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fuoqi

1,554 karma · joined May 3, 2020

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fuoqi··on The electric vehicles we need now are e-bikes (2022)
I believe unicycles are a better fit for urban mobility (I am talking about proper, mainline EUCs, not the Onewheel bastardization of the technology).

You can easily use them together with public transit systems, while e-bikes are quite unwieldy. The have better maneuverability and responsiveness. They do not require any parking spots and can be easily taken to an office.

They are a bit more dangerous than e-bikes, but with proper protective gear and improvements in the technology (chances of mechanical or electrical troubles are very low, if you don't intentionally push hardware to the limit) the difference is quite small. Also, they are somewhat harder to learn to ride, which hurts their popularity.

fuoqi··on The Undeniable Street View
>That it is Ukraine bombing their own cities

They do bomb them. Or do you think it's the Russian or rebel forces bombed Luhansk and Donetsk since 2014, and the Zaporizhia nuclear plant since the war started? There is a ton of blatant lies being told by the pro-Ukranian side before and after the start of the war. For example, the infamous "air conditioner explosion" was later confirmed to be a targeted strike of the Luhansk state administration building by the Ukrainian government.

Of course, it goes in both directions.

fuoqi··on Reasons the banking crisis isn’t a repeat of 2008
I wonder about the end-game effect of the BTFP. Great, today banks got enough liquidity thanks to the Fed, but after 90 days they have to return borrowed funds together with a relatively high interest and get back semi-worthless paper (because selling it will result in realized losses). In 90 days credit conditions probably will be even tighter than today and a lot of people will flee to the too big to fail banks. How we expect small/mid banks to stay stable after that?

And I don't even want to touch the question of fiscal deficits, which not only do not show signs of moderation, but accelerate even further. It either ends in a real default, or persistent high inflation, with negative real rates, which in a sense is also a default.

fuoqi··on Reasons the banking crisis isn’t a repeat of 2008
SVB also did not have "worthless assets", but the extreme rate hikes by the Fed significantly reduced its value. Wait until tightness of credit conditions will cause chain of defaults and we will see how well banks will fare. We already see the first signs of it in the auto loans market.
fuoqi··on Bank failures come in waves
>You don't even need somebody else's money to start a bank. The Bank of England was started by issuing shares to subscribers and booking them on the asset side as nil paid.

We discuss commercial banks. The Bank of England is quite far from your run of the mill commercial bank, to say the least. Try to start a commercial bank without any capital, it will be a fun exercise.

As I've said in the post, there are various make-believe games which can be played with assets. My favorite example is the irredeemable gold certificates owned by the Fed.

Your systematic view is certainly valid, but it does not matter much for day-to-day operations of most banks. They do not care about how the system was kick started. For them reserves at a central bank play role of bag of coins, even though, as you said, there are no real coins, just pairs of assets and liabilities spread out between different balance sheets.

>Much of the problems we have with banking and the view against it is because of the persistence of the Monetarist view

Oh, so the current debacle is mostly fault of monetarists? Got it. And here I thought that the "temporary" make believe games introduced after GFC, lax regulation, irresponsible fiscal and monetary policy had something to do with it... /s

fuoqi··on Bank failures come in waves
You can be your own narrow bank by directly investing into short-term bonds or by buying a money market fund.
fuoqi··on Bank failures come in waves
What exactly is incorrect in my explanation? Are you saying that bank's liabilities can exceed its assets for a prolonged time? Or that reserves at a central bank do not pay interest? The second order effects (such as loan at one banks creates deposit at another, meaning M2 gets essentially "printed"), which are important for monetary policy and regulation, are not relevant when we view operation of a bank in isolation.
fuoqi··on Bank failures come in waves
>when someone takes out a loan, a bank doesn't lend out depositors' money. Instead money is "created" by the bank (on behalf of the fed), and the bank needs to pay the fed interest.

Commercial banks can not create loans out of thin air during normal operation. They either have to use depositors' money or share holders' capital. In other words, bank's liabilities (e.g. user deposits) should not exceed its assets (loans to users, securities, reserves at Fed, etc.). There are games which can played with how assets worth is measured (e.g. mark-to-market vs. mark-to-maturity), but otherwise the rule must be followed by banks.

>Why can we not have a similar system for deposits? A bank takes a deposit, the fed "destroys" the money, but pays interest to the bank. When the depositor wants to withdraw their money, the fed/bank recreates the money.

When a bank receives a deposit, it has to decide what to do with it. It can either loan it to someone (either directly or by buying bonds), invest (e.g. by buying stocks), pay it as a dividend to share holders (assuming it has far more assets than liabilities), or keep it in bank's reserve account at Fed. In the later case it gets payed roughly the key interest rate. This is why rate hikes suppress inflation (at least in the near term), banks instead of deploying their capital into the economy deposit it at Fed, thus temporarily removing it from circulation. It also means that cost of loans in the wider economy rises accordingly, since banks will not loan without a sufficient premium to the Fed's rate.

fuoqi··on Federal Reserve lent $300B in emergency funds to banks in the past week
They can buy longer duration bonds and sell them before the loan is due or even corporate bonds. Yes, it introduces certain risks, but with the endemic banks irresponsibility constantly bailed out by the government, I will not be surprised. But I guess, possible spreads are a bit too small for this scheme to matter.
fuoqi··on Federal Reserve lent $300B in emergency funds to banks in the past week
A bank has 10 year bond which trades 90 cents on the dollar on the open market. It gives the bond to Fed as collateral and receives 1 dollar. It uses this dollar to buy bonds on open market with rate higher than cost of the loan, after 90 days it sells the bond, gives the Fed 1 dollar and interest, and pockets the rate spread on 10 cents.
fuoqi··on Federal Reserve lent $300B in emergency funds to banks in the past week
Is there anything preventing banks from buying treasures on open market by using funds they got from Fed by exchanging their treasuries on mark-to-maturity basis? Looks like a bailout with extra steps.
fuoqi··on Investor Mark Suster says a “handful” of bad actors in VC destroyed SVB
This is why I wrote "likely", but as for facts, I know that SVB's CEO has sold his stocks on March 1 for $3M (in addition to a number of earlier sells). And according to Bloomberg short sellers made at least $500M in profits: https://www.bloomberg.com/news/articles/2023-03-10/shorts-ma... I absolutely will not be surprised if in the future we will learn that some enterprising individuals connected to the VC crowd have helped to trigger the run in the right time for them.
fuoqi··on Investor Mark Suster says a “handful” of bad actors in VC destroyed SVB
And of course no one has shorted the stocks. /s
fuoqi··on Investor Mark Suster says a “handful” of bad actors in VC destroyed SVB
I think it's likely that certain actors were pulling the strings behind the scenes to trigger the run and make a hefty profit in the process. But they are nothing more than capitalistic hyenas, the root issue lies in irresponsible SVB management and reckless tightening by FED.
fuoqi··on Viable superconducting material created in Rochester lab
Maglev applications strongly depend on a sufficiently high critical field. Unfortunately, high temperature superconductors have serious issues with it.
fuoqi··on Chinese banks cause alarm as capital flight measures intensify
1) You are moving the goalpost compared to GP.

2) Yandex was understandably cautious in the light of the new Russian laws, which effectively put a censorship net on coverage of the war.

3) Are you saying that Volozh should have followed the unspoken Western rules in operation of a business in Russia (read: he should've acted to please the West as much as he can, anticipating its demands) or risk loosing access to all his property in the West without any warning? And you think the Chinese will not see it as a potential risk?

fuoqi··on Chinese banks cause alarm as capital flight measures intensify
With negative real interest rates they DO lose purchasing power and I think they thought about such risk. But making China a production powerhouse and technology transfer associated with it was a much more important goal.
fuoqi··on Chinese banks cause alarm as capital flight measures intensify
>why bother?

For example because your production capacity in China will produce your stuff for cheap and you will be able to sell this stuff with a good markup? You will not be able to easily sell the production capacity and move the resulting capital outside of China as you would in the US or EU, but as long as it operates it will generate you profit.

fuoqi··on Chinese banks cause alarm as capital flight measures intensify
How about Arkady Volozh? He got sanctioned not because he has "direct ties to and props up Putin", but because Yandex operates in Russia and has to follow its rules.

Just look at the length of the list with sanctioned persons. Are you seriously saying that all of them have "direct ties to and prop up Putin"?

fuoqi··on Chinese banks cause alarm as capital flight measures intensify
Because having a global reserve currency strongly relies on network effects and USD share in international trade is failing steadily?

How much of this IP heap is an utter trash like software patents and patents on black rectangles generated just to be added to a patent pool? From my (surface-level) understanding school-level education in the US has much bigger troubles compared to China, but luckily for the US it gets compensated (for now) by sucking brains from all over the world into the well established system of universities.

And it's not like China has no experience with playing extremely loosely with IP laws.

fuoqi··on Chinese banks cause alarm as capital flight measures intensify
No. They bought it because the excess capital produced by artificially low exchange rate used to stimulate domestic production and exports is too big to be parked anywhere else.
fuoqi··on Chinese banks cause alarm as capital flight measures intensify
>because if their money is in China, they don't really own it

The same can be said about money moved to the West, just with a different risk profile. As the Russian situation has shown, your property can be creatively taken away if your country of origin pisses off the US too much.

fuoqi··on Chinese banks cause alarm as capital flight measures intensify
They do not need foreign capital per se. They need foreign business expertise and technology in areas where domestic ones are not sufficient at the moment. For pure capital they have more than enough in US debt, maybe even too much, since they try to allocate as much of it as possible (e.g. using the one belt initiative) without launching RMB exchange rate into space.

With the mounting up US sanctions, trade wars, and "friend-shoring", China will have less and less interest in western investments.

fuoqi··on Data consistency is overrated
>In a financial world, a bank should never print money.

Except banks routinely do "print money" (if you agree that credit and money are effectively the same). Even without delving into workings of our financial system, there are enough stories of banks making mistakes which erroneously increase their liabilities to clients. Banks simply revert such mistakes if they can or sue clients if money were withdrawn before such mistake was found. So it's much closer to fuzzy/eventual consistency.

fuoqi··on HVDC transmission line to connect three ISO regions
Why in the world would they invest into such HVDC project when they already have a huge synchronous grid (unlike the US and Canada, which have 5 grids in total) shared by other countries, especially on the southern border. I think there are even plans for Iran to join this grid. They have absolutely no trouble sending energy across their territory to smooth consumption peaks. Add to that abundance of coal/gas/oil (FYI during winters they use thermal power stations to generate both electricity and heat for homes), robust atomic and hydroelectric generation, and almost zero (in relative terms) solar generation.

They only need relatively short HVDC links to be able to send energy from their hydroelectric installations in Siberia to China and maybe to South Korea and Japan, though with the current geopolitical climate the latter is quite unlikely.

fuoqi··on Hobby Club’s Missing Balloon Feared Shot Down by USAF
I wonder if Russia and/or China will start launching a bunch of relatively cheap stratospheric balloons with foil-covered cardboard boxes to imitate payloads to troll the US and make it spend millions on shooting them down. To make the trolling a bit less obvious they even may add some innocent recording devices to claim that they are "scientific experiments".
fuoqi··on The Joy of Duplexes
Note that this page for some reason redirects to https://en.wikipedia.org/wiki/Freddy_the_Pig if opened in a new tab (I guess it's a kind of "protection" against sharing the link). To open the article, copy the link, open a new tab, and open the link in it. Alternatively, use incognito mode in your browser.
fuoqi··on Do heat pumps work in cold climates?
The biggest issue with mass-scale installation of heat pumps is non-linear load on grid in cold weather. Failing efficiency and ultimately automatic switch to resistive heating causes electricity consumption spike, together with other accidents caused by the weather (be it reduced generation or grid damage) it can cause brownouts or full-blown blackouts. In other words, people can lose heating when they need it most.

Any programs which promote heat pump installations above a certain scale must either include huge investments into grid robustness or mandate that all heat pump installation must include fuel-based backup heating sufficient for a week or two.

fuoqi··on The cold hard truth about electric vehicles in winter
Are you suggesting to use flywheels as an energy source in EVs??? There is a heap of issues with this idea, the main ones:

- They are VERY heavy. Typical energy density for flywheels is 10-40 kJ/kg (if you account for the whole flywheel), while Li-ion batteries and gasoline store 300-1000 kJ/kg and 46700 kJ/kg respectively (the latter does not account for ICE efficiency).

- They are relatively big, since you can store more energy with a bigger diameter (limited by material's strength-to-weight ratio).

- Flywheel is a big gyroscope. You do not want to rotate it around while it spins.

fuoqi··on BundesMessenger, a secure messenger for Germany’s public administration
>the Russians (Telegram, prolly not)

I wouldn't call it a "Russian" system. Just consider where Durov currently resides and has his wealth.

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