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this is absolutely a taxpayer funded bailout... the government's money is essentially taxpayers and the Fed's money is also taxpayer money through inflation.
What if you worked for a company that chose to bank at SVB? Would you be cool with "get in line with the bankruptcy court" when you ask where's your paycheck? You really don't see the havoc this would cause for the economy? Or you prefer a law of the jungle to apply and say tough luck to those people and tell them they should have enough money to survive while waiting for the process to play out?
If people just read the actual statements out there and stopped running wild with the thoughts that this is Lehman 2.0 they would realize how insane it would be to stand by and say no to cleaning up this mess with appropriate resources. SVB was seeking $2.25 billion in capital to cover $1.8 billion in losses on the sale of government bonds and bills. The company had a market cap of over $20 billion last week! The intangible value of the business surely should be worth way more than the losses they incurred. With the luxury of time and an infinite amount of money backstopping it the assets of the bank are worth way more than the amount that will be needed for very short-term liquidity to find the deposits and assets new owners and servicers.
This facility is just common sense and should be in place anyways along with greater oversight of these regional banks. If another bank is facing a similar situation they can quietly go to the facility and borrow such capital before everyone goes and starts another bank run.
everyone is getting their money back despite being well over the FDIC insurance limits... looks like some rich people made some phone calls to their contacts in Washington DC.
Quote:
Originally Posted by Willy702
What if you worked for a company that chose to bank at SVB? Would you be cool with "get in line with the bankruptcy court" when you ask where's your paycheck?
companies go bankrupt all the time, people lose their jobs and their livelihoods, how is this any different? why are selective entities being bailed out and others are not? And if such entities pose such systemic risks to the economy then why are their activities not regulated to prevent the cause of this failure - clearly this bank was doing some sleazy things that were completely unregulated.
Nice that SVB gave out bonuses just a few hours before the crash. True, the bonuses were for work done in 2022, but try to convince the account holders that it was the right thing to do.
As someone who got screwed out of a bonus and a severance because of a company that took advantage of the Pandemic to say they couldn't pay these, I say good for these people getting their bonuses. They are out of jobs, probably going to miss getting paid out some earned PTO, maybe out some deferred compensation, and some of them probably lost a ton of paper wealth from the stock going to $0. The people most at fault for the collapse are out millions in options and stock so they most definitely are getting punished for this.
everyone is getting their money back despite being well over the FDIC insurance limits... looks like some rich people made some phone calls to their contacts in Washington DC.
companies go bankrupt all the time, people lose their jobs and their livelihoods, how is this any different? why are selective entities being bailed out and others are not? And if such entities pose such systemic risks to the economy then why are their activities not regulated to prevent the cause of this failure - clearly this bank was doing some sleazy things that were completely unregulated.
You really think losing your job is the same as going to check your bank on the 15th to find out that your paycheck is not there because of some bank closing that you never chose or did business with?
And please list the sleazy things they were doing. I'll be waiting...
Depends if the parent company of SVB ends up in Bankruptcy Court.
When the government seized control of WaMu back in 2008, its parent company ultimately filed for bankruptcy. In general, bankruptcy courts are NOT "courts of law." They are "courts of equity." The bankruptcy judge has surprising leeway in allocating assets to creditors.
Also, in general, bankruptcy courts tend to pay employees first. Employees rarely get stiffed in a bankruptcy proceeding. BUT, employee bonus formulae tend to have quantitative metrics about achieving financial goals - and in this case, there is essentially zero chance what remains of SVB will achieve its performance metrics, so the formulas for employee bonus will end up at zero or close to zero.
It is possible a receiver might argue in bankruptcy court that they need bonus money to retain talented bankers - the revenue side of the bank that did not screw up.
And the Federal Government made a profit on AIG, btw.
As someone who got screwed out of a bonus and a severance because of a company that took advantage of the Pandemic to say they couldn't pay these, I say good for these people getting their bonuses. They are out of jobs, probably going to miss getting paid out some earned PTO, maybe out some deferred compensation, and some of them probably lost a ton of paper wealth from the stock going to $0. The people most at fault for the collapse are out millions in options and stock so they most definitely are getting punished for this.
I don't see how your anecdote excuses the actions of the SVB management. CEO sold stock just days before their insolvency was announced. He knew.
Definition: Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost. It arises when both the parties have incomplete information about each other.
I have no comment whatsoever regarding this CEO's bank deposits, but I absolutely must ask this question - how is this company of hers a "tech" company?? It's a grocery delivery service for Pete's sake. Supermarkets have been delivering groceries since my grandparents were young lol. Remember the old delivery boys??? Why is this company called "tech", because you order on your cell phone? Because they have a computer system and an e-commerce site to process your order? Maybe I'm missing something, but I just don't see how anyone can call grocery delivery high technology no matter what they deliver, how they deliver it, or how it is ordered.
I have no comment whatsoever regarding this CEO's bank deposits, but I absolutely must ask this question - how is this company of hers a "tech" company?? It's a grocery delivery service for Pete's sake. Supermarkets have been delivering groceries since my grandparents were young lol. Remember the old delivery boys??? Why is this company called "tech", because you order on your cell phone? Because they have a computer system and an e-commerce site to process your order? Maybe I'm missing something, but I just don't see how anyone can call grocery delivery high technology no matter what they deliver, how they deliver it, or how it is ordered.
I don't even think this woman has a college degree and appears to be married to a guy twice her age with pictures of her botoxed face all over her social media pages. Good for her that she seems to be a hustler making money but yeah tech company and even the Rx after the name was misleading for sure.
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