Do any of y'all dabble in this stuff.?
I was just exploring NFTs, but didn't realize that there is a "Gas" tax for listing these things and can cost hundreds of dollars apiece.
I've acquired about 0.0005 ETH or about $1.55
when it "goes to the moon" (current robinhood lingo) i'll be rich... lol
I bought into Ethereum (eth) and Cardano (Ada) a while back with intention of a long term hold. I never messed with the NFT's.
I bought through Coinbase.com and held in their vault. Due to security concerns they recommend using a security key system, e.g. Linksys, for two factor authentification.
The entire security key system and risks associated with loss of access to accounts on Coinbase and other exchanges, it was too cumbersome as I am attempting to simplify things for my prospective beneficiaries.
Anyway, I cashed out on the plus side when the time seemed right and reinvested in a high risk metaverse longshot where I have been taking an ass whipping ever since. 😳. Only time will tell.
Good luck with your NFT's. I just can't grasp that whole concept.
I bought hooks, tied flies, went fishing.
I feel much better about my present and future.
It is possible to combine flyfishing and NFT's.
https://midcurrent.com/2022/02/01/fly-fishing-enters-nft-world/
Quote from: trout-r-us on February 15, 2022, 20:25:06 PMAnyway, I cashed out on the plus side when the time seemed right and reinvested in a high risk metaverse longshot called Matterport (mttr) where I have been taking an ass whipping ever since.
Capital gains tax?
I read that IRS treats mining as ordinary income, NFT sales would be taxable also.
There is supposed to be a question on Tax Returns asking if you own any crypto ..
Sort of like the offshore account question
Quote from: Woolly Bugger on February 15, 2022, 22:59:50 PMCapital gains tax?
I read that IRS treats mining as ordinary income, NFT sales would be taxable also.
There is supposed to be a question on Tax Returns asking if you own any crypto ..
Sort of like the offshore account question
Yes, I did a friend's taxes just yesterday and noticed they get right into it with a yes/no question about "virtual currency". And the question is posed right at the beginning of 1040 just after the all important question as to whether you want three bucks to go to a presidential campaign fund. 🤣
Seems the Crypto losses/gains will be taxed as with most capital assets based on time held to determine tax rate class for short or long term gains.
https://www.irs.gov/pub/irs-prior/f1040--2021.pdf
I've stayed out of purchasing crypto, until I opened a coinbase account yesterday. I still haven't purchased any, but they "gave" me $15 in BTC for opening the account.
I have bought & sold RIOT, MARA, HIVE and a few others. A friend's brother is in the blockchain development industry and his perspective is that crypto is too unstable, but the technology behind it will continue to grow into other industries that will prove more stable.
I think some form(s) of crypto will eventually stabilize, but even the miners are too tied in to the cost of BTC to be thought of as stable.
Oh, and @Wooly Bugger, I'm up 665% in my robinhood account since 2/4 last year :cheers
I'm more like Doug - go fishing.
I got a fungible once at band camp
I agree with your friends brother
@rbphoto that the future of crypto lies with Blockchain. Crypto that is tied to something tangible is what you need to be looking for IF you want to play with it. I do not.
Quote from: trout-r-us on February 15, 2022, 20:25:06 PMDue to security concerns
>>>A GROWING number of cyber criminals have amassed small fortunes in cryptocurrency as hacks and scams proliferate.
A new report from Chainalysis identified 4,068 criminal "whales", each of whom owns over $1 million worth of stolen cryptocurrency.
These whales — crypto slang for online wallets with large holdings — have amassed $25 billion in stolen or scammed cryptocurrency between them.
These criminal accounts now make up 3.7% of all the whale wallets.
Data analysts Chainalysis found crypto crime hit a new all-time high in 2021. $14 billion of funds were linked to illicit activity, up 79% on 2020's total.
https://www.msn.com/en-us/lifestyle/lifestyle-buzz/crypto-crime-wave-accelerates-as-report-finds-thousands-of-whales-hold-25-billion-in-stolen-funds/ar-AATVRDL?ocid=msedgntp
How a Young Couple Failed to Launder Billions of Dollars in Stolen BitcoinThe case against Ilya Lichtenstein and Heather Morgan describes a big crime followed by a series of frustrations>>>In August, 2016, a hacker stole 119,754 bitcoin from a cryptocurrency exchange called Bitfinex. On Tuesday, in Manhattan, a young married couple, Ilya Lichtenstein and Heather Morgan, appeared in federal court, charged with attempting to launder the proceeds of that crime. When the exchange was hacked, the stolen bitcoin was worth about seventy-one million dollars. Today, its value is more than five billion dollars. Shortly before their arrest, one could argue that—on paper, at least—Lichtenstein and Morgan were richer than Peter Thiel, who founded PayPal.
https://www.newyorker.com/business/currency/how-a-young-couple-failed-to-launder-billions-of-dollars-in-stolen-bitcoin
स्वस्तिप्रजाभ्यः परिपालयन्तां न्यायेन मार्गेण महीं महीशाः।
गोब्राह्मणेभ्यः शुभमस्तु नित्यं लोकाः समस्ताः सुखिनो भवन्तु॥
Quote from: Mudwall Gatewood 3.0 on February 16, 2022, 11:14:58 AMस्वस्तिप्रजाभ्यः परिपालयन्तां न्यायेन मार्गेण महीं महीशाः।
गोब्राह्मणेभ्यः शुभमस्तु नित्यं लोकाः समस्ताः सुखिनो भवन्तु॥
Μου φαίνονται Κινέζικα
Quote from: trout-r-us on February 16, 2022, 11:26:39 AMQuote from: Mudwall Gatewood 3.0 on February 16, 2022, 11:14:58 AMस्वस्तिप्रजाभ्यः परिपालयन्तां न्यायेन मार्गेण महीं महीशाः।
गोब्राह्मणेभ्यः शुभमस्तु नित्यं लोकाः समस्ताः सुखिनो भवन्तु॥
Μου φαίνονται Κινέζικα
There's a perfectly unacceptable reason it is Greek to you, confirming a monumental failure in our educational system. Few, if any of us, can read Sanskrit any longer!
"What's the different between Bitcoin and my wife?
My wife doesn't go down on me."
Personally I'd like to see interest rates get back up to where they were during the Reagan administration and just put everything in fixed income securities, sit back and tie flies and go fishin'.
I bought 5 Bitcoin in 2015. It was less than $400 a coin. Now I'm not sure how to maximize it's potential spending power. I recently saw where Turbo Tax and Coinbase are teaming up to offer your tax refund (refund, what the hell is that?) in crypto. https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto (https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto)
Quote from: Trout Maharishi on February 16, 2022, 19:21:10 PMI bought 5 Bitcoin in 2015. It was less than $400 a coin. Now I'm not sure how to maximize it's potential spending power. I recently saw where Turbo Tax and Coinbase are teaming up to offer your tax refund (refund, what the hell is that?) in crypto. https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto (https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto)
If you have a friend who's "into crypto", then now is the time to check in on them. In late January, prices of Bitcoin and Ethereum, two of the most popular cryptocurrencies, plunged to levels that many experts never predicted, and memecoins like Dogecoin were dragged down with them. Countless people have watched thousands of pounds disappear before their eyes.
https://www.vice.com/en/article/akvn8z/crypto-bad-for-mental-health
Quote from: Woolly Bugger on February 16, 2022, 22:15:15 PMQuote from: Trout Maharishi on February 16, 2022, 19:21:10 PMI bought 5 Bitcoin in 2015. It was less than $400 a coin. Now I'm not sure how to maximize it's potential spending power. I recently saw where Turbo Tax and Coinbase are teaming up to offer your tax refund (refund, what the hell is that?) in crypto. https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto (https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto)
If you have a friend who's "into crypto", then now is the time to check in on them. In late January, prices of Bitcoin and Ethereum, two of the most popular cryptocurrencies, plunged to levels that many experts never predicted, and memecoins like Dogecoin were dragged down with them. Countless people have watched thousands of pounds disappear before their eyes.
https://www.vice.com/en/article/akvn8z/crypto-bad-for-mental-health
Quote from: Woolly Bugger on February 16, 2022, 22:15:15 PMQuote from: Trout Maharishi on February 16, 2022, 19:21:10 PMI bought 5 Bitcoin in 2015. It was less than $400 a coin. Now I'm not sure how to maximize it's potential spending power. I recently saw where Turbo Tax and Coinbase are teaming up to offer your tax refund (refund, what the hell is that?) in crypto. https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto (https://www.fastcompany.com/90718566/turbotax-teams-with-coinbase-to-give-you-your-2022-tax-refund-in-crypto)
If you have a friend who's "into crypto", then now is the time to check in on them. In late January, prices of Bitcoin and Ethereum, two of the most popular cryptocurrencies, plunged to levels that many experts never predicted, and memecoins like Dogecoin were dragged down with them. Countless people have watched thousands of pounds disappear before their eyes.
https://www.vice.com/en/article/akvn8z/crypto-bad-for-mental-health
Their poor choices ruined their lives. Get a fucking job, sacrifice, save. Being a money skimmer has occupational hazards.
ConocoPhillips Selling Excess Gas to a Bitcoin Miner in North Dakota
The oil major is aiming to reach zero routine flaring by 2025.
>>>ConocoPhillips (COP), the giant oil and gas exploration and production company, is routing excess natural gas from one of its Bakken region projects in North Dakota to supply necessary power to a bitcoin (BTC) mining operation.
"ConocoPhillips has one bitcoin pilot project currently operating in the Bakken, where gas that would otherwise have been flared is routed to a bitcoin processor owned and managed by a third party," a ConocoPhillips spokesperson told CoinDesk in an emailed statement.
https://www.coindesk.com/business/2022/02/15/conocophillips-selling-excess-gas-to-a-bitcoin-miner-in-north-dakota/
Woo-woo space money :cheers
It seems anything that diverts investment dollars away from the wolves of Wall Street is quickly labeled as rat poison. 🤣🤣
"The harsh words for crypto mark the latest in a series of similar comments from Munger. In recent years, he has described bitcoin as "rat poison" and "noxious poison." Berkshire Hathaway CEO Warren Buffett, a longtime friend and colleague of Munger, has also described bitcoin as "rat poison."
https://www.yahoo.com/finance/news/charlie-munger-on-cryptocurrency-get-rich-quick-190526831.html
Governments are afraid of loosing control of their currency. Look at what they have done to the truckers in Canada.
Crypto Price Crash Panic: Serious NFT 'Hack' Suddenly Sends Bitcoin, Ethereum, BNB, Solana And Cardano Sharply Lower
>>>>Bitcoin and cryptocurrency prices, teetering on the brink of collapse in recent days due to the escalating situation in Ukraine, have suddenly moved sharply lower following news of a serious attack on non-fungible token (NFT) platform OpenSea.
The bitcoin price has crashed under $40,000 per bitcoin, down over 5% over the last 24 hours, while ethereum and its rivals BNB, solana, cardano are down between 6% and 8%—even as the crypto market is braced for a $100 trillion earthquake.
The latest crypto price crash, which has wiped almost $300 billion from the combined crypto market over the last few days, was sparked by a series of viral tweets from panicked NFT traders, leading OpenSea to say it's investigating "rumors of an exploit."
The hacker, whose ethereum address can be seen here, appears to have stolen roughly $3 million in NFTs, including from the popular Bored Ape Yacht Club collection that counts Paris Hilton and Jimmy Fallon as owners.
https://www.forbes.com/sites/billybambrough/2022/02/20/crypto-price-crash-panic-serious-nft-hack-suddenly-sends-bitcoin-ethereum-bnb-solana-and-cardano-sharply-lower/?sh=47811eea4244
This is an interesting development. Looks like the big guy wants his 10% :laugh: I think they want to create some more money out of thin air to fund some form of government run crypto. They also want to be sure they know where your money is and how you are spending it. Just in case they need to stop you from spending it like they did in Canada recently.
https://www.msn.com/en-us/money/markets/biden-e2-80-99s-crypto-executive-order-puts-e2-80-98urgency-e2-80-99-on-digital-dollar-research-and-fuels-bitcoin-ether-prices/ar-AAUQo8m?ocid=uxbndlbing (https://www.msn.com/en-us/money/markets/biden-e2-80-99s-crypto-executive-order-puts-e2-80-98urgency-e2-80-99-on-digital-dollar-research-and-fuels-bitcoin-ether-prices/ar-AAUQo8m?ocid=uxbndlbing)
40% of bitcoin investors are now underwater, new data shows
Bitcoin is off nearly 55% from its November peak, and 40% of holders are now underwater on their investments, according to new data from Glassnode.
In the last month alone, 15.5% of all bitcoin wallets fell into an unrealized loss, as the world's most popular cryptocurrency plunged to the $31,000 level, tracking tech stocks lower.
Bitcoin's close correlation to the Nasdaq challenges the argument that the cryptocurrency functions as an inflation hedge.
https://www.msn.com/en-us/money/markets/40-25-of-bitcoin-investors-are-now-underwater-new-data-shows/ar-AAX57VO?ocid=uxbndlbing
https://youtu.be/s2YRLIJcxwI
I'm a long way from underwater, but my Bitcoin is only worth about 44% of what it was at it's peak.
Quote from: Trout Maharishi on May 10, 2022, 23:18:45 PMI'm a long way from underwater, but my Bitcoin is only worth about 44% of what it was at it's peak.
Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user fundsHidden away in Coinbase Global's disappointing first-quarter earnings report—in which the U.S.'s largest cryptocurrency exchange reported a quarterly loss of $430 million and a 19% drop in monthly users—is an update on the risks of using Coinbase's service that may come as a surprise to its millions of users.
In the event the crypto exchange goes bankrupt, Coinbase says, its users might lose all the cryptocurrency stored in their accounts too.https://fortune.com/2022/05/11/coinbase-bankruptcy-crypto-assets-safe-private-key-earnings-stock/
https://youtu.be/EpNYn-l2ap8
Quote from: Woolly Bugger on June 16, 2022, 08:27:26 AMhttps://youtu.be/EpNYn-l2ap8
Bill Gate's remarks are basic common sense. Crypto is crap.
America has out of balance workforce as a result our priorities and aspirations being irrational. There are too many unproductive occupations because popular culture lauds those who find ways to be unproductive while looking trendy, but yet skim money. All of this unproductive skimming contributes to inflation as well as economic injustice. Eat that sugar, and blow coke.
Archaic rules of commerce are never obsolete.
America needs more tradesmen, not more Billy Mays types.
Sam Bankman-Fried, the disgraced founder of the collapsed cryptocurrency exchange FTX, was arrested in the Bahamas on Monday after United States prosecutors filed criminal charges, according to a statement by the government of the Bahamas.
"SBF's arrest followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition," the statement said.
Mr. Bankman-Fried has been under investigation by the Justice Department over the sudden implosion of FTX, a $32 billion company that filed for bankruptcy on Nov. 11.
Cryptocurrency is imaginary money. Using real money to "buy" it is pure foolishness imo.
Quote from: Phil on December 13, 2022, 09:34:01 AMCryptocurrency is imaginary money. Using real money to "buy" it is pure foolishness imo.
Phil, I'm in total agreement with you. I think it will be another "tulip bulb" bubble sometime in the future.
All things imaginary are trendy, and those who acknowledge reality as the law are weak, and so no cool in Western society. This mindset is baked in nearly all wacky trends observed in recent years. This decade is turning out to be kookier than the 70s.
As long as the alphabet people have the steam to carry on (Q Anon and the LGBTQ communities), wackery, scams, lies, will be found a plenty. The amount of cults that exist today is beyond shocking.
Rational isn't fashionable. Perversion immersion is, and the aforementioned perversion isn't confined to sexual matters.
Quote from: Onslow on December 14, 2022, 06:56:13 AMAll things imaginary are trendy, and those who acknowledge reality as the law are weak, and so no cool in Western society. This mindset is baked in nearly all wacky trends observed in recent years. This decade is turning out to be kookier than the 70s.
As long as the alphabet people have the steam to carry on (Q Anon and the LGBTQ communities), wackery, scams, lies, will be found a plenty. The amount of cults that exist today is beyond shocking.
Rational isn't fashionable. Perversion immersion is, and the aforementioned perversion isn't confined to sexual matters.
I have no clue when it comes to crypto, bitcoin, etc.. I have enough difficulties with real currency.
Also, clueless on Q; it may very well be irrational, trendy, and perverted. Frankly, I have no interest.
When it comes to LGBTQ, from a purely scientific approach, I fail to see the perversion, trendiness, or irrationality. A common misconception is these behaviors do not happen in the natural animal world. There are hundreds of examples. It is a natural occurrence. Only when we apply principles developed from our human (most often religious) moral compass do we fail to accept what is obviously natural.
Quote from: Mudwall Gatewood 3.0 on December 14, 2022, 10:16:04 AMIt is a natural occurrence.
13 Fish That Can Change Gender [Male To Female And Vice Versa]https://jaljeev.com/fish-that-can-change-gender/
Hermaphroditism is a common condition among fish because of which they can change their gender under certain circumstances. So, which fish can change gender?
Fish that can change gender are:
Clownfish,
Chalk Bass,
Mangrove Rivulus,
Broad-Barred Goby,
Potter's Angelfish,
Ribbon Eel,
Kobudai (Asian Sheepshead Wrasse),
Humphead Wrasse,
Bluehead Wrasse,
Hawkfish,
Black Porgy,
Black Sea Bass, and
Lyretail Anthias.
Quote from: Mudwall Gatewood 3.0 on December 14, 2022, 10:16:04 AMQuote from: Onslow on December 14, 2022, 06:56:13 AMAll things imaginary are trendy, and those who acknowledge reality as the law are weak, and so no cool in Western society. This mindset is baked in nearly all wacky trends observed in recent years. This decade is turning out to be kookier than the 70s.
As long as the alphabet people have the steam to carry on (Q Anon and the LGBTQ communities), wackery, scams, lies, will be found a plenty. The amount of cults that exist today is beyond shocking.
Rational isn't fashionable. Perversion immersion is, and the aforementioned perversion isn't confined to sexual matters.
I have no clue when it comes to crypto, bitcoin, etc.. I have enough difficulties with real currency.
Also, clueless on Q; it may very well be irrational, trendy, and perverted. Frankly, I have no interest.
When it comes to LGBTQ, from a purely scientific approach, I fail to see the perversion, trendiness, or irrationality. A common misconception is these behaviors do not happen in the natural animal world. There are hundreds of examples. It is a natural occurrence. Only when we apply principles developed from our human (most often religious) moral compass do we fail to accept what is obviously natural.
There is a difference between being gay, and buying into the LGBTQ community activist cult, or being transgender. These are very different activities. I have no issue with people being hermaphrodites, Black, American Indian, a real woman, or gay. I don't have an issue with a women and American Indians being a protected group. I have a problem with entitlement, and yes, the a la cart gender movement has taken on a life of its own with our youth. Yes, it is becoming a fad, and most certainly does not fall under the category of a 'born this way". My post was taking aim at the 'rules don't apply to me' crowd. I have a real big problem with those profiting from the TG movement.
Furthermore, it is important that people have a moral compass so we're not constantly harassed by people who want to euphemistically fuck us all in the ass. You benefit from people having a moral compass, so don't start hating on it.
Quote from: Onslow on December 14, 2022, 18:42:41 PMQuote from: Mudwall Gatewood 3.0 on December 14, 2022, 10:16:04 AMQuote from: Onslow on December 14, 2022, 06:56:13 AMAll things imaginary are trendy, and those who acknowledge reality as the law are weak, and so no cool in Western society. This mindset is baked in nearly all wacky trends observed in recent years. This decade is turning out to be kookier than the 70s.
As long as the alphabet people have the steam to carry on (Q Anon and the LGBTQ communities), wackery, scams, lies, will be found a plenty. The amount of cults that exist today is beyond shocking.
Rational isn't fashionable. Perversion immersion is, and the aforementioned perversion isn't confined to sexual matters.
I have no clue when it comes to crypto, bitcoin, etc.. I have enough difficulties with real currency.
Also, clueless on Q; it may very well be irrational, trendy, and perverted. Frankly, I have no interest.
When it comes to LGBTQ, from a purely scientific approach, I fail to see the perversion, trendiness, or irrationality. A common misconception is these behaviors do not happen in the natural animal world. There are hundreds of examples. It is a natural occurrence. Only when we apply principles developed from our human (most often religious) moral compass do we fail to accept what is obviously natural.
There is a difference between being gay, and buying into the LGBTQ community activist cult, or being transgender. These are very different activities. I have no issue with people being hermaphrodites, Black, American Indian, a real woman, or gay. I don't have an issue with a women and American Indians being a protected group. I have a problem with entitlement, and yes, the a la cart gender movement has taken on a life of its own with our youth. Yes, it is becoming a fad, and most certainly does not fall under the category of a 'born this way". My post was taking aim at the 'rules don't apply to me' crowd. I have a real big problem with those profiting from the TG movement.
Furthermore, it is important that people have a moral compass so we're not constantly harassed by people who want to euphemistically fuck us all in the ass. You benefit from people having a moral compass, so don't start hating on it.
I am always entertained and amused when a white dude grumbles about the entitlement of others.
Ken, fuck your moral compass! I ain't buying any.
Perhaps the trumpsky crowd will jump on these and revitalize the NFT market. Better move quick, they're going like hotcakes.
https://www.fastcompany.com/90825656/trumps-nft-collection-losing-value-opensea
Quote from: trout-r-us on December 16, 2022, 09:32:46 AMPerhaps the trumpsky crowd will jump on these and revitalize the NFT market. Better move quick, they're going like hotcakes.
https://www.fastcompany.com/90825656/trumps-nft-collection-losing-value-opensea
https://www.reddit.com/r/PoliticalHumor/comments/zmzbh9/got_me_one_of_them_trading_cards/
(https://i.redd.it/ri0nv0gyp66a1.png)
https://youtu.be/pWAyV_GoJxA
https://www.instagram.com/reel/CmhxxFsJMCa/?igshid=NDk5N2NlZjQ=
Quote from: Woolly Bugger on December 24, 2022, 04:14:41 AMhttps://www.instagram.com/reel/CmhxxFsJMCa/?igshid=NDk5N2NlZjQ=
Idiot seems rather harsh, but I do understand what he means concerning the lack of regulation surrounding the exchanges. When I was "holding" crypto, I never had a good feeling about who was actually holding what. I used Coinbase Exchange which is highly regarded in those circles, but there were just too many uncertainties for me to feel comfortable, which is why I got out.
Quote from: trout-r-us on December 24, 2022, 15:12:02 PMIdiot seems rather harsh
I don't think much of Jim Cramer but, in this instance, I think he is correct and idiot is the correct word - harsh but true. Crypto is an imaginary "asset" with a value based solely on the belief that someone will pay more to buy it from you than you paid to acquire it. That rarely works out well in the long run.
Also, while blockchain is theoretically a great concept it has so far not been workable in the real world for any significant purpose. I know that Walmart has tried using blockchain for inventory control from manufacturer to store and has backed away because of implementation problems. Blockchain also has the problem of using huge amounts of computer storage. To date blockchain has not been better than current databases in real world applications - maybe in the future but not yet.
Quote from: FlyChamps on December 25, 2022, 11:04:00 AMQuote from: trout-r-us on December 24, 2022, 15:12:02 PMIdiot seems rather harsh
Crypto is an imaginary "asset" with a value based solely on the belief that someone will pay more to buy it from you than you paid to acquire it.
So, pretty much like the greenback and various investment options available in the stock markets.
Quote from: trout-r-us on December 25, 2022, 13:22:15 PMQuote from: FlyChamps on December 25, 2022, 11:04:00 AMQuote from: trout-r-us on December 24, 2022, 15:12:02 PMIdiot seems rather harsh
Crypto is an imaginary "asset" with a value based solely on the belief that someone will pay more to buy it from you than you paid to acquire it.
So, pretty much like the greenback and various investment options available in the stock markets.
Not true. I have a reasonably good idea regarding the products or services produced by the companies that I invest in and they are products and services that are tangible and people actually use. And these are products and services that even you use. Little things like the food you eat, the energy you use whether liquid, solid or electrical, the medicines you or family members need, the vehicles you drive, the clothes you wear, your fishing gear, etc. ad nauseum. These companies will continue to be profitable and produce income for me over the long run.
What product or service does crypto provide, other than tax evasion and money laundering?
Quote from: FlyChamps on December 25, 2022, 14:43:24 PMQuote from: trout-r-us on December 25, 2022, 13:22:15 PMQuote from: FlyChamps on December 25, 2022, 11:04:00 AMQuote from: trout-r-us on December 24, 2022, 15:12:02 PMIdiot seems rather harsh
Crypto is an imaginary "asset" with a value based solely on the belief that someone will pay more to buy it from you than you paid to acquire it.
So, pretty much like the greenback and various investment options available in the stock markets.
Not true. I have a reasonably good idea regarding the products or services produced by the companies that I invest in and they are products and services that are tangible and people actually use. And these are products and services that even you use. Little things like the food you eat, the energy you use whether liquid, solid or electrical, the medicines you or family members need, the vehicles you drive, the clothes you wear, your fishing gear, etc. ad nauseum. These companies will continue to be profitable and produce income for me over the long run.
What product or service does crypto provide, other than tax evasion and money laundering?
Two words; worldcom / Enron
Quote from: Woolly Bugger on December 25, 2022, 18:27:49 PMQuote from: FlyChamps on December 25, 2022, 14:43:24 PMQuote from: trout-r-us on December 25, 2022, 13:22:15 PMQuote from: FlyChamps on December 25, 2022, 11:04:00 AMQuote from: trout-r-us on December 24, 2022, 15:12:02 PMIdiot seems rather harsh
Crypto is an imaginary "asset" with a value based solely on the belief that someone will pay more to buy it from you than you paid to acquire it.
So, pretty much like the greenback and various investment options available in the stock markets.
Not true. I have a reasonably good idea regarding the products or services produced by the companies that I invest in and they are products and services that are tangible and people actually use. And these are products and services that even you use. Little things like the food you eat, the energy you use whether liquid, solid or electrical, the medicines you or family members need, the vehicles you drive, the clothes you wear, your fishing gear, etc. ad nauseum. These companies will continue to be profitable and produce income for me over the long run.
What product or service does crypto provide, other than tax evasion and money laundering?
Two words; worldcom / Enron
Keith, I seriously doubt that anything will ever prevent fraud, just look to FTX/Alameda as they are currently in the news. Crooks always find away around "systems", at least until they are caught. Early in my career I did a fair amount of forensic accounting and had a hand in putting 30 - 40 people in jail for various frauds, some simple and some complex. They always felt that they had outfoxed the system right up to the time they were caught and neither crypto nor blockchain will change their mentality that they can beat the system.
Being a practicing CPA at the time I read a fair amount about the Enron fraud and neither crypto nor blockchain would have prevented this fraud, which was based on mis-valuation of certain assets, which would have been valued the same under current systems or blockchain.
Quote from: FlyChamps on December 25, 2022, 18:55:54 PMQuote from: Woolly Bugger on December 25, 2022, 18:27:49 PMQuote from: FlyChamps on December 25, 2022, 14:43:24 PMQuote from: trout-r-us on December 25, 2022, 13:22:15 PMQuote from: FlyChamps on December 25, 2022, 11:04:00 AMQuote from: trout-r-us on December 24, 2022, 15:12:02 PMIdiot seems rather harsh
Crypto is an imaginary "asset" with a value based solely on the belief that someone will pay more to buy it from you than you paid to acquire it.
So, pretty much like the greenback and various investment options available in the stock markets.
Not true. I have a reasonably good idea regarding the products or services produced by the companies that I invest in and they are products and services that are tangible and people actually use. And these are products and services that even you use. Little things like the food you eat, the energy you use whether liquid, solid or electrical, the medicines you or family members need, the vehicles you drive, the clothes you wear, your fishing gear, etc. ad nauseum. These companies will continue to be profitable and produce income for me over the long run.
What product or service does crypto provide, other than tax evasion and money laundering?
Two words; worldcom / Enron
Keith, I seriously doubt that anything will ever prevent fraud, just look to FTX/Alameda as they are currently in the news. Crooks always find away around "systems", at least until they are caught. Early in my career I did a fair amount of forensic accounting and had a hand in putting 30 - 40 people in jail for various frauds, some simple and some complex. They always felt that they had outfoxed the system right up to the time they were caught and neither crypto nor blockchain will change their mentality that they can beat the system.
Being a practicing CPA at the time I read a fair amount about the Enron fraud and neither crypto nor blockchain would have prevented this fraud, which was based on mis-valuation of certain assets, which would have been valued the same under current systems or blockchain.
What he said!
TB
Only time will tell.
I likely won't be around when people are talking about it 20 years from now. Will it be "I wish I had stuck with Ethereum instead of punking out." Or possibly there will be stories of homeless people that used to be well off before losing their wad when Ethereum collapsed?"
When Al Gore invented the internet, people were called idiots for forming and investing in related technology.
Was't too long ago when I heard many people doubting the concept of e-commerce. How often have we heard conversations that included "I wish I had bought Amazon stock back when..........
And I still feel "idiot" is too harsh a term to use towards someone who has a different choice in investments.
And where is Silvercreek when we need his expert opinion. He's the guy that has never picked a loser. 🤣
Quote from: trout-r-us on December 26, 2022, 09:54:29 AMWhen Al Gore invented the internet, people were called idiots for forming and investing in related technology.
Was't too long ago when I heard many people doubting the concept of e-commerce. How often have we heard conversations that included "I wish I had bought Amazon stock back when..........
And for every successful internet or e-commerce business around today many more fell by the wayside in the the Dot-Com bubble. Lots of "investment" money lost. A viable product or service is always needed for a company to be successful for the long haul.
Quote from: trout-r-us on December 26, 2022, 09:54:29 AMAnd I still feel "idiot" is too harsh a term to use towards someone who has a different choice in investments.
Idiot is the correct word for someone putting their money into something that is not a true investment because there is no viable product or service.
Time will tell.
I feel that the term idiot is rather harsh and likely stems from a lack of understanding and basic knowledge of the subject.
When we watched Star Trek years ago and Captain Kirk and Mr Spock were using communication devices, little did we know that we were getting a peek into the future.
I don't necessarily think that those who led the investment and development of the cellular technology boom should be viewed as idiots by others that were basically just too ignorant to comprehend what was going on.
4569FC2D-6179-4BF9-9C03-C61F5927040A.jpg
Quote from: trout-r-us on December 27, 2022, 05:44:43 AMTime will tell.
I feel that the term idiot is rather harsh and likely stems from a lack of understanding and basic knowledge of the subject.
When we watched Star Trek years ago and Captain Kirk and Mr Spock were using communication devices, little did we know that we were getting a peek into the future.
I don't necessarily think that those who led the investment and development of the cellular technology boom should be viewed as idiots by others that were basically just too ignorant to comprehend what was going on.
[url="https://www.brfff.com/forum/index.php?action=dlattach;attach=37952;type=preview;file"]4569FC2D-6179-4BF9-9C03-C61F5927040A.jpg[/url]
Yeah and Space Balls is another foreteller of the future! I mean, that ship that transforms into a huge planet sucking vacuum! We could clean our atmosphere...
/'/ -+; -+;
:P
TB
Quote from: trout-r-us on December 27, 2022, 05:44:43 AMTime will tell.
I feel that the term idiot is rather harsh and likely stems from a lack of understanding and basic knowledge of the subject.
When we watched Star Trek years ago and Captain Kirk and Mr Spock were using communication devices, little did we know that we were getting a peek into the future.
I don't necessarily think that those who led the investment and development of the cellular technology boom should be viewed as idiots by others that were basically just too ignorant to comprehend what was going on.
The difference between crypto and cellular technology is that cellular technology was understandable by ordinary people like me. For business reasons I was an early adopter of cellular technology - my first cell phone was a "semi-portable" version, most here are probably old enough to remember a "bag phone".
Within just a few years of introduction cell phone ownership expanded rapidly to cover most of the population and area coverage to almost the entire country. This was because cellular technology uses were obvious to almost everyone and once prices declined to somewhat affordable levels they bought cell phones.
Crypto has no function. Hell, even Tesla says they will no longer accept Bitcoin to purchase their cars.
As Forest Gump said "stupid is as stupid does".
I think that Cramer was calling the people that had invested specifically in Solana and Litecoin idiots. Not calling every crypto investor an idiot.
https://youtu.be/6bbzwJ0Sx48
I feel the term idiot is rather harsh.
If an investor does his due diligence and investigates a prospective opportunity, foresees it as something he would like to get involved in and his risk tolerance permits, why not take a shot?
As with most things in life, there are risks. Many of us enjoy gambling. If I bet on a team that loses I don't feel like an idiot any more than I feel like a genius if I win the bet.
"Is Ethereum a Good Investment?
As with any investment, the answer to that depends on your financial objectives, goals, and risk tolerance. The cryptocurrency ETH can be volatile, putting capital at risk. However, it is certainly worth researching as an investment because the various existing and emerging innovative technologies that use Ethereum may assume larger roles in our society in the future."
https://www.investopedia.com/terms/e/ethereum.asp
Quote from: trout-r-us on December 28, 2022, 14:00:12 PMMany of us enjoy gambling. If I bet on a team that loses I don't feel like an idiot any more than I feel like a genius if I win the bet.
If you want to gamble, call it gambling but investing it ain't. When you gamble with your investments you're setting yourself up for a retirement that isn't the one you dreamed of. And, like it or not, most of us live long enough to have a 20 to 30 year retirement and running out of money isn't fun.
Dumping cash into Crypto is speculation (or gambling) and definitely not what I would call investing.
Quote from: Native Fisher on January 04, 2023, 14:47:02 PMDumping cash into Crypto is speculation (or gambling) and definitely not what I would call investing.
US regulators issue new statement warning banks about risks from crypto assets such as BitcoinThe Federal Reserve, FDIC and OCC jointly issued the statement on Tuesday.
As per the statement, crypto assets have been stated as inconsistent with "safe and sound" banking practices.
Bitcoin price led the crypto market into consolidation as the king coin remained rangebound at around $16,000.
https://www.fxstreet.com/cryptocurrencies/news/us-regulators-issue-new-statement-warning-banks-about-risks-from-crypto-assets-such-as-bitcoin-202301040159
Bitcoin Will Soar to $250,000 in 2023, Says Billionaire Tim Draper
https://www.msn.com/en-us/money/other/bitcoin-will-soar-to-250000-in-2023-says-billionaire-tim-draper/ar-AA15V6cX
How much does he have in holdings of Crypto? Standard Pump and Dump technique of greedy slimeballs.
Quote from: trout-r-us on January 04, 2023, 18:07:26 PMBitcoin Will Soar to $250,000 in 2023, Says Billionaire Tim Draper
https://www.msn.com/en-us/money/other/bitcoin-will-soar-to-250000-in-2023-says-billionaire-tim-draper/ar-AA15V6cX
Sounds like he was wrong in every other prediction he has made with bitcoin and is trying to save face with the people he led wrong in the past. At what point does it become negligence?
Here are a couple of my favorite.
On April 21, 2018, Draper predicted during an Intelligence Squared debate that "In five years you are going to try to go buy coffee with fiat currency and they are going to laugh at you because you're not using crypto."
In December 2019, he predicted that bitcoin would reach US$250,000 by the end of 2022.
Quote from: Native Fisher on January 05, 2023, 09:12:54 AMHow much does he have in holdings of Crypto? Standard Pump and Dump technique of greedy slimeballs.
This ^
Only use for it.
Quote from: Big J on January 05, 2023, 10:15:51 AMQuote from: trout-r-us on January 04, 2023, 18:07:26 PMBitcoin Will Soar to $250,000 in 2023, Says Billionaire Tim Draper
https://www.msn.com/en-us/money/other/bitcoin-will-soar-to-250000-in-2023-says-billionaire-tim-draper/ar-AA15V6cX
Sounds like he was wrong in every other prediction he has made with bitcoin and is trying to save face with the people he led wrong in the past. At what point does it become negligence?
Yeah, I don't know this guy, but he is definitely lacking in the area of best prophesy practices. In the soon to be published "Prophesy for Dummies", the number one basic principle is *** don't lock yourself in with timelines***. Over the years, the best of the best in the prophesy field have almost always utilized the open ended approach. Another useful approach is what might be referred to as the shotgun principle where the predictions are worded vaguely enough to where if anything close to the prediction comes to be, it is construed as being a successful prophesy. One of the best known is Nostradame who made predictions over 400 years ago yet still retains many followers. Then of course are the numerous religious prophets, both past and current with literally millions of zealot level followers. "End Times" prophesy is classic. Gonna be hard for anyone to disprove. 🤔
Now even more issues with crypto as a bankruptcy judge has ruled that the crypto "on deposit" at Celsius belongs to Celsius and not to the depositors, so the depositors "assets" will be used to pay the bankruptcy expenses and if any is left over be treated like any other unsecured creditor.
This is the opposite of how depositors in banks or brokerage firms are treated.
Hopefully you can read this article without a subscription https://www.wsj.com/articles/celsius-network-wins-ownership-rights-to-customer-crypto-deposits-11672865422?mod=Searchresults_pos5&page=1
I agree at this point I wouldn't invest any more money into crypto. I bought a little Bitcoin 6 or 7 years ago after watching a Netflix special about it. It was way cheaper then. I keep hoping more will fall for it and help me out.
https://finance.yahoo.com/news/bitcoin-rises-5-5-19-222433883.html
If I were on the losing end, I would dump it and write it off on my taxes while I could. I think once something loses the public's confidence it will never recover.
More than $70 billion wiped off crypto market in 24 hours as bitcoin drops below $20,000
https://www.msn.com/en-us/money/markets/more-than-70-billion-wiped-off-crypto-market-in-24-hours-as-bitcoin-drops-below-20000/ar-AA18sgEG
Quote from: Woolly Bugger on March 11, 2023, 19:57:58 PMMore than $70 billion wiped off crypto market in 24 hours as bitcoin drops below $20,000
https://www.msn.com/en-us/money/markets/more-than-70-billion-wiped-off-crypto-market-in-24-hours-as-bitcoin-drops-below-20000/ar-AA18sgEG
FTX, Silvergate, and Silicon Valley Bank are just the tip of the iceberg.
Joseph Gentile
Chief administrative officer
(https://www.svbsecurities.com/wp-content/uploads/2020/03/rsz_joe_gentile-212x300.png)
Joseph Gentile is the Chief Administrative Officer at SVB Securities.
Prior to joining the firm in 2007, Mr. Gentile served as the CFO for Lehman Brothers' Global Investment Bank* where he directed the accounting and financial needs within the Fixed Income division.
Prior to that, he served as CFO of the Global Corporate and Investment Bank at Bank of America, where he led the Capital Markets Division. In addition he was the CFO for the Private Bank. Previously, Mr. Gentile spent more than 10 years with J.P. Morgan in various financial management positions, including Global Head of Financial Risk Management. He started his career at Arthur Andersen.**
Mr. Gentile earned his B.S. in Accounting and his M,B.A. in Finance from St. John's University.
Quite the résumé!
*Lehman Brothers Inc.was an American global financial services firm founded in 1847. Before filing for bankruptcy in 2008, Lehman was the fourth-largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley, and Merrill Lynch)
** Arthur Anderson — The firm collapsed by mid-2002, as details of its questionable accounting practices for energy company Enron and telecommunications company Worldcom were revealed amid the two high-profile bankruptcies. The scandals were a factor in the enactment of the Sarbanes-Oxley Act of 2002.[/b]
Federal authorities are seriously considering safeguarding all uninsured deposits at Silicon Valley Bank, weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system, according to three people with knowledge of the matter, who spoke on the condition of anonymity to describe private deliberations.
Officials at the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation discussed the idea this weekend, the people said, with only hours to go before financial markets opened in Asia. White House officials have also studied the idea, per two separate people familiar with those discussions
The plan would be among the potential policy responses if the government is unable to find a buyer for the failed bank. The FDIC began an auction process for SVB on Saturday and hoped to identify a winning bidder Sunday afternoon, with final bids expected by 2 p.m. ET, according to two people familiar with the matter.
https://wapo.st/3J9M4z2
8A4419FB-FE4B-44E1-BC86-5C002F847CF6.jpg
This is some scary stuff and I think someone from the government needs to step in and reassure people. A big part of this failure was a run on the bank. Now might be a good to review your own financial situation. https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/ (https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/)
I plan to make more money, and make more deposits.
I don't feel a bit sorry for those who get burned by crypto or any other retarded investment.
I met an MBA guy who was hoodoo'ed into purchasing Emu for 35K a piece when I was 23. The fella who sold him the birds was so myopic and greedy, he didn't understand the bottom was going to fall out of the prices at some point. He tried to sell me a breeding pair for 60K, but I declined, and burned him with a mountain of awkward questions. Within a few years, they worth were worth about 2-3K a piece. I honestly think the emu are a better investment than most crypto, lol.
Well shit
Another bank fails
Regulators seized New York regional bank Signature Bank (SBNY) two days after shutting down Silicon Valley Bank as overseers of the banking system try to restore calm before markets open Monday.
A79B006B-91BA-4615-9CB6-3CB89ABF35D5.jpg
Maybe not such a stable genius.
"Anyone who doubted how detrimental Trump administration policies would be should analyze the damage unfolding for those trampled by Silicon Valley Bank's collapse. On May 24, 2018, Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act (the "Reform Act"). This was a regulatory relief bill for regional and community bill, which bank lobbyists and numerous politicians had fought hard for."
https://www.forbes.com/sites/mayrarodriguezvalladares/2023/03/12/how-trumps-deregulation-sowed-the-seeds-for-silicon-valley-banks-demise/?sh=4cd366013432
27AABCAD-B420-41A1-8ADC-BAD2C76B7C77.jpgBC350602-39D3-4FC6-8160-EF112A98B87D.jpg
Quote from: Woolly Bugger on March 12, 2023, 18:37:14 PMWell shit
Another bank fails
Regulators seized New York regional bank Signature Bank (SBNY) two days after shutting down Silicon Valley Bank as overseers of the banking system try to restore calm before markets open Monday.
Well guess who was on the board at Signature Bank? Barney Frank. There's plenty of blame to go around in these bank's failures. Barney Frank spoke in favor of the"Reform Act". It would be myopic to point the finger at any one person in this failure. I have a couple in mind for the failure but I'll withhold my comments until more details are provided. We are letting the politicians and crooks control and regulate the banking system.
https://youtu.be/fUOSdbDLKQE (https://youtu.be/fUOSdbDLKQE)
Don't hate the player, hate the game.
Plenty of blame to go around for sure but Fed/OCC/FDIC are supposed to be monitoring these banks. They missed the boat. Period.
And that change in legislation was originally intended to help the community banks because of the high cost of compliance vs. the impact on the economy if one of these small banks failed. That risk management approach at least makes sense. What doesn't make sense, to me at least, is calling a top twenty bank in the US a "community bank". WTF? How did the deposit limit to define a community bank get raised to $250 billion? Wanna guess?
Bottom line as far as I am concerned is that SVB bet wrong on their risk management model. And the regulators flat missed it. If they go broke, who cares, but it could screw the pooch so we have to. If Travelers Rest Bank goes broke, nobody cares because it doesn't tank the economy. So risk/reward applies appropriately. IMHO of course.
My $.02
TB
A dark cloud shows itself on the horizon.
It is Tuesday, and the weatherman says a burst of snow will occur, maybe 3-4 inches.
A local mouthpiece posts a message on social media about getting food. Peter Thiel.
Throngs of townspeeps are triggered, and descend upon the local stores to stock up on food
The store runs empty, Fights break out, and the store is destroyed.
Sadly, no one really needed food because they went shopping over the weekend. None of this was necessary.
I see no difference between an unnecessary food run and a bank run. Yes, SVB made some poor choices, but I would argue they would've done fine if people would've kept their cool, and they would also been able to withdraw their funds in full at a later date.
I hate bank runs and grocery store runs. IMO, Peter Thiel triggered the avalanche of stupidity that resulted in the demise of SVB. I think we all loose a few IQ points every time an article is read concerning this matter.
Don't disagree with your thoughts, but risk management has to deal with real life and that would assume, correctly, that people would panic and withdraw their deposits. Which of course, they did. I don't blame folks for doing that because your money is YOUR MONEY when you think it might disappear!
Proper risk management could have dealt with that. They didn't have it. And regulators didn't catch it.
TB
https://youtu.be/OTJCI1FNBfA
Quote from: Onslow on March 14, 2023, 08:35:04 AMA dark cloud shows itself on the horizon.
It is Tuesday, and the weatherman says a burst of snow will occur, maybe 3-4 inches.
A local mouthpiece posts a message on social media about getting food. Peter Thiel.
.............
I see no difference between an unnecessary food run and a bank run. Yes, SVB made some poor choices, but I would argue they would've done fine if people would've kept their cool, and they would also been able to withdraw their funds in full at a later date.
I hate bank runs and grocery store runs. IMO, Peter Thiel triggered the avalanche of stupidity that resulted in the demise of SVB. I think we all loose a few IQ points every time an article is read concerning this matter.
I like the analogy of bank runs and grocery store runs. Is it Peter Thiel we should blame, or is it the architect of social media and how it has exposed our vulnerability, ignorance, stupidity, and our unhealthy reverence for both correct and incorrect information?
My analogy: I don't blame Columbus for discovering the Americas and the ensuing destruction of cultures and lands. I blame whoever invented the fucking boat!
I believe a periodic bank run is a good system test. If everything works, no problem. If there's an issue perhaps additional regulation is in order. Regulation is put in place to protect the masses. De-regulation on the other hand serves the relative few money grubbers.
https://www.richmondfed.org/publications/research/economic_brief/2018/eb_18-03
QuotePreventing Bank Runs
By Renee Haltom and Bruno Sultanum
PDFDownload PDF
Banking can be defined as the business of maturity transformation, or "borrowing short to lend long." Economists and policymakers have long viewed banking as inherently unstable, that is, prone to runs. This Economic Brief reviews the intuition and theory behind bank runs and the most popular proposed solutions. It also explores new research suggesting that runs might be prevented by creating a new, low-cost type of deposit contract that eliminates the incentive to run.
Banking can be defined as the business of maturity transformation, or "borrowing short to lend long." For example, commercial banks take deposits from households and businesses — short-term liabilities that depositors can withdraw on demand — and use them to make longer-term loans to other households and businesses. Banking activity does not take place only within commercial banks; entities ranging from money market mutual funds to investment banks perform this bank-like function in what has become known as the "shadow-banking" sector.
Economists and policymakers have long grappled with the question of how to promote a stable banking sector. The core issue in this debate is that banking activity is viewed as inherently fragile — that is, prone to runs. A run is when many depositors withdraw their funds to avoid losing those funds if the bank becomes insolvent. Notably, a run can occur whether the bank is insolvent or not — that is, the fear of a run may be enough to produce one.
Runs can be very costly for economic activity; in fact, many economists view the 2007–08 financial crisis as having resembled a traditional bank run across many markets.1 Given the potential costs of runs, preventing them is of interest to policymakers and the general public.
This Economic Brief reviews the basic theory of runs and describes how the economics profession has explored potential solutions. It also presents a new solution proposed in a recent model by one author of this brief (Sultanum) along with David Andolfatto of the St. Louis Fed and Ed Nosal of the Atlanta Fed.
What Makes Banking Unstable?
To understand why banking may be inherently fragile, it is helpful to articulate its fundamental purpose. Banks solve an important problem for households and businesses by connecting savers (direct lenders) and borrowers. Direct lenders would like a safe place to put their money that offers a return, and borrowers would like to finance productive endeavors. Absent banks, the timing of a direct lender's desired investment may not match up with the duration of the project that the borrower wants to fund. Also, direct lenders may struggle to monitor borrowers' projects. Finally, direct lenders may want the option to withdraw their funds on demand to account for uncertainty in their liquidity needs. This last issue, the uncertainty of when the need for liquidity will arise, is a fundamental issue in banking instability and the subject to which we now turn.
Banks address uncertainty in the liquidity needs of depositors by pooling the funds of many depositors together. If a bank's base of depositors becomes large enough, the bank could be fairly certain about the fraction of depositors who will need to withdraw their funds. This enables the bank to set aside a portion of liquid reserves and use its remaining deposits to make loans. This arrangement means that banks would not be able to meet the demands of all depositors at any given time and leaves them prone to runs. If enough depositors think, for any reason, that too many other depositors are about to withdraw funds, they may try to withdraw first, before the bank runs out of reserves. This behavior can be costly to economic activity because if borrowers have to repay their loans early, productive projects may not be completed.
Bank runs occurred frequently before 1933. The creation of the Federal Reserve as lender of last resort in 1913 was partly a response to this instability, as was the creation of deposit insurance in 1933. Deposit insurance should in principle eliminate depositors' need to run: just as the fear of runs can be self-fulfilling, having deposit insurance should ensure it never needs to be used.
Deposit insurance comes with problems of its own, however. It significantly reduces depositors' incentive to care about the bank's health, which may lead banks to fund riskier projects than they otherwise would, with potential negative consequences for shareholders and society. This generally is the reason why banks are supervised and regulated in a way that most other industries are not. But regulation is not a trivial task. For example, banks' incentives may not be aligned with regulators' incentives, and banks have a comparative advantage over regulators in evaluating loans. In part because of the difficulty of aligning incentives once deposit insurance is in place, economists and policymakers have explored other possible ways of ensuring banking stability.
One alternative is "narrow banking," in which banks offer demand deposits but hold only very safe, liquid assets — such as treasuries — as opposed to loans.2 In principle, this approach eliminates the possibility of runs because banks would virtually always be solvent. In this scheme, risky, information-intensive projects would be funded by capital markets — so this framework potentially involves higher costs of providing loans and less economic output. Another class of solutions involves suspending depositors' ability to withdraw, the subject of the remainder of this Economic Brief.
The Diamond-Dybvig Model of Bank Runs
Economists have formally modeled bank runs to identify conditions that might lead to runs and to explore potential solutions. The first two models of bank runs were provided by Bryant (1980) and Diamond-Dybvig (1983), the latter serving as the basis for many formal analyses of runs.3 Diamond-Dybvig (D-D) is a model of banking in which a collection of savers pools its funds in an entity, which can be thought of as a bank that invests the funds in a longer-term project.
The model's basic mechanism can be seen in a very simplified example. Imagine you are one of just two depositors. You put $100 into a bank account that earns an expected return of 10 percent at the end of one year. You also know that if the other depositor withdraws early, the bank's resources will be depleted such that your payout is only $90. The other depositor faces the same conditions. However, the probability that the other depositor will need the resources early is low, so as long as both depositors withdraw only when they truly need liquidity, the expected return of keeping the money in the bank is close to 10 percent. One possible outcome is exactly this: you both keep your money invested and earn $110 at the end of the year when the investment project is complete and pays out. However, if either of you expects the other to withdraw early — even if there is no fundamental need — the other will as well, both receiving only $90.
In the D-D model, there are two types of agents. "Impatient" agents will discover they need to withdraw their investments prematurely and consume today. On the other hand, "patient" agents can consume a greater amount at the end of the investment period, or they can withdraw early if they suspect a run. Once an agent realizes its type, this remains private information — only the agent knows it. This feature is important because the possibility of runs gives patient agents some incentive to misrepresent their type. Similarly, depositors in the real world who do not "need" their funds may choose to withdraw anyway if they anticipate a run.
This simple example illustrates two core insights from the D-D model. The first insight is that at least two equilibria are possible: a "run" equilibrium where both types of agents, patient and impatient, announce they are impatient (by withdrawing early) and one where patient agents reveal their true type (by not withdrawing). The second insight is that the equilibrium where agents reveal their true type yields a higher payout than a bank-run equilibrium. That is, an ideal depositor contract would create incentives for patient agents, who do not truly need their funds, to not withdraw.
Potential Solutions to Runs
Overall, the D-D framework suggests three main factors that may lead to bank runs: maturity transformation, each agent having private information about its own need for liquidity, and sequential service (first come, first served — as in actual runs).
This framework also implies a solution to runs: embedding deposits with a suspension clause that says when redemptions exceed a specific threshold, the bank will suspend all payments until the end of the investment period. If the clause triggers suspension once the number of withdrawals exceeds the number of impatient agents, then the run will never occur because all parties will know that the bank will not become insolvent. Put differently, this arrangement allows for withdrawals based on a fundamental need for liquidity but prevents those based purely on fear.
However, this solution is only possible when there is certainty about the total number of impatient agents. On the other hand, if there is aggregate uncertainty, the suspension may not occur at the right time, and that would be costly: suspending prematurely may leave some impatient agents without needed resources — hurting economic output — while suspending too late may leave the bank with insufficient funds to avoid a run. Aggregate uncertainty arguably is the more realistic scenario. This could be solved if the bank could collect information about liquidity needs before making payments. However, sequential service, both in the model and in the real world, means that it is not possible for the bank to collect information about total liquidity needs before determining payouts. Thus, the requirement of aggregate certainty for the suspension solution to work is a limitation of the D-D model.
It has proven difficult to modify the D-D framework with aggregate uncertainty to identify run solutions. Green and Lin (2003) were the first to do so, and their model provides a unique equilibrium, one in which runs do not occur.4 Key to their model is the structure of sequential service: they allow the payments that impatient withdrawers receive to depend on payments from past withdrawers. This "partial suspension" structure preserves some resources for later withdrawers, which is clearly preferable from a social perspective to forcing the bank's insolvency earlier. Partial suspension has historically been present in bank contracts and invoked in panic episodes. By contrast, in the D-D setup, withdrawal sizes are not restricted, and thus the bank's resources are necessarily exhausted in a run.
The notable result in this setup is that backward induction avoids a bank-run equilibrium. Since resources are preserved for later withdrawers, the last agent in line knows that he or she can either withdraw early and earn a discounted payout or hold the investment until maturity and earn what is left in the bank. The latter will always be greater because the investment has been allowed to mature, so if the agent's type is patient, the incentive is not to run. The penultimate agent understands that the final agent will only withdraw if truly impatient. Similarly, all agents know that all depositors who come after them face incentive to report their type truthfully, providing incentive to report truthfully themselves and never withdraw early.
Runs would be prevented. At the same time, their model has a very particular structure in which the shocks that agents face are uncorrelated. Ennis and Keister (2009) generalize the model by allowing the shock that one agent faces to reveal information about the aggregate state of the economy and thus the liquidity needs likely to be faced by other agents.5 This can cause the Green-Lin mechanism to break down, once again enabling a run equilibrium: while the last agent still will report truthfully, earlier agents may withdraw early.
Peck and Shell (2003) also generalize the Green-Lin (2003) model but in a different way.6 When agents in their model withdraw, they don't know what other agents have done — the game becomes simultaneous, not sequential as in Green-Lin. Since they do not know their place in queue, they cannot backward induct to a no-run equilibrium. Arguably this is a more realistic portrayal; bank depositors may know some events that are underway — based, for example, on news reports — but they will not necessarily have full certainty about other depositors' liquidity demand.7
One takeaway from this discussion is that several models have proposed solutions to runs, but the robustness of the solution depends very much on the assumptions of the model. Even to the extent that any one set of assumptions matches the real world, the real world is liable to change with new information and innovations in the financial industry. Thus, a surefire solution to runs remains elusive.
A New Proposal
Suspension clauses are one of the most common prescriptions for enhancing the stability of demand deposits. For example, they have been part of the reform of money market mutual funds (MMMFs), which experienced turbulence during the financial crisis. A 2014 rule adopted by the Securities and Exchange Commission recommended that MMMF boards of directors have the discretion to impose penalty redemption fees and redemption gates — effectively to suspend payments — in times of heavy redemption activity.8 This proposal is consistent with D-D (1983), Green and Lin (2003), and Peck and Shell (2003). But the fact that bank-run equilibria remain possible in these models suggests that suspensions alone may not fully prevent runs or that suspensions can indeed prevent runs but at too high a cost.9
As noted, the core question is when to suspend payments. The answer depends on whether the run is based on fundamentals or fear. If withdrawals are driven by fundamentals — that is, depositors truly needing their funds for productive uses — then suspension is not desirable. But if withdrawals are driven by fear, it is desirable to suspend payments. The challenge is that only depositors know what is driving their withdrawals. If those agents had incentive to provide that information, the bank could in principle design a suspension clause with a trigger based on that information, eliminating the run equilibrium.
Much of the literature focuses on a particular direct mechanism that depositors could use to signal their individual liquidity needs: they simply withdraw their deposits. But this is not effective at signaling fears of a run. For example, the volatility of redemption rates varies across classes of MMMFs.10 How are directors of those funds to determine whether withdrawals signal a run based on fear or fundamentals? This suggests that some indirect mechanism that contains information about why depositors are withdrawing is needed to prevent runs.
This information could be conveyed by a new type of financial instrument that rewards the depositor for delivering such a message when a run is occurring. In a 2017 paper, Andolfatto, Nosal, and Sultanum model such a mechanism.11
In their model, depositors have the option to pay a small fee to have their funds held in a priority account. Each depositor faces a choice between the priority account or a normal account from which depositors could withdraw early by forfeiting all interest. If a run occurred, the return on the priority account would exceed the return on the normal account (with or without early withdrawal from the latter). But if a run did not occur, the return on the normal account would exceed the return on the priority account.
In other words, choosing the priority account could be interpreted as a communication of an impending run; the fraction of depositors who choose the priority account over normal accounts informs the bank on the degree to which depositors expect a fear-based run. If depositors believe a run is occurring, they would be better off choosing priority accounts. If enough depositors exercise that option, the bank would know that a fear-based run is occurring. The suspension clause could then be conditional on this fraction hitting a certain threshold. Since depositors know suspensions would be triggered before fear-based redemptions affect their payouts, they would have no reason to actually exercise the priority option, and this option would simply never be used.
Conclusion
In general, understanding the sources of banking fragility helps explain why banks are supervised, the origins of the 2007–08 financial crisis, and the regulatory response to the crisis. Modeling fragility in the way described in this Economic Brief also provides guidance for designing regulations and institutional features that might prevent runs.
The mechanism provided by Andolfatto, Nosal, and Sultanum suggests that suspension clauses should be conditioned on information relating to depositor beliefs about the likelihood of a run. That information could be elicited through a modification to the deposit contract that would provide incentive for depositors to reveal that information.
How feasible is this proposal? Since it is difficult to run experiments in financial markets, there is little empirical information on which to assess its efficacy. One can imagine depositors as already having behaved as if they had this priority option, for example, when massive withdrawals from MMMFs were channeled into highly safe and liquid assets like Treasury securities. Regulators and fund managers widely interpreted this to be an indication of a run — for example, this type of occurrence triggered many of the Fed's unprecedented actions during the crisis to backstop certain markets. In this case, there was no priority account to keep investors from running, but it suggests that the necessary information may be available for the taking if depository institutions create arrangements for receiving it.
Renee Haltom is the editorial content manager and Bruno Sultanum is an economist in the Research Department at the Federal Reserve Bank of Richmond.
Quote from: trout-r-us on March 14, 2023, 09:48:58 AMI believe a periodic bank run is a good system test. If everything works, no problem. If there's an issue perhaps additional regulation is in order. Regulation is put in place to protect the masses. De-regulation on the other hand serves the relative few money grubbers.
We don't need more regulation; we need more personal responsibility. My grandfather with an 8th grade education knew to not keep all of his eggs in one basket, these supposedly "brilliant" Silicon Valley types didn't comprehend this fundamental principal.
And it's not hard to avoid the problem of uninsured deposits. One method is CDARS https://www.intrafinetworkdeposits.com/how-it-works/ which allows you to bank at one bank but spread your deposits among many banks at less than $250,000 in each bank. Back to my favorite Forrest Gump quote "stupid is as stupid does" and these Silicon Valley "geniuses" were STUPID!
But because we have a stupid government we will all get to pay the cost as taxpayers even though they lie to us and say we won't.
Hmm.
Interesting approach, but if I have a bank refusing to give me my "demand deposits" because they screwed up their investment strategy (duration risk), then I no longer have a demand deposit and should be paid a duration return because of that. Frankly, this approach seems to reward the bank for taking more duration risk because they can tell their creditors (depositors) they can't have their money back yet because they (the bank) screwed up their (the bank's) investment. So a demand deposit is no longer on demand and a premium to the depositors should be paid for that.
And anyway, it turns out that the Chief Risk Officer position at SVB has been empty since April 2021. I wonder if the old CRO told the board or CEO that they needed to mark their investment portfolio to market a while back (losing money) and they balked. I have no idea that this happened, but having that slot open for that long should have really bothered the regulators and they should have tightened their mark to market analysis just in case it wasn't being done well by the bank.
I still think this age old system works if everyone plays by the rules. Perhaps allowing the community bank definition to include banks up to $250 billion and therefore avoid closer scrutiny and higher capital requirements is a major contributor to this problem. If this was a $10 billion bank, we would not be having this discussion.
TB
Quote from: troutboy_II on March 14, 2023, 12:03:16 PMPerhaps allowing the community bank definition to include banks up to $250 billion and therefore avoid closer scrutiny and higher capital requirements is a major contributor to this problem. If this was a $10 billion bank, we would not be having this discussion.
It is not a matter of which regulations the bank falls under but the quality of the OVERSIGHT or in this case the failure of the San Francisco Federal Reserve Bank and any additional regulators to do their oversight job.
Even the bank my money is in is subject to liquidity oversight and its assets are only $1.585B.
This bank failure was the result of bad risk management by the companies that deposited money in SVB, bad risk management by SVB and a total failure of GOVERNMENT to to its oversight function.
More regulation does not prevent problems like astute deposit management by depositors, astute risk management by the bank and functional oversight of existing regulations by competent government agencies. In this case of SVB all three fucked up.
Quote from: FlyChamps on March 14, 2023, 20:08:04 PMQuote from: troutboy_II on March 14, 2023, 12:03:16 PMPerhaps allowing the community bank definition to include banks up to $250 billion and therefore avoid closer scrutiny and higher capital requirements is a major contributor to this problem. If this was a $10 billion bank, we would not be having this discussion.
It is not a matter of which regulations the bank falls under but the quality of the OVERSIGHT or in this case the failure of the San Francisco Federal Reserve Bank and any additional regulators to do their oversight job.
Even the bank my money is in is subject to liquidity oversight and its assets are only $1.585B.
This bank failure was the result of bad risk management by the companies that deposited money in SVB, bad risk management by SVB and a total failure of GOVERNMENT to to its oversight function.
More regulation does not prevent problems like astute deposit management by depositors, astute risk management by the bank and functional oversight of existing regulations by competent government agencies. In this case of SVB all three fucked up.
The only thing I would add is that many depositors are not competent to risk underwrite their deposit choices. I think that is what regulators should be addressing. My 83 year old sister is a good example. And no, I don't think tough shit if she can't figure it out.
Of course the guvment will fuck it up by over regulating and make it worse, but I digress... b';
Everyone isn't keeping their money in Lead and Brass investments these days? Seems like the only logical investments with the way 2023 is going.
NC pension fund had millions invested in two failed banks. Will it get the money back?
Like companies across the state, North Carolina's pension fund had millions of dollars invested in two recently failed banks.
The North Carolina Retirement System had $10.1 million in Silicon Valley Bank stock and another $7.8 million in Signature Bank stock, the Department of State Treasurer confirmed Wednesday. Bank runs contributed to the collapses of Silicon Valley Bank (SVB) on Friday and Signature on Sunday.
While the combined $17.9 million investments represent a sliver of the state's overall retirement system value, Treasury spokesperson Frank Lester said "we are unsure at this time" if the money will be recovered.
https://www.newsobserver.com/news/politics-government/article273181700.html
^^^ Ouch.
https://youtu.be/etQeFJ2lbbo
He lost $340,000 to a crypto scam. Such cases are on the rise
Naum Lantsman was sure his cryptocurrency investments were making money. Every time he'd log on to the trading platform he was using, it looked like he was reaping windfall profits. But Lantsman, in fact, was one of a growing number of people who've fallen victim to cryptocurrency scams.
https://stocks.apple.com/AkIiQHMTjTeqqSH2HF70wWg
It appears that the Non-Fungible Tokens of a couple years ago have for the most part gone the way of the Dodo Bird.
https://www.rollingstone.com/culture/culture-news/nfts-worthless-researchers-find-1234828767/
BUT:
In an effort to make NFT's Great Again, Trumpsky is offering a golden (more like orange) opportunity for his fervent supporters.
Though many consider trump to be a jackass, where does that leave those that are actually stupid enough to support this bum?
https://news.yahoo.com/donald-trump-sells-cut-pieces-113322716.html?fr=sycsrp_catchall