EugeneG

This is where Codex 5.5 just feels practically better. It’s fast, thoughtful and just works. It feels like a pleasure compared to Opus/Fable’s endless explorations.

The stock market (and in particular the US stock market) has been an incredibly positive influence on the average American's 401k... Great driver of allowing Americans and beyond to share in the upside of successful companies... big reason why Americans can retire.

Of course, it doesn't always go up...

I think you have an oddly negative bias.

Reminds me of this... During Apple's 1980 Initial Public Offering (IPO), Massachusetts regulators banned residents from purchasing the stock. The state's securities regulators deemed the offering "too risky" and "over-valued," enforcing a state rule that prohibited IPOs with a price exceeding 25 times earnings.

“properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives”

Spoken like someone has no clue what they are talking about and just throwing out jargon

In theory what they are doing of value, is that at any time you can go to an exchange and say "I want to buy x" or "I want to sell y" and someone will buy it from you our sell it from you... at a price that's likely to be the accurate price.

At the extreme if nobody was providing this service, investors (e.g. pension funds), wouldn't be confident that they can buy/sell their assets as needed in size and at the right price... and because of that, in aggregate stocks would be worth less, and companies wouldn't be able to raise as much capital.

The theoretical model is: - You want to have efficient primary markets that allow companies to raise a lot of assets at the best possible prices - To enable efficient primary markets, investors want efficient secondary markets (so they don't need to buy and hold forever, but feel they can sell) - To enable efficient secondary markets, you need many folks that are in the business of XTX ... it just so happens that XTX is quite good at it, and so they do a lot of this work.

Tries to fire, but he doesn’t have the legal authority to fire

Don’t ever pee in the ocean … to avoid accelerating global warming

You don’t have to spend your savings on trinkets.

If a company wants to expand and build a new factory (say to provide more, cheaper pharmaceuticals to more people), it needs capital. If you have cash but there’s deflation, you might just keep your cash under your pillow because it’s worth more every year. If instead we have an inflation, and so you have a disincentive to leave the cash under your pillow, you invest it (give to that company to fund its factory). That’s good for society.

I kind of agree. Money (e.g. the dollar) only has value because (1) we implicitly agreed as a society to have faith that it can be accepted by others for goods and services (2) the government requires us to pay a material part of our earnings as taxes which can only be paid using money.

If people lost faith, it would lose value.

Mild inflation (say 2-3pct a year) is considered generally good by economists. It’s an incentive to go and invest the money productively or spend that money on goods and services (which is good for growing the economy). Deflation in contrast would create an incentive to hoard money (just keep little papers with no productive value).

Financial derivatives like a call option have a value derived from a stock (which is a real thing that gives real world legal claims on actual assets/profits). So it’s still not like a crypto coin.

People are most definitely buying stocks for the reason I mentioned. There’s a reason why the pension fund of the teachers of California, the pension fund of the teachers of Texas, and your 401k holds stocks. It’s not because they are collectibles with a lot of hype. It’s because they get a claim on future profits at (expected to be, on average, over the long run) a discount. Of course there are people who have no clue what they’re buying or why it works and just buy something… but that doesn’t mean the thing they’re buying doesn’t have a fundamental value connected to reality.

Stocks and crypto are fundamentally different.

Stocks give you a legal right to the assets and future profits of a company - a legal right enforced by the government (i.e. men with guns).

Crypto gives you no such right. In crypto you just hope someone else will pay more for it later. In that sense crypto is similar to baseball cards, and slightly similar to gold (gold has some industrial “actual” uses, but its high price is really driven by cultural perception of value.)

Which is why the pro-Trump tech folks are playing with fire. Exchanging potentially faster approvals/lower regulation for favored projects, for an environment where rule of law and institutions are weakened.

After Russian invasion of Ukraine, Germany said it permanently won’t support the opening of Nord Stream 2. NS2 has been Putin’s number one priority for opening so he could deliver gas to Europe while sidestepping Ukraine.

Conveniently after the explosions, NS2 became one of the few working ways to get gas to Europe, and Putin offered to deliver gas via it. https://www.aljazeera.com/amp/news/2022/10/12/putin-offers-t...

That’s way he blew up what he blew up. To force Europe’s hand on NS2.

I believe the accurate answer here is twofold: - money is perpetually not supposed to be a great perpetual store of value relative to goods and services. Government policy aims for some inflation, fears too much and fears too little. Why? Because a bit of inflation is an incentive to use your money on more productive asset - eg don’t hold on to it but instead invest in a startup or go use someone’s services or goods (go to a restaurant!). The issues happen when inflation is so high that the money melts away before you have time to figure out how to use it productively. Deflation is also bad because then people stop spending on services, stop investing - and just hold onto money. (“No I don’t want to invest in this startup! I have the best investment I need, just holding onto my cash!”) That slows down the economy. - either way Bitcoin doesn’t solve inflation in any way. It’s just another asset - that can go up or down or whatever, and happens to have gone up for a long time (just like Facebook stock) and then dropped a lot. Just like any stock or any asset, Bitcoin can have higher-than-inflation real returns or lower-than-inflation. And more recent returns have definitely been lower. What will happen in the future? Who knows. Same answer applies to the S&P500 and to Gold and to the new condo in my neighborhood.

That’s obviously true. And once you accept that then the whole premise behind crypto is gone - if centralization is the only way to make it work, then traditional banking is preferred. All that’s left are use cases that are in the gambling and money laundering category.

Yeah there will be a spread, won’t go from LIBOR+0 to SOFR+0, but to SOFR+0.20% for example

Yeah I think there’s a difference in cardio fitness between people who do 10000 and 17000. Less fitness makes the latter more difficult.

In other words, people who can’t walk or can barely walk are likely not that healthy - is probably a more intuitive theory than walking causes better health.

The question is can you really make it simultaneously cheap to trade and decentralized and always on. Or is the overhead of all that just make blockchain tech very awkward and suboptimal (especially since ultimately there's a centralized winery that honors the "claim" with actual wine - so no real need for decentralization). Instead why not just have a little centralized company that lets companies create ledgers of asset ownership for $300/month. If it's a real use case, any winery can sign up, etc.

Issue is blockchain tech doesn't actually solve anything

Yep. Blockchain says I own this case of wine... but the other guy wont give me my wine! Who do I call? The physical, centralized police and the centralized legal system that back it. Without that legal system recognizing and honoring it, it's worthless. And if it all depends on my centralized legal system, then who cares about the decentralized blockchain. Might as well put it in a table in a database instance running on AWS, or in a written contract.

Tether isn’t some new innovation that is it’s own animal. We know what to compare it to. The right comparison isn’t “the US Dollar.”

The right comparison is money market funds - they are very highly regulated. If a money market fund said “we are backed by very highly rated short term debt,” but they weren’t, that is 100pct a scam that has huge fines.

Just because Tether is in the crypto world doesn’t mean it’s now a magical novel currency. Still just a money market fund in a slightly different form.

What do you use it for other than investing?

Impressive.

The guy is 65, has a net worth of $2bn. I genuinely don't think he gives a crap about bad mouthing bitcoin to save himself. He's won the game. At this point he's just trying to be credible and honest. There are crypto lovers who hear what he says, it hurts their emotions, so they rationalize his words as some sort of nefarious plot to subvert public opinion! But the explanation is simpler, it's just what he thinks.

I think "Digital Gold" is a legit use case, similar to "regular gold"

Though it's not a very satisfying use case because it's like "hold bitcoin because we all agree we should hold bitcoin"

why pay a traditional gatekeeper when you can pay a nontraditional gatekeeper and make it generally more convoluted

JPMorgan and friends are so hyperregulated they literally have regulators who sit in their offices, company officers who are required to report to regulators on a whim, regular scheduled updates with regulators, audits, etc. etc. there is probably no industry more regulated than finance.

And it's a crappy first approximation at that! "Banks are evil because I heard that banks are evil and I don't really understand what they do."

It's not about fear of competition. Crypto doesn't remove the middle man. There are just other middlemen, but JPM also is not stupid and will figure out how to compete in this space. The new middlemen are folks like Coinbase, the other exchanges, middlemen like PayPal that are built on top of middlemen like Paxos. Regular people aren't going to using private keys to send money (where a typo leads to permanent loss) anymore than regular people are going to be coding in assembly on their machine to do addition and subtraction.

If there's really value in bitcoin and it becomes a thing, JPM will figure out how to help. Why? Because they are good at what they do, they have tons of clients and relationships. They add real tangible value to their clients. If middleman means "tangible value" then yeah, they're a middleman. JPM figured it out with currency markets, stock markets, bond markets, commodity markets, credit markets, equity derivatives - they figured it out with big institutional clients, with retail clients - they figured it out in simple products (buy EURUSD) and complex products (buy a 5 year forward knock out call option on EURUSD, contingent on SPX, quanto into Yen). I'm sure they'll figure it out for digital assets - if it truly becomes a market worth entering.

In the meantime, crypto has yet to add any real world value. What sane person takes a vacation to Tokyo and does anything other than use their Chase-issued Visa card (now available on your iPhone!) to buy stuff? Are you going to go there and pay with your bitcoin? Ridiculous. And guess what, the credit card route works instantly and it costs nearly nothing.

Where are the real use cases for crypto? Digital gold? Maybe. Weird trading card things, ok maybe. But real ones? Maybe they will come, but also maybe not... When internet/BBS came out to real people in the mid 1980s, even then (even then!), it was obvious that this was huge and had real value. People communicated, played games, etc. In the 1950s, business used computer to automate processes. We didn't need to wait until 1995 to figure out the internet (or computers) would eventually be huge. But with crypto, 10 years later, and nobody who actually understands traditional finance can articulate where crypto is better/faster/easier/cheaper, or any other use case. Maybe it will come, but I haven't heard it!

"It's not a free market! Apple sucks and I want to use different products... and sure there are countless alternatives available for purchase online and in stores... but I can't and I don't switch because I love Apple and it has the best product and the others aren't as easy to use. Tyranny!"