Hacker News Reader

Comment by dadoge | Hacker News Reader

That is true, esp with Michael Saylors comment about mortgage your house to buy buy BTC…I am pro BTC, but that is utterly horrible advice.

That is indeed buried relative to many other points

View on HN

Yep. Know an elderly couple that did exactly this, and so did their friends. It is shockingly common. They were all exploited. Someone should be held accountable.

...really? what were they hoping to gain? By the time you're elderly I feel like you should understand that there's no such thing as low risk high reward investing.

To beat inflation. Simple as that. Interest rates aren't moving in line with the rate of inflation, ergo running out of money before they croak becomes something to be concerned by, thus most folks make investments in retirement to compensate for this.

Lots of folks online saying that crypto is the only way to beat inflation. We both know that's bullshit, but with so many people huffing the laughing gas, it's easy to get taken in, especially with influencers and the Crypto.com Stadium et al.

I like this thought and buy the motivation, but why not stocks?

Stocks aren't anywhere near as hyped, and countries aren't making stocks into legal tender ala Bitcoin, and Chivo. Not that I'm advocating for any of this BTW.

It just seems like a perfect storm of massive hype, a lot of very convincing marketing, and the wind blowing in the right direction between a pandemic, Brexit, war, and a possible recession.

When desperate, and many big names are involved, it can obviously look quite seductive. Used to work in this predatory niche about 7 years ago. Never again.

I heavily disagree with this. My generation's elderly people cannot read nor write. Of my one grandparent who can read, they have an 8th grade education. Only a minority of 60+ people were literate worldwide, much less financially literate.

This also applies to my parents' generation, who grew up primarily subsistence farmers. They don't understand finances or markets or anything like crypto. They understand business investment as mutual actions of trust, where they lend their neighbor money and their neighbor buys something to benefit the town. Cryptocurrency hijacks those avenues of business investments by forming parasocial bonds and fake communities.

If I could underline your comment repeatedly, I would. We take our access to knowledge for granted.

"They understand business investment as mutual actions of trust, where they lend their neighbor money and their neighbor buys something to benefit the town. Cryptocurrency hijacks those avenues of business investments by forming parasocial bonds and fake communities."

Exactly. The crypto promoters built a community, acted trustworthy, and then they exploited it for an affinity scam.[1] The promoters gave the impression they were on your side. They weren't.

Just like Madoff.

[1] https://www.sec.gov/investor/pubs/affinity

Was there some form of coercion involved? How is taking a loan against your home to gamble on risky, speculative assets the fault of someone else?

If someone borrows against their home to try to double their money in stock trading or the casinos, were they exploited by Wall Street or Las Vegas?

> If someone borrows against their home to try to double their money in stock trading or the casinos, were they exploited by Wall Street or Las Vegas?

Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling.

1. Citation needed - which jurisdictions? This is certainly not true in the USA where you can use home equity for investment purposes multiple ways via HELOC, equity loan, or cash-out refi. Additionally, brokerages themselves offer margin, and margin investing/trading is a loan.

2. This doesn't address the point of where the coercion was involved to make this "exploitation".

[0] https://www.lendingtree.com/home/home-equity/home-equity-inv....

[1]https://www.thebalance.com/can-i-invest-in-stocks-with-a-hom...

Non-purpose loans like SBLOC aren't allowed to be used to purchase or carry securities. I believe HELOC usually don't carry that restriction, so it would be legal. Probably a terrible idea, but legal.

> Actually, yes. There are laws regulating loans for the purchase of securities. Most jurisdiction ban lending for gambling.

How is Wall Street exploiting them in this case? It sounds like they are committing some sort of fraud (perhaps even criminal?) against the lender by breaking the terms the loan by investing in speculative assets.

Broadly speaking, if a bank lends you money and knows or should have known you were going to use it to gamble or buy securities, the regulators will ding them. The borrower may separately be pursued for fraud. But this is a known failure mode when it comes to human emotions and magic numbers. Some sociopaths just found new lipstick for slot machines.

You keep claiming this, without providing evidence. Home equity loans and lines of credit can be and are used for investment purposes.

It’s considered one of the worst ways to use home equity, but it’s absolutely legal for all parties involved

A lot of casinos offer lines of credit so this isn't true.

This attitude led to attestations like “accredited investors” that locked anyone but the top 3-4% out of private markets where the majority of wealth creation is happening

I'm not convinced a lot of opportunities open to accredited investors are that good. 2 and 20 takes a lot out of your returns.

But are you owning up to this ?

What do you mean?

GP wmf stated:

> The crypto "community" need to own up to this.

Whatever that means

Reply on news.ycombinator.com