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12hr ago
“It should be obvious from basic efficient market processes that every measurable category of people the credit card companies can subdivide people into is internally profitable”
I agree. Ackman 100% tweeted that it’s not without thinking about it. Even Asnes seemed to agree in a tweet. That’s 100% my opinion that a dumb mba should immediately see the logic behind the fed paper saying the poor subsidize the rich is wrong without reading the paper.
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14hr ago
This is my logic. I quoted Ackman agreeing with the logic. But he’s not the only mba type who initially agreed. Here’s another billionaire agreeing that the poor subsidize the rich who I think should see the poor logic: https://x.com/cliffordasness/status/2010360464291889392?s=46
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15hr ago
I would never lend money to homeless people even if I could charge 10k% yearly interest.
There was a twitter debate on Trumps plan to limit credit card interest rates to 10%.
In my view this is an interesting exchange between bad academia (fed paper), expert (Patrick Mckenzie), MBA logic, populists (Trump).
Trump proposed a policy of capping credit card interests rates at 10%. That set up a twitter folly of the high rate people are subsidizing low rate people with rewards backed by a fed paper.
https://www.elibrary.imf.org/view/journals/001/2023/054/article-A001-en.xml
Ackman backing it: https://x.com/billackman/status/2009976076559077844?s=46
Personally being a dumb MBA I feel like I can perfectly segment pnl between subprime borrowers and rich people. If I make money on subprime and lose money on rich people I can just shutdown the rich people business and deploy more money to poor people. So the academia people are most likely wrong based on simple logic?
I can’t find it now but somewhere he did a longer post on how all cc are segmented https://x.com/patio11/status/2010185232159518904?s=46
I think for culture war attributes there are: Academia can do bad research. Ignore basic (or a price) and find a conclusion that seems smart but does not pass a logic text.
Honest experts can give full market breakdown.
MBA and idiots can give a logic that makes sense and is more correct than an academic trying to make a paper.
And then there is the Trump 10% interest rate cap. Maybe most borrowing above 10% interest is bad? I might compare this to online gambling where the people doing it and are profitable it’s bad for them. Or legalized weed.
If I didn’t make it clear above. Most of the rich people rewards are paid for by the high interchange fees of 3%. It’s not credit risks. It’s not subsidized by poor people.
Edit: as a high income high fico. I would prefer we limit credit card fees. And rewards go to zero. Then the store I go to doesn’t pay a processing fee. So they cut prices. And it probably saves me more money than getting 2% cash back.
I might be high on 50%. When I got into the business things were less automated and tech may have lowered the success rate. I have tried to correct for this by giving ample capital ($1m) and saying they can play less scalable and less competitive games (small caps/smaller commodities). Avoiding super scaled trades like SP500 products where Jump etc has automated.
I am sort of assuming the average Motte poster is basically SBF - MIT/Stanford type. We probably have a few but that is probably 1-2 tiers higher intellectual firepower.
I’m not proposing huge compensation. 50% on 1m is only 500k. So not significantly more money than the same person taking Faang job and getting 10% on 1m.
This has been a twitter discussion lately on X about different prop firms and classifying them as “Chicago” style or “MIT” style. Chicago style being quanty people who take more risks (sleep on positions) with more yolo and vibe based. MIT being more pure algo trading. For the purpose of this discussion I am solely proposing a Chicago style since MIT style requires a lot of infrastructure. https://x.com/annanay/status/2012164686943261175/photo/1
I have a friend who a few years ago swapped between being “Chicago” to being “MIT”. His Chicago days were more fun. His MIT days now are a more stable lifestyle. You do not sleep well holding positions for weeks, but programming algos is much more of just a well paid 9-5 jobs.
To not dox too much he’s from a MIT/Stanford type school. He spent 5-10 years trading let’s call it cheese. At a firm but mostly siloed so had to build out what he needed himself. Think he made $20m those years. Out of college he couldn’t get into the name brand firms but he did those trades and eventually transferred.
David Orr is an interesting twitter follow. Jewish former poker pro. Not sure he went to college. Obviously some quant ability if he made it in the poker world. Started fucking around in Japanese value stocks when poker died and he fafo’d.
A lot of name brand hedge funds/firms started all have similar backgrounds. Of which the Motte has a high overlap in backgrounds with that group. Ken Griffin first started trading convertible bonds in his Harvard dorm room. Don Wilson just started showing up at the board of trade (UChicago), Tepper was pro but go fired and just yolo’d personal account (Jew ), 3red trading smaller Chicago firm like a single pod (Jew, Chess, Northwestern), Jeff Yass (poker, Jew). List could go on.
Now I started listing Jew because a lot of the firms are Jewish and it especially captures the ones without elite education. It’s probably just capturing the over representing in nobels and other intellectual achievements. It’s the only category that sometimes doesn’t have elite education too. Eliezer Yudkowsky would be an outside of the industry guy without education.
I think there are certain factors you can identify that strongly signifies they would work out in trading. Evidence of being good at math logic, Jewish, competitive mind game ability Chess/Poker. The equivalent of being 7’ tall and being able to consider basketball as a legitimate career path. Maybe 50% is too high, but if you start checking a few of “all the successful people have this background” then it’s far higher than the 0% of retail traders make money. I think the Motte has a lot of the people who check these boxes. Even more before rationalism went from a niche to a few percent of the population.
If you gave Scott Alexander a million dollars to trade prediction markets full time my gut says 12 months from now his pnl would be ok.
I want to call Jane Street as always rational from my memory. Grok is telling me no. It’s telling me the first public promotion was “earn to give” by some employees in 2012.
I am more confident in the 50% success rate in the pre-2010 timeline. I think this sub is smart enough that a high percentage of the posters could make money in the pre-automation days. Floor trading days - yes. Early electronic days but before heavy automation - probably yes. Today maybe we could get to 50% deploying people in trading niche.
I have worked in prop trading. The background that Jane Street hirers - math kids seem to work out at a 50% rate.
It’s like the NBA. A 7’ kid has like a 35% chance of making the NBA while the average person is not distinguishable from zero. We have a lot of 7’ kids in rational community.
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1d ago
Maybe a little less. Shape rotator brain types are the prototypical quant/prop trading personality/ability. We do have some word cells here.
In my experience about 50% of the prototypical shape rotator works out in trading. People always cite 99% of retail traders fail. But the typical MIT 800 math SAT kid can figure out a way to make money in markets. A lot of the people on the Motte fit that background.
With $1m, 3-6 months of guidance, and interest in markets - I think a person like that could find a way to make $400k over 12 months. At that scale you can do things like stare at less liquid small cap stocks and make a market or trade lumber futures. Both areas where you have a lot less competition from established players. This would not be side employment and managing a brokerage account in your free time.
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2d ago
I would be surprise if anyone here doesn’t believe that forecasting is possible. My gut says there would be nearly 100% agreement that psychohistory (Foundation Series) is most likely true.
I would assume 50% of posters here could generate 40% annual returns on modest amounts of capital if they focused on earning their living in trading. It’s not an impressive number especially when you made zero mention of your risks system.
Jane Street literally recruited straight out of SSC message boards. And they do like $25 billion a year in pnl now (far less when they began recruiting from SSC).
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2d ago
A Hispanic that is either first generation born here or illegal/semi legal that came from my Mexico there is no social stigma with being a laborer. A white guy has a stronger expectation to make it into white collar world or higher (boss/capital side).
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2d ago
Agreed. Doing the individual work is when learning happens. Sitting in lectures has its benefits but we probably do too much of it in high school. Cutting classroom instruction time by 66% with more time to do the work during the day would increase learning.
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2d ago
They have killed the status on those jobs. Straight to Incels’r US. Back in the day you could work a factory job that sucks, have a still skinny wife, and pump out a couple kids in a 1500 sq ft house. You can still pull that off if you are Hispanic. But not if you are white and even if you are black it’s going to be hard.
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2d ago
We have gone farther than this. Being the lying scumbag would not have been a thing in the small town I grew up in.
Now you basically need to be a lying scumbag to just get average opportunity, so everyone does it.
It reminds me a lot of the steroid era and Barry Bonds. He was already a HOF, but everyone else was doing steroids because it had tacit permission from Bud Selig. So he started doing steroids to be on an equal footing.
Didn’t they get rid of the Jews because they were too clever and people started to think they did societal harm? Good at inventing tech, but would also financially swindle you or push bad pathologies like Sigmund Freud. It seems like every American pop star (or black rapper) had a Jew managing them and pushing their sexuality at a young age. Onlyfans created by a Jew. Something about Jewishness they seem to excel at those roles.
We can’t help but watch and follow along, but 90% of the time it seems like it’s a Jew that created it. My gut says they were also doing things like creating onlyfans back then.
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4d ago
That isn’t wondering. It’s fairly much a fact. The Cuban regime hasn’t killed a lot of people. When tensions have risen they just put the people on ships and sent them to America. Which for a Cuban was a solid deal they would take.
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5d ago
Sure. Somalians aren’t capable of civilization unless they undergo extremely strong evolutionary pressures for a few centuries.
If civilization collapses now and we go back to being hunter and gatherers we probably don’t get another shot at civilization for a few million years. An Industrial Revolution likely requires access to surface level fossil fuels which would take a while to naturally occur again. Maybe we could get to a Roman level civilization without access?
I will not say whether industrial civilization is a good or bad thing. It’s good for my interests.
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5d ago
The annoyance part is my point. It was higher status to be a wife and mother than girl boss and being called Miss was low status above a certain age. This added a lot of pressure to have children so you could take the title of Mrs. which boost the fertility rate. Being called Miss above a certain age was basically being an incel.
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5d ago
I do think it changes in the next 10 years. The leaders of the revolution seems to be dying out and my gut says the next generation isn’t the same. I have no idea if the current protest can work but I don’t think the replacements will have the same zeal.
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5d ago
Trading desks speak a different language than the rest of society. I guess every industry has their own language. You are always asking yourself why your wrong. Or a cottage industry has grown analyzing a CEOs body language and tone versus what he’s directly saying. Which I guess develops a natural bit of conspiracy thinking. It doesn’t apply to the automated shops which is basically more engineering.
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5d ago
Someone willing to use physical force to evade arrest - which she 100% did - is going to be a problem to arrest at any point when you try to arrest her.
Legally you need imminent threat to life to shoot someone. From a broader level though an ICE agent will die if people are constantly evading arrest in vehicles. On net shooting her saves future ICE lives. And legally she opened herself up to get shot.
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5d ago
HackerNews was the other one that I thought of that on average probably has a reader 1 standard deviation above the NYT average.
Scott’s readership is high IQ, but he writes in a smart person way.
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5d ago
Venezuela may be incompetent. But I still expect country with 30 million people and some legacy wealth has a bunker or secure facility for their President to sleep in. And that he sleeps in said place when the USA is threatening to kidnap him. The men with guns protecting him have good places to shoot from versus guys landing in helicopters.
I am thinking about my condo building I sleep in. It’s a large building with 2 stairwells and 2 elevator shafts. It does have a 40th floor balcony. In order to get to me you either need to:
- Go up 40 flights of stairs. My armed men with guns can drop grenades on you and shoot you coming up.
- Take an elevator. My men with guns can light up the elevator even before the door opens.
- Come in thru the balcony. Which sounds like a very exposed entrance for a helicopter. My men with guns can shoot the helicopter from a few hundred balconies or the roof.
Of course you could fairly easily kill me. Just drop a bomb on my condo building. But we didn’t do that.
It does appear to me the US either bribed a lot of people or we have some technology that knocked guys out guarding choke points.
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6d ago
I’ve often pondered whether zerohedge might have the highest IQ readership on any newsite. It basically grew out trading desks communities which have a floor of about 120 IQ. I’m not sure how widely read they are outside of those communities. Traders also read news differently than other people.
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6d ago
Think that’s a status thing. Wife/husband mean there is someone in this world who was willing to permanently vouch for you which is offensive or lowers the status of people who no one would do that for.
I also think an early sign of the coming fertility crash was eliminating Mrs. and everyone goes with Ms. That made being married with kids as having no special status in society. Having kids is work. Taking away status of having kids took away one of the big benefits of doing that. Women probably even care more about status than men and something as simple as everyone has to call you Mrs. and being above the Ms. in the social hierarchy is big.
That is a good matrix for cards. I have a writing problem where I fail to structure my thoughts correctly. And probably something the Fed paper that kicked off the debate on twitter should have started with.
My gut is most people here started out getting category (3) card offers during college and later and eventually saw a lot of ads for category (4) cards. Category (3) you get a lot of offers for 0% balance transfers and (4) airlines and hotels. In (3) you have good enough credit you get offered interest rate buy downs while (4) you get basically a few free flights.
The populist take which I’ve used the term MBA logic for why it fails is that poor people subsidize free flights for rich people. Now more than a few smart people backed this idea (it had a fed paper saying it was true) but I think MBA logic prevails and you can just market segment. Besides AMEX only offers rich people cards and has the best rewards before mid 2010’s when Chase tried to challenge them.
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