Reminder: People never shut up about crypto gains, never mention the losses

[svelte]

Could this possibly be true?

The Bahamas ordered Bankman-Fried (and is that name for real? Seriously?) to transfer all FTX assets to The Bahamas when it filed bankruptcy?

https://www.dailymail.co.uk/news/article-11441311/Bombshell-court-filing-suggests-Sam-Bankman-Fried-transferred-digital-assets-Bahamas-government.html

This thing gets more bizarre every day!

How in the world did he convince some of the biggest institutions in the world to give him millions of dollars? It boggles my mind.

[XBoxBoy]

[quote=svelte]How in the world did he convince some of the biggest institutions in the world to give him millions of dollars? It boggles my mind.[/quote]

I have seen way too many cases of people convincing investors to give them money to build companies that are obviously just scams. The founders pay themselves a fat salary all the while knowing the company will be never work out. It’s just amazing how common this is.

Just like we watched netflix shows about Theranos this last year, I bet in another year or two we are watching a documentary about FTX and Bankman-Fried.

[Coronita]

[quote=svelte]Could this possibly be true?

The Bahamas ordered Bankman-Fried (and is that name for real? Seriously?) to transfer all FTX assets to The Bahamas when it filed bankruptcy?

https://www.dailymail.co.uk/news/article-11441311/Bombshell-court-filing-suggests-Sam-Bankman-Fried-transferred-digital-assets-Bahamas-government.html

This thing gets more bizarre every day!

How in the world did he convince some of the biggest institutions in the world to give him millions of dollars? It boggles my mind.[/quote]

Greed….

I think when the dust settles, it’s pretty clear that what crypto has become is basically get rich ponzi scheme. Whatever original altruist attempt at a digital secure currency for some altruist social benefit has long past the moment people started trying to create their own currency and NFT in the quest to get rich quick.

This shit needs to be regulated so the idiots of the world don’t get burned as easily moving forward…

The other part that is really said is if you go to social media like IG and Facebook, etc you have a bunch of unlicensed kiddie trying to push the ill-informed about crypto and trying to get people to buy… In the financial industry, pushing for financial products has to be licensed and regulated to some extent….It’s the wild wild west on IG and Facebook, and frankly, IG and Facebook bears some responsibility for letting this sort of ill-advised finance “advice” persist and spread throughout their platform.

They should be heavily fined too.

You know when the biggest least financially savy people start cheerleading about how easy it is to make a lot of money gambling in something…then it’s time to get out…It’s like the “water-cooler stock market advice by the office receptionist theory”….If the at the office water cooler, everyone’s talking about how easy it is to make money in the stock market, even the least financially savy people…it’s time to get out.

For me, I’m old school and agree with Warren Buffet on crypto. I won’t touch it..Well $100 tops, is what I have on dogecoin and sushiswap, he he.

[svelte]

[quote=Coronita]
Greed….

I think when the dust settles, it’s pretty clear that what crypto has become is basically get rich ponzi scheme. Whatever original altruist attempt at a digital secure currency for some altruist social benefit has long past the moment people started trying to create their own currency and NFT in the quest to get rich quick.

This shit needs to be regulated so the idiots of the world don’t get burned as easily moving forward…

The other part that is really said is if you go to social media like IG and Facebook, etc you have a bunch of unlicensed kiddie trying to push the ill-informed about crypto and trying to get people to buy… In the financial industry, pushing for financial products has to be licensed and regulated to some extent….It’s the wild wild west on IG and Facebook, and frankly, IG and Facebook bears some responsibility for letting this sort of ill-advised finance “advice” persist and spread throughout their platform.

They should be heavily fined too.

You know when the biggest least financially savy people start cheerleading about how easy it is to make a lot of money gambling in something…then it’s time to get out…It’s like the “water-cooler stock market advice by the office receptionist theory”….If the at the office water cooler, everyone’s talking about how easy it is to make money in the stock market, even the least financially savy people…it’s time to get out.

For me, I’m old school and agree with Warren Buffet on crypto. I won’t touch it..Well $100 tops, is what I have on dogecoin and sushiswap, he he.[/quote]

Agree with virtually all of that.

Last year I had a few friends come up to me very excited about how they got into crypto – dogecoin, etherium, bitcoin, etc. I told them it was my opinion they should only put in “play money”, an amount similar to what they would take to Vegas and not get heavily invested in crypto. I’m even more of that opinion now. 🙂

And if the kind of wrecklessness witnessed with the companies who invested in FTX is indeed common far beyond FTX and crypto as has been suggested elsewhere in this thread, then the world is going to feel much more pain going forward.

I agree with Jeff Bezos – he recently said people should keep a hefty reserve of cash right now because things are going to tank hard soon.

[Coronita]

[quote=svelte][quote=Coronita]
Greed….

I think when the dust settles, it’s pretty clear that what crypto has become is basically get rich ponzi scheme. Whatever original altruist attempt at a digital secure currency for some altruist social benefit has long past the moment people started trying to create their own currency and NFT in the quest to get rich quick.

This shit needs to be regulated so the idiots of the world don’t get burned as easily moving forward…

The other part that is really said is if you go to social media like IG and Facebook, etc you have a bunch of unlicensed kiddie trying to push the ill-informed about crypto and trying to get people to buy… In the financial industry, pushing for financial products has to be licensed and regulated to some extent….It’s the wild wild west on IG and Facebook, and frankly, IG and Facebook bears some responsibility for letting this sort of ill-advised finance “advice” persist and spread throughout their platform.

They should be heavily fined too.

You know when the biggest least financially savy people start cheerleading about how easy it is to make a lot of money gambling in something…then it’s time to get out…It’s like the “water-cooler stock market advice by the office receptionist theory”….If the at the office water cooler, everyone’s talking about how easy it is to make money in the stock market, even the least financially savy people…it’s time to get out.

For me, I’m old school and agree with Warren Buffet on crypto. I won’t touch it..Well $100 tops, is what I have on dogecoin and sushiswap, he he.[/quote]

Agree with virtually all of that.

Last year I had a few friends come up to me very excited about how they got into crypto – dogecoin, etherium, bitcoin, etc. I told them it was my opinion they should only put in “play money”, an amount similar to what they would take to Vegas and not get heavily invested in crypto. I’m even more of that opinion now. 🙂

And if the kind of wrecklessness witnessed with the companies who invested in FTX is indeed common far beyond FTX and crypto as has been suggested elsewhere in this thread, then the world is going to feel much more pain going forward.

I agree with Jeff Bezos – he recently said people should keep a hefty reserve of cash right now because things are going to tank hard soon.[/quote]

Funny you should mention that. I’ve been laddering CDs. Though money markets these days are looking good too.

[Coronita]

https://finance.yahoo.com/m/23a3df73-876e-3924-bd06-a6ed7bca2745/ontario-teachers%E2%80%99-pension.html

Ontario teachers pension fund got caught up in this too.

[The-Shoveler]

[quote=Coronita]
Funny you should mention that. I’ve been laddering CDs. Though money markets these days are looking good too.[/quote]

Moved some into short duration treasuries, I think fed will take it to 7% potentially (unless the whole shebang blows). Time will tell.

[barnaby33]

LOL the whole idea that a number generated by a computer algorithm and based on no other use or value other than its uniqueness (in which there could be literally millions more computer algorithm based coins with different names started every day) could be worth thousands of dollars is just completely insane to me.

Sounds a lot like gold to me. Still gold has uses.
Josh

[plm]

[quote=The-Shoveler][quote=Coronita]
Funny you should mention that. I’ve been laddering CDs. Though money markets these days are looking good too.[/quote]

Moved some into short duration treasuries, I think fed will take it to 7% potentially (unless the whole shebang blows). Time will tell.[/quote]

Building a 13 week treasury bill ladder to get 4 percent instead of 0.2 in my savings account. Stopped buying stocks, thinking it might be good to build cash in case there is a market crash coming so I don’t have to sell stocks at the bottom. Still losing money because inflation is higher but at least not losing as much this way. Bonds are boring but safe. Crypto is exciting but risky so I never bought any.

[Coronita]

[quote=plm][quote=The-Shoveler][quote=Coronita]
Funny you should mention that. I’ve been laddering CDs. Though money markets these days are looking good too.[/quote]

Moved some into short duration treasuries, I think fed will take it to 7% potentially (unless the whole shebang blows). Time will tell.[/quote]

Building a 13 week treasury bill ladder to get 4 percent instead of 0.2 in my savings account. Stopped buying stocks, thinking it might be good to build cash in case there is a market crash coming so I don’t have to sell stocks at the bottom. Still losing money because inflation is higher but at least not losing as much this way. Bonds are boring but safe. Crypto is exciting but risky so I never bought any.[/quote]

These are the CD rates I’m seeing at Schwab.

[img_assist|nid=27756|title=cd november|desc=|link=node|align=left|width=600]

Also the yield for their money market fund SWVXX (not insured) is currently 3.45% and that’s pretty liquid (within 1 trading day)…

https://www.schwabassetmanagement.com/products/swvxx

For my emergency cash, I park it in a basket of CDs 1-6 months, and the money market fund.

[plm]

CDs and treasury bills seem to pay about the same. My 13 week purchase last week was 4.2 percent. Treasury bill seemed easier since it comes straight out and in from my bank. Treasury bills are state tax free.

I do have some cash in my brokerage account which seems to be only getting 0.3 percent. So SWVXX would be like a mutual fund, you buy/sell and then it doesn’t happen until end of the trading day which would be the one day delay? I could probably do a money market there with some of the cash.

[Coronita]

So PLM, the brokerages have to make money somehow, now that they offer free trading and don’t make as much off of the trading, so the they do this with the “float” of your money. So there’s a little caveat to each investment choice. Here’s my understanding of how it is (at least at Schwab). I stand to be corrected by anyone more knowledgeable though…

1. Money Market: the issue with money market is (1) it isn’t insured and (2) it’s like a mutual fund with a settlement date. So there’s 1 day settlement date.

2. CD’s purchased from brokerage. You’re not going to earn interest at the CD rate between the time you purchase the CD and the when the CD term starts (the settlement date). You’ll be earning interest at the rate for your cash held in your brokerage account (cash sweep option), which is probably <1%.. Read the fine print. Let me show you what I mean.
[img_assist|nid=27757|title=cdexample|desc=|link=node|align=left|width=500]

In this example here, you can buy this 1 month cd right now that supposedly has a APY/YTM 3.918% / 3.850%... However, the settlement date for the CD isn't until 11/30/2022... What that means is even if you buy the CD today (11/23), you aren't going to be earning 3.918/3.85% until November 30th when the CD is actually purchased. Between now and 11/30, you're money will be earning the brokerage's interest rate for cash held in the account (which is probably less than 1%). The brokerage house holds on to your cash and actually does the purchase on 11/30... This doesn't matter as much if you buy a longer term CD like a 3 month or 6 month, but if you're buying a 1 month CD, having your cash held for 2 weeks almost half of the term of the CD...And in that case, you're better off buying the money market at 3.74% (I mistyped the yield above at 3.47..It's 3.74%..

If you do buy a CD from your brokerage, you want to buy it right before the settlement date, not weeks before. Sometimes, the CDs sell out the day before settlement, so you might need to check 2 days prior.

The other thing to think about wrto the CD, is what happens after it matures. You can elect to have it automatically roll into the specific bank's next term CD, but you won't know what the interest is. If you don't let it auto-roll, then when your CD matures, it will go back into your brokerage account, and then you'll need to buy another CD, with a waiting period until that new CD's settlement date is reached.

Hence, this is how brokerage makes money... You're paying for the convenience of doing this all from your brokerage account. But they are making money while they keep your cash until the CD settles and keeps the cash at the lower rate until the next CD you buy, if any.

3. CD's bought directly from a bank. If you buy a CD directly from a bank, there's usually no waiting/settlement date. Interest starts accruing right away.. But it can be a pain in the ass to move money to a bank and then when the thing matures move it back, especially if you're only doing 1 or 3 month CDs... And there's usually like a 2-3 days wiring transfer delay for money transfers between bank and brokerage.

--------

So, comparing the money market at 3.74% to the 1 month CD at 3.91% offered at schwab for purchase, the money market is probably better because since it just 1 day of settlement when you buy and when you sell the money market. You can get above 4% CD's for longer terms like 3/6/12 months. But the issue is if the Fed keeps raising rates, might not be a good thing to lock into a 6-12 month CD.

I buy both the money market and the 1 and 3 month CDs from Schwab, because I'm paranoid... although it's very unlikely Schwab's money market would collapse and not pay out, I just like to err on the side of caution and not put all my emergency fund into one basket.

------
The other thing I noticed is a slight difference between Schwab and other brokerages like Fidelity and Vanguard.

With Fidelity and Vanguard, you can designate how you want your cash to be held by the brokerage. So for example, you can designate that cash in the account be held in a "cash-sweep" account that is automatically invested into a money market fund. So in my Fidelity whenever I sell something, the proceeds auto-invest in the Fidelity money market FDRXX that currently has a 3.31% yield.
https://fundresearch.fidelity.com/mutual-funds/performance-and-risk/316067107
Vanguard is similar...

Schwab use to allow you designate your cash-sweep account to default to their SWVXX money market fund. But they no longer allow this. So after you sell an investment it defaults to a cash-sweep account that earns very little interest, I think less than 1%..And you have to explicitly move it into the money market fund...

Again, I think Schwab does this so they can make money on the float, while offering you a higher rate than Vanguard and Fidelity on the money market.

Fidelity allows you to auto-invest your cash into their money market, but their yield is about .50% lower than schwab.

If you move in and out of positions all the time, Schwab is probably not a good option for you because you need to move your settled funds in and out of the money market to get the rate.

If you buy stocks occasionally and sell occasionally, then it's not that much of an effort to do an extra step to move cash into the money market fund....

Pick your poison 🙂

I will probably move my more frequently trading account to Fidelity.

[plm]

I’m good with the treasury direct 13 week tbills ladder. Can get money out each week if I need it and it all can come out in 13 weeks. I’ll have to see when it renews there isn’t lost time to the next week’s auction or it’s instant. I do know that the interest is not going to compound. But doing a money market in the brokerage account is definitely something extra I should do.

[Coronita]

[quote=plm]I’m good with the treasury direct 13 week tbills ladder. Can get money out each week if I need it and it all can come out in 13 weeks. I’ll have to see when it renews there isn’t lost time to the next week’s auction or it’s instant. I do know that the interest is not going to compound. But doing a money market in the brokerage account is definitely something extra I should do.[/quote]

I hate treasury directs login web portal. That thing with the onscreen keyboard that you have to click to type your password is annoying. I know why they did it but still,.it’s annoying.

.

[plm]

Website actually crashed and was down for about a week during the last chance to get the higher ibond rate. Good thing I set up my orders ahead of time. Sort of a retro website like piggington but in a very bad way. But learned how to navigate it. Less people buying bonds due to their website, higher yields for me. So I love their archaic website!

[Author]

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