After Facing Hundreds of Millions of Dollars in Liquidations, Crypto Hedge Fund...
source link: https://news.slashdot.org/story/22/06/15/1217208/after-facing-hundreds-of-millions-of-dollars-in-liquidations-crypto-hedge-fund-three-arrows-capitals-future-looks-uncertain
Go to the source link to view the article. You can view the picture content, updated content and better typesetting reading experience. If the link is broken, please click the button below to view the snapshot at that time.
After Facing Hundreds of Millions of Dollars in Liquidations, Crypto Hedge Fund Three Arrows Capital's Future Looks Uncertain
They won't -
1) Not of enough of the political animals know what Crypto is. They don't understand it so they don't care about it not really..
2) Its a Trillion dollar industry across the entire world its a drop in the bucket. They are not going to waste political capital or treasury capital defending crypto bros when its looking like they might have to come up solutions for bailing out working class in the face of inflation and uncertainty about rolling government debt in the face of rising bond rates.
3) Politically speaking, not many votes have exposure to it in their 401Ks. That is what matters, that is what determines how wealthy people 'feel' and that is what governs the future retirement crisis the USA faces.
4) For everyone not "lucky" enough to get 401k matches as a retirement vehicle they think in terms of employment and hourly wages, and ultimately what that means for their SS comp. Crypto does not employ many of them.
5) The ones who do understand crypto see it as a dollar competitor, because it is, even if its a really shitty one that ought to go to zero because everything about it fucking stupid. In the middle of an inflation crisis - why would ANYONE in power think its a good idea prop up an industry that causes people to sell dollars to buy another "fiat asset"? Nope you'd want them selling crypto and buying dollars - strengthening the dollar by increasing demand for dollars and letting the other fiat vanish into the ether from which it came (see what did there).
The financial sector gamblers who were bailed out via TARP were unfortunate, in that it would have been nice for them to face the consequences; but they'd legitimately done the legwork of putting together enough complex links to the actual economy that letting them burn to death inside their casino without setting everything else on fire would have been deeply nontrivial.
'Crypto', though? There are some day-trading idiots who might be worth a flicker of humanitarian consideration; but the rest of the alleged 'value' in the space is a mixture of VCs and criminals whose losses are somewhere between irrelevant and desirable.
-
-
haha overrated because I'm concerned about normal people
You shitlords with modpoints aren't even trying to hide the fact that you are absolute scum any more.
-
So what? People lose their asses on get rich quick schemes all the time.
-
"A not inconsiderable number of normal people invested in crypto because they thought it would continue to blow up. I"
From the macro perspective, the number IS inconsiderable. There's a baseline of people who will fall for that through lack of understanding through to simple desperation. Think Amway and their ilk. This group isn't new, and it won't disrupt the economy.
-
The amounts are larger, and the numbers of people are probably larger because it was perceived and advertised as an investment vehicle. But yes, of course it will "disrupt the economy", a disruption of any size is still a disruption.
-
Well, I'll have to disagree. If you declare that any hiccup is a disruption, you nullify the term. That's just avoidance. A disruption would show up somewhere. It would move some needle other than the needle of those immediately involved in the failure. If you can explain to me how somebody who has no direct connection to crypto finds themselves impacted by this circumstance, I'll concede the point. But the line would have to be pretty specifically drawn.
-
"Have fun staying poor!"?
The people screaming that for the past few years... you want to bail those people out?
-
-
-
I was classifying those as the day-trading idiots who might be worth a flicker of humanitarian consideration. I'm certainly not in favor of the retail investors losing their shirts, if it can be avoided; I just don't suspect that a comparatively modest number of retail investors, dealing with an asset class you had to get into voluntarily(rather than everyman's 401k, which could be a political hot potato), is going to register in terms of changing the chances of getting bailed out.
-
You want another TRILLION dollars printed out of thin air to bail out [checks notes] fucking crypto bros?
Your suggestion is another reason the 2008 bailouts were such a catastrophe. Google "moral hazard", I don't feel like typing more paragraphs.
-
-
It's hardly "gambling" when one is forced to take on shitty NINJA (No Income, No Job or Assets) loans, thanks to the Community Reinvestment Act. I'm amazed that con lasted as long as it did.
It's just another variation of the Greater Fool Theory. Suckers who bought in at the high are left holding the bag.
-
I have no idea how this post being modded up lasted as long as it did. The community reinvestment act contributed essentially nothing to the last financial crisis.
It is true that community reinvestment required a certain number of loans that otherwise might not have been made. However, those loans all performed exceptionally well and much better than predicted. Of course those loans were made to borrowers who actually met with loan officers and had a conversation and the loan officer extended the community reinvestment loans to people they thought were most capable of repaying.
Lenders noticed that carefully-selected CRA borrowers were profitable. Rather than think through the *why* they assigned low risk ratings to the entire high-risk demographic. And well, duh, that's what you get.
I can't believe that not only is the fiction that CRA was a contributing factor still being repeated but that a post doing so was actually modded up.
-
So you are saying the CRA isn't responsible for the crisis but than you draw a pretty direct path form CRA related requirements to the crisis...
I follow what you are saying, about the CRA loans themselves not being directly responsible and having a lower default rate than the larger pool of NIJA loans.
However re summarized
1) Government forces to lenders to consider loans to people who would otherwise have been dismissed as to big a credit risk based on their usual metrics.2) The loans succeed because (as mo
-
This is.... unconvincing.
Banks got into subprime mortgages because some people with half a statistics degree realized that if you have a single mortgage with P=0.2 probability of default you have a 20% chance getting almost nothing but the foreclosure. But if you have thousands of mortgages close to P=0.2 of default then you're almost certainly going to get a 80% success rate.... Unless of course a systemic event happens that changes the P=0.2 to something like P=0.7 and your guarantee of success turns into
-
The falsity of the "Blame the CRA!" argument is most striking if you just ignore the weeds of detailed performance comparisons between CRA and non-CRA mortgages(though my understanding is that the comparison is not actually particularly unfavorable) and just consider a hypothetical example where the feds walked over and informed mortgage providers that it was going to be exciting and mandatory to give a certain number of free houses to a bunch of filthy poor people every year.
That wouldn't have done mort -
You are forgetting the second half of the situation. Insurance. Banks so they can lend more put all of theirbhigh risk portfollios and a bunch of good ones to balance it out and insured that through another bank.
That bank then took 2-5 of other banks high risk insurance mortgage portfollios and insured that. .
Repeat a few more times and a couple of banks suddenly held a massive pile of mortgages insurance that that was very very high risk.
Why did banks suddenly need a massive ount of capital and xould pa
-
-
The gaslighting is infuriating. The CRA that forced banks to give loans to people who had no means of paying them back is totally not responsible for the banks giving loans to people who had no means of paying them back!
-
I think you're misunderstanding things. Banks weren't so much "forced" to give out CRA loans, rather they actually loved doing it, if only for the money the same bank made selling mortgage bonds of those loans. Banks selling tranches as AAA when they contained a lot of profitable (for them) B and BB loans was the ultimate problem.
-
Those loans should've never been made in the first place and the CRA is largely responsible for that. There's also the MASSIVE fraud at every step of the financing process that went totally unpunished (just like crypto these past few years). And now people here are suggesting another bailout for criminals??? They all belong in prison.
It kills me how the same people whining about being priced out of the housing market defend the very policies, bailouts and subsequent re-inflation of all the bubbles that pri
-
-
-
By your logic, if I see a highly qualified stuntman do a high-wire walk and it looks cool and then I try it myself and get killed, that person is responsible?
The CRA was a good program that made housing available to a small number of people. Had banks made the required CRA loans but not additional loans to similar demographics, there would not have been a financial crisis. The CRA was intentionally limited in scope as to minimize the risk of losses.
The banks were required to take a small amount of
-
> So yes CRA was responsible, it was an unintended and perhaps avoidable consequence but that is sorta the point, when government puts its thumbs we don't know what all will happen. Had the CRA never existed those people would have been excluded from the credit market most likely (even if unfairly), and they would not have poisoned the risk data as a result.
No, there were many lenders who were doing crazy bad underwriting for short term fee generation, and these lenders had no obligation legally under CR
-
-
-
Recommend
About Joyk
Aggregate valuable and interesting links.
Joyk means Joy of geeK