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SL Xpress
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Everything posted by SL Xpress
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I'm missing an irrelevant point? Do you understand how stupid you sound?
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Are you purposefully being this dense? https://en.wikipedia.org/wiki/Baylor_University_basketball_scandal
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Actually we beat them soundly in the first half and then they beat us even worse in the second half. UH outscored Texas overall.
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I'm not sure saying Baylor was a terrible team when Scott Drew was hired quite covers the situation he inherited there.
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I'm rooting for a fun and historic end to this season. I am not rooting for Terry to fail because I want someone else as the head coach. That seems dumb and short sighted. But it would be a silver lining if Texas falls in the first or second round and that seals his fate. That's not the same as rooting against him. but it is an honest reflection of how I think he'll do as the head coach the next few years. To be honest, losing as a #2 seed in the first round sounds horrible. Please don't let that happen. I don't give a shit about silver linings. But we'll see what transpires. Regardless, this team has been a joy to watch. And Rodney Terry has been a huge part of that. I'm thankful as a fan for everyone in the basketball program who circled the wagons to help make this happen.
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@Jackson P. Neighbors has a great post on page 5 where he talks about some of the amounts involved: "What we saw yesterday should not happen. $42B deposit outflow and resultant -$958M cash position in one day is worthy of Congressional investigation in my opinion, and I have zero axes to grind. Previous posters showed the data on deposit size % which is spot on. Prudential regulators are going to have to reassess the entire playbook on liquidity management after this. Bank failures occur mostly due to liquidity, but it happens over weeks and months and quarters which gives the bank and regulators time to find buyers for assets, etc. Technology, an astute and influential client base, and a huge average relationship balance meant that this could happen with unprecedented speed." Here's an interview with a different CEO who describes her company's mad scramble between 12pm and 3pm to move all their cash above the $250k threshold somewhere else:
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I was plenty exposed. Still am. I enjoy reading about what transpired from various points of view. I was asking for a specific recommendation if you had any. I appreciate your response.
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I don't know that it is outside the scope of the failure issue. I wouldn't expect gross incompetence to be limited to one area of the business. They were obviously very good at obtaining huge deposits. It's unclear what else they were good at. What's the mechanism for holding management accountable? You mention SVB justifying the policy. Who do they end up justifying this whole thing to? Does someone end up with the Kareem Serageldin treatment?
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I guess. If you want to feel like I'm overgeneralizing and exaggerating what is being said, that's a perception on your part. I'm not going to argue you're wrong. It's your perception. But it's MY perception that people ABSOLUTELY want to see depositors lose their uninsured money. There's a righteous moral indignation involved. They were stupid. They should have known better. They're all tech bros and cancers on society. There's almost a celebration on this thread that it might occur. I don't know how it can be interpreted differently than that. I don't think this is a harbinger of a broader economic collapse, either, but I do think it sends a harmful market signal (that's only MY opinion, and I do not expect others to share it) if the depositors ended up losing their uninsured deposits. Which you and I agree they won't.
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There's a question mark there for a reason. I'm asking. I'm not a mind reader. I'm asking for clarification. If I get something wrong I appreciate being corrected. I'm asking for anyone you value that argues the position you hold as a reference to better understand where you're coming from. Google is not going to provide that. I don't think it's ever clear in the middle of a crisis what should or shouldn't be done. I've read plenty of arguments about what should or shouldn't have been done. Since we only have one course of action we can demonstrably measure, it becomes difficult to make legitimate comparisons. What I'm saying is that if nothing had been done it would have upended the global order on a bigger scale than what we saw in the 30s and 40s. A lot less would have had to be done if Lehman Brothers hadn't been allowed to just shut its doors. But of course that then creates its own issues. But that is absolutely the event that created the global freeze in the credit markets which brought the system to its knees.
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I understood it was sarcasm. My question was in reference to why anyone would think the planet is at stake here. Trey3216 answered the post was based on a Twitter feed he read, not on this thread.
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Sorry. I have made several posts with various degrees of histrionics, so I thought it was directed at me. My mistake.
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So we're on the same page regarding the definition, then. My point, and I'm sure we're on the same page here, is that such distortions are necessary. Market economies shouldn't be some kind of religion or ideal or aspiration. It's a tool. There are limited resources and we have to come up with some kind of system to disburse them. The first job should be to maintain the civilization in its current form, or there's no point. Might as well throw the baby out with the bathwater. Have a revolution or get conquered, or die out, or whatever and start over. The second job should be to reflect whatever values the civilization collectively holds. So if a society doesn't value human life relatively speaking, have rules and regulations that reflect that, but make sure there are plenty of babies being born, whatever that takes. Right now based on our rules and regulations, I'd argue we value allowing people to amass vast quantities of wealth over having some kind of equitable distribution. I don't see how that's sustainable, and since I believe job one is to maintain the civilization, something needs to be done to move that pendulum, otherwise we're going to cease to exist at some point (as a society, not as a species). I also believe we've become stratified, with measurable losses in upward mobility from one generation to the next. That's dangerous, IMO. I believe these frictions are reflected in this thread - but everywhere really. You keep telling me that no one is calling for the depositors to lose their money, but I just went to the first page of this thread and there alone are multiple posts calling for exactly that. It's repeated throughout the thread. I feel like you're gaslighting me when you claim something else. That's exactly what a lot of posters on here want. They want the depositors to lose their money above the uninsured amount. It's my opinion that's not helpful to the system, but I also don't think it matters, because like you've said, they're going to be made whole whether people want that or not.
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Can you point to me some of those very smart people? You're saying their argument is that if national governments around the world had done nothing to address the crisis, everything would have turned out fine? I've read plenty of people saying governments did too much. I don't think I've ever read anyone that I considered smart who said governments should have done nothing. Probably because they would have had to determine who should and who shouldn't have received those loans in the first place. They did freeze foreclosures, which is not the same thing I know. Ruling classes favor the rich. Newsflash at 10! If you're expecting that to change outside of some kind of violent revolution that simply puts new overlords in place, you're going to live a life of disappointment in that regard. Which doesn't mean you shouldn't do what you can to fight it. Just be somewhat realistic about what can be done. Outside of the whole overthrow thing. Nothing like chopping a few heads off of entitled rich people to change the whole dynamic.
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How is the planet at stake on this? There was a lot at stake in 2008. I don't see this as the same thing at all.
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I absolutely believe that would have been the outcome if governments didn't turn on the firehose by pouring cash into the system. The global credit markets were completely frozen. Financial institutions were no longer shifting money between one another for fear of who was going to go down next because everyone knew the underlying assets weren't worth book value. The only lender out there were the national governments. I don't believe people understand how reliant we are on economic growth for our society to function. There was a possibility that what happened in 2008 could have made the Great Depression look like Happy Time. But because it didn't go that way, we now minimize the danger we were actually in.
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Yeah, I don't have a deep well of sympathy, either. I would just like to see minimal disruption to the system as a whole. Which it looks like we're well on our way towards. There are some deep seated issues being revealed here that the government is going to have to address at other banks, and I don't pretend to know the best way to address those.
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Okay. I would argue distortions occur through greed, through speculative behavior, through the natural inefficiencies in meeting supply and demand, through emotional decisions that aren't properly valued by the market, through the natural tendency towards monopolistic enterprises, through the limitations in the mobility of labor, among many others. With government, rules and regulations by their definition create distortions in the market. Safety regulations create inefficiencies. Tax incentives create HUGE market distortions. Any rules preserving individual rights over private enterprises create market distortions. Any laws protecting the organization of labor introduces inefficiencies. Government subsidies create distortions. Implied government support creates distortions. The time and effort required to abide by government rules and regulations creates distortions. Torts create distortions. But I have a feeling we're defining the term differently.
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Okay. There's a fundamental difference between us, then. I do not believe putting the global financial system on the precipice of a potential civilization ending disaster was worth the lesson learned there. But we can agree to disagree. I do not believe the regulators would have allowed it to happen if they had understood all the consequences of their actions. I also question how many lessons were actually learned in its failure, to be quite honest.
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I don't believe SVB will exist any more. It's obviously not too big to fail. I feel quite confident the deposits left in SVB along with other assets will be sold to another banking entity relatively soon, and the depositors will be made whole based on that. I don't think the torches and pitchforks regarding how the depositors should lose all their uninsured deposits as represented in this thread are either correct, nor warranted. Nor do I feel like it will actually happen. I'm not sure exactly how we're disagreeing here.
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Because it's reality? Whether they should be or not. If you want to argue about whether any private enterprise should be too big to fail or not, that's a different discussion I don't have a lot of interest in, because that argument has already been made with a clear consensus reached after 2008. I'm not saying it's unimportant, or shouldn't be discussed. I'm saying I don't have any interest in it because an alternative outcome is not realistic.
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But that's exactly the mentality that led to Lehman Brothers shutting down. Do you feel like that was the right call? I'm not sure I've ever seen a government entity issuing regulations that didn't lead to market distortions. I'd argue it's one of the chief - and most dangerous - creators of market distortions. My argument would be market distortions are going to occur regardless. It's pretty much inherent in having a market economy. It's the government's job to ensure those market distortions do not bring down the whole system. There's also some kind of imperative in my mind to shift resources to create opportunities for upward mobility, because that is not inherent in the system, but that in itself is also a market distortion. Then there's the imperative to ensure certain goods and services are available for national security, but what those might be and at what level is open to debate.
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And I believe in this case that creates market incentives that have negative consequences by centralizing capital in fewer "too big to fail" hands.
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I assume you're aware that there's not a unified vision for what's moral and what's not. I know moral relativity is a slippery slope, and frankly government rules and regulations by definition have some kind of moral imperative to them, since they're a reflection of what we value as an overall civilization. But my chief concern is any government's tendency towards overreach. As much as anything I want a society that's functional, and that's going to look very different at one point than it does another. I do not believe making sure depositors lose their uninsured funds is the kind of moral imperative that others might. My hope is that there's room to agree to disagree but continue the conversation.
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Yes, I'm aware of that. It's what I've been saying consistently after wondering about it after the initial story broke. The analogy I made was the cop phrase, "You can beat the time, but you can't beat the ride." There's going to be some pain involved simply in having a delay, and that's going to at least generate some market correction. I can't say whether it will be enough, though. I honestly don't know how to achieve the right market incentives, though, other than more regulators coming down harder on banks that fit SVB's profile to one degree or another.
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