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Comment by bcantrill | Hacker News Reader

I have never seen such cognitive dissonance here at HN -- which I feel is really saying something! As an SVB customer who had to wire payroll on Tuesday, our perspective is naturally sharpened, but I found the lack of empathy here over the weekend galling. On the one hand, this is understandable, and Silicon Valley has done much to earn collective distrust. On the other hand, this is emphatically not all of us: many of us have been outspoken about our disagreements with the techbro culture, and have endeavored to create companies that are exemplars of what we want to see in the world. Speaking personally, I spent a lot of time DM'ing people privately who were saying absolutely outrageous things online, and almost uniformly hearing back: "No no, not you -- I love what you're doing." Well, if you want to see startups solving hard technical problems we need to have some real talk about how that has to be structured financially -- and maybe stop tweeting images of guillotines when our employees are anxious about their next paycheck?

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I understand what you mean here. I don't think it's people having no empathy for employees (or even founders) who did not act in bad faith.

We are (or were) in a situation where the entire ecosystem blew up because VCs and funds inadvertently incited a bank run.

Backstopping capital so payroll can be made obvoiusly helps out employees, founders, and companies alot, but the ones that benefit the most financially on an absolute basis are these investors.

It just feels a bit disingenous to hear an argument that "this small company out of the Midwest needs to make payroll" (which is an example I just made up, any relation to real companies are entire coincidental), while ignoring the argument that "If the government doesn't backstop this my $3B fund goes to $0".

In summary I have a lot of sympathy for employees, and even founders who were held to terms that were completed standard and seemed reasonable at the time.

I have less empathy for the group that are (were) vocally calling for bail-outs and trying to incite further panic in an effort to protect their own investments.

Edit: switch the example to avoid inadvertently matching a real life example way too closely.

Banking shouldn’t be an investment. The entire economy runs on the idea that banks are fundamentally secure. This is why banks are regulated, and why deposit insurance exists. The extension of it past $250,000 is very good

> This is why banks are regulated, and why deposit insurance exists. The extension of it past $250,000 is very good

It is not good. The insurance limits goes hand in hand with regulations. Different higher insurance limit needs to imply higher regulations and more control. This particular bank and these particular VCs lobbied heavily to have the regulations eased up. They won. These particular VCs forced their startups to have money in this bank, because it was good for them.

That is literally structural reason to not bail it all out. It is the "we are risk takers, we take profits from higher risk, but when it fails and cause damages someone else must protect our investments" strategy of VCs.

There is a huge spectrum of coverage possibilities in between 250k and “effectively infinity”

The $250K should be thought of as a minimum protection level, not a moral imperative to be a maximum protection level.

This effectively ends up being a subsidy for risky, well-connected people while being a tax on responsible, not-especially-well-connected people.

Yeah but the problem is that nobody wrote that down beforehand. It's not good to make it up as we go during emergencies. It's good to have clear rules written down ahead of time.

> It's not good to make it up as we go during emergencies

Complicated, fragile emergencies are precisely the time to consider exceptions to hard rules. After all, if all our rules were perfect, we wouldn’t have an emergency to begin with.

No, because those exceptions become the new rule, and fragile emergencies are a bad time to think through what the new rule should be. "Hard cases make bad law."

I feel the need to say this in every comment because I don't expect people to read my other comments, but I do support what was done here, assuming the private buyer solution was tried and it failed, I just also think it's bad that things are run this way.

> No, because those exceptions become the new rule

I disagree that this necessarily sets the new rule. Sure, sometimes it creates new precedents, but the necessity for an exception should go on to inform new hard set rules to prevent the necessity for exceptions in the first place. In this case, a return to a more regulated banking sector, hopefully.

This is not dissimilar from highly agile work environments that require frequent process changes to achieve the ultimate goal.

It is entirely dissimilar from highly agile work environments, because neither the federal government nor the financial system are highly agile. And even in far more agile systems, path dependency and status quo bias are very powerful.

I would make a very large wager with you that in a decade it will be unquestioned that last night was the night US bank deposits of any size became fully government backed. Maybe that's even a good thing! I dunno, I have no idea what all the downstream effects will be. But the banking system now works a different way than it did on Thursday morning, and I think it's reasonable to question the wisdom of a change this huge being made over one random weekend.

Why do you think the Fed was making things up as they went along? The rules were written down years ago and they were followed in this case.

https://www.fdic.gov/bank/historical/crisis/chap2.pdf

I think you may have missed the news last night. They just invented three brand new facilities within 72 hours of SVB collapsing. That is making it up as you go.

Yes, people make mistakes and then learn from them. Sometimes not every scenario can be anticipated. In this instance a bunch of startups got caught in this mess and 250k won't be enough for them to survive/meet their employees' payroll. I appreciate the govt stepping in and hopefully rewriting the rules based on the learnings.

"The entire economy runs on the idea that banks are fundamentally secure"

We should organize bank runs more often to verify that statement.

you say that in jest, but this event did expose that we (especially geriatric legislators) are not prepared to tackle a "social media" climate. 10 years ago neither could this Prisoners dilemma have taken place, nor could so much money have been physically drained in cash minus online banking.

And yet somehow almost every other bank didn't fail due to interest rate hikes. They seem to be prepared enough for the social media climate.

*so far.

Other banks don't have a tight nit group of customers so bank runs don't spread as quick.

Most, maybe all, banks don't have enough funds to cover a full on bank run because almost all treasuries bought over a year ago are worth less than their original value.

If people would accept 0% interest on their deposits, banking could be a fundamentally secure non-investment.

But people do like their interest... and in order for banks to take your $100 and give you back $101, well, that $1 has to come from somewhere.

It would have to be negative, as in an up front cost to the consumer.

Banks need to make money to cover operating costs at the very least. It's not that people don't accept 0% interest on deposits, it's that consumers would have to pay money to a bank to keep it operating with no risk.

Take that situation and then introduce a new bank that makes loans and therefore can pay depositors x% in interest on their deposits. If enough people decide that's a better deal than paying for total security, they'll take it.

The entire point of a low FDIC policy is to keep the small players safe while forcing the large players to make prudent decisions with their capital. Bailouts introduce moral hazard that says no big players need to scrutinize the risk adjusted returns they're getting. It's free money to those with money whole everyone else pays for it.

I mean, my Chase checking account is still only paying 0.01% interest. Many many people seem to be ok with ~0% interest on their day-to-day cash needs.

How would you run banks (or anything else for that matter) that wouldn't be an investment? A public service?

Yeah, like credit unions

Credit unions are not public services. They are essentially banks where deposits are shares. A credit union could blunder on long term loans just as well as a commercial bank.

"By all measures, credit unions fail less often than similarly sized banks. During 1980–2018, asset-weighted credit union failure rates were far lower than those of banks: 0.10% vs. 0.22%"

Source https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...

Sure, however, when a credit union takes a loss, it's worn by the depositors, not by shareholders for there are none.

I wondered the same thing. I think it's another veiled call for socialism. It would be weird (not the right word) to have government banks buying government and corporate bonds to pay a common interest rate and have no liability at all for bad investments.

As an employee of an otherwise decent company who happened to bank with SVB, I was mainly resentful of being stuck in the same boat as the latter group

Ugh yeah, I honestly find it really demotivating that I share an industry with these people. Unbelievably, they have managed to be even more insufferably disgusting than the bankers during the GFC. I would have never believed it possible.

hilariously "15 person company run by a Mom out of ohio" was literally one of the tweets going around trying to get empathy for people who had money at svb https://twitter.com/lcmichaelides/status/1634654751479541760

I looked into her company. It seems to be some sort of personal assistant service for $600/mo, $1500/quarter, or $5,900/year. And there's a page trying to convince employers to get the service for their employees so that they can be more productive at work.

Small company from Ohio? Sure. But their target demographic is definitely not small town Ohioans.

She and her husband are both Duke MBAs and ex-McKinsey.

Oh damn, maybe that’s why it came to mind.

I updated the comment because referencing an explicit example was *not* my intent.

There has been so many great reply to this comment already about how the lack of empathy is directed at the financial system itself rather than the small businesses and individuals directly impacted. The other thing that make it hard for me to have sympathy for a government backed solution is what makes these small companies and individuals anymore worthy of being 'bailed out' than any other small business that finds themselves unable to operate because of situations outside of their control or factored risk.

I don't see VC's and tech workers screaming for the government to step in when it's blue collar or service businesses failing. Thousands of small business with 5-20 people on payroll fail every year because of things outside of their direct control. I know small businesses that had to close doors because they got fucked over by things like landlords going bust and suppliers with half payments and no goods delivered collapsing. It's shitty for any small business to fail because of broader issues outside of their control, how is it fair to label this as anymore worthy of assistance?

you don't see the govt support that kick started all of the inflation and following rate hikes. I agree with the sentiment, however we can't thumb our ears to the facts that the govt HAS taken extraordinary measures to prop up the non-taxed fraction, at the expense of the middle class this decade

https://www.sba.gov/funding-programs/loans/covid-19-relief-o...

The subject is wrong though, SVB isn't getting bailed out, their depositors are. At the end of the day, SVB as a bank would be no more/the ownership would be washed.

The depositor didn't do anything wrong, they had the full right to withdraw at anytime and they didn't make the decision to invest into long term illiquid low interest MBS in 2021.

> The depositor didn't do anything wrong

They did if they deposited money above insured amounts.

There are plenty of necessary reasons for business to have money in accounts above $250k. There should be no exposure here, this is the US banking system - bank deposits should be guaranteed by the entire system (not the taxpayer). Let the shareholders burn, fine... but cmon man, what does anyone get by letting depositors lose capital when placed in US banks?

> There are plenty of necessary reasons for business to have money in accounts above $250k

Sure, and they know what's insured and accept those risks.

> There should be no exposure here

Bullshit. There's a gradient here: There are some depositors who have $750k and others who have many millions. What many of them (the latter group) were doing here is simply bad financial practice. I have to do better with my personal finances. Why don't they, too? Because more people depend on them? That's pathetic, they should do better because people depend on them.

And let's not pretend like they don't have options. They do. The individuals (corporate officers) losing money here (hypothetically, since they're going to be made whole) are supposed to be competent leaders. They're showing the world their asses.

Many employees had all their 401k tied up in enron too.. They were heavily encouraged by the employer, and it saw great gains for years. Doesn't mean that they should ignore financial advices and diversify to reduce risk...

> bank deposits should be guaranteed by the entire system (not the taxpayer)

Where do you imagine this money ultimately comes from?

The same place that took trillions of dollars in exchange for low-yielding treasury bonds. The same place that effectively devalued said treasury bonds when they decided to rapidly raise interest rates.

do you expect a company with $100MM in the bank to bank with 4000 different banks in order to keep their cash secure and insured?

One could do that, but there's plenty of other options available to insure amounts above $250k.

I expect them to explore their options, of which there are many, varied choices.

The reason employees are anxious about their next pay checks is because of the VC-induced panic which is entirely self-serving and has not one iota to do with making payroll — that’s just a palatable hand-wavey justification for demanding government intervention because their precious points are at risk.

I have a great deal of empathy for the workers anxious about being paid, but that goes without saying, there’s nothing to discuss there. Workers are victims of the VCs who rightly deserve to be derided for their behaviour, both in this incident and more broadly in squeezing every last drop of profit from normal people.

I don’t understand what you’re asking of people on HN. Are you asking us to preface all our comments with “…not all SVB customers are leeches…”?

I also think that people here are missing the game that was played by the VCs. I have a friend working at Insight who told me that they were preparing to issue loans and further funding to portfolio companies. This of course is less ideal than having the government bail their portfolio out, but they would have had no choice. So, having shot themselves in the foot by starting a panic, they decided that the best way to avoid getting in trouble was to push the panic even further to the point that it threatened the entire economic system.

Personally, that is what I find so disgusting and that is the source of my animosity. I believe the fed ultimately chose to maximize the probability of avoiding a crisis over punishing these morons. I think that is wise but still not good.

The analogy I choose is this. Imagine there is a forest that is due for a bit of a natural fire. We should let it burn - but wait it turns out some people built and sold houses in this forest. Instead of evacuating and having these people suffer and need to relocate, we put out the fire. Since we put out this fire, these people living in a hazardous way continue to do so. Eventually a massive fire will start and kill those people and spread to other areas that it otherwise would not have. All because we decided to stop the “maintenance” fire from clearing the brush.

I Do have a lot of empathy for those impacted here, but I think people are also reasonably angry about having the costs foisted onto them. Some people struggle to entertain or express both concepts at once.

It is like having sympathy for your friend that is mugged, but being angry that when the police came, they took money from your pocket to reimburse them.

It's 0 % shocking to see the lack of empathy and schadenfreude, if you've been in H1B related discussion on this site over the years.

I came here to say this.

If you feel shocked by the lack of empathy at "You knew all along that only $250K was insured, riiiggtt??", please consider empathy when you are about to type in " You knew that H-1B isn't an immigrant visa, right?".

I respect your work, but you have to realize that what many companies were doing with their money was the financial equivalent of developing by SSHing into prod and editing a 50kloc index.php.

And when they got into trouble, they did not stop to asses their situation (possible 5-10% haircut, nbd), but went into full blown existential meltdowns. One minute crying and begging, next minute threatening. In fact, after reading too many Twitter posts of founders complaining, they don't even seem remotely aware that they can even do things differently and properly.

And let's not even get into the outrageous behavior of tech leaders like Sacks et all. This episode makes me embarrassed to be part of this industry.

There are some absolute turkeys out there, no question -- but there were/are also a lot of people who have taken pay cuts and betting it all on themselves to try to bring something innovative and important into the world. And when you say "they got into trouble", what you mean is: the bank in which they (we) are depositors was subjected to a bank run (something that no bank can survive). And yes, I believed and believe that depositors should be made whole: we -- as a group -- were not acting with avarice or recklessness. I am proud of my government and our hard-working regulators who were able to ignore the shrill caricature and see the very real lives that would been adversely affected by deposit loss.

I'm sure the whole story will come out eventually, but I think there were some better options that I really hope were seriously entertained and that this was a last resort after those didn't pan out. We probably disagree on this (and I think reasonable people can), but I think one of those better options would have been a private sale with some relatively small haircut - 50% no, 99% definitely, 95% probably, 90% maybe; it's fuzzy - to uninsured deposits. That would have been painful. But it is also painful to make up yet more ad hoc public backstops for a banking sector that reaps large profits. Theoretically they earn those profits in large part through risk management on their customers' behalf. But increasingly it is actually the federal government of the US that is actually taking on that risk.

I have a ton of empathy for everyone with business or paychecks at risk, really I do. But I also don't like continuing our march toward privatizing profits while socializing losses.

We definitely disagree, because anything less than 100% was going to result in the failure of other banks -- probably FRB among them. (It's very hard to argue that there wasn't systemic risk when Signature also failed!)

Isn't this a bit of a narrative switch? It seems like this started with empathy for founders and employees of companies with deposits at SVB, and I feel that very strongly, for all those individuals.

But then there's this whole other narrative about the banking system as a whole, and that side of this I'm much more annoyed by. It really reminds me of the financial crisis bailouts, which I found frustrating, being painted into a corner like that and forced to save the banking industry. And this is frustrating for the same reason. Which is not to say it isn't the right decision! It was the right decision in the financial crisis and I trust that it's the right one now.

But until the FDIC and Fed and Treasury clearly all came to this conclusion, I was more skeptical of this narrative, because most banks don't have such a high concentration of uninsured deposits as SVB did.

But I do trust that the regulators had more information than me about the systemic risk of this, and made the right decision, and like you said, I'm very glad we have that institutional capacity.

Why let depositors in the US banking system lose capital when there's an insurance fund covered by the banking system itself for this purpose? The investors in SVB lost everything, isn't that accountability enough? You really want businesses with payables and payroll that exceed the FDIC limit by millions to be exposed to risk for relying on the US banking system, to what end, why?

Because this isn't the purpose of that insurance fund. Its purpose is to cover insured deposits, and these are uninsured deposits.

I'm very open to ideas about how to change the program to better support businesses on the large side of small or the small side of medium. I think raising the insurance limit, maybe conditioned on payroll size or something, and thus also raising the insurance premiums, seems like an idea that makes a ton of sense.

But that wasn't the rule on Friday, and it wasn't what the premiums historically charged to banks to build up that insurance fund were priced for. And it's especially rich that banks (like SVB!) have long lobbied to keep those premiums low, and now want to benefit from suddenly switching the insurance policy to be unlimited. It's like if I constantly pushed to keep my home insurance premium low with the trade-off that they would only cover part of my losses in a fire, and then after a fire I made a big stink about how my insurance company should cover an unlimited amount of my costs to rebuild.

This is the second time in my life now that I've woken up to find that I'm being held hostage by banks essentially saying to my government "nice society you have there, it would be a shame if something were to happen to it...".

They're right, we do have to bail them out, but it's bad that this is the case.

What losses are being socialized? This is a liquidity issue that is being reconciled with short term loans, not a solvency issue being bailed out with tax dollars.

So I don't know for sure, but my intuition is that if this were a great deal with no losses, there would have been a private solution.

The socialization of the losses is the mechanism where any losses that do happen will be passed on to other banks, who will pass that on in some way. I am certainly glad it isn't taxpayer funds, but it's not a free lunch.

Your comment really amused me.

"Hold on, let me just... I'm sure there's a Good Reason around here somewhere..." - Hot Take Taylor

The onus is on the people claiming that this is a no-risk deal for the FDIC. Otherwise, seeing this as a bailout is the reasonable conclusion.

If there was no risk, JP Morgan would be willing to step in to capitalize. The fact that they won’t tells me this is a bailout.

I mean, they spent the weekend trying to find a private buyer and clearly nobody wanted it. Doesn't seem to be a reach to conclude it might not actually be a great deal for the new owners (the US government)...

> I also don't like continuing our march toward privatizing profits while socializing losses.

We're already there, aren't we?

I don't think so? Or at least I don't think there is a final end state that we were already at, and I think we are closer now than earlier today.

> [W]e -- as a group -- were not acting with avarice or recklessness.

(First off, unashamed Oxide/Bryan Cantrill fan!)

Perhaps I am misunderstanding you, but some of the depositors obviously were reckless. Circle had $3.3 billion at a single bank. Roku had $487 million.

If you're trying to say that you/Oxide did not act recklessly, maybe not, but some of the depositors obviously did.

Ask yourself, if I was your accountant/CFO/CRO and I approved keeping vast uninsured amounts in a community bank, and that bank went under (as some have), and FDIC chose to uphold the letter of the law (as sometimes it has -- I'm not miles from were one of the most important oil and gas bank failures occurred), ask yourself -- would your board allow me to keep my job? I think not.

This bailout, with a few day's hindsight, is probably an okay policy, but this industry's failure to understand why people feel this way, and to shade the truth around something depositors are not supposed to be doing, is simply terrible politics! (Goes to "Why do people hate us?! We're not the tech bros...")

How would I get this industry on the road to being likable again? Be humble -- say we (as an industry, as a company) made a mistake, thank the feds and the people of the US for helping your industry get back on its feet, and you personally, out, and the put your head down and get back to work. Don't you dare imply people shouldn't be resentful when you've been given a special break/bailout. Be thankful, no one was entitled to this bailout.

It's not a bailout, it's a backstop -- it's making depositors whole. There is no doubt in our mind that there would have been contagion from anything less, but even if you assume the absolute bleakest scenarios, we would have been returned 80 cents on the dollar of our deposits -- and we likely would have made up the gap in the debt that we owed the bank. (We'll go into this in a bit more detail in our Oxide and Friends on Friday.[0])

In terms of "this industry", do you mean venture-backed startups? I'm not sure what mistake you're looking for people to acknowledge; taking on venture debt? Agreeing to a (non-negotiable) covenant that required us to bank with the provider of that debt? I think it's too reductive to think of this as one mistake, but if you must: the mistake wasn't made by depositors, it was made by Congress when they rolled back key provisions of Dodd-Frank.[1] (Part of Trump's "doing a number" on Dodd-Frank.) Without that SVB would have needed to be stress tested much more than they were -- and depositors would not have been exposed at all.

[0] https://twitter.com/oxidecomputer/status/1636124354491858947

[1] https://www.nytimes.com/2018/05/22/business/congress-passes-...

>>> [W]e -- as a group -- were not acting with avarice or recklessness.

>> this industry's failure to understand why people feel this way

> In terms of "this industry", do you mean venture-backed startups? I'm not sure what mistake you're looking for people to acknowledge; taking on venture debt?

Let's not be coy. I think we all know the VCs who tried to talk this country into more bank runs this weekend (which you may have appreciated, but which the rest of the country found disgustingly selfish). You couldn't miss their pod or their constant posting in our Twitter feeds. And you, in particular, would seem to be well-adjusted enough to understand to whom I'm referring, you're talking about the same industry in this video: https://vimeo.com/190937358

> I think it's too reductive to think of this as one mistake, but if you must: the mistake wasn't made by depositors

You will not get any argument from me that deregulation had a part to play in this bank's failure. And no one is pointing fingers at Oxide for taking venture debt and/or agreeing to that covenant. Yet, most industries also don't destroy their bank out of "out of boredom and a desire for Twitter clout"[0].

I simply do understand the unwillingness to recognize that Circle and Roku were playing with fire, because sometimes community banks fail. You perhaps didn't deserve this, and you were perhaps subject to a term that was bargained for, but I thought you had chosen to discuss this issue re: the entire industry (if not here, then on Friday). The entire industry was given a break and you got lucky too, right?

I can see that the venture-backed start-up industry is feeling very embattled right now, which is unsurprising given 1) it all almost went down the tubes, and 2) you are taking shots from both the left and the right. However, this isn't as complex as you and others make it out to be -- many companies left vast sums (88% [1]) uninsured for very little reason, and were saved because FDIC went above and beyond what was required by law. Note -- which was probably a good thing for America!

The issue, political or otherwise, is acting entitled to it, and remember -- the pleas for a backstop/bailout were dripping with entitlement. At this moment, you don't have to act like you deserved a bailout/backstop, so why should you? Because the smart political/comms/marketing move is to be the first to say, "These events were almost tragic because it is tragic when any dream dies. Far too often, some in this industry have set themselves apart from the rest of America. Not today. Our government took action to stop a cataclysm for us. We will be forever thankful. We are so proud to live in a country, and among a people, who cared enough to not let the dream die. We won't forget." That may sound cheesy to you, but the alternative is "of course, it's the Rs and deregulation" and "no small business pays attention to insurance limits". Technical reasons that make a super majority of Americans want to barf up their lunch.

If you want to know why the country wants to kick you while you're down -- it's because you don't sound grateful and you should be grateful. I can hear you right now say "My company is all about heart" but you need to start sounding like it.

[0]: https://www.bloomberg.com/opinion/articles/2023-03-15/silico... [1]: https://www.pbs.org/newshour/economy/why-silicon-valley-bank...

I think our perspectives on this are just really different. To me, this is much closer to a natural disaster -- which honestly prompts a question that has been troubling me: we in the Bay Area are in a seismically active region, with fault lines running through much of our urban areas. In a seismic event, am I going to have to first apologize for "the mistake" for where I live? Is FEMA aid going to be couched as a "bailout"? Is this going to be dubbed a "broquake" whereby innocents are made to pay a price because some unsavory people are as affected as they are? If this seems far-fetched to you, it doesn't to me, which may highlight how divergent our perspectives are...

> I think our perspectives on this are just really different.

Appreciate the opportunity to converse, and I hear your perspective. I was trying let you understand why others feel very differently, if you're going to ask yourself why some may not love your industry.

> To me, this is much closer to a natural disaster

It's interesting to analyze it in this way, but this analogy runs into its some difficulties. Natural disasters are one reason why we have insurance, and subsidizing/bolstering insurance in the wrong ways often leads to moral hazard (insurance is where I believe we get the phrase). It's plainly fair to ask whether we should subsidize flood insurance in a flood plain. The benefits of FEMA disaster relief are widely shared, and are not unlimited. Private insurance pays for plenty of the costs associated with hurricanes, etc. So, this analogy is imperfect for lots of reasons, but the most salient of which is, this bank failure was in no way natural. Bank failures are simply a fact of financial life.

This isn't to say your bailout/backstop is not now a fine policy. I bet you and your employees have been through what seems like hell the last few days. And you've done amazing things at your new company over a few short years. I can fully understand how you feel this way because I might feel this way too.

But IMHO what people are desirous for in public life is less entitlement, less division, and more fellowship and public spiritedness. Values which I am almost certain you share.

> This episode makes me embarrassed to be part of this industry.

I'm feeling that more and more these days. I don't want to wake up one day and think "what have I done?".

Disliking the industry does not mean you can't find a space where you're contributing to something you believe in.

In my opinion, the industry has been downhill since FB blew up and started abusing its power, though I wasn't around for the dotcom/Microsoft era so that's just my experience.

I absolutely loathe the vast majority of large tech companies, and that's only gotten worse (especially in the last 5 years). I outright refuse to work for companies (that I percieve) that are primarily involved in data collection/privacy violations, as I'm sure a lot of developers would refuse to work on weapons systems.

That said, I'm growing more and more jaded, and wondering how best to focus my efforts. This has lead me to take jobs at smaller and smaller companies, heavily impacting my income, but at least I'm not actively working on projects I despise. I've also found myself spending a lot more time on personal or contributing to open source projects that push back on said projects I despise (largely privacy related).

Not to say everyone is in a position to do that, but I do think we should be more conscious of what we're helping to build. Focus your efforts on projects you believe in, and be willing to push back on those you do not. This is not going to solve anything, but as the crowd grows larger we'll hopefully create enough noise for others to take note.

(this is all very subjective, take my comment with a grain of salt)

Thank you for saying this. It's the perfect encapsulation of how I feel.

For most of my career (I'm 48 now), I have loved my work. But the last 10 years have been really revealing in a bad way. I don't want to build information weapons, and that's how I'm starting to feel all the time.

It's unfortunate, and I only see it getting worse, though I'm hoping there's enough of us to influence the velocity. The sentiment seems to be growing, so I'm trying to be optimistic, but it's going to be difficult when up against the resources of "big tech" (for lack of a better term).

For me it ultimately boils down to my personal morals . I am not comfortable supporting these types of companies, even if my contribution makes minimal difference (on either side). I refuse to contribute because I wouldn't be comfortable with _myself_. I hope this decision will be beneficial to more than just myself, but if it isn't I'll at least be happy knowing I did what I could to support what I believe in.

(side note, I didn't mean this to be so subjectively idealistic, but even if you completely disagree with my opinion on tech, I think the introspection and focus of attention would benefit all)

It’s really hard to participate in a system that’s so interconnected without contributing to the bad parts. Chances are, you’re using a cloud provider that belongs to one of the big cos, etc etc.

I work for a company whose product/mission I believe is positive, but with the externalities I’m beginning to doubt whether there’s really any place to contribute positively in for-profit tech.

> Disliking the industry

You also have to remember, that tech isn't an "industry". You can work at Kahn Academy which is an education non profit that is heavily enabled by technology and still really feel good about yourself.

Except you probably pay millions of dollars to AWS every year so they can build drone-strikes as a service or something.

For what it's worth, I'm thinking about getting certified as an electrician instead.

Just had this discussion with my wife yesterday. Plumber sounds fine as well.

> [svb.com] 4.50% APY on deposits

Well, my accounts don't pay as much. Are you okay refunding the extra APY you get by having your bank takes more risks for the past years?

I've seen this argument made a few times, and it's nonsense. SVB didn't fail because they paid out 4.5% APY on their money market accounts; that's pretty safe for them because they can easily earn that much from low-risk bonds and Treasuries and as I understand it that doesn't have the duration mismatch problems that affected their normal, boring, no-or-minimal-interest demand deposit accounts. (Also, I'm pretty sure people weren't earning that kind of interest for the past few years - the interest rate increases that made it possible are really recent.) It's related to the cause of their failure, but only in the sense that the fact interest rates increased so much that it was viable to offer that kind of money market account caused outflows from other accounts - it didn't particularly matter whether it was SVB or any other bank, or even potentially corporations just buying bonds directly.

> 4.5% APY on their money market accounts

It's not on their money market accounts, but regular deposits. If they didn't pay that big of an interest, they won't have been in this position now. Maybe half as bad. But, depositors did profit for this.

The account I've seen people pointing to that paid that was definitely a money market account. Also, there's an interesting chart doing the rounds on Twitter showing that during the time period they dug themselves into this mess most of the deposits held there weren't being paid interest at all: https://twitter.com/mattyglesias/status/1635431225945890816 Once again, the problem isn't that they were paying unreasonably high interest by taking risks and the customers were benefitting from this - this isn't Icesave in 2008 - it's that due to global interest rate rises people and businesses were no longer as willing to hold large amounts of money there at zero interest and they couldn't afford to pay market interest rates to everyone to keep deposits at the bank.

This is not true. 4.5% APY for deposits is still in their own website: https://www.svb.com/business-banking/business-checking

Huh? It says right there on the page you linked: "A startup money market account with a competitive APY of 4.50%". Yes, that is on the marketing page for their business checking account, but it's not the checking account that has the 4.5% interest rate.

Higher on the page:

> Free checking for your first three years¹, 4.50% annual percentage yield (APY)² on savings

Which is different from money market funds and way higher than anything out there.

I think the concern is: this time they covered every cent of deposits to prevent systemic risk from spreading.

Now, what if, I, as a senior banker, start to abuse this policy. I'm not sure how senior bankers can abuse this policy but this is the concern here. So basically, if the FED can guarantee 100% of deposits, it encourages riskier moves. Worst case my equity gets wiped out, i.e. most of my unsold compensation vaporizes but that's it.

I personally don't think the thing holding banker-bros back from risky investment strategy is fear that their depositors won't get back 100% of their deposits.

The depositors reward banker-bros for risky behavior when they bank with them. SVB paid an unusually high interest rate and part of the reason is because they were more aggressive about investing.

Well also you lose your job and presumably never work in banking again, no?

Look up the SVB execs in 2 years' time and let us know how they're doing.

I'm not sure if I'd never work in banking again. It's a brotherhood, we take care of our...friends.

that worst case sounds pretty worse? there's already inherent risks, why would anyone want that

> and maybe stop tweeting images of guillotines when our employees are anxious about their next paycheck?

This is the unfortunate outcome of just mass producing us vs them rhetoric at EVERY level of discourse. Nuance is dead.

It’s also the unfortunate outcome of no one taking moderated concerns seriously.

> I have never seen such cognitive dissonance here at HN

> ...

> maybe stop tweeting images of guillotines

You're seeing randos on Twitter tweeting shit and somehow twisting it to suggest that HN commenters are doing this? Lumping together these edgy tweets in with the HN comments, which are by and large pretty inoffensive and civil, is a bit of a reach.

I am sure it is a bit of a stressful time to be an SVB customer and maybe it's a bit jarring to see people discussing its demise in such an open and matter-of-fact way. But I'm sorry, if you don't want to see people discussing the pros and cons of bailing out your bank, do not read the comments of a submission where your bank is being bailed out.

>I have never seen such cognitive dissonance here at HN

The cognitive dissonance is that most sv startups and SVB clients are run by people with very strong right wing economic beliefs. Suddenly when they're affected they're asking for bailouts of the parent institution so that they're not affected because of "too big to fail". This is quite simply capitalism for the poor and socialism for the rich.

Yes, this is exactly my issue. Libertarianism only lasts as long as it's not your $3bil at risk. Then it becomes "oh but the government can't let ME fail."

>>many of us have been outspoken about our disagreements with the techbro culture,

If this is what you have identified as the core issue people have with Silicon Valley, then you have really really missed the mark and do not understand at all what many people, particularly in the so-called "Fly out Country" have a problem with

>>Well, if you want to see startups solving hard technical problems we need to have some real talk about how that has to be structured financially

I want to see startups build sustainable business models built around solving complex problems. Not chasing quick adoption, with the goal to be bought out by a Google, Amazon, or Atlassian

I want startups to be driven by something other than Quarterly results that the MBA's at the VC firm's demand

There are a lot of vicious and blood thirsty people on the internet. It isn't specific to you or this event. Hardly any big event goes by without calls for executions.

Asking for equal treatment of the law as it is written is hardly a blood thirsty call for execution. It’s a call for fair treatment for all. Not special handouts to favored entities.

The actions of the Fed plainly stated that the rules don’t matter. Take risks, fuck up, and no big deal. We’ll just magically save everybody.

Fair or unfair doesn't matter; it's an allocation decision and the tech industry and its workers are strategically important to the U.S. That's always the axis on which these decisions will be made.

> It’s a call for fair treatment for all.

This will definitely be the rallying cry in the upcoming political shitstorm/reenactment of "The Merchant of Venice". But it's easy to make arguments about fairness and justice when your words don't become policy and your vote is 1/435.

> ...so the U.S. banking system continues to perform its vital roles...in a manner that promotes strong and sustainable economic growth.

As Yellen and Powell insinuate, crippling a bunch of startups and making a bunch of pension funds etc. have zero returns -- all because of a monetary system failure -- is not a strategically good decision if they want stability and people to continue investing in tech.

<< As Yellen and Powell insinuate, crippling a bunch of startups and making a bunch of pension funds etc. have zero returns -- all because of a monetary system failure -- is not a strategically good decision if they want stability and people to continue investing in tech.

So it is not payroll/depositor bailout. It is wall street owner shareholders of those startups bailout. This is the reason some are mildly miffed. That and the mid-game rule change.

> tech industry and its workers are strategically important to the U.S.

I think there are a lot of people who don’t feel that this is true to the extent that you (and possibly the fed) do. When I see Calendly being valued at 3 billion dollars, I think that somewhere down the line, someone has mis-valued something. I don’t just accept whatever the market-value is as it’s true importance.

There’s a lot of tech that’s overvalued, or valued for reasons that don’t contribute to real economic growth or wellbeing. Part of the point of people’s protests here is to get people in charge to realize/admit this. Tech isn’t actually that important.

I meant strategically important according to the government.

From the 2022 NSS (https://www.whitehouse.gov/wp-content/uploads/2022/10/Biden-...)

> Technology

> Technology is central to today’s geopolitical competition and to the future of our national security, economy and democracy. U.S. and allied leadership in technology and innovation has long underpinned our economic prosperity and military strength. In the next decade, critical and emerging technologies are poised to retool economies, transform militaries, and reshape the world... our technology strategy will enable the United States and like-minded democracies to work together to pioneer new medicines that can cure diseases, increase the production of healthy foods that are sustainably grown, diversify and strengthen our manufacturing supply chains, and secure energy without reliance on fossil fuels, all while delivering new jobs and security for the American people and our allies and partners. With bipartisan support, we have launched a modern industrial strategy and already secured historic investments in clean energy, microelectronics manufacturing, research, and development, and biotechnology, and we will work with Congress to fully fund ...

> We also are doubling down on our longstanding and asymmetric strategic advantage: attracting and retaining the world’s best talent. Attracting a higher volume of global STEM talent is a priority for our national security and supply chain security, so we will aggressively implement recent visa actions and work with Congress to do more.

> These investments will enable the United States to anchor an allied techno-industrial base that will safeguard our shared security, prosperity and values.

I'm not sure Calendly is necessarily central to the articulated strategy. And I agree that most tech companies don't produce much of value at all.

But the administration seems to think the future direction for the U.S. is tech, especially energy and military tech. And it begs the question: if not tech, what else could give the U.S. an advantage over China?

> if not tech, what else could give the U.S. an advantage over China?

I think in order to have this conversation, we must distinguish tech from the silicon-valley-branded, vc-funded, risky, socially-disconnected tech that’s largely being bailed out here.

Tech as in technology can be funded by non-profit research institutions, or arms of the government, or more traditional companies that don’t make slashing regulations, anticompetitive behavior, and socializing losses their business model.

If Silicon Valley goes under, there will still be plenty of innovation.

> If Silicon Valley goes under, there will still be plenty of innovation.

Where exactly, though? Ask any big tech worker; they will assure you it's not coming from there.

> socially-disconnected... anticompetitive behavior, socializing losses, slashing regulations

Innovation does not equate to social good. But if you recontextualize the software coming out of SV away from social wrongdoings, you have

Uber -- a model for work orchestration

Netflix/YouTube/Twitch -- video streaming technology

Datadog/etc. -- software monitoring technology

No established company (besides Apple) would ever put in the investment to develop these kinds of things.

I personally dislike SV, and every new DTC marketing startup that raises $50M makes me cringe. The model imposes high social costs as you indicated. But find me another model besides venture capital that has produced similar levels of innovation without the same waste and social cost.

> Where exactly, though? Ask any big tech worker; they will assure you it's not coming from there.

Like I said, non-profit research organizations, branches of government, traditional, sustainably-run companies. The fact that Silicon Valley is boxing all of these things out of the market doesn’t prove they won’t exist. They did before anticompetitive behavior became the business model du jour and they will again.

> non-profit research organizations, branches of government, traditional, sustainably-run companies

The same problem plagues all of these models: they're hierarchical and top-heavy. Having worked at traditional companies and having considered a career in academia; there's a reason these organizations get outboxed.

Innovation requires risk and investment. How are any of these three an effective model of risk? Big companies will invest without taking risk, research organizations and academia will take risks without investing, and branches of government and political entities (in the U.S.) are famously bad at both (ex: healthcare.gov).

> The fact that Silicon Valley is boxing all of these things out of the market doesn’t prove they won’t exist. They did before anticompetitive behavior became the business model du jour

Blame anticompetitive behavior all you want, but there are widely-known systemic issues with all of these alternative structures that makes them ineffective.

> and will again

Only if you create a walled garden where they are the only competitor. Obviously the current internet model favors VCs because R+D is cheap and quick. For rocketry, semiconductors, etc. (i.e., fields which require large upfront capital investment) these alternative investment models fare better.

> Big companies will invest without taking risk

Why do we think this is? Might it be because big companies would actually have to face consequences when big, dumb risks fail?

> research organizations and academia will take risks without investing

Not sure where you get this idea

> branches of government and political entities (in the U.S.) are famously bad at both (ex: healthcare.gov)

I'm not sure if healthcare.gov is a great example, since IT for the site was almost entirely run by private contractors. Before corporate lobbying was able to handcuff essentially any public innovation effort, the government routinely funded massively successful innovation projects (civilian aviation, the internet, microchips, satellites, AI, barcodes, touch screens - including the company bought by apple, nearly all devices and drugs/vaccines used in modern medicine, list could go on forever basically).

> Blame anticompetitive behavior all you want

I will, since once again, we've seen all of the alternatives be successful without nearly as many downsides.

> the current internet model favors VCs because R+D is cheap and quick

I'm not convinced. Largely the current model wins because it sidesteps regulations and gets away with anticompetitive, antisocial behavior and risky financialization under the guise of innovation. If it was true innovation, the world wouldn't be becoming a worse place every day that SV was essentially handed the keys. Our kids wouldn't be more depressed, climate change would be addressed, public health crises would be solved. What we have is a bunch of people scrambling trying to impress upon people that they have all the answers, when they do not.

I'm also not convinced that the answer to everything lies in the internet. Nearly all of our savings has gone to funding companies that do a thing that existed, but on the internet, rather than funding real innovation.

> Nearly all of our savings has gone to funding companies that do a thing that existed, but on the internet, rather than funding real innovation.

Man, if my money was forcibly tied up in some bullshit pension fund that mainly invests in VCs, I would be pissed, too.

Investment should be controlled by the people whose money it is. Corporate 401k plans are much more flexible which is probably why we have such a difference of opinion here.

I am a public market investor only. If I had the capital and the time to diversify maybe only then would I consider private markets.

> If it was true innovation, the world wouldn't be becoming a worse place every day that SV was essentially handed the keys. Our kids wouldn't be more depressed, climate change would be addressed, public health crises would be solved

I disagree here. The world sucked in these same ways before the internet and it will continue to suck after. True innovation from the government's perspective is increasing its control of citizens and the efficiency of their labor by any means necessary.

> True innovation from the government's perspective is increasing its control of citizens and the efficiency of their labor by any means necessary.

I'd be curious how you justify this when the U.S. (largely agreed-upon to be the most corporate-friendly first-world country over the past 50 years or so) has the largest police-state, prison population, military, etc etc etc. Other economies where the government isn't essentially an arm of the corporate world are much freer. It's almost as if when governments are actually democratically elected (rather than representatives being filtered through the money primary), governments tend to represent the interests of the people.

> I'd be curious how you justify this when the U.S. (largely agreed-upon to be the most corporate-friendly first-world country over the past 50 years or so) has the largest police-state, prison population, military, etc etc etc

The U.S. has been the leader in all those lovely statistics long before tech became the biggest thing in the economy.

I think you missed my point. I simply don't believe in fetishizing "true" (and therefore "untrue") innovation. We live in a messy world. Innovation is just a culturally-loaded way to describe people optimizing things. I miss the 90s and 00s too, man.

Also I agree with you.

> I simply don't believe in fetishizing "true" (and therefore "untrue") innovation.

I don’t think there’s a hard obvious line, but if I invent a machine that can take $1 from every other American’s wallet and put it into mine I am quite comfortable calling that “untrue” innovation.

When thousands of companies have opaque versions of this business model, you notice it on a macro level

That is literally every business in history. The innovation is how they choose to get that dollar.

No some businesses do things like create value. You can take a dollar or you can sell something worth a dollar. Those are not the same

When DoorDash puts themselves as a delivery service front end for restaurants without them knowing, and then raises the prices, that is simply legally stealing money. The restaurant, on the other hand, actually sells something of value.

If they don't create value, why do people pay for it? And by your logic, isn't Google doing the same thing for website owners.

There's more nuance to these issues that you suggest. The U.S. government is investing in tech for various legitimate strategic reasons you can read about. Government bureaucracies historically fail to produce (or contract) good products for reasons you can observe by working at one (or by reading Dilbert). Many tertiary sector businesses are indeed just middlemen but still create value in a more complex way.

I get it that tech can be criticized in the way you're doing it. This discussion had been had thousands of times on this site. I have nothing to contribute besides what I already said, and even all of that had probably been said thousands of times as well.

> If they don't create value, why do people pay for it?

How much would you pay for a machine that steals a dollar out of everyone else in the world’s pocket? Maybe you’re a good person and the answer is not much but I’d guess most people would pay, say, 7 billion for it.

If you’re asking about DoorDash specifically, people pay because they think that’s the price. It still damages the restaurant’s reputation, lowers their order numbers, etc. it’s legal stealing.

People who disagreed with this comment: I would love to understand why. Is this not the line of reasoning likely to be used by government officials in the bailout/no-bailout decision?

I have no idea who you are. but i dont care: if you take risks you should have skin in the game. what empathy do you expect if you don't have any ?

Do you really want “put money in a bank account” to be a risky activity? What benefit do you see there for the economy?

Not even “put money in a bank account, but also “Am employed by a company that put money in a bank account”.

You work for a company that needs more than $250k cash to make payroll? It's your fault for assuming that risk. /sarcasm obviously

Or even work for a company that uses a company for payroll that happens to flow through such a bank.

It’s turtles all the way down.

yes omg... some banks are more dodgy than others. why didn't they keep their money at chase

> many of us have been outspoken about our disagreements with the techbro culture

This is an odd thing to read. I always thought you were one of the people that began SV techbro culture when you replied to David Miller’s technical critique of Solaris with “have you ever kissed a girl?”

Yes, you have brought this up before.[0] And as I have said before[1] -- and will presumably say for the next 26 years as well -- I very much regret that quip. (The irony is that that was dredged up in part because people very strongly disagreed with my handling of the Noordhuis incident a decade ago.) But I will stand by my assertion that I have been outspoken about my disagreements with what I have found to be problematic in modern Silicon Valley, e.g. [2][3][4].

[0] https://news.ycombinator.com/item?id=8958705

[1] https://news.ycombinator.com/item?id=9041086

[2] https://www.youtube.com/watch?v=px9OjW7GB0Q

[3] https://www.youtube.com/watch?v=0wtvQZijPzg

[4] https://www.youtube.com/watch?v=VzdVSMRu16g

>Yes, you have brought this up before.[0] And as I have said before[1] -- and will presumably say for the next 26 years as well -- I very much regret that quip.

Do you also regret this post? I'm genuinely curious.

https://web.archive.org/web/20131203011310/https://www.joyen...

https://news.ycombinator.com/item?id=6845286

So if you follow the link that you're quoting there, you'll get your answer:

That said, I do think that this is contrast to the Noordhuis incident. I know that this position is not popular here (and that I will be downvoted into oblivion), and that it's likely foolish to revisit this, but just to make clear my position: I am understanding (very understanding, given my own history) of gaffes made on the internet. The Noordhuis issue, however, was not a gaffe: it's not that he rejected the pull request (that's arguably a gaffe), it's that when he was overruled by Isaac some hours later, he unilaterally reverted Isaac's commit. (And, it must be said, sent a very nasty private note to make clear that this was no accident.) This transcended gaffe, and it became an issue of principle -- one that I feel strongly about. So what I wrote at the time was entirely honest, and it is something that I absolutely stand by -- more than ever, actually.

I wrote that in 2015, and still feel that way in 2023 -- up to and including that I feel that way more than ever. (That is, I feel more strongly about this in 2023 than I did in 2015.) The world has changed quite a bit since 2015, and I daresay that the incident wouldn't repeat itself because I really doubt that Noordhuis would repeat his actions.

Getting into a revision war is bad behaviour, but it looks like Isaac rather than Noordhuis was the first to do that.

But let’s ignore your efforts to reframe the second situation, and focus on the the thing people are critical of you for: writing a blog post about someone that doesn’t work for you stating “if he worked here he’d be fired”.

This was the second example you came to many people’s attention, the second time with an empty display of machismo.

It seems odd that that the person from “I get more girls than you” when losing a technical argument and “you’re fired” when someone doesn’t work for them - would complain about “SV tech bro” culture.

I suppose I shouldn't be surprised that we're relitigating an incident from a decade ago, but certainly noted that you disagree with the handling of the Noordhuis incident so strenuously that you are unwilling to acknowledge anything else that I've said or done in the last decade. I personally think that that itself is revealing of your own character, but I think it best to let everything here speak for itself.

I’m unaware of anything else you’ve done in the last decade outside the second incident.

> Yes, you have brought this up before.[0]

> [0] https://news.ycombinator.com/item?id=8958705

Your link shows I didn’t bring the incident up previously. Your link shows the user thristian did. I added a link to Miller’s critique of Solaris performance and Miller’s wikipedia page.

I do think it’s fitting (rather than ironic) people would bring your first incident of bullying behaviour up in light of your second, but I’ve replied about that further down the thread.

Also the original commenter added another comment saying that they actually enjoyed bcantrill's "have you even kissed a girl" remark:

"On the other hand, even as a Linux advocate I found bcantrill's post freakin' hilarious. There are very few times when the universe gives you a perfect opportunity for a snappy retort, so I can't blame him for seizing the moment. While it's probably not bcantrill's favourite memory, I think that moment deserves to be remembered and respected for its comedic value, if nothing else."

To me it sounds like he did a quick google search "bcantrill nailer site:ycombinator.com" (note: it's the top result), didn't pay too much attention to the context and guessed that you all just had a grudge and were being mean. Except he's missed that it was more nuanced and respectful than that.

> maybe stop tweeting images of guillotines when our employees are anxious about their next paycheck?

I've been watching Elon Musk, Marc Andreessen, David Sacks, Peter Thiel, Jason Calacanis and on and on rant for the past weeks/months/years about the homeless in San Francisco, how students don't deserve student loan relief etc.

Now you're finding a lack of empathy galling? These prep school scions and maladroits, mostly wafting in angel/VC parasitism suddenly do an about face and beg for a government bailout. Of course they have been paying the piper and we hear before the weekend is over that their sweetheart deposits have been bailed out by the full faith and credit of the US taxpayer.

The structure of all of this points one way, and the intentions of a handful that are "outspoken about disagreements with the techbro culture" has no effect on that.

The reckoning did not come this week but it is coming, tweeted images and all.

Did you diversify your banking?

We were required by covenant to bank exclusively with SVB as part of the venture debt line we had with them. This is a condition that is (was!) very standard and non-negotiable. This is part of what I mean about the real talk: that venture debt line was clutch for us -- and I would wager than any hard tech company that you revere has used venture debt at one time or another.

This is the problem though! And why people don't feel as much sympathy as you would like. Agreeing to those terms was not a risk-neutral thing. And now the feds have eliminated the downside of that risk, leaving only the upside. And I'm glad you were able to get a venture debt line and I'm glad your deposits are going to be whole, because I really like your business. But this kind of thing creates perverse incentives.

Edit to add: In sensitivity to your point about insufficient empathy, I want to say that I have felt personally very worried for everyone waiting to hear about their paychecks, and about whether businesses I admire would be ruined by this mistake that was not their own. I (unsurprisingly as a commenter here) have a lot of attachments to people affected by this, and I've been very nervous about everybody. But I just also feel like we should be able to take a step back from our own personal feelings and look at this dispassionately and ask: Is this actually good, broadly?

Would you take $100k in free AWS credits if it came with a covenant that forced you to run only in us-east-1? That sounds exactly like what is happening here. If you really need the AWS credits, that's fine and good, but you can expect to take a reputation hit if running only in us-east-1 brings down your servers.

I'm sure you got a really good deal on that venture debt, though. Probably much better than everyone else who offered you a line of credit, and for a good reason.

Well, first, we can't make payroll or pay vendors with AWS credits, so your analogy isn't terribly apt, but it misses the mark in a deeper way: this is more like taking that deal and then AWS deleting some fraction of your S3 objects. That is, unavailability would be in your AWS calculus, but data loss (rightfully) wouldn't be. (I can assure you that total SVB failure would have been viewed as less likely than S3 data loss as recently as a week ago.)

This scenario actually is more like unavailability. SVB has assets that cover your account at par value, but needs time to liquidate them at a decent price (or let them mature). The FDIC has that luxury. Your account would have been open (with most of your money available) on Wednesday without this action.

This isn't a Lehman scenario. Those assets are marketable and worth something. They just can't be sold too quickly. This is why the TARP program made money: the sellers needed money now, but the government could hold those assets to sell at a good time.

I'm sure you could otherwise call up your creditors and they would say, "that sucks, pay us by Friday," and life would be pretty much normal.

That is the way that neither receivership nor payroll actually work. (And we needed to wire by Tuesday -- which is kind of the point?) Now, even in the scenario, we would have made payroll -- but it would have been because heroic investors wired out of personal funds, and I know that not every startup would have been as lucky.

Surely the whole point of AWS credits is that you're paying a vendor with them.

I took a loan like that once; "sign here, don't worry about the blank spots". There was no other alternative if the job was to be done.

When i saw the form again, the blank spots had been filled in with things like "24.99% APR" and other fun things that were not as had been advertised. I knew I was gonna get shaved, going into the deal, but this turned out to be right to the bone.

I learned lessons from that experience. Hopefully y'all learn without incurring unsustainable costs. Good luck getting through this, its gotta be less than fun even if it all turns out right in the end.

That's answered I think.

I've been told by numerous people, and ChatGPT apparently, that the way to minimize your risk at a bank is to only deposit a maximum of $250K into each bank, and use different banks with 250K at each bank, to ensure that FDIC will cover each person at each bank for that limit maximum of 250k.

Empathy is completely irrelevant. You agreed to a particular financial contract, one that ended up being a mistake ex-post. Now you want to wind back the clock and pretend you agreed to a different contract, and leave other people on the hook for it.

"Well, if you want to see startups solving hard technical problems we need to have some real talk about how that has to be structured financially"

There are deep, functioning, financial markets. Private buyers were already making offers to buy uninsured deposits at a discount. The world wasn't going to implode. Equity holders and founders were going to take a haircut. That's fine, that's equity's job here. Don't try to get out of it when shit hits the fan.

Putting your series A check into a fucking bank isn’t a risky financial strategy.

Speaking of private markets, they should have bid higher. Instead the government won and will likely come out ahead with their arrangement. No taxpayer money is being spent.

Sounds like you’re just bitter about tech/biotech companies surviving?

"Putting your series A check into a fucking bank isn’t a risky financial strategy."

You still think that's true? Clearly it is a risk. And that risk can and should be managed. Even now!

There is no law that says the FDIC has to pay uninsured depositors of the next failed bank.

What if you banked with one of the last several failed banks that no one heard of or cared about?

You think no companies split their funds among several banks and short-term US treasury instruments?

Those companies didn't worry about closing this weekend.

No, storing everything in one account at one institution is a risky strategy. You're conflating what you want (something without risk), with something that fundamentally has risk anyways. You take a risk anytime you decide to do something with money, whether that's storing it under a mattress, giving you wallet to your kids, investing in a 401k, or putting money in a bank. There fundamentally is no such thing as a risk free investment when it comes to money. Even treasury bonds have risk to them, especially speaking in real terms.

You're talking about financial risk like it's physics. Consider that financial risk is a psychological tool we invented to balance human behavior and we can reshape the tool whenever we want.

If you can consider that perspective, think about the activities we want to incentivize vs disincentivize in helping us decide when we _should_ reshape that tool.

Are simple bank deposits really something we want people to feel shaky about now and in the future??

> Are simple bank deposits really something we want people to feel shaky about now and in the future??

There is a strong argument for "yes": it will cause people to consider their (now extant) alternatives and some fraction of those people will choose something else, loosening the stranglehold that retail banking has on routine business transactions.

And what are the less risky alternatives to having money in a bank? Fucking Bitcoin?

Using a narrow/full reserve bank.

The Fed has gone out of its way several times to ban full reserve and narrow banks from ever getting access to Fed reserves.

No, normal bitcoin. It doesn't take much to be less risky than "you might have all of it frozen at any time by factors wholly outside of your control".

Or Ether. Or DAI. Or USDC if that's your risk appetite (the diversification of the storage of which is abstracted away already, as you will note it has regained its peg before SVB even reopened under FDIC management). Or a lot of other choices that present themselves.

This is such a childish response. You're essentially saying to the community: "stop saying things I don't like!"

This is so aloof. People are engaging in a conversation about how to structure innovation. Many, many people don't want to see "startups solving hard technical problems." That's the nature of the guillotine images. They want a more equitable system and they want stricter vetting of what constitutes a problem worth working on.

The fact that you can't see that in the discourse -- that you instead just take personal offense despite the need in your message to claim you are sort of outlier -- is emblematic of our community's lack of self awareness, constant need for praise, and general ego. Much of the criticism being leveled right now is deserved. While you can complain about civility, you shouldn't expect that critics sentiments would not exceed your own critiques when you stand to gain by the continuation of the system.

"...they want stricter vetting of what constitutes a problem worth working on."

How should we choose the approved projects and to whom should we assign them ?

Where shall I pick up my work-book for the month ?

Who will stamp it for me ?

Same place and people as always: the venture capital firms. Now their scope and focus will just be under harsh criticism and slight duress from the treasury dept for all the assurances they've been given.

I wonder if we can still build mobile-app based dog food delivery services

I know you’re not really engaging with the argument here, but IMO I'd like to see more early capital directed by agencies that are ultimately accountable to democratic bodies. Plenty of examples at DoE

The CIA has long had a "VC" arm; I think it's inevitable that there will be climate and energy investment funds (more like agencies) directed by DoE, DoT, and whatever Department gets created when the US finally decides to tackle climate change at large.

So I think you'll certainly get your wish but it's a matter of when. Until then it will be a small amount of informal control through a sort of cronyist "you owe us now" type pressure.

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