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The problem you’re talking about doesn’t exist. Billionaires are never going to leave much of their money sitting in a bank account, because there’s always goin

The problem you’re talking about doesn’t exist. Billionaires are never going to leave much of their money sitting in a bank account, because there’s always going to be better performing assets for them to invest it in. Even if they did, the banks would be putting most of that money to work themselves anyway.

taeric 4y ago
I don't see them leaving all of it. I do see them leaving enough to have collateral for a loan that they can live off for a long time. Heck, just the rate that is common for bump CDs right now is not too shabby and makes me regret not setting up a savings ladder sooner. That said, your point about better performing assets is why I don't think they care about inflation, as my response to the other thread said. I also agree that the banks should be putting them to good use. Sadly, we have active evidence that the banks are not too good at that. They seem to think it means either credit cards for the masses (which, yes, pays well for the bank), or convincing everyone to refinance their homes. Neither of which feels that good to me. Tech stocks have screwed this up by fucking up the idea of profit versus non-profit companies. Not paying out dividends to shareholders has made that a near meaningless distinction and made it so that living off changes in the market is all folks can do. That is, you cannot own stock in a company to get residuals while they make the world better for you. So, to that end, how do you think the banks should be putting that money to work?
- AmericanChopper 4y ago
  This comment describes a moral judgement about consumerism, and maybe that’s perfectly reasonable, but it doesn’t relate to issues around the productive use of capital.
  - taeric 4y ago
    Not what I meant, amusingly. I seriously meant it as a question of what you think they should do? Funding consumers is somewhat fine, as far as money making goes. But our rules are made to drive to outcomes we want. So, what do we want banks doing?
    - AmericanChopper 4y ago
      I don’t presume to know what’s best for other parties to do with their capital. I think the kind of central planning you’re alluding to only produces bad outcomes for everybody involved. My only point is that the risk of capital controlled by billionaires being withdrawn from productive use basically doesn’t exist.
      - taeric 4y ago
        I'm not aiming at Central planning any more than anyone else here. My question isn't a moral based one, either. I don't like credit cards for reasons, but I am not saying they should be outlawed, either. Same for mortgages. My question is specifically what use do you want banks making of deposits? That is better than having active participation in investments?
dehrmann 4y ago
I think that's mostly true. You don't get to be a billionaire by sitting there. The person who just wants to live on interest stops at $5M of principal. Meanwhile, Buffett is still going. The one exception is someone who inherits a billion and doesn't feel the need to prove themselves.
- taeric 4y ago
  Ish. I didn't intend it as a "set all money in bank and live off interest." Rather, more like put 10% in a safe place where I know I will make 5% on it. Then, 30% in 10 gambles that may make bank again, kind of thing. Realistically, no individual is managing billions without literally having staff accountants. Such that they can and will be more sophisticated. My assertion is in that sophistication will be pockets of "safe" assets. And I am further pushing that there are benefits to smaller caps on those safe assets

taeric 4y ago

I don't see them leaving all of it. I do see them leaving enough to have collateral for a loan that they can live off for a long time. Heck, just the rate that is common for bump CDs right now is not too shabby and makes me regret not setting up a savings ladder sooner. That said, your point about better performing assets is why I don't think they care about inflation, as my response to the other thread said. I also agree that the banks should be putting them to good use. Sadly, we have active evidence that the banks are not too good at that. They seem to think it means either credit cards for the masses (which, yes, pays well for the bank), or convincing everyone to refinance their homes. Neither of which feels that good to me. Tech stocks have screwed this up by fucking up the idea of profit versus non-profit companies. Not paying out dividends to shareholders has made that a near meaningless distinction and made it so that living off changes in the market is all folks can do. That is, you cannot own stock in a company to get residuals while they make the world better for you. So, to that end, how do you think the banks should be putting that money to work?

AmericanChopper 4y ago
This comment describes a moral judgement about consumerism, and maybe that’s perfectly reasonable, but it doesn’t relate to issues around the productive use of capital.
- taeric 4y ago
  Not what I meant, amusingly. I seriously meant it as a question of what you think they should do? Funding consumers is somewhat fine, as far as money making goes. But our rules are made to drive to outcomes we want. So, what do we want banks doing?
  - AmericanChopper 4y ago
    I don’t presume to know what’s best for other parties to do with their capital. I think the kind of central planning you’re alluding to only produces bad outcomes for everybody involved. My only point is that the risk of capital controlled by billionaires being withdrawn from productive use basically doesn’t exist.
    - taeric 4y ago
      I'm not aiming at Central planning any more than anyone else here. My question isn't a moral based one, either. I don't like credit cards for reasons, but I am not saying they should be outlawed, either. Same for mortgages. My question is specifically what use do you want banks making of deposits? That is better than having active participation in investments?

dehrmann 4y ago

I think that's mostly true. You don't get to be a billionaire by sitting there. The person who just wants to live on interest stops at $5M of principal. Meanwhile, Buffett is still going. The one exception is someone who inherits a billion and doesn't feel the need to prove themselves.

taeric 4y ago
Ish. I didn't intend it as a "set all money in bank and live off interest." Rather, more like put 10% in a safe place where I know I will make 5% on it. Then, 30% in 10 gambles that may make bank again, kind of thing. Realistically, no individual is managing billions without literally having staff accountants. Such that they can and will be more sophisticated. My assertion is in that sophistication will be pockets of "safe" assets. And I am further pushing that there are benefits to smaller caps on those safe assets