Valid points here Nikhil and I could not agree with you more on this topic. One thing I can't understand (as an outsider to the US financial system) is why the Govt would allow a large and important bank to collapse. So I do hope regulators and others involved figure out how to get depositers funds back to them. I do hope they will - and soon!
I am not unsympathetic to the hardship this entails for companies and individuals, on the contrary, however, we need to have a broader perspective and remember that we collectively, as a society, have decided to be a Capitalist not a Socialist society. You get the full upside (minus minimal taxes due to carried interest) and you get the full downside.
See all the homeless people on the streets of San Francisco and other cities? They are there (at least in part) because we as a society have decided not to have a strong safety net. Not for the poor and homeless, nor for Silicon Valley VCs and entrepreneurs -- that's why the government cannot guarantee that depositors will get 100% of their money back. That is not the role of government in our free-market, capitalist society, systemic arguments for the privileged notwithstanding.
The down side is obviously very unpleasant and challenging, but it is an intrinsic part of capitalism. There is no capitalism without the down side. If people and companies get bailed out every time something bad happens or somebody makes a bad decision -- i.e., do not diversify their investment or deposit -- then what is there to stop people from making bad decisions and sticking tax-payers -- i.e., each and every one of us, especially those who don't enjoy carried interest -- with all the downside?
Time for everybody in SV to dust themselves off and move on in a free-market, capitalist manner, and if the SV VCs love SVB so much -- put a consortium together, pull together a pile of money, buy SVB from the FDIC and carry on!
Never forget Schumpeter's Creative Destruction -- that is what makes Capitalism strong, however unpleasant it may feel in the moment.
On a side note, do you have any comments on the "U.S. Treasury backed accounts"
I tried not to put myself in a panic mode but honestly there are just too much info, some not close to accurate, flying around these days and it's hard to process.
Valid points here Nikhil and I could not agree with you more on this topic. One thing I can't understand (as an outsider to the US financial system) is why the Govt would allow a large and important bank to collapse. So I do hope regulators and others involved figure out how to get depositers funds back to them. I do hope they will - and soon!
Best wishes for a Happy Birthday!
Yes. And HBD fellow 1989er.
What a wild last few days..
A very clear and well thought out action plan and, fortunately, the US government is doing exactly that.
Happy Birthday Nikhil.
🤝
Happy Birthday Nikhil! Well said.
I am not unsympathetic to the hardship this entails for companies and individuals, on the contrary, however, we need to have a broader perspective and remember that we collectively, as a society, have decided to be a Capitalist not a Socialist society. You get the full upside (minus minimal taxes due to carried interest) and you get the full downside.
See all the homeless people on the streets of San Francisco and other cities? They are there (at least in part) because we as a society have decided not to have a strong safety net. Not for the poor and homeless, nor for Silicon Valley VCs and entrepreneurs -- that's why the government cannot guarantee that depositors will get 100% of their money back. That is not the role of government in our free-market, capitalist society, systemic arguments for the privileged notwithstanding.
The down side is obviously very unpleasant and challenging, but it is an intrinsic part of capitalism. There is no capitalism without the down side. If people and companies get bailed out every time something bad happens or somebody makes a bad decision -- i.e., do not diversify their investment or deposit -- then what is there to stop people from making bad decisions and sticking tax-payers -- i.e., each and every one of us, especially those who don't enjoy carried interest -- with all the downside?
Time for everybody in SV to dust themselves off and move on in a free-market, capitalist manner, and if the SV VCs love SVB so much -- put a consortium together, pull together a pile of money, buy SVB from the FDIC and carry on!
Never forget Schumpeter's Creative Destruction -- that is what makes Capitalism strong, however unpleasant it may feel in the moment.
All the best everybody!
HBD Nikhil!
On a side note, do you have any comments on the "U.S. Treasury backed accounts"
I tried not to put myself in a panic mode but honestly there are just too much info, some not close to accurate, flying around these days and it's hard to process.