<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>powera</author><text>It wasn&amp;#x27;t &amp;quot;irrational VCs&amp;quot; starting a bank run that caused the SVB problems.&lt;p&gt;It was the very clear fact that the bank was insolvent, except under &amp;quot;we can pretend all their customers will leave their money at below-market interest rates for a decade&amp;quot; accounting.&lt;p&gt;Perhaps if SVB had less-informed customers, the bank failure would have happened at the speed of First Republic.  But the writing was on the wall: SVB was certain to require some form of bail-out or acquisition.</text><parent_chain><item><author>epistasis</author><text>There is absolutely no hedge that can stop a bank run, there is literally not a single financial invention that allows both banking and enough liquidity to stop the run.&lt;p&gt;Except for insurance on that sort of bank run.&lt;p&gt;Really it comes down to irrational VCs starting this bank run, which inevitably led to the destruction of the only bank that really understands tech startups. And now the same folks are making fools of themselves doubting all economic data (public or private, they all agree) that shows that most sectors are doing fantastically, just not tech.  They are also backing a presidential candidate that thinks WiFi causes cancer, and has some of the worst anti-science views out there; in addition these same VCs are pretty much solely responsible for the community backlash against tech, the change from appreciation of tech to hate of tech, as they are outliers with their weird political obsessions that don&amp;#x27;t even match the rest of the industry.&lt;p&gt;The result of the interest rate hikes was that there were going to be some bank failures, that&amp;#x27;s the whole point of trying to cool things off.  That it happened in tech and not elsewhere is due to a few bad actors that have more economic power than wisdom to wield it well.</text></item><item><author>lesuorac</author><text>When you&amp;#x27;re paid millions of dollars its your job to hedge risks.&lt;p&gt;When you&amp;#x27;re just a small renter, it&amp;#x27;s fine for when the handyman doesn&amp;#x27;t show up the apartment keeps flooding. When you&amp;#x27;re a 200 unit apartment owner, you better have a list of a dozen handymen that you can go down when the first one doesn&amp;#x27;t show up.&lt;p&gt;These banks are the equivalent of the apartment owner. They are expected to be able to survive any decision the FED makes short of the FED shutting them down and even in that case they should have known ahead of time and been working on an appeal.</text></item><item><author>fosk</author><text>The Fed first said it would not increase rates, then it said inflation was transitory, then all of a sudden they did a 360 and increased the rates the highest in more than a decade, then they are saying they will keep increasing, then something will inevitably break, and then they will start cutting again despite their original plans.&lt;p&gt;Sure the banks should have managed risks better and this whole fiasco falls on SVB, but to be fair the Fed is doing a horrible job at setting expectations. Whoever trusted them in the past, got screwed. They are fundamentally a reactive organism  that for some unknown reason talks as if they are the ones in charge.&lt;p&gt;Obviously they are not.</text></item></parent_chain></comment><story><title>Big VC, Tech Got Backstop for Billions in Uninsured SVB Deposits</title><url>https://www.bloomberg.com/news/articles/2023-06-23/fdic-insured-billions-in-deposits-for-sequoia-other-top-svb-customers</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>lesuorac</author><text>1) What&amp;#x27;s irrational about taking your money out of an insolvent bank?&lt;p&gt;Sure SVB collapsed immediately from the bank run; but whose to say it wouldn&amp;#x27;t&amp;#x27;ve gone bankrupt 5 months from now (it&amp;#x27;s not like 2% mortgages are worth any more now than then!)?&lt;p&gt;2) It&amp;#x27;s not like the Fed didn&amp;#x27;t warn them quarters ahead of time that SVB wasn&amp;#x27;t hedged against rising interest rates. The Fed does not need to give banks advanced notice of what they&amp;#x27;re doing; the bank should be hedged for w&amp;#x2F;e the Fed does so that they don&amp;#x27;t become insolvent triggering a bank run.&lt;p&gt;Sure it would be much better if the VCs had gotten together and agreed to either loan SVB money or etc so it would be paper solvent. But my original point is, don&amp;#x27;t be blaming the Fed for SVB&amp;#x27;s collapse. SVB had a duty to manage their risks and they did not.</text><parent_chain><item><author>epistasis</author><text>There is absolutely no hedge that can stop a bank run, there is literally not a single financial invention that allows both banking and enough liquidity to stop the run.&lt;p&gt;Except for insurance on that sort of bank run.&lt;p&gt;Really it comes down to irrational VCs starting this bank run, which inevitably led to the destruction of the only bank that really understands tech startups. And now the same folks are making fools of themselves doubting all economic data (public or private, they all agree) that shows that most sectors are doing fantastically, just not tech.  They are also backing a presidential candidate that thinks WiFi causes cancer, and has some of the worst anti-science views out there; in addition these same VCs are pretty much solely responsible for the community backlash against tech, the change from appreciation of tech to hate of tech, as they are outliers with their weird political obsessions that don&amp;#x27;t even match the rest of the industry.&lt;p&gt;The result of the interest rate hikes was that there were going to be some bank failures, that&amp;#x27;s the whole point of trying to cool things off.  That it happened in tech and not elsewhere is due to a few bad actors that have more economic power than wisdom to wield it well.</text></item><item><author>lesuorac</author><text>When you&amp;#x27;re paid millions of dollars its your job to hedge risks.&lt;p&gt;When you&amp;#x27;re just a small renter, it&amp;#x27;s fine for when the handyman doesn&amp;#x27;t show up the apartment keeps flooding. When you&amp;#x27;re a 200 unit apartment owner, you better have a list of a dozen handymen that you can go down when the first one doesn&amp;#x27;t show up.&lt;p&gt;These banks are the equivalent of the apartment owner. They are expected to be able to survive any decision the FED makes short of the FED shutting them down and even in that case they should have known ahead of time and been working on an appeal.</text></item><item><author>fosk</author><text>The Fed first said it would not increase rates, then it said inflation was transitory, then all of a sudden they did a 360 and increased the rates the highest in more than a decade, then they are saying they will keep increasing, then something will inevitably break, and then they will start cutting again despite their original plans.&lt;p&gt;Sure the banks should have managed risks better and this whole fiasco falls on SVB, but to be fair the Fed is doing a horrible job at setting expectations. Whoever trusted them in the past, got screwed. They are fundamentally a reactive organism  that for some unknown reason talks as if they are the ones in charge.&lt;p&gt;Obviously they are not.</text></item></parent_chain></comment><story><title>Big VC, Tech Got Backstop for Billions in Uninsured SVB Deposits</title><url>https://www.bloomberg.com/news/articles/2023-06-23/fdic-insured-billions-in-deposits-for-sequoia-other-top-svb-customers</url></story>