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How to Steal a Billion

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Re: How to Steal a Billion

#71

Post by hermitdev »

travisoneill1 wrote: post #33
yawaramin wrote: post #7

Wow, this really drives home how absurd the whole WeWork thing was. And even until recently people were talking about how apparently Masayoshi San was playing some kind of three-dimensional chess and would come out the winner from WeWork. A fool and his money are soon parted, I guess. Also, the post title is a nice nod to an Audrey Hepburn/Peter O'Toole movie dripping with '60s cool: https://www.imdb.com/title/tt0060…

To statistically show skill in investment it takes a whole lot more data than the human mind assumes, so this is a common occurrence in the world of finance. John Paulson, who became famous as one of the fund managers to make a killing shorting mortgage backed securities, lost 50% in a year (much of it to Sino Forrest, a Chinese fraud) a couple years later.

Yes, it is very difficult to actually judge skill versus just survivor-ship bias. I worked for a hedge fund that had around $20B under management, lost 60% in 2008, then made all of that back in 18-24 months. Now, they're worth 50% more than loss. Are they skilled? I don't know.

Re: How to Steal a Billion

#72

Post by lifeformed »

christiansakai wrote: post #55
CptFribble wrote: post #13

That's the funny thing about Billions-with-a-b: normal thinking about money and value just doesn't work IMO. The Vision Fund is going to lose ~$19 billion. But Masa Son still controls over $80 billion. That's more wealth and power than almost any human being will ever have in history, ever. At that point the numbers don't even matter. Maybe Neumann took Masa Son for $50 billion. Who cares? A person can live in the US…

I am curious on how a person can live in the USA for their whole lives for $3 - 5 million. Serious question.

Really? $5M is $100k a year for 50 years. I can live comfortably off of $35k a year a long as I'm not in San Fransisco or something. With just $1M I could live indefinitely off investment income, which would be like $50k a year. Double those expenses to support a family, and you're still under budget.

Re: How to Steal a Billion

#73

Post by hanniabu »

ksdale wrote: post #38
CptFribble wrote: post #13

That's the funny thing about Billions-with-a-b: normal thinking about money and value just doesn't work IMO. The Vision Fund is going to lose ~$19 billion. But Masa Son still controls over $80 billion. That's more wealth and power than almost any human being will ever have in history, ever. At that point the numbers don't even matter. Maybe Neumann took Masa Son for $50 billion. Who cares? A person can live in the US…

It's especially interesting, because although a billion dollars is a staggering amount of money for one person to possess, if you distributed the wealth of the world out to every single person evenly, it would only be something like $50,000 per person (based on some quick Googling), which is a life changing amount of money, to be sure, but it's a one time deal. It's not $50,000 per year of income, it's $50,000, perio…

From my calculations of a total redistribution of money, which will be more than just redistributing funds from the wealthy, you'd have this:

Global money: $90,400,000,000,000

Global population: 7,742,131,000

Money per person: ~$11,650

Re: How to Steal a Billion

#74

Post by sanderjd »

christiansakai wrote: post #55
CptFribble wrote: post #13

That's the funny thing about Billions-with-a-b: normal thinking about money and value just doesn't work IMO. The Vision Fund is going to lose ~$19 billion. But Masa Son still controls over $80 billion. That's more wealth and power than almost any human being will ever have in history, ever. At that point the numbers don't even matter. Maybe Neumann took Masa Son for $50 billion. Who cares? A person can live in the US…

I am curious on how a person can live in the USA for their whole lives for $3 - 5 million. Serious question.

Well, the current poverty line for individuals is about $12k per year. Making that for about 80 years is about $1M in a lifetime. So the numbers quoted represent living at about 3x to 5x the poverty line on average. Or something like $35k-$70k per year, which seems doable with a fair amount of comfort (especially at the high end of that range) in most parts of the country.

Re: How to Steal a Billion

#75

Post by rayiner »

ianleeclark wrote: post #65
rayiner wrote: post #34

Earlier quoted context omitted.

> Most people out here are sweating medical bills in the low $10,000's, while the news is talking about billions being gained and lost in the span of a few weeks - so fast it makes you wonder if that amount of wealth really even existed in the first place. If people lose confidence in the system because of that it’s because they can’t multiply. Billionaires are very rich compared to middle class people, but there are…

> We spend way too much time worrying about the wealth of a small group of people that, in the end, doesn’t add up to that large a fraction of total wealth or income. People focus on billionaires due to the fact that they are the most stark representation of the deeply unequal society in which they live. Wealth inequality is very real, please refer to the following: https://www.stlouisfed.org/open-vault/2019/august/w…

> People focus on billionaires due to the fact that they are the most stark representation of the deeply unequal society in which they live. Wealth inequality is very real, please refer to the following: https://www.stlouisfed.org/open-vault/2019/august/wealth-ine... It's a rhetorical device

It's a rhetorical device that distracts from real problems and real solutions. Look at Warren's wealth tax proposal. It's blatantly unconstitutional and without precedent in the OECD. And what's the upshot? Just $275 billion in revenue per year. Compared to the $1 trillion or more we could raise by implementing a VAT, like every other OECD country has, or bringing payroll taxes in line with other OECD countries.

Focusing on billionaires also distracts from the nature of our "deeply unequal society." Look at the U.S. income distribution: https://taxfoundation.org/summary-latest-federal-income-tax-...; https://www.aei.org/carpe-diem/fair-share-top-400-us-taxpaye....

The top 400 taxpayers earned $127 billion in 2014, let's say an even $150 billion in 2018. There were 70 million returns filed by the bottom 50%. If you took all billionaires' income and redistributed it among the bottom 50%, they'd have about $2,000 a year more, or a bit more than 10%. But look at the top 50% minus the top 1%. (Even Sanders considers the 98th percentile to be "middle class" given his tax plan wouldn't raise taxes on people with household incomes under $250,000.) They have $7 trillion in income, versus about $1.1 trillion in income for the bottom half. If you want to talk about income inequality, that's the root of it. And that's the most significant kind of income inequality in terms of impact on peoples' daily lives. Billionaires aren't the ones driving up housing prices in urban neighborhoods and driving out people of color. Billionaires also aren't the ones that would be directly affected by the increases in VAT and payroll taxes that would be required to move to a more European model of taxation and public services.

If you took all personal income ($10 trillion) and divided it evenly among all filers (140 million), you get about $71,000. If you or your household make more than that, you benefit from inequality.

> So the group of people who leverage capital to sustain themselves and don't have to work have lower net income than the group of people who have to work to have a roof over their head?

Zuckerberg doesn't work? Buffet doesn't work? Kylie Jenner doesn't work?

> I love how these numbers increasingly grow.

The $50 trillion number was calculated by Warren's own experts: https://assets.ctfassets.net/4ubxbgy9463z/2Tg9oB55ICu2vtYBaK... (linked from: https://elizabethwarren.com/plans/paying-for-m4a)

Credit to Warren, her analysis doesn't assume that Medicare for All will result in massive cost savings, which I think is highly unlikely given the American political system.

Re: How to Steal a Billion

#76

Post by zackmorris »

I'm more concerned about the discrimination in finance/lending, which is thoroughly entrenched at this point.

Anyone can borrow $50,000 for a new car, $500,000 for a new home, or $5,000,000 in venture capital if they are connected enough. But there is simply no money available for anything outside of mainstream status quo thinking. That's why the Ubers and Airbnbs and WeWorks in these times are founded on hustling and even skirting laws in some cases.

That's great and everything (I guess?), but I am personally tired of the hustling/hacking mentality. I'd like to see real progress in the standard of living for everyone in the world. That's founded on the idea of self-actualization, that everyone has the modest resources needed to start their own business or invent the things that help themselves and their communities.

How many people here have been on verge of financial ruin trying to get their ideas off the ground? I've been up, I've been down, but overall I've basically been running on empty for over 20 years. I'm tired of it. I didn't expect my career to turn out this way. And I'm deeply concerned about a looming recession forcing otherwise capable, intelligent people to scrape by underemployed, doing menial work to make rent because there isn't enough capital flowing. Because it's all locked up in a few wealthy peoples' hands, who have a very Laissez-faire view of economics.

All of the above is why I'm almost certain now that hard times are coming as early as next year. I've already been through it twice with the dot com bust and housing bubble popping, and we're overdue for the next downturn.

^^^ Note that this wasn't always the case. There were protections in place like the Glass-Steagall Act that lessened these boom-bust cycles, which were overturned by the Gramm–Leach–Bliley Act and others. What we've been going through with this vast increase in wealth inequality is by design.

I was born in 1977 so I remember when it wasn't this way. But many of you reading this now were born after the corruption was instated and might not realize how honestly affluent middle class Americans felt in the 1980s and 1990s.

It can be that way again, but please, look beyond private sector solutions to these problems. The government is We the People, not some specter out to get us. I know that many of you live in Silicon Valley and other big cities that suffer from high taxes or government micromanagement, but I live in Idaho and have seen how the lack of government can lead to widespread poverty and environmental degradation.

Laws can change and movements do happen, which is why I'm optimistic that reforms are also coming and that we might finally see some relief in the 2020s.

Re: How to Steal a Billion

#77

Post by weaksauce »

CptFribble wrote: post #13

That's the funny thing about Billions-with-a-b: normal thinking about money and value just doesn't work IMO. The Vision Fund is going to lose ~$19 billion. But Masa Son still controls over $80 billion. That's more wealth and power than almost any human being will ever have in history, ever. At that point the numbers don't even matter. Maybe Neumann took Masa Son for $50 billion. Who cares? A person can live in the US…

A million seconds is 11.5 days.

A billion seconds is 31.7 years.

staggering difference.

Re: How to Steal a Billion

#78

Post by ksdale »

ZhuanXia wrote: post #70
ksdale wrote: post #38

Earlier quoted context omitted.

It's especially interesting, because although a billion dollars is a staggering amount of money for one person to possess, if you distributed the wealth of the world out to every single person evenly, it would only be something like $50,000 per person (based on some quick Googling), which is a life changing amount of money, to be sure, but it's a one time deal. It's not $50,000 per year of income, it's $50,000, perio…

>distributed the wealth of the world In the limit of a single individual wealth works in a naive fashion where such distribution is possible. But on the scale of the economy, such a thing is not possible without inventing a better distribution mechanism than capital itself. If you redistribute each peace of your car's engine to each passenger, you will be forced to walk. Even as a thought experiment, evenly distribut…

Yeah I agree it's not remotely practical and that there would be all sorts of crazy consequences, I just think the thought experiment is useful as an intuition check for how much wealth there is. As an aside, I don't agree that wealth is produced by the incentives inherent in inequality. Wealth is created when people make things and do stuff, which often happens because people want more than what they have, and that doesn't require inequality at all, just a desire to have a better life, however defined.

Back to the main point, we see someone worth $100b and we think there's plenty for everyone, but even in a best case scenario, where we can magically distribute an equal share of all the wealth to everyone and it all holds its value, there's nowhere near enough for everyone to have the standard of living we have become accustomed to in the richest parts of the world.

Re: How to Steal a Billion

#79

Post by hanniabu »

selectodude wrote: post #64
christiansakai wrote: post #55

Earlier quoted context omitted.

I am curious on how a person can live in the USA for their whole lives for $3 - 5 million. Serious question.

5 million over 100 years is $50,000/yr. The median household income is just over $60,000. I think you'd do fine.

As seen over the past few decades, $50k doesn't go as far as it used to, and I see no reason not to expect the same in the future compared to now. In 30 years $50k might be poverty level income.

Re: How to Steal a Billion

#80

Post by dadarepublic »

yawaramin wrote: post #7

Wow, this really drives home how absurd the whole WeWork thing was. And even until recently people were talking about how apparently Masayoshi San was playing some kind of three-dimensional chess and would come out the winner from WeWork. A fool and his money are soon parted, I guess. Also, the post title is a nice nod to an Audrey Hepburn/Peter O'Toole movie dripping with '60s cool: https://www.imdb.com/title/tt0060…

Love the reference you point out :)

Even the wisest can be a fool sometimes. And a fool can sometimes spout wisdom.

We are only human after all.

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