Hacker News Reader

No one is rejoicing that normal people in Latin America or Africa lost their savings because they were trying to hedge against inflation. At least no one I have noticed posting on HN.

That “canadian teachers pension fund,” however, is a $180 billion monstrosity that - in the process of losing a rounding error off their fund - legitimized a scam artist because they were too stupid to do a minimum of due diligence. They’ll make the money back in a fortnight off the safe investments they should have been putting money into in the first place while the little people who trusted FTX by proxy got fucked.

Crocodile tears for the speculators. That’s the story of finance.

Isn't the pension fund for regular people?

Regular people with a diversified portfolio of $180 billion who lost 0.1% of their fund.

That’s a small price to pay when interest rates are 3% to find out your fund managers need to be fired.

I Googled it. Here is the official statement from Ontario Teachers’ Pension Plan: https://www.otpp.com/en-ca/about-us/news-and-insights/2022/o...

    In October 2021, Ontario Teachers’ invested US$75 million in FTX International and its US entity (FTX.US).  In January 2022, we made a follow-on investment of US$20 million in FTX.US. ... Our investment represented less than 0.05% of our total net assets...

Thank you for the exact numbers!

I don’t know why but that extra factor of two somehow makes it even worse. 0.05% of assets isn’t even enough for petty cash for most businesses and they couldn’t do some due diligence when it was $75 million?!

You raise a good point about due diligence. They probably did as much as possible, but remember that they were investing in a private company that was committing massive fraud. It is hard to know if a company is lying to you when you are doing due diligence without direct access to internal materials. Also, for FTX, 75m USD was a tiny investment, so the amount of access granted for due diligence was probably very limited. I guess the sale was done with a 50ish page powerpoint presentation, and a few meetings with the C-suite. Some part of investing in private companies is always a gamble.

If we consider publicly listed companies that require annual audits by external professionals: Look how many people were taken surprise by Germany's largest start-up: Wirecard. It took years for highly skilled investigative journalists to expose the extent of fraud. Yes, you can be cynical about professional auditers, but they were also subject to an impressive level of deceit. When Dan Mccrum from FT was getting very close, I still thought it might be their Asian ops were a fraud, but EU ops OK. I was dead wrong -- the whole thing was a fraud.

Is it? Or is it for the guy who gets paid 2.85 million/year to run it?

Any time you see returns substantially higher than a savings account you have to assume you can lose your principal at any point. Risky investment is risky investment, trust by proxy is bullshit. How many fund managers have committed suicide after losing it all?

I interpret it less as "celebration" and more as "I told you so". That's never a pretty thing, and polite people don't do it... but when you have nothing nice to say, the polite people say nothing, and the impolite people say the impolite thing.

There's certainly a portion of the people who were annoyed at Crypto bros constantly posting about how they just made their third billion (on paper) and you're so dumb for not putting everything in crypto and hodl forever. It's hard to feel bad when those guys get wiped out. Everybody is a genius in a bull market. So many people who think they are God's gift to money management who were basically just leveraged to the max and the only real strategy was "line goes up".

Wait, is posting about how there are objectively only two groups of people (“polite” and “impolite”) a polite thing to do or an impolite thing to do?

I’m genuinely confused by the downvotes here since nobody has responded.

Am I to believe that lumping people into groups of polite and impolite as human beings is a polite thing to do, or am I meant to believe that lumping people into binary groups of polite and impolite is an impolite thing to do?

Am I being downvoted by polite people or impolite people??

Is reductively judging people and putting them into antithetical groups based on offhand comments polite, or is it impolite? It’s a legitimate question.

I certainly didn't downvote you, but I'm not clear about what point you're making.

From the post I originally responded to:

> when you have nothing nice to say, the polite people say nothing, and the impolite people say the impolite thing.

I’m genuinely confused by this sentiment. Does this poster think they’re saying something nice? Or are they intentionally outing themselves as impolite by opting not to say nothing?

It seems genuinely funny to assume the role of the judge of who is or isn’t “polite” while violating their own rules about who is “polite”

To further rephrase that: That appears to be (without clarification) a very amusing moralizing statement that provides no value whatsoever other than to directly contradict its own premise.

Usually I classify comments as polite or rude, not people. I guess GP is the arbiter of personality though?

I didn't realize it would be interpreted as an ontological statement about humanity.

I'm referring to an old dictum of politeness: "If you don't have anything nice to say, don't say anything at all." People breaking that rule are being impolite.

I apologize that I wrote that in a confusing way by referring to them as "impolite people". It was intended as a more instrumental observation: in that instance, they are being impolite (at least by that particular rule, which is of course itself not universally accepted). It was not intended to make a categorical statement about them, but it clearly read that way.

> […] it's not reason to rejoice when thieves do scam people […]

There’s very little solace in being able to say “I told you so” when disaster strikes. If there’s anything to rejoice about, it’s that the current crypto collapse seems to be more isolated from the rest of the economy than, for example, the 2008 subprime mortgage crisis.

After the damage has been done, we can go in and regulate the way that crypto should have been regulated from the beginning. You can’t escape politics, and large, public collapses like this provide the political willpower to create the oversight that we already knew was necessary, to protect future generations.

> There's also another angle: the very same who are cheering on people losing all their money to a scam were the first to say: "Pay your taxes on any crypto gain you made" (so that, in the end, they get their share of these winnings too through the state's spendings)...

I don’t understand the criticism here. If I think that it is right to pay taxes, and I think that crypto is a scam, are you saying that this is somehow hypocritical? I think there might be some steps here in the argument which I don’t see or understand.

I believe in due process and the prohibition on ex-post-facto laws. If you make money manufacturing widgets, but I think widgets are morally repugnant and pass laws to ban widget manufacturing, then I don’t get to go in and retroactively confiscate your widget profits from the past five years. You pay your taxes on crypto profits, and then if it turns out that you were breaking the law, you have to face the consequences for that too. Crypto tokens have blurred the lines between securities and other types of products and it makes no sense to pass new laws and backdate them to apply to old crypto transactions.

> not reason to rejoice when thieves do scam people (including a canadian teachers pension funds' money)

I am strongly against using public resources to bail out folks who willfully sidestepped centuries of learned experience in financial regulation. Most financial fraud is privately pursued. SBF should go to jail. But beyond that, it's on the creditors to recover their assets.

There isn't going to be any sort of bailout. There isn't a large enough impact to the economy for that sort of action.

> it's not reason to rejoice when thieves do scam people (including a canadian teachers pension funds' money).

I rejoice in that I would hope it deters future pension funds from investing in crypto. It’s a downright idiotic decision given the current sphere of hype-inflation that can balloon and burst on a whim.

Just look at the effect a single tweet from musk had on Doge.

In theory, this would deter pension funds from investing in crypto. In practice, I don’t think this collapse will have the desired impact on pension fund behavior.

The Ontario teacher’s pension fund had something like a $95M investment in FTX. It manages $241.6BN CDN in assets, making the FTX investment about 0.04% of the total assets. Pension funds normally put some percentage of their assets in risky investments, this is normal and good—and they will, therefore, invest in whatever new scam people come up with ten or twenty years from now. If not crypto, it will be something else.

Yes, they probably didn’t do the due diligence that they should have done. But that is a different kind of mistake than the mistake of investing in something risky when they thought they were investing in something safe. The pension fund likely knew it was risky, they just didn’t figure out that the inmates were running the asylum, so to speak.

Or in short, yes, this was a mistake, but pension funds invest, on purpose, in things that can balloon and burst on a whim anyway.

The only proven practical purpose of crypto is evading regulation. So when regulation happens, it will effectively amount to making it illegal. Which won't kill it off, just move it into the black markets where it has actual use.

(I'm not implying any moral judgment here. Personally, I think it's actually a net positive given the amount of harmful regulation, both in national laws and in international sanctions. But that's precisely why it would be silly to expect it to not be driven underground by the governments in the long term.)

Imagine that every day for two years some folks showed up at your door trying to get you to join their UFO cult and every time you say 'actually, I'm pretty sure To Serve Man is a cookbook' then finally the mother ship arrives and they start eating up the cultists. Sure being eaten is rough but they A) didn't heed my advice and B) at least now they won't knock on my door anymore.

That’s how I feel about people who got vaccinated.

Then you are a delusional moron.

idiot

We're just happy it's our turn to say "have fun staying poor"

The people who were completely obnoxious when anyone tried to warn them that monkey JPEGs going for $500k was nutso, have now flipped to obnoxiously playing the victim.

It was the exact same way on The Motley Fool boards after the dotcom crash. The crowd that was all "Well you may have your facts and figures, but my CMGI keeps going up and up and up, so PPPPPTTTTHHHHH!!!", instantly pivoted to "How can you kick me when I'm down like this? Do you enjoy suffering?"

> Many here are happy and find it funny to see people's crypto being stolen by fraudsters.

They are? I haven't noticed that.

The FTX meltdown has been a major source of schadenfreude.

Yes, of course. But I'm not seeing a lot of people happy about the victims.

Way I see it their shirts were lost as soon as they traded their money for fake money, they just didn't know it yet.