Ask HN: What does the SVB fail mean for the average person?

https://news.ycombinator.com/item?id=35112346

by CodeSgt • 3 years ago

1 4 3 years ago

news.ycombinator.com

I'm having a hard time understanding what, precisely, the downstream effects of the SVB failure will be.

Could anyone less ignorant than myself enlighten me?

ofalkaed2• 3 years ago

For the average person it means they will have to hear about it constantly until the next big news item takes its place.

colesantiago• 3 years ago

more outages.

muzz• 3 years ago

Ultimately probably not much at all.

You'll have to tolerate scare-mongering for the next few days, at least until Monday. Much of it appears to be to promote the idea of a government bailout, which (I hope) has little chance of occurring. If it did, then theoretically your taxes would be higher instead but instead it would likely just be funded by debt ie the govt debt would increase. The moral hazard created would be huge however, so the next time would be even worse.

There will also be scare-mongering about upcoming payrolls, but those will likely turn out to be not an issue as the FDIC moves to release some money on Monday and likely more throughout the week.

The bank has assets to cover _most_ of the deposits (if not all). It may take time, but there are mechanisms to cover that. Deposits will take a tiny haircut at most, or perhaps none at all.

The shareholders will be wiped out of course, so any ETF, mutual fund, etc holding SIVB shares will be lower.

But other than that, not much.

ofalkaed2• 3 years ago

at least until Monday

I think we have at least another week, they are going to follow the outcome closely unless something else comes up they can talk about. Decent chance that SVB/Silvergate will be with us for the next year, easily could end up election topics.

Ask HN: What does the SVB fail mean for the average person?

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