No, for Baal's sake, SBF did not "f***k up big".
He committed fraud.@FinancialTimes, can you get it? pic.twitter.com/Kdr1ahIBvr— Nassim Nicholas Taleb (@nntaleb) December 5, 2022
I’m deeply sorry that this newsletter happened and like, really, really hate that I didn’t, like, that I didn’t stop that from happening. https://t.co/gC3V0XlVY9
— Matt Levine (@matt_levine) December 1, 2022
Best (and funniest) explanation I’ve read, so far:
It is good, for journalists, to ask Sam Bankman-Fried where all the money went, but he is not going to tell you. The possibilities are:
1) He knows where the money went, and he has huge incentives to lie about it, or
2) He doesn’t know where the money went, as he sort of keeps saying, and he will just pass along his confusion to you.
There is not some third possibility where you can sit Bankman-Fried down and he will be like “here is a detailed timeline of all the innocent mistakes we made and how much customer money each one vaporized.” If he had those details available to him, he would not have vaporized the money. Or he would have, but the mistakes were not innocent, and he will not describe them accurately. Either way, you will not get a satisfying explanation, from him.
The person who will tell you where the money went at Bankman-Fried’s crypto exchange, FTX, and its affiliated trading firm, Alameda Research, is John Ray, six months from now. Ray is the current chief executive officer of FTX, appointed moments before it filed for bankruptcy, and the former bankruptcy wrangler of disasters like Enron. He harrumphed into bankruptcy court last month to be like “this is the biggest mess I’ve ever seen, and I’ve seen Enron,” and if I were him I’d say that constantly to my kids. Ray’s well-paid and frankly very interesting job is to sort it out, and I assume eventually he will. That sorting apparently involves, like, Googling news articles to see what venture capital investments FTX made, because FTX did not itself keep a list of its own investments. That is what we are dealing with here.
But Ray is methodically piecing together the accounts, not giving interviews, and keeping his complaints to court filings. Meanwhile Bankman-Fried is at loose ends in his Bahamas penthouse and seems to be spending his time calling up journalists and compulsively confessing to … whatever it is he thinks he is confessing to? “I didn’t ever try to commit fraud on anyone,” he told Andrew Ross Sorkin yesterday, but, otherwise…
[At which point, an elaborate and much-footnoted narrative unwinds, sharing a strong similarity to every other ponzi scheme you’re ever heard of. Go read the article!]
…The story of FTX that we have heard over the last month — from Bankman-Fried, from Ray, from everyone else — is that it was a bunch of disorganized children who had no idea what they were doing or where the money was. The story of FTX that we heard — from Bankman-Fried and everyone else — before this month was that FTX were the adults in the room, the hyper-competent, risk-focused, regulation-friendly, sophisticated crypto exchange. If you go around telling that story it really has to be true, or true-ish, or arguably true! If now you go around being like “ah, accounting, risk management, we never really understood those things,” that is not a good defense!
Related story, from NYMag — “Sam Bankman-Fried May Regret Throwing Caroline Ellison Under the Bus”:
Last night, Sam Bankman-Fried cracked. For the last few days, the 30-year-old former decabillionaire has given various interviews from his Bahamian suite. Dressed in his most formal T-shirts, he spoke of regret and contrition to the New York Times and Good Morning America, repeating lines about big mistakes and a tone-deaf joke about how it’s been “a bad month.”
But during a Twitter spaces event on Thursday — a kind of radio call-in show — Kim Dotcom (yes, the Megaupload guy) asked him a question that seemed to make Bankman-Fried lose his cool. It was about Caroline Ellison, the former CEO of Bankman-Fried’s hedge fund, Alameda Research. Ellison, of course, also happens to be Bankman-Fried’s ex-girlfriend. “You had power over her and she did what you asked for,” Dotcom said. “Why would anyone believe anything you say when you’re throwing your own lover under the bus?”
It was here that the carefully constructed image Bankman-Fried had sought to project broke down. See, SBF wants to talk about complicated, wonky financial things — margin requirements and the complex market structure behind his now-bankrupt exchange, FTX. He will admit that he was a little careless, labeled things poorly, should have been more on top of his web of businesses — still, all this was really just a $32 billion misunderstanding. Got it? What he does not want to talk about is what this is actually all about — which is how much power and control he really had over all aspects of the FTX and Alameda. That would seem to include being his ex-girlfriend’s boss. “Look, I fucked up big, but I’m pretty offended by some parts of that,” he said. “Caroline and I had been together for a while. I don’t control her. I never did. I think it’s really fucked that you would say that I would — that that’s how things work.”
But when Bankman-Fried says, “I don’t control her,” what he’s really saying is, It’s Caroline’s fault…
But it is also not just Ellison he is trying to blame. Take a look back at his interview with Vox’s Kelsey Piper, where he throws two of his other former top lieutenants under the bus: director of engineering Nishad Singh is “ashamed and guilty,” while chief technology officer Gary Wang is “scared.” He then implied that they had acted unethically. (“It hit him hard,” Bankman-Fried said, referring to Singh while saying nothing about Wang)…
Ellison hasn’t been making the media circuit like her former boss and former boyfriend in recent weeks, but her words still loom large in the entire affair. According to The Wall Street Journal, she told employees in a video call that she, Bankman-Fried, Singh, and Wang all knew that FTX’s customer deposits were being used by Alameda — a potentially fraudulent commingling of funds that’s at the very heart of what will happen next to these traders. (He told Bloomberg reporter Zeke Faux that he “doesn’t remember it that way” and downplayed his role in that meeting to a mere “kibitzing.” However, he also acknowledged that it happened, saying “that was the point at which Alameda’s margin position on FTX got, well, it got more leveraged substantially.”) But there was a telling moment in George Stephanopoulos’s interview where the Good Morning America host pressed Bankman-Fried on this. “If she’s in court and you’re in court, and she’s under oath and you’re under oath, and you’re asked, ‘Did you know that these funds were being funneled to Alameda?,’ what is your answer?” Stephanopoulos asked.
Bankman-Fried appears to stare at the floor. Five seconds go by. “I did not know that there was any improper, uhh, use of customer funds,” he said. Clearly Bankman-Fried was not under oath. But one day, he may be, and he may have to answer that very question. I doubt he’ll give the same answer.
Of course, there’s worse possible fates for SBF…
Look you're running a ponzi scheme which also serves as a way for criminals to launder money. And that money disappears. And people start dying. That is the opposite of "weird." That is: "the only way this would end." https://t.co/JcSsNYt9T9
— Jeet Heer (@HeerJeet) December 3, 2022
I don’t think crypto guys *should* be murdered by the international criminals and rogue states who they laundered money for, but i also don’t think they were under the impression it was the United Way’s finances they were facilitating.
— William B. Fuckley (@opinonhaver) December 4, 2022
Dorothy A. Winsor
So to me, crypto is just obviously a scam. Am I not seeing things that others see? Is there some possible way this is legit?
Gin & Tonic
Matt Levine is a gem.
Goku (aka Amerikan Baka)
I like “Scam Bankrupt-Fraud” myself lol
Antonius
“If he had those details available to him, he would not have vaporized the money. Or he would have, but the mistakes were not innocent, and he will not describe them accurately. Either way, you will not get a satisfying explanation, from him.”
He’s like the incarnation of a financial Heisenberg principle.
The Lodger
Masterful use of the Shatner comma, there.
Rebelsdad (fka texasboyshaun)
“I didn’t ever try to commit fraud on anyone,”“‘Try’ implies failure, I was a MFing success at committing fraud on everyone”
FTFY
Elizabelle
WaPost had a really good op ed by their tech columnist, Molly Roberts, on the many deficits of SB-F.
Sam Bankman-Fried doesn’t read. That tells us everything.
Gift link: https://wapo.st/3usMucW
Gift link, so you can read it yourself. And, the reader comments were great, too. Some of this reminded them of the Challenger explosion Death by Powerpoint slide.
Details matter. Picking up tangential information from reading is … very good. Altruistic, even.
Antonius
“Four crypto billionaires have died this month and nobody finds this strange AT ALL??????”
Lie down with gangsters, wake up… or not.
Brachiator
@Dorothy A. Winsor:
No.
A fool and his money…
Fleece and repeat.
Goku (aka Amerikan Baka)
@Dorothy A. Winsor:
It is. But sometimes I wish I could have seen into the future and bought up/mined a bunch of Bitcoins 10 years ago, held on to them and then sold them a year ago for several millions. But of course, hindsight is 20/20
I’m particularly bummed about the likely low expected returns we’ll see on stocks and bonds for the foreseeable future.
American Academy of Actuaries: Hitting the Wall—Why investors can expect lower returns in the near future, and for a long time to come
Dorothy A. Winsor
@Elizabelle: the first big article I ever published was on how communication failures contributed to the Challenger explosion.
Anonymous At Work
Link to a good story on the dead crytpo-billionaires?
Anoniminous
The only thing stupider than a cryptocurrency exchange is the stupid financial journalists writing stupid stories about a cryptocurrency exchange.
livewyre
@Dorothy A. Winsor: I’ve been trying to come up with a non-tech-oriented explanation for this stuff for a while, since it’s so convoluted for how much of a splash it’s making. Let’s see if this makes any sense:
So, the way we can make purchases safely on the Internet is that the information is protected by encoding it using numbers that only the one meant to see them can unlock. Cryptocurrency kind of extends this to the point of using secret numbers to secure an entire pool of “money” that can all be accounted for, since there can only ever be so much of it that “unlocks” – computationally-enforced scarcity. It’s a clever idea on paper.
Does it work? Well enough for fraud, extortion, and laundering.
Enhanced Voting Techniques
It’s not like we are talking about the death of a stray dog or something equally sad.
different-church-lady
This is a person who did not get beat up nearly enough in grade school.
Parfigliano
You or I steal $1. Jail. Sometimes billions poof.
Obvious Russian Troll
@Dorothy A. Winsor: Of course not. Cryptocurrency has plenty of legitimate uses, such as ransomware or buying heroin over the Internet.
The interesting thing to me is that the crypto aficionados I personally know were all Ron Paul-loving goldbugs who’d work the evils of fiat currency into conversations about how old friends from high school or college were doing.
different-church-lady
@Enhanced Voting Techniques: Aren’t we talking about former billionaires?
different-church-lady
Wait… I can get heroin over the internet?!?
Brachiator
@Goku (aka Amerikan Baka):
This is reductive horse shit. The future is not foreseeable.
trollhattan
Heard a long story about him on BBC. He met some organization while in school, that promotes charitable giving by the extremely rich as the best, most effective way to have an impact and claims that’s what convinced him to go into investment banking. Instead of, you know, banging nails for Habitat.
His whole schtick revolves around being this do-gooder who just happened to take a couple wrong turns. As one does.
brendancalling
@Elizabelle: i work with high school kids. I can tell the difference right away between those who read for pleasure, those who read “because I haaaaaaave to waaaaah poor me,” and those who read nothing. It’s not a very flattering comparison. There’s no doubt in my mind Chubby Cheeks here doesn’t read and doesn’t enjoy it when he does. He’s a POS and he deserves the same fate as those 4 missing crypto bros.
Martin
I don’t understand why financial reporters don’t get this. I’ve taught this to my kids so they could understand investing. We did this when they were like 12 or something.
Long term, wealth derives from value added. If you build something, you can sell it, and that creates wealth. The nice thing about making money this way is that generally nobody loses. If I turn a pile of lumber into a table and sell that table for more than the lumber was worth, I make money, the person buying the table gets a table rather than a pile of lumber. We both make money. By virtue of the table being worth more than the lumber, I am inclined to pull up the price of lumber, so the people selling lumber make money. And so on.
In any economic system, if you cannot identify the value being added to society, then the most you are doing is taking money from other people. It’s zero-sum. You can make money by being a middleman for these people, and so on, but at the end of the day the economy doesn’t grow. It’s just shuffling dollars from place to place, quite often with the money being lost being in the future without the person yet realizing they’ve lost it. This is about 90% of what modern finance is, with the other 10% being value-add – loaning me some money to buy lumber to make a table. The bank earns some interest, I still make money selling the table, you still gain by buying a table that you must think is worth more than you paid, otherwise you wouldn’t have paid it. Value got created.
Crypto creates no value that I’ve seen. There are I’m sure some trivial cases of value creation, but it’s almost perfectly valueless. You can choose to label that as fraud or not, but at the end of the day it is necessarily zero sum. SBFs motives are largely immaterial – the end of the game is that the aggregate amount of wealth in the crypto economy is the same or lower than when it started. Somehow the financial reporting industry has lost track of this very, very, VERY basic concept of how economies work. Financial fraud is fundamentally taking money from someone without providing value in return. That’s literally what crypto is, whether it is criminal or not.
The US has climbed so far up its personal self-interest asshole that we can no longer recognize ‘things that harm others’ as being inherently bad if the person doing the harm comes out ahead. So long as #1 gets paid, we need not even scrutinize whether the counterparties got anything out of it.
Danielx
Only real thoughts I ever gave to cryptocurrency were that a) I didn’t understand it and b) it sounded like a scam which would in due course collapse into smoking rubble.
A is still true and B is becoming true. It ain’t like buying Microsoft stock in 1985, friends – although a lot of people would have mentally classified it the same way back then.
“What’s with this Microsoft stock? Buy IBM, you can’t go wrong!”
Edit: as per usual, a decade from now fortunes will be made from things not even on the radar screen today. Things which will have real value.
Ohio Mom
@Brachiator: Yup. The future is unknowable. That is a lesson life provides you over and over.
Voltaire said something like, Doubt is uncomfortable but certainty is ridiculous.
eversor
@Dorothy A. Winsor:
Kinda, yes, and no all at the same time which is why this is all complex.
I got in at the start back when you could do this with CPUs, or even GPUs (back in ye old 8800gtx days via CUDA) because it was just interesting. Back then us tech people loaned out our extra computer downtime to crap like SETI or making genes and this was the brand new thing so we all pounced on it to see what this was all about. So I made out like a bandit and got out early as well.
Originally it was just a way to transfer money around online for all sorts of things. It quasi worked, but was more of a pain than it was worth and really we were all just doing this as a hobby. Then people got the entirely wrong idea it couldn’t be traced and it turned into a way to buy drugs and sex and line and boy oh boy did it take off. All of a sudden there are nation state actors involved, organized crime, custom ASICS to mine more and faster, people buying power plants and the entire thing got out of control. It quit being a “nerds doing nerd stuff and having fun” into the massive cluster fuck it is now.
Crypto in and of itself is not a sham, it’s just not really all that good at what it should do. It’s also massively criminal in what it actually does and hyped by scam artists to sucker in morons.
The key to grasping it is that there are a lot of middle to upper middle class “young” people like me who got wiped out in 2008 and again with COVID and never really recovered. I make good money, but I know I’m priced out of buying housing and that’s a scam. I know the stock market is a scam. I know banks are a scam. While I know crypto is also a scam the catch is you have now two generations of people who realized the game is rigged, and while politics is worth it for social issues economically we are all fucked regardless so don’t tell me what you will do for me there. But maybe, just maybe, I can get in on one of these new scams early enough things will work out OK.
While I got in at the start because it was fun nerd stuff and got out quick I get the logic in diving all in. If you’re fucked and it’s all a sham then why not try to be one of the winners in this sham? As dumb as it seems, and I agree it is fucking dumb, for most people it’s vastly less stupid than thinking they are going to vote their way out of this to a better economic future. That’s so deranged an lunatic people should be put away.
PJ
@Dorothy A. Winsor: If you need to launder money, or otherwise undertake transactions that are illegal, it can be useful. Beyond that, it just seems to be a libertarian wet dream/ponzi scheme.
Brachiator
As an aside I recently ran across this little tidbit about currency.
There are demographic aspects to this.
I was thinking about this recently when I noticed that a Bank of America near a local community college, along with its ATM machine, closed down without causing ripple of disapproval. The bank branch was located near a lot of shops and cafes. But I guess that people use apps in their smartphones to buy stuff.
Princess
@Goku (aka Amerikan Baka): my kid, some time around 2009 or so, told me to buy bitcoin. He was 14. You can bet I wished I’d thrown a hundred bucks or so at it to humour him and as a learning experience.
SpaceUnit
These folks should have just gone to Vegas and gambled all their money on blackjack.
You get free drinks and once in a while you win.
Martin
@Goku (aka Amerikan Baka): That’s burying the fucking lede right there. The problem isn’t demographic shift – it’s that a huge pile of existing assets are being herded by a small few and being shoved into negative work producing investments because making money is no longer the goal, not losing money is the goal. As such, parts of the economy are absolutely starved of capital. That’s also combined with a problem the goddamn actuaries themselves created which is the absolute intolerance to risk in lending, meaning that if you want to borrow for some immediate critical need, the answer is no – please do the following market studies so we the bankers can be assured you’ll be able to pay us in the future. Sorry, I know your market is artillery shells to Ukraine and that market may not even exist in 12 months, but we have a duty to investors to look after here.
Don’t worry about returns. Odds are, you wouldn’t benefit from them anyway. And it doesn’t matter what’s happening to big investors, there are always ways to make money if you do the work to find value opportunities and have the courage and diligence to invest in them. Some of my biggest gains came in 2008 when everyone ran so hard from stocks that even businesses that were still growing during all of that were getting dragged down. Bought those stocks and made a mint.
You gotta do the work though. Passive income is all bullshit.
Obvious Russian Troll
@different-church-lady:
See what the glorious crypto future brings us?
Cameron
@Brachiator: It’s certainly hard to make predictions about.
Goku (aka Amerikan Baka)
@Brachiator:
How so? From what I’ve read higher prices typically mean lower expected returns and vice versa. Policies like near zero interest rates and QE have helped push asset prices skyward to where we are now. The way I’ve seen it described, is that the tear stocks took last year was basically “borrowing” from future returns.
Plus, factors the article mentioned like aging demographics, large numbers of baby boomers retiring in the near future, and high levels of public and private debt, mean the future likely won’t resemble the past where we saw 7% nominal returns on average historically. So, instead of say a 5% average real return, it might only be a 2% real return, after inflation
It’s true no one knows the future, and it’s possible something could change
Dangerman
Slip of the tongue; he meant to say he kind of lost AT the track …
… and the tables and the slots.
waspuppet
@Martin: I feel like the only difference between the crypto “industry” and a giant Ponzi scheme is — well, there’s no difference, just that in crypto all the people involved know they’re in on it and are just prematurely congratulating themselves because they’re smart enough to get out in time.
Danielx
@Brachiator:
Cue political pundits: “Dems must absolutely do THIS to win in 2024!!!?!$&!” (Provided conditions don’t change, but hey I’m paid to sound authoritative, not accurate, so who gives a fuck?)
Yup, purest of horseshit, also true of economic pundits. Seems like black swans are becoming a lot more common.
marklar
@Dorothy A. Winsor: “the first big article I ever published was on how communication failures contributed to the Challenger explosion.”
That was you?!?!? I read that article back in the 90’s (and now I’ve been enjoying your ideas 30 years later)!
sab
@Martin: Like all of our pension funds are buying REITs which are purposely destroying our housing stock so that our own kids will no longer be able to afford housing.
NaijaGal
@trollhattan: Ah yes. Effective altruism (Washington Post gift link). Neither effective nor altruistic in this case.
waspuppet
@Danielx: The thing is, Microsoft, even IBM, saw a future where more people would have computers and you could do cool things with them. No actual people wanted cryptocurrency. No one was sitting at home going “Yeah, money is cool and all, but I’d like it better if, instead of being backed by the full faith and credit of a government, they were backed by a 26-year-old neckbeard from Brooklyn.”
Omnes Omnibus
@Goku (aka Amerikan Baka): Lower expected returns on what?
Brachiator
@Martin:
You’re confusing marketing lingo crap with the IRS category of “passive income.” Rental income is real, but is passive income.
Danielx
@waspuppet:
Yet another image I’m never going to be able to erase. Saw an article recently wherein it was stated (with illustrations) that neckbeards are becoming a thing – usual reactions, first “why” and next “jeebus I hope not”.
Ohio Mom
@Martin: But so much of what needs doing in this world does not add value in a simple way. Teaching elementary school children does, though the return is in the far future. The value does not accrue to the people paying for it in the current time frame.
Taking care of people who can’t take care of themselves — the very disabled and the very elderly — does not build value — maybe it bullds humanity?
Drug rehab staff, ditto, any kind of social work. Hopefully the client becomes more functional and more capable, so there is a value built but who can quantify that? It’s similar to the problem of getting at the value added by public school teaching.
What about the arts? I guess a choreographer adds value to human movement? How does that multiply though? I buy a ticket and am entertained and emotionally transported. That is value added to my life for a couple of hours but it is completely ephemeral.
A related issue is, a factory can figure out how to make widgets more profitably — automating, finding cheaper substitute materials, increasing its customer base, and so forth — but a teacher or care giver or social worker or psychiatrist — can’t really rev up their productivity. If you are say, providing talk therapy or counseling, you can only see so many patients in a day.
raven
@sab: What if we have REIT in storage facilities?
eclare
KISS: there is no such thing as a free lunch. I learned that on day one of my accounting career from a partner.
KISS=keep it stupid simple
Goku (aka Amerikan Baka)
@Martin:
Well, I certainly hope I would, given it’s for my retirement.
I try not to listen to that noise. It won’t change my investing plan of DCAing into index funds. I remind myself people predicted low returns after 2008 going forward and the exact opposite happened. Sometimes I do wonder if this time really is different though, but “stay the course” it is
twbrandt (formerly tom)
@Martin: adding value is work, but so much of the culture has bought into the idea that you don’t have to work for a living, but instead play games with money to increase wealth. CF The Bonfires of the Vanities, which captured this ethos well.
Martin
@livewyre: See, the technology is just a way to confuse the audience. Put that aside for now.
Ultimately crypto tries to take a thing we assume act as substitutes for one another and exploits it. We assume that work and value are correlated. I perform a bunch of labor on some lumber and out comes a table. $100 in lumber + 100 hours = $1000 table. That’s a 10x return, or $9/hr, depending on how you look at the value of labor. We assume that the 100 hours I put in wouldn’t be put in if it didn’t result in the increase in value of the lumber to the table. If I spent 100 hours moving that stack of lumber from one side of my garage to the other and back again that doesn’t turn it into a $1000 stack of lumber. So work doesn’t have any inherent value – it only has value if it’s applied in certain ways. But we don’t think about that in the economy – we assume people and corporations taken as a whole aren’t so dumb as to do nothing but non-value adding work. So we assume that work and value are correlated. Non-value add labor will be eliminated and value-add labor will be invested in.
Crypto asks you to ignore the value-add side of the situation and focus only on work. I did a bunch of work – I solved this arbitrary equation. It took 100 hours. Other computers verified the answer is correct. Now pay me. Does the equation have any value? Nope. Can it be used for anything? Nope. In fact, the moment we finished solving it we threw it away. But crypto tells investors that because work was done, value *must* have been created, because that’s how it works – nobody in the economy is dumb enough to do work without creating value, right? We just demonstrated that above. So since I’m doing a lot of work, the value of the thing must be going up. So the more work I do, the more wealth gets created, right?
That’s the whole play. The crypto in-between is just a MacGuffin. That’s literally all it is – some invented plot device to justify the work, which investors will assume means value is created which means wealth creation must be happening, which means that I should invest in it so I can keep some of that wealth. But at the end of the day you can’t buy a house with a stack of MacGuffin, so you have to convert it back to dollars and that’s the moment that the value gets assessed – do I want to give you a million dollars for that stack of MacGuffin? Because at the end of the day, that’s the transaction that has to take place for every scrap of crypto.
Goku (aka Amerikan Baka)
@Omnes Omnibus:
Stocks and bonds, specifically the returns from stock and bond index funds you can invest in 401k(s)/IRAs for retirement. I also guess more broadly the US stock and bond markets, with international ones to a lesser extent
Geminid
@Goku (aka Amerikan Baka): Shoot, Goku! You have plenty of earning years ahead of you. You would do better to figure out how you can have a happier life then to fret over investment returns. Sure, follow your investments if that’s your thing, but do it out of the corner of your eye, so to speak, and be on the lookout for that which can enrich your life independently of money.
Health is a good starting point, and physical exercise is cheap if you you want it to be. Hiking is free for the most part, and so is studying nature.
You might find you are drawn more to other activities. But regardless, if you make a fuller and healthier life for yourself that would be a good in its own right, plus you could better keep financial anxieties in their proper place.
frosty
@marklar:
@Dorothy A. Winsor:
Wow there you are writing for IEEE!
Martin
@Brachiator: But real estate income is only feasible as passive if non-market housing essentially doesn’t exist. Shift the market to majority non-rent-seeking and real estate income will become decidedly not passive – you’re gonna have to do real work for it.
It only operates as passive income because we’ve invented some tax tricks to make it work, and artificial constraints on housing supply through zoning and the like create a large wealth transfer – but the value-add here is almost nonexistent. In a non-constrained market, rents would asymptotically approach non-market rates, which means that their ability to serve as passive income streams dries up. Sure, maybe an inherited property would work for that, etc. but in the general case if you aren’t out there fucking up the ability to build to demand then yes, it’s called ‘passive income’ but it’s next to zero income.
ColoradoGuy
Entertainment, quality-of-life, good health, esthetics, and education are all values, even though intangible and difficult to measure. But there’s no value-add to market manipulation and crypto except wealth transfer to very few individuals. The society as a whole does not benefit, and it probably subtracts from overall wealth by diverting potentially useful investments to useless activities. From a macro-economic perspective, it is a form of theft and/or fraud.
MattF
The current episode of the podcast ‘Odd Lots’ has Brad DeLong interviewed by a couple of financially knowledgeable people about crypto and bubbles and all that. Tom Levenson’s book on the South Sea Bubble gets mentioned. No link, but go to your favorite podcast app and it will be in there.
Martin
@trollhattan: Turns out that’s a lie. He’s later admitted that was just marketing. For every dollar in social benefit giving he was praised for he was giving at least a dollar in dark money donations to republicans. The charitable donations was just reputation washing so that he could get the ear of lawmakers.
Goku (aka Amerikan Baka)
@Geminid:
I know you’re right. Checking over them defeats the purpose of the “set and forget it” I approach I’ve taken. I guess there’s little I can do but save as much as I can and enjoy life a bit : )
Anne Laurie
Well, not you. Or me. But some people…
I swear to Murphy, for every genuine criminal using crypto for their own fell purposes, there seem to be two ‘certified Mensa members’ on social media promoting the rationalist value of such uses.
UncleEbeneezer
I never put much effort into understanding Crypto. Don’t have the $ to waste on such things in the first place and one look at the people promoting it was all I needed to know it was probably a scam. Some things you absolutely can judge based on the people that are into them. Much like “things that attract Nazis are bad, even if I don’t understand why” is a pretty foolproof way to make moral judgements.
Jeffg166
@Dorothy A. Winsor: No.
raven
@Geminid: And you can do what you will, stop drinking and drugging at 40, don’t eat meat, run, swim. . . and then like a flash it all comes down and you can’t fucking walk around the block!
zhena gogolia
Twitter and crypto and soccer — will there ever be a topic I have some interest in?
Goku (aka Amerikan Baka)
@Anne Laurie:
Does “rationalist” have a bad connotation these days? I only associate it with RationalWiki
zhena gogolia
@raven: Yeah, healthful activities are overrated.
lowtechcyclist
@different-church-lady:
I don’t care how they turn out later. Kids shouldn’t get beat up in grade school, period.
Goku (aka Amerikan Baka)
@zhena gogolia:
Even pointing and laughing at the failed CryptoBros like Bankrupt-Fraud?
I hate that Matt Damon shilled for this stuff. I’ll never look at The Martian the same way again. Or the Ocean’s movies
Matt McIrvin
I just heard that StackOverflow slapped a ban on ChatGPT-generated text in answers.
To which my immediate thought was, “CHRIST, PEOPLE ARE USING CHATGPT TO GENERATE ANSWERS???” It’s so obviously incapable of answering any even remotely involved question correctly. You’d be better off just Googling it and believing the first link that pops up.
In other news, we just spent an hour+ struggling with a defective Christmas tree stand and my spouse is now off to pick up a new one.
raven
@zhena gogolia: Yea but I was a gym rat!
Goku (aka Amerikan Baka)
@raven:
Well, at least you felt good for all those years?
Martin
@Ohio Mom: Yeah, not everything lends itself to a capitalist approach. A lot of value add are things like roads and schools, and there’s lots of non-value-add stuff that we do like wars.
But this is why government spends money – because sometimes they’re the only party that can justify the investment. Often times they’re the only party that can *afford* the investment. Covid vaccine, anyone?
lowtechcyclist
@waspuppet:
At least the Ponzi scheme doesn’t contribute to global warming.
narya
@Dorothy A. Winsor: I remember reading something in that vein–I bet it was your piece! It has prompted me to share the PowerPoint Gettysburg Address about a billion times.
Sister Machine Gun of Quiet Harmony
@waspuppet:
Au contraire! Crooks had dreamed about an electronic substitute for cash which was as supposedly untraceable for decades!
Dorothy A. Winsor
@marklar: Could have been me. Other people probably wrote about it too. I had an article in IEEE Transactions of Professional Communication and then another in Journal of Business and Technical Communication. They were reprinted in collections so that could have been anywhere.
I think I’ll take credit
ETA: I have a pdf of the IEEE piece if anyone wants it
frosty
@zhena gogolia: Get Back by Peter Jackson maybe?
livewyre
@Goku (aka Amerikan Baka): Actually, (“well, actually…”) there’s a different community of “rationalists” than the skeptic/anti-woo/movement-atheist crowd, with fairly little overlap. These ones are more into “AI risk” (i.e. machine god singularity worship), “Effective Altruism” (read: billionairing as hard as possible), and “Human Biodiversity” (previously known as eugenics). Kinder gentler crypto-fascism, in other words. Not that kind of crypto, but yes, also that kind.
cain
@Antonius: “Lie down with gangsters and wake up with an Iron Maiden”
Gin & Tonic
@Goku (aka Amerikan Baka): Wait till you find out he didn’t actually live on Mars, either.
eclare
@Dorothy A. Winsor: I would like the .pdf!
I saw a really good documentary on Netflix a year or two ago on it.
frosty
@Goku (aka Amerikan Baka): Agreed on Matt Damon. Talk about burning your brand for a couple of bucks.
Goku (aka Amerikan Baka)
@Martin:
Money quote:
Um yeah. I’d beg to differ about that, Bankrupt-Fraud. Also, no shame whatsoever.
Dorothy A. Winsor
@eclare: Sure. Where shall I send it? You can email me at [email protected]
eclare
@frosty: I couldn’t believe Larry David shilled for crypto.
eclare
@Dorothy A. Winsor: Email sent! Thanks!
Ken
The Financial Times article in that first tweet reminds me of a couple of equally-gushing articles on this guy, also published after the bankruptcy of his companies and revelation that the whole thing was either a fraud or gross incompetency.
I think it provides valuable information, though not about SBF himself. Rather, it shows that once the financial press’s “he’s a billionaire, bow and scrape” switch gets flipped, it takes a while for it to go back to the “off” position.
Goku (aka Amerikan Baka)
@Gin & Tonic:
I don’t understand this comment. Did you mean that Matt Damon is not the same person as the characters he plays? He’s an actor, so of course. I assumed he was above shilling for crypto, but I guess I was wrong sadly
livewyre
@Martin: Excellent reply, much more than my clumsy explainer deserved – especially the economic implications. I did gloss over the “proof of waste” part, but then so does anyone trying to boost this stuff. Assist appreciated.
Reboot
@Anonymous At Work: I had the same question. Got to the end of the thread, no answer. So, here.
And if I managed not to do that: https://www.newsweek.com/crypto-ceos-founders-sudden-deathswhat-we-do-know-what-we-dont-1763586
Sounds like over a period of time, it was more than four, if you count some of them not being billionaires.
CaseyL
I worked for Weyerhaeuser in the 00’s, and very plainly saw the shift in the company’s financial strategy, away from making money by providing wood and wood-based products, and towards financial juggery-jiggery, like maneuvering manufacturing facilities and “investment” acreage to be sold, or closed, or opened, for the tax write-off advantages. I think there was even one fiscal year (this was before the housing crash and Great Recession) where the tax write-off resulted in the only profit shown for that year.
I remember thinking at the time there was something very deeply wrong with predicating a corporation’s profitability on how much of a 3 Shell Monte game it could play with various revenue streams, rather than producing the products/services that were its ostensible raison d’etre.
Now, it seems, more and more corporations are taking that route. Another legacy of the court decision that “shareholder value” is the ONLY value publicly-traded companies are mandated to pursue.
(When the housing market crashed, Weyerhaeuser pretty much crashed with it. The company contracted to maybe 30% of its pre-Recession size, and is mostly about REITs now. IOW, actually producing products is way down the list of priorities.)
Layer8Problem
@cain: SBF: “Iron Maiden? EXCELLENT! <air guitar riff>”
West of the Rockies
@Elizabelle:
By his last logic, there should be no movies. A movie should be, tops, six minutes. A TV series, maybe 20 minutes in total.
What about sex, SFB? 60 seconds or you’re doing it wrong?
Goku (aka Amerikan Baka)
@livewyre:
Oh, gotcha. So the LessWrong weirdos.
Brachiator
@Martin:
Uh no. Certain types of income are characterized as passive because there are separate rules that determine when and how you can take losses and credits for tax purposes, that are different from how you report income from wages, self-employment and other activities.
Rental income is just one example of income from passive activities.
I see YouTubers talking about getting fabulous wealth from “passive income,” and this is nothing more than a weird, gifted sales pitch.
You can talk about the housing market and rent-seeking without incorrectly using the term “passive income.”
Ken
It’s kind of appropriate, though, considering those movies are full of “that would not in fact work” schemes.
Matt McIrvin
@livewyre: The skeptic/atheist movement has some deeply horrible people in it too, though, mostly of the anti-feminist/”anti-woke” persuasion.
Gin & Tonic
@Goku (aka Amerikan Baka): As you say, he is an actor. His job is to read lines written by others. Why you think ethical judgement enters into it is a mystery to me.
Ken
@CaseyL: There’s a lot of that. Airline companies lose money moving people around — they’re kept afloat by the money that third parties pay them to be part of the frequent-flier programs. General Motors makes more from GMAC Financial than from selling cars. Harvard is an investment bank with a school attached.
Layer8Problem
@West of the Rockies: Doesn’t TikTok have a ten minute upper limit? If you can’t stuff a creditable adaptation of Moby Dick into that the book should never have been written.
Goku (aka Amerikan Baka)
@Matt McIrvin:
The Atheist Youtubers are the worst, like the Armoured Skeptic or the Amazing Atheist, who railed against “SJWs”, the old boogeyman term for “woke”. They like to talk a good game about “logic”
NotMax
@zhena gogolia
Could not be in fuller agreement.
This joint, especially, has developed such an obsession regarding a certain E. Musk one would surmise he absolutely reeks of dikironium.
/Star Trek reference
Goku (aka Amerikan Baka)
@Gin & Tonic:
Haven’t you ever been disappointed in a famous person you liked? I don’t expect them to be perfect, because that’s impossible (even Keenu Reeves has appeared to jump on the NFT train at one point despite making fun of them), but he could’ve done more research on them, instead of cashing a check shilling for a speculative investment that’s hurt millions and threatens the environment. That assumes he didn’t know already and just didn’t care
Ruckus
@Martin:
One might be able to make the case that passive income is actually theft.
Another side of our current economy is that some people expect large returns because they are moving money around which may create a reward for someone or a few someones but which actual is of zero value to anyone else. IOW nothing is accomplished but holding/moving money, especially when the money being moved has done nothing but create another page in a profit ledger.
Jeffro
I find it hard to get into the
Dutch tulip bulb crasher crypto crash and its aftermath. This country/world appears to never want to get smarter. Oh well.Since this is an open thread and speaking of not smart (but maybe cunning, or just paid well by the Republican powers-that-be), here’s Post hack Marc Theissen zipping in to declare that trumpov is just plain nuts and can’t be president again.
(he actually means trumpov is a bigly loser, but hey, if the right conclusion is drawn from the wrong motivations, it’s still the right conclusion):
Yes, REALLY. He really typed that ‘respect for the Constitution is the BEDROCK, of the modern conservative movement’ with a straight face.
But hey. The hacks have received their marching orders, peeps. They’ll be shivving ol’ Donnie ’til the end of time, all while pretending that there was some sort of conservative ‘core beliefs’ to be had, ones that DJT betrayed.
Sheeeeeit. The only thing he did wrong was lose.
Gin & Tonic
@Goku (aka Amerikan Baka): No.
different-church-lady
@Martin:
Well what the goshdarn heck is the point in that?
Brachiator
@Goku (aka Amerikan Baka):
The YouTube algorithm served me up some video clips from atheists, but these were nice people, including a sweet British non binary person, mainly all interested in debunking militant creationists.
Fortunately I have missed the stuff from people nursing stupid grudges.
Goku (aka Amerikan Baka)
@NotMax:
This place has nothing on Tatsuya Ishida of Sinfest fame. That guy has made over dozen idiotic webcomic strips on Twitter alone:
Exhibit A
Exhibit B
Dude used to be a decent web cartoonist who wanted to be syndicated in newspapers, that never happened, and eventually went off the rails, from going full second wave radical feminist suddenly in 2011, then progressed to SWERF and TERFism a few years later, and finally to Q-Ball, MAGA land in the past two years. His webcomic used to have characters and storylines and it was clearly inspired by Bloom County and Calvin and Hobbs. He wanted to be the next Bill Watterson, it seems. It’s sad because he used to be a fairly normal center-left person
MattF
@Jeffro: Hmm. Theissen has always been a reliable partisan hack, so I’d assume this is no reversal, but is actually, at best, a howl of pain from the RW power brokers. My popcorn needs butter.
Jackie
Open thread?
”Former president Donald Trump’s political action committee is paying legal bills for some key witnesses involved in the Justice Department investigation into whether Trump mishandled classified documents, obstructed the investigation or destroyed government records, according to people familiar with the matter.
The witnesses include Kash Patel, who has testified in front of the grand jury and is key to Trump’s defense, along with Walt Nauta, a potentially critical prosecution witness, according to these people, who like others interviewed spoke on the condition of anonymity to discuss an ongoing criminal probe. Nauta, a Trump valet, has told FBI agents he was instructed by the former president to move boxes at Mar-a-Lago, even as government investigators were trying to recover classified documents at that private club and residence, according to people familiar with the matter.
Both Patel and Nauta are represented by Brand Woodward Law, which according to public records has been paid more than $120,000 by Trump’s Save America PAC. Stan Brand, the top lawyer at the firm, said there is nothing improper about the PAC paying legal bills for witnesses in the investigation. Another lawyer not involved in the case, however, said it could encourage witnesses to not cooperate.”
https://www.washingtonpost.com/national-security/2022/12/05/trump-witnesses-legal-bills-pac/?utm_source=alert&utm_medium=email&utm_campaign=wp_news_alert_revere&location=alert
different-church-lady
@lowtechcyclist: Well of course they shouldn’t…
Goku (aka Amerikan Baka)
@Brachiator:
Count yourself lucky. They all seem to have went off the rails in 2014 after GamerGate
MomSense
Guys I’m going to get a grand cat tomorrow! My oldest and I went and looked at cats at the humane society on Sunday. Tomorrow he is going back to adopt one. I think it’s his heart cat. The way the two of them interacted was so sweet. Fingers crossed all goes well and Trouble will go home with him tomorrow.
Also cats love my kid. He has always been really good with animals , but when he was little and we moved to our farmhouse, the barn cats adored him. He usually had a cat or two or three following him around.
Burnspbesq
If this had happened six months earlier, it might have been the triggering event for a legislative change to bring crypto unambiguously within the scope of the securities laws. But that ain’t happening as long as the Rs control the House.
Goku (aka Amerikan Baka)
@Ken:
You got me there lol
eclare
@MomSense: How fun!
Burnspbesq
@Jackie:
All of those lawyers are going to get disqualified. What’s described in the article is a non-waivable conflict.
MattF
@Burnspbesq: Yeah, it would all be better with sensible regulation. But ‘burn it down and salt the earth’ is ok too, and appears to be happening naturally.
zhena gogolia
@frosty: definitely but I just gave up my Disney+
Amir Khalid
@MomSense:
Animals can sense things about people. Those cats know your son is a good person.
David 🦃The Establishment🥧 Koch
@Jeffro: With Biden racking up win after win, with Dump blowing easy win after easy win and igniting scandal after nuclear scandal, the enablers have finally eaten enough biter losses.
It’s easy to forget how much the cult and enablers loved Dubya. The he-man clearing brush, wearing a costume on an aircraft carrier, blowing up brown heathen left and right, holding a bible wrapped in a flag. They loved all that bullshit, until he started losing. Now they hate him because they blame him for the loss of white supremacy through the election of the skinny black guy with the funny name from Kenya.
Goku (aka Amerikan Baka)
@MomSense:
That’s what happened when I adopted my cat Bilbo. We had an instant bond. A local animal adoption charity had a small enclosed shelter set up at a pet store. All of the cats were out of their cages and walking about. Bilbo was incredibly affectionate, much more than the other cats.
Dorothy A. Winsor
@MomSense: Pets are the best. I’m glad your kid seems to have found the right one
Goku (aka Amerikan Baka)
@zhena gogolia:
Maybe Disney+ offers a free trial?
zhena gogolia
@Goku (aka Amerikan Baka): I’ve watched Get Back all the way through twice. I think I can wait a while
Jim, Foolish Literalist
Clown car alert
Ruckus
@CaseyL:
Actually creating products takes effort, time and money. I know, I was in the product making business for 3 decades. We created tools that our customers used to make products that they sold, either to another company that sold the final product of our work to use themselves – to sell the final product. You want to purchase some juice, someone has to grow/harvest the fruit, someone has to make the tool for making the container it goes into, then the container, then someone has to put the juice in the bottle, someone has to buy the juice in bottles to sell and finally you buy it and it’s in your refrigerator. We did step two, we made the tools. Someone else made the tools we used to make the tools someone else used……..
It’s a circle of steps. But it doesn’t create huge profit per item so other ways of making money were invented, some of which just moved money from one point to another. Crypto just leaves out a lot of steps on the promise that huge amounts of money are produced. But they aren’t so crypto ends up having the value that someone says it’s worth and it does as long as no one blinks or says bullshit. At which point it has the value of spit. Maybe less.
Omnes Omnibus
@Jim, Foolish Literalist:
I don’t mean to be speciesist, but do we need a walrus as president?
Goku (aka Amerikan Baka)
@Omnes Omnibus:
Well, we already had an orangutan….
MattF
@Omnes Omnibus: How long has it been since someone with a mustache ran for President?
WereBear
@Brachiator: The only reason I have cash accessible somewhere is my aunt is a First Responder and if the power grid goes down, I don’t want to be broke, too.
Geminid
My Atlanta friend sent me a weather report:
Warren thinks that Walker has the less motivated voters, while Warnock has banked more early votes:
rekoob
@Dorothy A. Winsor: @narya: These observations about the Challenger disaster and communications make me think about Edward Tufte’s monograph (no doubt inspired by DAW’s article):
Tufte on PowerPoint
in which he details the Challenger mission and its runup
Tufte on NASA Presentations (scroll down)
He, in turn, has pointed to Peter Norvig’s PowerPoint version of Lincoln’s Gettysburg Address:
The Gettysburg Powerpoint Presentation
I am especially fond of Norvig’s “Organizational Overview” bar chart.
Omnes Omnibus
@Goku (aka Amerikan Baka):
No we have not. Orangutans are rather gentle and kind.
Goku (aka Amerikan Baka)
@zhena gogolia:
I’ve heard nothing but good things about it. I’m thinking of getting it on Blu-Ray
Dorothy A. Winsor
@rekoob: Tufte is the best there is on visual displays
eclare
@Omnes Omnibus: Also smart, I have heard stories from zoos.
zhena gogolia
@Goku (aka Amerikan Baka): if you like the Beatles, it’s a must see
WereBear
@MomSense: I like Trouble already :)
Jim, Foolish Literalist
@MattF: in a general? Dewey?
A major candidate in a primary…. I can’t think of an example in my time
Gin & Tonic
@MattF: Speaking in behalf of mustache-Americans I say *far too long*.
Ramona Rosario
@Dorothy A. Winsor: yes please. I just now clicked on your name and subscribed to your newsletter. How do I get the pdf of your IEEE article?
Geminid
@Omnes Omnibus:
Philo Beddoe: “Right turn, Clyde.”
Clyde actually was a sweet natured orangutan, and didn’t seem to manifest any malice when he punched out those bikers.
trollhattan
@Jim, Foolish Literalist:
“John Bolton, imagining himself to be someone other than John Bolton, ponders presidential run.”
You do you, dude.
MomSense
@WereBear:
He is the cat version of my kid – sleek, athletic. He looks like a Russian Blue mixed with either a Siamese or Burmese. He was just climbing all over my son, purring, loving on him, and talking to him. He was following him and completely focused on him. My son looked at other cats but kept having to go back to Trouble.
Matt McIrvin
@Dorothy A. Winsor: It’s a scam, there is nothing you’re not seeing, and it’s not legit.
UncleEbeneezer
@rekoob: Did y’all watch the Challenger documentary series on Netflix? I thought it was really superb.
Dorothy A. Winsor
@Ramona Rosario: Holy cow. I admit I haven’t put out a newsletter in a while.
You can just email me for the pdf. dawinsor (at) dawinsor (dot) com
rikyrah
When you try to Ponzi Scheme the Money Launderers….
Of course folks wind up on the weird side of actuarial tables😒😒
Jim, Foolish Literalist
RIP, Rebecca Howe. She was very talented before her brain broke
eclare
@UncleEbeneezer: It was haunting.
rikyrah
@Dorothy A. Winsor:
Absolutely a scam😒
Spanky
@MomSense: I have a cat like that. His name our first year was Jesuschrist Goddamit.
Or at least that’s what he kept hearing as he WileECoyotied his way around the house.
Omnes Omnibus
@Jim, Foolish Literalist:
Rebecca’s first appearance. RIP
Ramona Rosario
@CaseyL: “Now, it seems, more and more corporations are taking that route. Another legacy of the court decision that “shareholder value” is the ONLY value publicly-traded companies are mandated to pursue.”
It occurred to me that this court created law is how Musk got to take over Twitter.
rekoob
@UncleEbeneezer: Thanks for the tip! I have not, but took a quick look at the trailer. On the list.
Jim, Foolish Literalist
@Omnes Omnibus: no YouTube of the We’ve got tonight scene.
I am scandalized and demand a congressional investigation
MomSense
@Jim, Foolish Literalist:
She had a place in Maine and hired my friend to do the renovations. She was not a nice person. This was years ago and long before her brown broke publicly. She was just really mean.
trollhattan
@Jim, Foolish Literalist: Aww, “Cheers” remains one of my alltime favorite shows and she did a good job replacing Diane (and what a super career call that was for Shelly Long).
Ramona Rosario
@Dorothy A. Winsor: don’t feel you have to on my account. I saw your reply to another bj’er and emailed you. Thanks so much!
schrodingers_cat
@zhena gogolia: We used to discuss politics here, remember? I miss that.
raven
@zhena gogolia: How bout those DAWGS!!!!
Jim, Foolish Literalist
Matt McIrvin
@Goku (aka Amerikan Baka): Recently a bunch of people on YouTube finally started complaining about Established Titles, one of these silly companies selling intangible novelty gifts similar to the old “star registry”–in this case, ownership (but not really) of a square foot of land in Scotland, which they claimed entitled you to call yourself a Lord or Lady (also not really, at least in any legally relevant sense).
Lots of big-name YouTubers I like, including some who really should have known better, had been shilling for this company. Turns out this is because they were paying some of them pretty big bucks, at least for YouTube. Which I guess means they were raking it in.
eclare
@raven: Very impressive! Kick THE Ohio State’s ass.
raven
@eclare: We’re on it! Stetson got invited to the Heisman Ceremony!
Suzanne
@different-church-lady:
DAMN we are on the same wavelength.
eclare
@raven: Awesome! SEC!SEC!SEC!
Martin
@Ruckus: Yeah. I mean, if you are earning income off of a rental long-term, that sort of requires that you are benefitting from some other form of economic manipulation that drives prices above non-market rates, or you are engaging in it in a non-passive way.
For instance, if you remove zoning (trivial, I know) then you should get a race to the bottom in terms of rental income because there are profits to be made between your investment in that property and rent, and those profits should drive development – single family to multifamily, multifamily to mixed use, etc.
Now, if everyone is engaging in the same sort of economic activity then you would get something akin to a strong supply/demand balance and profits should drop to roughly zero. You could hold onto the property past the time that your costs drop due to paying off the mortgage on that property, but even then the opportunity cost of selling should be compelling against whatever you earn in income. As such, holding the property must possess some other kind of value-add to you as the landlord – maybe you intend to live there in the future, etc. But that point should get increasingly hard to reach.
Zoning, owners associations, interest deductions for mortgage holders, access to lending, etc all serve to grant economic benefits to landlords over renters and serves as a kind of wealth transfer rather than value generation.
Now you can break this cycle somewhat if *your* labor is used to renovate a property instead of hiring it out, handling property management tasks, etc. Now you’re adding value. Is it passive? Sure, per the IRS definition. Is it passive in economic terms? Nope.
I take Brachiators point above, but he’s trying to say that what the IRS considers passive isn’t just wealth transfer. I disagree. Yes, you have to step farther back out (maybe unreasonably so) but rent seeking is just wealth transfer and not value adding to the economy. It only adds value if you accept the many thumbs on the scale are unavoidable. But we put them there. They’re just policy. Of course they’re avoidable. They’re unrealistic to remove, but that doesn’t make it value generating.
Mind you, this doesn’t apply to improving a property for your personal use, to build a business on, even to pave a road. But if you can improve a property and turn a profit on it, then there’s no reason why the person you rent it to couldn’t have done exactly the same thing under a fairer system and keep the wealth generation for themselves. They only gain value because they’ve been denied other opportunities.
Fake Irishman
@Ohio Mom:
oddly enough, you’ve hit on a major problem that researchers like Dave Anderson devote their lives to solving: how do we get health insurance companies to pay for things now that might now pay off until their customer isn’t on their plan any more in a few years?
Fake Irishman
@eclare:
As a Michigan alum I heartily endorse this sentiment.
karen marie
@Antonius: “CryptoBaddiez” is shocked that there are real crypto baddies out there?
I couldn’t swallow this shit if it was in a work of fiction. People with piles of money have to be some of the most gullible on earth. It’s hard to figure how they got those piles of money in the first place. Did they just find people more gullible than themselves who inherited wealth?
Martin
@Matt McIrvin: That’s one of the smaller things being pushed. Another is the Mikkelsen twins nested fraud scheme regarding publishing ebooks without doing any real work.
There’s a number of these in circulation at any given point.
The established titles deal is a bit less fraudulent in the sense that there is actual activity going on here – the purchase of the land, the planting of trees, etc. The fraud part is that the title they say you are entitled to isn’t true, but you do in fact get a rights claim on a 1 square foot piece of land. It’s not that something of value isn’t being exchanged – something is. The issue is that something derived from that thing of value (the title) isn’t legit, and yet, kind of is since the title doesn’t actually confer anything if it was legit. You wanna run around and call yourself countess, feel free. It doesn’t give you a vote in Parliament or diplomatic immunity or whatever. Call yourself whatever the fuck you want.
But that scheme isn’t promising the purchaser passive income. The Mikkelsen twins scheme absolutely does – send us $x and we’ll send you a book topic, point you at a ghost writer to hire and a voice talent to hire and you’ll earn a zillion dollars on Audible without having to do anything. Different animal entirely.
Martin
@Fake Irishman: The larger question is ‘should we rely on Aetna’s interest in turning a profit substitute for the federal governments incentive to maximize economic opportunity for all citizens?’. I mean, that’s a big part of what government is for – enabling citizens to add the most value to the nations economy, which each one of us individually and collectively benefit from.
Lots of treatment fail the Aetna test but would pass the government test. That is, things that Aetna can’t turn a profit on can still be boosts to GDP, but won’t because we have this system.
Matt McIrvin
@Martin: Yeah, the fact that there’s zero claim that your “lordship” will, say, earn you riches kind of limits the damage being done here. Nobody’s going to sink a large portion of their income into these things that are basically novelty gifts. But there was some mild dishonesty involved.
Brachiator
@Jim, Foolish Literalist:
Aw. Very sad. I remember her from one of the Star Trek movies. But she showed good comedic chops as Rebecca Howe on “Cheers. “
BruceFromOhio
Brilliant business strategy executed by genius! Where do I sign up?
rikyrah
When a bright idea goes very very wrong😂😂😂😂
https://vm.tiktok.com/ZTR4V8MCf/
zhena gogolia
@raven: Yeah, I love dog posts. //
DK2
@Martin:
This is completely wrong. What you’re describing has nothing to do with demonstrating value. It’s known as “proof of work,” and is designed to stop exploits by making them too expensive. Example: email systems that deter spammers by forcing them to fill out a simple form for each email sent.
Proof of work is not fundamental to cryptocurrencies. It’s used by bitcoin, but not by ethereum, for example.
You are correct that cryptocurrencies are largely a scam. But you’ve completely misstated the nature of the scam.
Hamlet of Melnibone
I think the biggest problem most people have with stocks is that they forget that they are actually tiny pieces of a business, and instead of thinking about them in that way, they get focused on the squiggles that the prices make over the short term.
When people buy stocks, they should be thinking in terms of decades, not weeks, months, or even years. They should be buying businesses that they understand at rational prices with the intention of holding them for a very long time. Or if they don’t understand businesses, they should buy index funds periodically over a long period of time to try to just get average returns over decades.
I’ve bought stocks for about 25 years, and I have enough to retire if my kids don’t go to college and I wanted to white knuckle Heathcare ( so I’m still working :> ).
frosty
@zhena gogolia: I mentioned it because I recall you were skeptical at first but when you watched it you loved it.
Once was enough for me for awhile. If you include rewinding bits as “once”.
frosty
@schrodingers_cat: Wait til tomorrow. I guarantee a few posts on Georgia.
After that we’ll be watching the Republican House shitshow. This is just a little hiatus from politics.
sab
@Hamlet of Melnibone: Good point. I hope Goku sees this.
Another Scott
@UncleEbeneezer: A variation on that rule is:
Good ideas do not need lots of lies told about them in order to gain public acceptance. Etc.
Cheers,
Scott.
Chacal Charles Calthrop
@Martin: it sounds like the Marxist labor theory of value.
Another Scott
@CaseyL:
Pikers.
In 2008-2009 Porsche had larger profits than sales.
(Their house of cards collapsed not long after and VW ended up buying them.)
Cheers,
Scott.
Another Scott
Meanwhile, …
Hey, they won’t get free money if they don’t ask!!
(via nycsouthpaw)
Grrr…,
Scott.
Brachiator
@Another Scott:
Wow. That’s just about the most cynical, manipulative stunt that I have heard about in quite a while.
Also seems of dubious legality.
Martin
@DK2: I think you’re misinterpreting what I’m talking about.
I’m saying that any exchange of currency that is non-fraudulent comes with a creation of value. The evaluated value of the system that currency exists in has to go up. Per my example above, I convert lumber to a table. The world has more value because we value the table more than the lumber. That value creation came with my labor, and you measure that value by how much currency you will give me in exchange for the table.
Currency exists to permit commerce, so the amount of currency in the economy is really a measure of the aggregate value of the economy. As we build widgets and roads and art and all that, the Fed needs to inject more currency into the economy so that we can buy that stuff. Inflation/deflation are when currency gets ahead or behind that aggregate value.
So what value does crypto measure if we think of it as a currency? It’s not additive to dollars which are a measure of US aggregate output. So what does it measure? There’s an artificial scarcity of it, a feature they promote as increasing its value. But that artificial scarcity is created by some work function (proof of work or stake). This is the MacGuffin. There’s work here, but no value being created to justify adding more currency. Nothing new of value has been added to the world. More crypto has been created, but what is it measuring? Worth goes up because of demand, not because of value created. The email form to deter spammers is work without value. It can’t create wealth either.
In the end all wealth not connected to value goes to zero. It can take a while, it can enrich some people at the expense of others, it can enable strippers in Florida to have 6 houses in 2007, but there is *always* a return to value. If there’s no value in crypto, then no wealth can come of it. Anyone who make a million in crypto has to ultimately destroy a million from somewhere else.
Chris T.
@Dorothy A. Winsor:
The problem here is that you see too clearly. You’re supposed to be blinded and baffled by the CryptoBabble!
mrmoshpotato
@Another Scott:
Hot diggity fuck them.
DK2
@Martin:
I’m not misinterpreting what you said. Here’s the exact quote:
That’s wrong. I’m pretty sure that no crypto investor has ever invested on that theory. I’ve followed the space fairly closely and I’ve never heard it.
As I explained earlier, proof of work is a legitimate technique designed to deter free-riders. It has nothing to do with perceptions of value and is in no way fundamental to cryptocurrencies as a whole.
J R in WV
@Jackie:
said the Wapo!
Sounds like a cut and dried case of bribing witnesses to not say bad things about your crimeing to the nice policemens to me.
Anyone involved could and should be asked harsh questions about participation in a coverup scheme. Over and over to see if their story changes from day to day.