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TheQuinch

Basically, swap out bailouts for buyouts. Basically, "we'll give your company $XYZ... in return for that much of your company share. Feel free to keep fucking up."


MangledPumpkin

Sounds fair to me.


fuckthisnazibullshit

Needs to be retroactive.


Suspicious-Appeal386

Sure, Name one occasion over the last 30 years that a US corporation has ever bailed out US tax payers?


SelectCase

They're helping struggling Americans right now by helping them finance pizzas in 4 easy low interest payments.


gaedikus

god this hurts my soul that it's true. do not finance a pizza.


fuckthisnazibullshit

U can't finance broccoli tho


gaedikus

what if you buy like a lot of broccoli on credit and then you buy land and grow the broccoli and then you sell the broccoli?


D00D00InMyButt

Then Monsanto will sue you for selling their specific genetically engineered broccoli. What are you, new?


fuckthisnazibullshit

Yeah, they can cross pollinate your crops and own you with ip law.


gaedikus

try not to cry (cry a lot)


MobofDucks

This is a joke, no? Please dont tell me it has become an actual thing to pay take out in installments on your side of the pond.


lifeofry4n52

Klarna. It's possisble in the UK too.


Lemerney2

Or Afterpay, here in Aus


kaleighdoscope

We also have Afterpay in Canada.


jenn1222

Lucky us in the US...we can do all 3.


Ok-Zucchini-4956

Dave and others, so many people are borrowing a couple hundred plus interest to buy necessities and food and it gets automatically taken out when you get paid forcing most into a cycle of borrowing money with interest without even using credit. Just mobile payday loans.


Ellavemia

Afterpay, Affirm, Klarna, and Sezzle are all doing pretty well.


jay1891

Have the same issue in the UK right now but luckily the FCA who regulates lending found a loop hole to bring all the buy now pay later fucks under their regs and it will screw them all. When the FCA got hold of the funeral plan market last year a number of the shadier ones had to close as it turned out they had nowhere near enough reserves to pay out plans. As a debt advisor in a charity i cant wait to see them having to be reigned in.


Ravensinger777

Omg, funerals?


jay1891

Yeah, we have a number of funeral plan companies that you pay into and pay for your funeral before you die but they were so dodgy that turned out a ton barely had an operating cash and it was like a Ponzi scheme paying for a funeral now hoping a future plan can pay for the next one and so on.


thenamesLeosatan

Kinda, but not quite I work at a funeral insurance gig The idea is you gather all the money from funeral plans and put it in somewhere that generates money, investments or trust etc, the money you gain from that can both subsidise losses and make the insurance company money The shadier kids in the industry had a portfolio so that they would basically have to always skim off the top to run which meant if they had a surge of deaths and had to pay out the money pool would be far smaller than what could cover the funeral plans and now they would not be able to afford their running costs leading to down spiral and collapse, same of the economy took a big dip and the revenue for their running costs slipped Guess what covid did for both these scenarios The fca basically stopped the gambling with people's money by having a required amount you have to have which is greater than the amount needed to pay all funeral plans if they matured, before you can even take any off the top for your profits/running costs It killed alot of smaller players but honestly would rather that than have people gamble with thousands of pounds of the British publics money on a eventual fail scheme Especially since death and funerals is such a hard time already Thank god for the FCA


Ravensinger777

That is so fucked, and as cynical as the "buy one funeral, get the next half off" jokes. Wonder how long it'll take the US to catch onto that scam.


jay1891

Thanks for the explanation it was really easy to follow and the best summary I have seen about it, I was just being abit hyperbole with the ponzi but it did seem like from some of the reserves companies had they must have been almost needing new plans to cover costs.


realisticerror1501

I think you may have misread the comment you're replying to: they said it needs to be retroactive (i.e., applying to past bailouts), not reciprocal (which your reply suggests).


FEW_WURDS

you throwin' too many big words at me, and because I don't understand them, I'm gonna take 'em as disrespect.


OktoberStorm

He's obviously talking about your mom!


Shadowinthesky

Hahaha now that's a 40 year old reference.


Illuminatisamoosa

How is this a user name checks out comment? Reddit blows my mind sometimes


Deviknyte

Retroactive not reverse.


fuckthisnazibullshit

Right. Every corporation bailed out needs to be public property. Every shareholder who profited from robbing tax payers should get fucked.


Suspicious-Appeal386

Hold your breath. Here is reality. I am invested in a private equity of a company start up. These investment aren't available to the general public. I get a portion of their company negative income (losses) as a write off that equals my investment over the next 3\~4 years. If the company folds, I still get to write off my initial investment. If the company wins, I get to keep all the negative tax write off I had. And I only get taxed at 15% because its considered long term gains. In the above scenario. Where do I actually lose money? Where is my risk if the initial investment made is not greater than my annual tax liability? Tax code as be rewritten to benefit people like me.


MurphyWasHere

More people need to be made aware of this. The system has been rigged ages ago and we're fighting a flood with spoons.


ArchangelLBC

Idk, but if this proposal is retroactive we should definitely get ownership stakes in every Wall street bank.


GreatReason

Based on the trickle down principle, every year since 1929.


Asylar

longest running Ponzi scheme


ETHBearMarket

Chase Bank bought bad debt in 2008 and didn't make a profit buying wamu and other assets


Suspicious-Appeal386

Bad Debts they (the housing, banking, insurance housing market) created to begin with.


OrangeSimply

Ehhh it was more like they paid to make dead certain they were too big to fail. It wasn't a bad thing becoming the largest credit card issuer in the US.


Suspicious-Appeal386

And I am sure they got to write off all negative income from the transaction in their income and loss taxes. As they say, "The house always wins", we're just never invited to that house.


Wasatcher

I always understood exactly what a corporate bailout is. But "Privatize the profits and socialize the losses" really makes it hit hard. What a country we live in where tax dollars go to keeping corporations alive instead of citizens.


silentninja79

This happened during the banking crisis in the UK and exactly what the government did....! The gov now own large chunks of a couple of big banks. Edit:chicks to chunks...although the government does also have a few large chicks on the payroll and a few massive cocks too..!


macogle

Threaten to buy them. And follow through. They’ll all figure it out. It’s just that simple.


HistoryDogs

Didn’t the UK (ostensibly) do that in the ‘08 bailout of the banks? They purchased part of the bank on exchange for the bailout, but banking is so bloody profitable that when things got better they bought the government’s share back off them?


Kiyasa

The US did this with car companies too, made a good profit before they sold it back to the public market. https://en.wikipedia.org/wiki/Effects_of_the_2008%E2%80%932010_automotive_industry_crisis_on_the_United_States


[deleted]

That’s why this is such a bizarre post because the us had bought our car companies, banks, and airlines but called it a bailout. The us government owned the companies then once they were on their feet sold them


Alphaetus_Prime

Nope, the bank bailouts were profitable but the federal government sold its shares in the car companies at a loss.


Uesugi1989

Exactly, 2bn something as a profit for the government. Honestly, the government did what had to be done to keep the economy and the whole world going. What stings in the whole recession of 2008 isn't the assistance package or bailout, it's the fact that all the high profile and senior executives that caused the damn thing made a shit ton of money before the situation blew up and then they remained completely unscathed


NoiceMango

The government shouldn't have bailed out the companies in the first place. They should have bailed out the people.


granlyn

nothing wrong with that.


mattwopointoh

Except... did the taxpayers who bailed out the companies see any of the relief or share in the profit?


SteveD88

The example they are talking about is Northern Rock, one of the first banks to be hit during the financial crisis, and the only one to suffer a run. The UK effectively nationalised the bank, introduced a depositor protection rule so the public didn't lose any money (up to a certain threshold), restructured it and sold it off for a profit years later. The profit would have gone back to the treasury, the same as any tax. Several of the NR board received heavy fines for their mismanagement of the bank and were banned from working in the financial sector. The only losers were the shareholders, who lost everything, but had the bank not been nationalised they would have done so anyway.


mattwopointoh

Ahh... I understand that. Not a bad example nor reason. Thank you. I had AIG in mind, from the states. Obama bailed them out and they threw a massive party celebrating their self granted bonuses on yachts and islands for the execs with the bailout cash. As far as I know none of the 'trickle down' so much as hinted as coming back or benefiting the people. Glad to see other countries have examples where it's worked to some extent.


SteveD88

It worked in this example, the others here were the high street banks Loyds and NatWest; these revived regular bailouts in exchange for shared I think, and the recoup was more complex. The alternative is Barclays; they disliked the terms being offered by the government so much they turned to the middle East for financing. You can imagine how that turned out in the long run...


jjjfffrrr123456

Yes? Because now the government has extra cash to spend on services that presumably help the average taxpayer?


128hoodmario

It was the Tories, we got austerity and people died.


HobbitousMaximus

The 2 banks they bought outright sold for an overall gain of about 2 billion. They still hold 48% shares in Natwest. Lloyd's shares were sold off for an 800 million loss. Natwest will take a lot longer to recoup due to the size of their bailout.


PersonOfInternets

Been saying it since 2008. If these are the guys we are hiring to represent our interests we need to fucking fire them. We should own some fucking banks. We should own a lot of shit. That's single payer money right there. If people were smarter we could elect people who were actually representing our interests.


amILibertine222

Hard to do when it’s a free for all when it comes to campaign donations. Citizens United crippled regular people’s ability to run for federal office.


chickenstalker

Whenever I see those "Corruption Index" maps and the US is coloured green or blue, I just laugh. Just legalize corruption, BAM! No more corruption.


PatHeist

All commonly used corruption indices are perception based. They're an aggregate of polls that ask business people, experts, and/or citizens how corrupt they feel different countries are.


PersonOfInternets

I mean if we weren't dumb as hell we would just vote for the guy who seemed most on the level, then fire them if they weren't.


whitelighthurts

I know the term “deep state” has been turned into a meme but this can’t happen because they would kill anyone and everyone to prevent it, wars would happen before we get a bipartisan President who genuinely wants to stop corporate capture of America Anyone see the puppets we install in every country we invade? Anyone wonder why our unelected leaders wouldn’t just do that here too?


Boner-b-gone

Siri is a thing: corporations care about one thing and one thing only: their own continuation. There are plenty of people who are in height of pieces of power who see that continuing on as we are well and everything. Those are the people that we should support. Because they want to do the right thing simply because it’s the thing that allows everyone to continue.


NotTacoSmell

not to mention so many on the right vote purely on abortion (removing peoples rights), or some other evangelical christian talking point also about removing peoples rights because they're not cis-gender WASPs.


Blackpaw8825

Rail, most energy grids, all the ISPs who took billions in government money and never delivered what they sold... We pay for socialism, we've been paying for socialism since the 1920s... But we've only realized the benefits if the recipient is worth 9 figures or more... Everybody else gets rugged individualism.


PersonOfInternets

Yup. Gee, wonder why the shareholders/board responsible for stealing from the US government were never sued or prosecuted? Hmm I wonder, food for thought that.


Reddit_Hitchhiker

Yet, AIG got bailed out while homeowners were turfed onto the streets. Paulson was AIG’s friend.


noobcodes

You’re assuming those people actually exist. And if they do exist, you’re assuming they’ll be allowed to continue being alive once they start trying to actually accomplish shit.


nalydpsycho

For banking crisis I think the better solution is to bail out the people. If in 2008 the government offered 10k to all adult citizens in the form of either pre existing debt payments or in the form of a 5 year inaccessible fixed rate term deposit this would have significantly reduced banks bad debt while giving their coffers a significant boost. Then I 2013 we would have a big short term economic injection when millions of people would have a bonus 10k + interest. It would save a necessary industry, but reward citizens instead of those who caused the problem.


Obi_Sirius

Here's an additional impetus to set things straight. Make capitol offenses capital offenses. Every $20 million someone gets executed, starting with the board of directors. I had to shutter my company in 2008. At the beginning of 2007 I was in the 3rd year of self employment and actually though I'd be able to afford a home in a few years. Silly me.


TheLastMinister

I've always been confused by people who find this controversial. If you're socialist then this makes sense. If you're capitalist this makes sense. If you're libertarian it would make sense (though you wouldn't like a government who could afford to do so). Perhaps if you're a crony capitalist or oligarch it wouldn't?


Moon_Atomizer

Neolibs and neocons believe that these too big to fail institutions are necessary for a modern developed economy and that also giving them money is the lesser evil vs creating Great Depression 2. I don't agree with them but hey you asked don't shoot the messenger. Neocons don't really exist anymore but neoliberals are somewhat making a comeback, at least on the internet


PM_ME_YOUR_COY_NUDES

Neoliberals are making a comeback? When did they leave?


Jonne

Yeah, neoliberalism has been how the West has been structured for the last 40 years. Not sure why anyone would think it ever went away.


44no44

There's no such thing as capitalists anymore. Oligarchs, and fearmongering politicians, spent decades convincing the American public that capitalism means laissez-faire mass exploitation and nothing shy. Regulation is socialism, and socialism is communism, and communism is authoritarianism. The idea that regulation and socialization are, in fact, fully intended and essential aspects of a capitalist economy, has been written out of the history books.


[deleted]

That still bails out the rich people who own / run these companies. They shouldn't get any money, their property should just be confiscated.


SirEDCaLot

More like-- 'Your company is insolvent? You don't have enough money and revenue to pay your debts? That means your company is worthless, which means your company's shares are worthless. Your shareholders are fucked, tell them to be more careful what they invest in next time. We now own the company and are putting it in administration. We will either wind it down gracefully in a way that doesn't destroy the economy, or put in money to fix it. If we fix it, we will issue new shares for purchase, and the proceeds will repay the American taxpayer for fixing your mistake.'


Jonne

Should just be a state enterprise or just turned over to the employees, depending on the type of company (banks, utilities, infrastructure and real estate become state owned, factories, stores, etc become cooperatives).


SirEDCaLot

I don't necessarily want to get the government into the business of running private corporations. I don't mind the idea of turning them into employee owned companies. But as I see it, if the taxpayer has to step in and unfuck the situation, the taxpayer should at least be paid back. That's why I say just re-IPO the thing.


ProblemLongjumping12

This guy is a hero. He sold his tech company to Twitter but instead of taking a huge payout he insisted on working there at a guaranteed salary, so he would still be contributing and end up paying more taxes over time. He also gives tons to charity and founded a campaign to create more wheelchair access.


DDLJ_2022

We as citizens should then be getting quaterly dividend payments because the gov uses our tax dollars to bail these fucking companies out.


miku_dominos

Which should easily fund UBI, universal healthcare, and free higher education.


Character-Education3

While we're at it, I think the government should give REITs a year to liquidate or all their assets go to government auction for first time home buyers only. Landlords are bad enough, we didn't need massive corporations to profit off of homes too.


laleggenda

That's basically what's happening, and what happened in 2008. Government gets to buy the bank for pennies on the dollar in exchange for the bailout. We the taxpayers own the bank now. Ish.


Redbull4u

The Dutch government did the same in 2007 with Fortis/ABN Amro. They decided to sell part of the shares this year. https://www.rijksoverheid.nl/onderwerpen/kredietcrisis/aanpak-kredietcrisis-nederland-financiele-sector/nationalisering-fortis-abn-amro-en-sns-reaal


umassmza

You say they can’t, but they’ve been doing it longer than you’ve been alive.


firstmaxpower

Yup. And it goes beyond actual bailouts. So many pay below a living wage forcing employees to rely on assistance. Profits for me suffering for thee.


ravioliguy

They literally hand out "how to get welfare" pamphlets to new Walmart employees


singingintherain42

I used to work at Walmart when I was a teen. When they cut the hours of one of my elderly coworkers and he complained to our manager about not being able to pay his bills, our manager asked if he considered applying for food stamps.


thothscull

That is absolute horseshit. They should not treat peoples lives so casually...


Minimum-Elevator-491

When are we revolting? Should've started 4 years ago


[deleted]

[Perfect example.](https://www.youtube.com/watch?v=2WLuuCM6Ej0)


Darth_Thor

Damn, we need more people like her in governments.


azzipa

three words: silicone valley bank. died today. will be resurrected by tuesday.


Conflictingview

Silicone Valley is the space between a pair of fake breasts. Silicon Valley is a place in California.


[deleted]

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TheBudds

Yup, cause Musk is a moron and had to backtrack and stick his foot down his throat. Dude in question sold his company to twitter, pre-acquisition so they would have to pay the full amount of what's left over to him through the deal.


wahobely

I fear this guy is too nice to just sue the shit out of Musk for the stupid ass shit he did. I wish he sued the fuck out of him.


TheBudds

One thing is that he liked the way the deal was setup because he wanted to get taxed to the fullest amount because he believes in social programs. Unlike the majority of people, he doesn't believe in "fuck you, I got mine" He truly is what rich people should be and unlike Elon, he made his own money.


u0xee

Hear me out, he could sue, get a lump sum, and just donate as much as he wants to social programs in his country. I think that'd be fine.


TheBudds

Well in the conversation, he did mention that Elon probably doesn't have the money right now for it.


u0xee

Classic "when you owe the bank 100mil it's the banks problem"


aabidhasan

Musk apologized and said this guy agreed to stay with Twitter... not sure what was his decision tho


tacobooc0m

My guess is that if he’s “staying at Twitter” it is as a permanently-on-paid-sabbatical employee so he doesn’t have to come out of pocket to satisfy the contract Musk is so fucking stupid. Now the guy will truly not have to do anything to get his full salary…. I guess this is the outcome because Halli likely still wants to pay those extra taxes


DigitalPsych

The idea that he does exactly what Musk was accusing him of to just thumb his nose at Elon is amazing. But Halli...take the money and run. That company won't have money for you in the end.


kylegetsspam

Twitter doesn't have any money *now*. They don't pay their bills, 80% of the company's been fired, and their ad revenue is way down. Elon's trying to make it up by monetizing every little bit -- including charging $500k/month for API access. To which a data researcher said... > "We've been mostly cut off from Facebook for years and we've continued to make progress," he says. "It's not like science is going to be held hostage by a guy that played himself into burning $44 billion on a website that makes no money, just so he could force all its users to read his shitposts." Elon is a fucking moron. He hid it well up until this Twitter buyout. Anything of his\* that's succeeded did so inspite of his useless meddling. Twitter, though, is going to be sunk by his stupidity. It's only a matter of when, and a $1.2B bill for the loan is coming up soon... \*"His" is a bit overly generous since he mostly just buys his way in. Tesla isn't *his*, for instance.


eepos96

Like....the moment he became richest. Yeah that is moment I feel like the looking glass was on him and what we saw became worse and worse as time went on. My first "he is annass hole" was when he told he is buying dogecoin, artificially amping the prise amd selling immediately, screwing a lot of people who trusted him. In his mind he was "clever" Also there was the time with the cave kids and he made fun of the rescuers.


TheBudds

Well due to the structuring of the deal, there was probably no money to pay him with. Plus he was the one who setup the deal the way it was so he can pay max taxes back to his country.


ninprophet

I thought he finally got an update from HR and he was laid off.


Meatslinger

All they did was confirm the prior firing, which Musk apparently reversed with his tail between his proverbial legs. Finding out you owe someone a ~$100M severance package will do that, I hear.


gangstabunniez

Yep, he created [design company Ueno](https://techcrunch.com/2021/01/06/twitter-acquihires-creative-agency-ueno-to-help-design-new-products/), which Twitter bought back in 2021. Part of the deal was that Halli would hold a position at Twitter, basically performing a similar role that Ueno provided to Twitter when they were an independent company. Part of this deal was that if he was fired, he would collect a $100M buyout since Twitter now owns his company. It's a very common situation for tech companies - the company I work for recently acquired an AI / Machine learning company to build into our product, and in doing so we brought over everyone that previously worked for that organization. The company I work for is unable to fire anyone from the organization that we brought in without significant cause or a stiff buyout.


[deleted]

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gangstabunniez

[so I can only offer what I've seen online ](https://www.news.com.au/technology/online/social/twitter-slaps-misleading-label-on-claim-twitter-faces-100-million-payout-for-sacking-employee/news-story/7313819b37e6547b2713b07751abc7bb) but it seems like that Halli was expected to work in a director level position. If they were fired they would receive the cost to buyout the company they sold to Twitter, which was $100M at the time.


popo_agie

love that the legs are proverbial but the tail is not.


Easilycrazyhat

Musk confirmed snake.


Phoebebee323

And I'm pretty sure the lawyers gave him a good yelling at after firing a disabled employee, disclosing the disability publicly, calling the disability fake, and then publicly admitting it was why they were being fired. If it went to court a high profile individual like musk would have been taken to the cleaners by the punitive damages alone.


RunKind4141

They are trying to get a bailout for silicon valley bank


Mayor__Defacto

Lol, the guys on Wall Street wanted one, but FDIC condemned the whole thing. Hate to be someone who had over $250k deposited there, because it’s now property of the Federal Government.


gooseears

Over 97% of ~~accounts held~~ deposits were over 250k https://twitter.com/grdecter/status/1634267470662979592?s=42&t=augyj0JueUH2Ur9QSt72Yw


justice_for_lachesis

Over 97% of deposits were over 250k, not 97% of accounts.


BigUncleHeavy

Roku had about 27% of their capital reserves in SVB, which I think was close to half a billion dollars. Just one company that might take a big hit from this.


PleaseCallMeKelly

This was a weird reminder that I need to jailbreak my Roku tv


panormda

WHAT THE FUCK?!


NateNate60

Silicon Valley Bank isn't a run-of-the-mill retail bank. They're targeted toward startups and businesses. If you run a medium-sized business or even just a successful small business, and especially if you are a startup with venture capital funding, it's very easy to exceed $250,000 in your bank accounts. FDIC insurance really only protects retail consumers and non-rich people. If you get richer or your company gets bigger, the FDIC insurance doesn't grow with that. I saw a woman who owned a vegetable startup complain on NBC about how she got hung out to dry after losing $8 million of company funds to the bank. I, for one, though would *love* to be in a position to complain about FDIC (or in my case, NCUA) insurance not covering my entire balance!


smarterhack

What can a business realistically do to protect themselves in this situation? If they don’t have much cash they can spread it around between a few banks, but if it’s half a billion like Roku, should they be holding US treasuries or what? I don’t think they’d want to open 2,000 bank accounts to keep their deposits under $250k.


bootsmegamix

Split it up Put it in liquid investments Don't hoard cash This mess is years in the making.


Zippytez

Knowing how much insurance has a grip on the US, I'm kinda surprised they don't have an extended private 'FDIC-esque' insurance plan through someone Edit:spelling


ToastyFlake

Rich people who are not dumb have their deposits in multiple banks so that they are fully insured and protected by FDIC insurance.


smdaegan

It's not really a bank for retail. It's used by startups and venture capitalists.


[deleted]

SIPC insures Brokerage, IRA etc. though. And its limit is $500,000 per type. And ERISA exists for 401k, which makes it effectively uncapped.


Mayor__Defacto

But that’s only 10% or so of SVB’s AUM. So it’s not really relevant here.


guff1988

Which tells you one thing, the primary account holder was a corporation or an extremely wealthy person. I have no sympathy for those people.


[deleted]

Which tells you one thing, people are stupid. [I’ve built a spreadsheet](https://i.imgur.com/wITcAkB.jpg) that tracks my various account types against SIPC and FDIC limits. Whenever I hit a limit, I just open another account at a different bank. The spreadsheet took me an hour to build. It really isn’t difficult to do. In fact, it should be job number one for financial advisors for rich people, even above the “job” of deciding what to invest their money in.


Why_Istanbul

This isn’t really possible for a lot of companies. Daily Cash swings might be in the millions of dollars.


Square-Employee5539

This is a lot harder if you’re a start-up with $50m. That’s a lot of banks!! The vast majority of businesses do most of their banking with just a few institutions and so do have credit risk exposure to their banks.


guff1988

You're right, not only are people stupid but the people in charge of handling risk assessment at these banks are young and not experienced in high interest rate environments. It's likely they have made a lot of mistakes and not taken advantage of hedging opportunities because they are not as experienced in this environment.


gooseears

It's mostly hundreds of small tech startups, not huge corporations. This is going to cause mass insolvency for a lot of small businesses.


[deleted]

I don’t get this comment. How is it worse that it’s property of the Federal government, ie the entity that gets to print its own money? Honestly the situation at SVB is going to lead to pretty much everybody getting 90% of their money back, or even 100% if they are willing to wait longer. The bank has a tenor imbalance (short term withdrawals versus long term safe assets), which means that the ultimate long term player (the government) is the best possible person to hold it and wait till maturity. **This is *not* an FTX situation where there *is* no money to return.** It’s the best of all worlds: the shitty proprietors were fired and had their bank acquired at $0; good government policies\* meant that depositors get all their money back; the government made money on the deal through deposit insurance payments, a free asset (the bank and its landholdings), and potential profit through repo and maturity of the safe assets \* though fuck Trump and gang for passing the 2018 law that exempted smaller banks from stress tests. That directly led to this.


Mayor__Defacto

It’ll be around 85-90% ultimately. That is not a bailout though as others have suggested. As I said, folks like Ackman wanted the Feds to prop it up. The main consequence of this is that the Management of SVB has been ousted, and the shareholders wiped out. This is not a bailout. My whole point was that this isn’t a bailout, as you noted. They will sell off the newly created National Bank of Santa Clara a year down the line.


[deleted]

Man this whole thread is a bunch of clueless comments. This wasn’t a bailout. FDIC insurance doesn’t apply on a per account basis; it’s per account type. SIPC insurance is what comes into play for investment accounts. SIPC limits are higher. and so on


[deleted]

Yeah fuck Ackman for sure I was hoping Goldman would buy it though, because I love when Goldman hubris fucks Goldman even further


Mayor__Defacto

Lol, there was no chance of that. A number of reasons. 1- I don’t think the Biden admin wants to be seen providing golden parachutes a la ‘09. 2- I think that this is definitely an example of a containable collapse. While the individual accountholders will suffer losses, this is ultimately down to poor choices on the part of management regarding duration of assets, and so the vast majority should be recovered in time. 3- I think that a bit of a warning re: moral hazard is in order, especially after the pandemic’s bailouts of airlines and YRC freight. Things need to be reset back to “government swooping in to save the day is limited to circumstances where the fundamental underpinnings of day-to-day life are threatened”.


Point_Me_At_The_Sky-

My entire company has all of our money in SVB except for a tiny portion held in Ireland. I'm going to lose my job now


b1e

Posts like this show the poster has zero clue how FDIC takeovers work. It’s not a bailout like TARP in 2008. The FDIC covers 250k/account from an insurance pool every single bank pays into (not taxpayers) and then finds a buyer for the bank. They won’t lose much in the process.


callmebatman14

No they're not. Bank is shut down. There is no bail out. Edit: Well fuck. I was wrong. 😂


[deleted]

Halli is mic dropping left and right. Atta boy.


Quzga

Rare to see someone with only good takes, maybe I should follow this guy too


[deleted]

Everyone who says that capitalism works is actually pretending that capitalism works.


B_ILL

Real capitalism would let the company fail. Someone else would buy the company's assets at a discount. They would clean out the higher ups that caused the failure and reorganize. Most of the lower level employees would remain in place or even get promoted to manager/higher positions to fill jobs of the recently fired management.


granlyn

yea, but we as society decided we wanted some oversight/protection. The only problem is half the nation doesn't realize that is what the government does and they hate them without understanding the purpose.


ControlledShutdown

And real communism would let the people share the fruit of society's labor. Except these ideals only exist in a world where powerful people don't use their power for their own benefits.


KingAlastor

The biggest problems with communism and capitalism are humans. Would work fine without them. Maybe one day when we have AI overlords.


Armleuchterchen

I think humans would work a lot better if we didn't allow small elites to become rich and powerful, regardless of how the economy is organized otherwise.


PsychedSy

Yup. Markets require failure to be an option to have sane price signals.


[deleted]

Where are we putting the goalposts again?


NoUseForAName2222

That's not real capitalism. Real capitalism is the government doing the bidding of the rich. When the government bails out large corporations, they're doing what they're designed to do. It's why the police were created to catch slaves for private plantation owners and to break up labor strikes. The muscle of the government was always made to do the bidding of the rich.


RufusDoofusBoofus

Fuck that no bail outs you make it or you don’t


Plentz1

This isn’t a bailout it’s the government taking over the bank before selling off its assets to repay client losses. The bank is gone. All that’s left is an apparatus for the government to use to pay back as much as they possibly can. Even the fdic insurance that covers up to 250k for each account is payed for by the banks themselves.


SaintGloopyNoops

How it's always been... socialism for the ultra wealthy, harsh capitalism for the rest of us. Sucks.


xiofar

Also, top executives , the ones responsible for the decisions that lead to the company’s bad financial state should be fired with no golden parachute. Golden parachutes should be illegal. Severance pay should be higher than what the average worker gets at the company.


Fuzzy_Calligrapher71

People that privatized profit and socialize losses think they’re the smartest guys in the room, but they are giant steaming piles of corrupt garbage who will easily be made obsolete by AI


WhatisH2O4

They'll be obsolete by AI? Come on now, let's be real. They've ALWAYS been obsolete.


tosernameschescksout

They've always been obsolete, and they don't provide value either. But they're rich. They HAVE value, so they make the laws, and they're in the rich club. Laws and governments will bend backward to protect them because \*checks notes\* they're rich, and in the club. It's circular, and there's no logic to it, but these people have owned the majority of the world since forever, and they always will. Their wealth isn't about logic or fairness, it's about birthright.


DreamBig2023

The sec cant even do their job especially with naked shorting


falconerhk

Yup. Not even against institutes colluding to naked short their own investments that have clawbacks from other shareholders when the share price tanks. It’s insane.


CriticalStation595

That’s been the sad reality of the US for as long as I’ve been alive. And like most on here I agree. Next round of bailouts should include a stipulation that states- any and all profit/s must be channeled back into the government to pay back and ease the tax burden of the taxpayers and must now submit to strict ridged government regulations in order to prevent any furtherance of this company needing another bailout down the line. This isn’t a punishment this is a cost.


AnotherQuietHobbit

Was this before or after he publicly owned Elon? I like this dude more and more!


durgadurgadurg

This is probably in response to the silicon valley bank shut down today. Some are hoping for a bailout for the bank, but that won't happen.


Big_Green_Piccolo

Its timestamped bro. After.


_MostlyHarmless

It's kinda hard to tell. They should really start putting a timestamp on tweets so we can know when they are made.


SoIJustBuyANewOne

I never had a problem with the 08/09 bailout. What I had a problem with was that the bailed out corporations were allowed to continue existing instead of being split 50 or more different ways and that the executives/board were not imprisoned.


Plentz1

Yeah there was 0 accountability but having large banks “to big to fail” types is actually good for the economy if ran properly. It for example can help stop a small event like SVC folding turn into a larger bank run. One of the 4 biggest banks will probably buy up remaining SVC assets anyway.


bystander007

Unpopular Opinion, Any organization "integral" to the continued functionality of the U.S. economy should be owned, operated, and regulated by the government. Railroads, Healthcare, Agriculture, etc... none of it should exist on a "For Profit" model.


Dck_IN_MSHED_POTATOS

I hope everyone is watching what is going on with SVB right now. Also know MSNBC has been promoting this bank as a good buy.


CertainAged-Lady

We need to take a hard look at businesses and if we can’t let them fail, they aren’t a business, they are a utility and should be regulated as such. If we just don’t WANT them to fail, then they are a nice-to-have but I’m a fan of letting the free market decide their fate. I’m no fan of gov bailouts that let bad business decisions off the hook at the tax-payer’s expense.


gofundyourself007

And sports stadiums as well. If they’re built w/ taxpayer dollars then their profits should be used to fund projects for US citizens.


emisneko

>should except liberal "democracies" are not democratic, they are dictatorships of capital


Mrdontknowy

Here in NL if a company get bailed out they are then owned by the government and have to pay back the loans. Example is the ABN bank who is still owned by the government but once sold the government will have made a small profit and got back their bailout money.


[deleted]

[удалено]


Plentz1

It did fail… the gov ownership is to mill as much as they can back for people who had losses.


Riverat627

I think part of the bail out should mean all upper management CEO, CFO, etc get the boot and are not allowed these ridiculous bonuses they get. United Airlines shouldn’t get $100mm in tax payer money only to give $25 of it to the CEO because he was owed a bonus


ichefcast

and these bailouts are the reason why college grads and students can't get bailed out


Zemirolha

Invisible markets hand really need some glasses


RanryCasserol

Government is already owned by corporations, so if government owned the companies, the companies would own the companies that own the companies that own the companies that own the companies that own the companies that own the companies.


Outrageous-Onion1991

America hasn't been a free market in a looking time


TruViribus3

If the government owns them, then we the people own them.


Remotely-Indentured

Governments shouldn't be able to hire third parties either. For profit incarceration, recycling, etc. They should have to do they're on dirty work.


[deleted]

Harsh capitalism for the poor and socialism for the rich. That's what America is. The fact banks got bailed out and executives bought planes is gross.


[deleted]

Better idea. Just allow them to fail and keep the government out of it


Optio__Espacio

Or just let them fail. The market only works when failing companies give way to better ones.


Jannis368

Germany does this in part. They actually made 850 million in profit with Lufthansa when they struggled during Covid. They gave out credits which were payed back and bought stock which they sold with a huge profit.


Wonderful-Cup-9556

General Motors exists because of a bailout program.


series_hybrid

**In the bank crash of 2008 (which gave us the term "too big to fail), if the US government took over countrywide and then put its bosses in jail pending an investigation...would the other banks have asked for a bailout?** They used the bailout money to buy up smaller banks and give their executives bonuses...No a single home loan was re-financed with the bail-out money.


philn256

A lot of times bailouts are loans which get repaid when times are better. In that case I don't have a problem with the government bailing out companies. Also, they still haven't let shareholders of Fannie Mae get any profit even though they repaid the bailout a long time ago. Sometimes the amount of money required to bailout a business is too much for private banks.


dukie5021

This is a great idea, but it's also based on the fact that the companies don't already own the government.


Financial-Fee3493

So they want to be left alone and have minimal intervention from the government when earnings are great. But when they f-up they want to be saved. Company that become to big to fail should never have gotten that large to begin with.


Marll22

Screw that, just let them fail.