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TerraUSD crash led to vanished savings, shattered dreams

wsj.com

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Re: TerraUSD crash led to vanished savings, shattered dreams

#41

Post by tylerhou »

sumy23 wrote: post #10
sbf501 wrote: post #2

And an avalanche of "I told you so". Don't forget that part.

People are so smug when they say “I told you so.” It really bothers me. On every negative story about crypto, so many people comment “hur dur financial regulation dur”. But that’s so easy to say after the fact. If these people really could foresee these events happening, then they could have made a lot of money by taking short positions. That would be a lot more impressive to me than taking cheap opportunities to fee…

Even if you know something will fall it's not necessarily rational to take a short position. You also have to correctly guess when it will fall. Otherwise you will lose money on premiums or get wiped out by margin calls.

Re: TerraUSD crash led to vanished savings, shattered dreams

#42

Post by dubswithus »

jmyeet wrote: post #31

I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king. Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this: Put your money in a broad index fund and don't look at it for 10 years. In giving this advice you start to realize it's not what people want to hear. It's not that…

Perhaps they knew what they were doing just as startup investors take a calculated risk that their doggy social networking site might not be the next big thing?

Re: TerraUSD crash led to vanished savings, shattered dreams

#43

Post by toomuchtodo »

twoodfin wrote: post #33
toomuchtodo wrote: post #26

Earlier quoted context omitted.

In my experience in interfacing with unsophisticated investors, they aren’t aware of the risk. Should they do more due diligence? Likely. Should there be regulation to protect the unsophisticated? Also likely. Speedrunning securities regulations, as one does.

Agree that if we’re going to have regulations to protect unsophisticated investors from obscured risk, these nonsense “yield farming” ventures should be at the top of the list.

It is heartbreaking to hear about people’s crypto losses. I was on a plane the other day next to a young lady invested (gambling really) only in crypto, Tesla, and 0DTE options (!!!). While not a financial advisor, and with appropriate disclaimers, I provided them with an Amazon gift link for your basic books about index investing and personal finance, as well as real broker recommendations (versus Robinhood).

The knowledge gap is real and incredibly worrisome, and this is real money these folks are losing. You don’t know what you don’t know.

Re: TerraUSD crash led to vanished savings, shattered dreams

#44

Post by arcticbull »

dubswithus wrote: post #36
arcticbull wrote: post #34

Earlier quoted context omitted.

You're welcome to review my post history.

Do you also welcome retail investors that haven’t heard of HN?

Welcome? Not sure what you mean. I maintain a similarly opinionated Twitter feed. It’s also to be clear not my responsibility. This whole “nobody could have known” is as asinine as it was predictable.

Re: TerraUSD crash led to vanished savings, shattered dreams

#45

Post by gowld »

Animats wrote: post #7

Oh, no. They had feeder funds. Stablegain [1] was feeding money into them: You can now earn up to 15% APY interest on your cash with Stablegains. This is 30x higher than in your traditional bank. You can deposit and withdraw using your preferred methods (ACH, wire transfer, USDC) with the help of our partner Circle. There are no long-term lock-up periods. Earn passive income every day We take care of all technical as…

> There are people hit by this who didn't even know they had exposure.

Does it matter?

What's the difference between "I invested in Terra, and I have no idea what that means, and I lost it all" and "I invested in Stablegains, and I have no idea what that means, and I lost it all"?

The Internet crosses national borders, which is kind of cool but also means that anyone in any country can pseudonymously attack people in their home country without any of the normal defenses of borders and local law enforcement / judiciary.

It's actually kind of crazy how physical borders are so heavily patrolled, yet virtual borders have no protection. IMO ISPs and web browsers should be injecting warnings in your packets and UI whenever they transmit data to or from a foreign jurisdiction.

Re: TerraUSD crash led to vanished savings, shattered dreams

#46

Post by unmole »

sumy23 wrote: post #10
sbf501 wrote: post #2

And an avalanche of "I told you so". Don't forget that part.

People are so smug when they say “I told you so.” It really bothers me. On every negative story about crypto, so many people comment “hur dur financial regulation dur”. But that’s so easy to say after the fact. If these people really could foresee these events happening, then they could have made a lot of money by taking short positions. That would be a lot more impressive to me than taking cheap opportunities to fee…

> But that’s so easy to say after the fact.

HN was almost always negative about the crypto currency hype. Even when shitcoins were at ATH. So, no. The criticism is not after the fact.

> If these people really could foresee these events happening, then they could have made a lot of money by taking short positions.

Markets can stay irrational longer than you can stay solvent has been a cliche for almost a century. That is to say nothing of the absurd cost of taking a short position and the counterparty risk of dealing with unregulated exchanges.

> As far as I’m concerned, you don’t say anything unless you put your money where your mouth is.

The motivation for a lot of us was to prevent our less sophisticated friends and family from blowing up their savings. The idea that one shouldn't be critical of obvious scams unless one has a financial interest in them is not a particularly well thought out take.

Re: TerraUSD crash led to vanished savings, shattered dreams

#47

Post by kareemsabri »

sumy23 wrote: post #10
sbf501 wrote: post #2

And an avalanche of "I told you so". Don't forget that part.

People are so smug when they say “I told you so.” It really bothers me. On every negative story about crypto, so many people comment “hur dur financial regulation dur”. But that’s so easy to say after the fact. If these people really could foresee these events happening, then they could have made a lot of money by taking short positions. That would be a lot more impressive to me than taking cheap opportunities to fee…

I don't think that's true.

First, shorting is expensive. Second, people have jobs and bills and don't need their money tied up in some short position. Third, just cause you think something is gonna collapse doesn't mean you know when it will collapse.

I think certain assets are shit (crypto or otherwise). I'm not going to short them all, and I still reserve the right to say I think they are shit. I'm not a professional trader.

Re: TerraUSD crash led to vanished savings, shattered dreams

#48

Post by joshjdr »

hug wrote: post #23
sumy23 wrote: post #10

Earlier quoted context omitted.

People are so smug when they say “I told you so.” It really bothers me. On every negative story about crypto, so many people comment “hur dur financial regulation dur”. But that’s so easy to say after the fact. If these people really could foresee these events happening, then they could have made a lot of money by taking short positions. That would be a lot more impressive to me than taking cheap opportunities to fee…

It is the opposite of impressive, to me: Crypto is deeply troubled and unethical, but betting against it by shorting the market and gleefully taking advantage of someone losing their shirt is worse . Basically if I can lose your respect by not fucking people over, I don't want your respect. How's that for conviction?

Arguably its helping them— you know… not lose more money than they otherwise could.

Re: TerraUSD crash led to vanished savings, shattered dreams

#49

Post by pphysch »

dubswithus wrote: post #42
jmyeet wrote: post #31

I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king. Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this: Put your money in a broad index fund and don't look at it for 10 years. In giving this advice you start to realize it's not what people want to hear. It's not that…

Perhaps they knew what they were doing just as startup investors take a calculated risk that their doggy social networking site might not be the next big thing?

"calculated risk" is doing a lot of heavy lifting here. "Wishful thinking" is the more likely culprit

Re: TerraUSD crash led to vanished savings, shattered dreams

#50

Post by peter422 »

sumy23 wrote: post #17
phailhaus wrote: post #15

Earlier quoted context omitted.

Short positions: * Have unlimited downside * Are more difficult to get your hands on It's not really reasonable to expect everyone bearish on crypto to also take uncapped risks.

You can buy short options that have capped downside.

So if you think crypto is mostly a scam the solution is to get into options trading?

Staying away and warning your friends/family about the scammy nature of many coins is a perfectly reasonable response.

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