Maybe it’s not fair to compare Garry Tan to sama in this situation because Garry is the current president and sama is the former, but, it’s nice to see sama’s measured response compared to Garry’s.
Garry is shouting from the rooftops that more than a million jobs are going to be lost if the fed doesn’t immediately do something (that we all know it isn’t going to do). I wouldn’t want to be a YC startup right now, listening to Garry stoke panic.
The fdic and fed probably will do exactly what Gary Tan and many others recommended - no bailout of the company or shareholders but organise a facility so that the depositors get 100%.
They’re trying to sell it first but if that doesn’t work they don’t really have other options if they don’t want to be dealing with massive job losses and multiple bank runs next week.
That’s not necessary though unless we are to believe that a meaningful amount of money has disappeared. The FDIC offers insurance with a limit for a reason, it’s a fantasy to believe that the FDIC are going to invent a brand new standard of deposit protection because some companies might be forced to take a small haircut on their money.
The bank will re-open, companies will get most of their money, and life will carry on. The FDIC aren’t going to guarantee 100% of deposits, and shouting from the rooftops that a million jobs will be lost if the FDIC don’t do it (which they won’t) is panic-inducing for no discernible reason.
Edit: I intentionally took one for the team by embarrassing myself with a claim disproven less than an hour later. You’re welcome.
I'm not sure it's as simple as that if the fed don't guarantee deposits, but we'll see tomorrow I guess. The impression I had was these assets can't just be sold right now, today, without booking substantial losses.
Getting 90 cents on the dollar is not 'massive job losses' and most people outside of tech (SV VC tech precisely) think that the bank run risk is massively overblown.
Anyway we'll see what FDIC does. They're good at what they do.
Isn’t this quite unusual (a bank run at a large US bank)?
I agree the fdic has done this before and if they can find a buyer or communicate well it should turn out fine next week.
There is a risk of contagion though and a risk of job losses if money is delayed for say 6-12 months. I don’t think it’s unreasonable to be worried about it if you’re impacted.
Is there the opposite list? VCs like Ackman, Sacks, Calcanis, Cuban all firmly belong on it. Nothing from them but blame directed at others (biden, yellen, zelinsky, the fed, fdic, regulations – everyone but themselves), dangerous misinformation (including fake photos and videos of bank runs), and demands for an immediate government bailout. I wish someone would compile a video of how quickly these "rugged libertarians" have done a 180 on their views on regulation and "socialism" now that their own money is on the line.
Right below that there’s another bracket of “trying to tweet through it”, a lot of the folks behind the We Support An SVB Successor thing, which then, as Paul Graham did, lectured people that they can’t really do anything because their LP agreements forbid it.
Didn’t know YC was a non-profit and Paul’s involvement was a $85k salary and no carry/returns…
Push came to shove, some people stepped or are stepping up, some didn’t.
If someone created a twitter bot right now that was able to pull old hard libertarian tweets from these people and post them as replies that would be...entertaining. Hypocrite-bot?
Garry is shouting from the rooftops that more than a million jobs are going to be lost if the fed doesn’t immediately do something (that we all know it isn’t going to do). I wouldn’t want to be a YC startup right now, listening to Garry stoke panic.
Kudos to sama for being pragmatic and calm.