I'm assuming March 10th is the traditional day for banks to issue bonuses, so at least that doesn't look suspicious.
I feel like, at any time during decades of successful lobbying, the banking industry could have asked for and received higher standard FDIC insurance coverage than $250,000 but somehow never got around to it.
Also, businesses saying you can't run a payroll from a $250,000 bank account should maybe learn about money market funds.
The bonus thing is a red herring so it annoyed me that some liberal commentators fixated on that. It was for 2022 performance, which in retrospect was questionable but a non-issue if not for the VC initiated bank run. Based on similar timelines in other industries these payouts would have been notified in early Feb, and already in the payroll processing pipeline last week before the bank run began. People are trying to make it sound like bonuses were quickly cobbled together in a few days to loot the bank on it way down.
If you don't like corporate bonus structure and culture overall that's fine, but this is a distraction that will make it easier to discount other legitimate criticisms because it makes people harping on it look uninformed.
Yeah, I don't buy that. Shoving money out the door before the collapse is common to every type of business when they fail and they all have a reason.
Year-end bonuses should come at Christmastime anyway. Holding on to the money until March is a scam in its own right.
i have a bleg heebie - anyone know anything about fairleigh dickinson in nj? close family member has a tt job offer. any intel re the school & surrounding communities much appreciated!
5- Oh I don't doubt some of that happened, probably by selective approval of wire transfers of connected clients and insider info for shorting the stock, I just don't think this was the mechanism.
6- In the case of our company the annual bonus has to be approved by the board, which has to review Q4 financials to set the company wide performance metrics, so there's a month or so lag. It does keep getting pushed later and later at many places though, probably more than is justified by reporting needs.
re svb with the bizarre beliefs in the magical wisdom of markets & smartness of rich white people we all unfortunately marinate in, it is v v difficult for anyone who hasn't had to trudge through the aftermath of a banking crisis or deal with go go deal guys in the lead up to one to understand how plain old mediocre all the main players are. just not that smart & utterly unselfaware.
7: I'm pretty sure New Jersey is a dystopia where the living envy the dead, but my main experience of the state is driving on the New Jersey Turnpike.
8.1: I'm sure they did other things too, but paying top management literal hours before the feds shut you down is the easiest one for people not in banking to understand.
Year-end bonuses should come at Christmastime anyway. Holding on to the money until March is a scam in its own right.
We're not getting paid ours until April.
I get mine December 15. But weirdly enough, only if the company is solvent.
Don't forget Signature. I haven't read much of anything about that one, bu5 I did see the word crypto in the coverage.
Also Silvergate, which is specifically a crypto bank.
1 and 4: my husband just got his bonus from the company he is employed by through the 22nd. I can't remember if it was always March or usually April.
7: I'm pretty sure someone who used to comment here has a pet from there. Puppy? Guinea pig?
The fucking pet thing was absolutely incomprehensible for me.
Anyway, bailing out Silicon Valley Bank is unfair to all the people who have already paid off their student loans. Why is a truck driver paying higher bank fees to support a venture capitalist?
Because the truck driver's boss gets free checking.
7, 19: Yes, I believe an ursine former commenter is there now.
[redacted]? cannot remember if they had issues or notable opinions re their employer, colleagues or students ... is anyone here in contact off blog & if so willing to put me in touch via heebie?
Let's see if I have all the ingredients together:
* The FDIC helped a hair more than they normally would have due to political pressure, making it perhaps technically a bailout but a minor and reasonable one
* With the expectation now essentially being that all deposits are protected, it would make more sense to make this the formal policy, and businesses should pay the marginal amount needed for it
* All the VCs showed their faux-libertarian asses
Yeah. Also Silicon Valley Bank customers got years of receiving higher interest rates than I do on my bank deposits. It must be nice collecting a risk premium and then socializing the risk when the time comes.
We should probably just nationalize a few banks, just out of an abundance of caution.
The FDIC helped a hair more than they normally would have due to political pressure, making it perhaps technically a bailout but a minor and reasonable one
The FDIC bailout/intervention is arguably "minor and reasonable" (more so for SVB than Signature, in isolation), but the Fed's is definitely not minor and is a massive subsidy to poorly managed (and supervised) banks.
It can't be that hard to run a bank. I have a cousin who does it.
28: Yeah, they're suddenly allowing easy money if you promise it's an "emergency" or something, right?
I guess I probably benefit from this because we still have an adjustable rate mortgage.
Funny how the president of SVB was on the Board of the San Francisco Fed. Something something regulatory capture.
28: Yeah, they're suddenly allowing easy money if you promise it's an "emergency" or something, right?
No emergency required. You get a one-year loan at par value for your collateral, no matte what its market price.
Huh. It seems the biggest depositor into SVB is Circle, with $3.3 billion. That is part of the money used to back up their "USDC" stablecoin, which had been trading at about $0.92 and is now back up to $1. So what we have here is a genuine example of the Fed bailing out cryto.
crypto. My typing skills have been going to shit.
Cryocurrency: the only currency guaranteed*†‡ to hold its value while you wait, suspended, for the next economic boom.
If crypto fails, it will be harder to buy bulk fentanyl for international shipment.
SFB....then SVB -- anybody else seeing a pattern?
My understanding of the banking system is that we are all cartoon characters walking on air, and we are fine as long as we don't look down.
That's my understanding of why they don't make glass-bottom airplanes.
A glass bottom airplane might have prevented DB Cooper from getting away.
ursine former commenter
I think it has to be [redacted]. Cocaine Bear only commented here once or twice, and also I'm pretty sure he's at Princeton.
God these Silicon Valley bros are so stupid. Everything about SVB's business practices makes it sound just incredibly mismanaged, but they still put all their money in it then killed it themselves for no reason.
There are reasons to use obscure language in comments.
(But also I don't actually know where people are boarding their pets these days.)
Some of them seem to have been genuinely unfamiliar with the concept of fractional reserve banking until all their money disappeared. (They could just be lying to get bailed out though. It can be hard to tell.)
My sister has to get her dog vaccinated before the dog can be boarded. I told her to sue, but she thought the vaccination was a good idea.
I don't know how she's so certain her dog isn't in Christian Science.
She'd probably succeed if she filed with Judge Kacsmaryk in Texas.
They're obviously liars, but they're also obviously idiots.
Hilariously it seems like a bunch of SV VCs started a panic in their group chat, then this guy starts buying SVB when it goes low (potential insider trading issue here):
https://twitter.com/torrenegra/status/1634573234187407369?s=46&t=nbIfRG4OrIZbaPkDOwkgxQ
I thought Christian Science was founded by someone named "Barker," but it's "Baker." So never mind.
The coterie of people eligible for three tries at a startup by courtesy because they graduated from the right department at Stanford, or more if their dad did too.
(I think an ex-relative of mine got similar deference in exec-land; his career sort of petered out at some point.)
24/dq: commenter is happy to talk to you; is the email address in your pseud live?
All those threads are hilarious (see also poor founder in Ohio driving a used minivan) because they not only show how disconnected the authors are from the finances of most people, but also how unaware they are that they're disconnected. The Ohio one was "We're normal midwesterners trying to make ends meet. We didn't make a lot of money so I started a company because we calculated we could forgo my half of our family income for 18 months." Like those stories about saving $1M by age 30 that always have "I'm totally a self made millionaire oh and my parents bought me a house at 26."
Can someone with the keys please anonymize 24 and 42?
This is a great summary of the whole deal.
It was the Woke Mind Virus wot done it
https://twitter.com/bcmerchant/status/1635331043216736256?s=46&t=nbIfRG4OrIZbaPkDOwkgxQ
That one black guy has a lot to answer for.
The one black guy is probably Herman Cain and they forgot he died.
Tokenism in the most literal sense and that's where the Wall Street Journal puts the blame.
6 et al. Before Great Britain and its colonies adopted the Gregorian calendar in 1752, the new year began with the first Quarter Day on Lady Day (25th March), so it made perfect sense to make year end payments at this point. Many businesses still run their financial year on this basis (Quarter days: Lady Day, Midsummer (24th June), Michaelmas (29th September), Christmas). Personally, I find it less worrying that some businesses pay their year end bonuses at Lammas, than that they're still conforming to an early 18th century calendar. What else do they do? Write cheques with goose quills?
Wait 'til you hear about our political system.
White men have never failed to properly run a bank. They've never been given a chance.
54: nope, but heebie has my email address, many thanks to all!
i've sent heebie an email so she has that address to hand.
7: What kind of rock must I be living under, that I don't think I've ever heard the name of the largest private university in New Jersey before?
So now that the Fed is going to hit the brakes on interest rate hikes, the next-best inflation-fighting tool we have is raising taxes on the rich.
Think the Republicans in Congress will go for it?
OMFG. Has this excerpt from a WSJ editorial been posted yet? It's enraging and on topic!
Actual footage of a VC group chat last week.
The largest public university in New Jersey is Rutger Hauer.
I probably shouldn't have checked how my Democratic Senators voted on the law that rolled back Dodd-Frank protections in 2018. The vote was 67-31 so a lot of Democrats went with Trump on that one.
Apparently, a host of Fox said that Americans need to take their money out of banks. I guess in cash or something?
After all, the root of "pecuniary" is "relating to pigs."
Also Silicon Valley Bank customers got years of receiving higher interest rates than I do on my bank deposits.
Ooh, look at Mr Rentier Capitalist here complaining about how little unearned income he's been getting.
Before Great Britain and its colonies adopted the Gregorian calendar in 1752, the new year began with the first Quarter Day on Lady Day (25th March)...
Slightly OT but I learned recently that there was a 30th of February in Sweden in the 18th century, because of a really badly handled J-G transition; full mildly hilarious story here https://en.wikipedia.org/wiki/List_of_non-standard_dates
My bank sent out an e-mail about how well capitalized they are and how diversified their holdings are.
They highlighted their age as well, I.e. they were founded in 1838 and weren't some innovative start up.
I wonder how many people have more than the FDIC limit deposited.
Actual footage of a VC group chat
Highly decorated British armed forces personnel or Vietnamese communist irregulars?
I wonder how many people have more than the FDIC limit deposited.
It does seem like an odd thing to have for more than a few days. You'd shift it into some sort of investment, or a money market account, surely, depending on your liquidity needs; that's what company treasurers are for, if you're a company.
re: 89
That first one would be quite a small meeting. There's three British, one Nepali,* four Aussies, and one Kiwi.
* my Dad met him as he--Rambahadur Limbu--was still serving when he was in the army (late 60s, early 70s) and his regiment worked fairly regularly with Gurkhas.
Ooh, look at Mr Rentier Capitalist here complaining about how little unearned income he's been getting.
I think if you look again you'll see that the complaint is about private profits that are subsidized by the socialization of risk.
Me, I don't have any gripe with how the Fed has handled this, but there's an identifiable moral hazard here that I wish the US were better at dealing with.
there's an identifiable moral hazard here that I wish the US were better at dealing with
Capped deposit insurance is a good thing, which is why every serious country in the world has had it for decades, and the moral hazard involved in letting people off doing due diligence on their current account providers is outweighed by the convenience of not having to worry about bank runs. The additional moral hazard involved in an unlimited deposit insurance scheme is not really very important.
Remember that SVB shareholders are going to be wiped out completely by this, as are the SVB bondholders. They will lose their money, and rightly so. SVB senior management will lose their jobs. Good.
What the US needs to be better at is not dealing with "identifiable moral hazard" involved in deposit insurance. What the US needs to be better at is regulating its banks.
Joe Stiglitz is good on this:
https://www.theguardian.com/business/2023/mar/13/silicon-valley-bank-failure-svb-collapse
I think if you look again you'll see that the complaint is about private profits that are subsidized by the socialization of risk.
Yes. Specifically, Spike is unhappy that he personally is only making small private profits subsidised by the socialisation of risk, while other people were making larger (but equally unearned) profits subsidised by the socialisation of risk.
94: I think that's all fair. I don't consider this particular moral hazard to be a big deal.
This is less obvious to me:
Capped deposit insurance is a good thing, which is why every serious country in the world has had it for decades
The key word here being "capped." The Fed, on this occasion, is ignoring the cap, and this seems like the right call to me. Do you want to preserve at least a threat to deposits higher than 250K? I'm not sure.
Do you want to preserve at least a threat to deposits higher than 250K? I'm not sure.
I'm coming round to the answer being "no", to be honest.
1. Even under unlimited FDIC cover, there are not going to be many people - consumers or businesses - with more than 250k resting in their bank accounts at any one time. I am not a very sophisticated financier, but if someone dropped that much into my bank account, I would do something profitable with it rather than just letting it sit there. Similarly, if you're a business with that amount of cash on hand, either it's leaving again soon to meet payroll, or it isn't in which case your treasurer should be doing something profitable with it. Therefore the additional burden to the FDIC of providing unlimited cover is, I would guess, not huge.
2. SVB is unusual in that it has a lot of startup customers. These are businesses which might well have a lot of cash on hand and still not be very financially sophisticated, because they are fairly small and haven't hired a proper treasury team yet, so it'll just sit in their bank account. Most banks won't have a lot of customers that look like that.
3. It is unfair to expect consumer depositors to do constant due diligence on the health of the bank that holds their checking account. It is also, I would say, unfair, though slightly less unfair, to expect small startup businesses to do the same.
4. As a general rule, I think, the threat of loss by which bank prudence is enforced should be a threat of loss to shareholders and bondholders, not to depositors.
But:
5. It is libertarian nonsense to think that you can enforce prudence solely by a threat of loss. It should be enforced in advance by proper regulation as well. We do not expect safe cars simply by imposing huge financial damages on Ford if someone dies in a Ford car that was badly designed. We also have strict inspections, safety rules and so on to make sure that Ford designs only safe cars in the first place.
6. YES THIS IS AN ANALOGY, I DON'T CARE.
7. I am very glad that my current job is actually about helping people not die, rather than dealing with this sort of thing.
I would be interested in knowing how much actual cash businesses tend to keep about. Meggitt has a £1.5bn annual turnover and £100-200m "cash and cash equivalents" but I don't know how much of that is actual cash in a bank account rather than just very liquid assets which are considered cash equivalent.
I think society would be a better place if fewer of the people involved in running and financing these start-ups were in a position of influence and am upset we are missing a chance to shove them out.
Some well known big media tech company, I'm too lazy to go back and check which one even though it may be noted in this very thread, said they had several hundred million exposed in uninsured SVB deposits. That seems like insanely bad management.
As noted few people have over $250k in cash deposits but I imagine the number with investments over the insured limit ($500k) in retirement accounts is much larger. I guess that's safer because it's hard to have a bank run on retirement accounts with the withdrawal penalties that apply, but I do wonder about the strength of SIPC insurance (FDIC equivalent for equities.) We have investments at two large brokerages but part of all brokerage profit models is "loaning" securities for market making and option trading. Is there a similar issue where the big firms are safe but there are sketchy smaller ones that are playing fast and loose with what they really own vs. what they've lent out to market?
Also this may be self interest/affinity but my sense is SV startup people are much bigger dipshits than biotech startup people. Always a few exceptions but the median SV startup seems to be some kind of delivery or personal organization app while the median biotech startup is "we're going to target cancer through this newly discovered mechanism."
I think the SV start up people are actively trying to produce a class of serfs.
So, I saw a headline that the fancy weight loss injection can cause loss of muscle mass. That sounds not good. Gwyneth Paltrow suggests rectal ozone, which is probably not cheap either.
You can probably make your own if you get the right diet
Or the correctly placed electrodes.
100: Roku. (I saw someone who works at a hardware setup working it out, and suggesting that maybe that's a year's worth of cash for wiring over to China to actually build televisions, so it's less boggling in that context but still bad.)
I didn't realize Roku was still a big deal.
I imagine the number with investments over the insured limit ($500k) in retirement accounts is much larger. I guess that's safer because it's hard to have a bank run on retirement accounts with the withdrawal penalties that apply, but I do wonder about the strength of SIPC insurance (FDIC equivalent for equities.)
This is 401k, yes? I know very little about how they work, but they aren't cash accounts - as I understand it you pay in a bit every month and it gets invested in stocks and bonds according to one of various investment plans on offer. I would think that makes it really quite different from a cash account at a bank. The value of your investment can go down as well as up...
(PEDANT: No! Facially absurd! Logically impossible! The value of your investments may go down instead of up, or down and then up, or for that matter up and then down, but it cannot go down as well as up!)
...but you aren't really exposed to a bank run at all, I would think; you're talking about actual assets, not just a cash claim on some bank. Even if your employer goes bankrupt, 401k assets are not included in the bankruptcy. And if your broker goes bankrupt, your assets should be segregated from firm assets, and should be OK. The exception is fraud or gross incompetence on the part of the broker.
I could be wrong though. I never did much in this area - I left that to the US office.
Spike is unhappy that he personally is only making small private profits subsidised by the socialisation of risk
I'm unhappy that the same jackasses who brought us both surveillance capitalism and the crypto industry managed to successfully lobby both Donald Trump and Senate Democrats to call off regulatory oversite on the grounds that they weren't systemically important, created a concentration of risk by all using the same bank, flagrantly ignored widely established best practices with respect to accounts over $250K (should have used a money market account, that's what they are for), collected more interest than could be offered by competing banks that weren't pushing the envelope on capital safety, blew up that bank through their own fecklessness, demanded a full bailout based on their systemic importance, and then get it even though its not really necessary.
The moral hazard isn't an account with $500K in it being made whole after a bank run (though I have different feelings about that $3.3 billion crypto-money account). The moral hazard is that wealthy industries are able to play by their own set of rules, bend regulations to their will, profit from doing so, fuck around as much as they want, but when it comes time to find out its the public sector holding the bag.
You can't really have a run on a non-crooked broker in the same way that you have a run on a bank. If a broker says "ogged owns 100 shares of Yoyodyne" what it means is "a nominee company under our control holds 100 shares of Yoyodyne, and we have written down a wee note that says that they belong to ogged". And if ogged, or indeed all of the broker's customers at once, demand that the broker sell all their shares, the broker can simply do it. And that may cause Yoyodyne's shares to drop in value, but so be it. It isn't like banks, which (see It's A Wonderful Life) even if they are impeccably managed, simply cannot give all their depositors all their money back at once.
I didn't know there was any insurance at all on 401k. There is something protecting part of your pension if your employer goes broke.
109: Spike, I think you need to understand that SVB is not getting a full bailout. SVB has been declared insolvent. Shareholders of SVB will not get a penny. Bondholders of SVB will get very little. Employees of SVB have been told that they will be out of a job within 45 days.
SVB's depositors are getting made whole, even those who had deposited more than the FDIC cap, and SVB UK's depositors are getting made whole because HSBC has taken over SVB UK for a payment of £1. But the shareholders, the bondholders, and the employees are taking a serious hit.
Did you know this? Because based on 109, you seem to think that SVB's shareholders and executives are being "bailed out" by the government - that they're getting away without serious loss. You seem to be very angry about it, so you should probably be relieved to hear that that isn't happening.
I didn't know there was any insurance at all on 401k.
Indirectly there is - if the broker handling the assets that your 401k is in goes bankrupt, SIPC will make sure you get your assets back. But brokerage bankruptcies are rare and generally most of the assets are recovered anyway.
There's no insurance protecting the value of those assets, mind you.
I don't think that's true. Just as a bank loans out its deposits to other customers taking out loans, a brokerage lends ogged's shares to someone who wants to short the stock. That's what shorting is, borrowing stocks you don't have to sell them then buying them later to return them to the original owner. If the short seller can't afford to do so how does the brokerage get them back in ogged's account if he asks to sell them? Borrow from another customer holding the same security. What if everyone wants to do that at once? I guess the price of the security drops and the short seller can afford to return them?
111.last: Certainly the stock market's initial reaction to the SVB news -- even after the announcement of the government backstop -- was basically "This could happen to anybody." While it's useful to think about moral hazard, it's also important to remember that there is a huge collective action problem associated with banking that (like many collective action problems) has to be handled by the government.
Or if not the government, then Jimmy Stewart. The depositors at the Bedford Falls Building and Loan were behaving perfectly rationally, and it's up to the government to ensure (and insure) that rational actors don't destroy the world.
I don't think 113 is based on a fair reading of 109.
115: I have only mutual funds in my 401k. I don't know if that's different.
111. Can the broker sell if the shares are collateral? Even if they can, their creditor collects first. Vanguard owns 7% of Apple, I guess if their management did this aggressively there might be systematic troubles, but this seems like a pretty theoretical rather than practical concern.
There's a huge market in short-term business loans invisible to retail investors (Commercial paper is the term used) that had problems during the credit crisis in 2008. That and the descriptions of shadow banking are IMO the places to read about interesting fragilities.
Tangentially related, real-time (or even delayed) information about flows rather than stocks or prices is hard to come by, so there's not much of a way for small people to detect runs. The rate of capital leaving or entering China seems useful for understanding threats to stability here, but I don't know good ways to look at even annual flow summaries. The crazy gyrations of the property market there must generate ripples here, but good luck seeing if there are forced sales.
SVB is not getting a full bailout.
The bank is not getting a full bailout, no. But the community of rich-ass venture capitalists that the bank was shaped by, is deeply a part of, and exists to serve sure is.
117: 109 seems to be confusing SVB management (who did things like lobby for loose regulation, and are not being bailed out) with SVB depositors (who collected slightly higher interest payments and are being made whole, aka "bailed out" if you like).
I don't think that's true. Just as a bank loans out its deposits to other customers taking out loans, a brokerage lends ogged's shares to someone who wants to short the stock. That's what shorting is, borrowing stocks you don't have to sell them then buying them later to return them to the original owner.
This is true but the risk is reduced, presumably, because the brokerage can't lend out ogged's shares multiple times, so recovery will be simpler, and short sales are generally happening with very liquid assets like stocks anyway, so the short-seller is unlikely to be left completely unable to return the stock though he may make a loss doing so. As I say, brokerage bankruptcies are very rare, and I'm not aware of any brokerage resolutions running into serious problems because they had trouble with the return of borrowed stock, though it may have happened.
The bank is not getting a full bailout, no. But the community of rich-ass venture capitalists that the bank was shaped by, is deeply a part of, and exists to serve sure is.
What? Half of SVB's loan book consisted of loans to venture capital companies! VC companies weren't SVB depositors, they were SVB debtors! How the hell are they getting a full bailout? What would it even mean for a bank borrower to get a full bailout after the failure of that bank?
Some were depositors, some were debtors, but most were both if I understand SVB's rules.
Uh, they were both? Do you not use the same bank for deposits as you go to for loans?
Do you really think the public should be backstopping billions in deposits for stablecoins? Because that's exactly what has happened here.
All I'm asking is that the largest uninsured depositors get a small haircut such that reckless banking practices are discouraged in the future.
I can't express how much joy I got out of the crypto bros saying, "See this is why we need Bitcoin, you might only get 90% of your uninsured deposits back from SVB," on the same day Bitcoin dropped 10%.
I don't like them either, but it's up 20% so far this week.
There was an effect that happened when the USDC stablecoin was trading at 92 cents on the dollar, people were getting out of it and fleeing to bitcoin as crypto's "reserve currency." I think that's what may have driven the price bump.
SVB is unusual in that it has a lot of startup customers. These are businesses which might well have a lot of cash on hand and still not be very financially sophisticated, because they are fairly small and haven't hired a proper treasury team yet, so it'll just sit in their bank account. Most banks won't have a lot of customers that look like that.
Yeah, it seems like a big part of this is that SVB is/was genuinely unusual as a bank, due largely to the weird distortions introduced by all the VC money in the tech industry. A typical commercial bank is mostly in the business of making loans to its depositors, so the money is constantly in motion. But SVB's depositors didn't need loans because they had VC funding, and the money just piled up in the bank, which had to figure out what to do with it and ended up making some very risky decisions. That's not a very common problem.
Josh Marshall had a good post on the different things people mean by "bailout."
Yeah. I'm pretty sure the people who got bailed out have public relations people making the argument that someone didn't get bailed out.
Part of the weirdness is that due to SV's incestuous culture there's a lot of overlap between SVB's depositors, creditors, stockholders, and bondholders and it's not clear from the outside exactly who belongs in which categories.
Debtors too. Basically all relationships to the bank are drawn from the same small pool of people but it's not clear where any given person falls.
131: The chat timeline of "I am pulling my money from the bank/let me scoop up shares on the cheap" is a funny.
133: Indeed. What exactly did they think was going to happen?
I'm still convinced that a lot of these people are just dumb.
That they would under pay for risk regardless.
I guess where I come down is, if after covering all accounts up to $250K, the FDIC sells off all the bank's assets and there is enough in there to cover all uninsured depositors in full, that's not a bailout.
Where it becomes a bailout is when they start reaching for other funds to cover the deposits. Which is seems to me is they are planning to do.
||
Drone incident, good times:
The U.S. European Command said in a statement that two Russian Su-27 fighter jets "conducted an unsafe and unprofessional intercept" of a U.S. MQ-9 drone that was operating within international airspace over the Black Sea.
It said one of the Russian fighters "struck the propeller of the MQ-9, causing U.S. forces to have to bring the MQ-9 down in international waters." Prior to that, the Su-27s dumped fuel on and flew in front of the MQ-9 several times before the collision in "a reckless, environmentally unsound and unprofessional manner," the U.S. European Command said in a statement from Stuttgart, Germany.
"This incident demonstrates a lack of competence in addition to being unsafe and unprofessional," it added.
|>
We should shoot down one of their balloons in retaliation.
A really persuasive video about the bank depositor backstopping intent and claims about its implementation - https://twitter.com/MarisaKabas/status/1635364515197091842 (I found it via Hilzoy's twitter.)
I do think this dsquared thread (ultimately stemming from a reply to raving entitled fuckpig David Sacks) is worth a read.
https://twitter.com/dsquareddigest/status/1635771760472727561
TLDR, it was not just the bank, but the customers and the milieu that set the stage. (Among other factors of course.)
He's just started a substack. Have we ever talked about substack, beyond grousing about the injustice of undeserved income to glib pundit-adjacent types? It's nice to see that theres a new contemporary place where writers can thrive financially, a sign of growth.
It seemed ideologically slanted in a bad direction at first, no? But maybe less so now.
It may be time again to link to Dsquared's response here to the onset of the 2008 Great Financial Crisis, which was, in essence, "this is nothing to worry about, shut up you ignorant outsiders".
Or, verbatim:
"can I have a quick show of hands lads, for whom here is this the first financial crisis of their professional life? Because AFAICT it's not as serious as savings & loans, not as serious as the Spanish or Nordic crises, not as serious as the Credit Lyonnais, not as serious as Asia/Russia 1998, probably not as serious as Mexico 1995 and arguably not as serious as the NASDAQ bust. Sense of proportion here."
I guess where I come down is, if after covering all accounts up to $250K, the FDIC sells off all the bank's assets and there is enough in there to cover all uninsured depositors in full, that's not a bailout.
Where it becomes a bailout is when they start reaching for other funds to cover the deposits.
OK. If there aren't enough SVB assets even to cover all deposits up to $250k, and the FDIC has to use other funds, is that a bailout?
It's a bailout. So what? I'm not at all opposed to all bailouts. I'm opposed to bailing out the wealthiest, particularly this set of wealthy.
Or it would be a bailout, but is it a hypothetical counterfactual that seems unlikely to me.
It's only a bailout if it comes from the Bailót region of France.
It's only a bailout if it comes from the Bailót region of France.
I looked up "bailout" in the OED, not expecting it to clear anything up, just curious about its first use.
"Bail out" first used as a verb in the financial sense in 1916, Richard Richard by Hughes Mearns. "Bail-out" as a noun in Time Magazine, 1939 - in their online archive!
Most interestingly, the OED thinks the phrase mixes together "bail" in the judicial meaning, with that in the nautical meaning. Both are from similar-looking French words, but with different Latin origins: judicial is from the verb bailler (give, lend, rent), Latin baiulo, nautical is from the noun baille (tub/bucket), Latin bacula or baiula.
It seemed ideologically slanted in a bad direction at first, no? But maybe less so now.
I think it still is but like twitter there's a large enough user base that lots of people who don't share the company leadership's politics are there.
Wow, they still haven't kicked off Graham Linehan.
(Substack, that is. Elmo restored his account last December.)
I'm not sure if I hope that's a typo or not.
Then I'll minimize risk of harm by not telling you.
If there aren't enough SVB assets even to cover all deposits up to $250k, and the FDIC has to use other funds, is that a bailout?
No, because that's part of the insurance policy that the FDIC is contracted to honor.