I started, I just didn't have the time and realized my blog was **. Looking around most other blogs are equally bad. There are some good writers out ther but the majority of tech people aren't.
However, threads are very rarely needed. The common use case in other languages is I/O, and JS environments handle that with async I/O—a superior choice, IMO.
Deno supports vastly superior threading model (such as green threads). Again depending on what you are coding, threading may not be the best model. Look at Ngnix vs Apache (event driven vs threading).
> Deno supports vastly superior threading model (such as green threads)
Whatever it supports, Javascript-the-language has no concept of threads. And workers are basically external processes with a somewhat awkward event-based communication and certain limitations.
Whatever Deno uses internally to implement them has no bearing.
Oh I do believe it. There will always be a market for snobs who will want to pay extra for handmade things vs AI-generated. The issue here is that it is all driven by fads and unstable. If you want to make money you will have to be flexible.
Can I forget about reactive programming now? Its been fashionable for the last 5+ years, I hate it. Kinda cool to play around with but just seems to double the complexity on everything.
The problem with all these banks disappearing is that there are continuously fewer and fewer choices left. Eventually there will be a handful of megabanks and nothing else. I guess this is happening in every industry these days.
I feel like we're missing a key part of banking infrastructure: somewhere to just park cash.
Start-ups who raise a Series A aren't looking to earn 1% on it - it seems silly that they can't really do anything with it that doesn't take on risk, and that FDIC insurance for just storing cash only goes up to a low amount.
Sure, in the old days when money was physical and there were costs involved in storing it and transporting it that makes sense. But these days, I feel like I'd like to just be able to have an account straight at the Federal Reserve or something, which doesn't earn any interest, but lets me keep my cash sitting there without any risk of a run or anything like that.
But generally, I don't think I really need a bank. I want somewhere to temporarily store any amount of cash (Federal Reserve), and somewhere else that I can invest what I want, if I'm looking for a return, with some risk, on my money. Neither of those are really roles of a bank, right?
There are a few full-reserve banks,
(as opposed to fractional reserve banks), where your money is not gambled with at all, but nobody uses them because nobody wants to pay money to have a bank account.
There are Massachusetts banks insured by the DIF (the inspiration for the FDIC) that has insurance for deposits over 250k, but at that point you're kind of putting more faith in the state of Massachusetts than the U.S. government.
> Start-ups who raise a Series A aren't looking to earn 1% on it - it seems silly that they can't really do anything with it that doesn't take on risk, and that FDIC insurance for just storing cash only goes up to a low amount.
If this is what they're looking for, they should probably just be banking with a SIB [1]. Wells Fargo and Bank of America might pay laughably low interest rates on their accounts, and deposits might technically only be insured up to 250k, but the U.S. government cannot and will not let these banks fail under any circumstances because they would drag the entire U.S. economy down with them.
The government doesn't want you to "just park cash" because it makes monetary policy difficult and loans more expensive. Predictable and cheap credit is an necessary part of a functioning modern economy so the Fed incentivizes(forces) banks to use deposits to make loans.
Custodia in Wyoming has been going through this same thing, recently. They tried to start a 100% reserve bank. The Fed has been ignoring their application for a Master Account for two or three years, until just recently, they were told on the side to withdraw the application or it would be formally denied.
Then, according to the CEO of the bank, the Fed leaked to the press.
Great read. What conclusions should we draw? What should we do, if "money is no longer money"?
It seems like most normal people operate as though money... is money. What should change in the way most normal people do what they do with... whatever it's called now?
Sign up with a brokerage. Use their cash management account. Confirm its FDIC limits (many cover $1M+ with sweep functionality). If you exceed those limits, consider investing excess cash or cash equivalents in treasuries or money market funds that solely hold short dated government backed securities. This is what a Narrow Bank would do with demand deposits. Treasuries are backed by the Fed and the full faith and credit of the US gov; they are considered risk free.
Tada! You have replicated narrow bank functionality. None of us have enough pull to change Fed fractional reserve and banking regulatory policy unfortunately. If you can't change the wind, adjust your sails.
If you don't mind your deposits being exposed to fractional reserve lending and FDIC insurance, CDARS: https://www.intrafinetworkdeposits.com/ To my knowledge, it can provide at least $50M in FDIC coverage with sweeps under the hood, although someone on HN mentioned the other day the limit might be more. Ask your financial services institution what their limit is.
Many do, but even if they didn't, it's free to ACH money to your real bank checking account every now and then that you can spend and write checks with.
Brokers only lend out of specific core cash accounts (FCASH at Fidelity, for example). Whether you hold cash in those account types is your choice, it isn’t mandatory.
Sure they can. You cycle it through very short term treasuries - weekly buys of 4 week t-bills if you really want to be conservative about your cash availability. And if even that is too spicy for you, buy shorter-out t-bills on the market to keep your average maturity lower.
(This mirrors some of the primary strategies used by money market funds, but a startup is in a better position because they can probably accurately forecast their cash needs a week or a month out.)
That is not what they are asking for. Investing in t-bills either requires an account with Treasury direct, or some other brokerage. If you manage the t-bills yourself, then you have to manually initiate the transfers, which has risk of both human error (if you forget to transfer, or input the wrong amount) and counter-party risk (if the brokerage fails, you may not have access to your funds for a while). And for many companies the day-to-day operations require more than $250k in an account just to be able to clear payroll and invoices, so even if they put their reserves in t-bills, their primary account is still at risk.
Small startups and business can easily end up with cash in the multi-millions. We are talking about companies with a handful of employees, too small to warrant a full time financial focused position. As the OP mentioned, there is zero reasons we can't have a zero risk depositor account. And I think most folks would be happy to pay a small fee for the service, but fees should not be necessary as the provider can still get overnight rates. But the only reason we don't have one right now is because the government doesn't want to interfere with the banks ability to make money off of our deposits.
EDIT: For some extra context, I know someone that had a swap account at SVB. In theory they were protected, but they still lost access to their funds for multiple days, which can be very problematic for a business. And on top of that it wasn't (and still isn't) clear how one would recover swap accounts, so they spent the weekend reaching out to lawyers. At this point they have probably spent a week of time sorting this mess out. They are a small biotech focused on finding cures for diseases and have zero interest/resources for financial engineering. And for companies that typically only have 1-2 years of runway, loosing a week of productivity is a huge distraction.
Please explain to me what happens to a sweep account when the primary bank fails. Asking for a friend, who quite literally tried to get an answer to this over the weekend. Also, I asked this question in the Mercury thread where the founders were responding to questions and got no answer.
And apologies, but I added an edit before I saw your comment. But in that edit, I explain how the sweep account was of little comfort during this SVB debacle. If they had needed to make payroll on Friday, they would have missed it. And while the FDIC has restored access to 100% of funds thanks to the intervention, it is still unclear how and when they would have gotten access to the sweep accounts in the case of no intervention.
I don't know, but I can tell you that my attorneys were pretty optimistic about the state of what would happen for the sweep accounts at SVB that invested in external money market funds before there was a resolution. But they're attorneys, so they're not going to commit to a hard answer unless you're paying them, and this was a general information call.
That provides little comfort. I too would be optimistic that the funds would be recovered eventually. I am sure there are some vulture funds that will happily lend you some money at high interest rates while you spend six months in bankruptcy court trying to get access to your sweep accounts, but I don't think that is what most folks had in mind when they signed up for these types of accounts. Until the FDIC clarifies, or until these accounts are actually tested in a real life scenario, I suspect we won't be able to answer that question. So maybe we shouldn't promote them as a solution until someone can answer it confidently.
I don't think this is missing at all. It's literally just what a bank does. Historically, a bog standard, straight-up boring old school bank. No fancy investment banking, no crazy growth strategy, no risky lending to maximize returns, no emperor's-new-clothes financial fashion tricks that we must do now because everyone else does them.
I worked for many years at a bank that did just that. We happened to be able to offer significantly lower deposit rates than our competition, because we had very low exposure to the kind of banking that risks government takeover due to surprising repricing events.
Wealthy customers too lazy or otherwise unable to spread deposits around to stay below the deposit guarantees chose us to an overwhelming degree, in spite of competition that offered better rates.
Granted, it's in Europe. Don't know if there's stuff in the US environment that makes this harder.
Our HOA’s noname bank has a cash deposit sweep where they automatically loadbalance reserve cash between many banks so it stays under fdic limit. Done that for years. But what do i know I’m just an hoa board member not a unicorn startup cfo ¯\_(ツ)_/¯
> It's a lot easier to split $1M between four banks than to split $300M between 1200
If you tens of millions in cash, that money shoupd be managed proffeshionally. And anyway, why should preserving that money be anyone's problem other than the owner's?
There is no such thing as 'sace money' in the world. It just doesn't exist.
We as a society spend more effort making sure money is safe than we do making sure children are safe/not hungry.
A person walking outside cant be safe from getting hit by a car, a child cant be safe from getting an ilness, plant machinery cant be safe from breakdown, a city can't be safe from being hit by an earthquake.
reserves are for more than a rainy day fund. They're also for saving up for predicted maintenance needs. For instance, say the HOA is responsible for the roofs of all the residences (like if the residences are condos). It's a somewhat predictable and high expense that you can map out to 10 years down the line or something. Then you save up for it in your reserves.
Exactly. Many HOAs are now required to get periodic reserve studies that calculate predicted maintenance costs going out sometimes 30 years. Association Reserves did our study (<300 homes) and calculated we needed $1.4M to be 100% funded. Our HOA policies require only 60%, which we think reduces the risk of special assessments to a very low level, but that's still a lot of money. Association Reserves believes that property values in HOAs with high percentage reserves can be 5-10% higher than low percentage (<40%) reserves.
If you have an account with noname for $3,000k and noname has 12 accounts with localcorp1-localcorp12 each of $250k -- and noname goes poof, what happens?
I think, according to the preSVB rules, you get $250k from FDIC and then get a very strong claim to $2,750k from the rest of noname's assets (if no BigBank steps in to buy the part of noname you're connected to).
When I look at acc statement it shows a list of completely different banks each with <250K. If our bank goes bust I presume we get our first 250K that are sitting in the bank itself as soon as FDIC takes over which is enough for operations and will need to contact other banks for our money. It's more like a brokerage account than a regular deposit.
> Also, per FDIC rules, the 250k is per party attached to the account, so at least for a married couple it seems to be $500k per account.
Its per owner per account class, but what constitutes an owner varies by account class, and, IIRC, many class by definition have a single owner.
But, yeah, you can double your coverage in simple directly-owned accounts as a married couple by splitting funds between maxed out single accounts ($250K) for each party and a maxed out joint account ($500K) for a total of $1M in coverage, because single and joint accounts are separate categories.
Brokered deposits are insured in the depositor (not brokers) name. If they still happen to be over the $250K limit, they are historically the least likely accounts to get full value back in a failure, but as long as there is less than the insurance limit per bank, they are fully covered.
SVB offered a sweep account. Turns out it does not cover the lawyer fees that one will incur when trying to figure out how to recover those accounts. Maybe your HOA should hire a CFO ¯\_(ツ)_/¯
This is actually what CDBC proposals are about, at least originally. The idea is that by making the computing infrastructure of the central bank scale up and out, companies and even individuals can directly hold and transfer "hard money" i.e. money directly issued by the central bank, without needing an intermediary bank.
When I was last tangentially involved in such projects it was quite unclear how they thought this would interact with monetary policy. Narrow banks could easily be created today without any new IT systems, but generally, governments are unwilling to do what it takes to enable them for political and financial reasons. At some level it's another obfuscated way of raising revenue without explicitly raising taxes: they force people to deposit money in banks, force banks to lend those deposits to "low risk" counterparties like themselves giving them more money to spend on vote-winning policies, then if the banks go under they either print the money to bail them out (taxation via inflation), or force banks to charge the depositors (taxation with the banks as collectors), thus hiding the true nature of what's happening.
To get banks with zero risk deposits is therefore not really an infrastructure problem - banks could easily just park cash with the CB and then charge fees for administration of things like the websites, the branches and so on. The problem is to convince governments to reduce their spending levels to the point where they can eliminate the rules forcing banks to loan them money, which in turn would allow narrow banks/accounts to appear, and that in turn would allow them to start removing the guarantee on deposits. In such a system people who wanted ROI would have to explicitly move some deposits into funds that expose the liquidity risks and requirements, and which can be left to collapse without a bailout if they make big losses.
Unfortunately governments are currently stuck in a local minima. Although everyone can see that bank runs are bad, and that they're also easy to eliminate, doing so would require people to believe that the government will not bail out depositors at a fractional reserve bank if there's a run. For as long as people suspect the government's commitment to the policy is weak, the winning move is to keep banking with a fractional reserve bank and pocket the zero-risk interest yields. The suckers who put their money in a safer place will end up poorer than those who put their money into a bank that later collapses.
Any bank that tries that would have to charge a fee to cover costs and will quickly lose business to the other “banks” that don’t do that.
The fundamental lie here is allowing banks to tell you you have “cash” deposited and “available” with them. If the online app showed the truth - how your $10k you deposited turned into some shares in mortgage backed securities or whatnot, the alternative “just pay to park some cash” might be able to survive.
I have the same pet peeve about Amazon being able to tell you that you “buy” a Kindle book instead of buying a revocable license to read it temporarily.
It’s all false advertising really and it’s eroding competition and consumer trust.
Certainly for up to $250,000 deposited at an FDIC insured institution, it is absolutely true that you can assume that you have cash deposited and available. If at any time the bank gets itself into a position where they can’t make good on that, FDIC will fix it so you still have your cash.
That is precisely the mechanism that the federal
Government makes available that gives you a place to park your cash.
As a note, this is one reason to still keep some paper checks around for your FDIC accounts.
Because when SVB closed on Friday and reopened on Monday, you could have still used a paper check during that time and it would be honored; but online access may have been shut off.
I would think that it wouldn't be an issue, so long as your total for written checks that have not cleared is both not over your balance amount, and not over the FDIC $250k limit, but IANAL as well.
>The fundamental lie here is allowing banks to tell you you have “cash” deposited and “available” with them. If the online app showed the truth - how your $10k you deposited turned into some shares in mortgage backed securities or whatnot, the alternative “just pay to park some cash” might be able to survive.
That's basically what bond mutual funds are (including money market mutual funds, which closely simulate savings accounts via $1 share price), and they seem to have a market.
The operations fee required for that company posited to have just raised its series A to park its fat stacks of cash is going to be negligible (as it should be constant for any size of account).
Well the other side of the equation is it would be very very tempting to do something with all that cash. Like “let’s fire the CEO who doesn’t go for it” tempting. I don’t see this working without regulation.
The problem for the startup is they are already doing something super risky and so want to be 100% conservative with the cash used to finance their operations. The last thing their investors want to hear is "so yeah, you wanted us to shoot for the moon with your money, but we didn't want to lose out on a couple percent of interest so we invested it in the market and that's down 20% right now so we're having to wait a bit to execute part of our strategy as we expect that to go back up soon".
Like, the problem is that the mental model of this money is wrong: there needs to be a place where a company that intends to take a bunch of money in and then spend it over the course of a few years can do that without it causing everyone a bunch of issues as those deposits were supposedly backing loans to still other people (such as that story with the hashicorp people that was posted here yesterday with the Chase bank branch that failed to understand that a startup's goal is to lose money, not invest it).
The Federal Reserve doesn’t want to be in the business of managing all the infrastructure of payments.
Banks offer a deposit product that lets you do useful things like ‘get your salary paid directly into your account from your employer’s account’, and ‘use a debit card to authorize transferring a couple of bucks to Starbucks’s account’.
> Sure, in the old days when money was physical and there were costs involved in storing it and transporting it that makes sense.
???
This never stopped being the case.
Banks receive deposits and make loans. They are core pieces of modern banking. They play a role in increasing the monetary supply through debt servicing.
Banks make money from loans. A bank that didn't make loans would have to make money from deposits by charging a large fee to its depositors, and compete for deposits with other banks that don't charge a fee.
For most of us, a bank is a place to just park cash. Most people are well under the $250k insurance. It seems the government is willing to cover depositors above that amount now too (SVB).
The Federal Reserve Bank's current balance sheet (as of last Thursday, https://www.federalreserve.gov/releases/h41/current/h41.htm ) shows they hold $4.5 trillion in Treasury notes and bonds and $2.6 trillion in MBS (mortgage-backed securities) out of a total of $8.3 trillion. The first two numbers are face value not market value.
If market value is 10% less than face value for these securities on average, then the Fed would have unrealized losses of about $700 billion. But the Fed doesn't have the same insolvency or liquidity risks that ordinary commercial banks do.
The US dollar would go down in value if there were more dollar sellers than buyers. That would happen if those with dollars had something else to buy. The Us dollar index is up a bit today, so far. I'd imagine at the moment that a run on the dollar would be unlikely. But there could be some combination of circumstances . . .
Corporate consolidation has been going strong since the late 90s/early 2000s, at least in my lifetime I saw the dwindling number of actual independent companies, the vast majority of big companies I was a customer during my lifetime have coalesced into some large conglomerate-ish... And in multiple countries, it really feels it's happening everywhere, even though seems more prominent in the USA.
This is a natural consequence of markets (and proof that economies of scale work). On a long enough timeline, they trend towards consolidation. This is why constant government intervention is necessary, to break up monopolies and restore competition. A government that refuses to engage in trust-busting is broken.
It's also the result of a low tax and low interest rate environment. When you can borrow money for free, or functionally for less than your rate of profit, why wouldn't you buy out your competitors?
I’m not so sure. The US has markets that are resistant against consolidation.
I think this is a natural consequence of letting the biggest companies control the politicians that set the rules.
(What you say is true for pure free markets, but the banking industry is incredibly regulated, and the government routinely picks winners and losers in it.)
> The US has markets that are resistant against consolidation.
I don't see why they are special and the trends are clear, despite the claim. If govt regulation results in a few winners who have played by the rules and are seen as more reliable or it's free market monopolists (or duo, etc), the result is the same.
I'd argue it's the opposite, government intervention and existence explicitly favors the biggest players and nudges the market into oligopolies and monopolies
Diseconomies of scale also exist and are very real, and I theorize that many organizations try to overcome it by applying political pressures on smaller peers.
That's how we get wonderful things like the East Palestine Disaster. Let's deregulate biotech! Coming up next after Shark Week -- Lab Leak Week! Let's deregulate environmental pollutants! You don't need clean drinking water! /s
Bank failures were incredibly common in 19th and early 20th century America. Today they are next to non existent.
Again, take a step back from the ideology and look at the evidence. The count of bank failures before 1930s era regulations vs post speaks to the effectiveness of government intervention.
That's a bit of a circular argument, since there are radically fewer banks now than there were in the past. Just in the last 20 years the number of banks in the US was cut down in half; and back in the 1930s, there were almost four times as many banks as we have now. Fewer banks mean fewer bank failures.
A fairer comparison perhaps would be to see how many dollars of deposits (in some adjusted manner, like per capita, percentage of GDP, or percentage of circulating money) were imperiled as a result of bank failures back then versus now? A hundred banks failing in the 19th century each serving a few thousand customers each would be a much smaller impact than, for example, the hypothetical failure of Bank of America.
Bank failure is a different problem than bank consolidation, of course it would happen less when you don't allow small banks to exist and just give money to the ones that do so that they don't fail, making them richer and protecting them from their mistakes
> This is why constant government intervention is necessary, to break up monopolies and restore competition. A government that refuses to engage in trust-busting is broken.
Conversely, more regulations mean more monopolies due to larger first-mover advantages, and the only viable route is to build until you get bought by a parent company who can sort out the admin.
Constant government intervention isn't what makes competition. It being worth it to start and build a company without, in the slim chance you make it, being a verbal and financial punching bag for future politicians, is.
The fact that economies of scale exist means that even unregulated markets will consolidate. Regulation is an orthogonal concept. On the spectrum of market competitiveness, one extreme end (perfect competition) is an unstable state, and the other extreme end (monopoly) is a stable state. As consumers we benefit from competition, but free markets abhor competition. Something needs to intervene to reintroduce competitiveness into monopolized markets, and that something is going to be indistinguishable from a government.
I agree that even less regulated industries have monopolies, you're right, but those will tend to be companies that either have a natural monopoly (e.g. they own some land) or are so competitively priced enough for their customers that there's no obvious way to create a competitor that can take market share from them. I don't see either of those situations being improved by constant government interference.
At least credit unions remove the profit motive --- I wish that there was a similar movement to farmer's co-operatives, or setups like "Southern States", which is a farmer-owned co-operative for supplies.
Socialism is a _very_ broad term that ranges from anarcho syndicalism and libertarian socialism to democratic socialism, market socialism and many others. The key commonality of these is that you have some form of worker owned economy AKA you have some say and direct responsibility in all aspects of life, including your work.
What is described here is some variant of state capitalism or state monopoly capitalism, which is an extremely controversial form in socialist circles: https://en.wikipedia.org/wiki/State_capitalism
But what is the competitive advantage to be had between a regional bank and a megabank? I kind of love my megabank(and there are quite a few megabanks too). I can expect a branch to be in a foreign country, it provides a pretty great mobile user experience, it is well capitalized, the in person customer service has been great as well.
Is it that less competition allows for companies like Wells Fargo to take advantage of their customers on a large scale? Is it that regional ones can provide fewer fees?
As someone that lives in a rural community, the national mega bank wouldn’t offer me a mortgage because they didn’t understand the local market, whereas the regional bank was the one most people living here got their mortgages from.
I'll add another example. I have a friend who lives in the Boston area and bought an old home about 10 years ago with the intention to gut renovate it. He didn't have enough cash to pay for the renovations without a loan, but the likes of Chase, Wells Fargo and Bank of America generally don't want to deal with mortgage loans like this, because 1) it's a different workflow... the bank gives you money piecemeal as construction proceeds rather than all at once and 2) the bank is basically fronting you the money based on what your home is going to worth when it is done.
For example, say I buy a home for $400k and gut renovate it for $200k. Let's say that the specific renovations are going to improve the value of the home, but it's hard to know by how much. If I go to Chase, they will gladly lend me 80% of the $400k ($320k). But Then I need an $80k down payment + $200k for renovations, or $280k cash on hand to make this work.
If I go to a smaller bank that doesn't do things as algorithmically and knows the local market, they might say "hey, we're gonna give you the $320k down payment and then we think that in that area of Boston and based on what you are doing, the house is going to be worth $150k more when you finish renovations, so we're gonna finance 80% of that $150k as well ($120k). You are still going to need to prove that you have your $80k down payment + $30k (20% of $150k) + $50k (the difference between what renovations cost and what they will add to value of home), or $160k total. So in this example, I need to have $160k in the bank if I want to make this whole transaction work with Regional Bank X, whereas with Chase, I need $280k.
A different take on your anecdote is that your friend goes to a big bank and they're willing to take a 20% down payment which gives your friend 5x leverage on the mortgage. Your friend says: "that's not good enough! I need more leverage because I also need money for renovations!". But big bank says "absolutely not, that's irresponsible."
Your anecdote presumes that the small bank is right and the big bank is wrong. I'm not so sure.
It's not more leverage after the additional money loaned is plowed back into the home's equity by way of the renovations, however. The bank simply needs some way to enforce that the additional money loaned is actually being used for this purpose, and that the renovations are of the 'widely acceptable' type.
There is nlan easy way to know: big bank didn't do the math and come to a dofferent conclusion, they jusy decided they don't want to deal with the problem.
Also, whay does 'right' even mean in this case? They lost the customer. Unless customer default on the loan, they won't be 'right'
>They lost the customer. Unless customer default on the loan, they won't be 'right'
This isn't how banks work. They put in place rules that they consistently adhere to when they decide if they're going to give out a loan to someone or not. The real answer is that if consistently allowing that type of loan would make them more money than it would cost, then they won't be right.
Genuine question is that more to do with the regional bank knowing the market or more to do with JPMorgan Chase having more stringent regulatory requirements and controls? Maybe a little of both?
MegaBanks have automated procedures which are more about automated bureaucracy than regulations.
If Computer Says No, nothing is happening. But Computer lacks any sense of context or local variation. By definition decisions are based on national stats which average a lot of behaviour.
Smaller banks have people - who are probably experts - making contextual loan decisions. Someone's good character and work ethic - or lack of - is going to influence the decision.
This doesn't make decisions infallible, but it's the difference between small-focus rigid decision making, and broad-focus community-dependent decision making.
It's also why so many people are caught in the rental trap. Many of them are perfectly able to afford a mortgage, but they don't match the bureaucratic criteria on some relatively minor point, and so Computer Says No.
It's also why credit scoring is so slanted. I have a perfect payment record, but no loan history because it's more than six years since I paid off all my debts. If I apply for a credit card I'll be marked down because I don't have a large existing credit limit.
This is deliberate policy, because lenders don't want people like me who will pay off the balance in full every month. They want borrowers who won't. This prioritises immediate profitability - until the loan book blows up with a wave of defaults during a recession, because these borrowers are inherently riskier.
Both. It isn't worth JP Morgan's time to understand the different neighborhoods in Boston. Their computer model is their computer model. But think about where you live. I'm sure you can tell me that certain streets are desirable and certain streets much less so. Maybe there is a block nearby with particularly nice foliage that makes it look good. Information that you wouldn't know by looking at a map. A regional lender might be tuned-in to things like that in a way that a megabank won't be, because it's not worth their time to get to know each and every neighborhood.
Seems more like a long-tail thing... mega banks take all the standard things that can be bundled into megasecurities, let someone else worry about all the things that don't fit into a standard box.
Examples:
(1) One reason SVB did well is it understood startups. If your startup just raised a large round and needed a small loan, you were more than good for the money, but most banks would scoff because your business didn't have a long record of profits.
(2) The "simple" thing of having a no-fee, no-minimum checking account with a convenient ATM you can use without fees is something we can take for granted in larger metro ares; in many places your local regional bank may be your only choice.
The one I hear about the most is service. Large, do-it-all banks don't have a lot of motivation to care about you and your $100,000 bank account & half-a-million mortgage. They've got corporate accounts to service against which yours is a mere rounding error. A smaller local bank will find you to be big, valuable customer to keep around.
This is a general economic principle. To put it into an HN context, this is why Google, Amazon, Facebook, Microsoft, and such aren't the only tech companies. When they sit down to spend a dollar, they do an analysis and put it into the place that will make $1.60 (tech companies still have absurd return ratios compared to the rest of the world even after the last year). It doesn't make any sense for them to put it where they will make $1.30. It doesn't matter how big they get or how much money they have, that analysis always holds true.
This is why Google shuts down so many things. Even being profitable isn't enough for them, it has to be wildly profitable and at scale to compete with "making ads better". It is also why it is perfectly rational to be distrustful of anything Google puts out and fear it being shut down. It is not a transient corporate culture thing, it is a systemic issue with where their profit comes from. And yet it is rational for them to float out various things as probes to see if there's some huge profit for them to tap into, even as total long shots.
Meanwhile, other smaller companies can happily survive and thrive on that $1 -> $1.30 return, and then themselves be too big to worry about a $1->$1.13 that a startup may thrive on.
There are some other reasons why One Big Company isn't actually a practical outcome, but this is one of them, and the one relevant to this discussion. It applies to tech companies. It applies to the retail industry; this is why Wal-Mart and the fancy boutique downtown import shop can still coexist, even today. It applies to the auto industry, which is why your local auto dealer may service a local business' 10-car fleet but there will be another company servicing huge fleets. And it applies to banks.
This does not mean a large bank is obligated to be negligent of you, it just mean that there's a pretty strong pressure that is hard for them to resist. Strong internal leadership may push the consumer branch to be friendly as a sort of advertising mechanism for the rest of their bank, because you never know what individual will be in charge of directing a large corporate account in the future. But they'll be vulnerable to the next MBA to come along and cut that cost and boost short term profits, and who will have moved up before the long term costs come in.
In the current system, a loan underwriting office can screw up and deny a loan, and it is no big deal. With one big bank, the same error means someone will never be able to buy a house/car/etc.
Also, not all banks offer all products. Many of the big megabanks product portfolios are missing fairly common financial instruments
It might have something to do with me being on the more chill side of things when it comes to customer service or other issues popping up. I'm pretty non-confrontational. I was also on the front lines of customer service for a while, those people have to deal with a lot, so I don't like to pile on.
Capitalism 101 explains that the consolidation of capital is necessary to maximize the capital extracted from customers. Basing our entire economy on a few average people handling the assets of billions is bound to go disastrously wrong. As we have seen cyclically for decades now. Does a bank exist that hasn’t knowingly laundered organized crime money, paid bribes, or otherwise engaged in substantial white collar crime? I cannot find one.
Credit unions are superior and their disparate ownership structure is a key reason why.
>“The unbridled, competitive free markets that the Right cherishes don’t exist today. They are a myth.” Furthermore, “The Left attacks the grotesque capitalism we see today, as if that were the true manifestation of the essence of capitalism rather than the distorted version it has become.”
I’ll posit that this am academic flight of fancy or distinction without a material difference. The fact is there’s no meaningful competition in the American economy, whether it’s called capitalism or socialism for the rich and debt peonage for the rest.
It’s an ouroboros, a cancer. One leads to the other and back again until everything has been extracted and the house of cards collapses in on itself and the survivors fight over the scraps to repeat these mistakes over again. The sooner mindless growth is reigned in and economic targets are forcibly aligned with reality, involving hard reality checks for very powerful and very despicable (subject of many articles trending on HN this past week) the better we’ll all be.
don't worry, just buy your Federal Reserve CBDC and keep up your social credit score so they don't unperson you with no recourse.
End game is the Fed tracking everything you do financially via their digital currency, this is almost classic Hegelian dialectic where you now have a manufactured crisis to get people begging for CBDC
If you paid attention the last week or so there have been a lot of accounts here promoting the fed bank as a solution.
You are correct and I agree with your assessment for what it's worth. Dozens of banks collapsing has two outcomes. Centralization into TBTF banks or a fed bank. Given the desire to manipulate currency further with CBDC I would suspect the modern money "theorists" in congress are salivating.
In accounting; the Big 8 -> the Big 5 -> the Big 4. EY is looking a bit precarious as they seem to be the goto firm for fraudulent companies so we may end up with the Big 3.
Banking is an industry where it’s not difficult to break up.
(1) ensuring only $250k should ensure capital is spread
(2) the above hasn’t been happening, so people are moving to big banks because the government bails them out
(3) regulations are such that smaller banks have to go through an insane amount of work to get to a “big bank”. Basically the big players have a moat. They’ll get bigger because they control / design regulation. It helps consolidation. Smaller banks can’t enter
(4) it doesn’t help some (maybe all) of these big banks are also board members of the fed. For instance Jamie Dimon of JP Morgan [1] where they funnel support to their corporations
(5) to fix, there’s a lot of options. (a) Simple one is to limit the amount of assets a bank can hold. They currently only do that for the smaller banks (not the big ones) (b) audit the fed directed by congress (there’s a lot of inner dealing there) (c) create a graduated tax based on asset (as it increases systemic risk) (d) good old fashion anti-trust breakups
This is a consequence of computers + internet. 2 ways in particular:
1. Large organisations become unwieldy - computers help track and tame that complexity.
2. Geographically distributed organisations have trouble communicating and can be outcompeted in a region by a company focussing on that region. The internet helps reduce the friction in communication.
Once both of these started getting adopted in the 90s and 00s, big companies became more competitive relative to smaller ones.
And the increase of lobbies and their increasing efficacy in getting tailored legislation adopted. Arguably as politics has become more and more a business. Not just in the U. S
Monopolies and robber barons are hardly a new phenomenon. In fact, I've seen the term "robber baron" derided as an anachronism. I suppose oligarch or plutocrat are the modern terms. Nevertheless, economics 101 (literally I had to sit through this in freshman intro economics) will tell you about forces that drive businesses towards consolidation.
I’m sorta the opposite, I still use my out-of-town credit union. Best investment for my life: been getting $5 every year on my initial $5 share (got in as a child) for a few decades now.
Have a line of credit with a big bank that I don’t really use, but means there’s a bank everywhere I can walk into if I needed a large amount of cash or a bank draft, and I pay it off the same day.
https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/... claims that there were 4,706 banks reporting to FDIC at the end of last year. If anything there are too many banks and too few big internet companies, given that you can fit the five that matter into one acronym.
I’m not sure it’s fair to compare regional banks to FAANG if that’s what you mean? There are plenty of “internet” companies that don’t fit into FAANG just as there are only a few mega banks on the scale of FAANG. Or I misunderstood?
There are also new banks popping up here and there that grow very rapidly due to a more software/tech focus.
And there are smaller more specialized banks that have been doing well (in Switzerland). There is at least one very recognizable co-op bank here and another one with a focus on sustainability.
For the conspiratorially minded, this is a feature, not a bug. The theory is that the creation of the current central banking system was, in part, to wrest power from the growing influence of regional banks back to the megabanks.
It's not a theory nor is it a conspiracy insofar as it is lacking evidence. The collapse during the great depression was used to sell the fallibility of the small banks. Senator Aldrich took the bill written by the wealthiest bankers in America straight to congress to form the fed.
It's relatively well known in fact [0]. Once you realize that was the intention to begin with the structure of modern banking starts to make a lot of sense.
Credit Suisse is a top 50 bank while SVB doesnt even make the top 100.
SVB dissapearing leads to a lack of choice.
Credit Suisse may pose a genuine global systemic risk.
I get that buying your groceries and morning coffee with crypto probably isn't happening anytime soon, but why do you single out those three things? I don't get what you mean by ownership, conversions are automated and easy (things like Uniswap), and transfers are as straightforward as transferring money could possibly be (insert recipient, insert amount, hit send). What do you mean?
Have you tried getting someone from nothing to setup to use all this independently? How long did it take to get them their hardware wallets, multiple backups in multiple secure locations, and various exchange accounts. How much did it cost? Not a chance in hell I’m setting up my parents or grand parents with this crap.
Its something every support desk should have. I often write my own tools like this. Ideally write a select query, execute it, note how many rows it selets, copy the where clause, start transaction, update using the where clause, execute, check rowcount matches what you selected earlier, commit trans.
Inquery co-founder here. Glad to hear the idea resonates with you! Do you usually just run these command in a local IDE? Would you prefer our solution be a local application or a self-hosted container in your VPC accessible through your web browser?
In the past I've done a few different ways but now I see strict infosec rules, That part is more important than where it runs. eg My last job we had a workflow where you needed a ticket approved by second eyes, which used CyberArk to create a new remote desktop running a DB IDE where you could do your business. Commands were tracked but no real restriction..
New firm you get your personal account temporary RW permissions via a centralized service.
The "temporary access" approach seems to be pretty popular based on our conversations with engineers at large-ish tech companies. We hadn't heard of anyone using a remote desktop for this problem, though.
The rest of the world, which for simplicity's sake we'll call the EU and china, have fairly powerful protections in place. EU law applies to companies operating in the EU, and China effectively bans all foreign apps. If Chinese businesses were not de facto arms of the Chinese state, and we had the diplomatic resources to investigate and prosecute chinese companies serving american citizens under american laws, then it might make sense to leaev well enough alone.
China does not ban foreign apps, that is pure misinformation.
I think lack of success of foreign apps in China comes down to a much simpler dynamic. Foreign apps are simply not launched concurrently in China and optimised for the Chinese market from the outset. The exception to this are mobile games titles which are generally overly optimised for the Chinese market if anything and generally fail to succeed outside of it.
This results in Chinese clones of said new foriegn app/service appearing very quickly and gaining dominance before said app can "expand" to China. By the time that happens, if it does, they have to compete with an established service that is language and culture native.
Essentially if you aren't launching in China day one and have a great understanding of the -very- competitive Chinese Internet platform economy you are screwed before you even start.
No application is banned from operating in China if they are willing to follow the rules. Generally speaking companies like Google just don't like the rules so they don't operate there.
The US has many laws that cause apps to be pulled from the App Store or forcibly be shutdown by hosting companies (even non-US entities!).
Why is it different when the laws are from a different country?
I'm not sure about connected, but I do like being able to walk the stairs to the apt, being able to open a door to a balcony. Its also less instrusive to the neighborhood than a tower which overlooks everyone.
I live in one, it isn't that awesome. Lots of noise from neighbours, but the worst thing is the big fire hazard. The risk of fire means there is a lot of sprinklers everywhere which regularly get damaged and leak everywhere. Usually every 2-3 years in our building a sprinkler pipe will get broken or leak will appear and destroy a few units.
There’s some massive variance in 4-over-1 and 5-over-1, with newer units very much built to a price.
I lived in one in Boston that was 4 total floors, actually all steel framed (so not really a 3-over-1), polished concrete floors in every unit, and built to the tune of $55M for ~150 units. Was intended to be condos, bottom fell out in 2007/2008, so it was rezoned to apartments. Dead silent in the over 8 years I was there. I must’nt of been the only one that thought it was good — there was a notable rapper as my next door neighbor, and a Stanley Cup winner in another hallway on my floor. I moved in when the market bottomed out, and paid like $1700/mo for years (moved out when it went up to $2450). I think it’d be ~$4000/mo now.
The newer ones though? I’ve heard of sub-$20M costs for similar number of units. They leak not because of the sprinklers, but because the general waterproofing and roofing is beyond awful, and just cost-cutting everywhere. I talked to some maintenance folks that had been to several new ones owned by the same company as the $55M one: “They don’t build them like that anymore. If they did, we wouldn’t be dealing with constant problems.”. Talk up your maintenance folk — they’ll be more than happy to vent about your building’s issues.
So the issue is building things to a price, knowing some people will pay because the vacancy rate is one of the tightest in the country.
It's also a matter of information asymmetry. Most potential renters or buyers don't have a good way to check for construction quality and interior noise levels. Even an independent pre-purchase inspection doesn't tell you much beyond really obvious problems. Customers aren't willing to pay more for higher quality because they can't easily determine quality, so most developers will go with the cheapest possible option and then slap on some granite countertops to make it look nice.
This could be addressed through stricter building codes. But that would drive up construction costs at a time when we already have a housing shortage in many areas.
Another fix would be to independently measure noise isolation and report that, so renters can actually make decisions based on it, and builders would have an incentive to include it, since they could more reliably charge more for it.
Someone should do that with good branding. Sorta like carfax. Call the Zillow Report or find a similar firm. License the standards and a saas interface to Inspectors to have another revenue stream (or maybe more broadly to contractors). Then it could become a defacto standard, especially if you get in with real estate agents.
I've lived in multiple of them, and they were often about the same or better than more "traditional" apartments in the area. Usually way lower energy costs than the traditional units. About the same amount of noise for a given build quality, it mostly depended on who lived in the neighboring units.
There were sprinklers in every apartment I've lived in. Building codes in my area require them in any structure with multiple households sharing the structure. Townhouses, apartments, commercial buildings, etc. all have sprinklers everywhere. It doesn't matter if its a high rise or a duplex, if it was built since like the early 90s its got sprinklers.
The issue with the modern apartment building noise, in my estimation, isn't wood construction (which is commonly blamed), but ducts. The double-loaded corridor requires extra ventilation per fire code. The demand for central air conditioning implies ducts. A properly designed double-stud wooden wall can have a Sound Transmission Class higher than 60, but a small hole in a wall can cut the STC by as much as 30. The presence of a large void in the wall (duct) could severely reduce the efficacy of the sound insulation.
The apartment buildings I've lived in without central A/C (in Atlanta and San Francisco) were consistently quieter than the ones with central A/C. Underfloor radiant heating and wall A/C units might be a better way to design apartment buildings. Removing climate control from the access corridor and letting it vent to the outside would reduce the need for sprinklers and complex ventilation. This is slightly less energy efficient, but apartment buildings are already way more energy efficient than houses, and anything that makes apartments more livable can increase the efficiency of the whole society by increasing people's willingness to live in apartments.
You shouldn't be sharing any air with you neighbors, so I doubt ducts are to blame. You can build highly sound-proof timber-framed walls, but most people don't because it's more expensive. Like everything in modern construction, the cheapest permissible option usually wins.
> The apartment buildings I've lived in without central A/C (in Atlanta and San Francisco) were consistently quieter than the ones with central A/C.
> You can build highly sound-proof timber-framed walls, but most people don't because it's more expensive. Like everything in modern construction, the cheapest permissible option usually wins.
Especially when reduced cost is the reason mid-rise wood construction became popular in the first place.
You can puts ducts in a soffit so they don't necessarily need to be inside the walls. I've lived in two apartments with ducts inside soffits. Both were still very loud.
It passes though a wall, but not necessarily a wall you'd share with a neighbor typically. For instance, in my apartment we had an in-unit air handler with soffits running long the ceiling. We could hear every step on neighbors made. Most building codes require fire separation between units, so you generally wouldn't have duct work running through walls like that as it'd be a path for fire to spread.
How old was the building? Currently I'm in a noisy building — it was built in 1890, before rock wool was invented, to say nothing of fiberglass. It definitely tracks that floors tend to be worse than walls (especially bad with Euclidean zoning that encourages low ceilings and thin platforms).
Actually its a good thing about our condo is independent heat pumps per unit so everyone gets their own air handler and ducts. Its expensive to replace each one individuall though.
Likewise - I've lived in these 5 story things and in proper high rises, and there is no comparison. It's likely that the 5 story buildings could be built to the same standard as a high rise, but there is little incentive for the builders to do so, and instead they're absolute lowest bar of quality.
Just the elevator speed makes a huge difference: I could get to floor 18 of the most recent high rise I lived in quicker than floor 3 of the mid rise.
> Surprisingly enough, sprinklers have actually technically been a requirement in all single family homes per the International Residential Code, since 2006. Regardless of home size, location, or construction type. IRC 313.2 states:
R313.2 One- and two-family dwellings automatic fire systems.
An automatic residential fire sprinkler system shall be
installed in one- and two-family dwellings.
> Period. It's just simply required. Only exception is for alterations or additions to existing building without sprinklers.
Your link seems to suggest the opposite above that quote.
> They base the need on distance to nearest fire house and nearest credible fire hydrant.
So there are obviously situations where SFHs do not need automatic sprinkler systems.
Most of my subdivision was built after 2006; none of the homes have sprinkler systems but there are also fire hydrants every 5 or 6 homes so I imagine that has something to do with it. The fire house is also a ~90 second drive down one street (at the speed they'd be going).
> So, why don’t we see every newer house since 2006 with sprinklers? Because most jurisdictions amend their local codes to delete this requirement. Only CA, MD, & Washington DC now keep this requirement.
> Most jurisdictions delete this requirement for various reasons, but the obvious one is the uproar it causes from citizens, builders, etc , because with this new requirement, comes increased cost.
So while its in the building code, local codes may relax that.
yeah—I feel like this is something that can be solved by code modification to expect better. 5-over-1's are already min/max'ing code, so if they're fire hazards, then we should expect cities to rein it in. Safety shouldn't be what makes 5-over-1s fail.
I would like to live in one instead of my current situation but the noise is what is concerning. Newer units should be more quiet than past buildings. I don't know what modern building techniques they use, if any, for sound isolation. Are there airgaps? I'm guessing no concrete slabs between floors? To me it seems like it's the difference between a high rise hotel/apt where it's like a tomb in the room and a smaller building that uses less expensive/more robust material and you can hear much more from the outside and your neighbors.
I'm sure it varies a bit, but generally not good in my experience. Except between the ground floor (usually retail, lobby, parking, etc...) and above everything is wood, no concrete slabs. They typically use the cheapest, least sound isolating materials so neighbor noise, both through walls and floors, is very noticeable. It's a bit jarring because they are modern and not usually low cost, but isolation is much more like the smaller building since they share more construction techniques with a cheap two-story row apartment.
> they share more construction techniques with a cheap two-story row apartment.
Low in cost, high in price, builders love it.
I discussed this issue a bit with someone who worked for a company that focused on affordable housing, and he told me a "joke": what's the difference between a regular condo and a luxury condo? The price.
Yeah I lived in one (in the Domain in Austin) and one thing that bothered me about the noise, was that I would hear it from the unit above me through my side wall. That is, if they played loud music or talked loudly, it sounded like it was coming from the side, not from above. (Specifically, the side that was the end of the building and didn’t adjoin another unit. I was on the first floor.)
I've seen multiple condos in San Francisco in 5 over 1 that have perfect sound insulation, generally they're on busy streets though (and thus you don't really want to live there).
In most buildings there is no concrete between walls but floors have a ~1 inch layer of lightweight-concrete, I think for fire resistance, its not solid so you hear every footprint.
