391–400 of 440 posts
"If you know Dimon’s actual reputation, him getting suckered isn’t surprising. From what I heard back in 2009, Dimon is a mediocrity who essentially got lucky his bank was too slow to get in on the subprime scam in 2006; he then used his bank’s incompetence at getting into the bubble as justification for how prudent he was." I take issue with this. Nothing to do with Dimon or the subprime crisis particularly but rath…
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I'd love to hear some research on these claims. Especially this: > Deflation at some point causes people to build stashes of tokens instead of investing in real businesses with real production capacity. I am deeply skeptical of this claim. I would still rather invest in a real business than get a 0% return on my stash. If a free market for currency existed, no way in hell would I choose to store my wealth in a deplet…
Yes but what about the not so rare times explained in my original comment when returns on tangible private marginal assets become negative (on a risk adjusted, liquidity adjusted basis)? During the financial crisis of 2008, the tailor rule put the natural rate (a rate correlated with private marginal safe asset returns) at as low as -4%. In those conditions, having a currency that returns 0% risk free gets you way ab…
Crypto volatility is not solely or even primarily because of the coins' deflationary natures. In fact some cryptos ("shitcoins") are not deflationary at all, and have their value regularly inflated by a central authority.
Note that my comment said Bitcoin specifically and not crypto in general. The ultimate deflationary currency, gold, is not volatile at all, which leads me to believe that crypto volatility is because of external factors like market manipulation, shady ICOs, etc.
> It's indirectly, a huge subsidy to people shutting down projects, laying off people and hoarding government paper instead.
As a counterpoint, consider how an inflationary currency causes income equality. Poor people typically hold their net worth in cash whereas the rich have the ability to invest in income generating assets. An inflationary currency ensures that the poor remain poor, because their primary asset is being constantly depleted.
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Why do private investors need protection? Why can't they be held responsible for the foolishness of their actions?
It's not that private investors need protection, it's that legitimate businesses have to compete against their fountain of capital and that all of these companies employ a lot of people.
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Cheaper to be down? I guess if you don’t have users sure.
Having a hot spare, a database slave and a mirror of your assets so you can manually fail over? Probably a good idea. Architecting a very HA infra? Now wait and look hard at all the possible downtime causes (you have a DDoS provider for sure, Voxility or Cloudflare probably, what if they go down and so forth) and so and then look at what you are protecting against: a hardware failure which is exceedingly rare and aga…
I remember working for a company about a decade ago where we spent so much time engineering duplicate everything hardware or hot spares everywhere.
Guess what, when switch failed it didn't properly failed over. When router it started sending spurious packets everywhere and had to be taken down manually.
All the effort that went into duplicating hardware and making hot spares could have been save by just... having cold spares, and in the end the amount of downtime would have been the same, or less -- because when one thing fails it's really easy obvious where things stopped working.
For me, this whole WeWork fiasco has shown just how valuable the SEC and the S-1 filing process is. Let's be clear -- Neumann was fired because any investor who read the S-1 was mortified and wouldn't touch the company with a 10 foot pole. If anything, this shows how lawless the private markets are and the lack of guardrails that are present to protect private investors -- perhaps this will lead to some reform in the…
I think it also shows the stunning level of mass delusion in the SV VC space. To this day I don't know whether the people who throw around and parrot the valuations actually mean it. I mean, take the price of a small portion of an asset that is illiquid and in short supply, and assume the same price would apply for valuing the whole? This sort of crap wouldn't fly amongst kids in kindergarten, so I'm astounded that i…
> CHICAGO — December 1, 2015–Basecamp is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1.
> In order to increase the value of the company, Basecamp has decided to stop generating revenue.
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People usually know what Ponzi is about so comparing unrelated things to it is going to be obviously wrong. But most people have very murky idea beyond "something in capitalism went bad" when talking about the subprime crisis, so any time anybody wants to criticize anything going bad in capitalism, they are free to grab this example with low(er) risk of being called out.
I was thinking of a Godwin equivalent for finance, which is narrower than capitalism as a whole. What I had in mind is that once you take several rounds of investments (especially from private individuals) and are not profitable, bad faith critics may try to picture you as some kind of Ponzi scheme (trying to repay early investors with late ones, etc.)
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That’s because it’s such a massive example of a systematic corporate private capital failure that was bailed out by equally massive public power while regular people were left on the hook. No other industry has gotten that kind of bailout that far into supposed maturity.
I think that is only because of the relative age of sectors given the sheer number of times airlines got bailed out.
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> Why can't they be held responsible for the foolishness of their actions? Because it's politically difficult. Sometimes, infeasible. The public often pays for defrauded grandmas' mistakes. There are also positive externalities to stable business environments. Diligence costs money. Putting some of that cost on the issuer, once, is more efficient than each investor incurring it. Consistent rules around fraud and disc…
But she can buy lottery tickets without understanding that her odds of a profit are worse than jumping on an ICO? Seems hypocritical to me. I'm no expert about legal matters. I'd appreciate if someone else can chime in here. But I found this with a brief search: "To be an accredited investor, a person must have an annual income exceeding $200,000, or $300,000 for joint income, for the last two years with expectation…
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Treasuries and money markets basically return zero after inflation. So, at least more than zero.
I never understood how anything can return more than zero after inflation "in the long run". If it did, then over time people with that asset would have all the wealth. But if they did, then they would buy things with it, raising prices of everything else.
Now as for other stuff, returns can be greater than 0 because there's more stuff to buy, later on, hence greater than what there is today. There are two components to long term returns above 0: population growth and productivity growth. In the past century we've done quite well on both fronts. Productivity has expanded at 2% per year and populations have increased by a massive 1.6% per year, add to that the 4% dividend and 3.5% for inflation and that gives you the 10% return on equities everyone is quoting.
but the future returns are expected to be much much lower. labor force size in the US is projected to grow 0.4% and per capita increase in productivity is now at about 1% for the last 20 years. and dividends are roughtly 1.8%. So, in the longer term, not including a contraction in PEs, we can see roughly 3% increase in equities on average/yearly
> WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses. > This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is wrong, wrong, wrong. The difference is Amazon saw what the marginal costs coul…
> with the idea of profiting later on via the surviving monopoly I don't understand...if you undercut your competitors so you're the sole survivor, I don't see how profiting is a obvious end result. When you return prices to market value wouldn't competitors just appear again. Is predatory pricing really such a bad thing, I'd assume the market would just corrects itself later?