FTX

[EACLucifer]

At times like this I am reminded that crypto scammers make their money from suckers who think they are cleverer than everyone else because they insist on bleating "but why?" to basic questions, much live a seven year old would.

[Woodchopper]

This is not how bank loans work. You surely know that they loan many multiples of their holdings and simply create the extra money they lend.

Better to say that while banks can create money they don’t create wealth. What is usually happening when banks make loans is that illiquid assets (eg, house, car or washing machine) are converted into liquid assets (eg pounds, euros, dollars).

[plodder]

This is not how bank loans work. You surely know that they loan many multiples of their holdings and simply create the extra money they lend.

Better to say that while banks can create money they don’t create wealth. What is usually happening when banks make loans is that illiquid assets (eg, house, car or washing machine) are converted into liquid assets (eg pounds, euros, dollars).

No, it’s more than that. They create money based on multiples of the asset base. See the link I just posted above. This is a bit of a tangent but it’s relevant because a) people ought to but don’t understand this stuff and b) the way that banks operate is a key driver behind crypto. The banks are not benign facilitators. A digital currency could potentially fulfil this role though - although it would be disruptive.

[Woodchopper]

This is not how bank loans work. You surely know that they loan many multiples of their holdings and simply create the extra money they lend.

Better to say that while banks can create money they don’t create wealth. What is usually happening when banks make loans is that illiquid assets (eg, house, car or washing machine) are converted into liquid assets (eg pounds, euros, dollars).

No, it’s more than that. They create money based on multiples of the asset base. See the link I just posted above. This is a bit of a tangent but it’s relevant because a) people ought to but don’t understand this stuff and b) the way that banks operate is a key driver behind crypto. The banks are not benign facilitators. A digital currency could potentially fulfil this role though - although it would be disruptive.

Yes, I do understand how banks work.

[nekomatic]

A digital currency could potentially fulfil this role though - although it would be disruptive.

Please could you explain, as if I were quite thick, how a crypto mortgage might work differently to an actual mortgage and why it would be cheaper?

[plodder]

A digital currency could potentially fulfil this role though - although it would be disruptive.

Please could you explain, as if I were quite thick, how a crypto mortgage might work differently to an actual mortgage and why it would be cheaper?

Good question. I don’t know.

[plodder]

Better to say that while banks can create money they don’t create wealth. What is usually happening when banks make loans is that illiquid assets (eg, house, car or washing machine) are converted into liquid assets (eg pounds, euros, dollars).

No, it’s more than that. They create money based on multiples of the asset base. See the link I just posted above. This is a bit of a tangent but it’s relevant because a) people ought to but don’t understand this stuff and b) the way that banks operate is a key driver behind crypto. The banks are not benign facilitators. A digital currency could potentially fulfil this role though - although it would be disruptive.

Yes, I do understand how banks work.

Then why say the whole thing is based on tangible asset values? It isn’t.

[dyqik]

I pay 2.49% p.a. on my mortgage and in return for that interest I get time shifting of cash flows. How does crypto move cash flows around in time?

I pay fees on my pension and in return I get a managed and balanced portfolio of investments appropriate for my age and risk appetite. How does crypto provide this service?

On my cash deposits at the bank I get free insurance protecting up to £85,000. Does crypto provide this protection against bankruptcy of institutions?

We're not talking about pensions or insurance.

Could you expand on what you mean by "time shifting of cash flows" in return for the interest you pay?

We're not talking about mortgages either. You brought that irrelevance up. A mortgage is not a transaction, and it doesn't have to be transacted in one particular currency.

[dyqik]

A digital currency could potentially fulfil this role though - although it would be disruptive.

Please could you explain, as if I were quite thick, how a crypto mortgage might work differently to an actual mortgage and why it would be cheaper?

Good question. I don’t know.

It would be exactly the same, except it would cost you more to make each mortgage payment.

In the same way, if you took out a mortgage denominated in a foreign currency to that which you receive income in, you'd have to pay exchange fees on each payment.

If you took it out in a volatile currency, then in addition, your payments and remaining principle could vary wildly from month to month, up, as well as down.

[dyqik]

Nonsense. When British Gas collects your direct debit, the bank charge is something like 0.05p. International transfers cost pennies. Modern clearing banks are astonishingly efficient in a competitive environment. Hence millions of people get free banking.

The most expensive element is handling physical cash, which needs armoured vans and security guards due to the risk of crime. And guess what, it's the risk of crime that makes crypto even more expensive to transact.

You’re only talking about transaction costs. I mentioned a number of other costs. Proponents of crypto like to talk about these. How much interest are you paying on your mortgage? What do you get in return for that interest? (For example)

Yes, because transaction costs are the subject here, and, along with holding costs and risks, are what makes a particular substitute currency viable. The transaction and holding costs are why we no longer use gold bars or coins for most transactions.

The costs of crypto transactions are intrinsically higher than the costs of moving numbers around between bank accounts, by design. Regulation makes the costs and risks of banks holding money for us in the form of an account balance very low. Most of the holding and other features of banks still have to be paid for and regulated between transactions with crypto - as we are seeing with the FTX collapse.

[Woodchopper]

No, it’s more than that. They create money based on multiples of the asset base. See the link I just posted above. This is a bit of a tangent but it’s relevant because a) people ought to but don’t understand this stuff and b) the way that banks operate is a key driver behind crypto. The banks are not benign facilitators. A digital currency could potentially fulfil this role though - although it would be disruptive.

Yes, I do understand how banks work.

Then why say the whole thing is based on tangible asset values? It isn’t.

I didn’t, I said it was based upon converting illiquid assets into liquid assets.

[lpm]

At times like this I am reminded that crypto scammers make their money from suckers who think they are cleverer than everyone else because they insist on bleating "but why?" to basic questions, much live a seven year old would.

Lol.

[Bird on a Fire]

Highly financialised late-stage capitalism with state backing is a Ponzi scheme run by sociopathic bros who take advantage of "morons" who pay no attention to the man behind the curtain.

By all means lets criticise crypto for having the same failings, but lets be realistic about the context.

[Bird on a Fire]

Currently all of you have pensions and insurance products based on investments in quantities of fuel fuels that, if burned, would render the planet effectively incompatible with what we call civilisation, and quite possibly humanity itself.

[lpm]

Highly financialised late-stage capitalism with state backing is a Ponzi scheme run by sociopathic bros who take advantage of "morons" who pay no attention to the man behind the curtain.

No it isn't.

[lpm]

Currently all of you have pensions and insurance products based on investments in quantities of fuel fuels that, if burned, would render the planet effectively incompatible with what we call civilisation, and quite possibly humanity itself.

No I don't.

[dyqik]

At times like this I am reminded that crypto scammers make their money from suckers who think they are cleverer than everyone else because they insist on bleating "but why?" to basic questions, much live a seven year old would.

The rest of the reason there are so many suckers is that they believe themselves to be rational open-minded thinkers, while everyone else are blinded by irrationality, and so they've spotted the one weird trick that no one will talk about, and that the system as is hasn't been tested in that particular way by clever people yet.

[dyqik]

Highly financialised late-stage capitalism with state backing is a Ponzi scheme run by sociopathic bros who take advantage of "morons" who pay no attention to the man behind the curtain.

No it isn't.

Yeah. This is the kind of conspiratorial thinking that leads to people investing in crypto.

That doesn't mean that there aren't a bunch of bad actors in current capitalism, so spare me the examples.

[Bird on a Fire]

Currently all of you have pensions and insurance products based on investments in quantities of fuel fuels that, if burned, would render the planet effectively incompatible with what we call civilisation, and quite possibly humanity itself.

No I don't.

If you personally have divested than that's very cool, and I'd be interested in hearing more about the process.

Nevertheless, pensions are often brought up when I mention fossil fuel investments. Many high street retail banks are routinely backing new fossil fuel extraction projects as part of their portfolio. Is the market just decades behind the science in issuing a correction, or do enough of the market bros just have so little faith in humanity that an outcome involving the deaths of millions of people, and displacement of billions, seems like a good investment?

[shpalman]

Currently all of you have pensions and insurance products based on investments in quantities of fuel fuels that, if burned, would render the planet effectively incompatible with what we call civilisation, and quite possibly humanity itself.

No I don't.

If you personally have divested than that's very cool, and I'd be interested in hearing more about the process.

Nevertheless, pensions are often brought up when I mention fossil fuel investments. Many high street retail banks are routinely backing new fossil fuel extraction projects as part of their portfolio. Is the market just decades behind the science in issuing a correction, or do enough of the market bros just have so little faith in humanity that an outcome involving the deaths of millions of people, and displacement of billions, seems like a good investment?

If everyone dies they won't have to pay out on the pensions will they.

[plodder]

Highly financialised late-stage capitalism with state backing is a Ponzi scheme run by sociopathic bros who take advantage of "morons" who pay no attention to the man behind the curtain.

No it isn't.

Why not, lpm? It sounds like a fair enough description

[dyqik]

Highly financialised late-stage capitalism with state backing is a Ponzi scheme run by sociopathic bros who take advantage of "morons" who pay no attention to the man behind the curtain.

No it isn't.

Why not, lpm? It sounds like a fair enough description

Because it's a (edit:) trite and meaningless description of a complex system.

The only rational response to it involves pictures of shrimp.

[lpm]

Currently all of you have pensions and insurance products based on investments in quantities of fuel fuels that, if burned, would render the planet effectively incompatible with what we call civilisation, and quite possibly humanity itself.

No I don't.

If you personally have divested than that's very cool, and I'd be interested in hearing more about the process.

Nevertheless, pensions are often brought up when I mention fossil fuel investments. Many high street retail banks are routinely backing new fossil fuel extraction projects as part of their portfolio. Is the market just decades behind the science in issuing a correction, or do enough of the market bros just have so little faith in humanity that an outcome involving the deaths of millions of people, and displacement of billions, seems like a good investment?

Mate, you were arguing for government subsidises of fossil fuel burning just a few weeks ago, so you can basically f.ck off.

As for the process of investing in ESG funds, it's as simple as clicking the ESG fund options. Because pensions are tightly regulated and have industry best practice guidelines, there's transparency where every investment fund gets an ESG rating and has to disclose what it is doing. Anyone can read the ratings or pick and choose or just click the funds with the best ratings.

And it may well pay off financially, because research suggests the higher ranked ESG investments outperform the lower ranked. For example
https://www.fidelityinternational.com/e ... ce135-en5/

[Bird on a Fire]

No it isn't.

Why not, lpm? It sounds like a fair enough description

Because it's a delusional description of a complex system.

The only rational response to it involves pictures of shrimp.

I'd be interested in your non-delusional description of who's running capitalism currently, and how, in one sentence, as a counterpoint?

Add a shrimp if you really must.

[dyqik]

Why not, lpm? It sounds like a fair enough description

Because it's a delusional description of a complex system.

The only rational response to it involves pictures of shrimp.

I'd be interested in your non-delusional description of who's running capitalism currently, and how, in one sentence, as a counterpoint?

Add a shrimp if you really must.

First you need to tell me what you mean by "running capitalism".

Or indeed what you mean by "capitalism". Because what I mean by it is not a thing that is run.