thebean11 · HackerTrans

4 jaar geledendiscuss

For a 3 month treasury the drop will be tiny, like less than 1% tiny. It's would be easy to cover during a "bank run" given that (a) they hold some portion of deposits in cash anyway and (b) they've been earning interest on these deposits for years now. That’s my whole point..do you disagree?

thebean11

4 jaar geledendiscuss

> Our financial system knows what to do with that situation. It is outlined in https://www.fdic.gov/consumers/banking/facts/payment.html. SBNY gets shut down, a new bank buys them, and depositors with accounts over $250,000 see their bank accounts reduced TO $250,000. USDC, as the largest of those depositors, would then no longer be backed.

That is..not how it works. Are you assuming all of SBNY's loans are worthless / bad debt? If SBNY folded the loans would get sold to pay back the creditors. They wouldn't get the full value obviously, but those loans don't just magically disappear. They'd certainly get more than the 20 cents on the dollar you are claiming..

Even your own link covers this..

> If for example, a depositor has only a single account with a balance of $255,000, he or she would be paid $250,000 through FDIC insurance and would receive a claim against the estate of the closed bank for the remaining $5,000 which is not insured. The depositor would be given a Receiver's Certificate as proof of this claim and would receive payments as the assets of the bank are liquidated.

Someone being so confidently and condescendingly wrong is peak hackernews.

thebean11

4 jaar geledendiscuss

haha, ok, so now we're just quibbling over the definition of short term instead of discussing the concrete question of how volatile USDC's treasuries are? Just replace instances of "short term" with <= 3 months, now are we in agreement?

My point is that your 10% figure is not applicable to the treasuries Circle claims to hold. You can call them whatever you want.

thebean11

4 jaar geledendiscuss

Short term for treasuries is generally considered <= 1 year, BSV is only 1 to 5 years.

I just looked it up, Circle says they only hold treasures that mature in <= 3 months, so yeah I think even 6.5% is a massive overestimate to how volatile their treasury portfolio is..probably more like <1% which is easy to cover if they just hold a tiny bit of the deposits in cash..

thebean11

4 jaar geledendiscuss

That's about as useful as pointing to some equally unrelated thing that did turn around. The truth is nobody here knows either way, and if you did you'd be in the process of becoming very wealthy on that knowledge. Let me make a wild guess that you will not actually be putting your money where your mouth is on this?

thebean11

4 jaar geledendiscuss

> That's worth much much less than the current 1-month US Treasuries that are available

It's not 10% less, or anywhere close to it. You are only missing out on roughly (1/12) * (0.0113 - 0.0036) * (treasury amount) vs a 1 month treasury bought today..I'm having trouble finding a price chart for 1 month treasuries.

6-month is obviously more sensitive to the rate drop than 1 month, but the 10% number you are referencing is almost certainly for long term treasuries, not short term..

thebean11

4 jaar geledendiscuss

Short term US treasuries specifically. They are pretty insensitive to interest rate changes since they are close to maturity.

thebean11

4 jaar geledendiscuss

Tether was not a small player in 2017, not sure if you remember but people were already sounding the alarm bells about it. Obviously it's bigger now, but so is the whole market.

Having USDC to compete with USDT puts things in a less risky position, not more. All evidence points to USDC being fully backed. The "bank run" scenario this article alludes to seems like a huge stretch.

thebean11

4 jaar geledendiscuss

Since they are short term the dollar amount wouldn't change much, even with big swings in interest rates. USDC is also tied to the dollar value (not inflation or interest rate adjusted) so I don't see how this could happen

thebean11

4 jaar geledendiscuss

> That's why you have FDIC insurance to cover the time period between say, a 30 day treasury and the worst case bank run.

Well, usually banks use your money for much riskier loans (business loans, personal loans, mortgages) which is why you need FDIC. Not because treasuries take too long to sell.

The volume on US treasuries is like half a trillion a day, so it shouldn't take very long to liquidate even large amounts of USDC's holdings..

thebean11

4 jaar geledendiscuss

USDC claims to have the entirety of it in short term US treasuries. I don't know enough about banking to understanding whether the evidence in the article conflicts with that though.

> If you have any money left in crypto at this point, then you get what you deserve.

Yeah, I heard this in 2017 too. In reality neither of us knows how things will look a year from now. Short term will probably be ugly though.

thebean11

4 jaar geledendiscuss

Most companies the size of MS, yeah

thebean11

4 jaar geledendiscuss

Yeah that's fair. Like I alluded to in a sibling comment thread, though, I think doing the same thing for food is pretty dangerous given our still pretty limited understanding of what foods are actually bad for you. Eggs are still oscillating between healthy and unhealthy every few years (although I think we're settling on healthy? Who knows!). Cigarettes aren't needed to sustain life so there's not as much risk to meddling like that.

The only thing I can really get behind is stricter controls on individual ingredients that are very clearly unhealthy and obviously don't need to be part of your diet (BPAs, trans fats, etc). Once you start messing with society's macros though it's fraught territory and very easy to do harm IMO.

thebean11

4 jaar geledendiscuss

I’m not a libertarian at all, I think taxes should be pretty high and there should be universal healthcare. Pretty silly I need to say that, though, and bringing it up is a non sequitur. I’m curious, do you think most non libertarians would agree with what you’re proposing?

But yeah, if you think forcing an ice cream shops to sell sides of broccoli (that nobody will order) to comply with some silly 20% law, we probably won’t get anywhere discussing. It takes a pretty active imagination to picture something like that having a positive outcome.

thebean11

4 jaar geledendiscuss

A mix of tech and broad (global) stock ETFs

thebean11

4 jaar geledendiscuss

20 years ago the sugar lobby told everyone that sugar was good and fat was bad.

I'm all for banning specific ingredients and processes that are known poisonous (like BPAs for example are banned in many countries, deservedly) but unilaterally deciding what's healthy and having quotas for healthy foods is extreme. It will be the sugar vs fat thing all over and only the rich will benefit.

Just to make sure I understand what you’re proposing, taco trucks and ice cream shops would be illegal in your ideal world yeah?

thebean11

4 jaar geledendiscuss

Can you be more specific then about what we're discussing, if it's not "ban things that the 10% is addicted to"?

thebean11

4 jaar geledendiscuss

Of course it's easy to cherry pick in hindsight. But we're talking about people with cash right now, they are investing at current valuations not valuations from 6 months ago.

thebean11

4 jaar geledendiscuss

Sure let's say it's 10%, is the conclusion you draw from that that free will doesn't exist? Do 100% of people need to give up the freedom of choice to lower that figure?

Not sure what you're getting at about elections, are you saying that's a reason to intervene? I don't really want the government making policy for the purpose of influencing election outcomes.

thebean11

4 jaar geledendiscuss

> Only a minority of people can withstand an onslaught...

Is that true? Most people aren't addicted to anything let alone social media..I really don't buy the claim that people have literally no control over their actions. What's your solution? Ban sugar, alcohol and social media? Padding on the sidewalks?

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