There’s Nothing to Do Except Gamble • Hacker News Board

Re: There’s Nothing to Do Except Gamble

#151

Post by sixstringtheory » Thu, Apr 15, 2021, 5:15 PM UTC

bondarchuk wrote: post #115

jayd16 wrote: post #95

Earlier quoted context omitted.

>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices...but putting that aside... I think the emphasis is more about how there's no other game in town that can compete, not that gambling is new. Interest rates are so low that there isn't a simple/safe…

> I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices... The existence of a financial elite hinges on the existence of a non-elite that actually does the work. If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial eli…

> In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't.

Maybe, but are you insinuating that no back breaking work would need to be done if money weren’t to exist?

Pretty sure the introduction of money reduces the total amount of backbreaking work to be done. Instead of hauling grain to trade for axe heads and carrying those back to your farm, you carry coins, paper, or in modern times, tap a few buttons on your smartphone.

Re: There’s Nothing to Do Except Gamble

#152

Post by seph-reed » Thu, Apr 15, 2021, 5:17 PM UTC

Mizza wrote: post #76

diamondhandle wrote: post #26

Our job in life is to engage in value creation. When money is decoupled from value creation, your long-term bet is that it will lose its value, as value creation is what actually matters in the “real” world. This is also why “crypto” (the asset class, not technology) is so corrosive, because it makes people who have done approximately nothing to create value in society, but who’ve enjoyed a massive boost in monetary…

> as value creation is what actually matters in the “real” world. I guess this is the thing that people are having a hard time coming to terms with - we no longer live in the real world. All of these surveillance-advertising tech giants, all of these financial instruments, all of these media-induced bad feelings and ideological trends, everything that defines our contemporary era - none if it is real. If it all simpl…

An interesting theory from "Sapiens" is that human happiness doesn't change too much throughout macro history.

People adapt to whatever the new norm is, and sort of fall back to whatever their bio-chemical baseline is. When things are in the process of getting worse or better, it'll push them one way or another. But once it settles again, so too do they.

The point being that happiness generally has more to do with internal bio-chemistry than whatever the new norm is.

Re: There’s Nothing to Do Except Gamble

#153

Post by toomuchtodo » Thu, Apr 15, 2021, 5:18 PM UTC

sixstringtheory wrote: post #151

bondarchuk wrote: post #115

Earlier quoted context omitted.

> I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices... The existence of a financial elite hinges on the existence of a non-elite that actually does the work. If workers are putting 25% of their paychecks in an index fund and retire a few years earlier, instead of paying off their too-expensive car loan or something, it will be bad for the current financial eli…

> In the end money is just an abstraction to determine who has to do back-breaking work all day, and who doesn't. Maybe, but are you insinuating that no back breaking work would need to be done if money weren’t to exist? Pretty sure the introduction of money reduces the total amount of backbreaking work to be done. Instead of hauling grain to trade for axe heads and carrying those back to your farm, you carry coins,…

The market would need to find ways to perform the back-breaking work, either by wages increasing or the development of automation. Supply and demand. The more people who can accumulate wealth and capital, and intelligently manage that wealth, the greater the reduction in the labor supply (as they will fund their expenses using investment returns versus engaging in labor activities to do so).

Money is an abstraction, but the status quo as a whole (monetary policy, capital markets, labor policy) is designed to ensure a supply of labor. Capital begets capital [1], so those who don't have will engage in riskier behavior to get off the wage slave treadmill.

[1] https://news.ycombinator.com/item?id=16592414 ("I think capitalism is much simpler: capital begets capital. Those who have capital will accumulate more capital, almost infinitely, until the capital/income ratio reaches an equilibrium who knows how high (in the absence of major corrections like wars and hyper inflation). Add inherited wealth and low taxes. Capitalism's winners are those who already have capital. Thomas Pickety's book "Capital in the 21st Century" cogently illustrates this using massive tax return based data sets.")

Re: There’s Nothing to Do Except Gamble

#154

Post by mrfusion » Thu, Apr 15, 2021, 5:18 PM UTC

rufus_foreman wrote: post #37

tcbawo wrote: post #8

Money is stored wealth, the ability to buy goods and services in the future. The problem seems to be that we live in a time of societal upheaval. The future of stored wealth becomes cloudier and more uncertain the further you go out in time. So, what is the best place to store wealth? Will my wealth be eroded by inflation? Will the companies I invest in become obsolete by technology or market-manipulating nation stat…

>> The problem seems to be that we live in a time of societal upheaval What time wasn't a time of societal upheaval? The Great Depression? World War 2? The Cold War? The Sixties? Stagflation? The Reagan era? The Clinton era? Post-9/11? Trump? Markets climb a wall of worry.

We didn’t start the fire ...

Re: There’s Nothing to Do Except Gamble

#155

Post by EVa5I7bHFq9mnYK » Thu, Apr 15, 2021, 5:21 PM UTC

diamondhandle wrote: post #26

Our job in life is to engage in value creation. When money is decoupled from value creation, your long-term bet is that it will lose its value, as value creation is what actually matters in the “real” world. This is also why “crypto” (the asset class, not technology) is so corrosive, because it makes people who have done approximately nothing to create value in society, but who’ve enjoyed a massive boost in monetary…

People (at least in the developed world) already have created all the value that they need. They have enough food, safety and shelter. Majority of the effort now goes into creating virtual goods. If you’re planning to be alive in 20 years, you’re better off making sure you hire robots with good work ethics.

Re: There’s Nothing to Do Except Gamble

#156

Post by paulpauper » Thu, Apr 15, 2021, 5:22 PM UTC

Al-Khwarizmi wrote: post #78

Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. When brokers did it it was OK, when algorithms did it in milliseconds (when common people can only operate with delays of hours and days, and with deterrent fees) it was OK, but now that there are platforms that allow more or less anyone to speculate, we start publishing moralistic pieces in the media and…

>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it.

Hardly. They make money from the commissions

Re: There’s Nothing to Do Except Gamble

#157

Post by lottin » Thu, Apr 15, 2021, 5:28 PM UTC

XorNot wrote: post #94

jasode wrote: post #77

Earlier quoted context omitted.

>Crypto is exploding because people are looking to get rich via speculation, that's it. No, that isn't just it. Like other assets, there can be multiple narratives that explain cryptocurrencies rising prices. Yes, pure speculation is one of them. But another reason for some is deliberately shifting wealth from an asset ($USD, euro, bolivar, etc) they believe is deteriorating . E.g. a multi-billionaire like Ray Dalio…

Ray Dalio at no point in his life ever believed he should be keeping his wealth in "cash". It has been basic economic knowledge that cash is a terrible place to keep large idle piles of wealth, and that it has to be invested to not depreciate. This is not new information, this is literally by design as a product of the Fed's 2% inflation target. US treasuries have always been a last resort investment, because the ret…

> is literally by design as a product of the Fed's 2% inflation target

Holding more cash than you need for transaction purposes is inefficient, regardless of the inflation rate. This is because what makes holding cash a bad idea is not the fact that it depreciates over time (in inflationary circumstances), but the fact that holding cash has an opportunity cost, and that opportunity cost is unaffected by inflation.

Re: There’s Nothing to Do Except Gamble

#158

Post by sixstringtheory » Thu, Apr 15, 2021, 5:28 PM UTC

TRcontrarian wrote: post #15

Is it better to live in a world where the future is unknown, and the best we can do is guess where value will be, or one where the future is known, and the prices of all investments are stable and already priced at their exact values? In which world is optimism and class mobility possible?

Excellent question that reminds me of two anecdotes:

1) In my CS ethics course, we had a writing prompt asking whether, assuming perfect capability, it would be better to replace sports referees with computers

2) I wrote a cheat program for a word game my dad liked playing. Super proud of my accomplishment, I showed it to him, and he was impressed for a minute before stating the game wasn’t fun that way (also have an earlier version of this memory involving a Sega Genesis Game Genie)

Re: There’s Nothing to Do Except Gamble

#159

Post by paulpauper » Thu, Apr 15, 2021, 5:29 PM UTC

second--shift wrote: post #146

paulpauper wrote: post #82

Earlier quoted context omitted.

no it's not. it is actually positive due to the dividends . a 3x funds pays 3x the dividends . the borrow cost is only 1%, versus 2% dividend

> a 3x funds pays 3x the dividends what? which funds pay 3x dividends? All of the leveraged ETFs i'm familiar with replicate the 3x exposure with futures contracts, which do not pay dividends. the drag exists when these futures contracts are in contango, where the back-month is more expensive than the front-month. The leveraged ETF pays that drag every time the fund rolls to the next futures. Nothing to do with borro…

it would only be in contago if there is borrow and storage cost. This applies to commodities. But stocks pay dividends, so this can cease backwardation if interest rates are low relative to dividends.

Re: There’s Nothing to Do Except Gamble

#160

Post by Hoasi » Thu, Apr 15, 2021, 5:29 PM UTC

Mizza wrote: post #76

diamondhandle wrote: post #26

Our job in life is to engage in value creation. When money is decoupled from value creation, your long-term bet is that it will lose its value, as value creation is what actually matters in the “real” world. This is also why “crypto” (the asset class, not technology) is so corrosive, because it makes people who have done approximately nothing to create value in society, but who’ve enjoyed a massive boost in monetary…

> as value creation is what actually matters in the “real” world. I guess this is the thing that people are having a hard time coming to terms with - we no longer live in the real world. All of these surveillance-advertising tech giants, all of these financial instruments, all of these media-induced bad feelings and ideological trends, everything that defines our contemporary era - none if it is real. If it all simpl…

> I guess this is the thing that people are having a hard time coming to terms with - we no longer live in the real world.

This, and the parent comment:

> If you’re planning to be alive in 20 years, you’re better off making sure you have a work ethic and skills that generate value, than obsessing over any sort of wealth-hoarding instrument at all, because it is the only true protection against change.

You see, the problem is that they both read like correct statements, which is rather worrying.