| 20:43 | Vex | http://logs.nosuchlabs.com/log/asciilifeform/2024-12-05#1116830 crazy, right? |
| 20:43 | dulapbot | Logged on 2024-12-05 02:10:14 mats: they’ve been printing money on the 100+bn usd in yield from the treasuries they’re holding. and considering the size of the Eurodollar market (prob in excess of 18tn today), and tether’s market dominance (around 66%) in stablecoins, I think it’s plausible they’ll be earning around 2-3% yield on a trillion dollars in treasuries behind issued usdt in the next decade. they could face competition from other issuers sharing yield |
| 20:44 | Vex | it's like some half arsed business model from bctalk |
| 20:51 | Vex | kyc indeed. treasury knows they're a good customer |
| 20:58 | Vex | aren't their books notoriously un-public too? |
| 21:09 | mats | they're a private outfit and under no obligation to open their books |
| 21:09 | Vex | i'd be tempted to negotiate the rate with those kinda numbers |
| 21:10 | Vex | "hey, about those indexed bonds.." |
| 21:10 | mats | there's no evidence they're holding inflation-indexed bonds |
| 21:11 | mats | anyway, we could very well go back to a ZIRP environment and then they get ruined by duration risk |
| 21:11 | mats | but right now they're by far the most profitable org by headcount on earth |
| 21:13 | Vex | I wonder if the desk jockeys get paid okay |
| 21:13 | mats | looks like they might have been more profitable than goldman this year |
| 21:13 | mats | forget blackrock, they're basically running a charity over there with their expense ratios |
| 21:13 | Vex | lol |
| 21:14 | Vex | what's stopping a copypaste, if their shit's so simple? |
| 21:15 | mats | which org |
| 21:15 | Vex | t |
| 21:16 | mats | i never said anything was simple |
| 21:16 | mats | the key to outcompeting incumbents is you have to offer something they don't in order to take their market share |
| 21:16 | mats | that's also the problem |
| 21:17 | mats | they can just adopt the mechanic you're using and crush you with inertia |
| 21:18 | mats | this is the key that all the social media outfits before fb was missing |
| 21:18 | mats | were missing |
| 21:18 | Vex | which mechanic? getting big? |
| 21:19 | mats | in the specific case of tether, as i said before, new stablecoin entrants could (and, i think, are) offer treasury yield sharing to users as a market differentiator |
| 21:19 | mats | and tether can do that too |
| 21:20 | Vex | mebbe they need it for `who they know' |
| 21:21 | mats | in the case of facebook, meta adopted stories, messenger day, and slingshot (learned from snapchat), reels (tiktok), live audio rooms (clubhouse) |
| 21:22 | mats | facebook/meta |
| 21:22 | Vex | what cool shit does tether have? you can walk into kings roman and spend it? |
| 21:22 | mats | facebook marketplace (craigslist), facebook live (periscope), facebook dating (tinder/bumble) |
| 21:24 | mats | the killer feature of tether is simple -- v low fee (compared to all alternatives) cross-border payments with dollars |
| 21:25 | mats | people use it for payments too but i'm not super familiar with that beyond what's in public reporting |
| 21:25 | mats | i don't live in a place that has issues with getting dollars |
| 21:25 | mats | retail payments |
| 21:26 | Vex | I only use aud unless i'm overseas. |
| 21:27 | Vex | you could prolly hand me a fake benjamin. I might not know |
| 21:28 | mats | its hard to understate how useful usdt is, and how dangerous it is to governments with capital/currency controls |
| 21:29 | Vex | oh yeah |
| 21:29 | mats | extremely difficult to interdict short of draconian intervention in citizens usage of the internet |
| 21:29 | Vex | I was wondering how it was legal, but reading your shit yesterday, it kinda clicked |
| 21:30 | mats | normally it is impractical or impossible for billions people to get physical dollars or usd via bank accounts, because their financial institution won't let them acquire it, they don't have a bank at all, the friction is extremely high (fees and limits), their local govt won't allow them to get it owing to currency controls and an interest in preventing capital flight, currency runs, and speculative attack against the local currency |
| 21:30 | mats | its going to be a shit show |
| 21:30 | mats | and all of this adds up to oxygen for the reich |
| 21:31 | mats | this is why the americans haven't crushed tether despite the fact the operators are in bvi and eu |
| 21:31 | mats | they're creatures of the empire |
| 21:32 | mats | we haven't even gotten to the stage where wall st has begun formal tokenisation of traditional assets |
| 21:33 | mats | which will only accelerate capital flows into the empire |
| 21:35 | mats | i don't have any interest in it but you could probably find a million people on the planet who want a piece of trump tower's earnings from tenant leases or whatever cre shit |
| 21:35 | mats | maybe a hundred million people |
| 21:36 | mats | there's serious regulatory hurdles and not given it will happen but use your imagination as to how far this financialisation could go |
| 21:36 | mats | and the incentives that exist for owners to do it |
| 21:40 | mats | yes there would be an extreme response to it by strong, autocratic states, but capital naturally interprets restrictions as damage and routes around it |
| 21:40 | Vex | i literally can't imagine, i'm mid range financially literate on a good day. I don't think anyone's in charge |
| 21:40 | mats | to abuse the expression about internet routing around censorship |
| 21:40 | Vex | oh yes. that |
| 21:40 | mats | a quarter trillion usd in capital exited china since covid |
| 21:40 | mats | the most awesome and expansive surveillance state in the history of human civ |
| 21:41 | mats | http://archive.today/2024.10.26-220330/https://www.wsj.com/world/china/china-economy-capital-flight-2ba6391b |
| 21:42 | mats | actually, correction, it happened in a single year |
| 21:44 | mats | billions of people naturally have incentive to seek safe (or productive) harbour for their capital and the internet and crypto will make it possible |
| 21:45 | mats | even if four billion of those people only have like $3000 in wealth apiece |
| 21:45 | mats | or whatever the number is |
| 21:52 | mats | thanks for coming to my ted talk |
| 21:52 | Vex | thanks for putting it on. real chin scratcher |
| 21:53 | mats | long live the reich |
| 21:53 | Vex | lol. keep winning mats |