Silicon Valley Bank Collapse

[bilby]

What's the fixed rate at which Excel skills are convertible to dollars? Surely it changes with every transaction.

There is no fixed rate. 1 is a value, 2 is a value 3 is a value. People value things arbitrarily. That doesn't denote NO VALUE as you seem to be insinuating.

We are talking about currency and whether or not it has a value right? Not whether or not it has a fixed rate.

We are talking about your claim:
"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

This claim is false. The only thing of value that is represented by a dollar is a dollar.

How that translates to "something of value (which is not the currency itself)", is that it simply doesn't. A dollar is worth any amount of anything that someone is prepared to swap for a dollar today. Which could perfectly well be nothing at all - it's entirely dependent on circumstances.

 

[Gospel]

What's the fixed rate at which Excel skills are convertible to dollars? Surely it changes with every transaction.

There is no fixed rate. 1 is a value, 2 is a value 3 is a value. People value things arbitrarily. That doesn't denote NO VALUE as you seem to be insinuating.

We are talking about currency and whether or not it has a value right? Not whether or not it has a fixed rate.

We are talking about your claim:
"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

This claim is false. The only thing of value that is represented by a dollar is a dollar.

How that translates to "something of value (which is not the currency itself)", is that it simply doesn't. A dollar is worth any amount of anything that someone is prepared to swap for a dollar today. Which could perfectly well be nothing at all - it's entirely dependent on circumstances.

Give me a real world example of currency as defined by the dictionary of your choice showing the below statement to be false?

"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

I'll try my best to clarify the parenthesized statement.

The very nature of currency is to represent something of value other than the currency itself. For example gold was used as currency because of its rarity as well as it being hard to duplicate. You seem to have a notion that the recent "gold standard" The US was based on (& Nixon nixed) was because of gold itself having value when in fact it being a currency dates back to ancient civilizations. Gold was used in the same way paper currency and digital currency is being used today. To trade something of value by means other than direct bartering using an item that is not easily duplicated/reproduced.

 

[bilby]

What's the fixed rate at which Excel skills are convertible to dollars? Surely it changes with every transaction.

There is no fixed rate. 1 is a value, 2 is a value 3 is a value. People value things arbitrarily. That doesn't denote NO VALUE as you seem to be insinuating.

We are talking about currency and whether or not it has a value right? Not whether or not it has a fixed rate.

We are talking about your claim:
"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

This claim is false. The only thing of value that is represented by a dollar is a dollar.

How that translates to "something of value (which is not the currency itself)", is that it simply doesn't. A dollar is worth any amount of anything that someone is prepared to swap for a dollar today. Which could perfectly well be nothing at all - it's entirely dependent on circumstances.

Give me a real world example of currency as defined by the dictionary of your choice showing the below statement to be false?

"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

I'll try my best to clarify the parenthesized statement.

The very nature of currency is to represent something of value other than the currency itself. For example gold was used as currency because of its rarity as well as it being hard to duplicate. You seem to have a notion that the recent "gold standard" The US was based on (& Nixon nixed) was because of gold itself having value when in fact it being a currency dates back to ancient civilizations. Gold was used in the same way paper currency and digital currency is being used today. To trade something of value by means other than direct bartering using an item that is not easily duplicated/reproduced.

Gold is NOT like the currency we use today, because the total amount of gold it's possible to have is limited, but the total amount of dollars it's possible to have is not.

A currency issuing government can run out of gold. A currency issuing government cannot run out of fiat money.

So a modern economy isn't constrained to only grow as fast as gold can be found and mined, lest it suffer a deflationary spiral. A modern economy can produce as much money as is needed to run the economy, and can be run in such a way as to make long-run deflation effectively impossible, and short-run deflation a rare result of extreme external shocks.

It's possible for a fiat currency producer to cause arbitrarily large inflation, although deliberately doing so is crazy and therefore very rare. That is, the government could in principle enact a policy that rendered the dollar worthless. They could not, even in principle, enact a policy that rendered gold worthless.

 

[Gospel]

That's all true. Regrettably it falls short of disproving;

"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

 

[Gospel]

A dollar is worth any amount of anything that someone is prepared to swap for a dollar today. Which could perfectly well be nothing at all - it's entirely dependent on circumstances.

I think an example of a society that traded for nothing at all is in order. You have the entire history of the human species to cite. Lets ignore the fact you just admitted that the dollar is worth any amount of anything that someone is prepared to swap for a dollar today. How do you swap for nothing? That's not really a swap now is it?

Edit: Folks are swapping for something they value. They use currency (no matter what that is) as a vessel to make swapping things of values more convenient.

 

[Gospel]

Ok maybe this statement will work. A grain of sand on the beach isn't worth much (if anything). However if society agreed that a grain of sand can be used as currency (AKA a medium of exchange that is widely used to buy goods and services) then that grain of sand represents whatever item (or service) of value people exchange it for.

Edit: Not because they say so either. But because when someone puts in work and that work is exchanged for a grain of sand & that grain of sand (like Sillicon Valley Bank would make it) vanished they'd have gained absolutely nothing for their work. Their work would have no value as they cannot use their work to obtain something of value now that, their grain of sand is gone.

 

[bigfield]

I think an example of a society that traded for nothing at all is in order. You have the entire history of the human species to cite. Lets ignore the fact you just admitted that the dollar is worth any amount of anything that someone is prepared to swap for a dollar today. How do you swap for nothing? That's not really a swap now is it?

That probably shouldn't be ignored, because it's the key point.

If a dollar can be exchanged for more than one amount of a commodity, then no amount of that commodity represents the value of a dollar.

Currency (digital and paper) is a replacement for the bartering system. It is so that people don't need to carry around things of value to trade but rather trade a peace of paper (or digital currency especially after the gold standard was dropped) that represents that thing of value because it's easier.

Currency is incapable of representing the thing that you traded for it, because it is simultaneously worth several different amounts of that thing.

 

[Gospel]

then no amount of that commodity represents the value of a dollar.

I never made the argument that the commodity represents the value of a dollar. In fact I made the opposite claim, the dollar represents the value of a commodity it was traded for.

Currency is incapable of representing the thing that you traded for it, because it is simultaneously worth several different amounts of that thing

Another claim I didn't make. What I actually said was currency represents something of value. There is no particular thing that it represents nor particular high or low value. The value is arbitrary. To clarify currency is exchanged for something in terms of its usefulness or desirability to someone. That something (regardless of whether it's services or materials) was handed over in exchange for currency. As such there are tangible goods (wither that be services are materials) produced for that currency.

If I paid you in currency every time you replied to my post, and then a thief robbed you of that currency, they robbed you of the time and efforts you put into writing those posts. As at that point you'd have replied for nothing while I still received your services. Something of value was lost when said currency was taken from you considering that we're still bartering but using currency as a middle man.

As you couldn't directly exchange your time replying to my posts for a book about currency, you instead exchanged your time replying to my posts for currency so that you may exchange it for that book (which you can't do now that a thief stole it).

To believe currency has no value is to ignore the fact that we've exchanged something of value. It's essentially bartering on steroids (indirect bartering). Lets say you give me currency in exchange for a bike so that I may exchange that currency for something of value. Someone robs me of that currency & I come back to you, and take back the bike. You've just lost something of value (the bike) because someone stole my currency.

 

[southernhybrid]

I'm gifting what I thought was an interesting article written by a person who had money in SVB. I might add another one how all banks invest in what the idiots on the far right are calling "woke". It's obviously being used as a political ploy and imo, they are making themselves look very stupid, while easily manipulating people who don't know any better.

Opinion | I Was an S.V.B. Client. I Blame the Venture Capitalists.

www.nytimes.com

In 2016, I started a New York-based creative agency that specialized in branded content. Among creative agencies, the trend at the time was for names that sounded like punk bands and I unfortunately chose The Insurrection. As of last week the only thing that aged worse than the name was my choice of bank: Silicon Valley Bank, which has now become the most spectacular example of a bank failure since the 2008 financial crisis. (I briefly lost access to our company’s funds, but I’m fine; my deposits were low enough to be covered by F.D.I.C. guarantees.)

There’s plenty to say about how the bank brought this about — making risky investments, issuing communications that did more to alarm than explain. But as I hit refresh on my account balance Monday morning, I was thinking of the high-prestige venture capitalists who herded start-ups like mine to S.V.B. They’re the reason the bank was so overloaded with risky clients, and they’re also the ones who panicked at the first rumors of trouble — and advised their portfolio companies to flee, initiating the bank run that brought the whole thing tumbling down.

On Saturday, an entrepreneur named Alexander Torrenegra, who was an S.B.V. depositor for two companies as well as his own personal accounts, explained what happened on Twitter. “Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to show up.” he wrote. “10 AM: some suggest getting the money out of SVB for safety. Only upside. No downside.”

The biggest supposed geniuses of Silicon Valley could have chosen to remain calm and used their influence to work with the bank and help maintain stability in the market. When S.V.B. disclosed its losses last week, it was in the process of restructuring its portfolio to include treasuries with shorter-term maturities, which would have helped. It had a commitment from General Atlantic — a top tier firm itself — to help shore up its balance sheet. The bank was doing exactly what it should have done under the circumstances, and had the depositors kept their money there, it could have stabilized as the restructured portfolio became more profitable.

Instead, people panicked. The venture capitalists chose a path that would be disastrous for their industry, freezing up capital, spooking investors and reducing the favored financial institution to rubble. Then they had the temerity to go on social media and congratulate one another for their quick thinking. Upfront Ventures’ Mark Suster, one of the few V.C.s who saw the potential damage of a bank run and publicly urged his colleagues to stay calm, told TechCrunch on Friday, “I’m seeing emails from VCs” to their limited partners “and they are forwarding these things like, ‘Aren’t I super smart?’ ”

The hubris of high-profile libertarians who howl for regulatory intervention (“Where is Powell? Where is Yellen? Stop this crisis NOW,” Tweeted Craft Ventures’ David Sacks) after previously coming out against it is all the more galling. I expect that as soon as the system stabilizes, they’ll all develop amnesia and return to insisting that government intervention destroys innovation.

They are not the only people to blame of course, but no bank is built to withstand simultaneous withdrawals from all its depositors. One S.V.B. executive told the Financial Times their biggest risk was “a very tightly knit group of investors who exhibit herd-like mentalities.” The executive continued, “doesn’t that sound like a bank run waiting to happen?”

 

[bigfield]

I never made the argument that the commodity represents the value of a dollar. In fact I made the opposite claim, the dollar represents the value of a commodity it was traded for.

Sorry, my mistake, but it doesn't change the problem.

Currency is incapable of representing the thing that you traded for it, because it is simultaneously worth several different amounts of that thing.

Another claim I didn't make. What I actually said was currency represents something of value. There is no particular thing that it represents nor particular high or low value. The value is arbitrary. To clarify currency is exchanged for something in terms of its usefulness or desirability to someone. That something (regardless of whether it's services or materials) was handed over in exchange for currency. As such there are tangible goods (wither that be services are materials) produced for that currency.

That doesn't mean that currency represents a thing of arbitrary value, it means that a unit of currency represents many things of different value at once.

 

[Gospel]

That doesn't mean that currency represents a thing of arbitrary value, it means that a unit of currency represents many things of different value at once.

This is true. I think there was a miscommunication around my use of the word arbitrary here.

Another claim I didn't make. What I actually said was currency represents something of value. There is no particular thing that it represents nor particular high or low value. The value is arbitrary. To clarify currency is exchanged for something in terms of its usefulness or desirability to someone. That something (regardless of whether it's services or materials) was handed over in exchange for currency. As such there are tangible goods (wither that be services are materials) produced for that currency.

There I meant within the arguments I'm making that I'm treating the actual value of materials and services arbitrability. I did not mean to say that the values are arbitrary. This is because I'm only discussing the relation between the value of a service and material & currency. I agree with you that values aren't fixed. The services and materials being traded aren't fixed either. My argument is that currency is connected to something of value which it was traded for (see my bike analogy). When you offer a service or materials for currency and that currency is stolen, you cannot obtain something of value in exchange for what you've offered. You lose the service and materials you valued for nothing in return.

Consider this. I want to buy a car, but the car dealer doesn't want my phone answering skills in exchange. The dealer would rather feed his family and pay his mortgage. I go get a job to offer my phone answering skills in exchange for currency. I receive the currency. To me that currency represents the value of the car (because the dealer will accept it for the car). The dealer sees the currency as food and mortgage payments. My Job sees the currency exchanged as making their clients happy.

If the currency vanishes before during or after any point of the events above, somebody loses something of value.

 

[bilby]

I never made the argument that the commodity represents the value of a dollar. In fact I made the opposite claim, the dollar represents the value of a commodity it was traded for.

If you make the argument that A=B, then you are also making the argument that B=A, even if you don't realise that that's implied by the argument you're making.

 

[bilby]

That doesn't mean that currency represents a thing of arbitrary value, it means that a unit of currency represents many things of different value at once.

This is true. I think there was a miscommunication around my use of the word arbitrary here.

Another claim I didn't make. What I actually said was currency represents something of value. There is no particular thing that it represents nor particular high or low value. The value is arbitrary. To clarify currency is exchanged for something in terms of its usefulness or desirability to someone. That something (regardless of whether it's services or materials) was handed over in exchange for currency. As such there are tangible goods (wither that be services are materials) produced for that currency.

There I meant within the arguments I'm making that I'm treating the actual value of materials and services arbitrability. I did not mean to say that the values are arbitrary. This is because I'm only discussing the relation between the value of a service and material & currency. I agree with you that values aren't fixed. The services and materials being traded aren't fixed either. My argument is that currency is connected to something of value which it was traded for (see my bike analogy). When you offer a service or materials for currency and that currency is stolen, you cannot obtain something of value in exchange for what you've offered. You lose the service and materials you valued for nothing in return.

Consider this. I want to buy a car, but the car dealer doesn't want my phone answering skills in exchange. The dealer would rather feed his family and pay his mortgage. I go get a job to offer my phone answering skills in exchange for currency. I receive the currency. To me that currency represents the value of the car (because the dealer will accept it for the car). The dealer sees the currency as food and mortgage payments. My Job sees the currency exchanged as making their clients happy.

If the currency vanishes before during or after any point of the events above, somebody loses something of value.

But the loss can only be valued in dollars, because there's no way to determine how many cars or how much food those dollars would ultimately be exchanged for.

If your argument is simply "dollars are not valueless", then that's both obviously true, and in no way certain to remain true indefinitely (ask the people of Zimbabwe).

But your actual argument was:

"I'm talking about the usage of currency and how it represents something of value (which is not the currency itself)."

But it's very clear that the only thing of value that currency represents IS the currency itself. Ask anyone in Harare; They can tell you all about the stuff they swapped (both goods and labour) for the paper that's currently hanging on a nail in their latrine - and are painfully aware that that paper turned out not to represent that valuable stuff at all. The value of the Zimbabwe dollar turns out to be identical to the value of the Monopoly dollar - and the only reason that the same isn't (yet) true of the US dollar is that people generally expect other people to continue to want US dollars.

The way currency represents value is (and is only) "the currency itself". What that's worth is up to the person setting the price in a given transaction. If the other party sets a different value on currency, and the seller values currency at a higher level than the buyer does, then a trade can take place.

 

[Cheerful Charlie]

Well, First Republic Bank just went tits up. Credit Suisse Bank is going under. Senator Mike Crapo who lead creation of legislation signed by Trump that deregulated the banks in 2018, has publically stated he sees no reason to reregulate the banks.

And Faux Noise yappers think the reason banks are failing was because the banks became "woke".

 

[Oleg]

Credit Suisse is in exquisitely manicured hands.

Credit Suisse Has A Diversity Champion in Pippa Bunce

With her shiny blond hair, nails polished pink and personality radiating pure vivaciousness, Pippa Bunce breaks like a ray of sunlight through the cloud that has been hanging over the Swiss bank.

www.finews.com

 

[ZiprHead]

Well, First Republic Bank just went tits up. Credit Suisse Bank is going under. Senator Mike Crapo who lead creation of legislation signed by Trump that deregulated the banks in 2018, has publically stated he sees no reason to reregulate the banks.

And Faux Noise yappers think the reason banks are failing was because the banks became "woke".

Credit Suisse is in exquisitely manicured hands.

Credit Suisse Has A Diversity Champion in Pippa Bunce

With her shiny blond hair, nails polished pink and personality radiating pure vivaciousness, Pippa Bunce breaks like a ray of sunlight through the cloud that has been hanging over the Swiss bank.

www.finews.com

And apparently Oleg too.

 

[Elixir]

They also earn money by giving out loans from loans they obtain themselves from the feds. They have money that materializes out of thin air at their disposal and they still can't earn enough to not fuck around with money that isn't theirs? The hell is going on round here?

They pay for that money they get from the feds.

They still have margins.

 

[Gospel]

people generally expect other people to continue to want US dollars.

And because they do that the dollar represents what? Until they stop doing that the dollar represents something of value. People counterfeit money in hopes to cheat people out of things they value.

 

[Gospel]

I never made the argument that the commodity represents the value of a dollar. In fact I made the opposite claim, the dollar represents the value of a commodity it was traded for.

If you make the argument that A=B, then you are also making the argument that B=A, even if you don't realise that that's implied by the argument you're making.

If I make the argument that water falls from the sky when it rains I'm not making the argument that rain falls up into the sky.

 

[Loren Pechtel]

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.

So we should require businesses to be racist?

I swear its like you're living on another planet entirely...

You are asking businesses to act on racial measures rather than financial ones. That's racist.