381–390 of 638 posts
Here's the key point in the article: A month ago, the bond was priced at +175bps yield above treasuries with similar maturity, now it's priced at +231bps.
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> 2. Those bonds are now trading for less than their face value. That means that if you buy one of those bonds on the secondary market, you will get a return (yield) of 7.387% That's your return if you buy one of those bonds and the bond is paid on schedule. Presumably the market consensus is there's some risk that payment may arrive late or not at all since the yield to maturity has increased since issuance and not…
I mean, that's what the yield is . The spread between what the bond pays and the Risk-Free Rate (Treasury) tells you what the market thinks the risk of default is. For a spread of 300 basis points that's still a very low probability, probably under 5%.
You'll probably get that, but you might not.
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Of course. But you have a bond buyer who can put their thumb on the scale, and has shown willingness to do so. That buyer also tried to interfere in (succeeded in interfering in) the business of law firms that worked for anti-Trump causes, has directly interfered in the renewable energy market to benefit its backers, etc. What is to say that SpaceX and Oracle won't get these benefits? (Government buying bonds, trashi…
Institutional bond traders are pretty sophisticated. They're aware of all the possibilities you mentioned, and pricing the bonds low anyway.
I am old enough to remember Long Term Capital Management.
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> It's crazy to believe that stopping the funding of US backed NGOs directly kills people. Why? Have US-backed NGOs never saved a single life with their spending? You can argue it's not worth the spending, perhaps, but you really can't argue that it's not happening somewhere. > This is a reason why the US is trillions in debt. This is a tiny, tiny, nearly invisible fraction of that reason.
- USAID's final budget was $34 billion. That's already very real money, but it came from the discretionary budget - that giant bill of spending where the government decides what to spend money on: schools, roads, housing, and so on. The entire discretionary budget for 2025 was $1.9 trillion, so USAID made up almost 2% of all the US' federal discretionary spending!
- Nothing USAID was doing was irreplaceable. The vacuum their exit has created is being rapidly filled by a wide mix of other interests. So saying they are saving a life when they are just another replaceable entity, even if a rather large one, is misleading. It's kind of like saying Google is why we have web browsers.
- USAID and the CIA worked hand-in-hand. For instance one project was USAID/CIA starting a fake social media site [1] in Cuba specifically with the goal of trying to create an insurrection, which would undoubtedly be very bloody had they succeeded. So in your calculus you need to account for deaths caused by USAID as well.
- Many of their programs seemed geared towards the creation of dependencies rather than working to ensure the self sustainability of various places. I think this likely ties into the above issue. Teach a man to fish and you feed him for life, give a man a fish a day and you now control that man because he's dependent upon you. Sociopathic intelligence agencies blending with philanthropy is a rather horrific combination.
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Sounds like no true scotsman. Remember kids: socialism is judged by how it failed in real life, capitalism is judged by how perfect it is in theory
The term "capitalism" was literally only created for the purpose of writing criticisms of the (then) current system of markets/trading/taxing/investing. Try actually defining capitalism in a way that doesn't apply to basically any random society since the dawn of agriculture. Stuff like people buying and selling items using a currency for a price the individual chooses has been common to basically every human society…
That's a market economy, which may or may not be capitalist. Markets have existed for thousands of years under various economic systems.
Agree on your other points though, 'capitalism' was coined to just describe and criticize the system they saw emerging, one of private ownership of the means of production, combined with wage workers who do not own their tools or the product of their labor, but instead sell their time.
But its hard to have discussions around because too many people conflate "market economy" == "capitalism" but you can have markets in a feudalist, socialist, communist, any other society, that doesn't inherently make them capitalist. But I still think its useful as a term, but only to specifically describe who owns the capital.
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I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation. Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.
“Broader economic purpose”? It’s all betting. If someone wants to dress it up in jargon or talk about beneficial second order effects, they can. But if putting money on an outcome you can’t control isn’t gambling, I don’t know what is.
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Not true: Depending on product and regulatory regime, for distinct trader/customer groups there may be distinct rules. And if you are buying an instrument where you can lose more than you invested, the approach maybe wrong? :-)
> And if you are buying an instrument where you can lose more than you invested, the approach maybe wrong? :-) This is precisely why shorting can lose more than you "invest", because you're not buying an instrument, you're selling it with the intent (or promise, depending on what kind of instrument it is) to buy it back later, hopefully at a lower price. The risk is unbounded.
https://en.wikipedia.org/wiki/Turbo_(finance)
There are, as said, depending on juristic regime, products which do not let you lose more than you invested.
On top of this comes national regulation: E.g. in some EU countries, retail traders are exempt from s.c. "margin calls" and the broker is required by regulation to "just close and not ask for more"
Source: Im living in one of these EU countries
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True capitalism has never been tried. This right now is crony capitalism.
We're living under true capitalism right now. Look at the incentives. I don't see how we could have progressed to anything besides this, this is the natural outcome of the system in place. American libertarians often imagine some kind of wonderland capitalism where everyone agrees to play by the rules that aren't enforced by anyone. To my knowledge this has never existed as a long-term equilibrium and it can't exist.…
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Institutional bond traders are pretty sophisticated. They're aware of all the possibilities you mentioned, and pricing the bonds low anyway.
> Institutional bond traders are pretty sophisticated. I am old enough to remember Long Term Capital Management.
There may be important factors that the bond market isn't aware of, just like most of them didn't know about the problems with mortgage-backed securities in 2008. But anything you and I are aware of, they probably are too.
The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its re…