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> Banks don't work that way any more because it's a really bad way to run a bank. As compared to what we have now? With dubious financial instruments so opaque

> Banks don't work that way any more because it's a really bad way to run a bank. As compared to what we have now? With dubious financial instruments so opaque I'd have to spend 30 years lurking underneath desks on Wall Street eavesdropping on conversations just to have any clue at all how the fuck those work? I'm almost comforted when there's a Bernie Madoff, because at least I can wrap my head around how a Ponzi scheme works (ignoring the ethics, obviously). I'm (irrationally?) worried that some of what's been going on the last few years actually makes plain Ponzi schemes look legitimate by comparison. Not 25 years ago, we used to laugh about the stupid books with titles like "Dow Jones 100,000!" and whatnot, I think it was a Slashdot post way back when. And while we haven't quite reached that pinnacle of absurdity, it did hit 37,000 not so long ago. None of us may be able to pick the queen of hearts, but some of us have caught on to the fact that it's three card monte. When it all falls down, should we console ourselves with "well at least the banks weren't small and local and vulnerable to economic shocks"?

kortilla 4y ago
> And while we haven't quite reached that pinnacle of absurdity, it did hit 37,000 not so long ago. Why do you think this is absurd? You know inflation means we’ll get there even without ridiculous multiples, right?
- NoMoreNicksLeft 4y ago
  What sort of inflation would take it from 2700 to 37,000 since 1987? How close to the CPI is that, exactly? It seems a little off.
  - tpxl 4y ago
    > What sort of inflation would take it from 2700 to 37,000 since 1987? 7.5%. Doesn't seem that unbelievable.
    - NoMoreNicksLeft 4y ago
      Well, it doesn't seem bizarrely implausible. It has spiked even higher than that in my lifetime (not even counting recently). The trouble is that I've been told that it was far lower. By official government sources. It would be interesting to include the DJIA into CPI though. I bet some people would lose their shit over that.
zamnos 4y ago
Why do you think it has to all fall down? What happens if it doesn't?
rocqua 4y ago
The difference between a ponzi and real finance is mostly lying. In a Ponzi you lie about asset growth. In real investments you report real asset growth. If the system fails it won't be because people lied about what their assets were. It might be because they mis-estimated what those assets were worth. But that isn't a Ponzi. Crucially though, it is actually possible for assets to grow. As long as there is new good business to finance, the whole thing doesn't need to be zero sum. And annoyingly, growing business is so much faster with a conplex financial system, that countries with such financial systems stand no chance. So even if you don't like the risk and excess in a complex financial system, it's really hard to go without.

kortilla 4y ago

> And while we haven't quite reached that pinnacle of absurdity, it did hit 37,000 not so long ago. Why do you think this is absurd? You know inflation means we’ll get there even without ridiculous multiples, right?

NoMoreNicksLeft 4y ago
What sort of inflation would take it from 2700 to 37,000 since 1987? How close to the CPI is that, exactly? It seems a little off.
- tpxl 4y ago
  > What sort of inflation would take it from 2700 to 37,000 since 1987? 7.5%. Doesn't seem that unbelievable.
  - NoMoreNicksLeft 4y ago
    Well, it doesn't seem bizarrely implausible. It has spiked even higher than that in my lifetime (not even counting recently). The trouble is that I've been told that it was far lower. By official government sources. It would be interesting to include the DJIA into CPI though. I bet some people would lose their shit over that.

zamnos 4y ago

Why do you think it has to all fall down? What happens if it doesn't?

rocqua 4y ago

The difference between a ponzi and real finance is mostly lying. In a Ponzi you lie about asset growth. In real investments you report real asset growth. If the system fails it won't be because people lied about what their assets were. It might be because they mis-estimated what those assets were worth. But that isn't a Ponzi. Crucially though, it is actually possible for assets to grow. As long as there is new good business to finance, the whole thing doesn't need to be zero sum. And annoyingly, growing business is so much faster with a conplex financial system, that countries with such financial systems stand no chance. So even if you don't like the risk and excess in a complex financial system, it's really hard to go without.