If I didn't need healthcare I wouldn't worry. COBRA will drain my emergency fund twice as fast as if I didn't need it. Moreover, I grew up poor. I will not go back. I've come too far to let some silver spoon patagonia wearing pricks take my livelihood from me.
In case you arent aware, you are able to enroll in COBRA retroactively. Meaning you dont need to be enrolled at the point that you need it. It makes sense to not enroll unless needed and save that expenditure, but keep in mind that I think you need to pay the previous premiums in the case you do elect to enroll (i.e. if you enroll in month 2 you need to also pay month 1 premium when you enroll).
This is true, but you do have to enroll by day 60 as far as I know. It’s also a royal pain to get hospitals to readjust billing if you retroactively purchase COBRA coverage after receiving care.
Another random fairly unknown thing about COBRA - it only exists as long as the group exists. If your company goes out of business and its group plan is dissolved, COBRA goes poof.
I learned this because it almost happened to me. I learned about it after a lot of phone calls to the insurance company piecing together this rarely talked about possibility.
AIUI, the hack is to enroll immediately but not pay. If you don’t need it, you can (usually) get the COBRA provider to leave nonpayment off your credit report with a simple “You never sent me a bill”. If you do need it, well, you’re really going to need it because you’re going to have to pay the premiums plus whatever your co-insurance is.
No, you can put down whatever you expect your income to be and receive subsidies based on that. If you end up making more than you expect that year (good problem to have!) you'll have to repay some or all of the subsidies on your tax return.
You just need a basis for proving your current or expected income.
Also, in CA, you can make an "urgent" application and be enrolled within 2 days. I requires some pressing medical problem, but that doesn't have to be life or death.
That's because it is a charade. The fed's entire job is basically a dependency injection in an otherwise free market. Money creation in a modern economy is literal magic and while they may claim it's tied to "metrics" these metrics are tenuous at best. Unfortunately, the clown show has been run for the last 20 years by people who do not have the country's best interests at heart. We are now reaping what was sown with the 20 years of free money to banks.
> We are now reaping what was sown with the 20 years of free money to banks.
This argument ignores the "black swan" events of covid, ukrainian invasion by russia, supply bottlenecks of various kinds, and trade tensions with china, all happening at the "same" time within the last 3 years.
The better question of course is who pays for this? They're quiet about it because it's not the banks. The banks paying it is only a technicality. This additional premium they will inevitably have to pay will come from depositors. So, effectively, people who trusted their money with banks are being punished for putting money in banks that abandoned their fiduciary duty to their customers.
Unless the banks themselves pay it and something is in place to prevent these costs being past down to their depositors this should be a non-starter. It is TARP by any other name.
FDIC fees are levied on banks. There are a lot of banks, some which compete on deposit rates. (The majors generally do not, but you don’t put your money in a Citibank account to grow.)
It's just insurance for your own account though. You pay to insure your car and you pay to insure your bank account.
As long as bank regulations are reasonably strict that this happens as infrequently as it does, ultimately having depositors foot the bill doesn't seem problematic.
It's more appropriate than taxpayers generally, and it can't be the bank owners because the whole point is they've already been wiped out.
The problem is they aren't wiped out enough. Bankers who instigated the GFC got jobs elsewhere. One of them was even the CEO of SVB!
Breach of fiduciary duty in any other context is essentially a death sentence for a career in finance. Clearly being wiped out isn't enough. The complexity in the matter is that depositors reasonably expect to be able to get all of their money out at any time. As they should. It's their money. At the command of the fed their reserve rates were dropped to zero essentially making the cash value of an account a meaningless number in a computer.
Given this risk, the bank should be the sole party responsible for paying such insurance for it's depositors. It's a cost of doing business, and importantly taking a risk and fiduciary responsibility over a client. We demand doctors insure themselves because they can destroy a patients life. A bank should be the same. To have the depositor (or patient) front the cash in any form should be made illegal. Hence my demand to insure the funds are secured only through the bank owners themselves. Ideally, the executive board carries enough insurance to make all depositors whole in the event of a bank collapse. This should be uncontroversial.
Corporations (and banks) rest on the bedrock principle of limited liability. To go beyond that is a pretty radical suggestion. That means if grandma buys shares in a bank as part of her retirement portfolio, then the worst case isn't that the shares go to $0, but that she owes money, without any limit she can know beforehand. I don't think that's a good idea.
> Hence my demand to insure the funds are secured only through the bank owners themselves.
I'm not sure there are any insurance companies who will insure an entire bank, and certainly not one of any decent size. That's the entire reason it's pooled insurance provided by the government.
And in any case, if it became that much more expensive to start a bank because you had to pay for all this insurance up-front, banking just becomes that much more expensive for consumers because owners still want to make the same amount of money in the end. At the end of the day, it's still going to cost consumers the same.
> Insuring unlimited amounts based on the whim of the fed while only charging insurance on the first 250k
The FDIC doesn’t charge insurance on only the amount of deposits covered by insurance. Prior to 2010, it did on all deposits, post 2010 under Dodd-Frank it expanded to all liabilities.
> Equity is getting zeroed out. Management was fired. Depositors were made whole almost immediately. SVB's assets are apparently not impaired; SVB would have held them to maturity had the bank run not happened, and now somebody else will instead.
Part of the problem is that the system that enabled them to end up in this situation is the erosion of Dodd-Frank. The systemic risk to depositors isn't going away. If pissant SVB (relative to it's contemporaries) can lobby congress effectively imagine what other banks are up to. Speculation? Sure you can say I'm speculating. But the apple doesn't fall far from the tree.
> Meanwhile: the point of the FDIC system is for customers not to have to do this kind of risk assessment themselves.
The issue of course is that the total balances required the FDIC to dip into special capital reserves in order to make the bold faced lie the taxpayer won't front this.
Anyone who knows the surface level details of a bank know that these FDIC "loans" are effectively collateralized by the taxpayer. Banks pay an assessment. With what money? The depositor's money. A perfect example of a hidden tax.
> But SVB is gone, so it's not much fun calling them out. I feel like people are flailing looking for someone else to blame.
Credit Suisse is in big trouble and getting a bailout. Several other banks have collapsed in the wake of SVB. The only people not worried have their heads buried so deep in the sand only their feet are showing. Calling Chicken Little because you believe it was only SVB and not a massive market level problem suddenly beginning to show it's head is not a very effective argument.
I'd ask you to consider the economy that allowed these levels of capital to even exist. Years of ZIRP and near-ZIRP allowing effectively free money. As it stands, the mainstream media currently blames the fed for this and implores it to once again lower rates. The problem of course is that there has been no sign of stoppage in market speculation and we are only now starting to see VCs really tighten their belts. History doesn't repeat itself but it often rhymes and terrible, borderline predatory, VC funding practices begin to approximate NINJA loans in the limit. There's no reason to believe it's just SVB and there are plenty of reasons to believe we have very serious economic concerns ahead of us. Only difference this time is the criminals responsible will be wearing Patagonia.
This wouldn't have been solved by any thing in Dodd-Frank. SVB invested in highly liquid securities that are considered the safest asset class, interest rate risk wasn't expected to materialize as quickly as it did as the Fed would have been expected to raise rates more gradually over a longer time horizon or provide an asset exchange mechanism for member banks. SVB is not an example of a bank that had engaged in Investment Banking activity with depositor capital or had unacceptable capital reserve ratios.
That being said, I could be wrong and not aware of the specific Dodd-Frank policy that, if followed, would have made SVB safer.
The fed doesn't need to lower rates necessarily, it could simply allow all member banks to exchange low interest rate long term bonds for new higher yield bonds and pay the Fed for the spread with a loan. That would reduce the liquidity risk if the member bank needs to sell some or all of its bond portfolio on short notice to fund depositor withdrawals, it would allow the Fed to hold the low rate securities to maturity while being fairly compensated by member banks.
Edit: after reading this article posted by lordfrito below I stand corrected. SVB executives knew the risk and took it anyway. But not for personal gain but to maximize firm value as it allowed higher profit which increased the valuation (so yes they benefited personally, but to a greater extent than just a few million in bonuses).
> The fed ... could simply allow all member banks to exchange low interest rate long term bonds for new higher yield bonds and pay the Fed for the spread with a loan.
Maybe we should admit Congress will never repay the national debt and simply have the Fed purchase new federal debt issuance. The current complicated charade just pays banker bonuses.
SVB was holding 91 billion dollars of underwater securities (with a fair market value of 76) . The FED is currently holding 2.7 trillion with a t dollars of underwater securities
> Part of the problem is that the system that enabled them to end up in this situation is the erosion of Dodd-Frank.
My understanding is that SVB would have met the Tier 1 capital requirements even without the 2018 revisions to Dodd-Frank, for the reason digitaltrees said: The bonds it purchased are considered highly liquid and safe.
> The only people not worried have their heads buried so deep in the sand only their feet are showing.
If you haven’t lived through a couple of these things then it’s perfectly understandable.
Back in ‘98 there was a huge monetary problem going on in SE Asia but pets.com could take a loss on every sale and make it up in volume. Everything was fine until it suddenly wasn’t.
In ‘08 cracks were starting to become obvious but housing prices never go down, keep selling $500k houses to someone making minimum wage. Everything was fine until it suddenly wasn’t.
Today you have massive layoffs in the tech sector but the CEOs are just trying to appease activists investors, nothing to worry about because tech companies never fail. That Dot Com Bust? Well, that was Web 1.0 and we have it all figured out this time, nothing to worry about. Everything is fine…
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.
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.
There's not much you can do to "decompress" when you go to work, sentence dogs to death, and then go home to your family pet and look at them thinking they could've been one of those dogs. I've met meat packers who still are haunted by the animals they killed.
It's because humans have moral and ethnical frameworks. Despite a document drafting XYZ is okay because "its for science" it still is wrong in the sense you are sacrificing something with a memory, sadness, happiness, etc for a possible "greater good". Especially for dogs, an animal deeply engrained and coevolved with humans, I cannot imagine the amount of cognitive dissonance, or more likely, sociopathy that would be required to engage in such experiments.
We trivialize the fact it's unethical to experiment on humans. I am not a treehugger or anything but to suggest talk therapy will help solve a very real moral and ethical problem...well I'm not sure you understand. Veterinarians have an extremely high suicide rate for a reason. Moreover, I will never forget the callousness of the veterinarian who suggested I put my family dog down for something that wasn't immediately fatal. It's only a small step from that asshole to these assholes and that step is complete transcendence into pathological psychopathy. We simply sometimes benefit from these psychopaths gassing dogs and pigs. It does not imply such a thing is either morally or ethically correct and no amount of "decompressing" will fix it. It just is what it is and some people have developed the pathological brain wiring to allow themselves to do it.
There are a lot of jobs that are necessary in society that have an emotional toll that can't be obviated. All of us, including you and I benefit from the fruits of their labor. Emotional and psychological support in the form of therapy absolutely can ease some of that burden.
The odd, perhaps not entirely coincidental, relationship between ivy league pedigree and job at FAANG. While there's a correlation between talent and ivy league the relationship is often tenuous. In my experience the difference between a new grad from MIT and a new grad from state school is almost zero in the professional world. Yet, one of these people have a fast pass to FAANG. This is not unusual. Look at Finance. However, to assert that "talent" plays a bigger role than pedigree is simply a falsehood refuted by the evidence.
I mean yes a lot of sub par metrics and proxies are used because people get really up in arms about using IQ tests; the best indicator Google ever found.
> Yet, one of these people have a fast pass to FAANG.
Citation? I haven't seen anything like that in the industry at all.
I worked at FB and Amazon for six years total and the vast majority of my fellow engineers were from random mediocre schools (including myself, from the U. of Arizona).
ML guys build the fun stuff, go to conferences, etc. We maintain their stuff and work the 60 hour weeks answering pages.
It's mind numbing. Arguably some of the most boring work I've ever done especially knowing that you're just a CI/CD robot. Nothing has motivated me towards looking into starting a business more than watching other people have fun and you cleaning up their messes.
I've lived in a LCOL my entire life and really made actual development money by going remote. I've done it for so long and the wage disparity is so great I will likely have to leave the industry if remote dries up. Owning a home does not permit me to move around the country and I'm not going to do staff level engineering for under $150k (and that's the lowest I'd ever go). Far easier to just go work somewhere else in a different field because at least then I'd be starting from the bottom with no memory of the past.
Remote work seems to be more difficult to get these days with all of the applications coming from people thinking it's an easy meal ticket. I've gotten most of my jobs through my network. Who knows how long that'll last. Pair this with the general apathy of doing coding interviews and other song-and-dance nonsense to get a job and this current job I have may be my last in the industry anyway. When skills are not valued over CS brain teasers the shark has been jumped.
>all of the applications coming from people thinking it's an easy meal ticket
Because it is an easy meal ticket. Why are we pretending it's not?
This is the only profession in the world where you can make decent money from the comfort of your home, via self study and without any high level education. Look at the other well paying professions, bankers, management consulting, doctors, lawyers, engineers, etc. how long they need to spend in university and how much money their studies cost, before they can get their first wage.
Meanwhile someone who's been coding for fun since childhood can get a decent wage starting 18th birthday, without a degree and without going into debt.
In my developing country that just moved to developed status, SW jobs were a big contributor in lifting young generations of ambitious youngsters out of poverty saving them from having to emigrate or do backbreaking work for peanuts.
The career has some downsides but it has the lowest bar for a skilled profession ever.
> Because it is an easy meal ticket. Why are we pretending it's not?
Well, at least for me it wasn't. I went to university to study CS (in Europe, so I didn't get a debt). It was hard (like any other Science/Engineering career I imagine). Then finding a job was relatively normal and the pay was normal as well. It was only after I got years of experience that it started to get better (e.g., home office, better salary, etc.), but it didn't come for free either (it happens that I like CS a lot, and I can afford to spend some part of my free time reading tech books... so that helps when it comes to salary as well).
I don't think it's an "easy meal ticket". Hell, I don't think anything in this world is an easy meal ticket (unless your parents are rich ofc).
The fact my company turns down over 80 applications a week and only 1/5 of the accepted applicants make it through the first interview tells me you're wrong. It's only an easy meal ticket if you're deluded. Highly motivated, hungry, individuals are not the usual candidate. The usual candidate is a code school graduate who got tricked by an influencer into spending 18k for a moonshot.
> When skills are not valued over CS brain teasers the shark has been jumped.
That's been the case for like the past 15 years at least, in my experience. There's now dozens of businesses built just on helping others pass technical interviews. The shark was jumped a long time ago.
