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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Lots of people who work at startups like SVB are doing so to put food on the table for their families; not all are rich techbros.
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Also being a rich techbro is okay.  [/quote]

So bailing out rich techbro with public money because they ignored FDIC insurance limits is okay?[/quote]

Bailing out a bank so that employees of startups that bank with SVB can eat next week is okay.[/quote]

Follow the money, these were not all small startups. ROKU had almost $500M, which was only 25% of their cash. You telling me Roku taking maybe a 10% haircut, $50M on what seems to be close to 2B in cash, is somehow unmanageable? Now their investors and execs who wouldn’t be making bonus may not like it but there is no material effect here.

Even the smaller companies, there is equity and we were looking at only a small hit to them, maybe even less than 5%. Why not give everyone access to 80% of their funds and figure out the loss after that.[/quote]

The whole payroll story is such a joke, this is how the public is manipulated. If these companies need 100% of their cash just to make payroll they were going under regardless. The original plan was the fdic insurance plus a large percentage of the rest which would have paid out this week, this almost every company would have made payroll. But that wasn’t enough, full bailout basically extending fdic insurance to all deposits.

Maybe someone should start a bank today, guarantee like a 8% CD rate to suck in all the deposits. If things go well you make a ton of money, once things crash just have the govt payout since it’s all quasi insured now. Billionaires could just buy billion dollar CD’s with a no risk guaranteed rate better than the market. No moral hazard here folks, this will all work out great long term….at least for the bankers![/quote]

Thank you. I feel like I’m tilting at windmills. There was no desperation for putting food on the table; the existing FDIC dividend plan and expected 10%-20% deposit holder haircut was hardly the start of breadlines.  But now the billionaires who got juiced returns from SVB accounts are made hole despite ignoring the risk of being above FDIC limits. [/quote]

I agree with you that the depositors wouldn’t go bankrupt from a 10-20% haircut, but the FDIC’s position is that even a 10-20% haircut would create a contagion effect and cause deposit runs at other small banks. And it seems other banks agree, since I haven’t seen too many protests against paying the special assessment that the FDIC will levy. Why do you care if the depositors bear the burden of the 10-20% loss vs. if other banks bear it? This is not a rhetorical question. I am genuinely curious.[/quote]

So are we ok now with unlimited FDIC insurance at all banks now? Because that is the new reality. Do we not see that a much larger crisis is already in the works for the future? Will other banks actually pay for this, when is congress passing that special assessment to cover all future moral hazard that was just created? Reality is they will put some band aid small fees to make it look like they did something. They will significantly underfund any type of “insurance” then when things boom and lending goes full tilt (because there are no more private loses) and there are major bankruptcies….who picks up the tab?

If the govt is basically guaranteeing against all future bank loses why not just eliminate all private banks and just have govt banks like in China? What happened to capitalism? Isn’t finance supposed to be the most capitalist sector of the economy. [/quote]

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