[HN Gopher] FTX "insurance fund" calculated by multiplying tradi...
       ___________________________________________________________________
        
       FTX "insurance fund" calculated by multiplying trading volume by
       random number
        
       Author : danso
       Score  : 159 points
       Date   : 2023-10-07 18:59 UTC (4 hours ago)
        
 (HTM) web link (twitter.com)
 (TXT) w3m dump (twitter.com)
        
       | goosedragons wrote:
       | Can't that go negative occasionally too? Was that intentional?
        
         | timmytokyo wrote:
         | This is obviously just speculation, but there probably wasn't a
         | whole lot of thought put into it by the coder. The goal was
         | "produce a fluctuating number based on daily trading volume so
         | that it looks like we have a real insurance fund". The
         | randomness is simply there to help make the fraudulent
         | representation less obvious. The fact that the number can (very
         | rarely) go negative is just another example of the fly-by-the-
         | seat-of-your-pants thinking pervasive at FTX.
        
           | chatmasta wrote:
           | Knowing FTX, they might have even convinced themselves that
           | this was a legitimate hedging strategy.
        
         | ilyt wrote:
         | I'd imagine that the person writing it thought the function
         | generates numbers 7500 +/- 3000 and not anything outside this
         | range.
        
         | gruez wrote:
         | The function doesn't calculate the insurance fund amount
         | directly, it only applies a change to the insurance fund (line
         | 28), based on last day's trading volume. Presumably this
         | function gets run every day, so the size of the insurance fund
         | would be the sum of this process repeated multiple times. The
         | chances of that going to negative would be astronomically low.
        
         | mxmlnkn wrote:
         | np.random itself with that configuration can go negative with a
         | probability of 0.62% as can be derived with
         | scipy.stats.norm(loc = 7500, scale = 3000).cdf(0) or by looping
         | a million times and counting the negative numbers.
         | 
         | Maybe the f2d function filters negative values but it sounds
         | like a simple float-to-double conversion.
         | 
         | I'm not sure whether it was intentional, but, contrary to the
         | headline, this random value was used to update the fund size
         | daily as shown in the rest of the code. So, a single day for
         | which the fund actually decreases wouldn't matter much. It
         | might even be beneficial to make it look more real.
        
         | whbrown wrote:
         | Since it's a normal distribution with a mean of 7500, and a
         | standard deviation of 3000 multiplied by daily volume--it would
         | only cause a negative change less than 1% of the time. This
         | "PublicInsuranceFund" truly embodies their culture of "number
         | go up".
        
       | who-shot-jr wrote:
       | import fraud
        
       | samtho wrote:
       | Isn't the bigger issue that the fund itself was fake? If they
       | made the decision to set aside some amount of money to be
       | untouchable based on a random number, that is, uh, unconventional
       | to say the least, but they very purposefully chose not to have an
       | insurance fund despite advertising that they did which makes this
       | all the more sinister.
        
         | fnordpiglet wrote:
         | Well, yes, the issue is it was fake. But they compounded their
         | fraud by publicly asserting a value of the fund, and the fact
         | they implemented it as a random number shows malicious intent.
         | Sometimes you can wave around incompetence etc as a mitigating
         | factor, but this is clearly intentional deception and this
         | proves it clearly and beyond a doubt.
        
         | opportune wrote:
         | Yes. This should be an instrumental price of evidence in
         | proving that FTX leadership was not "tragically incompetent"
         | but rather willfully and knowingly defrauded its customers.
        
         | [deleted]
        
         | doubloon wrote:
         | i think when you are trying to prove a company is lying about
         | having a zillion dollars of insurance, it helps if you can kind
         | of pull the curtain down and show everyone the number 'zillion'
         | was made up by someone throwing a pair of dice, not by someone
         | counting a pile of zillions of dollar bills.
        
       | playingalong wrote:
       | How is the number being random a problem?
        
         | svnt wrote:
         | The problem is that the reason it is random is to mislead. If
         | it were a static number then it would be obvious it was faked.
         | The value is designed to look like it is pulled from a fund
         | whose balance is determined by market conditions. But viewing
         | the code, there is no fund to get the balance from, only a call
         | out to random().
         | 
         | It's like putting pillows under your blanket so someone thinks
         | you're in bed. Once they find the pillows you aren't going to
         | get away with "oh I thought I was allowed to be out all night."
        
         | teraflop wrote:
         | When you tell your customers that a particular number
         | corresponds to something real (e.g. the amount of money in the
         | insurance fund that protects their assets) but you know the
         | number was actually chosen randomly with no connection to that
         | allegedly real thing, that's called "lying", or in the business
         | world "fraud", and you can go to jail for it.
        
           | playingalong wrote:
           | I could imagine they could possibly choose the amount
           | randomly and truly deposit such amount to the fund.
        
             | svnt wrote:
             | Oh of course, but then it would be breach of fiduciary duty
             | or maybe just gross negligence.
        
             | tomku wrote:
             | If you were doing that, don't you think it'd be handy to
             | have a record of the amount to deposit? The random amount
             | that's generated isn't even stored anywhere, it's just
             | added directly to the total and written back to the
             | database. What are you going to do, have another daily task
             | that tops off the actual insurance fund to whatever the
             | website says the total should be? Why would you treat a
             | display value meant for the website as the source of truth
             | about the correct value of an actual account?
             | 
             | The only reason to do it this way is if there's no intent
             | for the number to correspond to reality at all.
        
             | JumpCrisscross wrote:
             | > _could imagine they could possibly choose the amount
             | randomly and truly deposit such amount to the fund_
             | 
             | This would be bad risk management. The random number makes
             | it clear that not creating the fund wasn't an oversight, it
             | was a willful deception.
        
         | kgermino wrote:
         | Strictly speaking the problem isn't that it's random, the
         | problem is that it's a lie. The fact it's random proves that
         | the number isn't real.
         | 
         | The RNG is used to give some variance to the number without
         | accidentally making a pattern (which humans making up numbers
         | tend to do). Literally using a RNG in code that's meant to
         | produce a value based on real world data is blatant and hard to
         | defend if true.
        
           | wolverine876 wrote:
           | It shows intent.
        
           | Ylpertnodi wrote:
           | >accidentally making a pattern (which humans making up
           | numbers tend to do)
           | 
           | ...and if you are stealing, repeat a few digits occasionally:
           | lack of repetition has caught several-a-tea leaf.
        
         | planetpluta wrote:
         | Agreed -- isn't the problem that nothing was actually being set
         | aside for the insurance fund, not that the amount being set
         | aside was based on a random number?
        
         | danpalmer wrote:
         | ...and this is how this code gets written.
         | 
         | When a software engineer writes code because the _code_ makes
         | sense or solves the problem, without interrogating the
         | _problem_ or how it applies to the real world, there can be
         | real and significant consequences. We trust far too much of our
         | lives to tech to ignore these issues when we 're on the side of
         | writing the code.
        
           | wolverine876 wrote:
           | > without interrogating the problem or how it applies to the
           | real world, there can be real and significant consequences.
           | We trust far too much of our lives to tech to ignore these
           | issues
           | 
           | Seriously, that part is a humanities problem, and many
           | engineers have little education in or understanding of
           | humanitities (to the point of disdaining it).
        
         | Vespasian wrote:
         | If you claim it's a fund to mitigate risk you probably should
         | actually put money into said fund and not just pull some number
         | out of your code.
         | 
         | So technically it's not the randomness that's the issue, and a
         | constant or manually updated fake amount would be as bad, but
         | to me as a layman but it seems like they use a random number to
         | imply a sophisticated risk management system.
        
       | ngoldbaum wrote:
       | Fun to see an open source project I contribute to (numpy) used to
       | commit some light fraud.
        
         | sanderjd wrote:
         | I'd guess numpy has been used for _lots_ of fraudulent
         | accounting! Congratulations, I guess?
        
           | [deleted]
        
           | eclipticplane wrote:
           | At least it's _efficient_ fraud!
        
           | eastbound wrote:
           | Forgot to put the "Use for good, not evil" clause, ey?
           | 
           | https://web.archive.org/web/20130203112329/http://dev.hasenj.
           | ..
        
         | wolverine876 wrote:
         | "light"?
        
           | blacksqr wrote:
           | https://knowyourmeme.com/photos/1311608-arrested-development
        
       | fhk wrote:
       | Maybe abit weird ...
       | 
       | No "import numpy as np" !?
        
       | dabeeeenster wrote:
       | This is a proper disgrace to software as a discipline. Who writes
       | this?
        
         | pfdietz wrote:
         | One advantage of source code control systems is you know who to
         | send to prison.
        
           | ilyt wrote:
           | Unless you make sure to only have signed commits it's pretty
           | easy to impersonate someone in Git repo.
        
             | eastbound wrote:
             | So the main architect goes to prison. At one point, he put
             | the system on production, so it doesn't matter who was the
             | original programmer, he had to check.
        
           | meindnoch wrote:
           | admin@MacBook-Pro.local is going behind bars for a loooong
           | time!
        
             | pfdietz wrote:
             | He's just the worst.
        
       | tester756 wrote:
       | I don't know python, but what is the "or" here?
       | 
       | For me it looks like this value is used only when there was no
       | data?
       | 
       | Basically else part of monad
        
         | sangreal wrote:
         | That's on reading the daily volume. Basically daily_volume =
         | daily volume or 0. It is multiplied by the random number either
         | way
        
         | maxbond wrote:
         | Yeah you're barking up the right tree.                   >>>
         | None or Decimal()         Decimal('0')
         | 
         | So if their aggregation returned no results they'd substitute a
         | 0. It's a client-side `coalesce()`
        
       | [deleted]
        
         | [deleted]
        
       | wqtz wrote:
       | I guess the dude who wrote that function thought, maybe I
       | shouldn't add a docstring or any comments to that function. What
       | is he/she even supposed to write "function to commit corporate
       | insurance fraud."?
       | 
       | Protip. If you are committing fraud in the future - use a
       | compiled language, do not use offsite version control and UPLOAD
       | ONLY THE BINARY.
        
         | tedivm wrote:
         | It's always weird when people try to give advice on how to
         | commit crimes here, but it's even weirder when the advice is
         | horrible.
        
         | EMIRELADERO wrote:
         | > Protip. If you are committing fraud in the future. Use a
         | compiled language, do not use offsite version control and
         | UPLOAD ONLY THE BINARY.
         | 
         | Until you get prosecuted and legally required to turn over the
         | source code, as it happened here.
        
           | EA-3167 wrote:
           | Seriously, the real pro tip is, "Don't commit fraud, even
           | unethical businesses don't need to do that." If your
           | workplace is encouraging outright criminality, document
           | everything, and either become a whistleblower or run like
           | hell.
        
             | meepmorp wrote:
             | https://www.youtube.com/watch?v=FKGdhJybmT8
        
         | ksd482 wrote:
         | The bytecode of the binary could also be used to prove it was a
         | random number generator, right?
        
       | tqi wrote:
       | Is python typically used in production trading systems?
        
         | jiggawatts wrote:
         | It is at FTX.
        
         | [deleted]
        
       | gamache wrote:
       | Mastodon link:
       | https://hachyderm.io/@molly0xfff/111195068493652179
        
         | 90-00-09 wrote:
         | I always imagine large scale financial fraud as something
         | requiring a great amount of financial expertise. Seeing this
         | code snippet is surreal.
        
           | a1o wrote:
           | Hey, they used numpy.random.normal, it at least appears
           | credible.
        
           | neurostimulant wrote:
           | It's the large scale financial fraud _that aren 't caught_
           | which requires a great amount of financial expertise.
        
           | nlawalker wrote:
           | You should check out "Madoff: the Monster of Wall Street" on
           | Netflix, which struggles to dramatize the actual operation of
           | his scam because the reality of it was so incredibly
           | simplistic.
        
       | wolverine876 wrote:
       | Notice that now prosecutors not only understand code, but feel
       | comfortable showing to judges and juries. Not that long ago,
       | everyone's eyes glazed over at the mention of it.
        
       | jncfhnb wrote:
       | I'm really disappointed by the lack of comments explaining the
       | logic
        
         | birdyrooster wrote:
         | I am sorry we didn't serve your interests
        
         | rich_sasha wrote:
         | There are, however, some type annotations.
        
           | elbasti wrote:
           | Gotta avoid bugs, imagine if they lost some customer funds
           | due to poorly written code.
        
       | bigyikes wrote:
       | I was ready to reply with an " _um actually_ it is an _arbitrary_
       | number" but... no... it is literally a random number. How did
       | someone commit that and sleep at night?
       | 
       | It's amazing that some people still defend SBF. Among his
       | sycophants is Michael Lewis, author of Moneyball, The Big Short,
       | and now "Going Infinite" which somehow manages to gloss over the
       | rampant fraud happening at FTX since inception.
        
         | sanderjd wrote:
         | HAHAHA this was my first thought too!
         | 
         | To be fully pedantic: it's both things! It's a random number
         | chosen from an arbitrarily sized range around an arbitrary
         | number :)
        
           | SilasX wrote:
           | Semi-related: AIUI, in most places where you legitimately
           | want a "random number", what you _actually_ want is a number
           | that is knowably, causally unrelated to the other figures so
           | you know you're screening off accidental correlations. In
           | practice, random numbers accomplish this, but randomness
           | isn't quite the same thing as what you're striving for.
           | 
           | So, for example, the problem with "randomly" picking 4 every
           | time (a la xkcd) is that it introduces a spurious correlation
           | between the places where it's used.
        
             | eptcyka wrote:
             | 4 doesn't originate from XKCD, it originates from
             | Playstation 3's firmware. Ultimately, 4 is a random number,
             | so the developer in question could argue he was
             | _technically_ correct, it 's the specification that's
             | wrong.
        
         | monero-xmr wrote:
         | Can you link to anyone defending him? The Michael Lewis book
         | was a character study. I can't think of a single person who
         | defends what happened.
        
           | maxbond wrote:
           | He describes it as a "letter to the jury" (which I interpret
           | as an statement of intention to reframe the popular
           | understanding of what happened - presumably Lewis knows that
           | jurors aren't supposed to read editorials about the case & is
           | speaking figuratively) and casts SBF in a sympathetic light
           | while casting aspersions on the executives executing the
           | bankruptcy. Like GP mentioned, it glosses over the red flags
           | and such to present a different narrative of Lewis' choosing.
           | I think it's fair to characterize Lewis as carrying water.
           | It's also a character study, sure, but there's no
           | contradiction there.
        
             | benjaminwootton wrote:
             | I saw a few clips of an interview with Lewis here -
             | https://youtu.be/B2z8ikGLRh8?si=pqF-jUI4SeWsI4Fg
             | 
             | The interviewer maybe edits for effect, but Lewis seems
             | very biased towards SBF.
        
             | dxf wrote:
             | Matt Levine's take on _Going Infinite_:
             | 
             | "Many of the reviews that I have read of the book complain
             | that Lewis does not sufficiently explain that Bankman-Fried
             | is Guilty and Bad, Actually, but that is not the book that
             | he wanted to write... If you want to read a moral
             | condemnation of crypto theft, you can get that anywhere.
             | You go to Michael Lewis for character and story.
             | 
             | Also, reading those reviews you would think that the book
             | is a defense of Bankman-Fried, but it is actually quite
             | damning."
        
         | zeitgeistcowboy wrote:
         | I'd say it's less random than the headline makes it seem. It's
         | a random value with mean of 7500 and standard deviation of 3000
         | pulled from a normal distribution. And, it's multiplied by the
         | daily volume. So, there may be some thought here. It's adding
         | about $7,500 per trading unit volume. Not saying it's legal or
         | anything.
        
           | searealist wrote:
           | So basically, your claim is that a normal distribution is
           | less random than a uniform distribution? Can't say I agree.
        
             | laurent_du wrote:
             | If you order randomness by entropy, the uniform
             | distribution is indeed, in some sense, "more random" than
             | any other probability distribution with the same support.
        
             | [deleted]
        
             | sillysaurusx wrote:
             | Well, by definition it is. It's why we have names like
             | normal and uniform.
        
               | sampo wrote:
               | > Well, by definition it is.
               | 
               | If given only mean and standard deviation, the normal
               | distribution is the maximum entropy distribution i.e.
               | maximally random distribution.
        
               | uxp8u61q wrote:
               | By definition it's not. It's just as random. These names
               | just tell you a few key properties of the distribution.
        
               | sillysaurusx wrote:
               | That's a bit like saying that our bodies are random
               | numbers because of quantum fluctuations. It may be true,
               | but the distribution is the part that matters.
               | 
               | It's still ridiculous to use a normal distribution to
               | calculate how much money should go into an insurance fund
               | that needs to cover sudden, severe losses.
        
               | maxbond wrote:
               | You've probably just got different understandings of the
               | term "random."
        
               | jefftk wrote:
               | Would you say that a function that always returned 0 or 1
               | would be more/less/equally random than a function that
               | returned any int32 with equal probability?
               | 
               | I would normally say the latter is more random, because
               | you're getting more entropy per call. In the same sense,
               | a function drawing from a normal distribution is less
               | random than one drawing from a uniform distribution.
               | 
               | (All of this depends on a computers view of the world,
               | where values are in data types that have some number of
               | bits. In a mathy view of the world where every value is
               | effectively infinitely many bits you get just as much
               | entropy sampling from a normal distribution as a uniform
               | one.)
        
               | eterm wrote:
               | > a function drawing from a normal distribution is less
               | random than one drawing from a uniform distribution
               | 
               | That's some mathematical nonsense.
               | 
               | A normal distribution is continuous from negative
               | infinity to positive infinity, so even by your flawed
               | judgement of what makes something "random", a sample from
               | the normal distrubtion has far more possibilities.
               | 
               | The standard normal distribution is almost the definition
               | of random.
        
               | jefftk wrote:
               | Again, it depends on whether you are looking at this from
               | a pure math perspective or a "math as implemented on
               | computers" perspective. I'm only claiming that this use
               | of more/less random makes sense in a computational
               | context.
               | 
               | But in that context, there is more entropy in a float32
               | drawn from a uniform distribution than a float32 drawn
               | from a normal distribution, no?
        
             | [deleted]
        
             | stavros wrote:
             | As I understand it, the claim is that the volume being
             | added is tiny compared to the real volume.
        
           | TedDoesntTalk wrote:
           | > multiplied by the daily volume
           | 
           | How does volume correlate to the value of the insurance fund?
           | Isnt value equal to number of tokens * price per token?
        
             | gruez wrote:
             | see: https://news.ycombinator.com/item?id=37805256
             | 
             | It basically takes the daily volume, multiplies it by
             | 0.00075% (on average) and adds that to the insurance fund.
             | FTX charges a % fee on every trade, so this is the
             | equivalent of taking a fraction of their fee revenue and
             | putting that into an insurance fund, which seems pretty
             | reasonable.
        
               | jahewson wrote:
               | No it doesn't add it to the insurance fund - there's no
               | transactions here, it just increments the fake insurance
               | fund variable.
        
               | wolverine876 wrote:
               | In another company, it wouldn't be impossible that some
               | other function in some other code used that variable for
               | an actual transaction into an actual fund.
        
               | maweaver wrote:
               | Except the value isn't saved anywhere, it's just added to
               | the total. And running again would give a new value.
        
               | tomku wrote:
               | If you look closely, you may notice that the code that
               | "adds to the insurance fund" doesn't _take_ that money
               | from anywhere. It's just retrieving a number from the
               | database, adding a value to it out of thin air and
               | writing it back. This number was then presented to users
               | as representing the balance of the insurance fund
               | protecting their assets.
               | 
               | There was an actual insurance fund and it had a tiny
               | fraction (5% or less) of what this number in the database
               | claimed. The random numbers generated by this code did
               | not represent actual contributions to said insurance
               | fund. They were not, in fact, taking a fraction of their
               | fee revenue and putting it into an insurance fund.
               | 
               | They were not doing anything even remotely reasonable,
               | this was a flat-out lie.
        
           | protastus wrote:
           | Also not saying it's illegal.
           | 
           | The non-zero mean and relatively small standard deviation
           | (0.4 sigma) make all the difference here.
           | 
           | I'd say the ethics and legality are entirely determined by
           | how this distribution was determined and if it's consistent
           | with promises to customers.
        
           | out-of-ideas wrote:
           | agreed- title vs what is written in twitter is a bit
           | misleading than what the code actually does. at first glance
           | it is far too easy to assume the random numbers will be
           | around 7500 - but in reality folks may not understand
           | stddev's, and that the random number produced in this method
           | can still yield a negative (just with less likelihood)
        
           | ncallaway wrote:
           | What on earth are you taking about? It's literally a random
           | number taken from normal distribution, used to calculate the
           | figure.
           | 
           | What _possible_ justification could there be for using that
           | as an accounting practice for a fund other than fraud?
        
         | jmcgough wrote:
         | > How did someone commit that and sleep at night?
         | 
         | # TODO: stub for now until we have an actual insurance fund
        
         | usefulcat wrote:
         | > Among his sycophants is Michael Lewis, author of ...
         | 
         | Also Flash Boys, which was basically a book-length
         | advertisement for the IEX exchange.
        
           | mortehu wrote:
           | Fun fact for those who have read the book: IEX recently
           | started paying market makers for displaying liquidity on
           | their exchange.
           | 
           | https://www.wsj.com/livecoverage/fed-meeting-interest-
           | rate-d...
        
           | doubloon wrote:
           | and The Blind Side, in which he missed the fact that a couple
           | put an athlete into a conservatorship so they could profit
           | from his royalties.
        
         | dheera wrote:
         | [flagged]
        
           | 90-00-09 wrote:
           | That's just moral defeatism. Fraud exists in many businesses
           | and institutions. A healthier outlook on this is that we need
           | to stop it whenever we can, not that we should give up
           | because "everyone does it".
        
             | yayitswei wrote:
             | I read it to mean let's hold our governmental and financial
             | institutions to a higher standard. The Fed has
             | allow_negative too, are they truly held accountable?
        
               | JumpCrisscross wrote:
               | > _Fed has allow_negative too, are they truly held
               | accountable?_
               | 
               | To an inefficient degree, yes. Congressional oversight of
               | the Fed is massive because it's popular with many voters.
               | That unfortunately crowds out oversight over the many
               | other financial organs of the United States, _e.g._ the
               | FHLB.
        
           | cogman10 wrote:
           | SBF did what he did outside the system because that's the
           | only way he could have committed fraud like this.
           | 
           | He ran a literal ponzi scheme, something the SEC was created
           | to combat and that Bernie madoff ramped protects against up
           | to 11. He could not have pulled of this scheme without
           | unregulated securities, that was the point.
           | 
           | Say what you will about finance, but the fact is you get a
           | ton of information and protection when you go through the
           | system. Bypass it at your own peril.
        
           | automatic6131 wrote:
           | [flagged]
        
           | JumpCrisscross wrote:
           | > _he did commit many of the moral breeches that are
           | committed by existing governmental and financial institutions
           | at scale without any legal repercussions_
           | 
           | Example? Bankman-Fried committed outright fraud. He lied and
           | stole money. This is simply incomparable to what anyone in
           | finance is doing, much less being left unpunished for.
        
             | dheera wrote:
             | I disagree. Banks take my money and lend it out to others,
             | like businesses who are losing money, not profitable, and
             | want venture debt. They take MY money, and give it to
             | unprofitable businesses, with the hope that they'll be some
             | day profitable.
             | 
             | "But that's how banks work", you say. Only because you
             | drunk the Kool-Aid. Only because banks are so damn good at
             | managing risk that we haven't questioned the practice. But
             | at the end of the day, it's my money, and they shouldn't
             | have the right to lend it against my will.
             | 
             | "But you could store money under your mattress", you say.
             | If taxpayer money can provide me with the necessary
             | security guards for that, sure. If not, I don't consider it
             | an option.
             | 
             | SBF was just worse than Bank of America at managing the
             | risk, and got into deep shit. SVB got into deep shit but
             | because the law allows them to legally commit the same
             | fraud of lending out money they don't own, the law
             | protected them with FDIC funds. Bank of America is equally
             | in the wrong, though, it's a messed up system that we just
             | accept because everyone around you accepts it.
        
               | RandomLensman wrote:
               | Banks are forced to have some capabilities in risk
               | management and controls because they are regulated and
               | supervised to that effect.
               | 
               | You can buy short-dated treasury bills if you want direct
               | tax payers support for your money, for example. Giving
               | money to a bank is lending the money to the bank with
               | your permission, but there are other debtors available.
        
               | dheera wrote:
               | > Giving money to a bank is lending the money to the bank
               | with your permission
               | 
               | It shouldn't be that way. Banks should be forced to
               | either (a) never lend your money out, or (b) offer an
               | interest rate higher than the Treasury plus state taxes
               | -- that's the only reason I'd ever _want_ to lend to
               | them.
        
               | RandomLensman wrote:
               | Why? That's not what a bank is... What would the bank do
               | then anyway? Store cash?
        
               | [deleted]
        
               | wolverine876 wrote:
               | Other than shutting down the economy by making all those
               | assets unproductive, how would bank earn money?
               | 
               | Use a custodian account. Put your money in a safe deposit
               | box. Nobody is forcing you to use a standard bank
               | account.
        
               | growse wrote:
               | If you want taxpayer-funded protection of your savings,
               | that comes in return for your money being used to fund
               | economic activity that generates those taxes.
               | 
               | Thems the breaks. Take it up with your government if you
               | don't like it.
        
               | dheera wrote:
               | > If you want taxpayer-funded protection of your savings,
               | that comes in return for your money being used to fund
               | economic activity that generates those taxes.
               | 
               | Sure, if you give me the interest rate, sure.
               | 
               | But if the feds are giving me 5.5%, you, as a private
               | bank, better well give me 6.25% so that it's >5.5% after
               | state taxes. If you give me ANY LESS than 6.25% you have
               | no right to lend out my money.
        
               | JumpCrisscross wrote:
               | > _If you give me ANY LESS than 6.25% you have no right
               | to lend out my money._
               | 
               | Where do you want this free return to come from? While
               | also funding all the things people using a checking
               | account properly ( _i.e._ not to generate a return) want
               | from it, _e.g._ transaction capabilities?
               | 
               | Again, you can literally get this by buying Treasuries.
               | But you don't want that--you also want the other things.
               | For free. I, too, want free things. But it's obviously
               | not a serious suggestion.
        
               | growse wrote:
               | So you want to make banking dramatically more expensive
               | for everyone?
               | 
               | All that'd do is make credit hilariously more expensive
               | for everyone, which will push up the price of everything.
               | I'm not sure that's a good idea.
        
               | JumpCrisscross wrote:
               | > _Banks take my money and lend it out to others_
               | 
               | They' don't lie about it.
               | 
               | > _SBF was just worse than Bank of America at managing
               | the risk_
               | 
               | He lied about it. Also, he wasn't lending money to
               | anyone. He was lending it to himself. If Bank of America
               | was lending most of its balance sheet to its CEO, that
               | would be a problem!
               | 
               | > _SVB got into deep shit but because the law allows them
               | to legally commit the same fraud of lending out money
               | they don 't own_
               | 
               | They _do_ own it. You lent it to them. Depositing money
               | at a bank is not putting your cash in custody. There
               | _are_ cash custodian services, though it 's more
               | traditional to custody Treasuries. You didn't go to them.
               | And again, at no point were you mislead.
               | 
               | We get these frauds every generation because money and
               | banking is complicated. But instead of addressing that
               | deficit with understanding, enough people deal with it by
               | pretending it doesn't exist, thereby making themselves
               | vulnerable to those who take advantage of that willful
               | ignorance.
        
         | [deleted]
        
         | wmf wrote:
         | The book isn't as damning as it could be but I wouldn't call it
         | sycophantic. There's plenty of negative information.
        
       | skilled wrote:
       | https://nitter.net/molly0xFFF/status/1710718416724595187
        
       | joeman1000 wrote:
       | '_get_change' is written so poorly
        
       | c0balt wrote:
       | It's nice to see (from a quick lock) SQLAlchemy being used in
       | production software on such a scale. However the purpose is quite
       | disappointing
        
       | Thorrez wrote:
       | The line wrap on line 27 in that text editor is really confusing.
        
         | capital_guy wrote:
         | I think its a screenshot from a commit in github/gitlab. I hate
         | how gitlab makes the code viewer tiny in the review screen
        
       | mstudio wrote:
       | Someone needs to run a `git blame` on that line of code!
        
         | fishywang wrote:
         | That screenshot is already a diff view, which means this is
         | already from either a commit or a PR.
        
         | wmf wrote:
         | They've been discussing who wrote which git commits in the
         | trial.
        
           | philipwhiuk wrote:
           | Thank god for https://github.com/jayphelps/git-blame-someone-
           | else
        
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