arder (u/arder) - Readit News

arder commented on FTX creditors will make money on bankruptcy cnbc.com/2024/10/07/ftx-b... · Posted by u/koolba

tiffanyh · a year ago

Dumb question: why are creditors getting paid more than they are owed?

arder · a year ago

This was covered in some of the coverage much earlier about the bankruptcy proceedings. Essentially it's within the court's power to not only pay the creditors but to pay them interest on their losses if that's possible. That's obviously balanced against the rights of the equity holders to get back any value if there is any equity left. In this specific case the people with equity were: the fraudsters who ran the scam, venture capitalists. No one wants to pay off the fraudsters and the VCs would rather pretend this whole thing didn't happen (because it makes them look like drunken coked up degenerate gamblers on a weekend at Vegas) so everyone agreed the court should be generous with how they calculate the return to customers. Government entitires also have a claim for any fines or taxation or whatever, but they're relatively happy for the retail customers to be protected first too - but they care less about the equity getting wiped out.

My guess would be anything above what the customers get may well go out to government fines rather than returning to the equity holders.

arder commented on FTX creditors will make money on bankruptcy cnbc.com/2024/10/07/ftx-b... · Posted by u/koolba

fsckboy · a year ago

looking at individual investments is fallacious, need to look always at your entire portfolio (i.e. not just winning lottery tickets)

arder · a year ago

While that's true, if you have a good understanding of bankruptcy law, and a reasonable understanding of what assets FTX owned you could make a reasonable guess of how much money the eventual bankruptcy would pay out. Since the administrators publicly published what assets there were quite early on I think it's fair to say $270k always looked like a good deal.

arder commented on Should Insider Trading Be Legal? cato.org/blog/should-insi... · Posted by u/johntfella

Quarondeau · a year ago

It's not just about the potential effects on the stock market.

Allowing insider trading would also incentivize leaders to make business decisions that primarily serve their personal interests, rather than their company's. They would prioritize decisions that create short-term changes in the company’s stock price, just so they can profit from trading on that information.

arder · a year ago

In our libertarian utopia every employee at every company would receive a complex set of financial derivatives to incentivize them to manipulate the stock in exactly the way we want. Will Bob from Accounts push out recognising some revenue from this Quarter so that we miss projections and he can profit off some short dated Puts? No, because we had our HR team string together a series of quarterly short strangles to incentivize him to stabilize our share price.

arder commented on Pro bettors disguising themselves as gambling addicts bloomberg.com/news/articl... · Posted by u/JumpCrisscross

alphazard · a year ago

Clearly the problem in all of this is that these markets are rigged. Imagine if the most knowledgeable investors were banned from trading stocks, or had artificially low bankrolls. It wouldn't be practical for individuals to invest in the market because everyone would assume they were getting ripped off, and the price was totally separated from the value of the business.

The fact that the most successful investors have the largest effect on the price is exactly what makes the market fair. A layman can login to manage their 401k, put in a market order, and know they are getting a fair price because many people, much more knowledgeable than the layman, are competing to set the price.

arder · a year ago

The difference between a betting company the stock market is that in the stock market you have regulation to separate the exchange from the market maker. So in the stock market you go to the exchange, you buy or sell at the market price (or place an offer in the book) the exchange takes a commission but you're trading with a 3rd party. In the gambling world that generally doesn't happen, the exchange and the market maker generally are the same person - and there's good reason for that, if you can do it it's a better business model.

But either way, the same effect occurs. The sharks in the stock market profit from making good trades and in order to account for that the market makers have to quote a wider spread in the book, which effectively means the retail trader pays a larger spread. The net effect is money transfer from the retail trader to the smart trader. Would it be better for the market maker to just refuse to trade with the smart trader and then give the retail investor a better spread? Welcome to payment for order flow. Could a smart investor pretend to be a retail trader and get some good trades through Robinhood? Maybe, that's pretty analagous to what these guys are doing.

These are different mechanisms for the same thing but I'm not certain one is clearly morally superior.

arder commented on Why TCP needs 3 handshakes pixelstech.net/article/17... · Posted by u/thunderbong

tsimionescu · a year ago

Actually, the second answer is also unnecessary. The conversation can go like this:

A: Can you hear me?

B: Yes

A: What time is it?

B: 5 o'clock

A: Thank you, goodbye!

B: Goobye!

Nothing is lost compared to:

A: Can you hear me?

B: Yes

A: Yes

A: What time is it?

[...]

arder · a year ago

The problem is the other way around.

A: Can you hear me? B: Yes B: What time is it? A: ...

At the point that B has replied Yes, B knows that it can hear A and that it can send to A but it doesn't know that A can hear B. As long as A makes the first move in the rest of the conversation that's fine - the next message from A confirms that B's "Yes" was received, but if A has nothing to say then B has to send it's next query and hope that A received the Yes successfully. If it didn't then B thinks the connection is established but it actually hasn't been.

arder commented on YC criticized for backing AI startup that simply cloned another AI startup techcrunch.com/2024/09/30... · Posted by u/blinding-streak

paxys · a year ago

People look at the top 5 YC success stories and think every company they fund is of that standard. In reality they "graduate" 500-1000 startups every year. They aren't all winners. In fact I'd wager Pear AI is a lot closer to the norm in terms of quality and competency than, say, Stripe or Airbnb. If you look at their recent batches there is an endless parade of thin ChatGPT wrappers.

arder · a year ago

Well this just goes to the core of your view on the role of luck in life. Are there 1,000 startups coming out of YC every year and 5 of them are run by geniuses who single handedly disrupt loads of markets. Or are there 1,000 startups coming out of YC every year full of roughly equally good people 5 of which get extremely lucky and make boatloads of money.

Airbnb just forked hotels, Stripe just forked Visa.

arder commented on Gavin Newsom vetoes SB 1047 gov.ca.gov/wp-content/upl... · Posted by u/atlasunshrugged

alkonaut · a year ago

The immediate danger of large AI models isn't that they'll turn the earth to paperclips it's that we'll create fraud as a service and have a society where nothing can be trusted. I'd be all for a law (however clumsy) that made image, audio or video content produced by models with over X parameters to be marked with metadata saying it's AI generated. Creating models that don't tag their output as such would be banned. So far nothing strange about the law. The obvious problem with the law is that you need to require even screenshotting an image AI and reposting it online without the made-with-ai metadata to be outlawed. And that would be an absolute mess to enforce, at least for images.

But most importantly: whatever we do in this space has to be made on the assumption that we can't really influence what "bad actors" do. Yes being responsible means leaving money on the table. So money has to be left on the table, for - erm - less responsible nations to pick up. That's just a fact.

arder · a year ago

I think the most acheivable way of having some verification of AI images is simply for the AI generators to store finger prints of every image they generate. That way if you ever want to know you can go back to Meta or whoever and say "Hey, here's this image, do you think it came from you". There's already technology for that sort of thing in the world (content ID from youtube, CSAM detection etc.).

It's obviously not perfect, but could help and doesn't have the enormous side effects of trying to lock down all image generation.

arder commented on Caroline Ellison sentenced to 2 years in prison nytimes.com/2024/09/24/te... · Posted by u/gniting

UncleMeat · a year ago

SBF has been widely presented as a person who was constantly running these probabilistic computations and comparing expected values, but this strikes me as total horseshit that is a group invention of SBF himself and journalists who have a much more interesting story when he is a wunderkind.

I'll totally buy that he thinks about risk differently than other people, but not in some more mathematical sense.

arder · a year ago

Well for a start to run an even passable market making operation and to get into the jobs Sam did you have to be atleast fairly good at the mathematics behind probability. He's definitely more able to reason about probabilities than the average person. But sure, "I'm gonna go steal all these guys deposits to go gambling" wasn't an aggressive but understandable bet, it was the act of a degenerate gambler.

arder commented on Caroline Ellison sentenced to 2 years in prison nytimes.com/2024/09/24/te... · Posted by u/gniting

kristianp · a year ago

I still don't understand why they did it. SBF came from a period as a successful trader. He didn't need to defraud people to be successful. The same thought came to me when watching the Netflix show about Madoff: his pyramid scheme was only a sideline to a successful market-making business, he could have shut it down before his losses became too great, and the losses were only going to get bigger as time went on.

arder · a year ago

Nate Silver interviewed as SBF as part of research for his book and I think the big take away from it was basically that Sam's attitude to risk was pathological - he was willing to take any sized bet that he thought was positive expected value. The obvious problem with that is that you if you continually take higher and higher risk bets it's certain that you'll eventually lose one of them.