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/biz/ - Business & Finance

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55150011 No.55150011 [Reply] [Original]

Many of us here make more money than doctors do sitting at home in our pajamas. How the fuck is this simulation even real

>> No.55150017

That's just life when you're chosen by god.

>> No.55150050

There's a relatively straightforward mechanistic explanation for the phenomenon, though it indeed looks fucking bewildering "from the inside". If you looked at the behavior in a computer system, it would just look like a weird bug.

>> No.55150075

>Many of us here make more money than doctors do
Good. Pharma sellouts deserve nothing.
Only the emergency responders deserve any credit as they actually save peoples lives. Every one of the other cunts are the reason medicine is shit and they actively inhibit the function of emergency responders with their uninformed opinions.
Does not apply to all, only most.

>> No.55150099

>Many of us here make more money than doctors do sitting at home in our pajamas.
Speak for yourself I own HBAR

>> No.55150129
File: 47 KB, 1501x977, financialization.png [View same] [iqdb] [saucenao] [google]

Might as well give you a diagram. This is partly what people a referring to with the word "financialization". It shows a distributed system where the nodes are the economic participants and the lines between nodes are economic transactions (value exchange). The size of the nodes indicates the volume that goes through them, the huge is the value that they hold.
If you start at the top left, you have a p2p-system (idealized). Friction is high or, equivalently, liquidity is low because you only exchange money face-to-face, so there isn't some "financial market" to trade things in. Go on step to the right and you'll see a centralized node develop (a bank, a CEX, etc.) to act as a middleman between the nodes, enabling more nodes to connect to the central node and exchange via it. In real-world terms, this might be a stock exchange where anyone can invest. If we go another step to the right, we see the central node's growth over time, to the detriment of the value of the "real" nodes, indicated by their lighter hue - the "financial system is eating the real economy".
As to why this happens, go down: the same state of affairs is shown, but the value flows through the central nodes are added in. Illustratively, you see in the middle bottom graph some value-flows through the CEX in blue. Because they go through one one, there is an opportunity to harvest value-flows going through it. This is the analogue of someone "getting a good deal" in a person-to-person exchange (think of it like a shopkeeper on a street bartering well and getting an extra 5% on his goods), but he's "getting a good deal" from a central node, so instead of harvesting an extra 5% from one counterparty, he's harvesting 5% from everyone. The "value-harvesting" is shown in red in the bottom right, and shown as going to one node who uses this tactic, in red - the red node "trades well" or charges some fee, and it's only a little from each node, but it gets disproportionate income in total.

>> No.55150154

Speak for yourself faggot

>> No.55150172

The bottom row shows how the value-extraction is done and that value-extraction develops due to the incentives embedded in each node, namely to maximize its own utility. The reason the opportunity for value-extraction develops is embedded in the utility of all nodes, namely that each node wants more liquidity, since that allows it to trade more effectively. In concrete terms, each, employee wants some nice exchange via which he can invest his income into a retirement fund, say. Thus, naturally, someone spins up a centralized service, let's say the NYSE, to facilitate this (though you can also flip the causation and have NYSE develop first, and then it convinces the people that they need to invest). Once all the money flows through it, it's only a matter of time until someone gets the idea to harvest some value from this "money river".
Some harvesting is bound to happen in any case, since running the central node has costs, which is why it's the business model of brokers to charge fees for transactions. Now, the peripheral nodes naturally don't like that, so they want to eliminate those fees somehow (also embedded in their utility-function: they want minimal costs). This can't really be done, running a stock exchange isn't free, but someone does eventually comes along and offers to at least seemingly eliminate the costs via "zero-fee trading". He doesn't really eliminate the costs, he just eliminates the disclosed costs, while harvesting value in a hidden way via countertrading, routing order-flow, getting people to invest in bubbles, and so on.
It's very much like a F2P game nominally offering a lower price than a standard full-price game would, but ending up costing 10 and 100 times as much via hidden microtransactions and loot boxes.

>> No.55150215

The phenomenon of a few individual traders getting richer than doctors is due to some peripheral nodes more or less intuitively wising up to the fact that there's a money-river to drink from, and subsequently manipulating other nodes to direct value their way, in our case via shilling memecoins, for instance - but wealth advisors telling their clients to put money into the S&P500 is not structurally different.
That's not to say that the S&P500 is completely worthless or that wealth advisors are knowingly defrauding their clients, the value exchange isn't wholly corrupt, but it's a system that naturally degenerates over time. The reason for this is that everyone wants to wring water from stones: the memecoin-buyers want x100s, the S&P-buyers want 7% p.a. - unlimited returns, while real returns keep going down (you know: in the real economy).
Insofar as we denominate real returns on investment in money, this shows up as interest rates going down and asset values going up: people pay more and more for shares in the S&P, while dividends keep going down. If the S&P were, e.g. a CNC-machine which cost more and more to buy and produced less and less, it'd be pretty obvious that profits were going down since you're paying more to receive less, because ^SPY is an abstract good, people think that it "becomes more valuable", to the point where dividends are seen as somehow bad, even. If you press people on this, you'll notice that they quickly become quite upset in their attempts to explain where exactly the value comes from, which is indicative of their inability to explain it. That inability is due to the breakdown of their reasoning past a certain point, which they themselves of course don't notice. It appears to them as if someone were "asking stupid questions", even though it's their reasoning that's faulty, and making them questioning of it appear "stupid" is a defense mechanism of their minds.

>> No.55150228

How much coke did you snort

>> No.55150238
File: 818 KB, 350x268, 1667363460705686.gif [View same] [iqdb] [saucenao] [google]

You'll have noticed that people who themselves can't explain things are those that call everyone else "stupid", like in pic related (parodied). In fact, the more confused they are, the more insistent they become that others are "fucking stupid idiots" and the like.
None. The state is more "trance-like", I suppose.

>> No.55150247

While you're on one, can you look into toad and let me know if it's a scam or legit moonshot

>> No.55150287

Without looking at the chart, all memecoins nowadays work in the same way: one initial pump to paint the tape, which is the initial investment by the creators with the aim of getting others to buy. Once and if people have bought, they start cashing out from the LP, which shows up as an initial crash. The steepness of the crash is indicative of the profits: a steeper crash means less profit they can take out (since at a lower price), a gentle decline means more profit (selling slowly at a higher price). The reason that there is a crash is game-theoretical: while it would be advantageous for the creators to sell slowly, later buyers who also want a moonshot are selling as well, so the two are in a race as to who can cash out first. What keeps both of them "in the race" is the belief that the coin has value (like that (3,3)-OHM mechanism), and as the pumps & crashes become sharper, you see that belief in memecoins trends towards 0 - everyone just wants to quick buck, and it becomes purely a race on who can cash out first: the DOGE-like sustained high price levels become short and sharp spikes.
This process isn't specific to any one memecoin, but it's not even specific to "the whole memecoin", if you will. It's a single pump within a memecoin-chart embodies this whole process. The pump is actually a temporary spike in belief. Single coins can have multiple of these spikes, though they tend to be lesser as time goes on (just look at any of the memecoin charts that have a single big pump initially, followed by a smaller pump after crashing and crabbing, and maybe a third, even smaller pump). The memecoin is sort of incidental to the whole process, what all of these charts measure are spikes in belief (a belief in nothing in particular, since "moonshot" isn't a sustainable state of affairs or anything substantial: it is simply a belief in other people's belief; a belief that the coin will go up once and then who cares).

>> No.55150316

It's perhaps easier to imagine this process with a group of children in kindergarten, playing a game involving colored pebbles and pieces of paper with: one kid shouts "buy!", and then the other kids also start shouting "buy! buy! buy!", and handing the paper to the kid with the pebble. The pebble is worthless (I mean, they're kids, it's a game), the other kids handed him the paper simply because he shouted "buy!" - this literally IS how 5-year-olds would play this game.
They repeat this with various pebbles, but eventually, the game starts to get boring, and after an hour of playing this, and being on the 80th pebble, shouting "buy!" doesn't elicit much of a response anymore. A few kids still want to play regardless (we all know "that kid"), and even though most want to leave and do something else, they keep trying to cajole them to stay: "but he shouted buy! Come on guys, it was fun when we started!"
Maybe they even try to hand the pieces of paper to the pebble-kid, but, you know... the magic is mostly gone.

>> No.55150335

you sound smart anon what are your investments

>> No.55150381

I "sound smart", but I just explained a game that little children would play, and presumably, they're not PhDs. Then again, if a kid in that group did that explanation, the other kids would say "you sound smart!" too.
In money-terms, you just need something that can work as money, since credit contraction in the reserve currency rugs the leveraged financial system, causing "the money to disappear". The USD has no inherent value, of course, anything can serve as money as long as its agreed upon, so "investing" in the current situation just means betting on what people will agree upon to be money: USD if one is a "friend of the US" (literally "that kid" handing out his pieces of paper to his friends), BTC if one has access to nothing else, XMR if one doesn't wish to be surveilled, gold and silver for trades in physical proximity (like if you just physically handed someone down the street a silver coin for bread).
Equities under the current P/E ratio are quite expensive (I'm only counting US equities; India, Japan, China, Russia, the EU all have huge problems in that area), so while it might be nice to own shares in some US companies in principle, their prices are being driven up by pension fund payments and can't possibly be cashed out, unless they print up the money for it.