“You are standing here today” (29: 9)

Rashi brings a midrash: Why is this section of “You are standing” immediately following the portion of Ki Tavo? Because when the Israel heard 98 curses their faces turned green, and they said to themselves, ‘who can possibly live up to this?’ Moshe began to calm them down and said, ‘you are standing here today. You have angered G-d many times in the past, yet you still stand before Him’.

It seems to me that this is the basis for the Mishna in Pirkei Avos (1: 7) ‘Don’t despair from the punishment’. In Yalkut Yirmiya (34) this is explained in two different ways. When a person is surrounded by good things, he should not ‘despair’ of the bad things, and think that they can never happen to him. And when things are going badly for him, he should not despair that good things will happen to him in the future. Look also what we wrote about this later (verse 12).
We should point out that the Gemara (Brachot 10a) says in the name of King Chizkiyahu: ‘This is the tradition I have from my father’s house. Even if a sharp sword is placed to your neck, never despair of G-d’s mercy’.

It seems likely that the basis of this tradition are the words of the Torah here, as Rashi explained them.

It is also possible to explain a related concept in the laws of stolen or lost items. If the owner despairs of ever finding the stolen or lost item again, he loses his rights to it (if it is found by someone else in a different place – Bava Kama 115a). It is not explained why the original owner should be punished and lose his possession.

Perhaps this is some kind of ‘penalty’ for the fact that he despaired of ever finding them again, since it is forbidden to despair, even if a sharp sword is held to your neck. This person who despaired of finding it again showed a lack of trust in G-d, and therefore was penalised.