colinmorelli

13 ms·

91.
by colinmorelli 4y ago
What shareholder bailout? If you’re referring to SVB, shareholders will be wiped out. Only depositors are being bailed out (/made whole).
92.
by colinmorelli 4y ago
Please link to the policy where the FDIC announced 100% coverage of all deposits in all banks, not the press release where they announced providing depositors coverage in two specific banks. Edit: this is not debating nuances. Insurance cov
93.
by colinmorelli 4y ago
There was absolutely zero announcement yesterday that 100% of all deposits in all banks are guaranteed by FDIC. There was a commitment to cover 100% of SVB and Signature Bank deposits under the systemic risk exception. You can take issue wi
94.
by colinmorelli 4y ago
And if they do, then that's the right time to begin claiming that 100% of deposits are FDIC insured. That time is not now.
95.
by colinmorelli 4y ago
The Failed Bank List on the FDIC has quite a few examples. You can see dividend payouts from failed banks here: https://closedbanks.fdic.gov/dividends/ There are many examples of cases in which depositors take a 4-10%
96.
by colinmorelli 4y ago
This is a bad take on what FDIC did with SVB, and certainly not an assumption that is safe to rely on. Please do not spread this, as people who believe it carry a real risk of financial harm. There are multiple threads trying to go into det
97.
by colinmorelli 4y ago
SVBs liquidity issues predate VCs telling portfolio companies to take cash out. They already had to liquidate securities at a $1.8B and sell equity to fill the hole in the balance sheet on Wednesday, which was the announcement that led to t
98.
by colinmorelli 4y ago
If you think this created a multi hundred billion dollar hole, then I’m not sure you’re following what actually happened here. SVB had assets to cover most deposits, if not all. FDIC needs time to sell those assets, but depositors need the
99.
by colinmorelli 4y ago
As mentioned in another thread, $250k is a minimum. The FDIC guarantees $250k which is covered by fees paid by the banks. Above and beyond that they will pay out depositors first by selling the bank’s assets, which they took over on Friday.
100.
by colinmorelli 4y ago
It is absolutely in the collective market's best interest to retain confidence in the bank infrastructure of the nation. There were already people lining up at First Republic over the weekend, Signature Bank was shut down as part of th
101.
by colinmorelli 4y ago
This is not a bailout in the historical sense of the word. Equity holders in the bank are getting nothing. They'll be wiped out. Senior leadership has been removed. All this did was protect _depositors_, the people who put their money
102.
by colinmorelli 4y ago
Dipping into the FDIC pool beyond what's needed to cover the $250k. That, combined with the ability to sell of SVBs assets must give confidence to cover all deposits without burdening taxpayers.
103.
by colinmorelli 4y ago
I quite literally said in the message you're replying to "It's not clear what the better outcome is here" so I'm not really opining on what's preferable. It doesn't change the reality that this is going to
104.
by colinmorelli 4y ago
There's also a big difference between a startup failing because it doesn't deliver a product that people want and will pay for, and a startup failing because of "random chance" (in quotes because I can't prove that
105.
by colinmorelli 4y ago
There are plenty of workers at tech companies that are extremely vulnerable. It's an absolute myth that startups employ only 6-figure salary earning tech employees. Regardless, you're not replying to a thread where anyone claime
106.
by colinmorelli 4y ago
I hear you. Having run a venture backed startup myself, my opinion on how modern venture businesses work is...not at its highest point, to say the least. At the same time, I really have a preference for people who didn't sign up for th
107.
by colinmorelli 4y ago
> Or by raising earlier than expected, as a down round? Raising down rounds will be lower on the priority list to layoffs. Most companies would vastly prefer to buy more time to grow into their next milestone than to admit they can'
108.
by colinmorelli 4y ago
This speaks to my latter comment. You can use sweep accounts to increase protection, money market accounts which have different risk profiles, T-bills backed by the USG, etc. That said, it's all a tradeoff. Increasing FDIC insurance co
109.
by colinmorelli 4y ago
Losing deposits means losing cash flow to fund runway. Many tech companies just spent the last year optimizing to get 18-24 months cash runway. If they just lost several months of that, they will need to recover it somehow. That will come e
110.
by colinmorelli 4y ago
The only way taxpayers avoid footing the bill here is if the FDIC can sell assets to cover 100% of deposits in a very short timeframe, or if another bank comes in and agrees to cover the shortfall. In any other scenario, if businesses with
111.
by colinmorelli 4y ago
Isn't this just exactly what the FDIC is? The vast majority of people do not have more than $250k in deposits sitting in cash. More than that sitting around in cash wouldn't be a prudent financial decision anyway, since putting th
112.
by colinmorelli 4y ago
Employees also have no choice in which courier their employer chooses to send mail, but it would be a bit egregious to report them because a FedEx truck crashed and their letter was delayed for a day or two.
113.
by colinmorelli 4y ago
I think people are reacting to your suggestion that employees should report their employers for a circumstance that was entirely, 100% out of the hands of the employer. To be clear, this isn’t about employers using SVB. This is because Ripp
114.
by colinmorelli 4y ago
I think an important backdrop here is the initial catalyst for this (to my understanding) was a decline in VC funding and elevated cash burn in their clients, leading to a net outflow of deposits, which is ultimately what necessitated selli
115.
by colinmorelli 4y ago
I am quite confident that using this model for commercial purposes will, if detected, land you in quite a legal quagmire that almost certainly sides in favor of Meta. And even if it did not, Meta certainly has a more capable legal team with
116.
by colinmorelli 4y ago
The FTC would likely block the transaction precisely because of this. If they didn't block it, Apple would - upon doing the above - immediately subject themselves to anti-trust litigation from a lot of parties with a lot of money. Real
117.
by colinmorelli 4y ago
I would wager a guess that if you actually based success on revenue/employee, operating margins, and overall "healthy" business criteria, the number skews probably even higher. As we were clearly made aware of in the last yea
118.
by colinmorelli 4y ago
...isn't...this...exactly what autopilot in airplanes does? Self-driving cars? Manufacturing robots? The daVinci Surgical System? In fact, let's not even go that far. If you have one, your car is likely drive-by-wire, and the thro
119.
by colinmorelli 4y ago
I really struggle with this perspective for a pretty simple reason: "Market expectations" are predictions of the future. Early pandemic, predictions for tech companies were favorable. They were hiring not because of quarterly targ
120.
by colinmorelli 4y ago
It absolutely applies at cash-rich companies as well. Losing money is losing money, no matter how much you have in the bank. I don't know why folks seem to keep thinking that having money means you can lose it forever, or that out of t

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