ZachPruckowski

Looking at your thought experiment, the difference is whether that customer gets $500K (all of the bank's assets are sold to make him whole[1]) or $1M - all the banks assets are sold, and also he gets another $500K from the FDIC.

[1] - the $250K insurance is normally only supposed to apply if there are insufficient assets to cover it. Unless I'm misunderstanding your wording and the bank in the thought experiment has $750K in assets.

> "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."

Very curious to see who ends up paying this special assessment. Are we all going to pay in lower deposit/investment interest from banks? Are bank shareholders/profits gonna eat it?

> I hope the FDIC is able to get a substantial dividend quickly so that they can keep operating and that everyone works to keep disruption low

The FDIC has publicly said there will be an advance dividend and I don't see why it wouldn't be substantial, given that there's going to be a LOT of recovery unless SVB has big non-public problems.

I mean, yeah, that's ultimately a potential problem for the federal budget. But that's not what tripped up SVB - long-term Treasury prices declined because higher interest rates made short-term Treasuries more attractive than long-term ones.

Interest rates are where they were in the mid/late 90s (https://fred.stlouisfed.org/series/FEDFUNDS). The idea that these interest rates are unsustainable/dangerous is just silly. If anything, the 2009-2016 and 2020-2021 periods at an interest rate of 0% are the anomalies.

I mean, completely reducing this risk to 0 is probably expensive and annoying, yes. But you could halve the risk by splitting your money into just two bank accounts, and reduce it further by keeping medium/long-term savings in short-duration no-coupon T-Bills or something.

> "This isn't some sort of complex bid call option strategy"

Exactly. And "don't put all your eggs in one uninsured basket" is the exact sort of 101-level business advice I'd expect the experienced hands at YC or any Angel investor to provide pretty routinely.

They actually had like $12B split across 5 or 6 banks. But yeah, they definitely could've split it better. "No more than $1B per bank" seems like an easy rule, and even maxing at $500M could be doable.

Well and it's not just that they had money over the insured amount in a bank. It's that they had ALL of their money in ONE bank. If they had $500K in three different banks instead of $1.5M in one bank, there would still be a risk, but it would be that they'd lose $250K if any of those three banks failed, not that they'd lose $1.25M if one particular bank failed.

(And obviously actual losses are gonna be like 20% here, not 100%, but you get the picture).

Not just any initial capital, clean US dollars in a brokerage account under somebody's real name. You can't use BTC or rubles or drug money or whatever.

>When Musk posted a tweet 'joking' about taking Tesla private, which was utterly trivial to investigate, the SEC only managed to deliver a slap on the wrist.

Because prosecuting Elon Musk requires going up against top tier defense lawyers and proving things like "Musk tweeted this with the intention of impacting his stock's value" or something.

With hackers, you can use the financial stuff to target the hackers, and then either (a) prove the computer crimes or (b) use the computer crimes and the surrounding stock sales to prove intent. You also don't have to go up against a legal defense better funded than some militaries.

>Of course, insider trading among well connected hedge fund managers and our unaccountable financial elite is indeed pervasive and goes by without being prosecuted all the time

And a lot of those non-prosecutions involve either (a) civil fines, (b) the compliance department censuring or firing the relevant employee, or (c) the Feds backing down from a fight with a big white shoe defense firm. None of that applies to these Twitter hackers.

I'm not sure this works. A lot of the folks who're short on Tesla are big names with trading records who've been short on Tesla for a while. If you roll up and your first stock trade is to buy some short term put options right before the hack and then cash out immediately[1], that's going to be distinguishable and suspicious.

Any efforts to defer that (using a patsy with an established trading history, buying longer-term options, buying them earlier) cuts into your margins, and may well not work (since again, you've got to be the first one out since you know it's a momentary dip).

[1] - Remember, you know this is a momentary dip because you know the hack is going to get discovered soon, but the other investors don't know where the bottom is.

In the aggregate sense, it eventually netted out. But a lot of people who sold when it looked like prices were collapsing sure got a pretty decent chunk of their bank accounts "erased".

I know, right? I work with a lot of politicians and they run the gamut from "tech savvy 30-year-old" to "grandpa who still uses AOL". Any product which wants to appeal to the entire population needs to be able to explain itself to that range of people. If you want to move beyond the bleeding-edge techie crowd and the Millenials you've got to be able to sell yourself to the people who don't grow up with computers.

You're not supposed to round 0.08, you're supposed to divide 0.08/8.24. The 8.24 is the percentage point return for the pension fund and the 0.08 is the percentage point cost for the fees

A serious security push might raise computing costs to the point where some low-margin computing activities become unprofitable or folks like Amazon push less into expansion/R&D to keep budgets balanced, but I think it's likely that most computerized activity would continue. Folks are gonna still gonna wanna watch Netflix or blog about cats.

>"make a single-service product, get millions of investment dollars, sell it to Facebook or Google for billions at 1000x revenue premium while still not profitable and cash out"

And if you're not playing this game, realize that most of the folks that VCs see are.

>Breaking a bad law can be virtuous, but I suspect in this case it's neutral at best.

It's not "breaking a bad law" that can be virtuous, it's the case. Sit-ins are/were virtuous because the cause (civil rights) was just. The cause here is primarily "Uber and its investors want to make more money".

>Why do regulations have to be in line with market economics in the first place?

Yeah, I think this is something a lot of folks overlook - regulations exist because society has decided its interests are better served by making folks play by a certain set of rules than by hitting peak market efficiency or whatever. Now you can argue that a given regulation is not the best way to achieve a societal goal (for instance that limits on cab numbers don't reduce congestion much) or that they have worse externalities (medallion systems squeezing out the little guy in favor of big companies that can afford 6-figure medallion prices) or that the lost efficiency isn't worth society's goals, but straight up saying that they're "inefficient" isn't a case for anything.

Don't forget to factor in the costs of running, cooling, and maintaining that much hardware (also bandwidth costs). I'm not saying it's $2k/month, I'm just saying don't compare the physical box and AWS without factoring everything in. At the end of the day, if you don't need the support, you're probably right that a dedicated box makes sense there.

No, the article suggests that teachers can't raise scores in heavily impoverished unstable areas fast enough to meet demands. That's a much narrower thing than "schools are useless"

Yeah but what fraction of home users are going to consider that prompt as opposed to just clicking on the OK button? I've noticed a lot of software will include that in its install steps.

The sort of bot he's describing would be designed to mask large purchases and prevent them from sucking all liquidity out of the market temporarily or spiking prices.

Let's say I want to buy 500 BTC at $1000 (to make the math easy). I wire Mt Gox half a million bucks, and try to buy up 500 BTC all at once. This moves the market massively because that's a sizable chunk of existing sell orders. To prevent this, I could instead buy a few BTC a minute for the next couple of hours and I wouldn't drastically shock prices or be as notable. Prices would still move upwards (because more demand in the network) but they wouldn't spike. Or Mt Gox could keep a floating reserve, I could pay a free to lock in the price and move the money around internally to Mt Gox, and they replenish that reserve a few BTC at a time (taking on price risk if their reserve is depleted when prices are high, but making profits if they wait to refill that reserve until prices are in a trough).

Note that I have no evidence this is the case, I'm just trying to explain what he claimed was the cause.

Fairly hard actually - you've got to stakeout the house without being detected and tail the guy when he leaves. Plus you may not know how many folks were in the house in the first place (and thus how many are still there when the main guy leaves) - you could wind up raiding a house full of awake and semi-alert criminals with guns and have a bloodbath on your hands.

Additionally, the idea of this sort of raid is to arrest anyone who might be involved when they're found to be in a drug house. If you raid an empty house and find drugs, the owner of said house is gonna go underground if he sees his place crawling with cops, and everyone else is gonna steer clear of it.

Finally, there's a time-sensitivity component - the entire premise of drug dealing is that the drugs are in more or less constant motion, so your chances of success go down the longer there is between tipoff and raid.

I'm not saying that I like no-knock warrants or that they're a good idea, I just wanted to offer some reasons when trying to hit the house when nobody's home might be less safe or less effective.

>it's quite possible that it's just a sampling of bad hackers - he mentions that he has gathered many examples of bots and shells and such, so you can imagine that he's looking at a sampling of 1. hackers whose bots store their passwords in such a way that he can reverse-engineer where they are stored and 2. hackers who store their passwords in plain-text.

Yes, that's basically my point. The set of hackers who use strong passwords and the set of hackers who don't well-protect those passwords in their bots/viruses/whatever probably doesn't have a lot of overlap.

Also, it sounds like he couldn't crack (and thus couldn't include in the sample) some of the hashed passwords. Passwords that he can't crack or brute-force reasonably are probably strong passwords. Not having those passwords biases the sample - it's like doing a standardized test when all the honors classes are on a field trip, by removing the top-end you downward-bias the sample and make the overall sample look worse.

>they haven't even peeped one single word about making the customers of theirs that use Netflix pay more money to Verizon.

Not directly, but if the ISPs charge Netflix a fee that forces Netflix to raise prices for its customers to re-coup those costs (or hypothetically pass it as a surcharge on to its customers on a given ISP) they've essentially taken that money from their customers who also use Netflix. That the money went through an extra set of hands first is a mis-direct. That non-Verizon Netflix customers might be impacted ends up getting cancelled out if most of the major ISPs do the same thing. If Netflix doesn't charge a fee to re-coup those costs, then Netflix has less money to make rights agreements with, and I've got less content to watch. No matter what, I as a Verizon/Netflix customer lose.

>I looked at 40,000 samples of hackers’ passwords and found that nearly 2,000 were unique and 1,255 of those were in plain text. Another 346 passwords were easily cracked from MD5 hashes, because they were shorter than 9 characters. That gave me a total of 1,601 passwords and 300 hashes

If a significant fraction of his sample is "hashes he could easily crack" isn't a biased sample? Because it seems likely that the longer, properly hashed passwords are more likely to be the stronger ones...

I think part of it is that there's no real venue for customers to express their satisfaction to other prospective customers. If I find a store relatively well-laid-out, convenient, and friendly, I don't have a lot of opportunities to evangelize that store, even if I want to, because my legitimate actual real customer opinion gets crowded out by and blends in with astro-turfers. Sure I can talk it up to my friends, but that's not really a common topic of conversation.

>But my question/argument is, would that be a rational decision?

Does that matter? We[1] live in a capitalist democracy. One of the tenets of capitalism is that consumers should be well-informed and "vote with their dollars/feet", and the core principle of democracy is that the individual citizens get to decide how their society is run. We don't live in a LessWrong-ocracy where the world is run based on somebody's idea of rational objectivity or whatever.

I'm in politics so I know exactly how frustrating it can be when the average Joe doesn't necessarily agree with your vision of a rational decision, but if that's the case, the solution is to change their minds, not to circumvent or obfuscate to get around them.

[1] - I'm thinking Westerners in general, but I'm American, so I may be over-generalizing, we're good at that :-)