Halfway in, this reads like yet another home run after his last year's video on NFTs. Just exposing fraud, manipulation, and tragedy -- in three-hour monuments.
It's a long watch, but I'm impressed at Dan's dedication to digitally 'live amongst' the subjects in question for each of his videos. Maybe even moreso by the enormous script that must have gone into this, without any of the talking head shots feeling rehearsed.
Also incredible work by all the voice talents bringing these semi-anonymous comments to life!
Fascinating intersections between people wanting to change the world and grifters and conspiracy theorists.
How we so easily 'worldbuild' our way into a different reality in which up is down and literally accidentally tweeting a single letter is some kind of hidden mesage.
In general, it seems like there are many people who see a problem - like with the financial system - but come up with a solution that will never work. Crypto, for example seemed very promising for many up to the point it was clearly bad (for now?).
For meme stocks, there remain a core of people who are convinced (according to Olsen, and I believe him) that they have to hodl forever to change the world or get their reward. The problem (a self-serving, potentially corrupt financial system) may be real, but the solution (short-selling stock in a failing company) is definitely not.
It's unironically a cargo cult. GameStop was insanely oversold by short sellers and had an astronomical short squeeze because of it, but then it got limited by the big guys (because it literally had the potential to bankrupt Robinhood) and now it's probably the purest example of an anti-establishment cult, taking legitimate grievances about Wall Street and making them stupid
>Figure 6 shows that the run-up in GME stock price coincided with buying by those with>
short positions. However, it also shows that such buying was a small fraction of overall buy volume, and that GME share prices continued to be high after the direct effects of covering short positions would have waned. The underlying motivation of such buy volume cannot be determined; perhaps it was motivated by the desire to maintain a short squeeze. Whether driven by a desire to squeeze short sellers and thus to profit from the resultant rise in price, or by belief in the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock.
What really happened is that some people on Reddit bought up a bunch of GameStop stock and went around convincing other people to buy it by telling them an appealing but false story. If done deliberately, that's called a pump-and-dump. Dumb money attracts smart money, so there were definitely some wolves among the sheep.
> What really happened is that some people on Reddit bought up a bunch of GameStop stock and went around convincing other people to buy it by telling them an appealing but false story. If done deliberately, that's called a pump-and-dump.
Disclaimer: only read around figure 6 and the part you quoted
I'm willing to buy this as part of the explanation, but reading through the methodology for Figure 6 seems flawed. It doesn't appear to account for positions being managed through derivatives (possible reporting requirements are different here?) as firms might have delta-hedged through these means rather than simply buying spot. Really weird that ctrl+F hedges gets so few results, and the Consolidated Audit Trail sample only beginning on December 24, 2020 seems like a major flaw. Like, really, there's a once-in-a-generation market event and the SEC only bother to get CAT data from a month (and many holiday+half days) before regarding the major event for a listed security that had been brewing for months?
For me the most interesting (and imo alarming) part of the whole saga was the coordinated action by Robinhood, Trading212, IBKR and others to turn Gamestop into a sell-only asset. Increasing margin requirements? This seems obviously responsible in the circumstances. But effectively pausing a stock while there is no official trading halt was insane and seemed on the face of it to be coordinated. It's obvious that a retail-heavy stock would tank from such action being taken. If you did it to TSLA or MSFT there would be panic and dumping too.
(After watching the video where he addresses this I'm still not super convinced there weren't alternative ways to do this without having outsized impact on specific stocks. He definitely plays down the fact that the 28th close was like -50% relative to 27th close as a direct consequence of the volatility caused by the pause, and doesn't mention that those with cleared funds still couldn't buy the stock with these brokers)
Also interesting is how hedge funds have learned to exploit this kind of frenzy. I really hope that it will be possible to do research on BBBY to find out how much of that was astroturfed. Whipping up irrational actors through astroturfing seems like a pretty smart thing to do if you're in in Hudson Bay Capital's position with the agreement they had with BBBY. I'm not accusing Hudson Bay Capital of anything, I'm simply pointing out that the incentives were there. I've not watched the entire video yet, but I really hope it delves into that. The BBBY subreddit was kind of a morbid curiosity for me.
It's a cargo cult, in the sense that the apes are aware that stock market investors are able to make large amounts of money by coming up with clever theories and using smart derivative plays to make ridiculous profits... and so they follow those patterns, creating elaborate theories, buying stocks, but they miss the critical underlying component of the professional trader's version: those theories and trades are based in an actual understanding of how the market and businesses work. Lacking that understanding, ape theories are untethered and random, their trades are insanely naive, and the ridiculous profits will therefore never arrive.
It must be because the theories weren't outlandish enough, right?
> it got limited by the big guys (because it literally had the potential to bankrupt Robinhood)
This is usually inaccurately framed by r/wsb superstonk conspiracy drivel, although technically sort-of true if "big guys" == DTCC and "potential to bankrupt Robinhood" only if DTCC didn't do it's job of (always) requiring capital for extreme volatility.
The real financial-literate reason is that the trades are going through DTCC, and because of the huge, immediate price fluctuation (volatility), collateral requirements shot up (by necessity of ensuring a brokerage wanting those trades can actually follow through), and Robinhood didn't have the capital to post collateral for those trades and literally couldn't offer them. Many other brokerages also couldn't offer buys because of this.
You know, I'm one of the few people who - as much as I'd love to honor the effort that went into it - I truly barely ever have the time to watch 2+ hour long videos anymore.
Stay logged out of Google account(s), clear your cookies, and go to the channels you already like to (re)build your 'preference profile' associated with the new cookie that Google sends you.
Perhaps use browser profiles to separate your logged-in and logged-out 'personas'.
If you want to watch a video, but don't want it to contaminate your current preferences, watch it in a private browser window.
I have always felt this is where recommendation engines go wrong.
If I watch a cat video, it'll think all I like are cats.
I may like content about Foo — something entirely unrelated to cats — if I watch it. But since I have never watched anything about Foo before (perhaps because I didn't know about its existence), it won't recommend me Foo. Therefore I wouldn't know it exists. Hence I never see it, even though if I had seen it I may (or may not) have liked it.
Meanwhile, after a point I get tired of all the cat videos, and stop using the service.
I want recommendation engines to occasionally recommend totally fresh content unrelated to anything I ever watched.
I wonder if this is actually a small problem, or, reflection of the reality at this moment, that past performance is not necessarily indicative of future results. "___ is recommending ___ even after I'm done with it" seems too common of a complaint for recommendation engines to be a small simple oversight.
I've been following this community since the january 2021. I'm 50 minutes in and this seems like a pretty accurate take thus far. It has absolutely morphed into a syncretic conspiracy theory, and even cargo cult as some other commenters have pointed out.
I personally made a pretty penny on the run up just with some stop loss orders. I have been wheeling it for about 1.5 years as well and currently have 200 shares for free. I don't believe in any of the conspiracy theories, but these people keep pumping money in and maintaining a pretty stable trading channel, so I will keep selling theta.
Going a bit on side venture here with this comment, but I'd so much prefer this to be well written up instead of a two and half hour video. And it's so ubiquitous, watching videos over people reading, and I can't help but think it's extremely hurtful on a cultural/societal level. And the fact that it's creeping in more and more, even on HN, just shows that I must be more and more of an outlier,... is this what it feels to get old?
Writing > Video, because:
a) I have control over pace. Not just how fast I read, but how long I look at a graphic, or a slide, or I might reread a significant sentence, skip a paragraph where the author dwells on something for too long, stop reading to research something,... this also allows me to skim something to see if I'm interested... this is very hard to do with a 2 1/2 hour video... to the point of where I'm not looking into it for that very fact alone, I'm sad to say. I don't want my attention grabbed by 20 minutes of video watching to find out if it's worth watching...
b) Text automatically engages your critical thinking completely differently.
In text form it's far easier to see argumentative structure, and you are far more critically engaged in a subject matter. This applies to the reader, who can far more accurately scrutinize the arguments and logic applied, but also to the author while writing, who therefore produces by average far more valuable content. If you don't believe me transcribe audio to text (whether most speeches, podcasts, or other), and read it critically as if it was a book and find how (in most cases) horrendously it performs as text. This is by the way something we completely lost. Politicians long gone spoke modeled after written text. Speeches transcribed from Abraham Lincoln and fellow politicians of the era read like formally written up arguments... barely anyone can talk like this anymore (we've lost so much in that department).
c) Writing is in some ways more and in some ways less effort than a video. And I'd argue it benefits the content itself. All that energy going into video production, editing, having a nice background and good sunlight for talking to the camera, would be so much better spent on properly writing, researching, citing sources... I'm in no way saying none of it is done, but priorities are completely different when "producing a video essay" versus "I'll write something proper that can stand scrutiny". And I'd argue the latter produces higher quality content.
d) Text is far more easily accessible. I need a static HTML page to host text, it doesn't need any bandwidth to speak of, I can easily host it on my own site, on a blog hosting service, move hosting services, you could even use a pastebin and tweet the link. It's searchable, it can be fully indexed by search engines, it can be accessed via screen readers, easily auto-translated via any tools of ones choosing, easily copy-pasted into your own notes, can be easily cited, extended, worked on...
God I wish people would write more, read more, and in turn produce less videos, and watch less videos... but I might just be a walking dinosaur, or (since I am not even middle aged) just have grown up differently, so... I don't know...
I'm with you there. I just look at the transcript when I'm interested in the content and can't find a proper written alternative.
On the other hand, if there's no written alternative, chances are that the content was irrelevant anyway, so maybe it's fine to ignore in the first place.
You're right about all of that. But people use different media to convey different things, and to reach different people, and engage different states of mind. Every advantage you list is also a disadvantage from another perspective. Video is not just text poured into a different container - even if it's just a video of a talking head!
For example, it's well-known that video engages empathy in ways that text does not. When you're documenting a kind of widespread tragedy, that could be essential.
So, are you sure the video didn't work on you? If someone had just posted a giant article would you have read it, or wanted to read more with the same interest? And even if that would have worked for you, a popular video like this can create a proven demand for journalists to write more stories and authors to write more books.
Yeah, text is superior for these kinds of topics. But ads and SEO spam have destroyed discoverability for writing. The same hasn't happened for videos yet. They can still be monetized and that justifies the time and effort needed to make a video.
You could probably find a written article about the subject. For many things I prefer a written source. But these videos from Dan Olsen are entertainment. The subject is kind of dry and boring really, I don't care that much. Yet he presents all his videos in an entertaining way.
"Documentary make makes a documentary when I wanted a book" feels like an invalid complaint.
I share your preference for text over video in many cases, although I think Dan Olson makes extremely effective use of his medium in a way many other "video essayists" do not. As far as age goes: before the Internet or even TV, people would go to see lectures and presentations for entertainment. Political speeches and debates were much longer, too. I think there's always been a desire for information delivered verbally in a compelling way. We just have different ways of delivering it now.
I also wouldn't take the transcription of older speeches too literally.
Dan usually publishes transcripts on Patreon (or, at least he has done for 'Line Goes Up' etc.). He even puts them into EPUB format for e-readers which is quite nice.
You can also just rip the captions straight from YouTube (which Dan generally does a good job with), though you miss all the on-screen visuals, which can be quite amusing to pause and read.
I refuse to watch this 2.5-hour video because I don't trust his words.
I watched the entirety of one of his previous videos on a friend's recommendation - "Line Goes Up – The Problem With NFTs" https://www.youtube.com/watch?v=YQ_xWvX1n9g . While I agree with the main premise that NFTs and cryptocurrencies are very problematic from many angles (financial, hype, scams, etc.), he made so many factual errors that I found it very hard to take it seriously. I have worked with Bitcoin software and can point out things he said that are an outright misrepresentation of the technology and mechanisms.
To avoid the cost of sitting down for 3~4 hours to rewatch the full video while critiquing it and writing notes, I opted to skim the entire narration transcript and pick out some points. This is not a complete critique, but I'm bounded by how much time I can afford to spend on it.
[0h01m15s] He talks about the 2008 Great Recession and frames it in terms of greedy banks offloading risky mortgages. But he fails to mention that the government entities FMAC and FMAE insured those subprime mortgages in order to encourage home ownership, which is what enabled this risk-taking in the first place. If the banks had their own money at risk rather than the government's money, they wouldn't have done it.
[0h02m15s] > the biggest returns on a bond come from when it first hits the market, a new bond that creates new securities sales is worth more than an old bond that is slowly appreciating, but not seeing much trade.
What? I'm pretty sure that's not how the bond market works. Bonds are priced fairly. Bonds being traded are sold at neither a premium nor discount to their fair market value. Also, the trading value of bonds doesn't appreciate or depreciate unless the interest rate changes.
[0h14m15s] > How it works in Bitcoin, simply put, is that when a block of transactions are ready to be recorded to the ledger all of the mining nodes in the network compete with one another to solve a cryptographic math problem that’s based on the data inside the block. Effectively they’re competing to figure out the equation that yields a specific result
Wording nitpick, but they the equation is easily known, but the values to solve that equation are what are hard to find.
[0h14m42s] > Once the math problem has been solved the rest of the validation network can easily double-check the work, since the contents of the block can be fed into the proposed solution and it either spits out the valid answer or fails. If the equation works and the consensus of validators signs off on it the block is added to the bottom of the ledger and the miner who solved the problem first is rewarded with newly generated Bitcoin.
Another wording nitpick. The verifier doesn't spit out the valid answer; it takes a proposed answer and spits out "valid" or "invalid". Secondly, the notion of the block being added to the bottom of the ledger glosses over the critical detail that every validator does so. Any validator can choose to reject the block, but it is not in their interest to do so because they would be going against consensus.
[0h17m57s] > Because electrical consumption, electrical waste, is the value that underpins Bitcoin. Miners spend X dollars in electricity to mine a Bitcoin, they expect to be able to sell that coin for at least X plus profit.
Wrong again, this alludes to the labor theory of value. It's the other way around: Because people are willing to put a value on Bitcoin for their transaction utility, miners are willing to spend electricity to prop up the system.
[0h30m58s] > It’s an ecosystem that absolutely demolishes consumer protections and makes the re-implementation of them extremely difficult.
He presumes that consumer protection is the only worthy goal. What about merchant protection? Search on Google for horror stories of eBay merchants getting scammed on PayPal by customers who lie about not receiving the product. Look at Louis Rossmann's rants about payment processors forcing merchants to eat the transaction fee even if a dispute is resolved in favor of the merchant.
> the transaction fees on popular chains are so prohibitive that it’s pointless to use them on any transaction that isn’t hundreds, if not thousands of dollars
The transaction fee on the Bitcoin network is definitely not hundreds or thousands of dollars. Look up any fee estimator and the exchange rate. https://ycharts.com/indica...
A lot of this is ideological difference, which is to be expected, but let's take one concrete thing we can check here:
> The transaction fee on the Bitcoin network is definitely not hundreds or thousands of dollars. Look up any fee estimator and the exchange rate.
From the chart you posted, the current fee is roughly 2 BTC, which maps to $54,000. So that's thousands of dollars. When the video was published in January 21, 2022, the transaction fee was about the same, but 2 BTC cost about $70,000. So that's thousands of dollars.
At its peak in April 2021, the transaction fee was ~60BTC, with a BTC selling for $60,000. So that's 60BTC * $60,000 = $3.6 million. So I guess Dan was wrong. Transaction fees on popular chains can range into the millions of dollars.
Bitcoin network fees have never been $54,000, let alone $3.6 million. The most they've ever been is two, maybe three figures. You must be reading the chart wrong.
A huge portion of this is nits. A considerable amount of this is not challenging what is stated, but instead is just saying "well that's good, actually."
> I know he has an anti-capitalist, probably socialist bent.
More significantly, you seem to have missed his point: he isn't saying that fees are hundreds of dollars, but that a 50 dollar fee is too expensive for any transaction that isn't at least hundreds of dollars.
> the highest btc transaction-fees are public record and have (very rarely) ranged into the 10s of thousands of dollars
That's not representative of the market rate, so is irrelevant to the discussion of whether fees are cost prohibitive.
For example at the same moment in time as the guy who accidentally paid a $500,000 fee (in the same block), you can see a bunch of transactions that went through with $2 and $3 fees. Yes that's still high in a relative sense, but it's not tens of thousands of dollars.
To determine whether corn is cost-prohibitive, you need to go by the market rate, not link to a top-10 list of the most overpriced corn purchases ever made.
Sure, I agree with that. But I think the point in the video, that coins that pretty regularly have transaction-costs in the tens of dollars are an unreliable medium for transactions smaller than hundreds of dollars, still stands.
One I didn't see the other's mention is that in Line Goes Up, Dan calls secure-scuttlebutt (SSB), a p2p messaging protocol, a blockchain.
IIRC Dan was relying on a sentence from an outdated, archived documentation site made by an open source contributor many years ago. The core SSB devs then had to try to convince people that Dan was wrong about their project. Dan refused to admit he was wrong, despite a lack of blockchain in the open source code, and just pasted a screenshot of the old docs.
It's not just you. I'm not about to go rewatch that video to pick out the inaccuracies again because it's such a long video, but he definitely could have benefited from running his script by a software developer for fact-checking.
Like I said I'm not planning to go back and re-watch the entire video to make a list (I'd be writing an entire essay), but here's one illustrative example I noted the first time I watched it:
"[Proof of Stake] suffers from delays when elected validators are offline and the system needs to draw again."
It's easy to look at a poorly designed Proof Of Stake protocol and point out flaws. But since his beef is with PoS itself, I think it's fair to measure his claim up against Ethereum's beacon chain which is considered to be one of the better PoS designs:
* Ethereum's validators are self-chosen, not elected.
* There is a ~99.5% participation rate, meaning that 1 in 200 slots are missed. Offline validators are very, very rare.
* When this 1 in 200 chance occurs and a slot is missed, Ethereum's elastic block size mechanism (EIP-1559) ensures that the chain catches up by effectively adding additional capacity to the subsequent blocks.
* Whereas this slight unpredictability happens very rarely in Proof Of Stake, it happens constantly under Proof Of Work. This is because PoW is an inherently unpredictable poisson process. Thus, PoS is a substantial improvement over PoW in this way.
* The result of this 1 in 200 fluke is that your transaction takes 18 seconds instead of 6 seconds to reach preliminary finality. And that's only for Layer 1 transactions which are by their nature high-value; Layer 2 transactions enjoy quicker and more predictable soft finality.
I also remember there being issues in his economic analysis of PoS, an unwillingness to engage with scaling technologies (hand-waving it away as based on nothing), no mention of for example Secret Shared Validators or Rocket Pool as solutions to the solo staking minimum, no mention of the history or state expiry roadmaps when discussing the growing size of the chain. Those are just some more examples, reconstructed from some old notes of mine I found, without me spending too much more time on this.
Line Goes Up only briefly touches on proof of stake and mostly says that PoS had not yet proven itself as a solution to the problems with PoW. But I think it's important to understand that the central argument of the video is not a technical one. The inefficiency and scaling problems of cryptocurrency networks play a rhetorical role in the presentation, but the primary attack is on the concept itself. He argues that even if the technical problems were solved, the social and economic changes promised by cryptocurrency are undesirable. Any attempt to 'debunk' him based on quibbles about how up-to-date his understanding of different blockchain technologies is kind of missing the point.
> He argues that even if the technical problems were solved, the social and economic changes promised by cryptocurrency are undesirable.
I didn’t realize his argument is merely that crypto will change the world in an undesirable way. I thought he was arguing that crypto will be ineffective at changing it at all. That makes his argument much easier to address.
Investing isn’t about judging a technology as good or bad, it’s about judging it as profitable or unprofitable. If he’s not arguing that the line won’t go up, then his argument is frankly irrelevant to me as an investor.
I empathize with people who believe crypto will have an overall negative effect on the world, but it’s not like it will go away if investors refuse to buy units of it. And if crypto does cause real, lasting social and economic changes over the coming decades, I personally doubt that a layman video journalist will be the one to accurately predict the nature of that transformation. The most accurate prediction is probably going to come from someone much more versed in macroeconomics and/or the tech itself. Probably from someone who understands how proof of stake works.
Facially it's counterprogramming for pro-crypto advocacy. More broadly it's propaganda intended to promote general opposition to cryptocurrency and the adoption of related technologies. That this includes not investing in crypto markets is a given, but most of the intended audience is not made up of people seriously considering doing that in the first place. The end goal is to reach and convince a broad enough audience that corporations, celebrities, etc. see involvement in crypto as a risk to their brands, not something to be pursued and cashed in on. This also leads to an environment of public sentiment where politicians and regulators are more inclined to crack down on crypto, rather than enabling it.
I'm tired of the propaganda on both sides, honestly. I don't really care what non-technical people think about a piece of software that they don't understand.
The early days of WSB were much different compared to what it is today. It used to have some really smart people doing quality research and putting their money where their mouth was with large bets. As it grew and more new traders came in, the new traders started pumping out half-baked ideas to make a name for themselves and the other new traders followed and lost their life savings. Honestly I think that the focus on memes is partially to blame.
All of the people that were originally in WSB left and went to a couple of smaller subreddits and/or a collection of small discord servers.
“Any community that gets its laughs by pretending to be idiots will eventually be flooded by actual idiots who mistakenly believe that they're in good company.” - Earnest Hemingway
A long time ago, I worked for a company called MarinSoftware (MRIN). When I left, I bought whatever shares I had vested (it wasn't that much) thinking maybe some day it'll pay off. The CEO [0] is this short little guy with a Napoleon complex and I figured if anyone could extract value from this business, he could.
Eventually, the company went public and the stock performed as expected... it went to shit. This could be due to the company never actually realizing a profit, but who knows. Having worked on the inside, I knew that the technology stack was shit and the engineers working on the system were subpar. For example, the CTO hired his cousin.
Since the stock was under water, I held onto it for a a number of years (10?). My internal reasoning was that I wanted to wait until it got as close to zero as possible before selling so that I could maximize my tax loss. Yea, right.
Suddenly, in the middle of covid, the reddit "investors" decided to randomly start to pump the stock [1]. It really came out of nowhere and I was kind of lucky to have checked the stock price. Jokingly, I set my limit order for 25 and left it there. A day or two later, I got notified that all of my shares had sold.
Outside of cases where you are trying to keep your AGI below a certain number, it is always better to have the cash than an equivalent loss, since nobody's marginal tax rate is 100%.
Selling at a $0 loss is always preferable to selling at a $1,000 loss, which takes $1,000 off your income, saving a marginal 43% rate of $430. You still lose $570. Tax loss harvesting is about capturing the loss and immediately moving into similar assets, so you book the income tax reduction now and postpone your eventual lower base sale. That is useful for things like similar ETF's, not unique assets like Marin Software equity.
The superstonk crowd were my first real interaction with people fully in on a conspiracy theory. It was a huge learning experience for me - I'd always sort-of believed that if I was ever face to face with, like, a flat earther or whatever, I'd be able to talk them out of their beliefs. Super naive, I know! Interacting on that subreddit though really hammered home that people in a conspiracy theory don't really _read_ your post, so much as flag it as non-conforming then dunk on it. It was pretty eye-opening for me, and I'm really glad noone in my life has drank the kool-aid on any conspiracies because I'm not really sure there's anything you can do.
I know some people that lost a ton of money on this. It was definitely one of the weirdest things I've seen someone get absolutely convinced of. Any evidence that was contrary to what they already believed was more proof in their eyes to what they believed. Because it was just the "bad guy" trying to beat them.
These are seemingly intelligent people that would recognize this same problem in other peoples conspiracy theories and willingly ignorant beliefs.
At this point what is there to possibly do? It doesn't seem like a good idea to bring it up at this point and be like "I told you so" and just get them mad. I hope they have recognized their mistake by now on their own.
One of the video's conclusion from 2:14:27[1] - 2:18:03 is chilling, "the illusion must be defended at all costs, because the illusion is all that is.". He does call it outward-facing performance, but I'm not so sure if it's not also inward-facing, I think there are many "unhinged" out there who'd rather live in (and defend) the fantasy world rather than accept reality. Accepting reality would mean admitting they've been conned (or even, fooled themselves), that they're not as smart as they thought they were (because in their view: what smart people get conned?), and many of them have too fragile of egos to admit that, and would rather emotionally lash out rather than go down that "shameful" path of self-evalution when challenged.
Throughout the whole video I'm reminded of the Game Designer’s Analysis Of QAnon[2], where people are thrilled about connecting dots and finding hints where there are none intended.
To delve into politics, there are also many unhinged who put their hope of a better life, some of them probably did so first into Obama (Obama himself has said in his post-presidency book, he found it worrying when running in 2008 that people were putting their dreams and hopes into him), and some of them, when they found their lives hadn't gotten better in 2016, probably thought "Well, Hillary will be more of the similar, and Trump promises greatness (again), what the hell do I have to gain for voting 'similar', and what the hell do I have to lose for voting 'greatness (again)'?". In some sense Bernie also offered that radical change, but if you want to blame brown, gays, etc, people for your suffering, Trump was the easier choice. And rather than admit that they've been conned, they'd rather invent a million scenarios why Trump was (and is) the correct choice, there's just some deep state conspiracy ensuring the continued enslavement of the poor (Note: I don't share this viewpoint, just summarizing it!).
> people in a conspiracy theory don't really _read_ your post, so much as flag it as non-conforming then dunk on it.
It goes both ways - people flag legitimate claims of conspiracy and dunk on them, too. For example in the 40s, the idea that cigarette manufacturers were conspiring with the medical industry. Or as a 2010s example, that the NSA is secretly recording everything we are doing and saying online (PRISM).
My biggest take-away is that you need to be paying attention, you need to get your news from multiple sources, and it helps to have strong foundational knowledge that you can use to gauge the reliability of those sources. Usually the establishment is right, but sometimes that random guy on the internet is right, so it's important not to discredit anyone solely based on their pedigree. A process that, obviously, the kool-aid drinkers in that subreddit didn't seem to have a grasp on.
> the idea that cigarette manufacturers were conspiring with the medical industry
Was this actually dismissed at the time as a conspiracy theory? Similarly, claims about the NSA monitoring US citizens were taken seriously well before the PRISM disclosures -- there were hearings on ECHELON in the '80s.
75 comments
[ 4.1 ms ] story [ 236 ms ] thread* https://www.youtube.com/watch?v=YQ_xWvX1n9g
* https://en.wikipedia.org/wiki/Line_Goes_Up_–_The_Problem_Wit...
See also the 2020 video that starts out on Flat Earth, a belief that is waining… because people are going to Qanon:
* https://www.youtube.com/watch?v=JTfhYyTuT44
Also incredible work by all the voice talents bringing these semi-anonymous comments to life!
How we so easily 'worldbuild' our way into a different reality in which up is down and literally accidentally tweeting a single letter is some kind of hidden mesage.
Well worth the watch.
Echoes of hospital administrators 2000% growth since 1990...
src: med school drop-out
In general, it seems like there are many people who see a problem - like with the financial system - but come up with a solution that will never work. Crypto, for example seemed very promising for many up to the point it was clearly bad (for now?).
For meme stocks, there remain a core of people who are convinced (according to Olsen, and I believe him) that they have to hodl forever to change the world or get their reward. The problem (a self-serving, potentially corrupt financial system) may be real, but the solution (short-selling stock in a failing company) is definitely not.
https://www.sec.gov/files/staff-report-equity-options-market...
>Figure 6 shows that the run-up in GME stock price coincided with buying by those with> short positions. However, it also shows that such buying was a small fraction of overall buy volume, and that GME share prices continued to be high after the direct effects of covering short positions would have waned. The underlying motivation of such buy volume cannot be determined; perhaps it was motivated by the desire to maintain a short squeeze. Whether driven by a desire to squeeze short sellers and thus to profit from the resultant rise in price, or by belief in the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock.
What really happened is that some people on Reddit bought up a bunch of GameStop stock and went around convincing other people to buy it by telling them an appealing but false story. If done deliberately, that's called a pump-and-dump. Dumb money attracts smart money, so there were definitely some wolves among the sheep.
Disclaimer: only read around figure 6 and the part you quoted
I'm willing to buy this as part of the explanation, but reading through the methodology for Figure 6 seems flawed. It doesn't appear to account for positions being managed through derivatives (possible reporting requirements are different here?) as firms might have delta-hedged through these means rather than simply buying spot. Really weird that ctrl+F hedges gets so few results, and the Consolidated Audit Trail sample only beginning on December 24, 2020 seems like a major flaw. Like, really, there's a once-in-a-generation market event and the SEC only bother to get CAT data from a month (and many holiday+half days) before regarding the major event for a listed security that had been brewing for months?
For me the most interesting (and imo alarming) part of the whole saga was the coordinated action by Robinhood, Trading212, IBKR and others to turn Gamestop into a sell-only asset. Increasing margin requirements? This seems obviously responsible in the circumstances. But effectively pausing a stock while there is no official trading halt was insane and seemed on the face of it to be coordinated. It's obvious that a retail-heavy stock would tank from such action being taken. If you did it to TSLA or MSFT there would be panic and dumping too.
(After watching the video where he addresses this I'm still not super convinced there weren't alternative ways to do this without having outsized impact on specific stocks. He definitely plays down the fact that the 28th close was like -50% relative to 27th close as a direct consequence of the volatility caused by the pause, and doesn't mention that those with cleared funds still couldn't buy the stock with these brokers)
Also interesting is how hedge funds have learned to exploit this kind of frenzy. I really hope that it will be possible to do research on BBBY to find out how much of that was astroturfed. Whipping up irrational actors through astroturfing seems like a pretty smart thing to do if you're in in Hudson Bay Capital's position with the agreement they had with BBBY. I'm not accusing Hudson Bay Capital of anything, I'm simply pointing out that the incentives were there. I've not watched the entire video yet, but I really hope it delves into that. The BBBY subreddit was kind of a morbid curiosity for me.
It must be because the theories weren't outlandish enough, right?
This is usually inaccurately framed by r/wsb superstonk conspiracy drivel, although technically sort-of true if "big guys" == DTCC and "potential to bankrupt Robinhood" only if DTCC didn't do it's job of (always) requiring capital for extreme volatility.
The real financial-literate reason is that the trades are going through DTCC, and because of the huge, immediate price fluctuation (volatility), collateral requirements shot up (by necessity of ensuring a brokerage wanting those trades can actually follow through), and Robinhood didn't have the capital to post collateral for those trades and literally couldn't offer them. Many other brokerages also couldn't offer buys because of this.
So I appreciate it.
Is there any way as a consumer to discover new content (matching my taste) on Youtube. Seems like newer channels struggle a lot with this problem.
YouTube home page despite popular opinion is my best way to find new deep interesting content.
Perhaps use browser profiles to separate your logged-in and logged-out 'personas'.
If you want to watch a video, but don't want it to contaminate your current preferences, watch it in a private browser window.
If I watch a cat video, it'll think all I like are cats.
I may like content about Foo — something entirely unrelated to cats — if I watch it. But since I have never watched anything about Foo before (perhaps because I didn't know about its existence), it won't recommend me Foo. Therefore I wouldn't know it exists. Hence I never see it, even though if I had seen it I may (or may not) have liked it.
Meanwhile, after a point I get tired of all the cat videos, and stop using the service.
I want recommendation engines to occasionally recommend totally fresh content unrelated to anything I ever watched.
I personally made a pretty penny on the run up just with some stop loss orders. I have been wheeling it for about 1.5 years as well and currently have 200 shares for free. I don't believe in any of the conspiracy theories, but these people keep pumping money in and maintaining a pretty stable trading channel, so I will keep selling theta.
Writing > Video, because:
a) I have control over pace. Not just how fast I read, but how long I look at a graphic, or a slide, or I might reread a significant sentence, skip a paragraph where the author dwells on something for too long, stop reading to research something,... this also allows me to skim something to see if I'm interested... this is very hard to do with a 2 1/2 hour video... to the point of where I'm not looking into it for that very fact alone, I'm sad to say. I don't want my attention grabbed by 20 minutes of video watching to find out if it's worth watching...
b) Text automatically engages your critical thinking completely differently.
In text form it's far easier to see argumentative structure, and you are far more critically engaged in a subject matter. This applies to the reader, who can far more accurately scrutinize the arguments and logic applied, but also to the author while writing, who therefore produces by average far more valuable content. If you don't believe me transcribe audio to text (whether most speeches, podcasts, or other), and read it critically as if it was a book and find how (in most cases) horrendously it performs as text. This is by the way something we completely lost. Politicians long gone spoke modeled after written text. Speeches transcribed from Abraham Lincoln and fellow politicians of the era read like formally written up arguments... barely anyone can talk like this anymore (we've lost so much in that department).
c) Writing is in some ways more and in some ways less effort than a video. And I'd argue it benefits the content itself. All that energy going into video production, editing, having a nice background and good sunlight for talking to the camera, would be so much better spent on properly writing, researching, citing sources... I'm in no way saying none of it is done, but priorities are completely different when "producing a video essay" versus "I'll write something proper that can stand scrutiny". And I'd argue the latter produces higher quality content.
d) Text is far more easily accessible. I need a static HTML page to host text, it doesn't need any bandwidth to speak of, I can easily host it on my own site, on a blog hosting service, move hosting services, you could even use a pastebin and tweet the link. It's searchable, it can be fully indexed by search engines, it can be accessed via screen readers, easily auto-translated via any tools of ones choosing, easily copy-pasted into your own notes, can be easily cited, extended, worked on...
God I wish people would write more, read more, and in turn produce less videos, and watch less videos... but I might just be a walking dinosaur, or (since I am not even middle aged) just have grown up differently, so... I don't know...
On the other hand, if there's no written alternative, chances are that the content was irrelevant anyway, so maybe it's fine to ignore in the first place.
For example, it's well-known that video engages empathy in ways that text does not. When you're documenting a kind of widespread tragedy, that could be essential.
So, are you sure the video didn't work on you? If someone had just posted a giant article would you have read it, or wanted to read more with the same interest? And even if that would have worked for you, a popular video like this can create a proven demand for journalists to write more stories and authors to write more books.
https://www.summarize.tech/www.youtube.com/watch?list=WL&v=5...
"Documentary make makes a documentary when I wanted a book" feels like an invalid complaint.
I also wouldn't take the transcription of older speeches too literally.
I watched the entirety of one of his previous videos on a friend's recommendation - "Line Goes Up – The Problem With NFTs" https://www.youtube.com/watch?v=YQ_xWvX1n9g . While I agree with the main premise that NFTs and cryptocurrencies are very problematic from many angles (financial, hype, scams, etc.), he made so many factual errors that I found it very hard to take it seriously. I have worked with Bitcoin software and can point out things he said that are an outright misrepresentation of the technology and mechanisms.
(See also: https://en.wiktionary.org/wiki/Gell-Mann_Amnesia_effect )
[0h01m15s] He talks about the 2008 Great Recession and frames it in terms of greedy banks offloading risky mortgages. But he fails to mention that the government entities FMAC and FMAE insured those subprime mortgages in order to encourage home ownership, which is what enabled this risk-taking in the first place. If the banks had their own money at risk rather than the government's money, they wouldn't have done it.
[0h02m15s] > the biggest returns on a bond come from when it first hits the market, a new bond that creates new securities sales is worth more than an old bond that is slowly appreciating, but not seeing much trade.
What? I'm pretty sure that's not how the bond market works. Bonds are priced fairly. Bonds being traded are sold at neither a premium nor discount to their fair market value. Also, the trading value of bonds doesn't appreciate or depreciate unless the interest rate changes.
[0h14m15s] > How it works in Bitcoin, simply put, is that when a block of transactions are ready to be recorded to the ledger all of the mining nodes in the network compete with one another to solve a cryptographic math problem that’s based on the data inside the block. Effectively they’re competing to figure out the equation that yields a specific result
Wording nitpick, but they the equation is easily known, but the values to solve that equation are what are hard to find.
[0h14m42s] > Once the math problem has been solved the rest of the validation network can easily double-check the work, since the contents of the block can be fed into the proposed solution and it either spits out the valid answer or fails. If the equation works and the consensus of validators signs off on it the block is added to the bottom of the ledger and the miner who solved the problem first is rewarded with newly generated Bitcoin.
Another wording nitpick. The verifier doesn't spit out the valid answer; it takes a proposed answer and spits out "valid" or "invalid". Secondly, the notion of the block being added to the bottom of the ledger glosses over the critical detail that every validator does so. Any validator can choose to reject the block, but it is not in their interest to do so because they would be going against consensus.
[0h17m57s] > Because electrical consumption, electrical waste, is the value that underpins Bitcoin. Miners spend X dollars in electricity to mine a Bitcoin, they expect to be able to sell that coin for at least X plus profit.
Wrong again, this alludes to the labor theory of value. It's the other way around: Because people are willing to put a value on Bitcoin for their transaction utility, miners are willing to spend electricity to prop up the system.
[0h30m58s] > It’s an ecosystem that absolutely demolishes consumer protections and makes the re-implementation of them extremely difficult.
He presumes that consumer protection is the only worthy goal. What about merchant protection? Search on Google for horror stories of eBay merchants getting scammed on PayPal by customers who lie about not receiving the product. Look at Louis Rossmann's rants about payment processors forcing merchants to eat the transaction fee even if a dispute is resolved in favor of the merchant.
> the transaction fees on popular chains are so prohibitive that it’s pointless to use them on any transaction that isn’t hundreds, if not thousands of dollars
The transaction fee on the Bitcoin network is definitely not hundreds or thousands of dollars. Look up any fee estimator and the exchange rate. https://ycharts.com/indica...
> The transaction fee on the Bitcoin network is definitely not hundreds or thousands of dollars. Look up any fee estimator and the exchange rate.
From the chart you posted, the current fee is roughly 2 BTC, which maps to $54,000. So that's thousands of dollars. When the video was published in January 21, 2022, the transaction fee was about the same, but 2 BTC cost about $70,000. So that's thousands of dollars.
At its peak in April 2021, the transaction fee was ~60BTC, with a BTC selling for $60,000. So that's 60BTC * $60,000 = $3.6 million. So I guess Dan was wrong. Transaction fees on popular chains can range into the millions of dollars.
> I know he has an anti-capitalist, probably socialist bent.
Oh no.
More significantly, you seem to have missed his point: he isn't saying that fees are hundreds of dollars, but that a 50 dollar fee is too expensive for any transaction that isn't at least hundreds of dollars.
That's not representative of the market rate, so is irrelevant to the discussion of whether fees are cost prohibitive.
For example at the same moment in time as the guy who accidentally paid a $500,000 fee (in the same block), you can see a bunch of transactions that went through with $2 and $3 fees. Yes that's still high in a relative sense, but it's not tens of thousands of dollars.
To determine whether corn is cost-prohibitive, you need to go by the market rate, not link to a top-10 list of the most overpriced corn purchases ever made.
One person unilaterally paying far above the market-clearing rate didn’t significantly change what others needed to pay.
IIRC Dan was relying on a sentence from an outdated, archived documentation site made by an open source contributor many years ago. The core SSB devs then had to try to convince people that Dan was wrong about their project. Dan refused to admit he was wrong, despite a lack of blockchain in the open source code, and just pasted a screenshot of the old docs.
"[Proof of Stake] suffers from delays when elected validators are offline and the system needs to draw again."
It's easy to look at a poorly designed Proof Of Stake protocol and point out flaws. But since his beef is with PoS itself, I think it's fair to measure his claim up against Ethereum's beacon chain which is considered to be one of the better PoS designs:
* Ethereum's validators are self-chosen, not elected.
* There is a ~99.5% participation rate, meaning that 1 in 200 slots are missed. Offline validators are very, very rare.
* When this 1 in 200 chance occurs and a slot is missed, Ethereum's elastic block size mechanism (EIP-1559) ensures that the chain catches up by effectively adding additional capacity to the subsequent blocks.
* Whereas this slight unpredictability happens very rarely in Proof Of Stake, it happens constantly under Proof Of Work. This is because PoW is an inherently unpredictable poisson process. Thus, PoS is a substantial improvement over PoW in this way.
* The result of this 1 in 200 fluke is that your transaction takes 18 seconds instead of 6 seconds to reach preliminary finality. And that's only for Layer 1 transactions which are by their nature high-value; Layer 2 transactions enjoy quicker and more predictable soft finality.
I also remember there being issues in his economic analysis of PoS, an unwillingness to engage with scaling technologies (hand-waving it away as based on nothing), no mention of for example Secret Shared Validators or Rocket Pool as solutions to the solo staking minimum, no mention of the history or state expiry roadmaps when discussing the growing size of the chain. Those are just some more examples, reconstructed from some old notes of mine I found, without me spending too much more time on this.
I didn’t realize his argument is merely that crypto will change the world in an undesirable way. I thought he was arguing that crypto will be ineffective at changing it at all. That makes his argument much easier to address.
Investing isn’t about judging a technology as good or bad, it’s about judging it as profitable or unprofitable. If he’s not arguing that the line won’t go up, then his argument is frankly irrelevant to me as an investor.
I empathize with people who believe crypto will have an overall negative effect on the world, but it’s not like it will go away if investors refuse to buy units of it. And if crypto does cause real, lasting social and economic changes over the coming decades, I personally doubt that a layman video journalist will be the one to accurately predict the nature of that transformation. The most accurate prediction is probably going to come from someone much more versed in macroeconomics and/or the tech itself. Probably from someone who understands how proof of stake works.
All of the people that were originally in WSB left and went to a couple of smaller subreddits and/or a collection of small discord servers.
But yeah, sounds about right.
(Well, he said "Any sangha..." but still.)
Eventually, the company went public and the stock performed as expected... it went to shit. This could be due to the company never actually realizing a profit, but who knows. Having worked on the inside, I knew that the technology stack was shit and the engineers working on the system were subpar. For example, the CTO hired his cousin.
Since the stock was under water, I held onto it for a a number of years (10?). My internal reasoning was that I wanted to wait until it got as close to zero as possible before selling so that I could maximize my tax loss. Yea, right.
Suddenly, in the middle of covid, the reddit "investors" decided to randomly start to pump the stock [1]. It really came out of nowhere and I was kind of lucky to have checked the stock price. Jokingly, I set my limit order for 25 and left it there. A day or two later, I got notified that all of my shares had sold.
Thanks WSB!
[0] https://finance.yahoo.com/news/marin-software-inc-ceo-christ...
[1] https://investorplace.com/2021/07/mrin-stock-why-reddit-inve...
That is... not how finance works.
You're saying that to the person who literally sold the very top.
These are seemingly intelligent people that would recognize this same problem in other peoples conspiracy theories and willingly ignorant beliefs.
At this point what is there to possibly do? It doesn't seem like a good idea to bring it up at this point and be like "I told you so" and just get them mad. I hope they have recognized their mistake by now on their own.
Throughout the whole video I'm reminded of the Game Designer’s Analysis Of QAnon[2], where people are thrilled about connecting dots and finding hints where there are none intended.
To delve into politics, there are also many unhinged who put their hope of a better life, some of them probably did so first into Obama (Obama himself has said in his post-presidency book, he found it worrying when running in 2008 that people were putting their dreams and hopes into him), and some of them, when they found their lives hadn't gotten better in 2016, probably thought "Well, Hillary will be more of the similar, and Trump promises greatness (again), what the hell do I have to gain for voting 'similar', and what the hell do I have to lose for voting 'greatness (again)'?". In some sense Bernie also offered that radical change, but if you want to blame brown, gays, etc, people for your suffering, Trump was the easier choice. And rather than admit that they've been conned, they'd rather invent a million scenarios why Trump was (and is) the correct choice, there's just some deep state conspiracy ensuring the continued enslavement of the poor (Note: I don't share this viewpoint, just summarizing it!).
[1] https://youtu.be/5pYeoZaoWrA?t=8067 [2] https://medium.com/curiouserinstitute/a-game-designers-analy...
It goes both ways - people flag legitimate claims of conspiracy and dunk on them, too. For example in the 40s, the idea that cigarette manufacturers were conspiring with the medical industry. Or as a 2010s example, that the NSA is secretly recording everything we are doing and saying online (PRISM).
My biggest take-away is that you need to be paying attention, you need to get your news from multiple sources, and it helps to have strong foundational knowledge that you can use to gauge the reliability of those sources. Usually the establishment is right, but sometimes that random guy on the internet is right, so it's important not to discredit anyone solely based on their pedigree. A process that, obviously, the kool-aid drinkers in that subreddit didn't seem to have a grasp on.
Was this actually dismissed at the time as a conspiracy theory? Similarly, claims about the NSA monitoring US citizens were taken seriously well before the PRISM disclosures -- there were hearings on ECHELON in the '80s.