chernevik

8 ms·

31.
by chernevik 4y ago
These seem to me very different cases but of course you have a right to your own take
32.
by chernevik 4y ago
In this case, from assessments on other banks insured by the FDIC. It can be reasonably presumed that these costs, like any other business cost, will somehow be passed on to those banks' customers.
33.
by chernevik 4y ago
A "bailout" is a mitigation of consequences, generally supported by an injection of cash or a guarantee thereof. It can apply to any class of interests in an enterprise. "Shareholders were bailed", "bondholders we
34.
by chernevik 4y ago
Then you aren't getting the concept. This isn't equity funding for a business idea. It's basically buying a claim on a bank in receivership. It doesn't matter if that claim is held by nextbigthing.com or Apple. Those
35.
by chernevik 4y ago
I suspect your customer use cases would have begun in Week 2. Most depositors would be able to cover payroll with the first fraction returned in the early days. Then it's a question of managing cash flow within the tranches doled out
36.
by chernevik 4y ago
Not a lawyer but this always struck me as exaggerated. One, the FDIC was always going to provide a meaningful fraction in days which would have covered payroll. Employees and vendors are going to understand a few days delay because of a ba
37.
by chernevik 4y ago
Had precisely that vibe to me.
38.
by chernevik 4y ago
It was always going to be someone who noticed that SVB's idiotic investments had put a hole in its balance sheets, and that it was largely funded with hot money that would depart when that hole was noticed. Blaming Thiel for being that
39.
by chernevik 4y ago
The timing and optics on this are just awful.
40.
by chernevik 4y ago
That doesn't sound even remotely close to right. If the client is the owner of record Mercury hasn't any claim at all.
41.
by chernevik 4y ago
There has always been a lot of groupthink in the downvoting and flagging here and they don't want to do anything about it. Oh well.
42.
by chernevik 4y ago
No. - The FDIC's risk is distributed across many bank balance sheets - The FDIC is collecting insurance premium on these deposits Structures like this have existed for decades. [ETA: I've just seen a good bit in the WSJ that such
43.
by chernevik 4y ago
I expect these funds would have been available Monday, but I'm not a cash flow management expert and don't know the mechanics of how sweeps work.
44.
by chernevik 4y ago
> you would be able to access all your funds How fast and how? You might consider providing a "living will" document that keeps your clients up-to-date on where the $$$ are and how they access them. If I'm using something
45.
by chernevik 4y ago
"Don't talk about downvotes" but I'm sorry, the obvious suppression of inconvenient opinion on this thread is HILARIOUS. The HN community is all for free-thinking except when its own conventions are contradicted. And th
46.
by chernevik 4y ago
Yeah, why was that? Oops, sorry, not supposed to ask such questions.
47.
by chernevik 4y ago
It sounds like a useful and important product (if perhaps duplicative of extant offerings) but I'm afraid the government has blown up your market. All one has to do now is bank somewhere that "everyone thinks safe". So long
48.
by chernevik 4y ago
The point is that if you make a bureaucracy responsible for 100% of deposits it will be very risk averse in the loans it will let a bank make.
49.
by chernevik 4y ago
There are many ways a business can practically manage cash to avoid bank risk. This has been pointed out so in the past 48 hours that I am beginning to think people are just willfully ignoring it.
50.
by chernevik 4y ago
> "the answer will almost certainly be far more stringent regulation on small banks" And that regulation won't look kindly on lending to anything new, different or weird. A lending model like SVB's won't be suppo
51.
by chernevik 4y ago
You can have your own private definition if you like, but people talking about financial failures having using the term "bailout" in connection with all sorts of stakeholders for decades. The word games being played around this ar
52.
by chernevik 4y ago
Actually no. The FDIC was created to protect small depositors without the knowledge to protect themselves against bank failure. Larger depositors were expected to assess their banks or find ways of safeguarding themselves. One argument ag
53.
by chernevik 4y ago
I would add, it's just hilarious to see so many claim "it's not a bailout because shareholders were wiped out!" Everyone knows bailouts are bad, and that people shouldn't rely on them. But they want their money, s
54.
by chernevik 4y ago
They're passing any cost on to the other banks, who will pass those costs on to their various customers.
55.
by chernevik 4y ago
It's been fun watching the special pleaders redefine "bailout", as if the term could only apply to equity or bonds. It can apply to any interested party. As in "The depositors were bailed out".
56.
by chernevik 4y ago
It won't. A bank will have to justify its investments to its regulators. And if those regulators have any helpful suggestions about "under-banked sectors" that could use additional capital, management will be very attentive.
57.
by chernevik 4y ago
It does not, as they are far too small to be "systematically important". If they fail and their assets cannot support their deposits, their depositors will get a haircut. This will not go unnoticed by depositors. It's one of
58.
by chernevik 4y ago
As we've seen this week, the scrutiny of depositors is far more powerful than that of shareholders.
59.
by chernevik 4y ago
The basic analysis that the costs will ultimately fall on other banks' depositors is correct. That's why it's a bailout.
60.
by chernevik 4y ago
And so the regulators are empowered to make a whole bunch of other decisions, such as asset and lending strategy. I prefer to minimize regulators' control over decisions. Perhaps you have noticed that regulators are at bottom politicia

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