skysight-inc/HackerNews huggingface dataset:
I think there is a lot of confusion around bail-out vs bail-in. The Dodd Frank act 2010 rules out bail-out but opens the door for bail-in. In a bail-in uninsured depositors are unsecured lenders. It gets a bit complicated as rules are different between countries and are open to both interpretation and case by case modification.

AFAIK this isn’t a bail-in as there is no attempt to save the bank. As the bank is in receivership the depositors get a receivership certificate and by FDIC law depositors get paid first before lenders and equity. I think possibly before secured lenders but I’m not sure. In liquidation preference is everything. Given the assets, even at fire sale prices, depositors should get most and possibly all of their money back. That would mean any bail-out would be to help the banks other lenders. I don’t know for sure but I assume those would be other banks, so I guess it would be sold as an idea to limit contagion. I’m anti-bail-out. Depositors can borrow against receivership certificates to get some liquidity. Obviously they’d pay a time and risk premium for that but better than going insolvent. I don’t have cash in bank account above FDIC limits yet I still have multiple accounts in different countries. Basically applying backup rules to banking to avoid a single point of failure. If a bank freezes my funds for whatever reason I would need money to be able to pay a lawyer to get them unfrozen. I heard SVB would punish customers (with higher fees I guess) who banked with multiple banks so not only did SVB have a very high percentage of uninsured deposits the depositors they did tended not to spread the risk around.

Now bail-ins are a totally different matter. Deposits above insurance unsecured liabilities and depending on the jurisdiction can be anywhere in the preference line from in the front to near the back (still in-front of equity which will always get hosed). This is very different to most people’s perceptions as they believe the bank is holding their money in trust which would put them first in line. Effectively (afaik) uninsured deposit amounts are insuring the insured deposit amounts as their deposits contributed to pool of assets that get paid out in liquidation. One of the reasons for a bail in is continuity of operation, new equity is issued (the old ones are deleted) and instead of receivership certificates which holders can use to get loans on a case by case basis the equity can be traded making it easier and cheaper to free up liquidity. Since the new bank will be solvent the assets won’t need to sold at fire sale prices. But the other aspect is the mingling of uninsured depositors with other lenders really has the potential to drastically increase the size of the haircut depositors can expect. While many of bail-in legislations seem to have loop-holes allowing this (some countries state it more explicitly) it seems unfathomable that such a thing would be done as that would destroy the false trust that people have in the financial system. Unless of course all off-ramps from banks are closed and people are stuck choosing between a bad deal from one bank and a bad deal from another bank.
I think it mimics a certain kind of speech.

Some people do talk like that . All complete thoughts . Sequential.

Other people—and I very much count myself among them—have a less linear, more tree-like mode of expression; where the ideas, instead of building on what came before, are being laid out out of order – the ideas aren’t completed – and more complex punctuation is needed to establish the relationships between those thoughts.

It sounds like I’m saying the former is less sophisticated than the latter. I don’t think that’s true.

I think we should probably try to express our ideas in a way that doesn’t require out-of-sequence reasoning. Short, simple sentences. With clear meanings. Building on one another. Much easier to follow.

The tree-like mode of endless nested parentheticals and asides is just a rendering of an incomplete thought process.

Not better or more sophisticated. Just still in progress.
It absolutely does. You should have 3 months of cash in the bank always. The rest should be in cash equivalents or short term investments. This is why most company’s with payrolls like that have a person called a “Treasury Officer” who manages all that and makes sure the bank accounts are funded adequately. They should also spread that around between banks to ensure that in the case of an issue with one facility there are other facilities or lines of credit to cover short term needs.

Anybody with more than $5 million in the bank should have someone dedicated to managing that money. If you don’t, then you’re not running a business properly. Startups like to skimp on important things like that and they shouldn’t. Any CFO with basic skills should be doing or arranging this depending on the size of the company. That’s literally their job.
No, what they're saying is a far greater portion of their deposits are from depositors below $250K who have no rational motivation to participate in a bank run.
I'm not sure what you're expressing is a very helpful comment, but damned if it isn't a good description of my gut reaction to all this.
At plenty of companies, 250k is not enough to make payroll.
> how is the opposite end of this hedge hedging their position?

Plenty of financial functions create natural short interest rate exposure. Like SVB, they have no business speculating on rates, so they hedge it away. (The Fed is also involved in the repo market.)
> The commercialisation of the internet was a mistake.

The irony off posting this on a VC website that make money off the commercialisation of the internet.
> Fire sale means the selling of the assets pushes their value down. This is not that. It’s insolvency; the assets were and are worth less than their book value.

As has been repeated many times, the bank was never and is not insolvent.
One of the strangest misconceptions I've seen on HN and in general is some variation on the incorrect theme of "all the money is gone except the FDIC insurance".

The last I saw from Moody's was they're expecting "eighty-something" percent recovery rate, assuming no bailout or rule flexibility and no last minute forced merger.

This isn't like FTX where all the money is gone and ha ha you're not getting a penny of it back, ever. The SVB situation is a hyper regulated industry and the regulators flipped out when the asset ratio dropped below 95% or something like that, and as such, there will be inevitable expenses of a total shutdown, so figure everyone below $250K gets 100% back via insurance and everyone else gets $250K plus whatever was above $250K paid out at probably around eighty five percent when its all said and done (this is a guess although Moody's usually isn't all that wrong).

Historically when smaller banks collapsed (my hometown bank for example back in '08) the regulators semi-forcibly merge the small bank into a large bank and there's zero loss, you're just magically now a customer of some out of town megabank. The big bank eats the loss in a wink-and-nod agreement where the big bank gets some future favorable regulatory treatment in exchange, semi-informally. The problem with SVB is it is, or was, huge. So finding a huger bank to merge with will be tricky to impossible. Which was kind of the point of regulation intended to keep competition higher by making lots of small banks instead of few large ones.

The worst case outcome according to the last I saw from Moodys was big depositors will take maybe a fifteen percent haircut over $250K. The propaganda claims, of course, that all the money is gone and its 1933 again on Monday morning and the usual workers of the world unite stuff. But its not really THAT bad.

Idle speculation I've seen in chats that the solution to SVB being way too f-ing huge to merge with anyone is a forcible separation followed by a forcible multi-merge. So each 1/4 of you will be new customers with 100% rate of return of JP, BoA, Citi, and WF respectively. (off the top of my head those are the four largest banks by assets, I could be wrong) This is just internet chat nonsense I wouldn't plan on it. Although it is an innovative solution to having a "too big to fail" bank failure.
I think we should assume that they are going to be making the advance deposit earlier in the week rather than later, and it will be as large as they can possibly make it.
> If depositors aren’t protected, then it’s going to have a lot of downstream impacts

If depositors with deposits above the FDIC insurance limit _are_ protected then there will be nothing stopping this from happening repeatedly in the future. Depositors that exceed the FDIC insurance limit should be taking a haircut so they learn to do better risk analysis of their bank or purchase auxiliary deposit insurance on their assets at a bank or both. VCs/investors in the companies whose deposits exceed the FDIC insurance limit should take a bath for pushing one specific bank with bad risk management. (How this fact escaped VCs/investors is beyond me. I'm not a risk manager or investment manager by any stretch of the imagination but even I would recognize that investment in long-term near-0% bonds would have nowhere to go but down.)
This comes in contrast of what they do in China: rumors are excised from media (including social media) and at best the government coerces certain players to “show patriotic confidence” in the market, and at worst those certain players are given a heads up so they can exit their positions before the scandal breaks.

Western investors in these markets can get very confused. Take short seller Andrew Left in Hong Kong who warned of Evergrande being dangerously illiquid in…2016. He was fined and banned from trading by the HK SAR whose judges claimed he didn’t understand the Chinese market well enough.

https://en.m.wikipedia.org/wiki/Andrew_Left
Argh. Note to self, read articles more carefully. Thanks for the heads up :)

That being said, politicians seem to shy away from putting anything resembling a checkpoint on that border in fear of reigniting the conflict. But that would be necessary, if only to check residency status and validate the ETA for non-Irish EU citizens.

Once there is a checkpoint, political pressure will rise to also use it for EU goods checks and renegotiate the Windsor agreement.

That, or NI will be excluded from the ETA requirement and the check will be moved to the irish sea border - which would make the DUP mad again.

This stuff was a gordian knot to solve for goods alone, they'll have fun doing it all again for people.
Twice I’ve seen one of the higher ups add a private bathroom attached to their office. (in additional to the bathroom that the normal employees use by the elevators).

Once because of IBS and once because they liked taking mid-day showers.

Added bathrooms shouldn’t be a problem.
I'm guessing he has the contacts to be ahead on things like this. "Lucky" to have worked at Paypal to get him where he is.
I think you’ve reinvented callable bonds.

https://www.sapling.com/7796395/treasury-bonds-callable
I'm not sure why they are so worried about illegal immigration when their plan to turn the country into a third-world dump not worth even legally immigrating to is working so well. A significant chunk of the population is in "fuel poverty", critical infrastructure such as their beloved NHS has collapsed and there are shortages of certain produce blamed on weather conditions yet no other nearby country is experiencing it.
FDIC auction for SVB said to be underway, final bids due Sunday
I signed it as "Carol Marks"
There's something... interesting about ostensible egalitarians (equitytarians?) saying that someone is worthy of less respect because they went to LSU instead of an elite school like Stanford.

How they acted toward the guest would be inappropriate even if he were an ex-homeless high school dropout. If he's a midwit, embarrass him by asking pointed questions, not by heckling and hurling insults.
Is this a written excerpt from a text book or something? This single sentence makes more sense than many of the arguments I've seen previously.
He was invited to speak by Stanford students, so at least a minority of hard-working and bright students wanted to hear what he had to say.
There are many situations where a bank is literally solvent, but cannot survive the liquidity crunch of a bank run.

In fact, it's probably true of pretty much every bank every day, since this is partial-reserve banking. If everyone wants their money back, NOW, the bank doesn't have it, but in normal banking, the institutions can be stable for centuries.

SVB put themselves in a somewhat bad situation by heavily concentrating the high levels of deposits in 2019-2021 in long-term treasury bonds (which would not have been permitted had not the previous administration not rolled back Dodd-Frank regulations, in no small part due to the lobbying of SVB's CEO).

So to service the net withdrawals that started earlier this year (lower levels of VC investment and higher expenses in the concentrated startup community SVB served), after the big interest rate increases, they had to start cashing out their T-Bonds at ~80% of face value. This lead to need to raise new capital, which reduced confidence in the bank...

Had everyone, including Thiel, stayed calm instead of Thiel yelling "FIRE!!", it is entirely likely that it could have been at least calmly wound down or sold.

It's kind of like crossing thin ice. If you can keep your weight spread over enough surface area with no mis-steps, you can get across just fine. But if you take one wrong step focusing the pressure at one spot, you are now in the freezing water with a life expectancy of minutes if you are helped.
That's not at all true.

If I take a picture of a recipe from a cookbook and post it, that is absolutely a copyright violation, as the specific presentation is a copyrighted work.

This is because you can't copyright facts or procedures, but you can copyright specific representations/presentations of those facts or procedures.

If I take that recipes, type it out, and post my own version? Yeah, that's totally fine.

But I can't verbatim copy yours.
they work with tiny regional banks that act as a white label service

if one or more of those tiny regional banks fail in the same way SVB did I don’t see why there wouldn’t be an issue as a customer of Mercury

it’s also unknown what percentage of these banks’ total deposits are Mercury deposits now. if it’s a lot then you have the same risk of a bank run on the Mercury side disproportionately impacting the solvency of the underlying bank
For convenience, here are the RSS/Atom feeds for some of the publications mentioned in this thread:

Quanta
https://api.quantamagazine.org/feed/

Noema Magazine
https://www.noemamag.com/feed/

Aeon
https://aeon.co/feed

Nautilus
https://nautil.us/feed/

The Point Magazine
https://thepointmag.com/feed/

Asterisk Magazine
https://asteriskmag.com/feed

Symmetry Magazine
https://www.symmetrymagazine.org/feed

n+1 Magazine
https://www.nplusonemag.com/feed/

Harpers Magazine
https://harpers.org/feed/

Low←Tech Magazine
https://solar.lowtechmagazine.com/feeds/all-en.atom.xml

Public Books Magazine
http://www.publicbooks.org/feed

The New Atlantis
https://www.thenewatlantis.com/feed
> Did long duration assets (like bonds) comprise a greater proportion of SVB's assets compared to, say, JP Morgan?

Yes. JPMorgan is subject to the Fed’s stress tests and Basel III, both of which test duration. (SVB successfully lobbied to be exempt from both.)
I fairly recently applied for a Finnish visa and my application was rejected because Finland closed its border for Russians while my application was processing. I paid around 50€ for the privilege of having my passport held for 3 weeks and a small note saying "we're no longer issuing tourist visas, kthxbye".
'The U.K. has previously said that under current rules it does not have wholly accurate data on the number of people entering and leaving the country."

What? They can't track who comes and goes just by recording at the border now? We have computers and databases, right?
Sometimes our immune systems don’t work though. In that case we need vaccines. Please don’t forget that
A child-like regulatory question: Why aren’t HTM portfolios for retail banks frequently marked to market? Wouldn’t this force more accurate accounting in the event a bank needed to sell bonds in a capital crunch?
The depositors may have been able to borrow money at excessively favorable terms. For example, the bank lending money to businesses that otherwise would not have been lent to, or lent to at a higher interest rate. Or home mortgages for the business’s employees at lower rates, subsidized by the bank’s mismanagement (taking excess risks).
It is not a Brexit thing, the EU is going to make people do the same. If you ever do get a passport and attempt to travel anywhere you'll experience similar ennui. La vie, hein?
Yes you can do that. Tons of game programming roles don't touch other parts of game dev. If you are indie then buy assets or use AI to generate placeholder assets.
You got it :-)
> If the government doesn’t make depositors whole then people and companies all over the world lose trust in US banks and eventually US dollars.

Good. That's exactly what should happen. It should happen every single time, repeatedly. People should have to learn the hard way that banks and the government cannot be trusted.

These are the consequences of their irresponsibility. They should not get to avoid those consequences just because "banks and USD are important" or whatever excuse they come up with. If the US really is all about the free market as it claims, it should allow these banks to fail and everyone who trusted those banks to lose. Customers lent their monet to this bank and they lost. Allow them to face the consequences of their actions.
I think the implication is that if you make depositors take some of the risk then they'll be more proactive in their oversight of their banks' executives. I'm not sure how realistic that assumption is in practice though ...
> Wings are useless to generate lift at those altitudes.

They aren't, though. They still work, just much less well. There isn't one altitude where wings suddenly stop working entirely - there is however an altitude where generating enough lift to sustain flight would require going so fast that you're already in orbit (regardless of lift), according to wikipedia it's somewhere around 80km.

The Karman line has nothing to do with lift, it's just an arbitrary, round number.
Most of the uninformed takes are from older accounts, and use talking points straight out of Twitter... and I don't think /g/ is particularly interested by VC startup banks lol.
Which scale? 0 dollars? All of what will be paid on Monday will be paid out of SVB's assets, which are being liquidates as we speak.
Accounts are worth money to a bank even with no balance. Likely if JPM or someone buys the bank people will continue to use those accounts. So yeah someone will fill the hole and their stock price will probably go up because of it
That’s a cool insight about TypeScript’s type handling! Since it’s just about one specific case, the title of the blog post should ideally be a bit more specific, in my opinion.
Unless efficiency regulations take hold for protection against excess emissions, chip shortages, etc.

Seems unlikely, but at some point it might make sense. Of course if the resources (electricity, silicon, etc.) required by developers to implement such efficient code exceeds the estimated savings, then doing it would actually be worse. But think about all the build scripts constantly being invoked, for example. The energy used to develop them must be extremely overshadowed by the energy to execute them.
Thanks! So where is the catch?

According to https://www.ycombinator.com/blog/urgent-sign-the-petition-no...

> In the Y Combinator community, one-third of startups with exposure to SVB used SVB as their sole bank account

Why did so many startups end up in that situation?

Is doing things properly too expensive? Or just requires hiring an expert? Hubris? (won't happen ever), calculated risk? (Among the many things that can go wrong in a early startup life, the bank going bust is the last worry)
If your startup doesn't survive having only 50% in the bank account for one week and then 80-90% in the following weeks (appears to be the most likely outcome without any government money) it likely isn't viable to begin with (in a normal, non-zero interest environment). I think the believe that startups have to always be on the brink of bankruptcy is misleading because it worked in the last decade of endless money and in winner-take all industries. At this point I believe that "Blitzscaling" is a zero-sum game and that most value is created by non winner-takes all companies that grow steadily. It seems analogous to aerodynamic friction, the faster you try to go the less far you will be able to go with a certain amount of energy/money
Someone, please, kill it with fire.

In all seriousness, it appears to be more distracting than it is immersive. The form is also awkward and causes a disconnect.

Heads up, the demo doesn't work in Firefox mobile and the video at the top has an extended period that doesn't show the product which will lose people's interest or cause frustration. People go to a site with an allotted time/cognitive load, and if the site doesn't meet their expectations they dip out.
Right, that makes sense - thanks for explaining.
Exactly! My personal finances are nowhere near as sophisticated as even a small start-up, but I make sure I have multiple sources of cash and credit just in case I lose access to one for whatever reason temporary or permanent (bank failure, fraud, forget password, etc).

It isn't too difficult: open up a second savings account, apply for an extra credit card, open a HELOC if available. I have to believe there is some similar basic things a business can do to be more resilient. Even waiting for guarantees insured FDIC funds can be a problem depending how long it takes.

PS: not trying to victim blame for companies who trusted SVB. This is just a rough reminder to be prepared for contingencies.
We should not take for granted that value can be transferred through time for free and without any risks. When you give another party control of your money (including a bank) they make decisions on your behalf for which there are consequences.
I agree with "not_your_vase" says, but also people want fancy, look at GNOME, KDE, Windows and MACs.

I use fvwm and it is far from fancy, but it gets the job done and is quite efficient.

Proprietary software Companies discovered early on eye-candy sells, and many people in the Linux Land is following what Apple and Windows developers do because most people want a similar fancy look.

In many cases PCs and Laptops are more of an entertainment device as opposed to a data processing device, that means Browsers are getting lots functionality for that use-case, and that is not cheap.

I had hoped the move of the masses to Cell Phones and Tablets would stop this trend, but seems it only to have accelerated it.

Now a "rant"

On the Linux side, Wayland is a big concern for me because I may be forced into using software that has a lot of functionality I do not need, stealing RAM from processing/analyzing large sets of data that could use gigs of RAM.

Right now my distro of choice still easily allows me to avoid that bloat, but the Wayland move may force it to follow to use something Red Hat created that to me is way to complex and is overkill.

Luckily OpenBSD and NetBSD (on a BSD now) is trying to avoid that mess, but Wayland may force changes I believe neither of these systems wants. Adding the bloat these systems have been able to avoid. Already dbus is needed for Firefox/chrome... What else will they be forced to port.