

The End of Wall Street's Boom - naish
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

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davi
1) Click through, read, upvote post.

2) Look at comments to see what HN denizens have said. See post is a
duplicate. Upvote comment noting that.

3) Think to myself, "I should've checked comments before upvoting post."

4) Think to myself, "Why is it incumbent upon me to do this? The site should
do it for me."

5) Think to myself, "There is an interesting analog between a social news site
and ebay. At any given moment, there is some market for a given story or item
(respectively). The size of this market varies around some mean, through time.
The traction that a particular story/auction receives is a function of the
size of this market."

I have a friend who makes his living off ebay, and he likes the store a lot
better. He says he's getting triple what he would for small-market, rarely
purchased items than he would if he'd posted an auction for the same thing.

A store averages the size of the market through time. An auction samples the
size of the market for a much shorter time, and so experiences more noise in
market size.

A social news site has some algorithm to let stories with traction decay from
the front page as a function of time. The faster this decay, the more
approximately instantaneous the sampling is of the size of the market.

So went a semi-random, diverging-from-topic chain of thoughts during lunch
break. Maybe others will be interested.

~~~
13ren
Lots of people (51 upvotes) didn't see the first one, so maybe it doesn't do
any harm?

Also, there's arguably a market in _titles_ \- I know I've missed stories of
interest to me, because I didn't recognize that aspect of them from a specific
title.

4) [I believe] the site matches URLs, but doesn't catch non-significant
differences, because it's difficult to tell what's significant. e.g. in this
case, the previous submission's URL had an appended: ?tid=true

5) [I believe] there is a HN list with a slower decay, so it's averaged over a
longer period of time (like Digg's "Top in ..." on the RHS):
<http://news.ycombinator.com/best> but it's not very newsy, because it's
averaged over a longer period of time.

With your friend, isn't the asking price also an input? The experience of
getting more sales when you increase prices is not uncommon.

~~~
davi
5) cool! Didn't know about that.

4) fair enough

"Lots of people (51 upvotes) didn't see the first one, so maybe it doesn't do
any harm?"

\- It harms the people who already read the story, and now have decreased
signal:noise on their front page.

\- It helps the people who missed it the first time around who find it
interesting.

\- It helps the people who already read the story, and who were interested in
the HN discussion of the story (at
<http://news.ycombinator.com/item?id=360412>). These people now get an influx
of new comments to think about.

The last point only works because the user community pointed out the
duplicate, and collectively decided that on-topic discussion (as opposed to
this meta-ish discussion) best belonged under the original posting.

Possible conclusion: dupes are okay (even net good) on a site with a
principled user community. Probably net bad on a site with a more chaotic
community.

Feature idea for social news sites: let (high karma?) users fuse dupes'
discussion pages into one.

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shimon
My favorite part: some guys from a hedge fund that's betting against subprime
mortgages, at a subprime industry conference in late 2007:

Their first stop was a speech given by the C.E.O. of Option One, the mortgage
originator owned by H&R Block. When the guy got to the part of his speech
about Option One’s subprime-loan portfolio, he claimed to be expecting a
modest default rate of 5 percent. Eisman raised his hand. Moses and Daniel
sank into their chairs. “It wasn’t a Q&A,” says Moses. “The guy was giving a
speech. He sees Steve’s hand and says, ‘Yes?’”

“Would you say that 5 percent is a probability or a possibility?” Eisman
asked.

A probability, said the C.E.O., and he continued his speech.

Eisman had his hand up in the air again, waving it around. Oh, no, Moses
thought. “The one thing Steve always says,” Daniel explains, “is you must
assume they are lying to you. They will always lie to you.” Moses and Daniel
both knew what Eisman thought of these subprime lenders but didn’t see the
need for him to express it here in this manner. For Eisman wasn’t raising his
hand to ask a question. He had his thumb and index finger in a big circle. He
was using his fingers to speak on his behalf. Zero! they said.

“Yes?” the C.E.O. said, obviously irritated. “Is that another question?”

“No,” said Eisman. “It’s a zero. There is zero probability that your default
rate will be 5 percent.” The losses on subprime loans would be much, much
greater. Before the guy could reply, Eisman’s cell phone rang. Instead of
shutting it off, Eisman reached into his pocket and answered it. “Excuse me,”
he said, standing up. “But I need to take this call.” And with that, he walked
out.

------
jbyers
Duplicate of <http://news.ycombinator.com/item?id=360412>

------
jeroen
Single-page link: [http://www.portfolio.com/news-markets/national-
news/portfoli...](http://www.portfolio.com/news-markets/national-
news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?tid=true&print=true)

(I posted this in the other item first, but as this one is getting a lot of
reads as well and the article is split up into 9 pages, I thought it was worth
a repost.)

------
mberrow
Very revealing. I believe in the conservation of value. In the end there are
losers of value and those that made off with real value. This article explains
the convoluted pipes and flywheels through which the most massive theft of
value in history was performed.

Now if someone (or some article) can explain what the deal is with the black
hole that is AIG and why they are so special to get such huge transfusions of
capital (and Lehman didn't), I would really appreciate it.

~~~
ksvs
_I believe in the conservation of value._

You don't think it's possible to create wealth? Or do you just mean that it is
conserved within the finance industry?

~~~
mberrow
Not by pushing paper around. If you make something concrete, yes. If some
creates a brilliant new patent or technique, yes. But purely paper financial
maneuvers like CDO's and short selling etc. do not create _real_ value in the
aggregate.

------
geuis
yet another site that doesn't correctly forward urls when surfing via iPhone

~~~
dmaclay
Don't you mean "yet another site that iPhones can't navigate" ? It's kind of
like buying a golf cart instead of a car and then complaining that the roads
weren't made to accommodate it.

~~~
geuis
No, you're wrong. Read my other reply. Their site is broken.

