> no company in the entire crypto space that isn't a wretched hive of scum and villainy
Entire financial space. It's just that traditional financial companies are better regulated (and are better at working within the regulations to hide their crimes). But they are not in any way better humans. For every FTX or Binance there's an Enron or Deutch Bank ten times the size and just as villainous.
The armies of shill-droids that constantly post deflective whataboutism, fallacious predictions, unethical financial advice, strained rationalizations, and false equivalencies to justify the unregulated crypto space aren't better humans, or even human at all.
My bank is constantly and repeatedly recognized as one of the best-run, most ethical, and most customer-centric companies in the United States, if not the entire planet.
Of course it is not publicly-traded, so that eliminates one source of pressure to be a wretched hive of scum and villainy.
Of particular note is that they are the largest bank in the United States to not require or take a bailout during the financial crisis.
I imagine credit unions have the same lack of pressure that my bank does and it is incomprehensible to me that someone would patronize a financial institution that has incentives to screw them over to make their quarterly report look good.
It is entirely possible to interface with the financial system without dealing with scumbags, or putting your faith into digital magic beans that immediately collapse when the Ponzi stops.
JP Morgan didn’t require a bailout but was forced to so people wouldn’t know which banks actually needed bailouts, to stop bank runs. AFAIK Wells Fargo was in the same boat (although the Wachovia acquisition led it to need some help, Wachovia was insolvent)
I might be wrong but my foggy memory recalls that JP Morgan was in good shape because they were the top of the mortgage-backed security pyramid and that years later their penalty for misleading investors prior to the financial crisis was the highest of all time(or of all the banks?).
Enron gave us SOX, for reasons. Deutsche Bank is, like UBS and basically any other international bank, involved in all kinds of shady businesses, from money laundering to tax fraud. Those banks are usually fined, I do agree so that those scandals are very under covered. Deutsche Ban an other have yet to directly defraud customers of their deposits, not even WireCard managed to do that.
Name a financial firm that had a significant negative impact on consumers? Wells Fargo scandal is the only one i can name but the total losses to all customers involved was $2M which they got compensated with $140M payout.
Our banking system nearly collapsed in 2008. Lots of people got hurt. Financialization of the US economy is a larger, delayed version of what happened to General Electric.
> Our banking system nearly collapsed in 2008. Lots of people got hurt.
Yes, plenty of people got hurt because they made shitty investments.
How many people got hurt due to their bank running off with their money to the Bahamas/betting it all on red?
Because that's the degree of 'hurt' that the various crypto exchanges have been inflicting on their customers. Can you find me one American who lost money from their savings account in 2008? Or just had it go poof from their stock brokerage?
I responded to: "Name a financial firm that had a significant negative impact on consumers?" I didn't respond to which financial firms stole money from customers. What SBF did was more like Bernie Madoff.
The only reason we didn't have bank runs and frozen accounts is because the Fed stepped in to provide liquidity to the whole market. The banking system would've collapsed similar to the Great Depression without such action. Lots of people lost their savings in the Great Depression.
Retail investors used FTX, retail was not heavily exposed to Bernie. His marks were mostly institutional and accredited investors, for whom the expectations are far closer to the 'buyer-beware' side of the spectrum.
> because the Fed stepped in to provide liquidity to the whole market.
That's the Fed's job. Everything worked... Pretty much as intended.
And there's a reason it's not stepping in to provide liquidity for the various crypto scams. Liquidity injections can save a situation where value exists, but can't be immediately realized - as in the case of a bank run. In this case, though, there's no value worth saving.
> Lots of people lost their savings in the Great Depression.
Which is precisely why we built systems to prevent that failure mode from happening again. They worked.
I agree that the Fed was right in letting these crypto scams fail. The problem inherent to the system is inflation. As the Fed expands its powers, it can avoid significant recessions/depressions but one day it won't work and the dollar will fail like every other fiat currency in the world has eventually failed. This system "working" isn't eliminating risk, it's polarizing it.
I wrote a longer comment a year ago but here's a piece: "The price of gold was $45/oz in 1970. 52 years later it's $1,800/ounce. That's roughly 7.6% a year or 45x increase. If you use the inflation provided by the government, CPI, (1), they say inflation is only 3.6%/year or roughly 7x since 1970. Obviously we have a discrepancy. Is the dollar worth 45x less than 1970 or 7x times?
When we look at prices of things like education, housing, and healthcare, the 45x number makes a lot more sense. Education has 30x in price over the same time period (2). If you're comparing prices in dollars, it feels like education got really expensive compared to the basket of goods the BEA tracks but in reality, education requires less gold than it did in 1970. Our incredible supply chains and manufacturing automation have lowered most consumer prices such that we don't really notice inflation but when you look at things that can't get much cheaper like housing, healthcare, education, asset prices of all sorts, you can't miss the fact that they correlate more closely with gold than the USD."
>
I wrote a longer comment a year ago but here's a piece: "The price of gold was $45/oz in 1970. 52 years later it's $1,800/ounce. That's roughly 7.6% a year or 45x increase. If you use the inflation provided by the government, CPI, (1), they say inflation is only 3.6%/year or roughly 7x since 1970. Obviously we have a discrepancy. Is the dollar worth 45x less than 1970 or 7x times?
The main[1] answer to your riddle is that the economy grew about ~6x faster than we have been mining gold. The dollar is closer to being worth 7x less than 45x less.
> When we look at prices of things like education, housing, and healthcare, the 45x number makes a lot more sense. Education has 30x in price over the same time period (2).
The same amount of education isn't actually 30x more expensive.
Because you're not getting the same services in exchange for your money today, as you were 50 years ago.
If you drop the money-pit sports programs, the entirety of the administrative sector, the nice new dorm buildings, and account for reduction in public funding, you'll find that the growth in the cost of education is much closer to the cost of inflation.
It's not all that expensive, even in 2022, to stuff a group of young adults into a lecture hall and have an underpaid adjunct who doesn't even get health insurance read off Powerpoint slides to them for 15 hours a week. It's the everything else, most of which has nothing to do with education that costs money.
[1] The secondary answer to your riddle is that late-night-infomercial-manufactured demand from goldbugs and other morons can easily raise the price of gold significantly above where it 'ought' to be. Beanie babies, baseball cards, NFTs, shitcoins, etc.
College education is ~30x more expensive (1). Home prices (2) & Health care (3) are ~22x more expensive. Farm land is up 20x (4)
> The main[1] answer to your riddle is that the economy grew about ~6x faster than we have been mining gold. The dollar is closer to being worth 7x less than 45x less.
How are you measuring it? It's a circular argument if you measure it in dollars. If it measure it in anything that can't be made more efficient due to automation & offshoring, it's no where near a 7x decrease.
> [1] The secondary answer to your riddle is that late-night-infomercial-manufactured demand from goldbugs and other morons can easily raise the price of gold significantly above where it 'ought' to be. Beanie babies, baseball cards, etc.
Gold is simply a good that's impossible to mass produce with technology. Use land, housing, healthcare, education or whatever you feel is most representative. Using toothpaste and tv's for CPI is a bad measurement in the last 50 years, our technology for mass producing them has lowered the true cost.
> How are you measuring it? It's a circular argument if you measure it in dollars.
Measure it in houses built, cars sold, concrete poured, steel refined, restaurant visits, number of people working in service industries. Measure it in color televisions and washing machines and computers sold and movies made, and the mountains of disposable crap that everyone fills their homes with. Or by looking at the skyline in Beijing in 1970, and today. The dollar is the currency of global trade, you have to print more of it to keep track with the global economy, just to prevent it from becoming a deflationary currency.
It may not less obvious if you live in the United States, but we make and consume more useful goods and services, much faster than we mine gold. That's why the cost of an ounce of gold can grow 50 times, while the cost of a loaf of bread can grow 5 times in the past 50 years.
> If it measure it in anything that can't be made more efficient due to automation & offshoring, it's no where near a 7x decrease.
Why not? The world's economy has grown by around that much in real value (Denominated in goods[1], not dollars) added in 50 years. [2]
> Use land, housing, healthcare, education or whatever you feel is most representative.
Land is speculative, you don't make more of it when the economy grows, and its price trends towards 1 divided by the interest rate. In a world of zero-interest, it trends towards infinity. A modern house requires a lot more economic inputs to go into it than a 1970s house. Likewise, the amount of waste and work that goes into healthcare, education, etc, has significantly increased over that same time period.
A better metric would be median wages[3], compared to productivity growth. Median family income in the US in 1970 was $9,870/year. Median family income today is ~$78,000. If there was zero productivity gain, and zero quality-of-life increases/decreases, this will tell us that a dollar today is worth ~8x less than a dollar back then.
But we have had productivity and quality of life increases. And you have to divide that 8x by whatever those multipliers were.
Gold is the weird outlier when it comes to the value of things, not the gold standard.
[1] 50 years ago, there were 200 million cars in the world. Today, there are ~1.4 billion. You can't tell me that the real product of the economy hasn't grown by something resembling that factor. Or that billions of people haven't been born, without economic growth. Or that billions of people haven't been lifted out of complete poverty, without real, per-capita economic growth.
[2] It's grown about 35x, when denominated in dollars. If we actually used gold for money, it would have been deflationary, to the tune of... Whatever real economic growth the world would have had. That amount of deflation would have been utterly horrifying.
[3] At the end of the day, the costs of all things are largely determined by wages. Plus a bit of profit margin for speculators, rentiers, and capitalists, but they take a much smaller slice of the pie.
The problem is there are people who hold strongly to an ideological position that greed is, in fact, a good thing. So if you can still edit, you might want to clarify that you weren't stating that in your comment :-)
Fair warning. And those same greedy libertarian crypto shills are a dime a dozen in these discussions, but nobody's buying what they have to say and more.
Edit: I've recently seen a significant reduction of blatant crypto shilling posts from people like that on this forum (thanks to good moderation, and people calling them out on their lies, and linking to proof of their scams and well documented history of crimes).
For example, it's been ages since I've seen any posts here from the notorious scammer and spammer Richard "Dodge Dodge" Heart (whose real name is Richard J "Spam King" Schueler, winner of the "Golden Pump Award" for "Best New Scam" for his POS get-rich-quick pyramid scheme called "HEX"). He was trying to recruit and exploit unsuspecting developers here on HN to implement and operate his scams in exchange for promises of shitcoin equity.
Entire financial space. It's just that traditional financial companies are better regulated (and are better at working within the regulations to hide their crimes). But they are not in any way better humans. For every FTX or Binance there's an Enron or Deutch Bank ten times the size and just as villainous.