(03-22-2023 02:56 PM)GoodOwl Wrote:  DIE is code for communist re-enslavement....but you knew that already. Anyone against slavery is against DIE, anyone who believes in slavery is for DIE; only one major party has had slavery as a plank in its party platform, and they are for DIE. Coincidence? Nope. Planned re-enslavement. Get off the Plantation and think for yourself. Many already have figured this truth out for themselves. Tell your gubmint slavemasters to go pound sand (in a silo).

You OK, bro?

(03-22-2023 04:18 PM)tanqtonic Wrote:  Not saying it was wrong or right -- but that was the end line decision for the FDIC and Treasury with respect to SVB account holders.

That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

(03-23-2023 08:45 AM)Hambone10 Wrote:  

(03-22-2023 04:18 PM)tanqtonic Wrote:  Not saying it was wrong or right -- but that was the end line decision for the FDIC and Treasury with respect to SVB account holders.

That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

To the bolded - the fund providing the SVB assistance is kinda just that, and not coming from tax payers as you state later.

Quote:On Sunday, March 12, the Treasury Department, the Federal Reserve, and the FDIC announced that they were taking “decisive actions” to protect the economy and shore up confidence in the banking system. They said they would make sure all of SVB’s depositors would have access to their funds by the next day, not just the $250,000 guaranteed by the FDIC. Also on Sunday, New York regulators shut down Signature Bank, which had gotten into crypto, and the federal government said its depositors’ funds would be guaranteed as well. The Fed said it was also going to open up a facility to make funding available for other financial institutions in the form of one-year loans to try to limit contagion across the banking sector and to stave off other bank runs, like what happened with SVB. Essentially, the Fed wants to boost confidence so people don’t panic and try to withdraw all their money all at once.

The White House has been emphatic in its emphasis that this isn’t a 2008 situation. SVB and Signature aren’t going to be revived, and their lenders and shareholders aren’t getting any government money. The money for depositors will come from a fund that banks pay into, the Deposit Insurance Fund, and not from taxpayers. (Treasury could have to backstop the FDIC fund or the Fed’s loan program funds, but it’s quite unlikely.)

https://www.vox.com/money/2023/3/13/2363...net-yellen

Quote:Financial institutions pay quarterly into the Deposit Insurance Fund or "DIF," and the size of their fees is based on an assessment of the institution's size and risk profile.

The account exists to repay insured depositors when a financial institution fails, explained Greg McBride, chief financial analyst at Bankrate.com.

"Where that fund comes into play is in the event that a bank fails because their liabilities exceed their assets," which may not ultimately be the case with SVB and Signature Bank, McBride said.

https://www.cbsnews.com/news/silicon-val...joe-biden/

(03-23-2023 08:45 AM)Hambone10 Wrote:  

(03-22-2023 04:18 PM)tanqtonic Wrote:  Not saying it was wrong or right -- but that was the end line decision for the FDIC and Treasury with respect to SVB account holders.

That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

And it is also the taxpayer keeping in place about 12 - 15,000 jobs.

I think there would have been some very bad ramifications of a sudden impact of 'bank fails --- 15k jobs lost the very next week' + perhaps 8 - 10 SV companies headed to Chapt 11 that week, some of them brand names (Roku for one).

Not entering an opinion, just outlining the secondary effects that you may not have considered.

(03-23-2023 09:11 AM)tanqtonic Wrote:  

(03-23-2023 08:45 AM)Hambone10 Wrote:  

(03-22-2023 04:18 PM)tanqtonic Wrote:  Not saying it was wrong or right -- but that was the end line decision for the FDIC and Treasury with respect to SVB account holders.

That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

And it is also the taxpayer keeping in place about 12 - 15,000 jobs.

I think there would have been some very bad ramifications of a sudden impact of 'bank fails --- 15k jobs lost the very next week' + perhaps 8 - 10 SV companies headed to Chapt 11 that week, some of them brand names (Roku for one).

Not entering an opinion, just outlining the secondary effects that you may not have considered.

To me, the critical thing is that those who were trying to profit off of the operations of the bank (e.g., executives, investors) and not those using its services (e.g., depositors) do NOT profit from the bailout. The former group took the most obvious and explicit risk with how they operated the bank, and likely have profited handsomely. But there are downsides with risks, and one has to be willing to deal with said downsides.

(03-23-2023 09:28 AM)RiceLad15 Wrote:  

(03-23-2023 09:11 AM)tanqtonic Wrote:  

(03-23-2023 08:45 AM)Hambone10 Wrote:  

(03-22-2023 04:18 PM)tanqtonic Wrote:  Not saying it was wrong or right -- but that was the end line decision for the FDIC and Treasury with respect to SVB account holders.

That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

And it is also the taxpayer keeping in place about 12 - 15,000 jobs.

I think there would have been some very bad ramifications of a sudden impact of 'bank fails --- 15k jobs lost the very next week' + perhaps 8 - 10 SV companies headed to Chapt 11 that week, some of them brand names (Roku for one).

Not entering an opinion, just outlining the secondary effects that you may not have considered.

To me, the critical thing is that those who were trying to profit off of the operations of the bank (e.g., executives, investors) and not those using its services (e.g., depositors) do NOT profit from the bailout. The former group took the most obvious and explicit risk with how they operated the bank, and likely have profited handsomely. But there are downsides with risks, and one has to be willing to deal with said downsides.

Holy crap I agree with Lad.... with one add... depositors who deposited monies in excess of the insurance amounts were also investors/speculators. They knowingly put themselves at risk in exchange for a benefit that others did not get.

Tanq, you left something off of my comment... It wasn't just taxpayers.. the middle class... it was also the poor who don't pay income taxes but do use bank services who bailed these people out.

If you want to bail out wealthy investors, then you do it through the government... taxpayers alone... and not through the FDIC and an assessment on depositors. That's like having the Social Security administration bail them out, and funding it with a special assessment on retirees. If Biden had funded this bail out by a tax on the wealthy, THAT would have made sense.

IMO, the reason they did it through the FDIC was because it looks like the FDIC is doing what they're supposed to do and covering depositors.... but by statute and agreement, they covered depositors that THEY WERE NOT SUPPOSED TO COVER.

So here is my question.... If my local bank wants to try the same thing, will they get the same treatment?? If so, what is the point in an FDIC limit... and if not, why should anyone bank with a smaller bank??

(03-23-2023 10:45 AM)Hambone10 Wrote:  

(03-23-2023 09:28 AM)RiceLad15 Wrote:  

(03-23-2023 09:11 AM)tanqtonic Wrote:  

(03-23-2023 08:45 AM)Hambone10 Wrote:  

(03-22-2023 04:18 PM)tanqtonic Wrote:  Not saying it was wrong or right -- but that was the end line decision for the FDIC and Treasury with respect to SVB account holders.

That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

And it is also the taxpayer keeping in place about 12 - 15,000 jobs.

I think there would have been some very bad ramifications of a sudden impact of 'bank fails --- 15k jobs lost the very next week' + perhaps 8 - 10 SV companies headed to Chapt 11 that week, some of them brand names (Roku for one).

Not entering an opinion, just outlining the secondary effects that you may not have considered.

To me, the critical thing is that those who were trying to profit off of the operations of the bank (e.g., executives, investors) and not those using its services (e.g., depositors) do NOT profit from the bailout. The former group took the most obvious and explicit risk with how they operated the bank, and likely have profited handsomely. But there are downsides with risks, and one has to be willing to deal with said downsides.

Holy crap I agree with Lad.... with one add... depositors who deposited monies in excess of the insurance amounts were also investors/speculators. They knowingly put themselves at risk in exchange for a benefit that others did not get.

I think you are being a bit hyperbolic in denoting a depositor, any depositor, as an 'investor/speculator'.

There is zero 'investment' (in any form of the word) that accrues to any depositor.

There may have been a slight upside to that banking arrangement (maybe the first million gets you a tank of gas, or a slightly higher account interest rate), but at the realistic aspect, a highly de minimus upside.

And again, holy smokes, I agree with lad. That makes three times in a single calendar quarter. I must be getting soft or senile....

Quote:IMO, the reason they did it through the FDIC was because it looks like the FDIC is doing what they're supposed to do and covering depositors.... but by statute and agreement, they covered depositors that THEY WERE NOT SUPPOSED TO COVER.

And in practice, the FDIC actually DID NOT cover them. They didnt *do it* through the FDIC -- the program was in conjunction with actions, but through a third party and another wholly different set of rules and procedures. (I just got through reading a 'important legal update' blurb from my email on just this)

So no, they did not "[do] it through the FDIC" as your intro states.

Quote:So here is my question.... If my local bank wants to try the same thing, will they get the same treatment?? If so, what is the point in an FDIC limit... and if not, why should anyone bank with a smaller bank??

The actual question will the 'third route' (that actually isnt being highly touted, except to say the 'no taxpayer money is used' mantra) be available to anyone else.

Honestly, that is as equally important as the way in which you pose it above.

(03-23-2023 08:54 AM)RiceLad15 Wrote:  

(03-23-2023 08:45 AM)Hambone10 Wrote:  That's not a threat to the banking system, and the FDIC's job is to protect the banking system, not the tech system. If there was to be a bail-out, it should have been done through the general fund or some fund desugned to encourage tech companies or what have you... but NOT the FDIC.

Besides, obviously there was an 'advantage' that went with this covenant, otherwise they wouldn't have agreed to it... so it was a poor business decision. They took a risk and they should have paid the price for that risk and its failing... NOT a bunch of much much smaller depositors... including people who simply get their entitlement checks through their bank... to bear the cost for 'bad bets' by the wealthy.

It is quite literally taxpayers (and even a TON of those who do not pay income taxes) bailing out the wealthy for making poor investments/bets.

I don't agree with that in general, but I REALLY don't think a lot of Democrats/progressives would agree with that.

To the bolded - the fund providing the SVB assistance is kinda just that, and not coming from tax payers as you state later.

Quote: The money for depositors will come from a fund that banks pay into, the Deposit Insurance Fund, and not from taxpayers. (Treasury could have to backstop the FDIC fund or the Fed’s loan program funds, but it’s quite unlikely.)

I'll take responsibility for your confusion.

Depositors to banks... CD holders... are often taxpayers.... but even those who are not (checking account only peole) are impacted by this... because just as I said and you note... the funds come from a special assessment on ALL depositors... I suggested that a 'better' solution would have been for the funds to come from taxpayers (meaning excluding the poor) through the general fund and not the FDIC, or even better... through a special 'tax on the rich'.

I know exactly what Yellen said. That is precisely what I'm bothered by... I believe I said precisely what she said.... though I admit that by including 'taxpayers' in the comment, I gave the impression that I meant 'through tax revenues'. That isn't what I meant.

(03-23-2023 11:15 AM)tanqtonic Wrote:  I think you are being a bit hyperbolic in denoting a depositor, any depositor, as an 'investor/speculator'.

Not at all. If you put 500k into a bank account that is only insured for 250k, you are knowingly 'at risk' for 250k. That makes you an investor/speculator.... taking measurably more risk than someone who only puts 250k in. I won't go into the myriad of ways a person or entity can shelter vastly more than 250k... you probably know more ways than I do.

Quote:There may have been a slight upside to that banking arrangement (maybe the first million gets you a tank of gas, or a slightly higher account interest rate), but at the realistic aspect, a highly de minimus upside.

So why do it? I thought you (or someone) implied that in exchange for some banking services, they HAD to do ALL their business with that one bank? Maybe it was lower rates, maybe it was access to a loan product that they otherwise wouldn't have qualified for...

but if there was no advantage to keeping uninsured amounts in that bank, why would you do it? That's dumb!

Quote:And in practice, the FDIC actually DID NOT cover them. They didnt *do it* through the FDIC -- the program was in conjunction with actions, but through a third party and another wholly different set of rules and procedures. (I just got through reading a 'important legal update' blurb from my email on just this)

So no, they did not "[do] it through the FDIC" as your intro states.

That's not what I believe Janet Yellen said.... but the important issue isn't whether the funds come from the FDIC or the treasury or some third party... the issue is where the money the FDIC or treasury or third party GIVES them comes from... and just as the FDIC does with their quarterly assessment on deposits, a 'special assessment' will be collected from that same source. The money ULTIMATELY comes from depositors to banks that DID NOT fail, nor did they agree to bail out large wealthy depositors when they signed on for 'limited' insurance.

Quote:

Quote:So here is my question.... If my local bank wants to try the same thing, will they get the same treatment?? If so, what is the point in an FDIC limit... and if not, why should anyone bank with a smaller bank??

The actual question will the 'third route' (that actually isnt being highly touted, except to say the 'no taxpayer money is used' mantra) be available to anyone else.

Honestly, that is as equally important as the way in which you pose it above.

I don't really see the difference between your question and mine, other than a mostly pedantic (in my view anyway) clarification that the money may not be coming from the FDIC fund, but merely from a third fund set up and funded in an identical way as the FDIC fund.

My clumsy comment to lad about depositors often being taxpayers was intended to directly counter the 'no taxpayer funds' defense... because it is a deflection... and is being financed by a special assessment on deposits is ALSO completely misleading... in that this doesn't come from JUST wealthy depositors in CDs, but also to people who just have a $20 average balance in their checking account.

As I tried to say... it would be BETTER in my mind if it only came from taxpayers... and even better than that if it ONLY came from wealthy people.

This is literally a gift to the fairly wealthy/people who kept more than 250k in one bank.... at the expense of 'almost everyone else in the nation'.

(03-23-2023 03:30 PM)Hambone10 Wrote:  

(03-23-2023 11:15 AM)tanqtonic Wrote:  I think you are being a bit hyperbolic in denoting a depositor, any depositor, as an 'investor/speculator'.

Not at all. If you put 500k into a bank account that is only insured for 250k, you are knowingly 'at risk' for 250k. That makes you an investor/speculator.... taking measurably more risk than someone who only puts 250k in. I won't go into the myriad of ways a person or entity can shelter vastly more than 250k... you probably know more ways than I do.

Yes you are at risk. You equate those account holders in the same bucket as equity holders, investors, and execs. That line lad drew and you agreed with line specifically delineates the 'profit participation'. Apart from 'non-participants' (deposits).

Now you put *some* of the 'non-participation' group into the same bucket as 'profit participation'. Maybe its the word choice you use. I dont think the >250 group is should really properly referred to as 'investor', or as 'speculator'.

(03-23-2023 04:31 PM)tanqtonic Wrote:  

(03-23-2023 03:30 PM)Hambone10 Wrote:  

(03-23-2023 11:15 AM)tanqtonic Wrote:  I think you are being a bit hyperbolic in denoting a depositor, any depositor, as an 'investor/speculator'.

Not at all. If you put 500k into a bank account that is only insured for 250k, you are knowingly 'at risk' for 250k. That makes you an investor/speculator.... taking measurably more risk than someone who only puts 250k in. I won't go into the myriad of ways a person or entity can shelter vastly more than 250k... you probably know more ways than I do.

Yes you are at risk. You equate those account holders in the same bucket as equity holders, investors, and execs. That line lad drew and you agreed with line specifically delineates the 'profit participation'. Apart from 'non-participants' (deposits).

Now you put *some* of the 'non-participation' group into the same bucket as 'profit participation'. Maybe its the word choice you use. I dont think the >250 group is should really properly referred to as 'investor', or as 'speculator'.

I didn't put them in the same bucket... other than as investors. Their investment is very different from an equity holder, but it is still a speculative investment as it was only 50% (my example) insured.

What do you call someone who puts 500k into an interest bearing investment with the risk of losing 250k of that if the bank fails in exchange for more favorable loan terms??

A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

(03-23-2023 08:23 PM)Owl 69/70/75 Wrote:  A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

I would say an 'investor *or* a speculator' accepts downside risk in order to have an upside potential.
-----------

Oxford 'investor' -- a person or organization that puts money into financial plans, property, etc. with the expectation of achieving a profit.

### Apparently if you only take on downside risk that is also an investor. I dont know what the fk you are investing in (no payments, to equity, no rights to anything -- no nothing), but I guess an 'investor'.


-----------
Merriam 'speculator' --- a person who makes a relatively risky investment in something (such as stocks or real estate) in the hope of making a large short-term profit from market fluctuations

See ### --- replace 'investor' with 'speculator'.

-----------

I think we just redefined me selling insurance contracts where I receive no premiums and accept nothing but downside risk as 'investing'.... or 'speculating'. Interesting.

Look Ham, that is the problem I have with you defining the act of uninsured deposits as 'investors/ speculators'. I really do think you used the wrong term -- it doesnt detract from the moral hazard it presents that you put forward, and I agree with to some extent.

If you want to insist on investor or speculator, so be it. You are absolutely free to redefine any word to whatever you wish. I just dont think in common usage those uninsured folk would be easily ascertained an 'investor' or 'speculator'.

(03-23-2023 08:23 PM)Owl 69/70/75 Wrote:  A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

If a company brings in $10MM in revenue in a month, what’s the best practice of managing it?

(03-23-2023 09:25 PM)RiceLad15 Wrote:  

(03-23-2023 08:23 PM)Owl 69/70/75 Wrote:  A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

If a company brings in $10MM in revenue in a month, what’s the best practice of managing it?

gross? net? -- all depends.

How much loan leverage, yada yada yada.

Back to the subject.

Rice is simply no longer the university which I attended. It may or may not be better--I think not, but that's a matter of opinion. But it's no longer the university that I attended, and not one that I would have chosen to attend.

(03-23-2023 09:40 PM)tanqtonic Wrote:  

(03-23-2023 09:25 PM)RiceLad15 Wrote:  

(03-23-2023 08:23 PM)Owl 69/70/75 Wrote:  A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

If a company brings in $10MM in revenue in a month, what’s the best practice of managing it?

gross? net? -- all depends.

How much loan leverage, yada yada yada.

I was thinking gross in this instance. You’ve received $10MM in payments - does a company keep those checks on hand or do they deposit it into a bank account that they use to pay their operating expenses? I’m by no means an expert on payroll processes, but I’d have assumed that companies would at least need some sort of bank account to manage their receivables and payables - and that could easily balloon over $500k.

(03-23-2023 08:47 PM)tanqtonic Wrote:  

(03-23-2023 08:23 PM)Owl 69/70/75 Wrote:  A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

I would say an 'investor *or* a speculator' accepts downside risk in order to have an upside potential.
-----------

Oxford 'investor' -- a person or organization that puts money into financial plans, property, etc. with the expectation of achieving a profit.

### Apparently if you only take on downside risk that is also an investor. I dont know what the fk you are investing in (no payments, to equity, no rights to anything -- no nothing), but I guess an 'investor'.


-----------
Merriam 'speculator' --- a person who makes a relatively risky investment in something (such as stocks or real estate) in the hope of making a large short-term profit from market fluctuations

See ### --- replace 'investor' with 'speculator'.

-----------

I think we just redefined me selling insurance contracts where I receive no premiums and accept nothing but downside risk as 'investing'.... or 'speculating'. Interesting.

Look Ham, that is the problem I have with you defining the act of uninsured deposits as 'investors/ speculators'. I really do think you used the wrong term -- it doesnt detract from the moral hazard it presents that you put forward, and I agree with to some extent.

If you want to insist on investor or speculator, so be it. You are absolutely free to redefine any word to whatever you wish. I just dont think in common usage those uninsured folk would be easily ascertained an 'investor' or 'speculator'.

Let me start with this...
Numbers....

Influencing the bank to make a large loan to you is a financial advantage that is designed to make you money.

Tanq, I don't believe they only had downside risk. You yourself (again, or someone) said something about how in exchange for some service/access to loans/what have you... you had to do ALL your business with the bank. Why would they do that with no advantage anywhere else?? You answered your own question.

If not an investor/speculator... what would you call them?? As I asked, What do you call someone who puts 500k into an interest bearing investment with the risk of losing 250k of that if the bank fails in exchange for more favorable loan terms??

Whatever that access was, the companies CLEARLY thought the benefit of association with the bank.... whatever they offered... was WORTH having portions of their deposits be uninsured.

Maybe they thought the risk was close to zero, and that is fine... but I used to have a rule on investing... if there is only one scenario in any 'black box' analysis under which an investment fails such that the outcome SEEMS assured to win, expect the market to test that theory.

They took risk in order to accomplish their business goals... otherwise, they wouldn't have done it. When you take financial risk, I call you an investor/speculator. Feel free to disagree with that definition, but I don't think my definition is categorically wrong

Google Speculator... the first thing that comes up for me from Oxford language...
a person who invests in stocks, property, or other ventures in the hope of making a profit.

Google investor.... the first thing that comes up for me is investopedia...
An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest).

I think both descriptions fit... I just don't know specifically what their advantage or contribution to profit they had... but I would think it more odd to assume that they accepted an uninsured deposit and the limitations on their business dealings for 'nothing' in return.

It is also certainly possible that they were just stupid and took on risks with no advantage... essentially scammed by the bank... that is certainly possible... but they would still then be investors.... just not willing ones. If that was the case, they should be brought up on fraud charges... but still the FDIC shouldn't be bailing out that fraud. The people surely knew or should have known that their deposits were not insured.

(03-27-2023 09:40 AM)Hambone10 Wrote:  

(03-23-2023 08:47 PM)tanqtonic Wrote:  

(03-23-2023 08:23 PM)Owl 69/70/75 Wrote:  A speculative investor accepts the downside risk in order to have a chance at the upside potential.

With regard to putting $500K in a bank account, what is the upside potential? Other than maybe influencing the bank to make a large loan to you, it's hard to see the upside.

I would say an 'investor *or* a speculator' accepts downside risk in order to have an upside potential.
-----------

Oxford 'investor' -- a person or organization that puts money into financial plans, property, etc. with the expectation of achieving a profit.

### Apparently if you only take on downside risk that is also an investor. I dont know what the fk you are investing in (no payments, to equity, no rights to anything -- no nothing), but I guess an 'investor'.


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Merriam 'speculator' --- a person who makes a relatively risky investment in something (such as stocks or real estate) in the hope of making a large short-term profit from market fluctuations

See ### --- replace 'investor' with 'speculator'.

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I think we just redefined me selling insurance contracts where I receive no premiums and accept nothing but downside risk as 'investing'.... or 'speculating'. Interesting.

Look Ham, that is the problem I have with you defining the act of uninsured deposits as 'investors/ speculators'. I really do think you used the wrong term -- it doesnt detract from the moral hazard it presents that you put forward, and I agree with to some extent.

If you want to insist on investor or speculator, so be it. You are absolutely free to redefine any word to whatever you wish. I just dont think in common usage those uninsured folk would be easily ascertained an 'investor' or 'speculator'.

Let me start with this...
Numbers....

Influencing the bank to make a large loan to you is a financial advantage that is designed to make you money.

Tanq, I don't believe they only had downside risk. You yourself (again, or someone) said something about how in exchange for some service/access to loans/what have you... you had to do ALL your business with the bank. Why would they do that with no advantage anywhere else?? You answered your own question.

If not an investor/speculator... what would you call them?? As I asked, What do you call someone who puts 500k into an interest bearing investment with the risk of losing 250k of that if the bank fails in exchange for more favorable loan terms??

Whatever that access was, the companies CLEARLY thought the benefit of association with the bank.... whatever they offered... was WORTH having portions of their deposits be uninsured.

Maybe they thought the risk was close to zero, and that is fine... but I used to have a rule on investing... if there is only one scenario in any 'black box' analysis under which an investment fails such that the outcome SEEMS assured to win, expect the market to test that theory.

They took risk in order to accomplish their business goals... otherwise, they wouldn't have done it. When you take financial risk, I call you an investor/speculator. Feel free to disagree with that definition, but I don't think my definition is categorically wrong

Google Speculator... the first thing that comes up for me from Oxford language...
a person who invests in stocks, property, or other ventures in the hope of making a profit.

Google investor.... the first thing that comes up for me is investopedia...
An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest).

I think both descriptions fit... I just don't know specifically what their advantage or contribution to profit they had... but I would think it more odd to assume that they accepted an uninsured deposit and the limitations on their business dealings for 'nothing' in return.

It is also certainly possible that they were just stupid and took on risks with no advantage... essentially scammed by the bank... that is certainly possible... but they would still then be investors.... just not willing ones. If that was the case, they should be brought up on fraud charges... but still the FDIC shouldn't be bailing out that fraud. The people surely knew or should have known that their deposits were not insured.

Glad to know my Mom's estate account is an investor. Nothing but downside acceptance and still an 'investor'.

Sorry Ham, I just think your use of that is a huge stretch.

(03-24-2023 06:11 AM)Owl 69/70/75 Wrote:  Back to the subject.

Rice is simply no longer the university which I attended. It may or may not be better--I think not, but that's a matter of opinion. But it's no longer the university that I attended, and not one that I would have chosen to attend.

Yep... things probably did change as compared to 40-50 years ago. I would hazard a guess that many universities that you would have considered in the 1960s are quite different than they were when you were a HS senior. It sounds like many of the changes are ones that you find unfavorable. My guess is these unfavorable changes would be found at most colleges that you considered back in the day.

My dad (your era) attended one of the military academies and he tells me that there is constant grousing amongst his alum peers about the "woke" changes that have been put into effect in the academies since their days there.

There is now Hillsdale and University of Austin (if that's what they call it... did that ever actually happen?)...