4 ms·

I’m so tired of the fake make pay role canard. All depositors had $250k guaranteed at the bat. But sure maybe that’s short for 2 weeks of payroll for many comp

I’m so tired of the fake make pay role canard. All depositors had $250k guaranteed at the bat. But sure maybe that’s short for 2 weeks of payroll for many companies. Well FDIC was already cash payout warrants against the size of of their deposit assets (something like 50% would be available). If you need more than 50% of available cash to make payroll, you were already a dead firm walking. With liquid assets like long term treasuries, they could have been liquidated quickly, and at worst most companies would have seen a 10-15% haircut. A haircut hurts. But running a business includes all sorts of risks. You could have a lawsuit. You could have a fire. Your cloud provider could shutdown. They knew about the risk of being uninsured (since many companies have corporate treasurers who manage multiple banks and portfolio of treasury bills to manage bank risk), and this was just the one risk their company faced that came to fruition.

bogomipz 4y ago
I'm not sure how you reconcile acknowledging the reality of companies not being able to make payroll for two weeks and also calling it a "canard" in back to back sentences. A "fake canard" would be a double negative by the way ;) If you reread the thread and the context of what I was responding to it was the OP stating "It's not clear anyone would have lost anything at all ..." Perhaps you are well-off but losing a pay check for couple of weeks has real consequences for lots of people.
- Dylan16807 4y ago
  > Perhaps you are well-off but losing a pay check for couple of weeks has real consequences for lots of people. They're arguing that companies could already make payroll just fine with access to half their balance. A 100% guarantee was not necessary.
  - bogomipz 4y ago
    If your payroll plus all other outgoing expenses was greater than $250K then no you would not be able to "make payroll just fine." This is simple math. Arguing against basic math is absurd.
    - Dylan16807 4y ago
      I said half their balance. I didn't say anything about 250k. Please reread the comment thread.

bogomipz 4y ago

I'm not sure how you reconcile acknowledging the reality of companies not being able to make payroll for two weeks and also calling it a "canard" in back to back sentences. A "fake canard" would be a double negative by the way ;) If you reread the thread and the context of what I was responding to it was the OP stating "It's not clear anyone would have lost anything at all ..." Perhaps you are well-off but losing a pay check for couple of weeks has real consequences for lots of people.

Dylan16807 4y ago
> Perhaps you are well-off but losing a pay check for couple of weeks has real consequences for lots of people. They're arguing that companies could already make payroll just fine with access to half their balance. A 100% guarantee was not necessary.
- bogomipz 4y ago
  If your payroll plus all other outgoing expenses was greater than $250K then no you would not be able to "make payroll just fine." This is simple math. Arguing against basic math is absurd.
  - Dylan16807 4y ago
    I said half their balance. I didn't say anything about 250k. Please reread the comment thread.