A 28-year-old with no degree becomes a must read on the economy(bloomberg.com)
bloomberg.com
A 28-year-old with no degree becomes a must read on the economy
https://www.bloomberg.com/news/articles/2020-07-02/nathan-tankus-s-newsletter-subscribers-don-t-care-about-diplomas
140 comments
Even less: diploma means one has attended a prearranged set of courses, did some homework and passed the exam. It doesn't actually implying any sort of qualification except doing homework and passing exams. We are supposing that those activities are resembling those we do at work close enough.
Well, there are also people who actually learn something at a university and benefit from the fact that there are good teachers and supervised exercises.
There are. I went to a university straight out of high school and I don't regret it. But there are also people who learn elsewhere.
The art of presenting oneself optimally very often conceals a lack of competence. This also explains why people with less optimal self-marketing - usually women - earn less despite having the same or even better qualifications. To be deceived is unfortunately all too human. That's why people should trust more objective criteria than first impressions or their gut feeling.
I worked at a research institution for several years and you couldn’t be promoted above a certain level without a PHD.
I once worked at a national lab, advising postdocs on compilers and optimization, even though I don't have a degree. Is 20 years of experience worth less than a degree?
Most people I worked with were Ph.D.s who didn't care about their degree or title. They were focused on technical problems and solutions. There was never a statement like "But (s)he doesn't have a degree in this-or-that."
Only insecure managers have ever raised the "degree" issue with me. One manager who stymied my career because I didn't have a degree, was later fired for making a commitment for which a Ph.D. was committed to do the work. The project was late or never completed. The Ph.D. was demoted, but the manager who committed to his work, and who hurt me earlier because I didn't have a degree, was fired. I thought that was Karma.
Most people I worked with were Ph.D.s who didn't care about their degree or title. They were focused on technical problems and solutions. There was never a statement like "But (s)he doesn't have a degree in this-or-that."
Only insecure managers have ever raised the "degree" issue with me. One manager who stymied my career because I didn't have a degree, was later fired for making a commitment for which a Ph.D. was committed to do the work. The project was late or never completed. The Ph.D. was demoted, but the manager who committed to his work, and who hurt me earlier because I didn't have a degree, was fired. I thought that was Karma.
Depends. I tought for over 10 years at three universities without any degree. Never managed to finish, because I didn't need to. But this works only in liberal countries where qualification trumps buerocrazy. Would never work in Germany.
[deleted]
It tends to work out poorly for surgeons and structural engineers.
We rightly extrapolated that such an approach has similarly poor odds in other domains.
We rightly extrapolated that such an approach has similarly poor odds in other domains.
Good point. Structural Engenieers don't tend to follow newsletters written by someone without a degree living in his parents basement.
Well if you find someone doing a math newsletter or paper without a degree but a certain knowledge that one quickly climbs academic ranks.
This leaves me thinking that economics is more about assuming and musings than about verifiable facts
This leaves me thinking that economics is more about assuming and musings than about verifiable facts
Authority bias is systemic.
In summary:
Young man who has spent his entire life studying pro-system dogma and pro-system logic runs a blog and a newsletter where he writes optimistic, windy expositions on why what the government is doing is right, and gets paid by a multitude of liberal journos and government officials who need talking points and arguments that enrich their position. He's literally a yes man for money printer go brr
This sounds like a reddit comment, and not in a good way. Please explain your issues with their content in a way that frames your opinion and the differences with his, rather than simply attacking him and his character with sophomoric language.
Ironic, how you disparage the original comment by attacking him and his character through a comparison to reddit. Please attack the content of the comment rather than its tone. Using big words does not make your perspective more valid.
There is nothing ironic about it. I was aggressive, but made my point: His comment did not address any substance, or state is own beliefs.
My content is my criticism of his tone. There was little substance in his comment in the first place - that's the point.
My content is my criticism of his tone. There was little substance in his comment in the first place - that's the point.
> Young man who has spent his entire life studying pro-system dogma and pro-system logic runs a blog and a newsletter where he writes optimistic, windy expositions on why what the government is doing is right, and gets paid by a multitude of liberal journos and government officials who need talking points and arguments that enrich their position.
There's quite a bit of content here, but you instead focused on this:
> He's literally a yes man for money printer go brr
I think your comment is actually more ad-hominem and juvenile than his, to be honest.
There's quite a bit of content here, but you instead focused on this:
> He's literally a yes man for money printer go brr
I think your comment is actually more ad-hominem and juvenile than his, to be honest.
Anyone who has actually read Monetary History is going to be way, way more interesting than those that get their economics from internet memes, slogans, and journalists.
You've got to be careful with Friedman's work. He's highly persuasive, but presents an incomplete picture. For example, he dogmatically asserts that "market power" is not an obstacle to market efficiency. According to Friedman, monopolists are only problematic to the extent that they corrupt government to their ends.
The book's central thesis is that Fed monetary policy made the depression worse. That is widely accepted by economists of all stripes.
However, Friedman also argues that the Fed should boldly step in as a lender of last resort. He ignores the fact that no institution can make a realistic solvency determination during a crisis. What that means in practice is he supports things like TARP.
This amounts to a statement that the cost of financial panics (which are an inherent characteristic of all systems with maturity transformation) should be born by the public rather than the financial sector. That is a political decision, not a technical economic one.
A lot of economics from the Friedman era is about clothing political choices in technical jargon.
The book's central thesis is that Fed monetary policy made the depression worse. That is widely accepted by economists of all stripes.
However, Friedman also argues that the Fed should boldly step in as a lender of last resort. He ignores the fact that no institution can make a realistic solvency determination during a crisis. What that means in practice is he supports things like TARP.
This amounts to a statement that the cost of financial panics (which are an inherent characteristic of all systems with maturity transformation) should be born by the public rather than the financial sector. That is a political decision, not a technical economic one.
A lot of economics from the Friedman era is about clothing political choices in technical jargon.
> He ignores the fact that no institution can make a realistic solvency determination during a crisis. What that means in practice is he supports things like TARP.
I don't think either of these sentences are true. Friedman wasn't for bailouts for those that did wrong, he simply knows that a deflationary spiral can occur if there is a cascading banking failure. Which is what happened in the Great Depression, and what was avoided in 2007/08. It should also be noted that TARP made the public money.
> Should be born by the public rather than the financial sector.
That is also not true. The issuer of money explicitly a tool of the government (even if the Fed itself is technically private.) The reason the Fed has to step in, is because the actual equation for money supply includes the velocity of money. If economic activity crashes, the money supply goes down. That is accelerated further due to complex financial instruments such as derivatives. The Fed shoring up balance sheets with low interest loans alleviates that during economic downturns. There is a side effect that some firms are able to use this opportunity to enrich themselves, but it is rarely at a great cost to the public, relatively speaking.
I don't think either of these sentences are true. Friedman wasn't for bailouts for those that did wrong, he simply knows that a deflationary spiral can occur if there is a cascading banking failure. Which is what happened in the Great Depression, and what was avoided in 2007/08. It should also be noted that TARP made the public money.
> Should be born by the public rather than the financial sector.
That is also not true. The issuer of money explicitly a tool of the government (even if the Fed itself is technically private.) The reason the Fed has to step in, is because the actual equation for money supply includes the velocity of money. If economic activity crashes, the money supply goes down. That is accelerated further due to complex financial instruments such as derivatives. The Fed shoring up balance sheets with low interest loans alleviates that during economic downturns. There is a side effect that some firms are able to use this opportunity to enrich themselves, but it is rarely at a great cost to the public, relatively speaking.
Abstract away all the money supply stuff.
Banking systems have multiple equilibria [1]. That is one way of saying that financial crises are like floods. They are a fact of life, and happen from time to time.
Who should pay for flood insurance, the public or the people building on flood plains?
If the public pays for the flood insurance, there will be too much construction in the flood plain.
The fact that TARP provided a small accounting profit to the Treasury is sort of immaterial. It was a free put that was never exercised. People should pay a premium for insurance. An efficient market prices risk...
[1] https://en.wikipedia.org/wiki/Diamond%E2%80%93Dybvig_model
Banking systems have multiple equilibria [1]. That is one way of saying that financial crises are like floods. They are a fact of life, and happen from time to time.
Who should pay for flood insurance, the public or the people building on flood plains?
If the public pays for the flood insurance, there will be too much construction in the flood plain.
The fact that TARP provided a small accounting profit to the Treasury is sort of immaterial. It was a free put that was never exercised. People should pay a premium for insurance. An efficient market prices risk...
[1] https://en.wikipedia.org/wiki/Diamond%E2%80%93Dybvig_model
> should be born by the public rather than the financial sector.
Given the size of the financial sector, I am not sure those are not all that different.
Given the size of the financial sector, I am not sure those are not all that different.
Currently around 12% of GDP. In the New-Deal era it was around 3%.
In the new deal era IT was 0% of GDP. Now 25% of the SP500 is FAANG. Not even mentioning the change in health care stocks.
Financialization occurs when you can be explicit about costs and benefits. Finance does it with dollars, IT does it with bytes.
There is certainly a case to be made that it's gone too far. But honestly you should be pleased if people can move billions of dollars to a positive end with a mouse click.
Stock values follow profit. If the finance industry can encompass 100% GDP and break down everything into profit and costs that can be allocated to the individuals with the correct risk profile, we're doing extremely well.
Financialization occurs when you can be explicit about costs and benefits. Finance does it with dollars, IT does it with bytes.
There is certainly a case to be made that it's gone too far. But honestly you should be pleased if people can move billions of dollars to a positive end with a mouse click.
Stock values follow profit. If the finance industry can encompass 100% GDP and break down everything into profit and costs that can be allocated to the individuals with the correct risk profile, we're doing extremely well.
> If the finance industry can encompass 100% GDP
There are ideologically pro-finance economists who strongly reject this assessment [1].
[1] https://www.ft.com/content/4b70ee3a-f88c-11e4-8e16-00144feab...
There are ideologically pro-finance economists who strongly reject this assessment [1].
[1] https://www.ft.com/content/4b70ee3a-f88c-11e4-8e16-00144feab...
I don't have a sub to FT.
I do however doubt there are many economists who would be against the idea of digitizing cash flows, losses, and profits. It just makes for more efficient decision making. The two - ideally - aren't materially different.
I do however doubt there are many economists who would be against the idea of digitizing cash flows, losses, and profits. It just makes for more efficient decision making. The two - ideally - aren't materially different.
Why that book and not, say, Capital? Friedman is hardly unusual to run into in the US so I'm a little confused why you would consider that a distinguishing factor. Why not just label them a Friedman fan and move on?
Because Monetary History is a long, complex book and someone willing to make the effort is going to be more interesting.
[deleted]
His piece challenging Frank Partnoy’s fear mongering comparison between CDO’s and CLO’s is great.
https://nathantankus.substack.com/p/worst-case-scenario-or-i...
https://nathantankus.substack.com/p/worst-case-scenario-or-i...
That article was my first introduction to Tankus's writings, and I must say that I disagree - it's not great.
I found Partnoy's article quite persuasive, and Tankus's response [1] not convincing.
For example, this is confused, in my opinion:
> Remember that collateralized loan obligations are simpler instruments than collateralized debt obligations. There is one layer between individual loans to corporations and CLOs whereas CDOs were two layers away from individual mortgages. Second, because CDOs were made up of mortgage backed securities, what mortgage backed securities were in them mattered. It's important in this context to know what the purpose of CDOs were. They were the equivalent of kitchen leftovers thrown into a lunch special the next day and cooked in such a way as to hide that they aren’t fresh. CDOs generally took the riskier and lower rated portions of mortgage backed securities and made up entire securities out of them.
I disagree. They are quite similar. Mortgages are wrapped into Mortgage Backed Securities, yes, but they are typically not tranched. So it's basically more or less like one big "average" mortgage. Those then are put into a CDO, and tranched. (Two levels of tranching are normally called CDO-squared.)
Next, house values are somewhat floored - a house can loose 30% value, maybe 40 or 50%, but that's really quite unlikely. Debt, per se, will normally also have some significant recovery value if equity goes to zero. However, a comparatively junior loan might easily go to zero if a company goes bad. Partnoy mentions this explicitly and highlights that many underlying loans are fairly junior:
> > We already know that a significant majority of the loans in CLOs have weak covenants that offer investors only minimal legal protection; in industry parlance, they are “cov lite.” The holders of leveraged loans will thus be fortunate to get pennies on the dollar as companies default—nothing close to the 70 cents that has been standard in the past.
Thus, it is CLOs that have something akin to double-tranching, more so than CDOs, contra Tankus's assertion.
> The point is, a proper comparison between mortgage securities and syndicated corporate loan securities would compare the value of outstanding “subprime” Mortgage Backed Securities to outstanding Collateralized Loan Obligations, not to Collateralized Debt Obligations.
No. Compare the CLOs to CDOs, or corporate debt to mortgages, or corporate bonds to MBS.
> In other words, in nominal dollar terms the current CLO market is ⅓ of the size of the subprime mortgage backed securities market then. This actually understates how relatively paltry Collateralized Loan Obligations are.
That's not paltry. A big problem with CDOs was that it was very intransparent where the losses would accrue. The underlying mortgage market went down, say, 10%. If every bank took a 10% hit, fine. But given the opaqueness, it could be that one bank would take a 5% hit, the other a 25% hit. Nobody could tell, and that made every bank suspect. CLOs pose the same problem.
> The key here is to understand that the problems with CDOs were not because of losses on the underlying mortgages. They were dynamite, engineered to explode. The nitroglycerin was not the mortgages but credit default swaps, a type of unregulated insurance that let purchasers bet on whether a specific security was going to fail or not.
Dynamite is engineered to be stable and less explosive than nitroglycerin, and most CDOs were not engineered to explode either. Towards the end, when smart money wanted to short the market, some products were built and sold to long investors so that the smart money could short it, sure. But Tankus doesn't provide evidence about the relative size of that.
> Many of these collateralized debt obligations were filled with credit default swaps tied to the riskier and lower rated tranches of Mortgage Backed Securities which I discussed earlier, which were guaranteed to fail.
Again, CDOs are tranched, MBS aren't generally (except in the sense that a CDO is an MBS in the wider sense). CDOs based on CDS are synthetic CDOs, and yeah, they were constructed and sold.
> One way of recognizing how fundamentally different circumstances are is by examining what happened to AAA rated mortgage backed securities. If, as Partnoy implies, the losses on CDOs were simply a matter of defaults on the underlying mortgages, triple A rated Residential Mortgage backed Securities should have taken losses comparable to CDOs.
That's nonsense. The whole point is that the expected loss of an MBS is independent of correlation, while the expected loss of a CDO tranche depends on correlation. That's really the basic feature - if you have a non-linear payoffs of an underlying, vol enters, and if you have an underlying consisting of many other underliers, the vol depends on the correlation.
And really, that's what this is about. Higher tranches of CDOs or CLOs are safe when correlation is low, but when one massive black swan hits, namely a pandemic, then correlation is not low, and tranches considered safe before might fail. And one still has the opacity of CDOs.
> In fact, it’s likely that collateralized loan obligations made up of the top portion of a portfolio of loans will do the best of any of the Bank’s corporate loans [note: presumably he means the top tranches of such a CLO]. When a bank originates and holds a loan, it immediately takes losses if the borrower defaults. In contrast, it takes very substantial levels of defaults before holders of the top portion, or “senior tranche” of a collateralized loan obligation realize any losses. For any given portfolio of loans, given the same overall default rate and the same loan modifications, senior tranche holders will experience less losses than outright holders of a portfolio of loans. This structure may encourage originating lower quality loans and investors may overpay as a result of tranches being mis-rated by credit rating agencies.
Indeed! That's the problem. Correlation, again.
> However, it can’t be said that this structure, in and of itself, magnifies losses for investors in the senior tranche. In fact, it works as intended- other investors bear the bulk of the risks.
Not the structure in and of itself... but the problem remains: you construct a AAA security out of worse quality loans assuming low correlation, and then a pandemic hits...
Finally, Tankus imputes ulterior motives on Partnoy without any warrant.
To sum up, using Tankus summary:
1. No, collateralized loan obligations are not a major systematic risk to the banking system. - well, he hasn't refuted that claim though.
2. No, collateralized loan obligations are not like Collateralized Debt Obligations. - well, they are somewhat. It's the correlation, baby.
3. The Great Financial Crisis was a credit default swap crisis, not a mortgage crisis. - CDS (like all derivatives) are in net zero supply. So, they just redistribute the wins and losses. The losses came from mortgages. CDS redistributed them, CDOs made them very opaque. CLOs can do the same.
4. Credit Default Swaps are not threatening another banking crisis. - Hopefully. CLOs neither, hopefully.
5. Even the leveraged loan market is only somewhat important macroeconomically. - Ok.
6. Liquidity and capital issues are being handled differently today. - Hopefully. But we also have an unprecedented crisis at hand.
7. Leveraged loan issuance is not the major cause of financial distress among businesses. - Not yet.
In the response to Partnoy's response, Tankus reiterates his misunderstanding:
> I do not think that popular press pieces should present Collateralized Loan Obligations as similar to Collateralized Debt Obligations when the unique and dangerous feature of Collateralized Debt Obligations is that they were securitizations of already structured products and not securitizations of underlying loans directly.
That's not the unique and dangerous feature. The unique feature of a CDO is the tranching, which it does have in common with a CLO.
> Mortgage Backed Securities are the proper analogue to Collateralized Debt Obligations and if Partnoy’s piece were edited to reflect this, a large degree of its rhetorical force would be weakened and the premise of the article may not even hold up to scrutiny.
Same same. Or:
> However, a major overarching point of my piece is that that extreme scenario is only plausible when it is implied that top tranche CLOs are like subprime top tranche CDOs. I’m claiming that this is an apples to oranges comparison.
Same same. It's a valid comparison, in my view.
> Further, it’s important to grasp that to the extent to which the top tranches of CLOs are threatened on the scale that Partnoy speculates about, no other portfolio of loans would be safe.
Correct. But the portfolio of loans wouldn't be rated AAA, while the CLO senior tranches are. That's the problem.
So, I haven't read much of Tankus, but from this one piece (and the reply to the reply), I am not that impressed.
[1] https://nathantankus.substack.com/p/is-there-really-a-loomin...
I found Partnoy's article quite persuasive, and Tankus's response [1] not convincing.
For example, this is confused, in my opinion:
> Remember that collateralized loan obligations are simpler instruments than collateralized debt obligations. There is one layer between individual loans to corporations and CLOs whereas CDOs were two layers away from individual mortgages. Second, because CDOs were made up of mortgage backed securities, what mortgage backed securities were in them mattered. It's important in this context to know what the purpose of CDOs were. They were the equivalent of kitchen leftovers thrown into a lunch special the next day and cooked in such a way as to hide that they aren’t fresh. CDOs generally took the riskier and lower rated portions of mortgage backed securities and made up entire securities out of them.
I disagree. They are quite similar. Mortgages are wrapped into Mortgage Backed Securities, yes, but they are typically not tranched. So it's basically more or less like one big "average" mortgage. Those then are put into a CDO, and tranched. (Two levels of tranching are normally called CDO-squared.)
Next, house values are somewhat floored - a house can loose 30% value, maybe 40 or 50%, but that's really quite unlikely. Debt, per se, will normally also have some significant recovery value if equity goes to zero. However, a comparatively junior loan might easily go to zero if a company goes bad. Partnoy mentions this explicitly and highlights that many underlying loans are fairly junior:
> > We already know that a significant majority of the loans in CLOs have weak covenants that offer investors only minimal legal protection; in industry parlance, they are “cov lite.” The holders of leveraged loans will thus be fortunate to get pennies on the dollar as companies default—nothing close to the 70 cents that has been standard in the past.
Thus, it is CLOs that have something akin to double-tranching, more so than CDOs, contra Tankus's assertion.
> The point is, a proper comparison between mortgage securities and syndicated corporate loan securities would compare the value of outstanding “subprime” Mortgage Backed Securities to outstanding Collateralized Loan Obligations, not to Collateralized Debt Obligations.
No. Compare the CLOs to CDOs, or corporate debt to mortgages, or corporate bonds to MBS.
> In other words, in nominal dollar terms the current CLO market is ⅓ of the size of the subprime mortgage backed securities market then. This actually understates how relatively paltry Collateralized Loan Obligations are.
That's not paltry. A big problem with CDOs was that it was very intransparent where the losses would accrue. The underlying mortgage market went down, say, 10%. If every bank took a 10% hit, fine. But given the opaqueness, it could be that one bank would take a 5% hit, the other a 25% hit. Nobody could tell, and that made every bank suspect. CLOs pose the same problem.
> The key here is to understand that the problems with CDOs were not because of losses on the underlying mortgages. They were dynamite, engineered to explode. The nitroglycerin was not the mortgages but credit default swaps, a type of unregulated insurance that let purchasers bet on whether a specific security was going to fail or not.
Dynamite is engineered to be stable and less explosive than nitroglycerin, and most CDOs were not engineered to explode either. Towards the end, when smart money wanted to short the market, some products were built and sold to long investors so that the smart money could short it, sure. But Tankus doesn't provide evidence about the relative size of that.
> Many of these collateralized debt obligations were filled with credit default swaps tied to the riskier and lower rated tranches of Mortgage Backed Securities which I discussed earlier, which were guaranteed to fail.
Again, CDOs are tranched, MBS aren't generally (except in the sense that a CDO is an MBS in the wider sense). CDOs based on CDS are synthetic CDOs, and yeah, they were constructed and sold.
> One way of recognizing how fundamentally different circumstances are is by examining what happened to AAA rated mortgage backed securities. If, as Partnoy implies, the losses on CDOs were simply a matter of defaults on the underlying mortgages, triple A rated Residential Mortgage backed Securities should have taken losses comparable to CDOs.
That's nonsense. The whole point is that the expected loss of an MBS is independent of correlation, while the expected loss of a CDO tranche depends on correlation. That's really the basic feature - if you have a non-linear payoffs of an underlying, vol enters, and if you have an underlying consisting of many other underliers, the vol depends on the correlation.
And really, that's what this is about. Higher tranches of CDOs or CLOs are safe when correlation is low, but when one massive black swan hits, namely a pandemic, then correlation is not low, and tranches considered safe before might fail. And one still has the opacity of CDOs.
> In fact, it’s likely that collateralized loan obligations made up of the top portion of a portfolio of loans will do the best of any of the Bank’s corporate loans [note: presumably he means the top tranches of such a CLO]. When a bank originates and holds a loan, it immediately takes losses if the borrower defaults. In contrast, it takes very substantial levels of defaults before holders of the top portion, or “senior tranche” of a collateralized loan obligation realize any losses. For any given portfolio of loans, given the same overall default rate and the same loan modifications, senior tranche holders will experience less losses than outright holders of a portfolio of loans. This structure may encourage originating lower quality loans and investors may overpay as a result of tranches being mis-rated by credit rating agencies.
Indeed! That's the problem. Correlation, again.
> However, it can’t be said that this structure, in and of itself, magnifies losses for investors in the senior tranche. In fact, it works as intended- other investors bear the bulk of the risks.
Not the structure in and of itself... but the problem remains: you construct a AAA security out of worse quality loans assuming low correlation, and then a pandemic hits...
Finally, Tankus imputes ulterior motives on Partnoy without any warrant.
To sum up, using Tankus summary:
1. No, collateralized loan obligations are not a major systematic risk to the banking system. - well, he hasn't refuted that claim though.
2. No, collateralized loan obligations are not like Collateralized Debt Obligations. - well, they are somewhat. It's the correlation, baby.
3. The Great Financial Crisis was a credit default swap crisis, not a mortgage crisis. - CDS (like all derivatives) are in net zero supply. So, they just redistribute the wins and losses. The losses came from mortgages. CDS redistributed them, CDOs made them very opaque. CLOs can do the same.
4. Credit Default Swaps are not threatening another banking crisis. - Hopefully. CLOs neither, hopefully.
5. Even the leveraged loan market is only somewhat important macroeconomically. - Ok.
6. Liquidity and capital issues are being handled differently today. - Hopefully. But we also have an unprecedented crisis at hand.
7. Leveraged loan issuance is not the major cause of financial distress among businesses. - Not yet.
In the response to Partnoy's response, Tankus reiterates his misunderstanding:
> I do not think that popular press pieces should present Collateralized Loan Obligations as similar to Collateralized Debt Obligations when the unique and dangerous feature of Collateralized Debt Obligations is that they were securitizations of already structured products and not securitizations of underlying loans directly.
That's not the unique and dangerous feature. The unique feature of a CDO is the tranching, which it does have in common with a CLO.
> Mortgage Backed Securities are the proper analogue to Collateralized Debt Obligations and if Partnoy’s piece were edited to reflect this, a large degree of its rhetorical force would be weakened and the premise of the article may not even hold up to scrutiny.
Same same. Or:
> However, a major overarching point of my piece is that that extreme scenario is only plausible when it is implied that top tranche CLOs are like subprime top tranche CDOs. I’m claiming that this is an apples to oranges comparison.
Same same. It's a valid comparison, in my view.
> Further, it’s important to grasp that to the extent to which the top tranches of CLOs are threatened on the scale that Partnoy speculates about, no other portfolio of loans would be safe.
Correct. But the portfolio of loans wouldn't be rated AAA, while the CLO senior tranches are. That's the problem.
So, I haven't read much of Tankus, but from this one piece (and the reply to the reply), I am not that impressed.
[1] https://nathantankus.substack.com/p/is-there-really-a-loomin...
You are making an argument of CLO’s having more risk than CDOs by using the following from Fartnoy:
> Later this summer, leveraged-loan defaults will increase significantly as the economic effects of the pandemic fully register. Bankruptcy courts will very likely buckle under the weight of new filings. (During a two-week period in May, J.Crew, Neiman Marcus, and J. C. Penney all filed for bankruptcy.)
1. We have hit 2014 highs, but we are reopening, and the Fed keeps buying bonds allowing the companies to incur on new debt while keeping their dues with banks.
> We already know that a significant majority of the loans in CLOs have weak covenants that offer investors only minimal legal protection; in industry parlance, they are “cov lite.” The holders of leveraged loans will thus be fortunate to get pennies on the dollar as companies default—nothing close to the 70 cents that has been standard in the past.
2. I don’t see him even throwing a percentage of the number of CLO’s that would have to default for this to be a problem. It would be nice to understand where we were, where we are, and what are the possible outcomes. Moreover, the assumption that companies will go down to zero net worth that returns pennies on the dollar implies that the market for companies is inefficient, the risks and pros are not assessed properly. If that was the case we wouldn’t be seeing so many mergers. Companies that will rather be acquired by other companies on pure stock transaction rather than going down to zero, and the leader in the space absorbs the debt. These mergers are driven for a hunger of client expansion and space specific technology acquisition. https://www.reuters.com/article/us-masmovil-m-a-loans/masmov...
After that, you continue making analogies between them by assuming there is more shadow banking and a short market exists, without proof. You also go into a layer structure comparison while ignoring the fact that the CDO’s risk was being assumed recursively while sold linearly. There is also no comment on the fact that the debt on non financial organizations, consumers of CLOs is 23% less than that in 2008 without even adjusting for inflation.
I understand your argument, but it seems you have convinced yourself already of a worst case scenario that is not occurring so far because the Fed is bailing the banks out by buying bonds.
> Later this summer, leveraged-loan defaults will increase significantly as the economic effects of the pandemic fully register. Bankruptcy courts will very likely buckle under the weight of new filings. (During a two-week period in May, J.Crew, Neiman Marcus, and J. C. Penney all filed for bankruptcy.)
1. We have hit 2014 highs, but we are reopening, and the Fed keeps buying bonds allowing the companies to incur on new debt while keeping their dues with banks.
> We already know that a significant majority of the loans in CLOs have weak covenants that offer investors only minimal legal protection; in industry parlance, they are “cov lite.” The holders of leveraged loans will thus be fortunate to get pennies on the dollar as companies default—nothing close to the 70 cents that has been standard in the past.
2. I don’t see him even throwing a percentage of the number of CLO’s that would have to default for this to be a problem. It would be nice to understand where we were, where we are, and what are the possible outcomes. Moreover, the assumption that companies will go down to zero net worth that returns pennies on the dollar implies that the market for companies is inefficient, the risks and pros are not assessed properly. If that was the case we wouldn’t be seeing so many mergers. Companies that will rather be acquired by other companies on pure stock transaction rather than going down to zero, and the leader in the space absorbs the debt. These mergers are driven for a hunger of client expansion and space specific technology acquisition. https://www.reuters.com/article/us-masmovil-m-a-loans/masmov...
After that, you continue making analogies between them by assuming there is more shadow banking and a short market exists, without proof. You also go into a layer structure comparison while ignoring the fact that the CDO’s risk was being assumed recursively while sold linearly. There is also no comment on the fact that the debt on non financial organizations, consumers of CLOs is 23% less than that in 2008 without even adjusting for inflation.
I understand your argument, but it seems you have convinced yourself already of a worst case scenario that is not occurring so far because the Fed is bailing the banks out by buying bonds.
Tankus has been studying economics full time for twelve years! He's earned it. His posts used to be not good but he's paid his dues.
What’s the famous saying about the best way to get the right answer? Something about posting it to the Internet and having the crowd correct you?
Cunningham’s Law! It is great and has many applications, when you’re trying to squeeze good information out of a system that doesn’t circulate it naturally.
I have a fun anecdote about this one. I once misattributed this on a podcast and called it Godwin's Law. A listener pinged me about it to correct me on the next day.
Cunningham's Law is self-healing.
Cunningham's Law is self-healing.
Universities, in their current incarnation, offer a poor return on investment.
When a degree was scarce, it was valuable. As was when a degree guaranteed a certain level of knowledge and skill.
But that really isn't the case nowadays. The vast majority of degree programs exist simply to collect tuition dollars, and the students that undertake these programs would be better-served by a vocational or professional education system.
The standard counter-argument here is that you gain social skills in university... but the same is true when you join the workforce.
Germany gets this one right, by the way.
That is not to say that the idea of a university has outlived its utility! We need spaces where curious minds can seek answers from and challenge themselves against well-practiced experts. That's part of how you set a country up for future success.
But that's not what we have now, not from my experience in the United States. What we need are Schools of Athens, but what we have are Temples of Amun.
So it's not all that surprising that, in the information age, curious people look to both the cost of a degree, and to the legions of unemployed graduates, and figure they can do better.
When a degree was scarce, it was valuable. As was when a degree guaranteed a certain level of knowledge and skill.
But that really isn't the case nowadays. The vast majority of degree programs exist simply to collect tuition dollars, and the students that undertake these programs would be better-served by a vocational or professional education system.
The standard counter-argument here is that you gain social skills in university... but the same is true when you join the workforce.
Germany gets this one right, by the way.
That is not to say that the idea of a university has outlived its utility! We need spaces where curious minds can seek answers from and challenge themselves against well-practiced experts. That's part of how you set a country up for future success.
But that's not what we have now, not from my experience in the United States. What we need are Schools of Athens, but what we have are Temples of Amun.
So it's not all that surprising that, in the information age, curious people look to both the cost of a degree, and to the legions of unemployed graduates, and figure they can do better.
Yup. I was a shitty student (I used to read novels on my way to the exam hall) and still got a masters degree without breaking a sweat (with decent grades). And this is from a good institution with a fairly tough entrance exam.
Everything I learned, I learned outside school. Sometimes I wonder if the only things that schools provide are friendships and connections, and in some cases brand recognition. Something is not right about the way we teach youngsters.
Everything I learned, I learned outside school. Sometimes I wonder if the only things that schools provide are friendships and connections, and in some cases brand recognition. Something is not right about the way we teach youngsters.
College offers a "poor" return on investment because students focused on passing their exams and their classes, with no thought on application or any plan to retain the knowledge they acquired.
Thus, any skills or knowledge they gained are only temporary, to be forgotten as soon as they graduate.
In this perspective, college can teach as much as they want, but 80% will evaporate.
Thus, any skills or knowledge they gained are only temporary, to be forgotten as soon as they graduate.
In this perspective, college can teach as much as they want, but 80% will evaporate.
Interesting article, but it feels like it's grinding some weird axes. Like the way it harps on his lack of a degree, and awkwardly mentions the political alignment of people Tankus learned from (like "[he read a book] by the liberal John Maynard Keynes" or "[he studied with] with the leftist economist J.W. Mason").
Is this standard for Bloomberg?
Is this standard for Bloomberg?
Isn't that important when talking economics? Liberalism as a political philosophy has a lot to say on economics (very pro capitalist and pro markets) and "leftism" informs the reader that Mason isn't a capitalist.
It shows that he's learned from people with very different theories/opinions on economics.
It shows that he's learned from people with very different theories/opinions on economics.
Paywall bypass:
With so much knowledge & resources being available for free online: why would any smart, independent young person want to go to college in the US? The only reason I can think of is to become something that you actually _need_ to go to college for like a doctor or lawyer.
It's pretty crazy when people like Jordan Peterson, who used to teach at Harvard, is suggesting that young people go to trade schools. The college system in the US needs to be restructured or die.
wget -U "Mozilla/4.0" "https://www.bloomberg.com/news/articles/2020-07-02/nathan-tankus-s-newsletter-subscribers-don-t-care-about-diplomas" && firefox nathan-tankus-s-newsletter-subscribers-don-t-care-about-diplomas
With so much knowledge & resources being available for free online: why would any smart, independent young person want to go to college in the US? The only reason I can think of is to become something that you actually _need_ to go to college for like a doctor or lawyer.
It's pretty crazy when people like Jordan Peterson, who used to teach at Harvard, is suggesting that young people go to trade schools. The college system in the US needs to be restructured or die.
People are absolutely obssessed with institutions, mainly via justification of their own passage through those institutions. I have seen it at every level of education where people a notch below them or more on the educational ladder are looked down upon. People holding bachelor's or master's degrees will look down upon those with only an associate's degree or a high school certification. Those with a Ph.D. will look down upon those who don't and elevate those who do. I have both seen this and experienced it.
A book that covers this is Disciplined Minds by Jeff Schmidt.
A book that covers this is Disciplined Minds by Jeff Schmidt.
I definitely agree with this, and I will check out the book you suggested.
The title of the posted article is particularly relevant to me, as I'm also a 28 year old without a degree. I gained my technical skills from schools in the military, OJT, and self-teaching. When I was applying for software engineering jobs in the civilian world, my resume often wouldn't even be looked at because I didn't have a college degree.
The title of the posted article is particularly relevant to me, as I'm also a 28 year old without a degree. I gained my technical skills from schools in the military, OJT, and self-teaching. When I was applying for software engineering jobs in the civilian world, my resume often wouldn't even be looked at because I didn't have a college degree.
I think one big problem with college here is that it's fairly easy to attend and get a degree while putting in only minimal effort. If you are someone who is motivated to make the best of your college experience, I think it is still possible to have experiences there that are difficult to have elsewhere.
As a personal example, I have a journalism BS, a law degree from a T20, and I then self-studied comp sci and software dev for four years before doing a career switch. I was fairly unmotivated in college and feel like my BS was a waste. The prestige of the T20 law school didn't change that; once I was admitted I was virtually guaranteed a degree and my motivation followed accordingly.
Then I had a life revelation that led me to the comp sci and a career that I am now obsessed with. My dedication to learning was able to get me significantly more educational value than I got out of my unmotivated degree work. I think I was able to get myself 90% of the way to a BS level in comp sci, but at the same time I do believe there are things I have missed out on by not getting a CS degree that I will really struggle to replicate on my own. For instance, I have tried and tried to (a) find a valuable Compilers course online (like I was able to for algs, ML, linear alg, discrete, etc.), or (b) self-study via textbooks, but neither has been very successful.
Now, would that missing 10% from my CS self-education have been worth $100,000? Since I'm someone with no interest in academia, probably not, but it's hard for me to tell.
I do think that encouraging young people to pursue other avenues than college is part of the answer, but I think we'll fail to make college a truly valuable experience for all unless we increase the challenge (on the average -- certainly there are some schools currently in existence that are highly challenging).
As a personal example, I have a journalism BS, a law degree from a T20, and I then self-studied comp sci and software dev for four years before doing a career switch. I was fairly unmotivated in college and feel like my BS was a waste. The prestige of the T20 law school didn't change that; once I was admitted I was virtually guaranteed a degree and my motivation followed accordingly.
Then I had a life revelation that led me to the comp sci and a career that I am now obsessed with. My dedication to learning was able to get me significantly more educational value than I got out of my unmotivated degree work. I think I was able to get myself 90% of the way to a BS level in comp sci, but at the same time I do believe there are things I have missed out on by not getting a CS degree that I will really struggle to replicate on my own. For instance, I have tried and tried to (a) find a valuable Compilers course online (like I was able to for algs, ML, linear alg, discrete, etc.), or (b) self-study via textbooks, but neither has been very successful.
Now, would that missing 10% from my CS self-education have been worth $100,000? Since I'm someone with no interest in academia, probably not, but it's hard for me to tell.
I do think that encouraging young people to pursue other avenues than college is part of the answer, but I think we'll fail to make college a truly valuable experience for all unless we increase the challenge (on the average -- certainly there are some schools currently in existence that are highly challenging).
> I think one big problem with college here is that it's fairly easy to attend and get a degree while putting in only minimal effort.
> I think we'll fail to make college a truly valuable experience for all unless we increase the challenge
This is really interesting. I think we need to both increase the challenge of getting a degree and find other ways to make it more "exclusive". One way to accomplish this might be to make certain, non-technical majors limited somehow. That way areas of study that are over-populated like social sciences, psychology, etc are smartly minimized so they could produce fewer, more elite graduates with credentials that are more valuable. This is obviously easier said than done.
Also, if you're still looking for a book on compilers there's none better than the "Dragon Book" - https://en.wikipedia.org/wiki/Compilers:_Principles,_Techniq...
> I think we'll fail to make college a truly valuable experience for all unless we increase the challenge
This is really interesting. I think we need to both increase the challenge of getting a degree and find other ways to make it more "exclusive". One way to accomplish this might be to make certain, non-technical majors limited somehow. That way areas of study that are over-populated like social sciences, psychology, etc are smartly minimized so they could produce fewer, more elite graduates with credentials that are more valuable. This is obviously easier said than done.
Also, if you're still looking for a book on compilers there's none better than the "Dragon Book" - https://en.wikipedia.org/wiki/Compilers:_Principles,_Techniq...
I’m not sure I’d agree with the Dragon Book recommendation. I think a better starting point might be Appel’s Modern Compiler Implementation in C/Java/ML.
It’s starting to become an unspoken understanding. The same way we all know just because you got a HS Diploma doesn’t mean anything.
In America a having a HS degree won't get you very far or impress most people but not having one is a terrible thing. The amount of work required to pass through four years of public school is a joke, 'D' grades across the board will do the job.
I agree and (from a developers POV) think the education needs updated to match the opportunities. But while this article and generate healthy discussions, so much is directed towards some "either / or" debate that it's hard to add input or perspective without feeling like a preamble
[deleted]
I think it's to idealistic. How else can you verify someone got educated on a subject while not being educated on it your self.
Education is basically a system for vouching for someone's knowledge. It is too exhausting to individually check people, so we trust an institution instead and let them confer that trust on others.
Shouldn’t we be willing to reward his effort? It has been a long road.
Does anyone subscribe to his newsletter?
Does anyone subscribe to his newsletter?
Nathan made a thread as a reply to this piece on him
https://twitter.com/NathanTankus/status/1278777095670370304
https://twitter.com/NathanTankus/status/1278777095670370304
I've been thinking about this exact issue with respect to my accomplishments. How much benefit have I drawn from looking like a programmer? I'm an Asian American male with glasses. I fit the part. Looking back, people gave me respect and their ear far before I deserved it. Would I have gotten the same level of encouragement if I were Black? Would I have gotten the same level of respect if I were a woman? Probably not.
Any social engineer can tell you that appearances are half the battle. A white male in a hardhat with a clipboard could get into most construction sites. A white male in a suit could probably get into most office buildings.
There's some rather vehement responses in this thread. I wonder how many people are threatened by the idea that their accomplishments are partially due to them "looking the part" and not just their work and skill.
Any social engineer can tell you that appearances are half the battle. A white male in a hardhat with a clipboard could get into most construction sites. A white male in a suit could probably get into most office buildings.
There's some rather vehement responses in this thread. I wonder how many people are threatened by the idea that their accomplishments are partially due to them "looking the part" and not just their work and skill.
> Any social engineer
From my readings of pentesters doing social engineering, female pentesters have the vast advantage when trying to gain building access.
From my readings of pentesters doing social engineering, female pentesters have the vast advantage when trying to gain building access.
> How much benefit have I drawn from looking like a programmer
On the other hand, our profession does have the benefit of being able to be done with zero knowledge of appearance. In fact, I credit that fact to enabling smart teenagers to make key contributions to open source they otherwise would be excluded from due to assumptions coming from age.
On the other hand, our profession does have the benefit of being able to be done with zero knowledge of appearance. In fact, I credit that fact to enabling smart teenagers to make key contributions to open source they otherwise would be excluded from due to assumptions coming from age.
On the internet, nobody knows you are a dog.
https://en.wikipedia.org/wiki/On_the_Internet,_nobody_knows_...
https://en.wikipedia.org/wiki/On_the_Internet,_nobody_knows_...
It's a great point you raise, and something that we all should think about.
> There's some rather vehement responses in this thread. I wonder how many people are threatened by the idea that their accomplishments are partially due to them "looking the part" and not just their work and skill.
Additionally I think a lot of people understand the concept of probability and likelihoods, but when it comes to this topic people get very uncomfortable thinking that where they are today is partially due to luck but as well due to structural factors that benefited them unrelated to any active actions they took.
And usually the emotional response is either doubling down on the parts they did control (completely ignoring the fact that plenty of other people put in more effort or did better at those same parts and didn't get as far as they did), or claiming that yes the problem does exist but "not in my area, because no-one actively does anything bad like that", or the other "my intuition says it's a minor issue or an already resolved issue therefore that's true" - which goes against the research that says - no it is a problem.
> There's some rather vehement responses in this thread. I wonder how many people are threatened by the idea that their accomplishments are partially due to them "looking the part" and not just their work and skill.
Additionally I think a lot of people understand the concept of probability and likelihoods, but when it comes to this topic people get very uncomfortable thinking that where they are today is partially due to luck but as well due to structural factors that benefited them unrelated to any active actions they took.
And usually the emotional response is either doubling down on the parts they did control (completely ignoring the fact that plenty of other people put in more effort or did better at those same parts and didn't get as far as they did), or claiming that yes the problem does exist but "not in my area, because no-one actively does anything bad like that", or the other "my intuition says it's a minor issue or an already resolved issue therefore that's true" - which goes against the research that says - no it is a problem.
Im a white man who looks like a wrestler, while also the CEO and founder of a pair of very well known companies and I without fail will get "bro" talked to upon first meeting by other guys in all contexts.
Dressing for success is not exactly some secret of influence. A black guy in a suit in 2020 is going to be able to get into any office building as well. A black guy with a hard hat is not exactly unheard of on construction sites. It's quite common.
> A white male in a suit could probably get into most office buildings.
A woman is going to have a far easier time getting into an office building.
A woman is going to have a far easier time getting into an office building.
I appreciate the correction, but frankly this isn't what I hoped people would take away from my comment. My point was that race/gender/appearance plays a large role in gaining access to normally stratified resources
aren’t Asian-Americans dominant in every high-paying profession? doctor, engineer, consultant, banker, etc.
I just haven’t seen very many in industries such as education or government
I just haven’t seen very many in industries such as education or government
Wow, what a thoughtful way to respond. That level of character is something you certainly can't get with a degree.
There are quite a few people in the world with a high level of character and no degree
It's unfortunate to see other HN commentators here seeing someone be humble and recognize that their success is the result of a number of different criteria as being an example of 'PC culture gone mad' or that he's just lying to avoid the mob or as a personal attack on them.
There was an example a while ago of the issues black CEOs face in SV [1] and it's just something you'll never see as a cis white man. I've certainly never encountered any issues relating to my race or my gender or how I present myself, but if you're a black man you're already used to dressing a different way to prevent being perceived as a threat [2].
[1] https://news.ycombinator.com/item?id=23540162
[2] https://mashable.com/2015/08/08/black-men-dressing-up-police...
There was an example a while ago of the issues black CEOs face in SV [1] and it's just something you'll never see as a cis white man. I've certainly never encountered any issues relating to my race or my gender or how I present myself, but if you're a black man you're already used to dressing a different way to prevent being perceived as a threat [2].
[1] https://news.ycombinator.com/item?id=23540162
[2] https://mashable.com/2015/08/08/black-men-dressing-up-police...
Thank you for linking this. Arguments will be made that Nathan is politicizing his spotlight, but he's simply seizing the moment to cast light on a dark and apolitical truth most of us take for granted.
I hope HNers can take the time to read this with an open and introspective heart and mind. Unrolled: https://threadreaderapp.com/thread/1278777095670370304.html
I hope HNers can take the time to read this with an open and introspective heart and mind. Unrolled: https://threadreaderapp.com/thread/1278777095670370304.html
He's literally just some dude; he isn't even claiming credentialism. Anyone who complains about him politicising something is looking very hard for reasons to complain.
If making political statements is the reward he wants for doing the legwork to document what the Fed is doing, he can have it.
If making political statements is the reward he wants for doing the legwork to document what the Fed is doing, he can have it.
spinach(1)
It absolutely is politicized and I find this to minimize his accomplishments.
I don't like this new trend where some people believe certain facts are political. A fact is a fact, no matter which "side" you're on.
It is hardly factual that he was only allowed into conferences for being white.
Do you think it's factual that it's easier to blend in if you look like everyone else?
That is factual. That would be relevant if conference entry were being managed by snipers searching crowds.
Or if you're attending without a badge, which is what Nathan was doing. As someone who's done the same thing... they definitely check at a lot of conferences.
One of the few times I was caught was at a psychoanalysis conference where I stood out for being roughly 20 years younger than most attendees. I wish I had a badge in that case because I was very obviously called out due to my age alone.
One of the few times I was caught was at a psychoanalysis conference where I stood out for being roughly 20 years younger than most attendees. I wish I had a badge in that case because I was very obviously called out due to my age alone.
A parroted opinion, presented without evidence and rigorous scientific research, on the other hand, can very well be just a political statement. Especially the kind of opinion that is given in a context completely unrelated and to an audience of people that never asked to hear it. Regardless of whether being white is a statistical indicator of likeliness to have something meaningful to say, we need to first establish that the consequences of such a thing are negative in the first place. “White privilege” does not exclude others from the same “privilege” - it’s entirely possible for any other attribute-based demographic to accumulate a statistic average as well.
[deleted]
Can you help me understand why you believe that highlighting privilege arising from one's innate characteristics is political?
Not OP but I’d be curious to hear why you think it isn’t.
As best I can tell the distinguishing characteristic between people who believe in the existence of white/male privilege and those who do not is political affiliation.
As best I can tell the distinguishing characteristic between people who believe in the existence of white/male privilege and those who do not is political affiliation.
> As best I can tell the distinguishing characteristic between people who believe in the existence of white/male privilege and those who do not is political affiliation.
The people who are not white, not cis-male, or not straight are the people who have encountered consistent barriers as a result of these negations.
These are all immutable parameters, not political affiliations. No one chooses to be white (or not). No one chooses to be male (or not). No one chooses to be straight (or not).
Women? Barriers.
Trans? Barriers.
Black? Barriers.
Middle Eastern? Even though we're classified as white by tax code? Barriers.
Gay? Barriers.
Jewish? Muslim? Even Catholic? (Considering the mental trauma that often arises with rapid disillusionment from religion, this is largely considered immutable) Barriers.
Hispanic? Asian? Aboriginal? Native American? Barriers.
I get that it's uncomfortable to hackernews because we like to think that every startup operates in a meritocratic manner, but that's been consistently proven false just with the sheer volume of white straight cis-men managing and leading companies in the US, Australia, the EU, wherever you look.
tl;dr: it's not political because the people who understand that it's an issue overwhelmingly tend to be the victims, and the people who don't understand that it's an issue mostly tend not to be victims, and the victims tend to be victimized because of immutable traits rather than ideologies.
The people who are not white, not cis-male, or not straight are the people who have encountered consistent barriers as a result of these negations.
These are all immutable parameters, not political affiliations. No one chooses to be white (or not). No one chooses to be male (or not). No one chooses to be straight (or not).
Women? Barriers.
Trans? Barriers.
Black? Barriers.
Middle Eastern? Even though we're classified as white by tax code? Barriers.
Gay? Barriers.
Jewish? Muslim? Even Catholic? (Considering the mental trauma that often arises with rapid disillusionment from religion, this is largely considered immutable) Barriers.
Hispanic? Asian? Aboriginal? Native American? Barriers.
I get that it's uncomfortable to hackernews because we like to think that every startup operates in a meritocratic manner, but that's been consistently proven false just with the sheer volume of white straight cis-men managing and leading companies in the US, Australia, the EU, wherever you look.
tl;dr: it's not political because the people who understand that it's an issue overwhelmingly tend to be the victims, and the people who don't understand that it's an issue mostly tend not to be victims, and the victims tend to be victimized because of immutable traits rather than ideologies.
Point out your "flaw" before the mob does. Classic tactic. I can't even tell if people are sincere any more, that's how far the PC culture has gone. Nathan now gets a free ride since he has acknowledged his privilege, and has now unlocked new avenues to market his work. Maybe he can get a job as an economic diversity consultant to ensure a perfect racial balance is admitted to conference from now on, given how self-aware he is.
"That I'm a white cis male who dresses in dress shirts and dress slacks(and have done so since I was 19)has given me a passport into conferences,events and more.I crashed conferences without paying during high school that I would have been barred from if I looked any other way"
How does he know? Is there any evidence for this? Were women or blacks 'barred'? Because if so, I would expect someone to sue and win easily.
The rest of the tweets are a stream of similar and all-unsubstantiated accusations. But we can't dispute any of what he said, because he made his accusations without enough specificity for them to be checked in any way. He chose not to name the 2010 conference.
There's nothing trifling about such accusations. Just because nobody is in a position to respond doesn't mean you're not hurting people. Whether the accusations are made against individuals, specific groups, or a whole ethnic group. If you're gonna slag someone you should have evidence, and you should be specific.
In any case, he chose a good strategy to maximize his personal outcomes. He'll benefit greatly from this. D on fairness and principle, A on strategy.
How does he know? Is there any evidence for this? Were women or blacks 'barred'? Because if so, I would expect someone to sue and win easily.
The rest of the tweets are a stream of similar and all-unsubstantiated accusations. But we can't dispute any of what he said, because he made his accusations without enough specificity for them to be checked in any way. He chose not to name the 2010 conference.
There's nothing trifling about such accusations. Just because nobody is in a position to respond doesn't mean you're not hurting people. Whether the accusations are made against individuals, specific groups, or a whole ethnic group. If you're gonna slag someone you should have evidence, and you should be specific.
In any case, he chose a good strategy to maximize his personal outcomes. He'll benefit greatly from this. D on fairness and principle, A on strategy.
It's outrageously easier to fly under the radar if you're white. If you want to look at it in a ridiculously objective way just consider being a black rock on a white sand beach. Even without the concept of racial bias, which is absolutely at play in these situations, you'll be subject to more scrutiny just by not being the norm.
It's easier to fly under the radar when you act to blend in with your environment. If you went to an economics conference in cargo shorts, you are going to stand out. I am pretty sure that a lot of biases are towards how people dress and act rather than skin color, in this given situation. I've snuck into conferences before, generally there are so many people that as long as you are dressed the part and act appropriately you will not even be noticed. Many of the most prestigious economists in the world are people of color, so I have to say what he's saying is largely nonsense.
Anyhow, MMT is a very popular thing right now, so it's obvious he would get attention regardless of his age, gender or race.
Anyhow, MMT is a very popular thing right now, so it's obvious he would get attention regardless of his age, gender or race.
On the flip side there are positive racial biases.
i.e. if you're the only non-white but otherwise fit the part / especially if dressed on the smarter end some people are less likely to question you because they don't want to be seen applying a bias. Actively questioning the one black guy is a lot more obvious than actively not questioning him.
i.e. if you're the only non-white but otherwise fit the part / especially if dressed on the smarter end some people are less likely to question you because they don't want to be seen applying a bias. Actively questioning the one black guy is a lot more obvious than actively not questioning him.
> less likely to question you because they don't want to be seen applying a bias
Many people aren't immediately conscious of their biases. This isn't the same situation, but I thought this article about being a black CEO was illuminating. I've seen the similar bias-exposing mistakes happen to women.
https://www.mercurynews.com/2020/06/16/for-black-ceos-in-sil...
They're easy mistakes to make (I made an similar mistake by assuming a young woman was a nurse and not a doctor), but the most important bit is to learn and be aware.
Many people aren't immediately conscious of their biases. This isn't the same situation, but I thought this article about being a black CEO was illuminating. I've seen the similar bias-exposing mistakes happen to women.
https://www.mercurynews.com/2020/06/16/for-black-ceos-in-sil...
They're easy mistakes to make (I made an similar mistake by assuming a young woman was a nurse and not a doctor), but the most important bit is to learn and be aware.
lucky them not being treated like anyone else
He didn't say it was 'easier to fly under the radar'.
He made a vastly more hurtful claim - that everyone else was 'barred'.
You're simply not responding to the charge that's been made, you've chosen to try to argue a far weaker claim (which is trivially true) instead in the hopes that nobody notices the difference.
He made a vastly more hurtful claim - that everyone else was 'barred'.
You're simply not responding to the charge that's been made, you've chosen to try to argue a far weaker claim (which is trivially true) instead in the hopes that nobody notices the difference.
It's outrageous to fly under the radar if you look like you're supposed to be there. Being white makes it easier in most cases, but it was not required.
Also check out r/investing or r/wallstreetbets, lots of free opinions on what's happening in the world.
There may be lots of free opinions, but I don't believe they have much value to the novice investor. I'll admit there are some hidden gems, but separating the wheat from the chaff requires more insight than these subreddits provide on average.
They're free and worth every penny.
> check out ... r/wallstreetbets
Don't. At least not for anything other than the memes.
Don't. At least not for anything other than the memes.
Serious question: does anyone know when/why that subreddit became what is is today? I used to follow it in the early 2010s and it actually provided some reasonable insights.
I can tell you for sure that Robinhood hasn't contributed positively the quality of content.
I have to beg to differ. The Robinhood "infinite money cheat code" was WSB's finest hour.
What was that, for those of us out of the loop?
I don't remember (and maybe never read) the exact details, but as I recall it wasn't so much "infinite money" as "infinite leverage". You could somehow buy assets leveraged, then make the system "forget" that those assets were already leveraged, so it lets you leverage them again to buy something else.
Decent article here: https://banyanhill.com/robinhood-infinite-leverage-money-che...
Amusing video here: https://www.youtube.com/watch?v=qKXrVriacUM
Amusing video here: https://www.youtube.com/watch?v=qKXrVriacUM
“It literally can’t go tits up”
Idk, it's basically been the same thing for as long as I've been following it, and I started around 2017. The only thing that's really changed is the number of subscribers has exploded.
Here's the front page of WSB from 2016: https://web.archive.org/web/20160706011305/reddit.com/r/wall...
Here's the front page of WSB from 2016: https://web.archive.org/web/20160706011305/reddit.com/r/wall...
Honestly I think the average IQ on WSB is pretty high, you just have to learn to sift through the junk. There are plenty of gold nuggets to be found.
Also the memes are great. What's the point in life if you aren't having fun?
Also the memes are great. What's the point in life if you aren't having fun?
That sub is for the lulz; it’s not a serious analysis of the market. The best description I’ve heard of it was “a jackass for finance, made all the funnier because you realize that people actually got hurt”
4chan with a Bloomberg terminal.
IQ has inherently racist origins...I think as a society we'd do better to remove it from our lexicon, as it's simply racialist pseudoscience meant to preserve the status quo.
lipstone(1)
He shouldn't be so humble, he's not that great.
The headline and the article were incredibly patronizing. I'd argue his response was undignified, as the implication is that due to his privilege, he might have otherwise earned his success if only he had in fact finished his degree. It was a smug gesture that betrays the legitimacy of every other person who has also succeeded without one. The phrase "unctuous git," sprung to mind.
Good on him for succeeding, and one hopes he isn't just being elevated because he can be relied upon to toe the party line, but as someone with a similar background, Tankus is not representative.
The headline and the article were incredibly patronizing. I'd argue his response was undignified, as the implication is that due to his privilege, he might have otherwise earned his success if only he had in fact finished his degree. It was a smug gesture that betrays the legitimacy of every other person who has also succeeded without one. The phrase "unctuous git," sprung to mind.
Good on him for succeeding, and one hopes he isn't just being elevated because he can be relied upon to toe the party line, but as someone with a similar background, Tankus is not representative.
(From Nathan's Twitter after this: https://mobile.twitter.com/NathanTankus/status/1278777095670...)
> I do have a credential- the intersection of my whiteness, maleness and cisness.
Wow, wasn't it just yesterday a post blew up about political correctness gone mad?
I suppose Nathan wanted to get in first and "apologise" for his whiteness, before his rise to fame (which has coincided with the rise of a... particular socio-political movement) punishes him for it.
Isn't it enough to just say "if you're good at something, you don't need a degree"?. But no. He took to Twitter to perpetuate the woke, self-denigrating culture of white Twitter to ensure that his success wasn't hampered by the mob. PC culture has reduced people to snivelling, grovelling shadows of themselves that can't think for themselves.
Forget blind-hiring practices! Should we be putting disclaimers on our resumes that points out if we're a white cis-male so that a company can appropriately punish us for the sin of being born a particular sex and race?
> I do have a credential- the intersection of my whiteness, maleness and cisness.
Wow, wasn't it just yesterday a post blew up about political correctness gone mad?
I suppose Nathan wanted to get in first and "apologise" for his whiteness, before his rise to fame (which has coincided with the rise of a... particular socio-political movement) punishes him for it.
Isn't it enough to just say "if you're good at something, you don't need a degree"?. But no. He took to Twitter to perpetuate the woke, self-denigrating culture of white Twitter to ensure that his success wasn't hampered by the mob. PC culture has reduced people to snivelling, grovelling shadows of themselves that can't think for themselves.
Forget blind-hiring practices! Should we be putting disclaimers on our resumes that points out if we're a white cis-male so that a company can appropriately punish us for the sin of being born a particular sex and race?
This kind of rant is just as boring as any other that would be considered "PC" just for the sake of it and it works by the same logic of first and foremost not being charitable to what was intended/tried to be communicated to then deliberately making up wrong interpretation to try to conjure up ridicule, so yeah, tell me how is it not the same shit on an inverted signal? Seems though that he actually has something else to add rather just acting out butthurt or laying down The New Law, plus he also writes with some humility something which I grew up thinking it's a good thing.
I'm not uncritical of "PC culture" or whatever you wanna call it, I call it left-moralism and I don't like it because it's also a lot of times entirely based on being uncharitable or purposefully misinterpreting others, which is no good for making sense of stuff, I do however care first about if there's truth on statements I may be reading/listening and second about if it brings me or others emotions in one way or another, and that I call: reading/listening.
I'm not uncritical of "PC culture" or whatever you wanna call it, I call it left-moralism and I don't like it because it's also a lot of times entirely based on being uncharitable or purposefully misinterpreting others, which is no good for making sense of stuff, I do however care first about if there's truth on statements I may be reading/listening and second about if it brings me or others emotions in one way or another, and that I call: reading/listening.
My rant wasn't about his intentions. He almost certainly had good intentions. I'm sad that his good nature has been corrupted by the current PC trend, and that he is suffering from imposter syndrome where he is attributing his success to his "whiteness".
When you read that much into a text, how can you be sure you're not projecting your own conceptions and stereotypes on it? It's impossible. Nobody really has access to the cogs running inside ppls minds, you're just claiming you know his ulterior motives. Plus, I'd have to assume that not only you have this special knowledge but that it surpasses the authors own words directly saying otherwise(1), sorry, I can't trust that thought and I do not follow your conclusions. I just don't buy it.
I haven't talked about 'intentions' anywhere either, I criticized your reasoning and you restated your beliefs. More on what I meant by "uncharitableness" is here: https://en.wikipedia.org/wiki/Principle_of_charity
(1):
"This isn't to bemoan or disclaim my success or my hard work. The point is there are plenty of people who have worked just as hard as me, and many harder than me, who aren't having the success I am. It takes my social credentials to take a glidepath to the most interesting and advanced subjects."
"I don't feel guilty for my success but I won't be satisfied until I see a Black trans person given the social license to do what I've done"
I haven't talked about 'intentions' anywhere either, I criticized your reasoning and you restated your beliefs. More on what I meant by "uncharitableness" is here: https://en.wikipedia.org/wiki/Principle_of_charity
(1):
"This isn't to bemoan or disclaim my success or my hard work. The point is there are plenty of people who have worked just as hard as me, and many harder than me, who aren't having the success I am. It takes my social credentials to take a glidepath to the most interesting and advanced subjects."
"I don't feel guilty for my success but I won't be satisfied until I see a Black trans person given the social license to do what I've done"
> "I don't feel guilty for my success but I won't be satisfied until I see a Black trans person given the social license to do what I've done"
"I can't enjoy eating until there are no hungry children in Africa". Good intentions, not a healthy way to live in my opinion.
"I can't enjoy eating until there are no hungry children in Africa". Good intentions, not a healthy way to live in my opinion.
I see what you mean. I mean, nobody should be expected to be always tuned in on this sort of stuff, much less so to, and this is something I specifically think is very wrong, to forget that whatever one may have learned, he was once ignorant of it that this is absolutely natural and normal and should be treated as such, inclusive to those that think they've gotten the absolute unquestionable knowledge.
So, any kind of moralism is just bullshit to me, and this just goes back to the "charity gap" I meant. Ppl going overboard with sermons, that is completely misguided, I don't think that was specifically the case here but I know what you're talking about.
To me this comes from insights I had from philosophy & stoicism, for the whole it's a much more complicated matter.
So, any kind of moralism is just bullshit to me, and this just goes back to the "charity gap" I meant. Ppl going overboard with sermons, that is completely misguided, I don't think that was specifically the case here but I know what you're talking about.
To me this comes from insights I had from philosophy & stoicism, for the whole it's a much more complicated matter.
Or - get this - he genuinely believes that and isn't playing some three-dimensional career chess contrivance.
That's very likely. Nobody is immune from this trend. Despite his great accomplishments in a field in which you usually need a degree, he is now feeling guilty about how maybe he only achieved success because he was white. This is the 2020 version of imposter syndrome. Everybody feels imposter syndrome when they have unexpected success. This is the woke Twitter version of it.
Or he recognizes that part of his success came down to skin color alone. That a black person who took the exact same actions as him would’ve come out less successful.
The only data people use to back this up is "how many black economists are there?". It's as if people's knowledge of statistics completely goes out the window when it comes to this issue. Show me a black person without a degree, with an equal or greater knowledge of economics than Nathan, and with a website and newsletter following, who was denied entry to conferences because of their skin color.
You can't just pluck out one variable and compare them head to head. There are so many other variables that account for success: family support, educational background, financial position, work experience, etc. Boiling everything down to race is unhelpful and doesn't solve any problem.
You can't just pluck out one variable and compare them head to head. There are so many other variables that account for success: family support, educational background, financial position, work experience, etc. Boiling everything down to race is unhelpful and doesn't solve any problem.
> family support, educational background, financial position,
All of which are harder to come by or worse on average for black Americans, because of the US's history of race-based slavery and racial discrimination.
All of which are harder to come by or worse on average for black Americans, because of the US's history of race-based slavery and racial discrimination.
Not denying the history of slavery and discrimination, but [citation needed] for causal link to the modern day, and if there is a statistically significant difference in ascending the "social ladder" between poor, uneducated whites and poor, uneducated blacks.
https://www.epi.org/blog/housing-discrimination-underpins-th...
https://www.brookings.edu/blog/up-front/2020/02/27/examining...
There's a couple articles there's plenty more out there, just Google "racial wealth gap". IMO it is also just common sense, wealth is passed down from generation to generation and black Americans have never been given the opportunity to build much wealth until very recently (but are still held back by the judicial system). There's been very little/no wealth to pass down. This is compunded by the fact that the education system in the US is tied to property value.
> statistically significant difference in ascending the "social ladder" between poor, uneducated whites and poor, uneducated blacks.
I honestly haven't done much reading on that. Here's a study I found quicky though: https://academic.oup.com/qje/article/135/2/711/5687353
I believe the best way to end racism is to address wealth inequality. This could help both poor black kids and poor white kids.
https://www.brookings.edu/blog/up-front/2020/02/27/examining...
There's a couple articles there's plenty more out there, just Google "racial wealth gap". IMO it is also just common sense, wealth is passed down from generation to generation and black Americans have never been given the opportunity to build much wealth until very recently (but are still held back by the judicial system). There's been very little/no wealth to pass down. This is compunded by the fact that the education system in the US is tied to property value.
> statistically significant difference in ascending the "social ladder" between poor, uneducated whites and poor, uneducated blacks.
I honestly haven't done much reading on that. Here's a study I found quicky though: https://academic.oup.com/qje/article/135/2/711/5687353
I believe the best way to end racism is to address wealth inequality. This could help both poor black kids and poor white kids.
Slavery is to blame for lack of family support? That’s a new take.
I’m also curious how far this thing is meant to go, at what point do black Americans become fully independent and responsible for themselves again?
I’m also curious how far this thing is meant to go, at what point do black Americans become fully independent and responsible for themselves again?
Black Americans have never been fully independent from racially-based socioeconomic discrimination in the United States. You've also conveniently ignored GP's additional condition: racial discrimination.
The Prison Industrial Complex and the War on Drugs systematically dismantled the nuclear black family across the United States - this is not a new take. Take it from Lee Atwater, Reagan strategist and co-architect of the Southern Strategy:
>Atwater: Y'all don't quote me on this. You start out in 1954 by saying, "N-----, n-----, n-----". By 1968 you can't say "n-----*"—that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites. And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me—because obviously sitting around saying, "We want to cut this", is much more abstract than even the busing thing, and a hell of a lot more abstract than "N-----, n-----". So, any way you look at it, race is coming on the back-burner.
A black man around Nathan's age would have been born in the middle of the Clinton-era when the government was going "tough on crime." They would have been born in the wake of the Central Park Five case, for perspective, and grown up in the shadow of Superpredator Theory. This before even unpacking the financial and social disenfranchisement of the Jim Crow era and the systematic and brutal dissolution of black wealth ala the Tulsa Race Massacre.
The Prison Industrial Complex and the War on Drugs systematically dismantled the nuclear black family across the United States - this is not a new take. Take it from Lee Atwater, Reagan strategist and co-architect of the Southern Strategy:
>Atwater: Y'all don't quote me on this. You start out in 1954 by saying, "N-----, n-----, n-----". By 1968 you can't say "n-----*"—that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites. And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me—because obviously sitting around saying, "We want to cut this", is much more abstract than even the busing thing, and a hell of a lot more abstract than "N-----, n-----". So, any way you look at it, race is coming on the back-burner.
A black man around Nathan's age would have been born in the middle of the Clinton-era when the government was going "tough on crime." They would have been born in the wake of the Central Park Five case, for perspective, and grown up in the shadow of Superpredator Theory. This before even unpacking the financial and social disenfranchisement of the Jim Crow era and the systematic and brutal dissolution of black wealth ala the Tulsa Race Massacre.
I’m sorry maybe I’m missing the forest for the trees here, did you answer the question of when black Americans will be responsible for themselves? I am all for reparations to be clear, I think the impact of slavery has put them at a severe disadvantage (perhaps stifling their ability to ever climb out of socioeconomic situations) but to fully support the idea I need to know what the plan is. At what point is everyone’s potential considered equal? If the answer is “never” then obviously reparations is not a valid solution and could even be considered harmful (if we look at “potential” as “acceleration” then at some point increasing that value will cause the “velocity” to become so great that we end up right back where we started with some demographic far beyond the rest)
When race stops being a significant variable for success or failure.
Have we forgotten what a "degree" actually means? When you receive a diploma, it just means some institution is willing to attest that you have achieved some sort of qualification.
You can learn something without approval from an institution. Diplomas are typically expensive, so it's not always worth it to get one. Why is this such a foreign concept?