I try not to make too many jokes on HN. They have to be very clearly funny and/or very spot-on to survive HN's this-isn't-reddit ethos, which seems to be pretty strictly enforced.

If you want to get flagged, the best way to do that is to make an irrefutable strong argument that ruffles political or economic feathers of a popular ideology on HN. There's nothing that enrages people here more than an unpopular but sound argumen they don't like, so they flag it to make it go away. If they can quickly disprove you or make you to look an idiot, they'll downvote rather than flag so that everyone can see their moral or intellectual superiority in the full thread.

I downvote jokes even if they are funny, and it is (partly) the "HN-isn't-reddit" methos. Reddit has so much noise-to-signal that it's not particularly valuable. It's like junkfood.

HN is better because every comment (per the official rules) is supposed to be substantial. Jokes that are funny but not satirical or insightful aren't substantial in my opinion.

(I should also say that I often find reddit to be hilarious, but that's not what I'm looking for when I come here.)

Not shocking the voters wanted something different.

The economy was pretty much in the dumpster for most of the 70’s in both countries.

Not unusual for the old guard to be turfed out when that happens.

Thatcher won two landslide re-elections for a reason.

For example the UK has also had subsequent Conservative victories for the last 12 years or so but every single argument made in 2010 about their approach has been proven true. To the detriment of every person in the UK.

So it doesn't necessarily follow in my eyes that an election win means that what you're doing is the right thing, only that you are popular and you can convince people you will do something to help them.

There certainly was an aspect of that back in the 80s. In the early years Labour was lead by Michael Foot, basically a likeable version of Corbyn but just as unelectable. But then, the Labour Party back then was properly Marxist and had actually pushed forward a programme of nationalisation and unionisation that worked out about as well as you'd expect.

The most egregious example of waste was the coal industry, hence the strikes. The tax payer was subsidizing coal to the tune of £1.3 billion a year which was real money back then, just under 1% of total national GDP, not including the increased costs to power and steel industries that were prevented from using cheaper alternatives. When the mining union leader Arthur Scargill appeared before a Parliamentary committee and was asked at what level of loss it was acceptable to close a pit he answered “As far as I can see, the loss is without limits.” That's what we were dealing with. That's just coal, but swathes of industry had been nationalised and was a horrible rotting carcass of waste and losses dragging the country down. Reforming that lot was incredibly painful but it had to be done.

Maggie is generally portrayed as being incredibly unpopular, and the way she was lampooned by a generation of up coming British comics was cruel though frankly hilarious, but she won resounding election victory after victory. The economy she built transformed the country into the modern nation it is today. Notably when Blair and Brown brought in a Labour government in 1997 they changed essentially nothing substantive because her reforms palpably worked. All the proposed changes reverting Britain towards a statist socialist economic agenda were quietly shelved and never talked about agin until Corbyn came along.

Since then Conservatism on both sides of the pond has suffered an appalling moral and intellectual collapse. The conservative and republican parties are mocking parodies of their former selves. Back in the 80s there were serious, major economic and social problems that desperately needed fixing and economic liberalism had the answers. Nowadays that's just not even vaguely controversial, instead the focus of the right has shifted towards damaging reactionary dog whistle issues like culture wars and blind nationalism. That tendency has always been there, but now it's all they have.

The conservatives of the 80's had a problem to solve, stagflation, inefficient socialism, big state. Neo-liberalism solved those problems, but created new ones.

The conservatives today have another problem to solve, mass immigration, rampant crime, loss of sovereignty and ability to reform to foreign bureaucracy, dependency on foreign manufacturing, etc.

Part of these problems are residues of the same economic neo-liberalism that was enacted in the 80s. Reagans immigration act and Thatcher's neo-liberalism saved society from the socialist dystopia, but over time it has thrown society in a neo-liberalist dystopia that few people like, beside the elites.

The conservatives have moved on to new, real problems. You seem stuck in the past.

A friend of mine tried that line about manufacturing on me a few years ago and I asked him what kind of factory he wanted his so. To work in when he grew up. He looked at me as though I’d just shot his dog. We don’t need factory jobs, we’ve git near full employment anyway. That’s why we need immigration to solve our demographic issues with our ageing population. We’ve got plenty of jobs much higher up the value chain, the main problems are around training and education.

As for the crime rate the perception is divorced from reality, I’ll quote from Wikipedia: “The United Kingdom's crime rate remains relatively low when compared to the rest of the world, especially among first world countries.” Our crime rate is a fraction of that in Ukraine before the war. Their murder rate is three times ours.

Maybe if you define immigrants with passports as Britons. There's a reason why the BNP, British National Party, won the two seats they ever won in counties most affected by immigration. This effect would also be exact opposite of that in Sweden, which is intriguing, because here the sub-urb ghettos are split between social democrats, which the immigrants vote for, and the nationalists, which the few non-immigrants left vote for.

The fact that you are trying to argue that areas affected are the least concerned, when the case is exactly the opposite across Europe; says a lot about your "reality". Modern leftists are a scourge.

Arguably the reason was the war, not domestic policy [0]

[0] https://history.com/news/margaret-thatcher-falklands-war

I should add that as a Scot I'm definitely not a fan of hers (you just grow up there knowing "Thatcher Bad") but I'm not quite at "put a stake through her heart and garlic round her neck"[0] :)

[0] - https://twitter.com/halaljew/status/1294414600566382598

It's a lot more complex than war-helps-current-leader, at least outside the US. It depends on the war and the context.

It was a strange time.

Hardly a problem local to Britain, and hardly something Thatcher solved. It was a crisis that also passed in countries that did not elect viciously anti-state, anti-working class governments.

> crumbling infrastructure; that couldn't even clean its own streets

Bit of an exaggeration, and I'm not sure how Maggie "Minimal State" Thatcher has supposedly helped with that.

> Thatcher won two landslide re-elections for a reason

If it weren't for the Falklands she would have been a one term president.

"Neither the strong nor the weak version of the proposition that American defense spending bankrupted the Soviet economy and forced an end to the Cold War is sustained by the evidence."

https://www.theatlantic.com/past/docs/politics/foreign/reagr...

"Fabulous witticisms" feels good to listener and is funny, because it validates what people want to hear. It is rarely actually correct or actually correctly describes world.

Currently, for example, there is Wokeism in general, with particular emphasis on transgenderism. Transgenderism only "affects" a very small percentage of the population, nobody paid it any mind a decade ago, and yet today it's a thing.

I think what we’ve discovered is that, thanks to the Internet, that’s a strategy that’s significantly easier to employ than ever before. In the past ups at least need to have mainstream media outlets onboard. Nowadays you can do that with a hashtag

"Denis, listen, I am president of this country, I am 42"

https://twitter.com/DenisRogatyuk/status/1510419008457039874

They played air raid sirens for Biden[3], after Biden got assurances from the Kremlin for his visit[4], all the while even CNN reporters said that there were no signs of any strikes.

Why not just providing sources instead of slandering people that ask for them? Even if the person above is right, asking for sources and providing is the correct behaviour in an adult conversation on a platform that prides itself to be full of scientists.

[1] https://www.youtube.com/watch?v=zckV1bYrGdQ

[2] https://www.vogue.com/article/portrait-of-bravery-ukraines-f...

[3] https://www.youtube.com/watch?v=VfaCc1feMaM

[4] https://www.theguardian.com/us-news/2023/feb/20/how-biden-pu...

Anyway, I'm not replying to all your other crap, but you should check yourself b/c you're really buying into some obvious BS here.

However, not to defend the guy, but as a CEO of this bank he ... has to say something. And whatever he says it will be bad anyway.

I never thought much of public relations until i had to work with the team.

It’s really an art.

A bank can follow a lower risk strategy and accept lower profits, but that's not necessarily what shareholders want. Some risk of failure is acceptable.

The point is that a bank run is a liquidity event (i.e. we still own more than what we owe, it’s just hard to turn it into cash fast enough).

SVB has a fine balance sheet for now, they’re just running out of easy things to sell.

The quote is referencing liquidity events, where the problem is everyone wants their money because they’re nervous about the bank, but the only thing that can hurt the bank is them taking out their money (because then the bank is in fire sale mode).

A CEOs job in this time (something SVB CEO did not do) is to project confidence. That’s literally all they can do.

His statement didn't project confidence. My "we are adequately capitalized" shirt is raising questions answered by my shirt is the meme way of expressing it. The right move would be to find a recapitalization transaction and complete it, which they tried to do but issued the press release right after a crypto-focused bank went into receivership due to falling account levels. That did not help matters.

There’s no deeper point.

Do they?

If SVB is sitting on a pile of Treasury bonds that mature in 20 years, they can “hold to maturity” and get their principal plus some very low interest rate. But this is useless! In a fantasy world in which all their depositors leave and they keep those bonds for 20 years, they are indeed worth that amount in 20 years, which has a rather lower net present value today, and maybe their investors care and maybe they don’t.

But this is, of course, a fantasy. Those bonds are collateral for deposits, SVB pays 4.5% APY on savings, and that 4.5% doesn’t materialize from the ether. In 20 years, 4.5% multiplies money by 2.4, those T-bonds will not multiply by 2.4, and SVB will slowly but surely end up in the hole. Unless they convince a very large fraction of their depositors to forego interest.

It boggles my mind that banks are apparently permitted to do accounting on a hold-to-maturity basis. Holding a bond to maturity avoids paying a spread and maybe has some tax effects. And that’s it. Otherwise you might as well sell it and buy a new one with the same present value.

(I am not an expert, and I’m going off HN comments for how these rules work. But if the banks really do get to say they plan to hold a fixed-income instrument to maturity and they can value it as something like face value, then I think the system is broken.)

It's hilarious that banks serving crypto and startup ecosystems aren't failing because their crypto and startup loans went bad, they're failing because of the duration risk from holding long-term Treasurys on their balance sheet.

That is the number one reason why banks go bankrupt...

It's not hilarious, duration risk is the biggest risk a bank has to deal with and it gets worse the more and more people keep their money as demand deposits. This is why the Fed does QE, the duration of deposits has shrunk so low, that the banks can't buy treasuries as the duration of the treasuries has become too long in relation to instantaneous demand deposits that can switch from bank to bank. The only solution that the Fed came up with, is to do the duration transformation themselves by buying long duration treasuries and giving instantly transferrable central bank reserves with no duration risk. This works because the system as a whole cannot go bankrupt, but individual banks can. If you take your money out of the bank, the CB reserves just get turned into cash. If you transfer between banks, the recipient bank now holds the reserves.

Also, plenty of crypto specific banks did fail because their loans went bad.

If a bank has $100 of deposits and has lent out $90 on a 30-year adjustable rate basis, the bank is exposed to potentially liquidity issues, default risk, and second-order effects like changes in the yield curve. But if the bank lends that $90 as a fixed rate mortgage or buys a 30-year T bond, they are directly exposed to interest rate changes.

(Also, as I understand it, and this is far outside my expertise: banks usually try repackage their debt and sell it to investors. The banks presumably can’t carry those 30 year fixed mortgages on their books without accounting for interest rate risk. Why are T bonds special?)

No it isn't. Any other bank would be happy to write a loan backed by US treasury holdings, at no more than a moderate profit. If you're sitting on that, it has value. But it doesn't have value in literal dollars by tomorrow morning to pay out a withdrawal. That's what "liquidity" is all about.

This has nothing to do with liquidity. If I had a 0 interest, $100 T bond maturing in 30 years, I cannot sell it today for $100. But anyone who lent me $90, nonrecourse, using it as collateral and asking for only a moderate profit is nuts because this bond is not worth $90 — not even close. Maybe I can get a loan that is based on my own credit-worthiness, but that’s a different story entirely.

If I have this $100 T bond, and I’m a bank, and that T bond is collateral for a $100 savings account paying 4.5% APY, I am in the hole. If my depositor sticks around, I can gamble and hope I can make up my losses (e.g. by interest rates going way down), or I can try to be such an awesome bank going forward that my profits can make up for my losses, and maybe I’ll get away with it, but I don’t really deserve to get away with it.

Not to a retail investor looking at short term returns (and irrationally obsessed with Inflation! due to media consumption), but to a bank with regulatory deposit requirements and a longer term outlook? Seems not unreasonable.

Anyway it doesn't have to be worth the full face value. It just needs to be worth enough to back a short term loan big enough to honor current withdrawal demands.

I wonder if this is the problem.

> to a bank with regulatory deposit requirements and a longer term outlook?

Maybe with some generally accepted accounting principle, but not by any sensible business standard.

If that bond trades for $80, no one would buy it for $90. It’s worth $80. Similarly, if you already own it, it’s not magically worth more.

And if you are a bank with a long term outlook, you expect interest rates to hold near current levels, and you pay 4.5% APY to depositors, your long term outlook of paying 4.5% to deposits where that deposit money is locked up in a very safe bond earning 1.8% APY, you are losing a lot of money, very safely, in the long term. Almost exactly as much as you would lose by booking the loss right away and investing in something else.

Other than tax or regulatory arbitrage, complex accounting is no substitute for actual profits and losses :)

But they wouldn't continue to pay 4.5% interest for 20 years would they? This is just a brief moment of high interest rates, so I think that's the main detractor from this argument. In other words, it's not like 4.5% APY on savings is anywhere close to the norm.

You are welcome to make that bet for your personal finances or on behalf of your company. You should not make that bet with someone else’s money unless they have signed up for it.

For most banks, it is fine to assume a 20 year deposit window because deposits are fungible and for most of recent history deposit bases have gone up.

SVB was wrong for not assuming that the 2021 deposit spike was (in hindsight obviously) a short term blip, but you can look at their loan book on page 19 of [0].

It's not immediately clear to me that there's some sort of systemic risk in VCs/PE firms not paying back their loans, but given how circular the tech ecosystem is, maybe we get there.

[0]https://s201.q4cdn.com/589201576/files/doc_financials/2022/q...

Let me try again. You're still thinking about liquidity -- assuming a 20 year deposit window seems okay to me.

But the problem is solvency. It's not that the assets are illiquid -- it's that they insufficient. If you run a bank, assume a 20 year deposit window, and invest those deposits in safe assets that carry similar interest rate risk to the deposits themselves, then you are solvent. If depositors leave faster than expected, you may be forced to pay a spread or other haircut to sell your long term assets early, but that's a small effect and can be managed gradually as long as you stay on top of it.

This isn't SVB's problem AFAICT. SVB bought assets that were perfectly liquid (T bonds!) and (if I read the filings right) assets that are still fairly liquid (MBSes), but they had interest rate exposure that did not match the deposits. Savings account interest rates (at SVB!) were up to 4.5%, and those T bonds had much lower fixed interest rates. [0]

If depositors held their money at SVB for 20 years and SVB didn't have a bank run right now, SVB would still be in trouble: SVB would be paying more interest on those deposits than they would receive on their investments, and their portfolio would slowly go negative.

[0] Whether you think about them as paying low interest for a long time or as being marked to market at a loss and then paying current interest rates at maturity is immaterial. You end up with the same number of actual dollars at the same times.

You are confusing price today with the actual characteristics of the instrument.

A T-bill pays back it's face value always, it just trades below face when interest rates are higher than when it was purchased.

That is the definition of a liquidity problem. You'll get the face value back eventually (it is sufficient), but not if you sell today.

A liquid market is not the only characteristic of liquidity. There's a liquid market for anything at a low enough price...

>If depositors held their money at SVB for 20 years and SVB didn't have a bank run right now, SVB would still be in trouble: SVB would be paying more interest on those deposits than they would receive on their investments, and their portfolio would slowly go negative.

This is a true statement people are making that has nothing to do with what happened here. The point of a bank is interest rate arbitrage, so I agree SVB would have to do their job better over those 20 years, but this thing that happened over 3 months is a liquidity crisis. They weren't running out of money to pay interest on deposits, they were running out of money to give those deposits back and were veering into the problem discussed above - selling things below value to create liquidity.

I Don't think you can make that call for all CEO's of Banks 1873.

  #notallceos!

It’s on par with the Big Short in terms of telling a great story about the economic crisis.

Is that terribly worded or is it just me? I figure it’s supposed to be poetic but I find it tedious. I think it could be simplified like this:

“A banker who argues his creditworthiness has none.”

I realize it’s a quote but holy shit.

I figure you’re just being snarky but still.

That said, it doesn't seem to have emerged into widespread use until well after the 1950s, so would have been a peculiar choice for a 19th century author:

<https://books.google.com/ngrams/graph?content=creditworthine...>

It's just you.

Ugh. Give me a break.