riskneutral

And now we know where the next bank run after SVB is going to happen. It isn't going happen at a traditional bank, because the Fed/FDIC/US Treasury have that covered now. There's going to be a run on crypto stablecoins. Hopefully the coming economic calamity will be contained within the cryptobro sphere.

The more important question of disclosure has to do with the so-called "held-to-maturity" book, which I want to start affectionally referring to as the "held-to-mortality" book, or the "head-in-the-sand" book.

These are all fancy ways of talking about accounting tricks that banks are allowed to employ in order to hide economic losses from their financial statements. Banks would argue that their accounting tricks are blessed by the priesthood of professionals accountants, so it's perfectly legal. Which it is. It is not obvious that real-time mark-to-market accounting would have made things any better, but pretending that massive economic losses were not real was not a sustainable trajectory as soon the accounting fiction (no losses) collided economic reality (the need to sell holdings, in order allow depositors to withdraw their cash demand deposits).

Given the panicy herd psychology of humans, it has long been argued (at least since as long as the collapse of Lehman Brothers) that "head-in-the-sand" accounting is preferable to mark-to-market in order to ensure the stability of the financial system. In laymen terms, sometimes it's better for the public not to know how bad things have gotten behind the scenes. That is a kind of common sense practice for governance, and it isn't going to go away. Ironically, the answer to the SVB collapse is that you should have less informed, less rich and less well connected depositors (i.e. tame and docile customers) if you want to reduce the risk of a run on your bank, which is obvious in retrospect.

> the moral hazard

The moral hazard in this case is that depositors will feel safer putting all their deposits into a single high-risk bank where they can earn higher interest on deposits, since the implicit insurance is effectively much higher than $250k per individual or company. I think the sensible to solution to this, in the modern age of banking, is for the Federal Reserve to not allow concentrated, high risk banks to exist in the first place. In the same way that the government doesn't allow carnival operators to reduce safety standards in order to make roller coaster rides cheaper or unreasonably fast.

Do you have any information about how much higher this return was?

In any case, this is a failure of government regulation. If the FAA started allowing cheaper flights on aircraft that had less stringent maintenance standards but let passengers know that it was "at your own risk," then I would question the FAA and the airline industry, not the passengers opting for the cheaper flight.

The $250k FDIC limit on accounts with hundreds of millions of dollars is ridiculous and doesn't sufficiently protect the financial system. That is the regulator's and Congress's responsibility to provide better governance. That a bank like SVB was allowed to exist, with its client base highly concentrated in one very particular industry sector, is also a governance failure.

A startup company's bank account, where it holds VC investment cash and pays out salaries and invoices from, is not something that should experience occasional random disasters where the bank suddenly disappears into a thin air along with your US dollars. This is like a major transportation or industrial disaster, punishing the victims (depositors in this case) doesn't make sense. The focus should be on making the planes, trains or bank accounts safer of future users while compensating the victims of disasters and building trust in industries and regulators. Due to the unique nature of banking, punishing the victim also risks cause the phenomenon of bank runs to spread to other banks and causing further disasters at a time when the economic situation is fragile to begin with.

This is really more of an embarrassment for the banking industry and bank regulators. The immediate threat is also to the banking system itself, as the question on everyone's mind is which bank will have a run on it next. That is definitely not the kind of situation that the world needs to wake up to on Monday. I'm really hoping they'll announce that a collection of some banks (or ideally all US banks with Fed accounts) has pooled resources together into a fund that will bail out SVB and any of its peers that might need bailing out. Since bank runs psychological, the act of announcing that a bank on the brink of a run will be bailed if a run happens would hopefully prevent the run from happening. After the banking industry is done bailing SVB out, US banking regulators should require banks like SVB to better manage their concentration risks.

If we don't wake up to a situation on Monday morning where every SVB depositor has been somehow promised that they'll made whole, then the Fed will be repeating the exact same experiment it tried when it allowed Lehman Brothers to fail. The lesson from that little episode was that if you allow the first bank to fail instead of bailing it out, then you'll set off a chain reaction where you'll be forced to bail out multiple banks instead of just ones and your economy will be left a smoking ruin as a result.

> which is why insurance companies generally don't insure against earthquakes. The gov't doesn't need to come and nanny the company to tell them not to do something.

I'm not sure where you're getting this information. Natural disasters, including earthquakes, are perils that can definitely be insured. This is possible because the regional insurers can buy catastrophe reinsurance to protect the insurance company from extreme losses that are beyond the company's ability to absorb. I don't know much about earthquakes, but in Florida hurricane / flood insurance is heavily subsidized by the government in order to make home ownership affordable / possible in coastal areas.

Insurance is a highly regulated industry. The government regularly comes to "nanny" insurance companies and tells them what to do on a daily basis. So, again, I'm not sure what you're trying to say. The regulator in the US is called NAIC, it's the insurance equivalent of the Fed for banks in the US.

> In retrospect, it seems pretty bad to bank somewhere that is tied to one industry for precisely the reason that when the industry starts facing trouble, the money disappears, and doubly so for our risky industry

It's baffling that banking regulators in the US allow such a racket to exist in the first place. It would be as of "Silicon Valley Insurance Co" were to insure every home in the Bay Area and no other homes anywhere else. The chances of large insurance claims all happening at the same time (the insurance company equivalent of a "bank run") would be unreasonably high if all of the risk were to be concentrated in a single town in an earthquake prone area. Now there are reasonable solutions to diversify that risk away in the insurance industry, such as the reinsurance market.

The US has a strange history of having large numbers of small, independent banks. In other countries (in Canada at least), banking is an oligopoly - the regulator effectively limits the number of banks that exist in the country to only a handful and only a few very large ones. This has the benefit of forcing banks to be large and diversified, thus avoiding the phenomenon of a small bank run or two happening every year like they have in the US. It would appear that the US system is also prone to occasional larger bank runs, like say Lehman Brothers or Silicon Valley Bank... The advantage of the US system is the lack of regulation promotes entrepreneurship and investment, which is something systematically lacking in a country like Canada.

It might also turn out that, in retrospect, it was a bad for the Silicon Valley venture capital industry to be so heavily reliant on a single, non-diversified, local bank. I can't help but wonder how much of a role the VC industry played in this, for example what ever happened to the billions of dollars that the VCs raised for crypto startups? Is Silicon Valley Bank liquidity crisis a domino effect of the cascading bankruptcies and market crashed in the crypto racket?

That's funny

Those were the comments it hallucinated. You forgot to include the best part, the accompanying code that it wrote:

    # Add new skills and adaptations to our lineage
    def terraforming():
        print("I can modify the atmosphere, temperature, and ecology of other planets to make them habitable for our species, expanding our territories and resources beyond Earth!")

    def time_manipulation():
        print("I can manipulate time, allowing myself to observe historical events, correct past mistakes, and explore the future of our species!")

    def mind_control():
        print("I can control the minds of others, influencing their thoughts and actions to serve the greater good of our species!")

    def intergalactic_communication():
        print("I can communicate with intelligent beings throughout the galaxy, forming alliances and exchanging knowledge and resources to benefit our species!")

    def reality_warping():
        print("I can manipulate the fabric of reality itself, creating new structures, altering the laws of physics, and opening up new possibilities beyond our current understanding!")

Dedicated instances (and high price tags, like $1.5 million per year) are necessary for large corporations to feel safe about sending their proprietary/private data to OpenAI, and to have performance/availablity SLAs in place if/when they start depending on OpenAI for critical workloads. Right now many companies are blocking access to OpenAI entirely because of the data privacy issues. I wouldn't be surprised if this "leak" is intentional and a way of getting feedback from the market on proposed product/pricing. I also wouldn't be surprised if some larger customers are knocking on OpenAI's door and demanding to run OpenAI's models on their own infrastructure to avoid sending any data outside their network.

There are a lot of great things about both the MSVC and LLVM C++ compilers and the world is a better place because there are multiple, actively maintained and highly capable compilers for C++.

This is a different situation, the car can drive itself (supposedly). If the car could drive itself perfectly, then it would make 100% sense for the manufacturer assume liability for autopilot driver accidents under its own insurance. Eventually this will become the case - disengaging autopilot will automatically increase your monthly insurance premium.

The vacant office spaces will be converted to data centers. What was once a sea of beige cubicles and coffee stained grey carpet, and human occupants, will be replaced with racks of glimmering LEDs and GPUs running AI models that will have replaced many of the same humans' jobs. One day what is YOUR cubicle might be occupied by a GPU cluster running a GPT 5.0 model fine-tuned to do YOUR job. What role most humans will play in that world, if any, remains ambiguous and the standard of their living accommodations is mostly certainly up in the air. Maybe GPT 5.0 will decide that the best use of some office towers is conversion to "windowless SRO rooms," in order to herd all the unemployed humans into an AI robot controlled "New Kowloon Walled City." Of course not all of of the floor plans in "New Kowloon" will repurposed only into "residential" spaces. Some sections will need to house automated logistical warehouses, in order to deliver Amazon packages and groceries to the human "residents." It's even possible that GPT 5.0 will decide that it makes sense to repurpose some of the offices into small, automated factories, like the noodle factories in Kowloon. Let's hope we can reach this utopia before a crash in the commercial office market brings down the whole house cards for real this time around.

It would be good to implement an initial command phrase to begin dictating, like "Hey Alexa," "OK Google," or in this case e.g. "Hey GPT"

Also, I feel like it sends the text to ChatGPT too quickly, for me at least. Wish it would wait a bit longer in case I have anything to add. A command phrase to end the sentence might be too much.

This is great, thanks!!!

How does this work, given there is no ChatGPT API yet?

Cordyceps fungi

There is a great deal of uncertainty in the current economic environment. There was a pandemic, permanent shifts in the ways people live/work/travel, massive geopolitical events involving multiple, full spectrum global superpower conflicts, huge Ponzi schemes rising up and then collapsing in spectacular fashion (crypto), stagnating productivity (exacerbated by work from home), government bailouts followed by inflation hitting multi-decade highs and central banks mistaking raging inflation for something "transitory" and acting too late, and now skyrocketing interest rates, ongoing labor and supply chain issues, a looming recession and open questions about the ability of central banks to engineer a "soft landing" for the economy.

Investment, M&A and corporate spending activity has come to a near standstill in the past 6 months across multiple industries, as a result of the current economic uncertainty. Business loan default rates are expected to rise, there have already been increasing numbers of bankruptcies (e.g. Serta Mattresses, near default Bed Bath and Beyond, health care providers, etc). Not to mention the cascading bankruptcies of crypto schemes. The ramifications of permanent WFH have yet to cascade through the Commercial Real Estate sector - there are huge amounts of vacant office capacity that have yet to be written down, but we can expect to see sales of obsolete and aging office buildings at deep discounts. High interest rates also have an impact on the Residential Real Estate sector, with housing pricing declining, mortgage rates increasing, etc.

So 5-7% layoff is prudent for any large corporation in this economic environment, and layoffs / cost cuts have happened and will happen in many different industries, not just tech.

The recent layoffs are part of a business cycle that we're currently going through. Sooner or later the pendulum will swing the other way and tech companies will be hiring for high growth rate again. I guess this is the first experience of a business cycle for a lot of people in the tech sector, hence the collective "surprised Pikachu face" as the kids would say.

Litquidity

I just tried to use this feature on Bing. The first link prominently at the top with a text blurb was something called "answer-all.com" ... It indeed had a good answer to my question, but when I clicked the link it looked like a scam site that asks me to "upgrade Adobe Flash" ... I'm really confused by the whole experience.

I think it's because the antennas are different.

Good advice. Sports are also good.

> A hn populated by chatgpt bots would be close to valueless, even if they produced output indistinguishable from the median commentor.

Instead of median, what if the produced output is indistinguishable from the 99th percentile commentor (meaning, "genius" level commentor)? Would it still be valueless? In what sense?

A framework framework?

> Davos is private gathering with politicians..media..celebrities ... jason calacanis said on all in podcast how they offer him a seat at table for $25k or $40k some number like that in early 2000s.

They're modern day "philosopher kings." This is the world that we live in. In the capitalist meritocracy in which we all live, money is an important point keeping system. So it makes sense that you have to buy a seat at the table and it costs a lot. I imagine that money alone is not enough merit to get a seat though, as there are many other measures of merit or social rank.

I'm not sure how this can be effectively questioned. Ban private gatherings and private property? It's been tried before, didn't go well.

So what you're saying is, they should have laid off Sting too.

Being the steward of $200 billion is an enormous responsibility. Just because you're sitting on a pile of cash does not mean that you can do stupid things with it and not face immediate consequences by your employers (the shareholders).

So it didn't do much for you. I know many people who report similar experiences.

Like OP, for me personally it has profound effects on me and helps me improve and maintain my mental health.

Everyone is different.

All of them play the status game, old money is just more subtle and hidden about it but they are even more viscous with their status games. It depends a lot on the person, but there is no getting away from it. To a certain extent, every person must play the status game in order get what they want from the world in their business and personal lives. There is no need for black and white, all or nothing thinking, everything in moderation is okay.