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SL Xpress

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Everything posted by SL Xpress

  1. 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?
  2. 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.
  3. 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.
  4. 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.
  5. Sorry. I have made several posts with various degrees of histrionics, so I thought it was directed at me. My mistake.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  15. 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.
  16. And I believe in this case that creates market incentives that have negative consequences by centralizing capital in fewer "too big to fail" hands.
  17. 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.
  18. 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.
  19. Thank you for typing that out. One thing I read about in today's Wall Street Journal that I haven't seen referenced here except perhaps in your post "There is a big difference between equity and regulatory capital..." is that some of the incentives for SVB's investment strategy was to lower their regulatory capital requirements, even if it meant taking less than optimal investment positions. I especially appreciate you pointing out the distinction with the clientele and the speed and size with which they withdrew their funds. This may be a perfect storm, but it also seems to me to be something of a harbinger. I also feel quite certain there was a regulatory failure here that needs to be addressed, but I dread the finger pointing that goes with it. Ah well. At the very least this bank should have been under a lot more scrutiny after doubling its deposits in one year, but as you're pointing out, on paper it was quite solvent until it wasn't. Excepting the lack of liquidity that caused the downfall. Again, thanks for the post.
  20. Again, I just appreciate the civil discussion. I think the difference here is I'm not focused on the moral argument the way you are. And that's a difference I find that comes up often. It doesn't mean you're wrong and I'm right. My priority is that the financial system as a whole faces minimum disruption, whereas in your mind I get the feeling (and I'm projecting here, so my apologies if I'm getting it wrong) that you believe the financial system could use a gigantic kick in its collective balls the way it's set up right now, and if depositors at SVB lose their uninsured money that's a small step towards making it happen.
  21. Gotcha. Thank you for actually explaining what you meant. Based on this post, I'm not sure what we're disagreeing about, really.
  22. I don't know what you're trying to say. How about being less cryptic.
  23. You're right. That screams short term investment to me. What was I thinking.
  24. I don't agree with your distinction, although I appreciate it. A long term investment in T-bills by an individual investor can still be exposed to liquidity risk. Especially with higher inflation. Just because it's an extremely safe investment doesn't make it risk free. And a T-bill is still the safest investment for institutional buyers, which is why so many of them invest a portion of their portfolio into them. What they don't do is invest the humongous percentage of their assets in the lowest interest bearing bond on the planet (because of its safety). I think of institutional investors like pension funds or insurance companies, and what would happen to them if they put all their assets into T-bills. It would be a monumental disaster. Imagine having annuity obligations and you've locked yourself in to long term T-bill maturity rates with the vast majority of your assets. You'd lock yourself into a ponzi scheme using new investors to pay out interest because you were never going to have enough to cover your obligations with T-bills. That isn't exactly the situation that SVB was in because the interest amount they owed to those depositors was so low. But what they had done is locked themselves into an inevitable death as interest rates continued to rise. I guess they might have been able to grow out of it if their situation had stayed hidden, but it didn't stay hidden precisely because they were trying to raise capital to deal with it. And their incompetence was so severe it appears unlikely they had the institutional wisdom to solve it even with an infusion of capital. Mostly based on everything I've read, I'm glad they failed when they did instead of being allowed to raise more money and fuck that up, too.
  25. I've never seen a Chris Beard team push this much inside. It reminds me of Rick Barnes more than Beard. I'm with you. It's a welcome addition. Beard's teams used the post player to set blocks. However, the post player was never set up close enough to the basket, IMO, to be effective. It was obviously done on purpose, to allow the post player to potentially take his defender off the dribble, but for me it made the post play way less effective. Also, they were often given the ball too late in the shot clock. We're going really early inside right now, often times as the first option, which is what I've been craving. And Disu in particular is really coming into his own right now. Bishop, too. They've done a great job of using the pick and roll to get ridiculous matchups inside when the opponent switches, and wide open shots when they don't. And having so many guards who can initiate the offense is turning into the asset we all thought it would be in the preseason. I'm a tiny bit concerned now at what bringing Allen back means, but it's minor. The main thing I'm grateful for is the loss of Allen forced Terry to change the lineup in ways he seemed extremely reluctant to ever since he took over after Beard's suspension. It's really paying dividends.
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