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Pricing Money: A beginner's guide to money, bonds, futures and swaps

jdawiseman.com

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Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#261

Post by MrPatan »

notahacker wrote: post #252
MrPatan wrote: post #237

Earlier quoted context omitted.

It's the same application layer just running in a different tech and social stack. It's clear why the current gatekeepers don't like permissionless alternatives, but why do you agree with them?

The "social stack" is what actually makes finance's "application layer" happen, because it turns out that blockchains can't actually enforce delivery of barrels of oil or sue ICO recipient for spending their proceeds on coke and hookers, and things like hiring and receiving goods and valuing insurance losses all involve counterparties. Much as you would like to personalise this debate, it's not about my level of agre…

Nobody is saying delivery of assets is done on chain.

That's a strawman you've skewered twice already, well done.

What we're saying is: a lot of the low level infrastructure used now in finance (brokers! Dealers! Clearinghouses!) is easily replaced by some code, once you have trustless decentralized computers. Which we do now.

Then your oil barrel market is just some code nobody needs to trust, and yes, the "last mile" of it still needs "guys with guns" infra. So what? We made a part of that market freer and fairer.

Cool, isn't it?

Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#263

Post by refurb »

tech_ken wrote: post #17

This is an excellent resource and a great read, but DAMN do money markets seem stupid as all get out to me. Where is the productive output of all these arbitrage shell games? How is this more than an abysmal waste of time and resources simply to make a small handful of bankers richer?

The value add is offering financial products that consumers want.

Businesses and people need to loan or borrow money, offering a wide variety of products that suit different needs supports economic growth.

A good example of this are all the foreign companies that decide to go public on the NASDAQ. They aren't doing it in their home country because of a weak (or non-existant) equities market, or burdensome regulation.

Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#264

Post by alex_smart »

chii wrote: post #200
alex_smart wrote: post #143

Earlier quoted context omitted.

This is exactly the why and how of "travel broadens the mind". You only have to visit countries and socities that do not have well-developed financial markets to directly see and appreciate the value financial markets bring to your own society. Visit a part of the world where most people do not have access to home loans, health insurance etc. and you will not have to ask how mere redistribution of risk and capital ad…

> socities that do not have well-developed financial markets to directly see and appreciate the value financial markets Which is true, but there's another angle that needs discussing - that of a high-trust society vs low-trust society. In all places where there are well functioning financial markets, there exists a high trust society. This trust is the foundation on which the financial markets exist. So in poorer cou…

Rural India (unlike urban India) is relatively high trust environment. Everybody knows each other and there are lots of shared ethical values. But they still have to build their houses one brick wall at a time (lack of access to home loans) and be at the risk of financial ruin due to unpredictable life events (lack of access to insurance).

Urban India is a very low trust environment, but people still have access to things like home loans, insurance and capital markets (equity and loans).

> lack of good governance (bad or non-existant laws, corruption etc)

I agree that good governance is a necessity for development of financial markets, but not sure what it has to do with being a high trust or low trust society.

Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#265

Post by matheusmoreira »

alecco wrote: post #218

All these Financial guides are very interesting. But beware of falling into the illusion of being a good-enough active investor. It's like entering the Pro league as an overconfident amateur. The other players are the best in the universe. And they have cybernetic extensions: algorithmic trading with virtually limitless amounts of resources and information. And sometimes they have "alpha" you'll never, ever get your…

Surely it must be possible to learn how to do whatever these so called "smart money" types are doing. Or at the very least learn how they operate so we can identify and avoid their attempts at predation.

Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#267

Post by asdff »

chii wrote: post #202
Matl wrote: post #117

Earlier quoted context omitted.

> The default should be the government doesn't do things Right, but taking this in the opposite direction then, why for public interest things should the default of 'people who just want to buy the next yacht' run them good?

because they can only buy that yacht _if_ they ran it good!

Unfortunately "running it good" might also mean things like bain capitalism where they part out anything of value and leave the customer base high and dry.

Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#268

Post by notahacker »

MrPatan wrote: post #261
notahacker wrote: post #252

Earlier quoted context omitted.

The "social stack" is what actually makes finance's "application layer" happen, because it turns out that blockchains can't actually enforce delivery of barrels of oil or sue ICO recipient for spending their proceeds on coke and hookers, and things like hiring and receiving goods and valuing insurance losses all involve counterparties. Much as you would like to personalise this debate, it's not about my level of agre…

Nobody is saying delivery of assets is done on chain. That's a strawman you've skewered twice already, well done. What we're saying is: a lot of the low level infrastructure used now in finance (brokers! Dealers! Clearinghouses!) is easily replaced by some code, once you have trustless decentralized computers. Which we do now. Then your oil barrel market is just some code nobody needs to trust, and yes, the "last mil…

You started off asking "why do you still want the guys with guns solution" and insisting that blockchain provided a "trustless, decentralized" solution to the problems financial markets purport to solve.

So I don't think it's a "straw man" to point out the answer to your question is market participants want promises actually delivered upon which you now admit is entirely dependent on the "guys with guns" (and/or trust). By extension, blockchains don't actually provide a trustless or decentralized solution to the actual problems of finance. Actually knowing that your counterparty will send you oil isn't some unimportant detail of the oil barrel market which can be handwaved away, it's considerably more important than the implementation detail of the transaction record updates or whether brokers are involved.

You've moved more goalposts in this discussion than crypto has moved in the useful bits of finance.

Re: Pricing Money: A beginner's guide to money, bonds, futures and swaps

#270

Post by notahacker »

MrPatan wrote: post #266
croes wrote: post #262

Earlier quoted context omitted.

That Bitcoins still have a value when you sell them

1 BTC = 1 BTC

sure, and 1 UST = 1 UST, but it turns out that people who thought they didn't need to trust the asset held its value are considerably poorer than they were before.
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