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

Re: There’s Nothing to Do Except Gamble

#291

Post by Shaanie » Thu, Apr 15, 2021, 10:30 PM UTC

anonporridge wrote: post #287

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…

I do actually wonder if the FIRE movement will come under criticism in the coming years. Does the economy still work if too many people are checking out of their careers in their 30s and 40s? But yeah, it's mostly the financial elite freaking out that their kids might actually have to be a wage slave for a living.

I really doubt FIRE is popular enough for them to matter in practice. I suspect very few can stand pinching pennies for the 10-25 years it takes to save up the capital.

Re: There’s Nothing to Do Except Gamble

#292

Post by eloff » Thu, Apr 15, 2021, 10:32 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…

I think it's fair to snipe at speculating unreasonably when anyone does it. Its not good for society.

But what's happening is somewhat different. It's really an alpha strategy to trigger a short and or gamma squeeze. It's not a simple ponzi scheme - it's not zero sum.

Re: There’s Nothing to Do Except Gamble

#293

Post by anonporridge » Thu, Apr 15, 2021, 10:35 PM UTC

Shaanie wrote: post #291

anonporridge wrote: post #287

Earlier quoted context omitted.

I do actually wonder if the FIRE movement will come under criticism in the coming years. Does the economy still work if too many people are checking out of their careers in their 30s and 40s? But yeah, it's mostly the financial elite freaking out that their kids might actually have to be a wage slave for a living.

I really doubt FIRE is popular enough for them to matter in practice. I suspect very few can stand pinching pennies for the 10-25 years it takes to save up the capital.

It probably matters more for highly paid professionals who can do it in 5-10 years.

Re: There’s Nothing to Do Except Gamble

#294

Post by arcticbull » Thu, Apr 15, 2021, 10:36 PM UTC

ksdale wrote: post #238

Aunche wrote: post #237

Earlier quoted context omitted.

> 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 elite. Nobody is complaining about people placing their paychecks in index funds though. Index funds are a reasonably good proxy for the future health of the economy, so your gains from it will likely represent real g…

Index funds go up because more people want to buy them than sell them, cryptocurrencies go up because more people want to buy them than sell them. Index funds happen to represent ownership of productive assets, but the assets don't really care who owns them, your investment in an index fund doesn't increase the number of productive assets in the world, likewise with cryptocurrency.

Index funds are positive sum because companies are positive sum. You buy shares in a productive enterprise, which then generates revenues, and profits. These profits are returned to shareholders via dividends or buybacks, or just through the accretion of value within the enterprise.

On the other hand cryptocurrencies are negative sum. The only way the early folks make money is when late folks put money into the system. At the same time, the house (miners) are constantly extracting massive amounts of actual liquidity. The "sum" of Bitcoin is negative 21,000,000,000 per year. This welfare is extracted by Chinese mining cartels bribing their local governments for access to coal-powered electricity. Enough to offset all of the solar panels installed in the entire world.

The total amount of wasted power per Bitcoin transaction is now 30 days of power for the average household, and generates 100 grams of non-recyclable e-waste.

Re: There’s Nothing to Do Except Gamble

#295

Post by solosoyokaze » Thu, Apr 15, 2021, 10:36 PM UTC

groone wrote: post #204

m3ta4a wrote: post #177

Earlier quoted context omitted.

Nonsense, a different word doesn't suddenly make it universally true. It could be a guiding philosophy, something like "to live a good life provide value to your community". But it is in no practical way a rule.

It is a universal rule as if you don't do that, you are part of the problem and are creating a drag on the society, reducing the value for everyone to use and enjoy. Your argument sounds like You want to see the society to fail and collapse.

It's not universal. I'd rather see someone "freeload" in a system of wild wealth inequality than further enrich those who already have runaway gains via the power law. In fact, I'd say it's quite an ethical position to take.

Put another way, I'll worry about a million people not "adding value" when there ceases to exist individuals who have captured enough wealth to support a million people. The latter is the real problem.

Re: There’s Nothing to Do Except Gamble

#296

Post by mbil » Thu, Apr 15, 2021, 10:37 PM UTC

AlexandrB wrote: post #21

paulpauper wrote: post #13

Earlier quoted context omitted.

then how come the US economy boomed after 2009 in spite of unprecedented stimulus and other programs. Not saying that the programs caused the expansion, but it did not seem to hurt it either. Everyone who said that the printing would cause inflation, a repeat crisis, recession, or other problems, were wrong.

Doesn't something feel wrong about the post 2008 "boom"? Theoretically the economy is doing great but you have constant social upheaval, a generation where many are still living with their parents, and the need for constant central bank stimulus in the form of cheap credit. I sometimes wonder if we've managed to mask the real state of the economy by pumping the metrics to make it look like it's fine.

Lyn Alden explored this idea in her January newsletter, titled "The Hindsight Depression"[0].

> the US and much of the rest of the world have already been in a mild depression for the past 12 years, ever since the 2008 global financial crisis. It’s just not as obvious as the 1930s depression, because higher levels of technology and anti-deflationary monetary policy disguised it in a nominal sense.

[0] https://www.lynalden.com/january-2021-newsletter/

Re: There’s Nothing to Do Except Gamble

#297

Post by solosoyokaze » Thu, Apr 15, 2021, 10:39 PM UTC

alert0 wrote: post #285

jpdus wrote: post #162

Earlier quoted context omitted.

What you call "corrosive" (appreciation of non-value-creating assets) is 1:1 applicable to Real Estate. Compared to the appreciation of worldwide real estate, the market value of crypto is only a drop in the ocean. And countless people got unbelievable rich due to rising prices and "crowding-out" in cities without creating any value for society at all (in the opposite, making life harder for everybody struggling to k…

Comparing cryptocurrency to real estate is laughable. With real estate you have either a place to live, reducing a real world expense (rent), or an income producing property. No matter how much you dress up cryptocurrencies as stocks, by using terms like market cap, you are not buying a share of an income producing asset. You're speculating on a digital collectible. You can speculate on real estate and stocks, but yo…

They compared it to the appreciation of real estate, which is wildly divorced from real value. Real-estate prices in say, the Bay Area are driven by legislation and speculation. Not actual value. The move to remote works accelerates the discrepancy.

Re: There’s Nothing to Do Except Gamble

#298

Post by rchaud » Thu, Apr 15, 2021, 10:40 PM UTC

lazerpants wrote: post #256

rchaud wrote: post #59

Earlier quoted context omitted.

> Is that arguably true? Where is the stuff? First off, the chart shows GDP per capita at current prices, meaning it's not adjusted for inflation. GDP per capita is a very rough proxy for economic well-being. Adam Neumann of WeWork 'earned' $185 million for getting fired. So in essence, he raised GDP per capita by about $0.50.

That is incorrect. GDP is typically calculated using an expenditure approach. Just transferring 185MM would not impact GDP.

GDP can also be calculated using the income approach, since conceptually they both add up to the same amount.

In either case, it is still a highly misleading proxy measure for economic development and well-being.

Re: There’s Nothing to Do Except Gamble

#299

Post by anonporridge » Thu, Apr 15, 2021, 10:41 PM UTC

polypodiopsi wrote: post #271

w0de0 wrote: post #195

Earlier quoted context omitted.

> Our job in life is to engage in value creation. That's grim! It's not my job in life.

The cycnicism in me insists that the the ones saying this also make money in finance; and feel that the purpose of life for everybody should be to create value - of course with an implicit exclusion of themselves; because their purpose in life is obviously to ENJOY. (The latter of course is a silent narcisitic thought that can only dwell in the privacy of the ego, and is not allowed to enter public discourse)

Finance people tell all kinds of stories to themselves about how they're actually adding value to the system with their activities.

Re: There’s Nothing to Do Except Gamble

#300

Post by solosoyokaze » Thu, Apr 15, 2021, 10:43 PM UTC

AnimalMuppet wrote: post #226

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.

Their formula was being wealthy enough to float above war, upheaval, regime change and so on. If they were wealthy enough, they probably triggered some of that and capitalized on war profiteering.