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Comment by colinmorelli | Hacker News Reader

What shareholder bailout? If you’re referring to SVB, shareholders will be wiped out. Only depositors are being bailed out (/made whole).

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Everyone knew FDIC limited to $250k an account. They put more in anyway and got bailed TF out. It's a bailout of depositors who didn't hedge risk among multiple accounts. Make no mistake, it's a bailout. I'd be more OK with it if regular citizens didn't get shafted at every opportunity but the wealthy always get a pass.

Steal a $2 bag of chips, get a year in jail. Take a stupid risk on overfunding your account over FDIC insurance, the taxpayers have your back, whether they want to or not.

It's garbage.

I have no idea what you’re commenting in response to, but the parent comment had a typo that said shareholder bailout, and regardless of your opinion as to whether this was a bailout for depositors or not, it most certainly wasn’t one for shareholders. That’s all I was saying.

I know, I wasn't fussing at you, I was just ranting in general. I've been in tech since I was a little kid in 1983, and it's all gone to pot, taken over by money men corrupting the hope that it once was.

I wonder whether part of the problem is that technology has a tendency to concentrate and amplify power. For instance, I wouldn't consider Mark Zuckerberg or Bill Gates or Larry Page (to name a few) money men... and these men all have very very large egos.

If depositors split $1 million across multiple accounts, then they would be made whole with FDIC insurance for each account. If they have the same $1 million in one account, they’re still being made whole for the same amount. There’s literally no difference in the amount of money being paid back to them in either scenario.

If they had split the $1m over 4 accounts and only 1 failed, there would be no need for a bailout. It's redundancy, something every tech person learns about pretty early on. It's hedging risk, something every finance person learns about pretty early on. It's basic, fundamental stuff in two disciplines.

Fine it's an error, take your medicine. My problem is when the average Joe makes an error, they get the full force of the justice system coming down on them. Walk around the area, you'll see a bunch of them living in tents.

It seems like Im missing something.

Is it accurate to say that you are mad the system, and not tech specifically? Afterall, VCs and tech workers aren't the ones locking people up. If anything, it seems like they are softer than average on crime. When I walk the streets in the bay area I see stolen cars and when I go shopping I see people flagrantly robbing stores.

I don't like the account holder bailout either, but in reality, it has much less impact on me. The other banks will pick up the tab and I will probably see another nickel or dime in fees on my checking account.

I don't know that "bailout" is quite an accurate description of what is happening. AFAIK it isn't as if the money was/is lost; it is more of a timing issue that is being bridged.

> regular citizens didn't get shafted at every opportunity but the wealthy always get a pass.

Not in this case in my view, but generally I would agree with you. Unfortunately, this is how power works... and I don't know that any society, bar perhaps an authoritarian one with a benevolent dictator (but that is destined to fail too over time), has solved it fully or even acceptably. If we think back to the French Revolution, I think as long as the populace is mostly happy, then the powerful are able to get away with things; it is when the population is more down and out that the pitchforks are sharpened and the torches readied with fire - so the powerful have to keep that in mind, always.

>I don't know that "bailout" is quite an accurate description of what is happening. AFAIK it isn't as if the money was/is lost; it is more of a timing issue that is being bridged.

Bridging that timing issue will cost a few billion dollars in real cash, and other banks are being fined to make up the difference.

I should've realized as I wrote that that there is a real cost (time == money). Do you know whether the other banks are being compelled? Or are they doing it willingly to shoulder their own kind?

They are being compelled.

>Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

I'm assuming it is all banks and the fine will be proportional to their size.

https://home.treasury.gov/news/press-releases/jy1337

This is basically how the 250k FDIC money is covered as well. All banks have to pay insurance fees to the FDIC, and when one goes belly up, the Federal Deposit Insurance Corporation pays out. The only difference is the 250k is prepaid

typo, I meant account holder/depositor

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