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Calling All Hackers: How money works (2024)

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Re: Calling All Hackers: How money works (2024)

#251

Post by littlestymaar »

eru wrote: post #245
littlestymaar wrote: post #243

Earlier quoted context omitted.

See Bob Schiller's work (for which he received the econ Nobel prize in 2013). The “weak version of EMH” has nothing to do with markets being “efficient”, it's a property of random markets. Assimilating the two just Fama's motte-and-bailey fallacy.

When you say 'random' you probably mean that market prices are a Martingale? See https://en.wikipedia.org/wiki/Martingale_(probability_theory... That's very, very related to being efficient. > Assimilating the two just Fama's motte-and-bailey fallacy. No, not at all.

> That's very, very related to being efficient.

“No, not at all”.

Re: Calling All Hackers: How money works (2024)

#252

Post by dsr_ »

globular-toast wrote: post #247
jjav wrote: post #235

Earlier quoted context omitted.

There is nothing "stupid" or "ridiculous" about correcly tracking net worth. Also nothing wrong if you don't feel like doing it. But some people want to track value of assets, nothing stupid about that.

But it's not "correct" and doesn't make sense for the vast majority of people. Can you at least agree that a car doesn't lose any value just by driving it off the forecourt? Can you agree that people can have value in their lives that can't be written on a balance sheet? Most people would do well to stop thinking value exists on a single dimension. It's utterly absurd when you really think about it, but too many peop…

One of you uses the word value to mean "how much money can I get in exchange for this thing?" and the other means "how much utility can I get out of this thing?".

As long as you use the same word, you will run into this problem.

Value is always highly context-dependent.

Re: Calling All Hackers: How money works (2024)

#253

Post by jjav »

globular-toast wrote: post #247
jjav wrote: post #235

Earlier quoted context omitted.

There is nothing "stupid" or "ridiculous" about correcly tracking net worth. Also nothing wrong if you don't feel like doing it. But some people want to track value of assets, nothing stupid about that.

But it's not "correct" and doesn't make sense for the vast majority of people. Can you at least agree that a car doesn't lose any value just by driving it off the forecourt? Can you agree that people can have value in their lives that can't be written on a balance sheet? Most people would do well to stop thinking value exists on a single dimension. It's utterly absurd when you really think about it, but too many peop…

> But it's not "correct" and doesn't make sense for the vast majority of people.

It is absolutely the correct way to track the value of assets.

Whether it makes sense for a particular person is subjective. Some people care, some don't. Clearly you don't. Nothing wrong with not caring so I don't say that negativelty. You do you, as they say. But, the fact that you don't care does not alter reality nor invalidate the math.

> Can you at least agree that a car doesn't lose any value just by driving it off the forecourt?

Of course it does lose value when you sign the purchase papers, this is not debatable. Not a matter of opinion.

You can trivially prove this if you wanted to. Go buy a new car from the dealer, drive it a mile or less to the nearest parking lot and now try to sell that car for the same amount you paid. You will never be able to find a buyer. If you want to sell that car you will have to lower the price to get any takers. So there, you lost money.

> The point of a post like this is to strip back the bullshit and just say it like it is: finance is a bunch of children in adult bodies playing games

Probably not worth trying to continue to respond factually in that case.

Re: Calling All Hackers: How money works (2024)

#254

Post by globular-toast »

ratelimitsteve wrote: post #204
ipsento606 wrote: post #191

Earlier quoted context omitted.

> Some web searching suggests that only about 2% of home mortgages have prepayment penalty clauses. It's clear (to me) that you're talking about the US specifically, but it might not be clear to everyone. Residential mortgages are highly idiosyncratic to the country you're talking about. Try getting a 30 year fixed rate mortgage in the UK.

is there somewhere where a majority or a plurality of mortgages come with a prepayment penalty?

The UK.

Re: Calling All Hackers: How money works (2024)

#255

Post by grog454 »

danielmarkbruce wrote: post #242
grog454 wrote: post #234

Earlier quoted context omitted.

Wouldn't the principle be a current liability, and the interest the future liability?

No.

For those hoping for more elaboration (including myself):

1. Only the portion of the principal that is due to be paid within the next 12 months is considered a "current liability".

2. Interest is a "future cash flow" that becomes a liability as it accrues over time.

Re: Calling All Hackers: How money works (2024)

#256

Post by gerdesj »

LeanOnSheena wrote: post #74
gerdesj wrote: post #66

Earlier quoted context omitted.

You are fixating on one tiny point which isn't really that important within OP's ... errm "opus". Why not critique the entire work? Anyway: I borrow 100 from someone. I am now in debt and they are in credit - to balance, both are 100. However, they require a return on investment - usury: 10 for 100 (or a 10% margin - call it what you like). When I take out my loan, I am in debt for 110 and they are in credit for 100…

Yeah CPA here. On the day you take out the loan you're not in debt 110, you are in debt 100; you would accrue interest expense over the term of the loan. What if the lender called the loan day 2 for some reason? You wouldn't pay 110, probably just 100 plus one day of interest. Goes back to fundamental definitions of financial statement elements. Liabilities are present obligations. Anyways, recognizing the interest o…

You failed to check the terms of my loan and assumed it was on an interest basis. I literally told you I borrowed 100 and promised to pay 110. I also failed to note a term and you also assumed there was one. I do mention interest later on so that's a fair assumption, if misguided.

I might be guilty of abusing an industry term or two 8)

Re: Calling All Hackers: How money works (2024)

#257

Post by gerdesj »

talentedcoin wrote: post #97
gerdesj wrote: post #66

Earlier quoted context omitted.

You are fixating on one tiny point which isn't really that important within OP's ... errm "opus". Why not critique the entire work? Anyway: I borrow 100 from someone. I am now in debt and they are in credit - to balance, both are 100. However, they require a return on investment - usury: 10 for 100 (or a 10% margin - call it what you like). When I take out my loan, I am in debt for 110 and they are in credit for 100…

What gets on my tits more is people who are pretty bright in one field (hacking) thinking that entitles them to just brute force their way through reasoning about some other field (finance) that in their arrogance they think is simpler.

... and yet somehow I have muddled along running an IT company for 25 years (I'm the MD) and I have a fair idea about finances, including surviving some rather unpleasant financial environments that have rocked up over those years.

One month in 25 years, my partners and I didn't pay ourselves. That's as close as we have got to having issues. We keep six months payroll, corp. tax and VAT in readies. The property mortgage is nearly paid off.

I'm no hacker and I treat finances as a means to an end - no more and no less.

Re: Calling All Hackers: How money works (2024)

#258

Post by user3939382 »

danielmarkbruce wrote: post #197
user3939382 wrote: post #167

Earlier quoted context omitted.

SQL seniors can understand anything in finance. Senior finance people would be baffled from chapter 1 of anything serious in CS. That’s the difference between general purpose programming and a math DSL.

This is laughable.

Which part? You can’t find any mainstream finance concept that can’t be expressed in SQL, or it’s laughable that finance people don’t understand computing? Which part is laughable, would love to know.

Re: Calling All Hackers: How money works (2024)

#259

Post by danielmarkbruce »

gerdesj wrote: post #256
LeanOnSheena wrote: post #74

Earlier quoted context omitted.

Yeah CPA here. On the day you take out the loan you're not in debt 110, you are in debt 100; you would accrue interest expense over the term of the loan. What if the lender called the loan day 2 for some reason? You wouldn't pay 110, probably just 100 plus one day of interest. Goes back to fundamental definitions of financial statement elements. Liabilities are present obligations. Anyways, recognizing the interest o…

You failed to check the terms of my loan and assumed it was on an interest basis. I literally told you I borrowed 100 and promised to pay 110. I also failed to note a term and you also assumed there was one. I do mention interest later on so that's a fair assumption, if misguided. I might be guilty of abusing an industry term or two 8)

You said interest. It's right there. In practice all loans have interest. No matter what you call it, it's interest as the word is understood in finance.

Re: Calling All Hackers: How money works (2024)

#260

Post by staplers »

littlestymaar wrote: post #155
staplers wrote: post #134

Earlier quoted context omitted.

and liabilities are always paid back in full and never smoothed over with money printing bailouts.

I don't understand the point you're making. All kind of assets can lose value overnight, be it stocks or real estate.

Lending on no reserve secretly doubles the money supply, sometimes even more if repackaged multiple times. It creates a highly risky financial environment that taxpayers inevitably are forced to bailout (usually through layoffs and hyperinflation). Time and time again.
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