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Comment by chewz | Hacker News Reader

Op is not bitter but realistic... Deposits are insured up to 250 thousand. Above they do incur risk..

Both you, op and others are being ignorant on this. Insurance payment or bailout is external money, this is making depositors whole using the bank's assets, not FDIC or government money. Tax payers are not making anyone whole as I understand yellen's proposal.

But this is literally what was going to happen as soon as the FDIC moved in. If that's all they want, why all the extra noise?

Because there are tons of people, including in this very thread, who are confused and calling this a bailout.

Nope. YC and other investors are explicitly asking for something beyond the normal process - no possible haircuts, no delays, $10M guaranteed, whatever. That can't be covered just by SVB assets. (It can be mostly covered. But that's not what they're begging for.)

And that's without getting into the question of whether they should be allowed to still reap the rewards of being a customer of a risk-taking bank for years before the event.

The solvency gap is minuscule and there are known buyers lining up. They will pay a premium to acquire the business of 40k companies (and whatever is left of the brand) and that capital (along with the assets) is ensuring creditors are made whole while shareholders get wiped. There is no bailout; people just seem to project 2007 onto a completely different situation.

From your mouth to god's ears, but this isn't what Tan, Cuban, Sacks, etc. have been asking for. They want a 100% commitment from the government.

Yes, the way I read this request (and Yelen’s response) the government’s “commitment” is meant to provide a floor for private offers so as to immediately address concerns, not as a primary path forward.

What investors are clamoring for and what the government has announced are two different things.

Please keep this subthread's context in mind - it starts with

> The only thing anyone is asking for...

And my comment is about what those people are asking for. They're claiming they're not asking for a bailout, while asking for a bailout. They are confused, or lying, or both.

Fair enough.

When the government has to step in and use money to back things up, that’s a bailout. “Making depositors whole” can only be accomplished if the assets owned by SVB are bought for more than their market value, where the government is on the hook for the delta. That’s a bailout.

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