2 ms·

The banking system IS well researched. STEM fields also have lack of consensus on different topics.

throwaway290 4y ago
Whataboutism. It's not about STEM a lot of which is abstract and of no direct consequence (especially where there is no consensus) but about something that can impact society and livelihoods directly in unknown ways.
orwin 4y ago
I don't think that's exactly what GP meant. The banking system and the way money really works started being researched quite recently (late 2000s). They are some specialists, but a lot of economists (and especially those you can find on TV or read in the generalist press, but not only) are still stuck on the pre-2000 vision where the money banks lend is from deposits.
LukeB42 4y ago
Oh yeah for sure: https://en.wikipedia.org/wiki/Libor https://en.wikipedia.org/wiki/Libor
- JumpCrisscross 4y ago
  How is fraud in a commercial index relevant to our understanding of money and central banking? Did the Enron scandal undermine our understanding of steam turbines?
  - LukeB42 4y ago
    How is the interbank interest rate being defined on the fly in-mente relevant to our understanding of some large central banks determining their total credit supply by punching some numbers into a computer ex nihilo? Seems similar enough to me. That's how.
    - JumpCrisscross 4y ago
      > the interbank interest rate being defined on the fly All prices are determined on the fly, certainly day-to-day ones. Libor wasn’t the interbank rate, it was one commercial offering, albeit a powerful one. The Fed Funds rate always was and now SOFR are transactionally derived, which is fundamentally different from Libor, which was never anything more than a survey.
    - LukeB42 4y ago
      There is a finite amount of energy in this universe and yet here we are at "Practically all prices are determined on the fly". This is mere bankster handwaving in lieu of calculating physically intrinsic value for a sufficient number of commodities.
      - JumpCrisscross 4y ago
        > a finite amount of energy in this universe and yet here we are at "Practically all prices are determined on the fly" This is a silly comparison. Stars don’t model their fusion output. Particles interact on the fly. There is also no model relating entropy to overnight collateralised borrowing rates. > calculating physically intrinsic value for a sufficient number of commodities Interbank funds aren’t a finite commodity.
        LukeB42 4y ago
        >Stars don’t model their fusion output. The sum total positive energy contained in the universe can be calculated and predicted. >Interbank funds aren’t a finite commodity. This statement is obviously false and can run into brick walls in practice. The comparison isn't silly in the slightest. Currencies must be coupled to a finite resource to function; Lest agent A buy all of agent B's gold using practically nothing but chutzpah. That you think the comparison is "silly" shows limited/magical thinking on the subject.
        JumpCrisscross 4y ago
        > statement is obviously false No, it isn’t, though misunderstanding it isn’t even fundamental to the flaw in your thinking. A couple of banks can create and destroy an infinite amount of money among them with no real effect. JPMorgan credits UBS a trillion trillion trillion dollars at the latter’s JPMorgan account at the same time UBS credits JPMorgan at its UBS account, and then they both undo it a moment later. No real effect. Hell, JPMorgan could create the money with no counterbalance so they could look at it how pretty it is for an indefinite amount of time. Same deal. Regulators won’t be happy, but that’s because of the potential effects of UBS trying to buy the Fed’s balance sheet. It’s when the interbank market interacts with broader markets that anything real happens.
  - throwaway290 4y ago
    > Did the Enron scandal undermine our understanding of steam turbines? If you know anything about it, you probably are aware it's accounting related rather than technology related.
    - JumpCrisscross 4y ago
      > it's accounting related rather than technology related Precisely. The accounting scandal has as much to do with the underlying technology as the Libor scandal does with our understanding of the mechanics of banking. Nobody informed walked away from the Libor scandal rethinking the fundamentals of banking in the same way chickens didn’t get bioengineered in response to chicken Libor.

Whataboutism. It's not about STEM a lot of which is abstract and of no direct consequence (especially where there is no consensus) but about something that can impact society and livelihoods directly in unknown ways.

orwin 4y ago

I don't think that's exactly what GP meant. The banking system and the way money really works started being researched quite recently (late 2000s). They are some specialists, but a lot of economists (and especially those you can find on TV or read in the generalist press, but not only) are still stuck on the pre-2000 vision where the money banks lend is from deposits.

LukeB42 4y ago

Oh yeah for sure: https://en.wikipedia.org/wiki/Libor https://en.wikipedia.org/wiki/Libor

JumpCrisscross 4y ago
How is fraud in a commercial index relevant to our understanding of money and central banking? Did the Enron scandal undermine our understanding of steam turbines?
- LukeB42 4y ago
  How is the interbank interest rate being defined on the fly in-mente relevant to our understanding of some large central banks determining their total credit supply by punching some numbers into a computer ex nihilo? Seems similar enough to me. That's how.
  - JumpCrisscross 4y ago
    > the interbank interest rate being defined on the fly All prices are determined on the fly, certainly day-to-day ones. Libor wasn’t the interbank rate, it was one commercial offering, albeit a powerful one. The Fed Funds rate always was and now SOFR are transactionally derived, which is fundamentally different from Libor, which was never anything more than a survey.
  - LukeB42 4y ago
    There is a finite amount of energy in this universe and yet here we are at "Practically all prices are determined on the fly". This is mere bankster handwaving in lieu of calculating physically intrinsic value for a sufficient number of commodities.
    - JumpCrisscross 4y ago
      > a finite amount of energy in this universe and yet here we are at "Practically all prices are determined on the fly" This is a silly comparison. Stars don’t model their fusion output. Particles interact on the fly. There is also no model relating entropy to overnight collateralised borrowing rates. > calculating physically intrinsic value for a sufficient number of commodities Interbank funds aren’t a finite commodity.
      - LukeB42 4y ago
        >Stars don’t model their fusion output. The sum total positive energy contained in the universe can be calculated and predicted. >Interbank funds aren’t a finite commodity. This statement is obviously false and can run into brick walls in practice. The comparison isn't silly in the slightest. Currencies must be coupled to a finite resource to function; Lest agent A buy all of agent B's gold using practically nothing but chutzpah. That you think the comparison is "silly" shows limited/magical thinking on the subject.
        JumpCrisscross 4y ago
        > statement is obviously false No, it isn’t, though misunderstanding it isn’t even fundamental to the flaw in your thinking. A couple of banks can create and destroy an infinite amount of money among them with no real effect. JPMorgan credits UBS a trillion trillion trillion dollars at the latter’s JPMorgan account at the same time UBS credits JPMorgan at its UBS account, and then they both undo it a moment later. No real effect. Hell, JPMorgan could create the money with no counterbalance so they could look at it how pretty it is for an indefinite amount of time. Same deal. Regulators won’t be happy, but that’s because of the potential effects of UBS trying to buy the Fed’s balance sheet. It’s when the interbank market interacts with broader markets that anything real happens.
- throwaway290 4y ago
  > Did the Enron scandal undermine our understanding of steam turbines? If you know anything about it, you probably are aware it's accounting related rather than technology related.
  - JumpCrisscross 4y ago
    > it's accounting related rather than technology related Precisely. The accounting scandal has as much to do with the underlying technology as the Libor scandal does with our understanding of the mechanics of banking. Nobody informed walked away from the Libor scandal rethinking the fundamentals of banking in the same way chickens didn’t get bioengineered in response to chicken Libor.