“Now, now, Jim, you don’t understand, your money is in Tommy’s start-up, and Mike, your money is in Jenny’s start-up…”
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or, OR you have regulations in place that prevent this from happening. Failures are then a problem with the regulators failing to maintain.
Pretty sure that in Canada, if we had a bank failure, that consumers would be calling for the blood of regulators.
I mean, I luv me some capitalism, but there’s got to be limits, and when it comes to the financial sector, that’s as good a spot for limits using gov’t regulations as any.
are we all happy to let our investments tank if it means we don’t bail out these banks?
In the short term I am sure a lot of people would say no, but if you let them fail, I am willing to bet my non-existent family farm that next go around startups will be more careful as to where they park their money.
Sure. But as rich actuaries here, we all benefit from the bailouts.
So the question is, are we willing to sacrifice our wealth to punish these banks.
I agree with the latter half of this sentiment. Irresponsible banks, as well as their stock and bond holders, deserve their punishment that the market is doling out. Let them fail.
I somewhat disagree with the sentiment on depositors. I wrote this in another thread:
If you are a small tech company, working capital can easily exceed 250k, even for just making payroll.
Don’t blame me, I voted for Warren.
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Kinda…
The bank product you are looking for is not a deposit account, you want a line of credit. To do so, you may have to post collateral and sign some papers saying that the bank can foreclose if you fail to maintain that collateral. Banks (should) be encouraged to secure their loans to avoid…well avoid a bank failure.
If the start up peeps don’t know how to get an LOC, then I’m certain the VC that funded all that cash can be a resource.
In any event, it’s seems irrational to fail at enforcing the established and known limit of $250k while indicating that the regulators need to be more vigilant. Change the rules if you want, but let’s stop with the “in this case, let’s not apply them.”
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Maybe? I don’t know if people really think that much about it, after 10 years pass.
Obviously, serious investors are more likely to consider bank failures than average joes, but I doubt they are all that responsible.
Buying opportunity
I’m glad we have brokerages and stock exchanges so I don’t have to face the person who just lost a big portion of his nest egg while I buy it up on the cheap.
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Hi, I’m so sorry you lost everything, but can I have your house for $200?
Don’t forget to yell at them and call the cops when they’re homeless and wander around your block
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Right. If it has to be done face-to-face, then you need to keep building rapport until you have an irrevocable deal.
I have to draw the line somewhere, though. When the police finally started confiscating the vehicles of nocturnal urban street racers and exhibitors, I decided not to buy one of those unique, flashy sports cars at police auction and park it on the street outside my house at night in the same neighborhood as the racing.
Im not. Why do I care? Do I want to give my livelihood up as a matter of principal?
Good for you!
Then yes, we should bail out these banks
ISWYDT
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I see the Big Four American banks are trying to bail out First Republic Bank but consumer confidence has not yet been restored.
lol the stock price cliff.