Kansas Crimson

Silicon Valley Bank topic go here?

16th largest bank in US failed.
A shit-ton of startups had much more than $250k deposited.

I don't think anyone here would say the bank itself should be bailed out.

What about the depositors though?

My worthless opinion, yes - I feel people should be "bailed" out for up to 250K.

BJ (Illi) deleted his post before I could respond to it.

Yes, supposedly people who deposited money with/into SVB were "insured" for up to 250k by FDIC.

That being said, allegedly 90% of the money with/in the bank was uninsured.

That also being said, if someone doesn't/didn't comprehend the risks involved then I question if I should feel less or more sorry for them.

More than anything it’s the employees of the companies and the knock on effect. My daughter’s former employer runs payroll through a company which banks with them and has several millions of dollars there. Her friends don’t know if they will be paid on Wednesday. Very scary!!!

zsn wrote: ↑Sun Mar 12, 2023 11:52 am More than anything it’s the employees of the companies and the knock on effect. My daughter’s former employer runs payroll through a company which banks with them and has several millions of dollars there. Her friends don’t know if they will be paid on Wednesday. Very scary!!!

Exactly

zsn wrote: ↑Sun Mar 12, 2023 11:52 am More than anything it’s the employees of the companies and the knock on effect. My daughter’s former employer runs payroll through a company which banks with them and has several millions of dollars there. Her friends don’t know if they will be paid on Wednesday. Very scary!!!

I'm clueless in regards to payroll but supposedly the FDIC claims those insured up to 250K will have available funds on Monday.
There are valid reasons why people keep cash at home. This being one of them?

RainbowsandUnicorns wrote: ↑Sun Mar 12, 2023 11:43 am My worthless opinion, yes - I feel people should be "bailed" out for up to 250K.

BJ (Illi) deleted his post before I could respond to it.

Yes, supposedly people who deposited money with/into SVB were "insured" for up to 250k by FDIC.

That being said, allegedly 90% of the money with/in the bank was uninsured.

That also being said, if someone doesn't/didn't comprehend the risks involved then I question if I should feel less or more sorry for them.

Obviously they should be "bailed out" up to 250k. The question is beyond that. 250k isn't much for a company trying to make payroll

RainbowsandUnicorns wrote: ↑Sun Mar 12, 2023 11:43 am My worthless opinion, yes - I feel people should be "bailed" out for up to 250K.

BJ (Illi) deleted his post before I could respond to it.

Yes, supposedly people who deposited money with/into SVB were "insured" for up to 250k by FDIC.

That being said, allegedly 90% of the money with/in the bank was uninsured.

That also being said, if someone doesn't/didn't comprehend the risks involved then I question if I should feel less or more sorry for them.

Sorry. Made the post and then figured I'd just read about it before asking a question.

Mjl wrote: ↑Sun Mar 12, 2023 12:00 pm

RainbowsandUnicorns wrote: ↑Sun Mar 12, 2023 11:43 am My worthless opinion, yes - I feel people should be "bailed" out for up to 250K.

BJ (Illi) deleted his post before I could respond to it.

Yes, supposedly people who deposited money with/into SVB were "insured" for up to 250k by FDIC.

That being said, allegedly 90% of the money with/in the bank was uninsured.

That also being said, if someone doesn't/didn't comprehend the risks involved then I question if I should feel less or more sorry for them.

Obviously they should be "bailed out" up to 250k. The question is beyond that. 250k isn't much for a company trying to make payroll

I don't think they should be bailed out unfortunately.

Bank financials are public. Concentrating all your money into 1 bank is a risk. If you're going to do that I'd made damn sure that bank has significant reserves to survive the bad times or a large loan loss.

It sucks. Terrible for those businesses that will lose money. But there is risk involved in doing business.

I am assuming this is a reason many businesses have operating lines to cover expenses and payroll during each fiscal year so that those types of things are not being paid out of a deposit account with balances over the insurable limit.

There is supposed to be risk in business.
I don't generally think of putting money in a bank account as one of those risks

I guess it also sucks to be an employee? Is it your suggestion that before accepting a job you look at the financials of the bank which holds the money of the company which runs payroll for your employer?

Mjl wrote: ↑Sun Mar 12, 2023 12:00 pm

RainbowsandUnicorns wrote: ↑Sun Mar 12, 2023 11:43 am My worthless opinion, yes - I feel people should be "bailed" out for up to 250K.

BJ (Illi) deleted his post before I could respond to it.

Yes, supposedly people who deposited money with/into SVB were "insured" for up to 250k by FDIC.

That being said, allegedly 90% of the money with/in the bank was uninsured.

That also being said, if someone doesn't/didn't comprehend the risks involved then I question if I should feel less or more sorry for them.

Obviously they should be "bailed out" up to 250k. The question is beyond that. 250k isn't much for a company trying to make payroll

It's a sore subject that I have mixed feelings about. Companies know the risk/s. Unfortunately it's the employees who suffer - for doing nothing wrong.

Mjl wrote: ↑Sun Mar 12, 2023 12:11 pm There is supposed to be risk in business.
I don't generally think of putting money in a bank account as one of those risks

It shouldn't be.
If all of the people who keep money in banks went to all the banks tomorrow morning and tried to withdraw our entire balances not a single bank would have enough to cover their balances on the books.

zsn wrote: ↑Sun Mar 12, 2023 12:13 pm I guess it also sucks to be an employee? Is it your suggestion that before accepting a job you look at the financials of the bank which holds the money of the company which runs payroll for your employer?

We doing this just for banks or for any business that fails to be able to meet their payroll obligations?

I just don't know what the fix is. The government covering all the money doesn't make sense to me. It's not sustainable practice.

BasketballJayhawk wrote: ↑Sun Mar 12, 2023 12:19 pm

zsn wrote: ↑Sun Mar 12, 2023 12:13 pm I guess it also sucks to be an employee? Is it your suggestion that before accepting a job you look at the financials of the bank which holds the money of the company which runs payroll for your employer?

We doing this just for banks or for any business that fails to be able to meet their payroll obligations?

The company has the money to make payroll, it’s just that the company that processes the checks can’t access theirs

BasketballJayhawk wrote: ↑Sun Mar 12, 2023 12:18 pm

Mjl wrote: ↑Sun Mar 12, 2023 12:11 pm There is supposed to be risk in business.
I don't generally think of putting money in a bank account as one of those risks

It shouldn't be.
If all of the people who keep money in banks went to all the banks tomorrow morning and tried to withdraw our entire balances not a single bank would have enough to cover their balances on the books.

Exactly, that's the issue. If I'm a business owner with my cash in a non-gigantic bank, I'm pulling it out Monday.

Everyone does that and every small bank goes down, no matter how responsible they are or aren't. But not just them, but everyone who wasn't quick enough to get it out before the run is also fucked. The economic repercussions are devastating.

zsn wrote: ↑Sun Mar 12, 2023 12:33 pm

BasketballJayhawk wrote: ↑Sun Mar 12, 2023 12:19 pm

zsn wrote: ↑Sun Mar 12, 2023 12:13 pm I guess it also sucks to be an employee? Is it your suggestion that before accepting a job you look at the financials of the bank which holds the money of the company which runs payroll for your employer?

We doing this just for banks or for any business that fails to be able to meet their payroll obligations?

The company has the money to make payroll, it’s just that the company that processes the checks can’t access theirs

It's unfortunate. Mistakes were clearly made on both sides of the equation.

Like I said, this is why operating lines of credit exist. This is why companies have CFOs to manage the money and mitigate risk. There are better options and products than sitting money over the insurable limit in a deposit account for long periods of time. Most well run businesses would be moving money into and out of that type of account if that's how they paid their payroll.

Mjl wrote: ↑Sun Mar 12, 2023 12:36 pm

BasketballJayhawk wrote: ↑Sun Mar 12, 2023 12:18 pm

Mjl wrote: ↑Sun Mar 12, 2023 12:11 pm There is supposed to be risk in business.
I don't generally think of putting money in a bank account as one of those risks

It shouldn't be.
If all of the people who keep money in banks went to all the banks tomorrow morning and tried to withdraw our entire balances not a single bank would have enough to cover their balances on the books.

Exactly, that's the issue. If I'm a business owner with my cash in a non-gigantic bank, I'm pulling it out Monday.

Everyone does that and every small bank goes down, no matter how responsible they are or aren't. But not just them, but everyone who wasn't quick enough to get it out before the run is also fucked. The economic repercussions are devastating.

That's because our banking industry, both large and small banks, is a lot of smoke and mirrors. They aren't money holders. They are money sellers. They are lenders.

The big banks can't cover their balances either.


As someone who has worked at a financial institution that was close to a billion dollars in total assets, so a large community bank, we did not have very many business customers with over the 250k insurable limit sitting in a deposit account. There are better products offered and ways to store that money.

I get that... but are we willing to risk a massive depression?