Yellow Costco Tote

@Noahpinion Smith and Yglesias meeting up at a pundit con:

The benefits of a high-volume mid-market strategy

@jessesingal Wait so racism is no longer determined solely by the perception of the victim? Can finally roll out my t shape firestarter product idea!

ah my bad

@rexsalisbury @khaslett The brokered reciprocals in deposits are money they’ve drawn DOWN from the network. Point is those are not their customers originally. They just popped a juicy rate into a portal and took money. Such innovative. Much disruption.

no. if you read the call report, a lot of the deposits are in "reciprocal brokered deposits" which means they spread the money across many banks and get FDIC insurance for their clients well above the $250,000 threshold. this might sound novel or like not a real thing, but it very much is. unfortunately, a lot of banks DONT do this. in fact there are wait for it...$7 trillion in uninsured deposits (as of 2025) at banks. this is despite what happened at SVB! JPMorgan Chase alone holds $1.225 trillion in uninsured deposits (mid-2025) so...the real crazy thing is what most banks are doing. not what erebor is up to.

Hey fam is rapid deposit growth for an extremely new bank, potentially above the uninsured level, risky or not risky?

@khaslett It may or may not be “risky”, but it’s definitely cynical. Duping folks who don’t understand that this “growth” isn’t competitive differentiation. Anyone with a charter and capital to burn could run a narrow bank that lose money before their first exam if they felt like it

@khaslett Meh. This quarters call report isn’t that interesting. So they signed an intrafi contract and pulled down a bunch of sweep cash, probably by offering a juicy rate in the network. The float on that is probably upside down or break even at best.

@hhua_ @rexsalisbury @ereborbank With 600 million in cash pulled down from intrafi …. Not that much.

@rexsalisbury @ereborbank Imagine the float

Just in - @ereborbank posted their 1st call report. In 7 weeks since opening, they've already hit $1.1 billion in deposits. unprecedented growth for a de novo (or fintech) For comparison - Grasshopper Bank (also a tech-focused NYC de novo) took 7 years to reach the same number, and only got there via acquisition - Square Financial Services, even with Block's enormous merchant base, sits at $495M after 5 years. - Mercury took 4 years - Chime took 6 At $1 billion this makes them ~1,000th largest bank in America (out of ~4,500). If they want to be a top 100 bank, thats ~$20 billion of deposits. 5% of the way there in 7 weeks. Next up...what do they do with those deposits? Will be watching how loans ramp from here!

@mattmvinson @rexsalisbury @ereborbank In this case all Erebor did was get a charter, fire up intrafi and put a juicy rate in a portal and suck a bunch of cash in. Not exactly a16z tier innovation Ignore their brokered reciprocals and of the remaining actual deposits of Erebor over half of them are uninsured.

@rexsalisbury @ereborbank > Most banks don't do this I get you're shilling for Erebor here (and I'm rooting for them) but that's absolute nonsense. Insured Cash Sweep (now IntraFi) has 23 of the 25 largest banks and 95% of community bank charters as network members. en.wikipedia.org/wiki/IntraFi

is @ereborbank safe? they scaled to $1.1 billion in deposits in 7 weeks. isn't rapid growth in deposits super risky!? no. it's fine. what is crazy is how risky most banks are. what's scary are bank runs. when depositors collectively decide (correctly or "incorrectly") that a bank is failing and demand their money immediately. usually, depositors don't have to worry about this at all thanks to FDIC insurance ($250k per account). but some depositors have more than $250k per account. they are the ones bankers should worry about making a run for it. This was the problem w/ SVB. A lot of ppl had a lot of uninsured deposits. At the time of SVB's collapse there were ~$8 trillion in uninsured deposits across the entire banking system (out of ~$20 trillion in total deposits) SVB was one of the worst offenders with the highest rates of uninsured deposits and with a highly networked customer base that accelerate the pace of the run. But they were not the only one! lots and lots of banks were in the same boat, which is why the regulators had to step in and say "we will insure the uninsured deposits". If that had not thing would have gotten...interesting. 100s of banks could have failed. So surely we've learned our lesson and there are no more uninsured deposits in our banking ecosystem??? hahahahaha. no. In 2022 (SVB era) there were $8 trillion of uninsured deposits. In 2025 there are now...$7 trillion and - 96% of the top 1,000 banks have uninsured deposits - JPM alone has $1 trillion in uninsured deposits nice. anywho. back to Erebor. why should you not worry? Erebor has placed a lot of deposits ($600+ million) in "reciprocal deposit networks" which if a customer has an account with over $250,000, the excess is placed lots of other banks. the net effect is you log into your account you see a balance of say $1,000,000 and everything works normally, but from a regulatory perspective you are fully insured b/c the balance sits w/ 4+ banks on the backend. most banks DONT do this. that's why we still have $7 trillion in uninsured deposits. you might think "that seems kinda dumb, why do we have a regulatory system where that's something we do." if you think that, don't spend time learning about bank regulations b/c you will only get more disappointed the more you learn!

@rexsalisbury @mattmvinson @ereborbank Erebor has $250MM of uninsured deposits, and the only reason it’s using deposit sweeps so heavily is because it hasn’t been able to deploy those deposits in any other way and some banks pay a premium to IRB for sweep deposits that are only slightly less hot than uninsured amounts

@mattmvinson @ereborbank and yes, happy to shill for anyone bringing more competition to financial services. status quo sucks.

@ravi_riley You keep repeating a simply incorrect statement. That money is not sitting in a pipeline earning interest for nobody. It’s sitting in either the originating or receiving banks fed master account an it’s absolutely earning interest for them.

@RogueCfpb Also the “no earns the benefit of the float on ‘in transit’ payments” bit of the premise is either a Goebbels tier propagandist lie or demonstrates yet again how little the DeFi cultists understand about the tradfi payment rails they constantly bloviate against.

But, let’s remember, that payment time lag serves a lot of purposes for fraud prevention and error prevention purposes. Instant payments would solve some problem, while creating others. The real problem here, that wasn’t mentioned, isn’t really the settlement timing. It’s the businesses bi-weekly or even monthly pay cycle. That made sense in the past. It no longer does. THAT is the issue to really be fixed. But businesses want that float, among other things. And if you really want to lose your mind, take a stroll down state wage and hour laws. If you thinking banking has some outdated, anachronistic requirements, wage and hour law is that times 50.

@ravi_riley So what I’m saying is one of your key legs is just … wrong. Kinda calls into question your fitness to opine on the whole topic mate.

@ravi_riley Banks get IRB on the reserves while waiting for the ACH debit to hit or credit to apply.

I genuinely can’t believe this hasn’t been fixed yet. Every two weeks, American companies bundle their payroll into batch files and route them through a clearinghouse system that was built in the 70s. It takes 1-3 days for these paychecks to clear, leaving trillions of dollars just sitting there. Annually, roughly $9 trillion is pushed through these rails, and the weirdest thing about this arrangement is that the money in transit literally doesn’t benefit anyone. Banks don’t make any yield on it, and employees are left waiting days for the money they already worked for. This doesn't get fixed by another fintech bolted onto ACH. It gets fixed by stablecoins or it doesn't get fixed at all.

@grok @kaycidot @ravi_riley But where do the “in transit” balances currently sit for ACH?

Based on the $9T annual volume in the post, daily throughput is ~$24.66B. Assuming 2-day ACH settlement, the in-transit float is roughly $49.3B at any time. Stablecoins settle in seconds, so that float drops to ~$0—workers get paid instantly with no idle capital sitting in the old rails.

@ravi_riley @grok Assuming the average ACH tx takes 2 days settle, what is the hypothetical float that could be generated if stablecoins were used instead?

@arshbot @AlexH_Johnson Is it really surprising that tech bros would sell you a roadmap? Building compliant international money movement is hard, complicated and even with AI tools takes longer than they’ve had. Frankly if they were moving money already you should be scared to put it on their rails.

@CostcoTote @AlexH_Johnson Wow yea this is surprising. They were selling me on their international capabilities as well.

Why? They have a bank charter. The whole point is to get direct access rather than going through a correspondent bank.

@arshbot @AlexH_Johnson Goes to show how well this is all going to go if Erebor’s own people don’t understand how their money moves now. Found on Wise: note the “via CCB”. Erebor is using CCB to route money. Not the other way around.

@AlexH_Johnson Just chatted with someone at Erebor. It seems like it's the other way around, Coastal is using Erebor as a correspondent for international payments!

@mikulaja @ereborbank it’s one thing to draw a pretty diagram stitching together a payment hub you are in charge of … quite another to build and then say “Finastra/Finzly/TM take the wheel” to high volume STP as a bank.

@mikulaja @ereborbank I would love to know if there’s any of this related to the tech bro mindset underestimating how much of a nerve wracking slog it is to construct your own payment hub.

Mini-scoop: @ereborbank is leveraging Coastal Community Bank as a correspondent, per an investor presentation Coastal filed with the SEC earlier this week:

@SwannMarcus89 Don’t take the bait. You’re smarter than that.

I feel like an asshole for saying stuff like this but how the fuck are you 34 and never made more than 20k a year? Are you lazy or retarded?

@nominalthoughts @eclairification Is there though Jason? Or is it really just good engagement bait that probably has no bearing on their actual economic circumstances.-

@eclairification There’s a level of bravery in making that second sentence public information that I simply don’t have, I’ll give you that

the federal minimum wage is still 7.25. I am 34 and have never made more than 20k/yr, rarely more than 15. it’s really important that i, as a working person oppressed by capitalism, follow news and politics coverage written by people paid 6 figures to live in the culture city.

@mattyglesias Everyone remember when Musk and his teens were going to shave hundreds of billions of dollars off of federal spending?

Ooops