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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

#301

Post by yieldcrv »

88913527 wrote: post #82
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…

There's a meaningful difference between putting <10% of your portfolio into a speculative investment versus 100%. If your speculative investments moon anyways, 10% * a large number = still a large number, and you didn't bet the farm. It's a good way to fulfill one's desire to be an active investor, while largely acknowledging most of us won't beat the S&P-- I know the active portion of my own portfolio (no crypto) ha…

One of my experiences is that nobody tells you what to do next. They don't know.

If your speculative investment moons then your portfolio has risen to 95-99% speculative investment. At least thats a consistent case in crypto or a super quick and awesome private equity exit, both of which have multiple thousands of percentage gains.

So the people following that kind of risk allocation advice might already be starting from that second state. Rebalancing is an option, but its lame when everything has such high correlations to each other. And rebalancing when? Anytime the speculative investment goes over 10% of the portfolio? After you let it ride and its price got stable for a few days? Waiting a year or more for lower tax treatment on the rebalancing sells?

Re: TerraUSD crash led to vanished savings, shattered dreams

#302

Post by yieldcrv »

imtringued wrote: post #243
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…

Wealth concentration happens when the long term return on capital exceeds the growth rate of the economy according to Thomas Piketty. The wealth obviously concentrates with those, that have the most assets and least amount of spending in relation to their total income. When you think about this, this system is inherently injust if r Now, under this perspective you have found the secret cheat code on how to get richer…

Mmm, Thomas Piketty.

Were you able to read the whole book? I was really enthralled by the main points and graphs made near the beginning but was wondering if there were further insights because its a bit of a slog.

Re: TerraUSD crash led to vanished savings, shattered dreams

#303

Post by SilasX »

Sprite_tm wrote: post #264
SilasX wrote: post #197

Earlier quoted context omitted.

Withdrawals are supposed to reduce market cap.

Until liquidity runs out.

Great, then you should cite evidence of declining liquidity if you want to support the thesis of Tether being about to blow up.

FWIW, I agree Tether is flaky and worth avoiding (to the point of having a short), I just cringe at attempts to cite market cap as a meaningful figure on its own.

Re: TerraUSD crash led to vanished savings, shattered dreams

#304

Post by ProjectArcturis »

prostoalex wrote: post #119
gruez wrote: post #102

Earlier quoted context omitted.

>Edit: There are also lots of investment strategies where people are short tail-risk and don't realize it or properly account for it. For instance, my dad is a pretty smart guy (practicing medical doctor who never got his undergrad degree because he crushed the MCATs and got into med school after 3 years of undergrad, back in the 1970s when med school was less competitive) but he's convinced that his gut-feeling cove…

Not saying the strategy outperforms, but he should be aware that there are ETFs now covering the covered-call strategy - XYLD, RYLD, QYLD - which automate most of that at reasonable cost.

I'm sure he thinks he's better at selecting stocks and call strikes than a robo-index.

Re: TerraUSD crash led to vanished savings, shattered dreams

#305

Post by 4ggr0 »

MadeThisToReply wrote: post #267
CTDOCodebases wrote: post #236

Earlier quoted context omitted.

How can Bitcoin be a ponzi scheme if it doesn't generate returns for the investors? I have bought and sold Bitcoin on an exchange and the anonymous person on the other end of the trade did not make any promises of returns. By your definition is Uber stock a ponzi scheme? It too does not provide a return and relies on buying pressure to increase it's price so people can reap the rewards of their so called "investment"…

"Ponzi scheme" has become completely divorced from its original meaning. It's supposed to refer to a specific type of scam where you pay "investors" using the money you received from previous investors, but nowadays it's basically just used now to mean "anything crypto-related in which people might lose or have lost their money."

I think people refer to some cryptos as a ponzi scheme in the way that for a lot of coins the only reason that they have a value is that lots of people own them. So the strategy there is to buy low, try to convince or just hope that others will buy it as well, which drives the price up, then sell it when the price is up.

In that description the people on the top of the pyramid are just the early buyers or founders, and the later you buy a specific coin, the lower on the pyramid you are. When early whales start selling of their bag, you as a late-joiner will be left holding your own bag.

This of course does not necessarily apply to the minority of cryptocurrencies which have an actual use-case other than just existing.

Re: TerraUSD crash led to vanished savings, shattered dreams

#306

Post by weq »

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…

Im sorry but a high horse for betting on the slave traders vs betting on crypto. NUP. Money breeds money. the whales (1%ers) on index funds are doing it investing in the companies that are destroying the world. Displacing millions of people a year, causing corruption and famine, funneling offshore into tax havens.

Crypto has a LONG way to go before it gutters into the dirty tactics of the stock market.

Re: TerraUSD crash led to vanished savings, shattered dreams

#307

Post by cableshaft »

imtringued wrote: post #245
UkrainianJew wrote: post #143

Earlier quoted context omitted.

>Put your money in a broad index fund and don't look at it for 10 years. That might be a dead strategy in 2022. After the 2008 crisis the fed discovered a miraculous economic cure: slowly print money and throw it into the economy, so people keep transacting with each other, and the GDP (and stocks) keep growing. Turns out, most of this growth was on paper - fads, speculative investments, overvalued stocks. Now that t…

Nothing has changed. There is still an abundance of capital. Interest rates have known only one direction and that is down.

You do know the Fed has been raising rates all year, and have signaled they will keep doing it through the end of this year, right?

Or are you suggesting on a long enough timeline it's just going to go right back to zero again? If so, then yeah you might be right there.

At least the US never got down to negative interest rates, like they've had in europe for the past eight years. I can't imagine having money being taken away for parking it in a 'savings account' (of course inflation is practically the same thing, but negative interest rates still seem worse to me, especially since they also have high inflation over there right now).

Re: TerraUSD crash led to vanished savings, shattered dreams

#308

Post by cableshaft »

yieldcrv wrote: post #301
88913527 wrote: post #82

Earlier quoted context omitted.

There's a meaningful difference between putting <10% of your portfolio into a speculative investment versus 100%. If your speculative investments moon anyways, 10% * a large number = still a large number, and you didn't bet the farm. It's a good way to fulfill one's desire to be an active investor, while largely acknowledging most of us won't beat the S&P-- I know the active portion of my own portfolio (no crypto) ha…

One of my experiences is that nobody tells you what to do next. They don't know. If your speculative investment moons then your portfolio has risen to 95-99% speculative investment. At least thats a consistent case in crypto or a super quick and awesome private equity exit, both of which have multiple thousands of percentage gains. So the people following that kind of risk allocation advice might already be starting…

Yes, there are people who rebalance when that happens. I'm not one of those people (I probably should be, but I'm not), but there are people who definitely do rebalance their portfolios whenever it gets out of whack.

Re: TerraUSD crash led to vanished savings, shattered dreams

#309

Post by BeFlatXIII »

marcus_holmes wrote: post #223

So, what are we going to do about this? We've known that the whole crypto scene in general is a fraudulent, cynical ploy to get rich at other people's expense. Any conversation with anyone involved in the industry quickly reveals that their goal is to get rich from asset speculation. And that means for them to win, someone else must lose. The thing that the article describes is an inevitable consequence of this proce…

I look at it the other way: play stupid games, win stupid prizes.

Re: TerraUSD crash led to vanished savings, shattered dreams

#310

Post by triumphantomato »

dustyharddrive wrote: post #37
ceeplusplus wrote: post #12

Earlier quoted context omitted.

The biggest scam Stablegains pulled was to advertise taking USDC (most trusted stablecoin, backed by real, audited reserves), as to imply they were providing USDC lending yield, when in reality they converted your money to UST funny money.

It’s worth mentioning USDC (Circle) reserves have never been audited, and they don’t even claim to hold dollars anymore ( https://archive.today/2021.07.12-223553/https://www.ft.com/c... ): > Until March 2020, the attestations said USDC was backed by dollars, held in government-backed US depository institutions. After that, they said the reserves were held at institutions and in “approved investments”, but did not giv…

This doesn't seem to be true, could you help me see what I'm missing?

USDC has been audited yearly since 2018 as part of Circle's financial statements, with years 2020 and 2021 publicly available with the SEC: https://www.circle.com/blog/how-to-build-trust-usdc-audits-a...

Circle also does monthly attestations - independent, signed reviews by third party accountants - on USDC holdings. Those are available here: https://www.circle.com/en/usdc#transparency

I looked and the April '22 attestation seemed fine.

Even the FT article seems to walk back its claims about changes in the attestations as worrying, seems like their source actually is more concerned about digital currencies in general:

> “The problem to me isn’t the specifics of any one attestation, it’s the fundamental workings of these kinds of systems,” said Grey.

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