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There would have also been massive bank runs. Check out regional bank stocks, tons of them were down 30% this morning for no reason and a lot are still down. Th

There would have also been massive bank runs. Check out regional bank stocks, tons of them were down 30% this morning for no reason and a lot are still down. The rich panicked, which destroyed Washington Mutual and Wachovia in 08 and caused both the Great Recession and Great Depression

david927 4y ago
> for no reason For reason. This is far from over.
- epistasis 4y ago
  The only thing we have to fear is fear itself! Bank runs are quite often a crisis of unreason, and I think this one is mostly caused by poor communication. The contagion effect is as much a mental virus as it is an assessment of liquidity.
  - pas 4y ago
    It's kind of obvious from this that either deposits should be guaranteed by law (because in practice FDIC does that now anyway) or the law has to prohibit banks from investing deposits (unless the account holder instructs the banks to do so, of course).
anon291 4y ago
Okay well banks are not owed existence. If the banks went out of business give the deposit holders the choice of holding the underlying assets or the choice of selling them on the market. If you held the same portfolio as the bond, you too would not be able to withdraw at full face value. You are believing a lie if you think a ten million dollar deposit can be immediately withdrawn anywhere in its entirety.
- kevingadd 4y ago
  Startups were in fact able to withdraw large amounts of money from SVB. That's why it collapsed, they did this to the tune of 42 billion, and lots of the pending transfers completed.
  - anon291 4y ago
    In my book, having your bank fail when you withdraw large amounts of money is an equivalent statement to 'you cannot withdraw large amounts of money from your bank'.
    - kevingadd 4y ago
      Sure, but at the end of the day, a bunch of these startups withdrew large amounts of money successfully. Claims that you can't do that are simply false, at best conditionally true.
      - anon291 4y ago
        I never claimed that some startups didn't withdraw successfully. Not sure what you're arguing about. I said > You are believing a lie if you think a ten million dollar deposit can be immediately withdrawn anywhere in its entirety. This is true, by your own admission. A bunch of startups did; some did not. Thus, it is empirically true, by your own reckoning that you cannot withdraw large deposit accounts in their entirety. To say 'you CAN do X' means that your ability to do X is not conditioned on some probability. For example, when I say I can walk, I mean I certainly can walk; not that I can walk with 20% probability.

david927 4y ago

> for no reason For reason. This is far from over.

epistasis 4y ago
The only thing we have to fear is fear itself! Bank runs are quite often a crisis of unreason, and I think this one is mostly caused by poor communication. The contagion effect is as much a mental virus as it is an assessment of liquidity.
- pas 4y ago
  It's kind of obvious from this that either deposits should be guaranteed by law (because in practice FDIC does that now anyway) or the law has to prohibit banks from investing deposits (unless the account holder instructs the banks to do so, of course).

anon291 4y ago

Okay well banks are not owed existence. If the banks went out of business give the deposit holders the choice of holding the underlying assets or the choice of selling them on the market. If you held the same portfolio as the bond, you too would not be able to withdraw at full face value. You are believing a lie if you think a ten million dollar deposit can be immediately withdrawn anywhere in its entirety.

kevingadd 4y ago
Startups were in fact able to withdraw large amounts of money from SVB. That's why it collapsed, they did this to the tune of 42 billion, and lots of the pending transfers completed.
- anon291 4y ago
  In my book, having your bank fail when you withdraw large amounts of money is an equivalent statement to 'you cannot withdraw large amounts of money from your bank'.
  - kevingadd 4y ago
    Sure, but at the end of the day, a bunch of these startups withdrew large amounts of money successfully. Claims that you can't do that are simply false, at best conditionally true.
    - anon291 4y ago
      I never claimed that some startups didn't withdraw successfully. Not sure what you're arguing about. I said > You are believing a lie if you think a ten million dollar deposit can be immediately withdrawn anywhere in its entirety. This is true, by your own admission. A bunch of startups did; some did not. Thus, it is empirically true, by your own reckoning that you cannot withdraw large deposit accounts in their entirety. To say 'you CAN do X' means that your ability to do X is not conditioned on some probability. For example, when I say I can walk, I mean I certainly can walk; not that I can walk with 20% probability.