Providing my anecdata. I've been at amazon for a few years and I have been in a few teams. In each team I would see about 10-20% of the team were not a net benefit to the team. Especially in 2022 I saw this figure grow even larger. This isn't a charity, if you're not contributing to the benefit of the company you should be let go.
Do you have data on this? Its not like other apps don't have issues. Sometimes I open netflix and it takes 30 seconds to show my profiles; that doesn't mean the app is garbage.
Bailout implies that the individual/business being made whole *should* have made decisions to prevent the situation from occurring in the first place. What responsibility did a SVB depositor have in SVB's decision to purchase billions of MBS in 2021?
If the depositor wasn’t ok with that (presumably public) decision they should have pulled out then. Or pulled out when treasury rates started ticking up and the writing was on the wall. Alternatively, they should have bought private insurance for their money or structured their money in multiple banks.
I can only partially agree to this, they did a lot of creative accounting and weren't hedging their interest rate risk. Do you really expect a retail depositor to understand fully the implications of a large bank not holding adequate interest rate swaps? This seems like the perfect example where government oversight is needed as not everyone is an expert in this
Yeah although it's strange to assume something is "not risky" when you don't what it is. If you're ignorant of what it is, and your money depends on it, that seems like cause to be worried and want to hedge the risk.
Taxpayers do have an obligation to ensure that I do not view my checking account as a risky loan to the bank... It is not a positive outcome for taxpayers if they no longer view their deposits as safe. $250k is also a ridiculously low insurance amount for any company with a non-trivial number of employees.
I agree there are a lot of poorly thought out populist arguments for not making depositors whole. I for one prefer HN to not converge into another social forum like Reddit that has a lack of critical thinking in discussions.
The VC's obligation is to their startups... Its a completely rational decision to get your money out of SVB once you know others are thinking the exact same.
I’m not trying to sentence them to the guillotine or anything. I appreciate the strong incentives driving their actions. Even the desire for the government to retroactively insure their deposits is understandable, although I disagree. In the OP I said they’re not completely blameless; I should emphasize I also think they’re not completely to blame. (Except for the shrill, nigh-hysterical tone of their demand, and the extraordinary timeline they demanded. That one’s all on them.)
They are blameless is my point. The depositor has zero responsibility to evaluate the bank's balance sheet. Not ensuring the depositors are made whole will risk a run on all regional banks throughout the country starting tomorrow morning. We will then see a consolidation of deposits into the top 4, too big to fail banks; hardly a progressive outcome.
I understand your perspective, but I also want to impress on you that the way you stated it is going to hurt your chances of being heard with a lot of people.
The outside view on this situation is: shit happens to blameless people all the time and they mostly just have to cope, no matter how validly they insist on zero responsibility. The depositors are going to be made whole - starting with a lump sum Monday morning, some decent percentage by the end of the week, and almost all within a month. That’s what’s going to happen. “Make the depositors whole on Monday morning or the whole banking system goes under” is profoundly off-putting. It’s not because the outside view wants you to lose all your money, it’s because it looks like “getting a little back now, enough back soon, and most back eventually“ isn’t enough, you want to get it all back now. The outside view does not buy your claim of contagion because SVB looks like a weird and insular bank for a weird and insular group of buddy-companies, so it feels like you’re cynically doom-mongering to get what you want, and they already think what you want is too much (and especially too quick).
I’m not espousing these views, I’m trying to see all sides and get all sides seen. That’s how outsiders will see it, and they’ll probably be less polite about letting you know too.
The government's responsibility is to ensure the integrity of our financial banks. It isn't the responsibility of the depositor, nor are they capable, to evaluate a regional bank's (the 18th largest bank in the USA) balance sheet. The FDIC is not without blame; there should be regulation that the bank's bonds should have been marked to the market.
This is akin to blaming a patient for medical malpractice — "why didn't the patient choose a better doctor".
>The government's responsibility is to ensure the integrity of our financial banks
Correct. Thats why they shut SVB down. It is not the government's responsibility to ensure the deposits of every individual depositor.
>This is akin to blaming
There is no blame. The depostors money is lost*. That is a fact, an event that already occurred.
>why didn't the patient choose a better doctor
Just like with a hospital, they can sue SVB (well, not anymore). Some things just aren't fair. But "thing not being fair" does not mean "and now the government shall make it fair."
The law has always been $250K (or some other limit) since the FDIC was created, hundreds (thousands?) of banks have failed since, and sometimes the depositors were burned. Somehow VCs think they are special because they are "disruptive" or whatever but they are not. The other times depositors were burned it wasn't because it was their "fault" or not, that isn't part of the consideration.
