Silicon Valley Bank Collapse

[Elixir]

Which should be a dispute that's an absolute slam-dunk for you to win - all you have to do is tell me what the valuable thing it represents is.

Coercive capability.
What do I win?

 

[TomC]

Which should be a dispute that's an absolute slam-dunk for you to win - all you have to do is tell me what the valuable thing it represents is.

Coercive capability.
What do I win?

Close your eyes and hold your cupped hands.
I'll show you.
Tom

 

[Politesse]

The very idea that a bank could be ""woke"....



... is proof that conservatives have no goddamned clue what that word actually means.

But, similarly, there are people who think banks are being racist when they apply the same standards to loans in declining areas as they do improving areas.
Tom

Because, of course, they are.

You don't have to hate a man personally to pick his pocket, or help someone else do the same. Favoring white customers because you'll get better returns for doing so is "objectively" justifiable, if your only concern is the profit incentive. But it also results in the creation of an institution that systematically and persistency widens the gap between "rich" and "poor" neighborhoods, stoking racial animus and quickening the break-down of society generally. Hence why those who know jack shit about racial issues usually have some questions about the merit of unfettered, laissez-faire capitalism.

 

[Bomb#20]

Biden is acting swiftly to make sure depositors will not be hurt, while Fed chair Yellen vows no big bailouts as usual for these banks or those running them into the ground.

Making sure the depositors will not be hurt, including accounts over the FDIC guaranteed $250,000, is a big bailout as usual for these banks and those running them into the ground. It's like those making government decisions never took Econ 101. "People respond to incentives. That is the whole of economics. The rest is commentary."

No, it's not a bailout. A bailout is giving financial institutions to a failing business to save it from collapse. SVB has collapsed. It's shareholders and owners lost everything.

Risk management is a chess game, and you aren't thinking several moves ahead about it. SVB took excessively risky bets, lost them, and the shareholders and owners lost what they'd gambled, but they didn't lose everything. They didn't lose their skill sets and they didn't lose their reputations, because...

The insurance fund is making the bank's customers whole.

So there's nothing -- no vocal and highly visible community of angry former customers who lost their shirts -- to stop the shareholders and bank directors from doing it all over again, setting up a new bank, taking excessively risky bets, and maybe next time making out like a bandit. Average returns go up with risk, so risky bets enable you to offer depositors higher returns. When that risk isn't passed on to the depositors -- the people who financed those risky bets -- the depositors have no incentive to accept the more moderate returns offered by more prudent banks. How are more prudent banks supposed to compete with risk-embracing banks like SVB?

It's like if you have a million dollar house and buy an insurance policy with a cut-rate company that doesn't charge actuarially sound premiums. If few houses burn down they get rich and you got a good deal. If a lot of houses burn down they go broke, but what happens to you? Do you get the quarter of a million the company has assets to pay you? Or does the government swoop in and make you whole? If the government is going to swoop in and makes you whole, what's your incentive to buy insurance from a prudent insurance company? What's to stop the people who went broke just setting up another cut-rate company and enticing all the customers away from prudent insurance companies? Next year there are few fires so they're rich again; meanwhile the other insurance companies are switching to the cut-rate model too in order to survive in the new environment where they have to compete with somebody who's getting a de facto government subsidy; and the year after that there are a lot of fires and all the companies fold.

You can't blame the customers for not knowing the risks that SVB was taking. One of the top auditing firms in the country gave SVB a clean bill of health 2 weeks before the collapse!

And derivatives made of junk bonds were rated Triple-A before the 2008 collapse. People don't understand the difference between correlated and uncorrelated risk. But customers should know not to expect a million dollars worth of insurance from paying the premiums on a $250,000 policy.

If Biden hadn't authorized this, SVB's customers, large tech companies, would not have been able to pay their vendors or pay their workers. It would have been chaos.

And the same argument was made for the 2008 bailout. And that's fine: we can weigh the merits of taking the pain now versus creating expectations and incentives that make future pain more likely; maybe this was the lesser evil. But deciding Biden made the right call doesn't change the fact that this is yet another bailout.

 

[TomC]

The very idea that a bank could be ""woke"....



... is proof that conservatives have no goddamned clue what that word actually means.

But, similarly, there are people who think banks are being racist when they apply the same standards to loans in declining areas as they do improving areas.
Tom

Because, of course, they are.

Obviously.
Using the same parameters is racist.

If you're looking for racism.
Tom

 

[Politesse]

The very idea that a bank could be ""woke"....



... is proof that conservatives have no goddamned clue what that word actually means.

But, similarly, there are people who think banks are being racist when they apply the same standards to loans in declining areas as they do improving areas.
Tom

Because, of course, they are.

Obviously.
Using the same parameters is racist.

If you're looking for racism.
Tom

Dang, you're quick. I edited my original post to clarify my point, realizing it might have been too ambiguous. Yes, I know that favoring white customers is good for your bottom line, at least in the short term. That doesn't excuse a business from the charge of participating in institutional racism, no matter how "objective" their means of getting to that point may have been. Creating "objective" incentives to favor one group over another is pretty easy to do when you already control the flow of most of the capital in the system.

But yes, a "woke" bank would quickly go out of business, especially a sketchy little shit bank like SVB. Their investors would balk, their customers would flee, and they would disappear. A bank cannot be "woke", both because a bank is not an individual, and cannot fundamentally change its way of seeing and interacting with the world. If I started a Bank of Woke tomorrow, the proccess of corrupting or destroying what I was trying to do would begin the minute after I filed the paperwork.

 

[TomC]

Yes, I know that favoring white customers is good for your bottom line, at least in the short term.

What reason have you got for believing that banks care about race or ethnicity? Banks are about profits, that's it.
Tom

 

[Politesse]

Yes, I know that favoring white customers is good for your bottom line, at least in the short term.

What reason have you got for believing that banks care about race or ethnicity? Banks are about profits, that's it.
Tom

Exactly. They cannot, and do not, act with an awareness or concern for social questions. So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

Indeed, if you think a company can have any sort of feelings, you're substantially dumber than I thought you were. People have feelings. Companies have risks and incentives. But I think you actually know that.

 

[Gospel]

Well I am saying that it doesn't represent anything of value, other than itself.

Which should be a dispute that's an absolute slam-dunk for you to win - all you have to do is tell me what the valuable thing it represents is.

Ok I'll bite. Excel skills. If I provide excel skills in exchange for a note that says 1$ , that 1$ note represents excel skills someone received in exchange for it. I can then exchange that 1$ note for a single bottle of cool refreshing whiskey. The whiskey vender then exchanges that 1$ note for two bottles from a whiskey supplier. The supplier takes said 1$ note to the bank and the bank gambles it away. The supplier can not obtain the resources to make 4 bottles of whiskey that they usual can for a $1 note. So when the merchant comes back and says, "bruh, Gospel returned and purchased two bottles of whiskey so I'd like 4 more!". The vendor can't produce 4 bottles of whiskey without the merchant paying in advance this time. Something of value was lost. And no it wasn't the piece of paper that says 1$ it was what that piece of paper represented.

Sure currency can be anything from human testicles to sand on the beach. And it can represent anything of value to us (that's the sole purpose). However messing around with an agreed upon form of trade (as I've explained above) has a direct impact on things of value because..... That 1$ note represented that thing of value. Monetary systems are just glorified bartering systems that are improved to make bartering less cumbersome.

Maybe some day if humans don't kill ourselves first, bartering will become obsolete right along with these gambling with values that aren't yours ass banks.

 

[TomC]

Exactly. They cannot, and do not, act with an awareness or concern for social questions. So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

Similarly, they do not favor white customers.

50 years ago they sure as hell did. I was around then, barely. But

Yes, I know that favoring white customers is good for your bottom line, at least in the short term.

is flat out false.
It isn't good for your bottom line, equal treatment is good for your bottom line. Has been for decades.

Pretending that a bank drawing lines around areas of declining property values is any way similar to redlining is lying to yourself. The worst kind of fraud.
Tom

 

[Oleg]

Pretending that a bank drawing lines around areas of declining property values is any way similar to redlining is lying to yourself.

No one seems to care when these areas are also devoid of Apple stores.

 

[TSwizzle]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

 

[Politesse]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

Yes, spouting bullshit about how your business is really a charity in disguise is good for business.

Do you believe that Bill Gates, the McDonalds corporation, and the World Bank are all "woke", since they likewise claim to be a boon to the poor?

 

[Oleg]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

Woke just means anti-competency/anti-merit. It’s the same irrational philosophy that wants to abolish the SAT and other standards. For “equity.” It’s the cornerstone of idiocracy.

 

[TSwizzle]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

Yes, spouting bullshit about how your business is really a charity in disguise is good for business.

Apparently not, they just went tits up.

 

[ZiprHead]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

Woke just means anti-competency/anti-merit. It’s the same irrational philosophy that wants to abolish the SAT and other standards. For “equity.” It’s the cornerstone of idiocracy.

Will I find that in the dictionary?

 

[Politesse]

Apparently not, they just went tits up.

They certainly did go tits up. But not because people read their "about" page and were worried about there being too much wokeness. SVB went tits up because they invested in the wrong tech stocks at the wrong moment, and because interest rates are up as a result of a public outcry over "inflation", and because investors are alarmist morons.

 

[Oleg]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

Woke just means anti-competency/anti-merit. It’s the same irrational philosophy that wants to abolish the SAT and other standards. For “equity.” It’s the cornerstone of idiocracy.

Will I find that in the dictionary?

Oh, right. It’s all those conservatives who want to do away with standardized tests.

 

[TSwizzle]

Apparently not, they just went tits up.

They certainly did go tits up. But not because people read their "about" page and were worried about there being too much wokeness. SVB went tits up because they invested in the wrong tech stocks at the wrong moment, and because interest rates are up as a result of a public outcry over "inflation", and because investors are alarmist morons.

Page after page of woke virtue signaling, donating money to woke causes etc. You said that bullshit was good for business. It's not, it fucked them up big time.

 

[TomC]

So they cannot become, nor ever are, "woke" to the social conditions in which they operate. I do not for a second believe that banks care about race or ethnicity - or anything else except the collective interests of the capitalists who run them- ergo my laughter at the very notion of a "woke bank".

SVB have page after page dedicated to their woke credentials;

SVB

Woke just means anti-competency/anti-merit. It’s the same irrational philosophy that wants to abolish the SAT and other standards. For “equity.” It’s the cornerstone of idiocracy.

Will I find that in the dictionary?

The dictionary committees are too politically correct to be that clear about a word that's repurposed slang, mainly about connotations.

You probably won't find dictionaries explaining that Affirmative Action is fundamentally systematic racism either.
Oh well.
Tom