Shouldn't the title be "likely required recapitalization"?
Tether Required Recapitalization in May 2022
221–230 of 336 posts
Re: Tether Required Recapitalization in May 2022
#222Is this what the earlier "hash drop" tweet [0] was about? [0] https://twitter.com/patio11/status/1527616238586716160
Hah, good catch. Kind of can't believe he's still doing that after the last time [0] 0: The tweet: https://twitter.com/patio11/status/1241551327743770624 The, ah, assertion: https://twitter.com/patio11/status/1241553311024603140 > I am materially wrong about the most consequential thing I've had to have a view on in 15 years. You should probably degrade your estimate of my ability to think through complex problems. T…
How was he wrong? I remember this dust up but only now having actually read the whitepaper I see he was extremely alarmed by covid-19, which was entirely correct.
Further, it's apparently a very common thing in cybersecurity circles (though I've worked in cybersecurity for a decade and don't recognize the idiom, but my experience is more in software dev than research), so I don't really get why he'd stop even if he got a prediction wrong.
Re: Tether Required Recapitalization in May 2022
#223Earlier quoted context omitted.
>This is true for every pile of toxic crap that's ever been financially engineered. I have a radical idea that I'm fairly sure would get me killed if I ever stood a chance of implementing it: A complete ban on all non-productive financial schemes. We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society. The "futures trader" extracting value from the system…
"The "futures trader" extracting value from the system buying/selling futures has done no "real" work" Small farmers hedging next years crop would like a word with you ... ... and there are one hundred examples just like that. Did you ever convert foreign currencies in advance of an international trip when you saw the currency pair move favorably ? Have you ever bought an ETF ? Do you have a mortgage in the United St…
Comparing sophisticated market makers trading using their own money to "hedge funds" run by some rich guy's son charging 2 and 20 are hardly the same.
The bank in Margin Call was packaging MBS out of mortgages, not speculating on the price of commodities using derivatives to gain leverage.
Re: Tether Required Recapitalization in May 2022
#224The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.
They want to prop up Tether until they don't want any longer.
Nothing lasts forever, especially in cryptoland.
Re: Tether Required Recapitalization in May 2022
#225Earlier quoted context omitted.
"The "futures trader" extracting value from the system buying/selling futures has done no "real" work" Small farmers hedging next years crop would like a word with you ... ... and there are one hundred examples just like that. Did you ever convert foreign currencies in advance of an international trip when you saw the currency pair move favorably ? Have you ever bought an ETF ? Do you have a mortgage in the United St…
Comparing sophisticated market makers trading using their own money to "hedge funds" run by some rich guy's son charging 2 and 20 are hardly the same. The bank in Margin Call was packaging MBS out of mortgages, not speculating on the price of commodities using derivatives to gain leverage.
The person you're replying to was talking about futures traders. Where did you get a rich guy's son from?
Re: Tether Required Recapitalization in May 2022
#226Earlier quoted context omitted.
Comparing sophisticated market makers trading using their own money to "hedge funds" run by some rich guy's son charging 2 and 20 are hardly the same. The bank in Margin Call was packaging MBS out of mortgages, not speculating on the price of commodities using derivatives to gain leverage.
The person you're replying to was talking about futures traders. Where did you get a rich guy's son from?
Speculating on futures and other derivatives is basically what those rich guy's sons are doing in their hedge funds. Most hedge funds get worse returns than the S&P 500.
Re: Tether Required Recapitalization in May 2022
#227Earlier quoted context omitted.
It's such a weird "bet", though. Pay $1, get back $1 if you win, get back $0 if you lose.
If you just sit in Tether sure, but the ecosystem of stablecoins gives you access to DeFi yield opportunities with much better "passive" interest than bank deposits or treasuries, so the bet is a little more sophisticated than dollar for dollar.
Have you ever thought where that yield comes from?
Re: Tether Required Recapitalization in May 2022
#228Earlier quoted context omitted.
It's remarkable that a stablecoin which was able to mostly maintain the peg for years at a time now needs to redefine what being pegged means, and that this state of affairs has continued for more than a week. That's why I mentioned it.
On the other hand DAI fluctuates between 0.999 and 1.001 all the time. Is it not "stable". I am no fan of tether, but small fluctuations like this have always been normal for "stable coins".
DAI has been designed to be soft-pegged. It is meant to fluctuate around the $1 mark, but it never guarantees any kind of parity.
Re: Tether Required Recapitalization in May 2022
#229It recently occurred to me, with the whole LUNA fiasco, that any "stablecoin" that is 1-1 backed by fiat can come under attack from leveraged traders, and get de-pegged. So it really doesn't matter what backing tether has, although more is obviously better. When the music stops it's anyone's guess what will happen.
No, 1-1 backing prevents this. Let’s imagine that I have 1000 cans of beer in my warehouse and I give out 1000 tickets to exchange for a beer. Let’s further imagine you have infinity dollars to “break the peg”. So you buy tickets, trade tickets, give them away for free after re-buying them… doesn’t matter. As many times as you want. Everyone who has a ticket at the end can still visit my warehouse to claim a beer — n…
you can't make a profit like that. banks (and tether) make profit by miniting news tickets out of thin air, lending the newly minted tickets at a certain rate, once the credit is reimbursed they usually destroy the minted tickets and keep the profit.
Re: Tether Required Recapitalization in May 2022
#230The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.
As long as there are well-capitalized parties that want to prop up Tether That's been my personal conclusion as well but it led me to the next question of what # is the breaking point for these well-capitalized parties? I tried looking at the size of other well-known collapses like Enron, LTCM, Lehman Bros, etc. LB reportedly had $700B in assets and liabilities before the underlying asset devaluation precipitated the…
The majority of this scam is happening on unlicensed unregulated off shore exchanges. They don't keep client funds segregated either. When the bubble pops they all go down. The bag holders won't even realize it until the website domains stop resolving. It's musical chairs and the music stopped playing earlier this year when the audits of Tether's reserves came out. Now people that were listening are getting as much out as possible before the seats are all gone.