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The 72-hour scramble to save the United States from a banking crisis
- indigodaddy 4y agohttps://archive.ph/xZRZh https://archive.ph/xZRZh
- lowkey 4y agoI find it curious that the word startups has been replaced with “small business” Didn’t Paul Graham write an essay explaining that they are not the same [0] [0] http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html
- blitzar 4y agoI would go a different path. Companies with 10mil of seed capital in their bank account are not a “small business”. The guy who owns 14 car dealerships in 3 states has less money in their bank account. A “small business” has -100k/+100k in their bank account.
- zaroth 4y agoTypical rule of thumb is 3 months OpEx for a small business’ checking account balance. A tiny $400k run-rate company should have $100k in the bank. Keep in mind we’re talking about expense run-rate not profit. The guy who owns 14 car dealerships might not have $10 mil in their checking account, but they absolutely have payroll and rent obligations at a level where they’re holding at least a couple million. To say nothing of cash requirements for all that inventory…
- rcme 4y agoI’m happy the financial system didn’t collapse, but I hate this spin by the Biden administration that this wasn’t a bailout. Yes, SIVB owners got wiped out, so it wasn’t a bailout for them, but, as far as I know, the owners of other banks that are insolvent based on the market value of their holdings had all of their equity saved by the new Fed lending program. So I fail to see how that’s not a bailout for all the other banks.
- blitzar 4y agoI guess this just adds to the outrage your must feel for; the Main Street New Loan Facility, Main Street Priority Loan Facility, Main Street Expanded Loan Facility, Nonprofit Organization New Loan Facility, Nonprofit Organization Expanded Loan Facility, Commercial Paper Funding Facility, Primary Dealer Credit Facility, Money Market Mutual Fund Liquidity Facility, Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, Term Asset-Backed Securities Loan Facility, Paycheck Protection Program Liquidity Facility, Municipal Liquidity Facility, Main Street Lending Program, Money Market Investor Funding Facility, ABCP MMMF Liquidity Facility, Term Securities Lending Facility, Term Auction Facility and the Maturity Extension Program and Reinvestment Policy.
- rcme 4y agoI’m not outraged that banks are being saved. I’m not outraged about anything. But I do think it’s a bit stupid to get up on a soap box and yell “we’re definitely not bailing out banks” when that’s exactly what’s happening.
- ElevenLathe 4y agoSVB takeover was mainly a bailout of startups and startup insiders IMO. Backstopping banks is the FDIC's job. Making sure Peter Thiel's companies can make payroll is not. Maybe it was still the right thing to do, and maybe enough Ivy-trained lawyers can make it seem legal eventually, but to every outside observer it's clear that the law was not part of the decisionmaking process. This was purely and only about bailing out well-connected Valley investors/founders/intelligence assets.
- rcme 4y agoBackstopping banks is the Fed’s job, yes. But I’m not sure why the owners of insolvent banks that need backstopping get to keep their equity. That’s called a bailout.
- 4y ago
- blahblah1234567 4y agoThe US should stop being saved from banking crises. Let natural consequences happen. Then adjust based on what is learned from the outcomes-- no pain, no gain. The society & economy should recognize the pain resulting from irresponsible action, if only do drive the society & economy to punish those who were so greedily irresponsible. Stop sheltering the population. And especially stop sheltering the bankers. Experiencing consequences is an important part of improvement-- without consequences there is no real impetus to change.
- JoeAltmaier 4y agoHm. That's pretty optimistic. It's like folks on the space station, "Let the oxygen filters fail! It'll teach Gary to clean them like he was supposed to."
- Koshkin 4y ago> natural consequences Also see Mother Nature Is Trying to Kill You by Dan Riskin.