FTP was a real, legitimately profitable business, and it could have run quite successfully without secretly borrowing from the customers.
But secretly borrowing from the customers allowed the directors of the business to give themselves $400mm with no waiting, whereas operating as they claimed they were (with segregated accounts for the customer money) would've required that they wait a few years to pull that much out.
The plan fell apart when some laws changed in the US, and the outflows started exceeding inflows, but the directors were unable and/or unwilling to put the money they'd taken out of the company back into the company. It's quite likely this was because several of them used the money to speculate in the real estate market.
I can't help but think of the reaction that online poker players had when first told that UltimateBet admins were cheating, or that celebrity-backed FullTiltPoker was insolvent.
When it came to UB, the common response was that the company was making money hand over fist and that cheating a few high rollers out of $50 or $100k would jeopardize the much larger legitimate source, so they clearly wouldn't do that. Except that some of the admins really were cheating individual high-rollers.
And with FullTiltPoker, the business really was as profitable as the players guessed, but the company directors weren't actually treating customer deposits as deposits, but were instead paying themselves most of the money and paying withdrawals using new deposits (which works seamlessly, so long as deposits exceed withdrawals which is the usual case for both gambling websites and bitcoin exchanges).
So, I hope you're right. But I'd note that MtGox's actions are ALSO fully aligned with the actions of an insolvent company that wants to continue operations, and realizes that it is possible that they can recover so long as sufficient confidence is maintained by depositors such as yourself.
After all, if Gox is insolvent, then Tux's best hope for a new fortune is to use your deposits as his working capital... which is exactly what you're letting him do.
It saddens me that some people look at travesties like this and think "fuck him, the system is great, three cheers for the status quo."
This despite the fact that any honest reading of our medical outcomes shows that America gets very average medical care, and that we pay about twice per capita what the best care in the world costs.
I mean, I know there's a lot of propaganda out there, and I know there are a lot of sociopaths who are eager to believe it... but I'd think you'd keep your dishonest pro-status-quo, anti-efficiency nonsense out of a thread like this one. Especially since your post implies an utterly nonsensical (and clearly grossly uninformed) dichotomy that the only options are pure state control or the status quo, when any informed survey of developed nations would show many other models, some of which would work well in the US.
Sadly, progress is stalled and we all suffer because there are obstructionist assholes like you, willing to ignorantly pretend that the status quo is the best in the world.
He wrote the following to a father: "the cost of replacing the thing is much, much lower." That's rude. A lot of his other beliefs (such as his belief that being a brother is just like being a dad) just show ignorance and naivte, but "replacing the thing" is a cruel, inhuman, and astonishingly horrible way to express an already thoughtless opinion.
I've met a lot of assholes, but I've never, in my entire life, met somebody who would think that's a fine thing to say.
He's entitled to his (ignorant) opinions, but he's not entitled to be so pointlessly rude and cruel with his method of expressing it.
If this was a dinner party, I'd quietly ask him to excuse himself, and he'd never be invited again. His choice of language was pointlessly cruel and outrageous.
HFTs tend to add liquidity when it's least valuable, and they tend to consume liquidity when it's most vital.
For example, an analysis of the 2010 flash crash shows it was worsened by HFTs fleeing their positions once volatility increased, which is the exact time that liquidity and market-making are most valuable.
If there is any social benefit to HFT it is utterly trivial.
They already did, but many people are satisfied with the Apple app and wouldn't appreciate being forced to switch to a different and not-meaningfully-better app.
FTP was a real, legitimately profitable business, and it could have run quite successfully without secretly borrowing from the customers.
But secretly borrowing from the customers allowed the directors of the business to give themselves $400mm with no waiting, whereas operating as they claimed they were (with segregated accounts for the customer money) would've required that they wait a few years to pull that much out.
The plan fell apart when some laws changed in the US, and the outflows started exceeding inflows, but the directors were unable and/or unwilling to put the money they'd taken out of the company back into the company. It's quite likely this was because several of them used the money to speculate in the real estate market.