MICROBLOGGING: Caffeine Debt Spiral, & Þe FOMC Inches Toward “Þe Beatings Will Continue Until Morale Improves”
From þe Chat, & of þe Moment… Things worth noting, but much too short to be worth a full post sent to someone's email inbox, þt þey þen must deal wiþ some way or another.
Caffeine Debt Spiral:
Brad DeLong Usually before a heavy teaching semester, I spend a month going cold turkey on caffeine. Yes, I am low-energy during that month. Nine hours a night on average during that month. But then, when the semester starts, I can power through a class on a double latte, and then continue at a normal level activity for the rest of the day. But this time I did not do that. So now I am exhausted after a class, even with a double latte, and good for little for the rest of the day. So now I have a choice:
Double-down to a pre-class quadruple latte, and see what happens .
Move wake-up time back from 7:00 to 530, and hope to get high-quality productive work done while working like a dog before dawn.
Recognize that freedom is the acknowledgment of necessity; decide, like an adult, neither to increase my already unsustainable caffeine death nor to disrupt my daily schedule; and recognize that little besides teaching is going to get done for some months.
The FOMC Inches Toward “The Beatings Will Continue Until Morale Improves”
Brad DeLong I find myself distressed by something that four little birdies have told me recently. The bond market thinks the FOMC has overdone it, or is about to overdo it. The FOMC, however, is interpreting this as: The bond market is not taking us seriously! We need to do more! It strikes me as a counterproductive positive-feedback loop: The FOMC will keep raising short rates, hoping that they will push up long rates, but instead they will push the long rate down further.
My assumption all along has been that the Fed will raise interest rates enough to allow Republicans to campaign against the Recession during 2024.
Matt Levine´s newsletter: ¨But can you … can you … can you just a little bit go back to Option 2? Not really, of course; not fraud. You have to be open and honest about the hole in the balance sheet, about the backdoors in FTX’s code that allowed Alameda to take all the money. But before they knew about the missing money, a lot of people — retail customers but also institutional crypto traders — seem to have liked trading on FTX, and that is what made FTX valuable, and maintaining and increasing that value seems like the best way to fill the hole in the balance sheet. If FTX could just restart its exchange business, and go back to being popular and making billions of dollars in trading fees, then those billions of dollars could be used to pay back customers. And if that happened then maybe the FTT tokens, the magic beans that right now FTX will have trouble selling, could recover their value, and also be used to pay back customers.
This seems far-fetched and I do not personally have any idea how you could restart trading on FTX, attract new deposits, and get everyone to pretend everything is fine so you can earn back the money that Alameda borrowed/lost/stole. But I guess John Ray does? [...]
I guess? I mean, conceptually, what you have to do here is convince big crypto investors to start trading again on FTX by (1) opening up some new entity where they can deposit money that won’t get thrown into the hole caused by Alameda and (2) convincing those investors that, this time, you won’t steal the money. I suppose installing a new CEO, filing for bankruptcy, and disclosing the hole in the balance sheet and the backdoors in the code is a way to build that sort of trust. Maybe John Ray had to burn FTX down to save it.¨
My original thinking was that Bitcoin (crypto) was so stupid that it would eventually fault and people would run away and that would be the end of it, but I was in error there. I did not count on the sheer number of stupid people with way more money than sense, but also I did not take in to account the sheer number of people with some amount of money and zero sense willing themselves into believing that billions of magic beans (on paper) is somehow going to morph into actual folding green money. (Alternatively: some serious number of people are so infatuated with the idea of being pretend (crypto) bazillionaires that they would do absolutely anything to continue to maintain said belief (´Baby, I´m a crypto billionaire! Dig my crypto yacht!' even if it´s all fake and their money is all gone and they will likely never see it again and they totally know that.)
That said, crypto will die when someone cracks the encryption (and someone will eventually, because there is no form of cryptography that can´t be cracked, eventually) and starts counterfeiting to beat the bad, so there´s a fatal ending to the crypto dreams, but boy, isn´t it great being a magic bean billionaire!
elm
ok man whatever you do you