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

Re: There’s Nothing to Do Except Gamble

#221

Post by imtringued » Thu, Apr 15, 2021, 7:15 PM UTC

ryan93 wrote: post #210

DylanDmitri wrote: post #202

Earlier quoted context omitted.

People who build housing create value. People who manage properties create value. People who speculate on properties do not create value.

Why are people selling real estate assets to speculators for less than they are worth?

Because the real estate market is very illiquid. Each property is unique. It's not easy to figure out the right price. Trading isn't even bad, it's contributing to price discovery in the market and makes sure that the average sale price is close to the actual market price.

The problem isn't that speculators are evil people but rather that the "arbitrage" they are doing is fueled by regressive housing policies. Increasing the efficiency in the housing market exposes the fundamental housing problem. After all, it can't just be that speculators are snapping up properties, there must be buyers that are willing to buy properties from the speculators, otherwise the speculators lose money. Those buyers don't even need to think that the house is overpriced, the house could genuinely be a good deal for them.

Re: There’s Nothing to Do Except Gamble

#222

Post by jasonwatkinspdx » Thu, Apr 15, 2021, 7:19 PM UTC

legulere wrote: post #190

cjf4 wrote: post #3

>for many of us, money is only experienced through our phones, as a number on a screen. You pay your rent with one app, you buy put options with another. The number goes up, it goes down, it lives in the little portal we hold in our hands. And decades ago it was a number written down on a little piece of paper, and before that it was little pieces of “precious” metal locked away somewhere. At least nowadays amateurs…

It's the other way around. First there was personal debt, then impersonal money. In the beginning you would just lend stuff from other people and give it back, or with consumables give something back of similar worth. Precious metal was pretty rarely used, as its main benefit is that you need almost no common trust relationship.

I see you've read Graeber. Great book and changed my views on a lot of things, particularly how much of our "common sense" understanding/education on topics relies on "just so" assumptions made by some aristocratic scholar a couple centuries ago.

Anyhow, to explain for the forum: Graeber's book goes through the evidence we know of from the places were money first appeared. In essence, debt came first, and money was a later innovation. Very interestingly temple records using tally mark schemes may have been what lead to the development of cuneiform writing in the levant. A similar debt first pattern appears in other places, at other times too.

Coinage, particularly metal coins, came about much later as a clever hack by rulers to simplify raising and maintaining a large army. Pass a law demanding all citizens pay you X coins each year. Pay your soldiers in coins. Suddenly your society is figuring out how to feed and house soldiers, without you haven't to build a command hierarchy to run it all directly.

I can't recommend this book enough. It's dense in parts because he goes into a lot of detail that fully justifies what he's saying. Still, completely fascinating to learn much of the way we think of economic history is mythology. It's also a great lens for understanding what's happening now with cryptocurrencies.

Re: There’s Nothing to Do Except Gamble

#223

Post by imtringued » Thu, Apr 15, 2021, 7:27 PM UTC

Mattasher wrote: post #40

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…

I agree with your last statement, but I think you are mixing cause and effect. Crypto is exploding because our system is already corroded. Starting with the creation of the Fed, and tracing through endless money printing and complex financial instruments which let well-connected companies and politicians create paper wealth out of nothing, we've decoupled money from value. Savings pay no interest, manual labor doesn'…

The real problem the US, Japan and EU are facing is that the system is way too stable and resilient, the COVID stimulus should have created enough inflation to bring the economy back to a normal state yet it completely failed to do so.

The last 20 years were marked by the corporate savings rate increasing, meaning companies are not investing. This could be related to China and various other factors but it is clear that the Fed and the government has done enough to help corporations, they are doing so extremely well that they don't need any more help. The mistake from the start was that the government didn't help citizens enough. It didn't create enough jobs or it didn't return those excess corporate savings to the population forcibly. The reason why wealth redistribution is popular is that excess savings are zero sum, for the corporate savings rate to go up, either total investment has to go up (it hasn't) or the household savings rate has to go down. There is a similar dynamic with rich vs poor.

The corrosion you speak of doesn't exist. The system is way too stable, far more stable than should be possible, that's the real problem. Your dollars, by that I mean the dollars corporations and therefore the wealthy own, aren't losing value fast enough.

Re: There’s Nothing to Do Except Gamble

#224

Post by WJW » Thu, Apr 15, 2021, 7:28 PM UTC

entropicdrifter wrote: post #104

Mizza wrote: post #76

Earlier quoted context omitted.

> 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…

> My bet is that we'd all be happier for it. Yeah, except for those who'd suddenly be without electronic medical assistance. There are definite downsides to the digital era, but to act as if there's been no benefit is laughable at best and dangerously ignorant of the past at worst.

Everyone whose food supply depends on electronic supply chain management (ie everyone who is not actively farming their own food _right now_) is also going to be in for a pretty rough time though. Or everyone who needs gasoline for transport because they live a non-walkable distance from the nearest food and water.

Re: There’s Nothing to Do Except Gamble

#225

Post by Tenoke » Thu, Apr 15, 2021, 7:28 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…

>maybe they should try not to create a system where workers are punished and gamblers are rewarded.

I find it hard to see how people are even thinking that it's the gambling that's being rewarded. It doesn't take much to check that pure gambling is unlikely you to win you money on average, and that those who do make money are (again, on average) doing something more than just gambling.

Re: There’s Nothing to Do Except Gamble

#226

Post by AnimalMuppet » Thu, Apr 15, 2021, 7:31 PM UTC

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…

I heard of a wealthy family that had managed to maintain their wealth in Europe across multiple generations, through lots of war, upheaval, regime change, and so on. Their formula was "one third gold, one third art, one third land". You could lose any piece of it in any upheaval, but you wouldn't be likely to lose all of it.

Re: There’s Nothing to Do Except Gamble

#227

Post by Tenoke » Thu, Apr 15, 2021, 7:34 PM UTC

ameister14 wrote: post #130

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... There are a few cases I can think of immediately where this applies - gambling with novices in Blackjack, for example, is not ideal. They'll screw up the flow of cards and can cause your math to go haywire. The same happens with Hold-em or Omaha Poker - you want people to have enough skill to play the game…

I've bought counted cards at casinos and played poker semi-professionally and this is just wrong.

In Blackjack the other players are not really relevant, the count stays the same and on average you will be about equally profitable with or without them. They might increase the variance a little but they reduce the attention the dealer pays on you and my team never minded others on the table.

In Hold'em and Omaha you WANT weaker players, they are in short supply, and you will expect to have an edge against someone that barely knows the rules, too.

Re: There’s Nothing to Do Except Gamble

#228

Post by 52-6F-62 » Thu, Apr 15, 2021, 7:34 PM UTC

onlyrealcuzzo wrote: post #181

nickthemagicman wrote: post #125

Value is already decoupled from money in the entire economy. When inflation is 3% YOY, but wages don't increase. If money was an indicator of value wages would track with inflation. There's no objective measure of value anymore and most jobs are more or less bullshit jobs. https://en.wikipedia.org/wiki/Bullshit_Jobs

Median household income is up to $69k now. In 1980, it was $17k. Wages are up 3.7x since 1980. REAL median household income is up 32% [1]. And this is with labor force participation absolutely plummeting [2]. Less people are working, and yet households are bringing in 32% more. [1] https://fred.stlouisfed.org/series/MEHOINUSA672N [2] https://fred.stlouisfed.org/series/CIVPART

That isn't really meaningful on its own, is it?

I'm sure the parent comment actually meant in the context of how it income has increased in relation to cost of living (though they didn't indicate that explicitly)

eg, https://www.investopedia.com/ask/answers/101314/what-does-cu...

Re: There’s Nothing to Do Except Gamble

#229

Post by lazerpants » Thu, Apr 15, 2021, 7:36 PM UTC

AnimalMuppet wrote: post #217

mytherin wrote: post #119

Earlier quoted context omitted.

What will actually happen if the crypto coins collapse in price? What tangible effects will there be? Very few people's salaries are paid in crypto, crypto isn't backing people's mortgages, and outside of the rare (and newsworthy) cases, people are not investing extreme amounts of money into crypto that they cannot possibly afford to lose. I have a hard time imagining what actual tangible disasters will happen if cry…

No real damage (except to those holding it) unless enough people have bought crypto with borrowed money. That's where it can cause damage to the overall economy.

The Wealth Effect is a real consideration here. During 2007 people cut their spending considerable because their houses went down in value, even if they were not, at that time, trying to sell their home. You would see the wealth effect work similarly if cypto assets were devalued.

As an example, I have 5-20k in crypto assets on any given day. My wife and I are also shopping for a new couch. If my crypto assets evaporated we would not be shopping for a new couch, nor would we be going out for dinner tonight, despite the fact that I am not spending down crypto assets to fund either of those purchases. The psychology behind it is that people adjust to a certain amount of "savings" and will adjust purchasing to get back to that level if their savings changes quickly and substantially.

https://en.wikipedia.org/wiki/Wealth_effect

Re: There’s Nothing to Do Except Gamble

#230

Post by sgerenser » Thu, Apr 15, 2021, 7:37 PM UTC

DC1350 wrote: post #139

vsareto wrote: post #80

Earlier quoted context omitted.

Skills around software and IT - not just developers. There might be a lot of churn within that industry, but if you can solve problems in those industries industry with any tools, you're going to be valuable. It might take longer to find a job depending on the current times and your own retraining speed, but it will be there in some form. Nothing is likely going to make all software and IT workers obsolete like autom…

I’d love to believe this, but dev and IT people are not paid exceptionally well in most of the world. That says to me that the high salaries are a consequence of social structures and the current economy, not that the skills are super valuable. It’s proximity to money that actually matters.

Developers are paid pretty well in most of the world, usually well above median income for the country. Just because they’re not paid at 90-95th percentile incomes as in the U.S. doesn’t mean they don’t have valuable skills.