Post AzLlSvNX1Awk2BGOLQ by futurebird@sauropods.win
(DIR) More posts by futurebird@sauropods.win
(DIR) Post #AzFcPFugfBh61lBhvE by futurebird@sauropods.win
2025-10-16T01:11:52Z
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"Hey market what are you up to?""I have a AAA bond very safe can't go wrong.""Wow THREE As?""Yes.""So uh... what's in it?""Well... you know. Bundles.""Bundles of what?""Bundles of bundles.""Ok what is in those bundles?""Loans.""That's nice. What kind of loans?""...""Well?""I'm lending cash to teenagers over the internet to buy NFTs... LISTEN I know it sounds risky... but ALL the loans can't fail!"
(DIR) Post #AzFcYNE2qVtLJPae2K by cykonot@mas.to
2025-10-16T01:13:30Z
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@futurebird klarna is such a dark sign... People are taking out loans for food... DEBT FOR FOOD!That said, commodities are looking GREAT đ
(DIR) Post #AzFePjuBM1BsxCJHf6 by futurebird@sauropods.win
2025-10-16T01:34:21Z
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@cykonot I have an idea for a hip hop song. It'd go a little like"here comes the pump n dumphere come the pump n dumplooks like a pump trucksike it's the dump truck"Don't worry I will keep my day job.
(DIR) Post #AzFfNqjP6U5TV2vnnc by Hawaii@mastodon.world
2025-10-16T01:45:10Z
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@futurebird @cykonot I'd change only the last line, to "psyche, it's a Fump Truck." :-)
(DIR) Post #AzFgqWDYYH6eEJGkgi by futurebird@sauropods.win
2025-10-16T02:01:37Z
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@eeentropyyy @cykonot I was thinking something more like the 1800 VICTIM 2 song:https://www.youtube.com/watch?v=7KfRcxLPCIA
(DIR) Post #AzFkcdcacygoxFcCOW by futurebird@sauropods.win
2025-10-16T02:43:51Z
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@neckspike @eeentropyyy @cykonot OMG I didn't catch that! đ¤Ł
(DIR) Post #AzFrFyjSfgcfRnyIJE by PizzaDemon@mastodon.online
2025-10-16T03:58:15Z
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@futurebird every generation learns that variances don't cancel
(DIR) Post #AzH9IJP6mIV8TJfph2 by mikenoe@mastodon.social
2025-10-16T18:55:02Z
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@futurebird Itâs collateralized! Diversified! Safe! lol
(DIR) Post #AzHCVfBfOpqResRcjw by Intaglio_Dragon@furry.engineer
2025-10-16T19:31:05Z
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@futurebird Isn't that what basically happened during the 2008 financial crisis? Millions of bad sub-prime mortgage loans re-packaged as collateralized debt obligations for basically the sole purpose of bumping up the debt by one or more letter grades?
(DIR) Post #AzHD60V3dX36BRqQG8 by futurebird@sauropods.win
2025-10-16T19:37:42Z
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@Intaglio_Dragon yes. and they are doing it again
(DIR) Post #AzHHivbs9RPe7yqY76 by karlauerbach@sfba.social
2025-10-16T20:29:29Z
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@futurebird Oh, have we reverted to 2008 and the system of bundling and rebundling and securitizing bundles of bad loans that brought down so many firms and banks and cost many people their homes?
(DIR) Post #AzHHuFDLbQuY7ClsLg by futurebird@sauropods.win
2025-10-16T20:31:34Z
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@karlauerbach YES
(DIR) Post #AzHoAiRzrrUTxMWODw by m@miruku.cafe
2025-10-16T08:19:59.025Z
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@PizzaDemon@mastodon.online @futurebird@sauropods.win what does that mean exactly?is it like "if E(x) is negative then n*E(x) is even more negative"?but if your E(x) is zero or positive, the variance doesnt really matter no?
(DIR) Post #AzHoAjpQkDpUEKUcO8 by PizzaDemon@mastodon.online
2025-10-17T02:14:11Z
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@m @futurebird https://statproofbook.github.io/P/var-lincomb.htmlIf both RVs are drawn from a similar population, they are likely to covary together. My long ago recollection from undergrad. So two subprime mortgages are probably not independent risks. It's likely the same factors that influence one home owners ability to make payments also affects others in the same tranche. I.e. the macroeconomic conditions.
(DIR) Post #AzIZT5FQXgyRidu0Gm by vegard_berget@tutoteket.no
2025-10-17T11:22:59Z
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@futurebird
(DIR) Post #AzIpoNLK3ibxBhpncG by futurebird@sauropods.win
2025-10-17T14:26:08Z
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@cshlan @PizzaDemon I view the source of the nonsense as the idea that just because you can do math to show two sets of debts are âequivalentâ that means itâs wise to treat them like they really are identical. But, in the end, behind every loan contract there are people and there is no math to make people equivalent.
(DIR) Post #AzLlSvNX1Awk2BGOLQ by futurebird@sauropods.win
2025-10-19T00:21:34Z
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@spherulitic Really?Oh shoot. Oh no. Oh no no no no.
(DIR) Post #AzLlteZBdHpViASb3o by futurebird@sauropods.win
2025-10-19T00:26:29Z
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@cyberlyra @cshlan @PizzaDemon What is it called?
(DIR) Post #AzLmRmh9uvUsleSqGG by david_chisnall@infosec.exchange
2025-10-19T00:32:37Z
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@futurebird @cshlan @PizzaDemon That normally doesnât matter. The estimation of the probability that someone will default has error margins, but most of the time theyâre independent variables and so large enough sample sets mean they donât matter. There are two cases where it typically goes wrong, neither is particularly to do with the humans on the customer side.The first, which caused the 2008 crash, Enron, and so on (including, I suspect, the AI Bubble Crash) is that itâs possible to just lie. When a mortgage customer lies, it doesnât matter that much because a load of other customers donât and the ones that do are just another kind of outlier thatâs averaged out. But when the bank lies and shuffles paper trails enough that it looks like their loans are lower risk than they are, and then they sell them on that basis, it causes problems. Similarly, if the loans are smaller numbers and are to massive companies reporting ârevenueâ and not telling you that they are getting that revenue only because the loan is âinvestedâ in companies that then use that money to buy their products, then itâs a problem.You couldnât convince banks that a bundle of loans backed by NFTs are AAA rated, but you possibly could if you mixed them in with a load of mortgages to the lowest-risk customers and gradually diluted the mortgage ones. Or if youâre actually loaning money to a company that is selling NFTs and is reporting revenue that exceeds the loan amount, while quietly moving things from the capex column to the revenue column by investing in their own customers.The second, which is more interesting (to me, at least. I donât find lying that interesting) is that we remain very bad at reasoning about correlated risk. Prior to Katrina, a load of insurance companies did reasoning like âthese two businesses are in completely different markets in different towns, so the risk of them both needing to claim on insurance at the same time is lowâ. Only it turns out that they both depended on the same electricity substation, or the same water treatment plant. When the hurricane took out their common dependency, both claimed at once. Suddenly a load of those independent variables turned out not to be independent and that caused, as I recall, six insurance companies to go out of business. This is still a big problem with things like cybersecurity. How do you find two things to insure that are not both more likely to claim in the case of a critical Windows vulnerability, for example? Itâs also a problem now, because âthe country elects a president who actively attacks the economyâ was the kind of thing that everyone knew was a common risk for most businesses and individuals (most of whom get their income via employment at businesses), but not something people estimating insurance claim rates or loan defaults thought was high enough probability to bother modelling.
(DIR) Post #AzLnhhcEfb3RbMJcnY by futurebird@sauropods.win
2025-10-19T00:46:45Z
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@david_chisnall @cshlan @PizzaDemon I think you are making much more sophisticated points. And risk evaluation is fascinating. Frankly I just have a trauma response to the word "bundle" in the context of debt trading and that's just as someone who likes to read about markets who didn't even lose anything. Just seeing it happen was enough. So I was shocked to find out that it's still going on and people are getting burned again.
(DIR) Post #AzMLNaeCGVxCdhoXNg by dahukanna@mastodon.social
2025-10-19T07:04:01Z
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@futurebird @david_chisnall @cshlan @PizzaDemon âWe remain bad at reasoning about co-related riskâ mainly due to human bias for making assumptions without validating them. How does what a company does factor when you are selling âenvironmental risk coverage insuranceâ. Should you not check and calculate the likelihood of claims if hurricane or tornado takes out critical infrastructure (commons) like electricity, water, roads, etc.#techConsequencesInRealWorld