61 ms·

There’s Nothing to Do Except Gamble

264 points by known 5y ago

simonebrunozzi 5y ago
> Maybe the question we should have been texting our financially literate friends wasn’t “What is an NFT?” but “What is money now?” Potentially interesting piece on the subject, but not particularly deep or insightful.
cjf4 5y ago
>for many of us, money is only experienced through our phones, as a number on a screen. You pay your rent with one app, you buy put options with another. The number goes up, it goes down, it lives in the little portal we hold in our hands. And decades ago it was a number written down on a little piece of paper, and before that it was little pieces of “precious” metal locked away somewhere. At least nowadays amateurs have a better chance to be literate.
- newsclues 5y ago
  I still have gold and prefer cash for purchasing daily items. The money seems real, swiping cards or phone financial transfers lack a physical reality and my brain has less friction with digital transfers, thus I avoid them out of financial prudence.
  - jp555 5y ago
    Have you noticed how your cash is buying fewer items than it did a ~year ago? My daily item costs are WAY up, which is really just saying the value of the cash is WAY down.
    - newsclues 5y ago
      Yes, inflation is real, and since I’m on a fixed income I noticed that despite cutting out luxuries and limiting meat purchases, my groovy bill went up and I still lost weight.
      - toss1 5y ago
        Insufficient data - supports several modeks. If you are trying to lose weight, shifting away from sugary & processed foods & meat to high-quality fresh fruits, vegetables, nuts, etc. can definitely increase your grocery bill while reducing your weight in a very healthy way. Food bill may go down by going directly to farmers, but travel & fetching costs increase. Or, it could be an unhealthy shift towards more processed foods, costing more in factory work & transport, and you are seeing real inflation. So, insufficient data to indicate inflation or not.
        newsclues 5y ago
        Wasn’t trying to lose weight and my diet remained essentially the same other than modification due to cost (mainly less meat). I had a fixed grocery budget, and over months, I lost weight due to a caloric deficit. Literally I bought less food with the same money and the result was just over a pound a month lost .
        toss1 5y ago
        I'm sorry to hear that you are having such difficulties; I hope things improve for you soon. That is the data we need to confirm that you're seeing inflation. Curious where you are located that you are seeing these numbers?
        newsclues 5y ago
        It’s ok, I might be poor but I’m pretty happy despite the disability. I live in a city an hour away from Toronto, Canada.
    - jfengel 5y ago
      Honestly, no, I haven't. My groceries are the same. My electric bill is stable. The watch I'm replacing today is the same price today as ten years ago when I got its predecessor. I don't know if it's because I buy different things from you, or if I live in a different place from you, or what. But my andecdote is that no, I'm not paying more for stuff than a year ago.
      - newsclues 5y ago
        Odd that some people don’t notice things like this... https://en.m.wikipedia.org/wiki/Shrinkflation https://en.m.wikipedia.org/wiki/Shrinkflation Do you actually track spending or just don’t notice?
        jfengel 5y ago
        A gallon of milk is still a gallon of milk. A pound of carrots is still a pound of carrots. It sounds as if your basket of goods is different from mine. Most of the examples on that Wikipedia page are sugary foods, which I just don't buy a lot of.
        newsclues 5y ago
        I used to buy 3lbs of carrots, but now the bags are 2lbs but cost the same.
        jfengel 5y ago
        Here, two pounds of carrots are $1.79, just as they have been for as long as I can remember. I don't have a spreadsheet, but I know what carrots cost. They certainly haven't shot up by 50%.
        gruez 5y ago
        >Do you actually track spending or just don’t notice? Do you? The BLS does, and their inflation numbers for food is 3.5% YOY. [1] https://www.bls.gov/cpi/ https://www.bls.gov/cpi/
- legulere 5y ago
  It's the other way around. First there was personal debt, then impersonal money. In the beginning you would just lend stuff from other people and give it back, or with consumables give something back of similar worth. Precious metal was pretty rarely used, as its main benefit is that you need almost no common trust relationship.
  - imtringued 5y ago
    Yeah this is true, people didn't necessarily "barter" back in the day. Traders and merchants probably did because they wanted immediate payment, but within a trustworthy community you simply record or memorize what you did and demand the other side to pay you back in the future. An oversimplified hunter and gatherer society would just let the hunters give meat to the gatherers, assuming that they will one day be paid back with gathered vegetables or fruit.
  - jasonwatkinspdx 5y ago
    I see you've read Graeber. Great book and changed my views on a lot of things, particularly how much of our "common sense" understanding/education on topics relies on "just so" assumptions made by some aristocratic scholar a couple centuries ago. Anyhow, to explain for the forum: Graeber's book goes through the evidence we know of from the places were money first appeared. In essence, debt came first, and money was a later innovation. Very interestingly temple records using tally mark schemes may have been what lead to the development of cuneiform writing in the levant. A similar debt first pattern appears in other places, at other times too. Coinage, particularly metal coins, came about much later as a clever hack by rulers to simplify raising and maintaining a large army. Pass a law demanding all citizens pay you X coins each year. Pay your soldiers in coins. Suddenly your society is figuring out how to feed and house soldiers, without you haven't to build a command hierarchy to run it all directly. I can't recommend this book enough. It's dense in parts because he goes into a lot of detail that fully justifies what he's saying. Still, completely fascinating to learn much of the way we think of economic history is mythology. It's also a great lens for understanding what's happening now with cryptocurrencies.
    - nostrademons 5y ago
jp555 5y ago
Zero mention of the recent unprecedented fiat currency printing we've seen, nor the fact that every time since the Tang Dynasty when we have done this, it has led to very troubling times 12-18 months later. Everyone is gambling even if they dont know Crypto exists.
- tim333 5y ago
  Ha. I was skeptical about the unprecedented bit but googling seems to indicate you are correct, at least for the US https://mobile.twitter.com/fgmr/status/1355105955982282752 https://mobile.twitter.com/fgmr/status/1355105955982282752
  - quickthrowman 5y ago
    You need to look at velocity of money in conjunction with the money supply to get the true picture: https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V The tweet you linked leaves out half the story, which is that money velocity is down greatly, thus the increase in money supply hasn’t caused rapid inflation. https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us https://www.stlouisfed.org/on-the-economy/2014/september/wha...
    - tim333 5y ago
      Yeah though what happens when people go out again?
      - imtringued 5y ago
        Hopefully people spend their money and corporations invest their money to meet the demand.
      - mariojv 5y ago
        The Fed sells its assets to decrease the USD supply and raises rates. My best guess is a short period of higher inflation and then a correction, but who knows.
deleted 5y ago
[deleted]
tcbawo 5y ago
Money is stored wealth, the ability to buy goods and services in the future. The problem seems to be that we live in a time of societal upheaval. The future of stored wealth becomes cloudier and more uncertain the further you go out in time. So, what is the best place to store wealth? Will my wealth be eroded by inflation? Will the companies I invest in become obsolete by technology or market-manipulating nation states? Will regulation changes suddenly damage the value of my investment? Will changes in tax regime eat my earnings? Will corruption and crime take my wealth? Clearly, some people are getting out of hand with speculation and credit (a suitcase full of lottery tickets is not diversification). As Warren Buffett says, when the tide goes out you learn who's been swimming naked. The economy has its ups and downs and speculative fervor ebbs and flows. There are no certainties, but IMHO all you can do is stay diversified and maximize the probability of your success.
- LudwigNagasena 5y ago
  Assets are less ephemeral stored wealth. Money facilitates transactions, but it is not a factor of production, it is not a consumption good, and it is not backed up by any of these things, so it is a very nebulous type of wealth.
  - galaxyLogic 5y ago
    I would agree with a previous poster that money is a debt obligation. If you have "money" in bank, what does it mean? It means the bank has a debt-obligation to pay you back with other type of debt-obligation, the government sanctioned cash. Money is definitely an interesting concept. I'm not sure I fully understand it. But I use it.
    - LudwigNagasena 5y ago
      I don't get how it contradicts what I've said.
- paulpauper 5y ago
  My answer to these questions and other unknowns about the fed, fiscal policy, America and its role in the world, the economy etc. is that the future will be a lot like the present, but more so. So extent the current trends into the future. Sure, things sometimes change, even dramatically such as the fall of the USSR or 911, but we are living in a steady-state world in which the underling trends do not change. Inflation will remain low in spite of printing, America remain on top economically and militaristically. Stock market keep going up. US dollar remain strong.
paulpauper 5y ago
How many people are actually getting rich with NFTs besides people who who are already celebrities/famous? Not many. The market is flooded now with NTFs. The overwhelming majority of listings do not sell or sell for little. A better way to make money is with 3x ETFs using options strategies, which I am working on. The performance of some of the major 3x funds such as TECL, FNGU, and TQQQ surpass even Bitcoin
- second--shift 5y ago
  The contango drag on 3x ETFs is hilarious - good luck on your endeavors sir, I've got futures contracts for sale for your fund manager to buy.
  - paulpauper 5y ago
    no it's not. it is actually positive due to the dividends . a 3x funds pays 3x the dividends . the borrow cost is only 1%, versus 2% dividend
    - second--shift 5y ago
      > a 3x funds pays 3x the dividends what? which funds pay 3x dividends? All of the leveraged ETFs i'm familiar with replicate the 3x exposure with futures contracts, which do not pay dividends. the drag exists when these futures contracts are in contango, where the back-month is more expensive than the front-month. The leveraged ETF pays that drag every time the fund rolls to the next futures. Nothing to do with borrowing costs. This is also the reason why USO trends down long term, regardless of the spot price of oil.
      - paulpauper 5y ago
        it would only be in contago if there is borrow and storage cost. This applies to commodities. But stocks pay dividends, so this can cease backwardation if interest rates are low relative to dividends.
paulpauper 5y ago
>If crisis had opened the door to a new way of thinking about money, the checks closed the door on the old: Gone was an understanding of money as a scarce, quasi-natural resource to be managed disinterestedly by apolitical experts. The question was: What was replacing it? Would MMT’s chartalist view of money as a tool of state power prevail? (The undeniable success of the pandemic cash drop seemed to be a point in its favor.) Or could the crypto-millenarians’ anarchic vision of money backed by cybermetal take the upper hand? (Cryptocurrency had a boom year, perhaps driven by the existential fear that accompanies a global pandemic.) Maybe the Marxists would finally figure out how to abolish the value form? (Don’t hold your breath.) This is bollocks. Money will always be scarce, by design. Look at all the ppl struggling to get by even in spite of these stimulus checks, who lost their jobs or businesses due to Covid and still have not be rehired. The money that the fed is creating is not the type of money that individuals exchange with, which also explains the low inflation. Rather, what everyone got wrong is, the experts, pundits, etc. in 2008, and now in 2020-2021 thought that all of this printing would cause inflation to surge, but CPI just refuses to budge much. This is due to many factors, such as America's growing economic dominance, which has widened since 2008 and even more so since Covid.
- makomk 5y ago
  Remember, CPI is just the average of a particular basket of goods weighted in a particular way - it doesn't necessarily represent the real levels of inflation people will see. I know for example that here in the UK, the low figures were the result of price increases in things people were actually buying like food, computers, cars, holiday stays when we weren't locked down, etc being counterbalanced by lower increases or even decreases in things they weren't buying as much anymore like clothes. (Our better news sources went out their way to explain this.) So the average person would have seen rather higher inflation than the CPI and RPI would suggest.
  - gruez 5y ago
    >I know for example that here in the UK, the low figures were the result of price increases in things people were actually buying like food, computers, cars, holiday stays when we weren't locked down, etc being counterbalanced by lower increases or even decreases in things they weren't buying as much anymore like clothes. Source? Maybe uk is different but that claim isn't consistent with the CPI figures coming from the BLS. In your list of things food makes up the biggest part, and it's only up 3.5% YOY. Computers is actually down 3.2%. New cars/trucks is only up 1.5%. Used cars/trucks is up 9.4%, but that only makes up 2.71% of the basket. https://www.bls.gov/cpi/tables/supplemental-files/cpi-u-202103.xlsx https://www.bls.gov/cpi/tables/supplemental-files/cpi-u-2021...
ppod 5y ago
"I used to be with it, but then they changed what it was. Now what I'm with isn't it, and what's it seems weird and scary to me, and it'll happen to you, too" -Abe Simpson
TRcontrarian 5y ago
Is it better to live in a world where the future is unknown, and the best we can do is guess where value will be, or one where the future is known, and the prices of all investments are stable and already priced at their exact values? In which world is optimism and class mobility possible?
- beiller 5y ago
  Excellent point. And to drive a steak further into this idea - ironically gambling is the one where all the prices / chance / rewards are absolutely known up front and calculable. I guess that's what sets wall st. apart from gambling in a casino.
- deleted 5y ago
  [deleted]
- sixstringtheory 5y ago
  Excellent question that reminds me of two anecdotes: 1) In my CS ethics course, we had a writing prompt asking whether, assuming perfect capability, it would be better to replace sports referees with computers 2) I wrote a cheat program for a word game my dad liked playing. Super proud of my accomplishment, I showed it to him, and he was impressed for a minute before stating the game wasn’t fun that way (also have an earlier version of this memory involving a Sega Genesis Game Genie)
ArtWomb 5y ago
Skip this NYMag pablum. Read Dean Kissick's Downward Spiral: Popular Things (on NFTs and the pervasiveness of mundane art) instead. "We live in an algorithmically generated culture, and we are the algorithms" ;) https://www.spikeartmagazine.com/articles/downward-spiral-popular-things-dean-kissick https://www.spikeartmagazine.com/articles/downward-spiral-po...
- rideontime 5y ago
  I hope your dismissive tone doesn't cause people to skip the column you linked. I appreciate seeing a criticism of NFTs (and meme "art" in general) that isn't solely about environmental impact. "Post-death culture" is a term that's going to stick with me.
tim333 5y ago
>Welcome to the non-fungible, memeified, cryptodenominated, degenerate future of finance. I think a lot of that is the now of finance rather than the future. We'll look back on meme stonks like we do on the pets.coms and webvans.
wayoutthere 5y ago
The “woe is me, how do I know how to invest?” drivel in this article is solved by a sufficiently diversified portfolio. The article even admits that these shenanigans have no impact on the larger market — so invest there. If you want to take on more risk, great — but with great risk comes lots of market manipulation. The wider public is now learning what every MBA is taught in investment theory classes: investing is a racket where the house always wins. Either you play long positions in a diversified portfolio or you enter the water with the sharks. If you’re not sitting on a billion dollars, you’re at an extreme disadvantage in the options market. And the biggest risk in corporate America today is negative PR. The sharks you’re playing against have the connections to get insider trading info, the sophistication to hide it, and the influence to get away with it. Retail investors are at their mercy. I guarantee Elon Musk is making money moves off his tweets, he’s just sophisticated enough to hide it in a trust. And he’s not the only one; hedge funds have been known to actively seek out scandals to generate negative PR, then trade on that info. The vibe on Reddit right now is “the system is broken and they’re cheating like crazy”. But that’s no revelation, this kind of crap has been completely normalized because the SEC can’t stop it (the people working there are largely the ones who couldn’t hack it on Wall Street). I fully expect that Wall Street will end up coming out on top in the end because the retail investors don’t quite understand the role of market makers and the level of coordination done with the investment side of things. Yeah, it’s flagrantly illegal, but if you get away with it (as they almost always do because the SEC can’t prove anything) you’re going to be rich.
- freeone3000 5y ago
  >the system is broken and they’re cheating like crazy You can still make money off that -- the stock market is baccarat, not poker, and you can make money off betting on whoever cheats best, or fastest, or whose manipulation you think will win. The strategy is difficult but not impossible.
- jfengel 5y ago
  I have begun to worry that broad indexes are themselves becoming a problem. As that advice seeps out, a lot of people are buying "the market". Which has long been good sensible advice, because the market as a whole genuinely produces wealth, but it's not inexhaustible. The S&P 500 P/E ratio is up over 40, a number it has seen only twice before and both immediately before crashes. P/E is an imperfect measure, especially during a genuine crisis that results in fewer goods being produced, but the idea that "it will take 40 years to produce enough profits to return your money" is a little scary. The pandemic is certainly contributing, but it's been heading this direction since well before the pandemic. The broad market is still probably your best bet long term, and even if now isn't a great time we all know that timing doesn't really work. Stick it in a broad index and forget about it remains the best advice. But that advice eventually undercuts itself, if everybody invests in every company regardless of its merits just because it's listed. The listing itself is becoming a skew.
diamondhandle 5y ago
Our job in life is to engage in value creation. When money is decoupled from value creation, your long-term bet is that it will lose its value, as value creation is what actually matters in the “real” world. This is also why “crypto” (the asset class, not technology) is so corrosive, because it makes people who have done approximately nothing to create value in society, but who’ve enjoyed a massive boost in monetary value, think they’ve “won” or accomplished something real. This doesn’t work long term, and will eventually collapse on itself like all false religions. If you’re planning to be alive in 20 years, you’re better off making sure you have a work ethic and skills that generate value, than obsessing over any sort of wealth-hoarding instrument at all, because it is the only true protection against change.
- benjohnson 5y ago
  Your great advices pays dividends much further down the road too - focusing on work and creating value is also good for your children. Sadly, there’s been many children that took decades to get out of their entitled mindset caused by easy money from their parents or the government.
  - the_gipsy 5y ago
    Culture is the best inheritance you can give your children.
- mam2 5y ago
  There is no justice in the world. You seem to be strugglinh with this idea :(
- Mattasher 5y ago
  I agree with your last statement, but I think you are mixing cause and effect. Crypto is exploding because our system is already corroded. Starting with the creation of the Fed, and tracing through endless money printing and complex financial instruments which let well-connected companies and politicians create paper wealth out of nothing, we've decoupled money from value. Savings pay no interest, manual labor doesn't scale, but rent seeking and financial games get many people riches in no time. What are the incentives in this kind of a system, and where are the safe harbors for storing value? And if you can't in value creation, your safest bet may be to gamble.
RGamma 5y ago
Welcome to the age of meaninglessness. Why should tech tycoons and .1 percenters be the only ones living with their head in the clouds?
- realce 5y ago
  Giving you today another version of what you had yesterday. https://www.youtube.com/watch?v=MHFrhIAj0ME https://www.youtube.com/watch?v=MHFrhIAj0ME
drewcoo 5y ago
The difference between finance and gambling is largely class. The things we call finance and gambling today both trace back to gambling/insurance in Venice a few centuries ago. They've diverged over time to reflect society and now Vegas is low brow and Wall Street is peopled with suits. If finance has been reduced to gambling, it just means that class boundaries are being broken down. In the cases listed, broken down by technology.
whatgoodisaroad 5y ago
Weird how finance suddenly becomes "gambling" when a bunch of regular people join the table.
- LargeWu 5y ago
  If you think about the difference between "investing" and "speculating" (ie. gambling), the latter involves no actual value creation, just transfer of assets based on outcomes the speculating party has no influence over. Crypto, meme stocks, penny stocks...just pure speculation. To be fair, hedge funds and HFT are also mostly speculation, just a more sophisticated version.
  - dehrmann 5y ago
    HFT is usually arbitrage, almost the opposite of speculation.
    - LargeWu 5y ago
      Fair enough, although one can make a reasonable argument that arbitrage is not a value creating activity either, if the market is already reasonably efficient.
      - Tenoke 5y ago
        If the market is reasonably efficient there'd be no room for arbitrage in the first place.
        aabhay 5y ago
        That’s why it feels so unequal. The arbitrage doesn’t come from market inefficiency, it comes from regulation/government, ingrained asymmetries, and consumer ‘dumb’ money
        RhodoGSA 5y ago
real-dino 5y ago
GME is actually quite a solid gamble, and could lead to what people are referring to as the MOASS. https://iamnotafinancialadvisor.com/DD/GME/og/GMEv14.pdf https://iamnotafinancialadvisor.com/DD/GME/og/GMEv14.pdf It hasn't alreadys been like this, but everything has been turned into overdrive. Where people were talking about 10% returns on investments, people are getting 1000% returns on investment. There is some bubble going on at the moment with the repo-market, hyper inflatation and what is being coined 'the everything short', but it's all too crazy to talk about seriously. Money has always been valuable, but will becoming a millionaire in a years time be the same as it is now? It's literally a field in a database, and a sheet of paper from the future could get you there! The stock market and crypto is so similar to gambling too it really pushes those triggers in the brain. Buy and HOLD does run counter to this though, but still, we are all still dreaming of benefiting from the chaos. I've been full on GME for a while now, and back in January, the shorts did not cover. Not even by a long shot. Ask me anything about GME and I will try to answer, but it does feel like some kind of echo chamber at the moment, even though I am participating, but then again everything is so crazy at the moment regardless, it might just be true.
- alecst 5y ago
  I'll take you up on that. What's your thoughts on how many GME investors are retail vs. institutional? Any idea on what the breakdown is like?
  - real-dino 5y ago
    Honestly, no-one knows, except maybe Citadel and brokers who run via 'payment for order flow' There have been estimates using subscriber counts on subreddits and an average value which feels like complete BS, and there are some brokers who broadcast how many they own. However, institutional ownership for the top 10 is 192% http://finra-markets.morningstar.com/MarketData/EquityOptions/detail.jsp?query=126%3A0P000002CH&sdkVersion=2.59.0 http://finra-markets.morningstar.com/MarketData/EquityOption... Even Finra don't seem to know properly, the sums don't add up.
- kart23 5y ago
  Why doesn't gamestop just sell back a ton of stock? They repurchased >100 Million shares in 2019 for dirt cheap. I saw the news about the share selloff, but a paltry 3.5M shares isn't what I was expecting, and thats part of the reason I was extremely skeptical about GME, why wouldn't the company simply sell directly to the shorts so that they could cover? https://ycharts.com/companies/GME/stock_buyback https://ycharts.com/companies/GME/stock_buyback
Al-Khwarizmi 5y ago
Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. When brokers did it it was OK, when algorithms did it in milliseconds (when common people can only operate with delays of hours and days, and with deterrent fees) it was OK, but now that there are platforms that allow more or less anyone to speculate, we start publishing moralistic pieces in the media and calling it "gambling"? Yeah, I'm sure people are going to listen... next time they want to promote values based on work and effort, maybe they should try not to create a system where workers are punished and gamblers are rewarded. PS: I don't even speculate myself, at most I buy and hold, but I'm disgusted by the level of hypocrisy of those who suddenly started saying that speculating was bad when common people started doing it. It almost makes me want to speculate just to do the opposite of what they say.
- the_local_host 5y ago
  Professionals don't gamble with their own money. They gamble with other people's money, and keep a percentage if they win. "Common people" are entering the game without the most important piece of equipment they need, namely a pile of money that doesn't come out of their own pocket if they lose.
  - alex_anglin 5y ago
    Thanks to fees, professionals can also keep a portion if they loose. If they under-perform, they also win as long as their clients aren't calling them on it.
- jayd16 5y ago
  >Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices...but putting that aside... I think the emphasis is more about how there's no other game in town that can compete, not that gambling is new. Interest rates are so low that there isn't a simple/safe investment entity to pull out a reliable 10%. We're all stuck gambling whether we want to or not.
pyrrhotech 5y ago
There's only one entity to blame for this mess of a bubble, the US federal reserve. It started with Greenspan, and it's gotten worse with every subsequent chairperson
zoshi 5y ago
All trade is speculative. Prices are a result of speculation between buyers and sellers.
nickthemagicman 5y ago
Value is already decoupled from money in the entire economy. When inflation is 3% YOY, but wages don't increase. If money was an indicator of value wages would track with inflation. There's no objective measure of value anymore and most jobs are more or less bullshit jobs. https://en.wikipedia.org/wiki/Bullshit_Jobs https://en.wikipedia.org/wiki/Bullshit_Jobs
- onlyrealcuzzo 5y ago
  Median household income is up to $69k now. In 1980, it was $17k. Wages are up 3.7x since 1980. REAL median household income is up 32% [1]. And this is with labor force participation absolutely plummeting [2]. Less people are working, and yet households are bringing in 32% more. [1] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [2] https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART
  - 52-6F-62 5y ago
    That isn't really meaningful on its own, is it? I'm sure the parent comment actually meant in the context of how it income has increased in relation to cost of living (though they didn't indicate that explicitly) eg, https://www.investopedia.com/ask/answers/101314/what-does-current-cost-living-compare-20-years-ago.asp https://www.investopedia.com/ask/answers/101314/what-does-cu...
    - onlyrealcuzzo 5y ago
      The Fed's REAL income measures this. It doesn't capture that debt markets - things like housing, cars, and tuition - have gone up. This is because the debt service payments haven't gone up, because they've lowered the interest rate and made it cheaper for people to pay for those things with debt (like most people do). So, sure, if you live in a world where debt doesn't exist, and all you care about is purchasing homes in cash - then the Fed's measure doesn't work for you. For everyone else, it does.
      - 5y ago
99_00 5y ago
This article is the a sign of a speculative mania peaking. There is a lot of liquidity. But liquidity has a bad habit of disappearing when margin calls are made. Don't get me wrong, I'm gambling too. The choice is to join the speculation party or sit out because there is no value to buy. And I'm joining in, but my eye is on the exit.
JackPoach 5y ago
And this never ends well.
Animats 5y ago
The NFT thing is interesting. Some things to note: - It's inherent in NFTs that they are thinly traded. If each thing is unique, there is no overall market price. Price quotes are anecdotal. There are "indexes" which list prices for transactions, but that doesn't mean you can sell at that price. - Liquidity is very limited. This works like collectables. Try to unload a million dollars worth of Beanie Babies. It may pay off as a way to monetize fame. Taylor Swift, who has a very good understanding of how to monetize followers, may bring it off. Mark Cuban and his basketball team are doing fine with it. If you have fans, this works. If you're just a fan, well, you're the sucker. - The NFT industry is trying to become like the diamond industry. Diamonds are mostly hype. Diamond manufacturing is working so well that you can buy gemstones on Alibaba. The diamond industry works to get gemstones into "safe hands", that is, one person with some items of jewelry. A hedge fund with a vault full of stones ready to sell, constantly watching prices, destabilizes the market. NFTs are more like the hedge fund case. - There's a long history of bulk manufacture of collectables. Beanie Babies. Cabbage Patch dolls. Franklin Mint castings. Commemorative plates. Currier and Ives prints from the 19th century. All of which can be purchased on eBay for low, low prices. There are people in eBay still trying to unload Jar Jar Binks merchandise. The stuff produced in quantity does not appreciate in value. - The NFT bubble may already have popped.[1] Prices, such as they are, are down 70% since February 2021. - The real reason for NFTs is that, not being commodities, they are not regulated by the CFTC, and not being securities, they are not regulated by the SEC. So unlimited hype is legal. [1] https://www.cnn.com/2021/04/05/investing/nft-prices-falling/index.html https://www.cnn.com/2021/04/05/investing/nft-prices-falling/...
- deleted 5y ago
  [deleted]
- heartbeats 5y ago
  The Commodity Futures Trading Commission does not regulate commodities, only commodity futures (and swaps, and options, and other derivatives).
  - Animats 5y ago
    That is not entirely correct.[1] The CFTC has authority to investigate frauds which affect commodity markets in which futures trading exists, and they have used this with regard to Bitcoin. "Examples of Prohibited Activities: Price manipulation of a virtual currency traded in interstate commerce.", writes the CFTC. One could, for example, trade some art object at a grossly inflated price between two parties that are secretly cooperating. That's a "wash sale". Do that in a US-traded stock, and the SEC will go after you. Do that in a US-traded commodity, and the CFTC will go after you. Do that in a NFC, and you're probably legal. This is very convenient. [1] https://www.cftc.gov/sites/default/files/idc/groups/public/%40customerprotection/documents/file/labcftc_primercurrencies100417.pdf https://www.cftc.gov/sites/default/files/idc/groups/public/%...
teh_infallible 5y ago
“ last year the U.S. government pulled 13 million people out of poverty with a few million strokes of the autopens” I am pretty sure the government forced more people into poverty with the lockdowns. To treat the stimulus checks as some mind of boon when people were forced to close productive businesses seems intellectually dishonest at best.
giantg2 5y ago
Gambling is great, as long as I win.
Lammy 5y ago
Bold of them to put Groyper in the hero image
geitir 5y ago
I don't know where all of this is going. But I can tell you it won't be good
6gvONxR4sf7o 5y ago
> In an era defined by slow growth and flatlined productivity (if not outright economic stagnation) and marked by widening inequality and underemployment, “money” feels at once deadly serious and stupidly silly. Seen from this viewpoint, the pandemic economy isn’t an anomaly but a heightened version of one possible future: a world where money is abundant but safe long-term investments are rare and where “getting rich quick” is less an American pathology and more the best bet for a stable life — assuming you think such a thing is possible with ecological catastrophe looming. If you’re supposed to buy stocks as a bet on the future condition of a business, why would you buy stock in a brick-and-mortar retail video-game chain unless you didn’t really believe in any future at all? How different is the stock market from betting on soccer? What’s the point of investing safely when Elon Musk can create and destroy millions of dollars of value with a couple of tweets? This paragraph with its doom and gloom seems apt in that it leaves out the aggregate stock market. In parallel with this, there’s a story of passive investment which is booming. Why take risks when you can put your money in here and just watch it go up reliably? The cynic in me contrasts those stories by looking at the doom and gloom one and pinpointing the line “safe long-term investments are rare” and rolling my eyes, wondering: if a safe broad market index gaining 10% per year for a few generations now isn’t enough, what is? Is it just not rich enough or quick enough? The curmudgeon on me really comes out now. I love the article, but not the “woe is us” aspect. (I especially loved the description of MMT as Keynesian economics as told by Morpheus)
- thewarrior 5y ago
  It’s not enough to do things like buy a house.
- meowkit 5y ago
  Both points of view here are off imo. Growth based on real productivity is slowing (stagnate even), but it should be noted maybe growth is moving linearly, but we expect non-linear improvements (100 -> 110 is 10% growth, 1000 -> 1010 is 1% growth). As you point out, growth via financial instruments is all fine and dandy. Better than ever even. But the stock market is a model of the economy, but it doesn’t represent individual experiences. But distribution in ownership of capital very much follows a power law. So while people in the market are making great paper gains, there are many who are left out. We are growing, but relative inequality is growing faster. Psychologically, people can handle absolute differences in comparisons of wealth, but relative ones are what cause much of the views and behaviors we see today. Such as “woe is us”. Of course this is all my synthetic anecdotal speculation.
WalterBright 5y ago
> we simply use the computer to mark up the size of the account that they have with the Fed That's been going on since 1914 when the US switched to a fiat money banking system.
- chipotle69 5y ago
  OK!
WalterBright 5y ago
If you're investing in NFTs, art, collectibles, etc. - prepare to be disappointed.
- throw_this_one 5y ago
  They're so worthless lol. The idea legit makes no sense. Nobody cares about owning unique digital goods. Digital by nature is not unique.
splithalf 5y ago
“for many of us, money is only experienced through our phones” I’m calling bullshit. Where we live, the air we breathe, who we know, all we see and experience in our culture is mediated by how much money we have. Money defines our existence. What the author is noticing is a change in our attitude towards risk. After the past year people have hit the saturation point for fear.
andrepd 5y ago
> If you were going to choose a moment when money became unstuck in the popular imagination — when it stopped being entirely serious and started being, at least a little, funny — you could do worse than an interview that then–Federal Reserve chair Ben Bernanke gave to 60 Minutes in 2009. Asked if the money the Fed was injecting into banks in the wake of the global financial crisis was “taxpayer money,” Bernanke shook his head and grinned sheepishly. “To lend to a bank,” he said, “we simply use the computer to mark up the size of the account that they have with the Fed.” > given the global financial crisis and the Fed’s “using a computer to mark up the size of the account,” money had been reanimated from the suspension of settled policy consensus. Was this the moment when the author discovered fractional/no reserve banking? This and other things he says betray a lack of expertise about finance and economics (not to mention history). How is he writing a money column then? > Maybe the Marxists would finally figure out how to abolish the value form? (Don’t hold your breath.) ????
lucasnortj 5y ago
cryptos are blockchain are absolute trash, just like most of wall street.
greengrom 5y ago
In my opinion, gambling is the most addictive game of all those that I have met on my way. I even have a list of all these games and in the first place I have an online casino. You visit this source https://www.888casino.ro/ https://www.888casino.ro/ . This is just the most interesting thing with which you not only spend time, but also have a benefit from it in the form of finance.

264 points by known 5y ago

> Maybe the question we should have been texting our financially literate friends wasn’t “What is an NFT?” but “What is money now?” Potentially interesting piece on the subject, but not particularly deep or insightful.

cjf4 5y ago

>for many of us, money is only experienced through our phones, as a number on a screen. You pay your rent with one app, you buy put options with another. The number goes up, it goes down, it lives in the little portal we hold in our hands. And decades ago it was a number written down on a little piece of paper, and before that it was little pieces of “precious” metal locked away somewhere. At least nowadays amateurs have a better chance to be literate.

newsclues 5y ago
I still have gold and prefer cash for purchasing daily items. The money seems real, swiping cards or phone financial transfers lack a physical reality and my brain has less friction with digital transfers, thus I avoid them out of financial prudence.
- jp555 5y ago
  Have you noticed how your cash is buying fewer items than it did a ~year ago? My daily item costs are WAY up, which is really just saying the value of the cash is WAY down.
  - newsclues 5y ago
    Yes, inflation is real, and since I’m on a fixed income I noticed that despite cutting out luxuries and limiting meat purchases, my groovy bill went up and I still lost weight.
    - toss1 5y ago
      Insufficient data - supports several modeks. If you are trying to lose weight, shifting away from sugary & processed foods & meat to high-quality fresh fruits, vegetables, nuts, etc. can definitely increase your grocery bill while reducing your weight in a very healthy way. Food bill may go down by going directly to farmers, but travel & fetching costs increase. Or, it could be an unhealthy shift towards more processed foods, costing more in factory work & transport, and you are seeing real inflation. So, insufficient data to indicate inflation or not.
      - newsclues 5y ago
        Wasn’t trying to lose weight and my diet remained essentially the same other than modification due to cost (mainly less meat). I had a fixed grocery budget, and over months, I lost weight due to a caloric deficit. Literally I bought less food with the same money and the result was just over a pound a month lost .
        toss1 5y ago
        I'm sorry to hear that you are having such difficulties; I hope things improve for you soon. That is the data we need to confirm that you're seeing inflation. Curious where you are located that you are seeing these numbers?
        newsclues 5y ago
        It’s ok, I might be poor but I’m pretty happy despite the disability. I live in a city an hour away from Toronto, Canada.
  - jfengel 5y ago
    Honestly, no, I haven't. My groceries are the same. My electric bill is stable. The watch I'm replacing today is the same price today as ten years ago when I got its predecessor. I don't know if it's because I buy different things from you, or if I live in a different place from you, or what. But my andecdote is that no, I'm not paying more for stuff than a year ago.
    - newsclues 5y ago
      Odd that some people don’t notice things like this... https://en.m.wikipedia.org/wiki/Shrinkflation https://en.m.wikipedia.org/wiki/Shrinkflation Do you actually track spending or just don’t notice?
      - jfengel 5y ago
        A gallon of milk is still a gallon of milk. A pound of carrots is still a pound of carrots. It sounds as if your basket of goods is different from mine. Most of the examples on that Wikipedia page are sugary foods, which I just don't buy a lot of.
        newsclues 5y ago
        I used to buy 3lbs of carrots, but now the bags are 2lbs but cost the same.
        jfengel 5y ago
        Here, two pounds of carrots are $1.79, just as they have been for as long as I can remember. I don't have a spreadsheet, but I know what carrots cost. They certainly haven't shot up by 50%.
      - gruez 5y ago
        >Do you actually track spending or just don’t notice? Do you? The BLS does, and their inflation numbers for food is 3.5% YOY. [1] https://www.bls.gov/cpi/ https://www.bls.gov/cpi/
legulere 5y ago
It's the other way around. First there was personal debt, then impersonal money. In the beginning you would just lend stuff from other people and give it back, or with consumables give something back of similar worth. Precious metal was pretty rarely used, as its main benefit is that you need almost no common trust relationship.
- imtringued 5y ago
  Yeah this is true, people didn't necessarily "barter" back in the day. Traders and merchants probably did because they wanted immediate payment, but within a trustworthy community you simply record or memorize what you did and demand the other side to pay you back in the future. An oversimplified hunter and gatherer society would just let the hunters give meat to the gatherers, assuming that they will one day be paid back with gathered vegetables or fruit.
- jasonwatkinspdx 5y ago
  I see you've read Graeber. Great book and changed my views on a lot of things, particularly how much of our "common sense" understanding/education on topics relies on "just so" assumptions made by some aristocratic scholar a couple centuries ago. Anyhow, to explain for the forum: Graeber's book goes through the evidence we know of from the places were money first appeared. In essence, debt came first, and money was a later innovation. Very interestingly temple records using tally mark schemes may have been what lead to the development of cuneiform writing in the levant. A similar debt first pattern appears in other places, at other times too. Coinage, particularly metal coins, came about much later as a clever hack by rulers to simplify raising and maintaining a large army. Pass a law demanding all citizens pay you X coins each year. Pay your soldiers in coins. Suddenly your society is figuring out how to feed and house soldiers, without you haven't to build a command hierarchy to run it all directly. I can't recommend this book enough. It's dense in parts because he goes into a lot of detail that fully justifies what he's saying. Still, completely fascinating to learn much of the way we think of economic history is mythology. It's also a great lens for understanding what's happening now with cryptocurrencies.
  - nostrademons 5y ago

jp555 5y ago

Zero mention of the recent unprecedented fiat currency printing we've seen, nor the fact that every time since the Tang Dynasty when we have done this, it has led to very troubling times 12-18 months later. Everyone is gambling even if they dont know Crypto exists.

tim333 5y ago
Ha. I was skeptical about the unprecedented bit but googling seems to indicate you are correct, at least for the US https://mobile.twitter.com/fgmr/status/1355105955982282752 https://mobile.twitter.com/fgmr/status/1355105955982282752
- quickthrowman 5y ago
  You need to look at velocity of money in conjunction with the money supply to get the true picture: https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V The tweet you linked leaves out half the story, which is that money velocity is down greatly, thus the increase in money supply hasn’t caused rapid inflation. https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us https://www.stlouisfed.org/on-the-economy/2014/september/wha...
  - tim333 5y ago
    Yeah though what happens when people go out again?
    - imtringued 5y ago
      Hopefully people spend their money and corporations invest their money to meet the demand.
    - mariojv 5y ago
      The Fed sells its assets to decrease the USD supply and raises rates. My best guess is a short period of higher inflation and then a correction, but who knows.

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tcbawo 5y ago

Money is stored wealth, the ability to buy goods and services in the future. The problem seems to be that we live in a time of societal upheaval. The future of stored wealth becomes cloudier and more uncertain the further you go out in time. So, what is the best place to store wealth? Will my wealth be eroded by inflation? Will the companies I invest in become obsolete by technology or market-manipulating nation states? Will regulation changes suddenly damage the value of my investment? Will changes in tax regime eat my earnings? Will corruption and crime take my wealth? Clearly, some people are getting out of hand with speculation and credit (a suitcase full of lottery tickets is not diversification). As Warren Buffett says, when the tide goes out you learn who's been swimming naked. The economy has its ups and downs and speculative fervor ebbs and flows. There are no certainties, but IMHO all you can do is stay diversified and maximize the probability of your success.

LudwigNagasena 5y ago
Assets are less ephemeral stored wealth. Money facilitates transactions, but it is not a factor of production, it is not a consumption good, and it is not backed up by any of these things, so it is a very nebulous type of wealth.
- galaxyLogic 5y ago
  I would agree with a previous poster that money is a debt obligation. If you have "money" in bank, what does it mean? It means the bank has a debt-obligation to pay you back with other type of debt-obligation, the government sanctioned cash. Money is definitely an interesting concept. I'm not sure I fully understand it. But I use it.
  - LudwigNagasena 5y ago
    I don't get how it contradicts what I've said.
paulpauper 5y ago
My answer to these questions and other unknowns about the fed, fiscal policy, America and its role in the world, the economy etc. is that the future will be a lot like the present, but more so. So extent the current trends into the future. Sure, things sometimes change, even dramatically such as the fall of the USSR or 911, but we are living in a steady-state world in which the underling trends do not change. Inflation will remain low in spite of printing, America remain on top economically and militaristically. Stock market keep going up. US dollar remain strong.

paulpauper 5y ago

How many people are actually getting rich with NFTs besides people who who are already celebrities/famous? Not many. The market is flooded now with NTFs. The overwhelming majority of listings do not sell or sell for little. A better way to make money is with 3x ETFs using options strategies, which I am working on. The performance of some of the major 3x funds such as TECL, FNGU, and TQQQ surpass even Bitcoin

second--shift 5y ago
The contango drag on 3x ETFs is hilarious - good luck on your endeavors sir, I've got futures contracts for sale for your fund manager to buy.
- paulpauper 5y ago
  no it's not. it is actually positive due to the dividends . a 3x funds pays 3x the dividends . the borrow cost is only 1%, versus 2% dividend
  - second--shift 5y ago
    > a 3x funds pays 3x the dividends what? which funds pay 3x dividends? All of the leveraged ETFs i'm familiar with replicate the 3x exposure with futures contracts, which do not pay dividends. the drag exists when these futures contracts are in contango, where the back-month is more expensive than the front-month. The leveraged ETF pays that drag every time the fund rolls to the next futures. Nothing to do with borrowing costs. This is also the reason why USO trends down long term, regardless of the spot price of oil.
    - paulpauper 5y ago
      it would only be in contago if there is borrow and storage cost. This applies to commodities. But stocks pay dividends, so this can cease backwardation if interest rates are low relative to dividends.

paulpauper 5y ago

>If crisis had opened the door to a new way of thinking about money, the checks closed the door on the old: Gone was an understanding of money as a scarce, quasi-natural resource to be managed disinterestedly by apolitical experts. The question was: What was replacing it? Would MMT’s chartalist view of money as a tool of state power prevail? (The undeniable success of the pandemic cash drop seemed to be a point in its favor.) Or could the crypto-millenarians’ anarchic vision of money backed by cybermetal take the upper hand? (Cryptocurrency had a boom year, perhaps driven by the existential fear that accompanies a global pandemic.) Maybe the Marxists would finally figure out how to abolish the value form? (Don’t hold your breath.) This is bollocks. Money will always be scarce, by design. Look at all the ppl struggling to get by even in spite of these stimulus checks, who lost their jobs or businesses due to Covid and still have not be rehired. The money that the fed is creating is not the type of money that individuals exchange with, which also explains the low inflation. Rather, what everyone got wrong is, the experts, pundits, etc. in 2008, and now in 2020-2021 thought that all of this printing would cause inflation to surge, but CPI just refuses to budge much. This is due to many factors, such as America's growing economic dominance, which has widened since 2008 and even more so since Covid.

makomk 5y ago
Remember, CPI is just the average of a particular basket of goods weighted in a particular way - it doesn't necessarily represent the real levels of inflation people will see. I know for example that here in the UK, the low figures were the result of price increases in things people were actually buying like food, computers, cars, holiday stays when we weren't locked down, etc being counterbalanced by lower increases or even decreases in things they weren't buying as much anymore like clothes. (Our better news sources went out their way to explain this.) So the average person would have seen rather higher inflation than the CPI and RPI would suggest.
- gruez 5y ago
  >I know for example that here in the UK, the low figures were the result of price increases in things people were actually buying like food, computers, cars, holiday stays when we weren't locked down, etc being counterbalanced by lower increases or even decreases in things they weren't buying as much anymore like clothes. Source? Maybe uk is different but that claim isn't consistent with the CPI figures coming from the BLS. In your list of things food makes up the biggest part, and it's only up 3.5% YOY. Computers is actually down 3.2%. New cars/trucks is only up 1.5%. Used cars/trucks is up 9.4%, but that only makes up 2.71% of the basket. https://www.bls.gov/cpi/tables/supplemental-files/cpi-u-202103.xlsx https://www.bls.gov/cpi/tables/supplemental-files/cpi-u-2021...

ppod 5y ago

"I used to be with it, but then they changed what it was. Now what I'm with isn't it, and what's it seems weird and scary to me, and it'll happen to you, too" -Abe Simpson

TRcontrarian 5y ago

Is it better to live in a world where the future is unknown, and the best we can do is guess where value will be, or one where the future is known, and the prices of all investments are stable and already priced at their exact values? In which world is optimism and class mobility possible?

beiller 5y ago
Excellent point. And to drive a steak further into this idea - ironically gambling is the one where all the prices / chance / rewards are absolutely known up front and calculable. I guess that's what sets wall st. apart from gambling in a casino.
deleted 5y ago
[deleted]
sixstringtheory 5y ago
Excellent question that reminds me of two anecdotes: 1) In my CS ethics course, we had a writing prompt asking whether, assuming perfect capability, it would be better to replace sports referees with computers 2) I wrote a cheat program for a word game my dad liked playing. Super proud of my accomplishment, I showed it to him, and he was impressed for a minute before stating the game wasn’t fun that way (also have an earlier version of this memory involving a Sega Genesis Game Genie)

ArtWomb 5y ago

Skip this NYMag pablum. Read Dean Kissick's Downward Spiral: Popular Things (on NFTs and the pervasiveness of mundane art) instead. "We live in an algorithmically generated culture, and we are the algorithms" ;) https://www.spikeartmagazine.com/articles/downward-spiral-popular-things-dean-kissick https://www.spikeartmagazine.com/articles/downward-spiral-po...

rideontime 5y ago
I hope your dismissive tone doesn't cause people to skip the column you linked. I appreciate seeing a criticism of NFTs (and meme "art" in general) that isn't solely about environmental impact. "Post-death culture" is a term that's going to stick with me.

tim333 5y ago

>Welcome to the non-fungible, memeified, cryptodenominated, degenerate future of finance. I think a lot of that is the now of finance rather than the future. We'll look back on meme stonks like we do on the pets.coms and webvans.

wayoutthere 5y ago

The “woe is me, how do I know how to invest?” drivel in this article is solved by a sufficiently diversified portfolio. The article even admits that these shenanigans have no impact on the larger market — so invest there. If you want to take on more risk, great — but with great risk comes lots of market manipulation. The wider public is now learning what every MBA is taught in investment theory classes: investing is a racket where the house always wins. Either you play long positions in a diversified portfolio or you enter the water with the sharks. If you’re not sitting on a billion dollars, you’re at an extreme disadvantage in the options market. And the biggest risk in corporate America today is negative PR. The sharks you’re playing against have the connections to get insider trading info, the sophistication to hide it, and the influence to get away with it. Retail investors are at their mercy. I guarantee Elon Musk is making money moves off his tweets, he’s just sophisticated enough to hide it in a trust. And he’s not the only one; hedge funds have been known to actively seek out scandals to generate negative PR, then trade on that info. The vibe on Reddit right now is “the system is broken and they’re cheating like crazy”. But that’s no revelation, this kind of crap has been completely normalized because the SEC can’t stop it (the people working there are largely the ones who couldn’t hack it on Wall Street). I fully expect that Wall Street will end up coming out on top in the end because the retail investors don’t quite understand the role of market makers and the level of coordination done with the investment side of things. Yeah, it’s flagrantly illegal, but if you get away with it (as they almost always do because the SEC can’t prove anything) you’re going to be rich.

freeone3000 5y ago
>the system is broken and they’re cheating like crazy You can still make money off that -- the stock market is baccarat, not poker, and you can make money off betting on whoever cheats best, or fastest, or whose manipulation you think will win. The strategy is difficult but not impossible.
jfengel 5y ago
I have begun to worry that broad indexes are themselves becoming a problem. As that advice seeps out, a lot of people are buying "the market". Which has long been good sensible advice, because the market as a whole genuinely produces wealth, but it's not inexhaustible. The S&P 500 P/E ratio is up over 40, a number it has seen only twice before and both immediately before crashes. P/E is an imperfect measure, especially during a genuine crisis that results in fewer goods being produced, but the idea that "it will take 40 years to produce enough profits to return your money" is a little scary. The pandemic is certainly contributing, but it's been heading this direction since well before the pandemic. The broad market is still probably your best bet long term, and even if now isn't a great time we all know that timing doesn't really work. Stick it in a broad index and forget about it remains the best advice. But that advice eventually undercuts itself, if everybody invests in every company regardless of its merits just because it's listed. The listing itself is becoming a skew.

diamondhandle 5y ago

Our job in life is to engage in value creation. When money is decoupled from value creation, your long-term bet is that it will lose its value, as value creation is what actually matters in the “real” world. This is also why “crypto” (the asset class, not technology) is so corrosive, because it makes people who have done approximately nothing to create value in society, but who’ve enjoyed a massive boost in monetary value, think they’ve “won” or accomplished something real. This doesn’t work long term, and will eventually collapse on itself like all false religions. If you’re planning to be alive in 20 years, you’re better off making sure you have a work ethic and skills that generate value, than obsessing over any sort of wealth-hoarding instrument at all, because it is the only true protection against change.

benjohnson 5y ago
Your great advices pays dividends much further down the road too - focusing on work and creating value is also good for your children. Sadly, there’s been many children that took decades to get out of their entitled mindset caused by easy money from their parents or the government.
- the_gipsy 5y ago
  Culture is the best inheritance you can give your children.
mam2 5y ago
There is no justice in the world. You seem to be strugglinh with this idea :(
Mattasher 5y ago
I agree with your last statement, but I think you are mixing cause and effect. Crypto is exploding because our system is already corroded. Starting with the creation of the Fed, and tracing through endless money printing and complex financial instruments which let well-connected companies and politicians create paper wealth out of nothing, we've decoupled money from value. Savings pay no interest, manual labor doesn't scale, but rent seeking and financial games get many people riches in no time. What are the incentives in this kind of a system, and where are the safe harbors for storing value? And if you can't in value creation, your safest bet may be to gamble.

RGamma 5y ago

Welcome to the age of meaninglessness. Why should tech tycoons and .1 percenters be the only ones living with their head in the clouds?

realce 5y ago
Giving you today another version of what you had yesterday. https://www.youtube.com/watch?v=MHFrhIAj0ME https://www.youtube.com/watch?v=MHFrhIAj0ME

drewcoo 5y ago

The difference between finance and gambling is largely class. The things we call finance and gambling today both trace back to gambling/insurance in Venice a few centuries ago. They've diverged over time to reflect society and now Vegas is low brow and Wall Street is peopled with suits. If finance has been reduced to gambling, it just means that class boundaries are being broken down. In the cases listed, broken down by technology.

whatgoodisaroad 5y ago

Weird how finance suddenly becomes "gambling" when a bunch of regular people join the table.

LargeWu 5y ago
If you think about the difference between "investing" and "speculating" (ie. gambling), the latter involves no actual value creation, just transfer of assets based on outcomes the speculating party has no influence over. Crypto, meme stocks, penny stocks...just pure speculation. To be fair, hedge funds and HFT are also mostly speculation, just a more sophisticated version.
- dehrmann 5y ago
  HFT is usually arbitrage, almost the opposite of speculation.
  - LargeWu 5y ago
    Fair enough, although one can make a reasonable argument that arbitrage is not a value creating activity either, if the market is already reasonably efficient.
    - Tenoke 5y ago
      If the market is reasonably efficient there'd be no room for arbitrage in the first place.
      - aabhay 5y ago
        That’s why it feels so unequal. The arbitrage doesn’t come from market inefficiency, it comes from regulation/government, ingrained asymmetries, and consumer ‘dumb’ money
        RhodoGSA 5y ago

real-dino 5y ago

GME is actually quite a solid gamble, and could lead to what people are referring to as the MOASS. https://iamnotafinancialadvisor.com/DD/GME/og/GMEv14.pdf https://iamnotafinancialadvisor.com/DD/GME/og/GMEv14.pdf It hasn't alreadys been like this, but everything has been turned into overdrive. Where people were talking about 10% returns on investments, people are getting 1000% returns on investment. There is some bubble going on at the moment with the repo-market, hyper inflatation and what is being coined 'the everything short', but it's all too crazy to talk about seriously. Money has always been valuable, but will becoming a millionaire in a years time be the same as it is now? It's literally a field in a database, and a sheet of paper from the future could get you there! The stock market and crypto is so similar to gambling too it really pushes those triggers in the brain. Buy and HOLD does run counter to this though, but still, we are all still dreaming of benefiting from the chaos. I've been full on GME for a while now, and back in January, the shorts did not cover. Not even by a long shot. Ask me anything about GME and I will try to answer, but it does feel like some kind of echo chamber at the moment, even though I am participating, but then again everything is so crazy at the moment regardless, it might just be true.

alecst 5y ago
I'll take you up on that. What's your thoughts on how many GME investors are retail vs. institutional? Any idea on what the breakdown is like?
- real-dino 5y ago
  Honestly, no-one knows, except maybe Citadel and brokers who run via 'payment for order flow' There have been estimates using subscriber counts on subreddits and an average value which feels like complete BS, and there are some brokers who broadcast how many they own. However, institutional ownership for the top 10 is 192% http://finra-markets.morningstar.com/MarketData/EquityOptions/detail.jsp?query=126%3A0P000002CH&sdkVersion=2.59.0 http://finra-markets.morningstar.com/MarketData/EquityOption... Even Finra don't seem to know properly, the sums don't add up.
kart23 5y ago
Why doesn't gamestop just sell back a ton of stock? They repurchased >100 Million shares in 2019 for dirt cheap. I saw the news about the share selloff, but a paltry 3.5M shares isn't what I was expecting, and thats part of the reason I was extremely skeptical about GME, why wouldn't the company simply sell directly to the shorts so that they could cover? https://ycharts.com/companies/GME/stock_buyback https://ycharts.com/companies/GME/stock_buyback

Al-Khwarizmi 5y ago

Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. When brokers did it it was OK, when algorithms did it in milliseconds (when common people can only operate with delays of hours and days, and with deterrent fees) it was OK, but now that there are platforms that allow more or less anyone to speculate, we start publishing moralistic pieces in the media and calling it "gambling"? Yeah, I'm sure people are going to listen... next time they want to promote values based on work and effort, maybe they should try not to create a system where workers are punished and gamblers are rewarded. PS: I don't even speculate myself, at most I buy and hold, but I'm disgusted by the level of hypocrisy of those who suddenly started saying that speculating was bad when common people started doing it. It almost makes me want to speculate just to do the opposite of what they say.

the_local_host 5y ago
Professionals don't gamble with their own money. They gamble with other people's money, and keep a percentage if they win. "Common people" are entering the game without the most important piece of equipment they need, namely a pile of money that doesn't come out of their own pocket if they lose.
- alex_anglin 5y ago
  Thanks to fees, professionals can also keep a portion if they loose. If they under-perform, they also win as long as their clients aren't calling them on it.
jayd16 5y ago
>Financial elites have been gambling for decades. They seem to be really upset that the plebs now can also do it. I really don't understand this sentiment, as if a professional gambler would not gladly gamble with novices...but putting that aside... I think the emphasis is more about how there's no other game in town that can compete, not that gambling is new. Interest rates are so low that there isn't a simple/safe investment entity to pull out a reliable 10%. We're all stuck gambling whether we want to or not.

pyrrhotech 5y ago

There's only one entity to blame for this mess of a bubble, the US federal reserve. It started with Greenspan, and it's gotten worse with every subsequent chairperson

zoshi 5y ago

All trade is speculative. Prices are a result of speculation between buyers and sellers.

nickthemagicman 5y ago

Value is already decoupled from money in the entire economy. When inflation is 3% YOY, but wages don't increase. If money was an indicator of value wages would track with inflation. There's no objective measure of value anymore and most jobs are more or less bullshit jobs. https://en.wikipedia.org/wiki/Bullshit_Jobs https://en.wikipedia.org/wiki/Bullshit_Jobs

onlyrealcuzzo 5y ago
Median household income is up to $69k now. In 1980, it was $17k. Wages are up 3.7x since 1980. REAL median household income is up 32% [1]. And this is with labor force participation absolutely plummeting [2]. Less people are working, and yet households are bringing in 32% more. [1] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [2] https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART
- 52-6F-62 5y ago
  That isn't really meaningful on its own, is it? I'm sure the parent comment actually meant in the context of how it income has increased in relation to cost of living (though they didn't indicate that explicitly) eg, https://www.investopedia.com/ask/answers/101314/what-does-current-cost-living-compare-20-years-ago.asp https://www.investopedia.com/ask/answers/101314/what-does-cu...
  - onlyrealcuzzo 5y ago
    The Fed's REAL income measures this. It doesn't capture that debt markets - things like housing, cars, and tuition - have gone up. This is because the debt service payments haven't gone up, because they've lowered the interest rate and made it cheaper for people to pay for those things with debt (like most people do). So, sure, if you live in a world where debt doesn't exist, and all you care about is purchasing homes in cash - then the Fed's measure doesn't work for you. For everyone else, it does.
    - 5y ago

99_00 5y ago

This article is the a sign of a speculative mania peaking. There is a lot of liquidity. But liquidity has a bad habit of disappearing when margin calls are made. Don't get me wrong, I'm gambling too. The choice is to join the speculation party or sit out because there is no value to buy. And I'm joining in, but my eye is on the exit.

JackPoach 5y ago

And this never ends well.

Animats 5y ago

The NFT thing is interesting. Some things to note: - It's inherent in NFTs that they are thinly traded. If each thing is unique, there is no overall market price. Price quotes are anecdotal. There are "indexes" which list prices for transactions, but that doesn't mean you can sell at that price. - Liquidity is very limited. This works like collectables. Try to unload a million dollars worth of Beanie Babies. It may pay off as a way to monetize fame. Taylor Swift, who has a very good understanding of how to monetize followers, may bring it off. Mark Cuban and his basketball team are doing fine with it. If you have fans, this works. If you're just a fan, well, you're the sucker. - The NFT industry is trying to become like the diamond industry. Diamonds are mostly hype. Diamond manufacturing is working so well that you can buy gemstones on Alibaba. The diamond industry works to get gemstones into "safe hands", that is, one person with some items of jewelry. A hedge fund with a vault full of stones ready to sell, constantly watching prices, destabilizes the market. NFTs are more like the hedge fund case. - There's a long history of bulk manufacture of collectables. Beanie Babies. Cabbage Patch dolls. Franklin Mint castings. Commemorative plates. Currier and Ives prints from the 19th century. All of which can be purchased on eBay for low, low prices. There are people in eBay still trying to unload Jar Jar Binks merchandise. The stuff produced in quantity does not appreciate in value. - The NFT bubble may already have popped.[1] Prices, such as they are, are down 70% since February 2021. - The real reason for NFTs is that, not being commodities, they are not regulated by the CFTC, and not being securities, they are not regulated by the SEC. So unlimited hype is legal. [1] https://www.cnn.com/2021/04/05/investing/nft-prices-falling/index.html https://www.cnn.com/2021/04/05/investing/nft-prices-falling/...

deleted 5y ago
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heartbeats 5y ago
The Commodity Futures Trading Commission does not regulate commodities, only commodity futures (and swaps, and options, and other derivatives).
- Animats 5y ago
  That is not entirely correct.[1] The CFTC has authority to investigate frauds which affect commodity markets in which futures trading exists, and they have used this with regard to Bitcoin. "Examples of Prohibited Activities: Price manipulation of a virtual currency traded in interstate commerce.", writes the CFTC. One could, for example, trade some art object at a grossly inflated price between two parties that are secretly cooperating. That's a "wash sale". Do that in a US-traded stock, and the SEC will go after you. Do that in a US-traded commodity, and the CFTC will go after you. Do that in a NFC, and you're probably legal. This is very convenient. [1] https://www.cftc.gov/sites/default/files/idc/groups/public/%40customerprotection/documents/file/labcftc_primercurrencies100417.pdf https://www.cftc.gov/sites/default/files/idc/groups/public/%...

teh_infallible 5y ago

“ last year the U.S. government pulled 13 million people out of poverty with a few million strokes of the autopens” I am pretty sure the government forced more people into poverty with the lockdowns. To treat the stimulus checks as some mind of boon when people were forced to close productive businesses seems intellectually dishonest at best.

giantg2 5y ago

Gambling is great, as long as I win.

Lammy 5y ago

Bold of them to put Groyper in the hero image

geitir 5y ago

I don't know where all of this is going. But I can tell you it won't be good

6gvONxR4sf7o 5y ago

> In an era defined by slow growth and flatlined productivity (if not outright economic stagnation) and marked by widening inequality and underemployment, “money” feels at once deadly serious and stupidly silly. Seen from this viewpoint, the pandemic economy isn’t an anomaly but a heightened version of one possible future: a world where money is abundant but safe long-term investments are rare and where “getting rich quick” is less an American pathology and more the best bet for a stable life — assuming you think such a thing is possible with ecological catastrophe looming. If you’re supposed to buy stocks as a bet on the future condition of a business, why would you buy stock in a brick-and-mortar retail video-game chain unless you didn’t really believe in any future at all? How different is the stock market from betting on soccer? What’s the point of investing safely when Elon Musk can create and destroy millions of dollars of value with a couple of tweets? This paragraph with its doom and gloom seems apt in that it leaves out the aggregate stock market. In parallel with this, there’s a story of passive investment which is booming. Why take risks when you can put your money in here and just watch it go up reliably? The cynic in me contrasts those stories by looking at the doom and gloom one and pinpointing the line “safe long-term investments are rare” and rolling my eyes, wondering: if a safe broad market index gaining 10% per year for a few generations now isn’t enough, what is? Is it just not rich enough or quick enough? The curmudgeon on me really comes out now. I love the article, but not the “woe is us” aspect. (I especially loved the description of MMT as Keynesian economics as told by Morpheus)

thewarrior 5y ago
It’s not enough to do things like buy a house.
meowkit 5y ago
Both points of view here are off imo. Growth based on real productivity is slowing (stagnate even), but it should be noted maybe growth is moving linearly, but we expect non-linear improvements (100 -> 110 is 10% growth, 1000 -> 1010 is 1% growth). As you point out, growth via financial instruments is all fine and dandy. Better than ever even. But the stock market is a model of the economy, but it doesn’t represent individual experiences. But distribution in ownership of capital very much follows a power law. So while people in the market are making great paper gains, there are many who are left out. We are growing, but relative inequality is growing faster. Psychologically, people can handle absolute differences in comparisons of wealth, but relative ones are what cause much of the views and behaviors we see today. Such as “woe is us”. Of course this is all my synthetic anecdotal speculation.

WalterBright 5y ago

> we simply use the computer to mark up the size of the account that they have with the Fed That's been going on since 1914 when the US switched to a fiat money banking system.

chipotle69 5y ago
OK!

WalterBright 5y ago

If you're investing in NFTs, art, collectibles, etc. - prepare to be disappointed.

throw_this_one 5y ago
They're so worthless lol. The idea legit makes no sense. Nobody cares about owning unique digital goods. Digital by nature is not unique.

splithalf 5y ago

“for many of us, money is only experienced through our phones” I’m calling bullshit. Where we live, the air we breathe, who we know, all we see and experience in our culture is mediated by how much money we have. Money defines our existence. What the author is noticing is a change in our attitude towards risk. After the past year people have hit the saturation point for fear.

andrepd 5y ago

> If you were going to choose a moment when money became unstuck in the popular imagination — when it stopped being entirely serious and started being, at least a little, funny — you could do worse than an interview that then–Federal Reserve chair Ben Bernanke gave to 60 Minutes in 2009. Asked if the money the Fed was injecting into banks in the wake of the global financial crisis was “taxpayer money,” Bernanke shook his head and grinned sheepishly. “To lend to a bank,” he said, “we simply use the computer to mark up the size of the account that they have with the Fed.” > given the global financial crisis and the Fed’s “using a computer to mark up the size of the account,” money had been reanimated from the suspension of settled policy consensus. Was this the moment when the author discovered fractional/no reserve banking? This and other things he says betray a lack of expertise about finance and economics (not to mention history). How is he writing a money column then? > Maybe the Marxists would finally figure out how to abolish the value form? (Don’t hold your breath.) ????

lucasnortj 5y ago

cryptos are blockchain are absolute trash, just like most of wall street.

greengrom 5y ago

In my opinion, gambling is the most addictive game of all those that I have met on my way. I even have a list of all these games and in the first place I have an online casino. You visit this source https://www.888casino.ro/ https://www.888casino.ro/ . This is just the most interesting thing with which you not only spend time, but also have a benefit from it in the form of finance.