Preaching to the choir. We're still on the topic of citizen financial dentistry.

Friday, 28 June, Year 5 d.Tr. | Author: Mircea Popescu

ThickAsThieves At least he had the sense to make his bond callable, unlike Graet or Namworld.
mircea_popescu Why is a callable bond sense ?

jcpham It gives you exit strategy, albeit one that might cost you. But probably a decent exit strategy given x amount of time.
ThickAsThieves Because it needs to end someday, no? What if bitcoin investment market becomes more like the meatspace market, and a reasonable APR is like 5% or whatever these bonds will sell at a premium and he'll be locked in. Making them callable gives a way out.
mircea_popescu This is why bonds have maturity dates. It may need to end sometime, but it may NOT induce uncertainty in the system.

ThickAsThieves Granted he is only offering 1% penalty which is nothing. Makes the whole thing that much more scammy, because he's offering 2% monthly and could call back for less.
mircea_popescu You can't call back "for less" lmao. Jesus fuck I'm trapped in the head of a 5yo! THIS COMMUNITY IS RETARDED.

ThickAsThieves Suppose he takes the loan and then calls them back 3 weeks later at 1% premium, buyer gets shorted 1%.
mircea_popescu No. Buyer gets shorted all the DDi, all the fiscal implications and all the other inconvenience a spontaneously collapsing of its own volition investment structure bringsii. Bonds have terms. There's no such "callable" bs.iii The reason bonds have terms is because bonds finance a definite something, which means they are part of a plan, which plan necessarily has terms to be a plan. The fact that all teh forum ninnies do not know this and do not wish to bother with this doth not make things different.

jcpham So a callable bond is sortof a loan.
mircea_popescu A callable bond is the equivalent of the fiddy bux you lend to your coworker. Fuck me I had to say that. Now there's going to be an office coffee kitten ipo.

jcpham I'll print flyers and visit the local high schools to raise the capital.
ThickAsThieves So if you call it a loan then everything is square?
mircea_popescu ThickAsThieves no. Because you don't "list" loans, even on "exchanges", admitting it's what they are on the strength of it being what they call themselves.

ThickAsThieves Hmm.
mircea_popescu All this shit. All this shit has reasons to exist and causes it's so. Tits on men are there for a reason, not because the original bad fanfic writer fucked up. God is not a fanfic writer, and the random fanfic writer is not motherfucking god. Loans and bonds are different things for cause. That cause is not "the order in which princess pokemon oliver learned the respective words". A bond is not the loan of 2013, a loan is not the bond of 2014. Bloody Hell.

To sum this stuff up :


It's not about how old the fuckwit is. Everyone that hasn't been 21 already will be 21 at some point in the future. It's not about going to Stanford, I used to fuck a girl who lived across the street from Stanford and she had a cat which went to Stanford all the god damned time.

It's not about "more millions than his age". It's not about the secret of the lone mom who discovered how to take out stains in a way big corporations hate. It's not about being reported on by the retarded press (which means all of the press if you don't know better). It's about the business plan and nothing else. Absolutely nothing else at all.

It's about the business plan. That business plan is yet another website purporting to process payments "easier" "hypier" and whatever, green-er ? Fail. That's all.

  1. Due diligence. It's a thing. []
  2. This point can not be accentuated enough. If you create some sort of an asset you can not then change its structuring. Ever. No matter what. In no way and in no manner whatsoever. This is because changes will have unpredictable effects downstream. It having effects means someone will have a better position and someone will have a worse position. This is never acceptable, because they with a worse position now have a valid claim for compensation for your deed. The effects being impredictable however means that you can't even establish the sum total of compensation owed in many cases.

    It's not even a matter of you having or not having enough BTC, now or in the future. It's a matter of making it impossible to correctly and verifiably assign responsibility, which means that making things of this nature makes you one of the scammers. Even if you do not intend to scam anyone, and even if you do not in fact manage to get a car or motorboat or whatever the fuck your retarded mind arbitrarily paints into the "real proof" of scamming.

    This is why assets must be correctly structured by people who know what the fuck it is that they are doing, and this is why blown assets, such as gigavps' crap or such as usagi's crap - and the two are not actually distinguishable - can never be fixed, no matter what happens. The only solution is to behead the causes of the problem and move on. And yes beheading is forever. Contrary to insanities widely held by the illiterate crowd there exists not such a thing as "redemption" and there exists not such a thing as "let's rejudge already adjudicated matters every three to six months in the court of public sentiment, who knows, maybe the verdict changes". []

  3. For the record, in actual sanity land bonds callable by the issuer to exist, to accomodate a very particular situation : the home financing consumer wishes to have the ability to pay early on their mortgage. Since most of these mortgages are packaged into securities and then sliced as bonds, it is unavoidable to bundle the option downstream as the cost of retaining it and [insuring for the] servicing of it is usually too large to make it economically feasible. There's no such equivalent legitimate need at work here in any case. []
Category: Bitcoin
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3 Responses

  1. Mircea Popescu`s avatar
    Mircea Popescu 
    Friday, 28 June 2013

    The main drawback as well as advantage of publishing on Trilema is that you end up having discussions with people. For instance :

    Warren Fugger So, my plan, however insufficient/summarized it may be at the moment, is generally to raise capital in order to grow XYZ through acquisitions, underwriting of IPOs (partially or wholly), creation of PTs that are relevant but do not yet exist, and generally becom a facilitator in similar regards to those. This of course presents me with early investment opportunities, unique arb opportunities, and the ability to seize them while they exist.
    That Guy From Faust Ok. So ?

    WF The original idea, which i think mentioned to you was to raise this money through a bond, rather than liquidate unencumbered parts of my portfolio and the design i am attempting...
    TGFF You're not really in a position to raise bonds, for the following reason : bonds are a financial device whereby relatively large structures with very stable revenue streams finance ops.

    WF to somehow mix this bond with a loan with a fund...
    TGFF Ok, say your thing, I'll listen.

    WF ... by allowing any who participate in it, to have exclusive access to invest in any of the new offerings. I issue whatever-it-is at a face valuem, you buy however many whenever. You collect interest. I take this money and create new offerings for which only these investors may have first access before going to open market. Bondholder may redeem at face value toward purchase or choose not to and keep collecting interest 'til the next offer. Any redeemed bonds may be reissued, each bond also has callability/putability at 5% penalty to the instigator. This is the current design for the most part. I want to strike a balance between being the noob having no right to issue a bond, and designing something new that mixes a bond and a fund.
    TGFF Here's the problem. It's not a matter of you not having the right to issue a bond in the sense ytou're 17 so you may not fuck. It's a thing of you not having the right to add reactors to your design on the grounds that a. the entire thing is made of wood so a reactor will tear it right out, b c d e and f.

    WF I'm not totally understanding, are you saying the current issue is the callability?
    TGFF Let's go into details. what is a reactor ?

    WF Something that is triggered and happens?
    TGFF No. A reactor is a particular type of engine,

    WF Ah hehe
    TGFF With a particular profile of force and consumption. Now, this type of engine is great in some instances (like... fighter jets) and horrible in others. Like... underwater. Or like... for radio controlled small models. Or etc.

    WF So the design is too big for my britches?
    TGFF There's a functional underpinning of the visible world. I grant you, jets look great. Chinese plastic toy manufacturers add plastic molds that look like a reactor on toys that can't fly for this reason. But we're specifically eschewing making plastic models. We want to make the real thing. So for you a bond is not good because you lack the size and the constant revenue stream. For you a bond is a fucking rock.

    WF But it's also a way to create revenue streams.
    TGFF No, it is not. That is the motherfucking point. Bonds do not create revenue streams, bonds only and strictly DIVIDE already existing revenue streams. This is fucking important, like you telling me a reactor is a way to make fuel. No, it's not. Never.

    WF So how do I do what I am going for properly? Are you saying I simply have no right to ask anyone for money to invest with?
    TGFF You have the right to ask people for BTC to invest as much as anyone. BUT !!! not under false pretenses. And preferably not under bad structuring that won't hold your project.

    WF The falsehood being that this is a bond at all?
    TGFF The falsehood being that by calling an equity play a "bond" you are both misrepresenting your revenue streams and robbing your actual equity investors of their equity. It's not so different from bfl tasking "preorders", ie, "bonds".

    WF So the right way to do this is to create a more traditional fund? And include the assets within it?
    TGFF May be. You'd have to lay out all you're doing, and what's what, and see. But if you have no certain future revenue it makes no sense to call anything you're issuing "bonds". As they're not bonds.

    WF I was trying to give the investor some ability to opt out/in of investments as not everything is for everyone.
    TGFF A that's fine! Why doesnt selling his shares give him that ability ?

    WF Because in a fund it would be sweeping.
    TGFF I'm sorry ?

    WF Dropping all assets or none that are within it.
    TGFF You'll have to explain this.

    WF Say I use the Fund BTC to start a S.MG PT and to buy XYZ BTC Service. Now the fund is an investor in both. If you own part of the fund and dont want to be a part of S.MG you must also sell your stake in XYZ to exit the fund. The fund investor has no ability to customize his position.
    TGFF Of course not. That's what he's paying you for : to customize his position. If he wants to do it himself he just fucking does it.

    WF Maybe so, but i do more than that. And he gets more than that.
    TGFF Good for you. It's called added value. There is no point in trying to offer an investor in your investment bank / fund the ability to "customize his position" in that sense. Finance is about controlling risk and alloting responsibility. Just do your job, stop trying to let your investor do your job.

    WF I suppose I could run more than one fund and theme them somehow. By risk or category.
    TGFF You could but it would be premature. Operate fgor a few years first.

    WF I agree.
    TGFF Keep things simple.

    WF Thats actually it. The idea came about as I felt a fund would be more complicated and I wanted to give incentive for ppeople to invest thru me on a case-by-case basis.
    TGFF Just lay it on the table. What exactly is your business plan here ? A re-do of Berkshire ?

    WF I am not trying to mimic anyone. The eovlution is natural. I see ways I can make money and provide offerings.
    TGFF This is pure stupid right there. No such thing as "natural evolution". Do you know how that works ? By most species going extinct.

    WF Ok then call it me adapting then.
    TGFF No dude. You must have a business plan first, and understand it. This is what the fuck I mean when I say "at least he's trying must come before you cut rather than after". You're not in the position of Joe Magic, "I'll do whatever and it'll fall right into place it always does".

    WF Hmm. I cant argue with your saying.
    TGFF Look, this is a swamp, BTC finance (and a superset of the greater finance swamp). It's very easy to lose track of just how deep the waters are.

    WF In other venues I've planned more than in my head but things move so fast in bitcoin, I feel like a shark that must keep moving.
    TGFF You don't have to keep moving. It's a fallacy. And especially you don't have to run blind.

    WF You are right. I have already skipped enough steps.
    TGFF I won't even charge you. I will however publish this, but I won't give out yer name. Maybe it halps more people from the fate of being usagi "through no fault of their own".

    WF Hmm i'm a little worried there's still a unique idea in there for later.
    TGFF Where ?

    WF About the first access and selective investing.
    TGFF You serious ?

    WF You think its garbage?
    TGFF I don't think it's garbage, I think it's beyond obvious.

    WF Maybe to you.
    TGFF What the fuck ?! The idea of being an investment bank ? It was common in 1700s Florence.

    WF Nah, I invented that shit ;)
    TGFF Lol. You're cute at times. Ideas are a dime a dozen anyway. What, the idea of making a Bitcoin game publisher is novel ? What idea. There's no ideas. Stick to doing obvious shit well. You'll come out ahead of all the idiots, which is to say, people with ideas.

    That latter point needs perhaps a little explanation. Idiot is at the source a Greek word, which described the simple man without property or skill, the equivalent of the atom for the animate world if you will : that smallest pinch of something which still retains some semblance of the greater whole it originated with (and in this sense it's connected with the notion of a iota, which survives to this day).

    The Greek idiot was the man who couldn't support himself out of either his history or his ability, and had to rely on something else, perhaps the state. The cubical dweller, the WoW player, the 99% of the Greek world, the idiot. Unchanged since then, today's idiot is a guy without capital or skill, someone who expects to make it through the days strictly on the strength of... his "ideas". Because Progress, while nothing ever changes.

  1. [...] by mythical she means fictitious. [↩]I undersign the story, in that it's a very good summary of one particularly common [...]

  2. [...] basic point that any evaluation of a business is strictly about its business plan and nothing else. [...]

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