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Its the US Government courts who are handling FTX's bankruptcy. So at a minimum, they are expecting the USA Government to figure out how to split the money / cl

Its the US Government courts who are handling FTX's bankruptcy. So at a minimum, they are expecting the USA Government to figure out how to split the money / clawback what they can and untangle the mess of the balance sheets (rumor has it: a completely non-existent set of documentation in the case of FTX).

loeg 3y ago
That's not really what socializing losses usually means. This isn't an FDIC bailout, for example. I'm really looking for a response from GP, bodiekane.
- dragontamer 3y ago
  How is FDIC "bailout" socializing losses? SIVB stock collapsed and all the investors into SIVB were wiped out. US Government stepped in and started allocating the remaining assets, prioritizing the customers and hurting the bondholders and shareholders. IE: The shareholders / bondholders of SIVB were basically wiped out. The losses were privatized so to speak, isolated to the investor class.
  - loeg 3y ago
    Sure, you can quibble somewhat -- investor losses are not socialized. However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers.
    - dragontamer 3y ago
      > However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers. FDIC funds don't come from taxpayers. *Banks* pay FDIC insurance fees. Now you can quibble if FDIC is paid by banks, or if you think the "costs are passed onto the customers". But bank-customers are not necessarily "tax payers". At very least, the vast majority of my cash is in VMFXX and SWVXX, so I personally have very little money in Checking/Savings (so I barely pay any kind of "banking insurance" fees in practice, just enough to keep my checking account open). The little banking insurance that my money is going towards is my Checking account / Savings Account at a local Credit Union as well. Which is NCUA (not FDIC), so a totally different insurance program. ------- So none of my personal wealth is actually tied to FDIC in any way, despite myself paying plenty of taxes all the time. I'm simply not a bank customer, so there's no way I personally am related to any FDIC related situation. And plenty other people are like me as well.
SilasX 3y ago
"Expecting the government to bear the costs of enforcing the law" is not generally what is meant by "socializing the losses", even if you can define the expression in a way that that makes sense. But I'm going to go out on a limb and guess you've never referred to it as "socializing the losses of having possessions in your home" when police unravel a burglary operation and return the loot to its rightful owners.

loeg 3y ago

That's not really what socializing losses usually means. This isn't an FDIC bailout, for example. I'm really looking for a response from GP, bodiekane.

dragontamer 3y ago
How is FDIC "bailout" socializing losses? SIVB stock collapsed and all the investors into SIVB were wiped out. US Government stepped in and started allocating the remaining assets, prioritizing the customers and hurting the bondholders and shareholders. IE: The shareholders / bondholders of SIVB were basically wiped out. The losses were privatized so to speak, isolated to the investor class.
- loeg 3y ago
  Sure, you can quibble somewhat -- investor losses are not socialized. However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers.
  - dragontamer 3y ago
    > However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers. FDIC funds don't come from taxpayers. *Banks* pay FDIC insurance fees. Now you can quibble if FDIC is paid by banks, or if you think the "costs are passed onto the customers". But bank-customers are not necessarily "tax payers". At very least, the vast majority of my cash is in VMFXX and SWVXX, so I personally have very little money in Checking/Savings (so I barely pay any kind of "banking insurance" fees in practice, just enough to keep my checking account open). The little banking insurance that my money is going towards is my Checking account / Savings Account at a local Credit Union as well. Which is NCUA (not FDIC), so a totally different insurance program. ------- So none of my personal wealth is actually tied to FDIC in any way, despite myself paying plenty of taxes all the time. I'm simply not a bank customer, so there's no way I personally am related to any FDIC related situation. And plenty other people are like me as well.

SilasX 3y ago

"Expecting the government to bear the costs of enforcing the law" is not generally what is meant by "socializing the losses", even if you can define the expression in a way that that makes sense. But I'm going to go out on a limb and guess you've never referred to it as "socializing the losses of having possessions in your home" when police unravel a burglary operation and return the loot to its rightful owners.