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Bank failures come in waves

yarn.pranshum.com

251–259 of 259 posts

Re: Bank failures come in waves

#251

Earlier quoted context omitted.

"I don't personally know a single person who, if given the chance, would choose to abandon work of all kinds forever. " this is what i mean. You're in some kind of insane bubble and need to wake up. Does everyone around you have a "career"? you're glorifying work way beyond regular person life experience

No, they definitely don't. Did you see where I said I knew disabled people who were unemployed because, in our current system, they are unemployable , but actually want to be doing stuff? The point isn't "glorifying work". It's that people don't actually want to be couch potatoes. They want enrichment . They want activity . They want meaningful stimulation . Look at us more like zoo animals and maybe it'll make more…

> They want enrichment. They want activity. They want meaningful stimulation.

> Writing is work. Acting is work. Making video games is work. Helping old people get around is work.

All true, but keep in mind that value is created when work produces something that someone else wants to consume. Enrichment and meaningful stimulation to one may not produce anything useful to another, and in fact can often come from consumption. The alternative to being paid to be at a job you don't want to be at isn't sitting around doing nothing all day; it's being out there, enjoying themselves, living life, consuming products and services that others produced.

Would you rather clean toilets (providing what is desired by others, i.e. having a clean bathroom) for five hours or go do your favorite leisure activity, be it playing basketball, hiking, or spending time at a museum (consuming to fulfill your desire), for the same five hours, if you got the same universal basic income payment regardless of your choice?

Work is often hard and stressful. People have to deal with irate customers. People have to sweat and lift heavy things and have their bodies ache afterwards. People have to struggle and wrack their brains to solve a technical problem under a deadline. People have to do all sorts of things that they may not want to do in the immediate moment. Currently, the incentive for that is remuneration for time and labor performed. When you take that incentive away, who remains to do the work that is hard, isn't enjoyable, and may not be fulfilling?

What's that you say -- humans want their lives to having meaning, and this will somehow result in all of that stuff being done, anyway? All against the backdrop of a culture that is steadily moving away from one that values hard work in a moral sense? I'm skeptical.

Re: Bank failures come in waves

#252
post #89

Earlier quoted context omitted.

FDIC - Federal Deposit Insurance Corporation It is not the Fed itself, but a separate entity that doesn't receive any federal funding. The $250k insurance you hear about is not free, it has a cost associated with it: https://www.fdic.gov/deposit/insurance/assessments/proposed.... Just like your $25k car has an insurance premium, these bank accounts are also insured because they pay a premium. Now if your car's value…

The Fed government as an issuer of currency can fund anything to infinity so long as Congress authorizes it. They change numbers in a spread sheet to create money. Rules like FDIC insurance are vestiges of a gold standard era when money was not fungible.

What? Money was always fungible. In the case of crisis, sure fed can step in, but you can't except basic economics to go away when you except to be insured to infinity dollars (and for what cost, btw?)

Re: Bank failures come in waves

#253

Earlier quoted context omitted.

I'm not an expert on MMT, but I've never heard anyone say that. MMTers say that a government cannot be forced to default on debts denominated in its own currency, but that doesn't mean it can control exchange rates if it chooses to prints money to pay them. MMT encourages a broader range of thinking about what's possible, but those possibilities aren't free of consequences.

You've never heard anyone say the main - and very popular - counter argument? (which is correct IMO) Seems disingenuous.

Re-reading the comment, I misunderstood what they were saying the counterargument to MMT was. But I still think they're wrong. The rest of the world accepts all sorts of things that we might not expect, such as a debt to GDP ratio over 100. A lot of conventional economic arguments are rigorously weak, and while I think policy recommendations from the MMT camp are very debatable, I find their model to be thoroughly thought through.

Re: Bank failures come in waves

#254
post #166

Earlier quoted context omitted.

I imagine we'd have a similar level of services, and the same level of urgency to raise taxes.

Depends on the country. For countries with a lot of "black money" and corruption there is an obvious benefit. Taxes yield less because they don't capture the whole economy, as a result taxes are increased and get paid by the "idiots/ethical" which creates a vicious cycle. Now if tomorrow you had everyone paying taxes then 2 things would happen which would result in a new equilibrium. 1. The tax revenues would massive…

crypto isn't some magic wand that just makes corruption go away. It'd just be baked into the new system from the get go.

Re: Bank failures come in waves

#255

Earlier quoted context omitted.

Here's the data on M2 money supply in billions of dollars, for those curious, in billions of dollars: Feb 2020: 15,457.9 Feb 2022: 21,699.2 This is a 40.3% increase. To be charitable, this money isn't all on printed physical cash dollar bills, but nowadays there is no need for it to be. (I'm tempted not to be charitable though.) https://fred.stlouisfed.org/series/M2SL

A 40.3% increase is different than the percentage of the total money supply that was printed in the last two years , which for your numbers works out to about 29%. I would argue that most people would interpret “we created X% of the Y supply” in this way and not as a percentage increase.

the point your making is completely useless. If someone has billions of dollars in storage somewhere (like Iran literally does) it doesn't affect the supply of money until they start moving it or using it in some way.

Like if someone found a trillion long tons of pure gold somewhere, but decided not to sell it or even use it. The price of gold isn't just going to collapse overnight. Sure the markets will panic sell for a few days, but it's still a real commodity with real uses & demands.

Putting a ton more _active_ money in the system does change the value of money.

Re: Bank failures come in waves

#256

Earlier quoted context omitted.

A 40.3% increase is different than the percentage of the total money supply that was printed in the last two years , which for your numbers works out to about 29%. I would argue that most people would interpret “we created X% of the Y supply” in this way and not as a percentage increase.

the point your making is completely useless. If someone has billions of dollars in storage somewhere (like Iran literally does) it doesn't affect the supply of money until they start moving it or using it in some way. Like if someone found a trillion long tons of pure gold somewhere, but decided not to sell it or even use it. The price of gold isn't just going to collapse overnight. Sure the markets will panic sell f…

I’m not making any point at all, besides trying to clarify the math and terminology GP used. I know very little about economics :)

Re: Bank failures come in waves

#257
post #252

Earlier quoted context omitted.

The Fed government as an issuer of currency can fund anything to infinity so long as Congress authorizes it. They change numbers in a spread sheet to create money. Rules like FDIC insurance are vestiges of a gold standard era when money was not fungible.

What? Money was always fungible. In the case of crisis, sure fed can step in, but you can't except basic economics to go away when you except to be insured to infinity dollars (and for what cost, btw?)

no money was a receipt for a gold bar amount which is not very fungible. How does basic econonmics go away ?

Re: Bank failures come in waves

#259
post #92

Interestingly enough, the graph of bank failures looks like the ones Mandelbrot shows in his works about transmission errors if I recall correctly (can't check right now). My conjecture is that markets encode information rather than other things like value etc. Failures are just transmission errors.

This makes sense. Prices are literally encoding information - first the demand for the item being priced and then the cost of supplying the item. The price of beef is signaling a lot of phenomena including consumer tastes, weather, costs for feed, slaughter, and transportation, etc. You could argue that central banks putting non-market pricing on the money supply distorts the information that a market-priced money su…

just found out this paper by Kelly (which may be widely known as the Kelly criterion), stating that one should maximize the expected value of the logarithm of its capital, independent from one's utility function of money, in which Kelly starts by mere information theory considerations.

Edit: the paper https://www.princeton.edu/~wbialek/rome/refs/kelly_56.pdf

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