Nothing is quite as exciting as exploring the implementation of persistent volume claims

There's a Borges story lurking here...

I wrote a post about this. The frequency of failures was much higher but the individual failures were smaller: https://yarn.pranshum.com/banks2

I wrote a couple of visual essays on the topic.

It's not entirely fair to compare bank failure sizes across times, even inflation adjusted [1]. The rate of asset price growth since 2008 far outstrips inflation.

IMO the frequency of bank failures is more worrying. They tend to come in waves [2].

1: On the size of bank failures: https://yarn.pranshum.com/banks 2. On the frequency of bank failrres: https://yarn.pranshum.com/banks2

From https://yarn.pranshum.com/banks

> Most banks hold more assets than deposits. So in theory, depositors should always be made whole.

No such theory is established; it's the central bank's money printing ability that can always make depositors whole. In the US, the Federal Reserve implicitly backs the Federal Deposit Insurance Corporation.

I get that the money goes brrrr attitude, but it's kind of silly.

The FDIC holds an adequate deposit insurance fund, financed by banks who must buy FDIC insurance. It's over $100 billion dollars, which is enough to weather some major failures. With large failures, the FDIC may issue special assessments to maintain the fund at a safe level (they did this with SVB).

Love it! Thanks for making this.

For folks who have used both, how do you feel Svelte + sveltekit compares to React + Next?

I honestly feel 10x more productive when using SvelteKit instead of Next, and really I have much more experience with React than I ever had with Svelte, it's just that simple and logical. The biggest problem however is ecosystem, you might have difficulties finding Svelte-specific libraries to do what you want and might need to create your own components (i.e. using generic JavaScript libraries), although that's not too hard it can become a bit of a burden to be maintaining it. Overall, I would really recommend people try out SvelteKit, but just pay attention to see if the libraries they may need are available before using it for a bigger project.

OP here, you're right! Argh, this is embarrassing. Thanks for spotting this, fixed now.

It feels like so much of the IPO class of 21-22 was just a 0 interest rate phenomenon. I did this analysis of fintech IPOs last year. So many of them are down by 80% and growth is slowing. https://yarn.pranshum.com/ipos_int

IPOs at least have to file their business model + documents (balance sheet, cash flow, and profit/losses) before taking investor money.

SPACs effectively raise money before they even find a business model. There is no balance sheet, there is no cash flow, there are no profits (or losses).

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So while yes, your discussion about "bubbly IPOs" is warranted, its also kind of off topic with regards to SPACs. SPACs are just another level of risk far beyond IPO.

I feel like a comprehensive discussion would compare IPOs in 2022 vs SPACs in 2022, and see how the two methodologies compared.

Isn’t this kind of the story of the stock market writ large though? I don’t recall the exact number but some researcher found that like 95% of the net gains in the market are attributable to less than 5% of companies.

Nice write up, would be nice to have full company names in addition to tickers.

Generally, this has been a pretty terrible year across the board for Fintech.

A number of stocks are down by over 80%, when the S&P 500 was down about 22%.

The standout fintech stock is DAVE, which is down an amazing 97%!

A common argument for why it is happening is that investors are moving to safer stocks, as interest rates rise. But this is only partially true: a bunch of the businesses are genuinely doing worse. Eg, Coinbase's revenue is down 27% QoQ, Upstart revenue is down 30% QoQ, Affirm revenue is flat and no longer growing.

And most of the sector is super unprofitable, burning a ton of money. Lemonade's margins are -120%.

I wrote about all of these observations here: https://yarn.pranshum.com/ipos_int

A lot of spending in fintech was fueled by low interest rates. So there is kind of a trifecta forming to lower crypto equity prices caused by higher interest rates:

1. The risk-free return is higher, which lowers the value of risky assets broadly.

2. The increased cost of borrowing money makes it more expensive to run a cash-flow negative business.

3. Part of the spending in crypto was driven by speculation, which was a side-effect of free money.

And 4. The price was too high given any reasonable projection in the first place.

"Every banker knows that if he has to prove he is worthy of credit, in fact his credit is gone." - Bagehot

"Exchanges"(Exchanges and brokerages in one) are not supposed to be banks. Everything can be withdrawn from brokerages without them being insolvent.

If the brokerage provides leverage to its customers, it can be subject to the same sort of bank runs that a normal bank can.

Indeed. And in this case, it was from one day to the next.

+1 That's a great book.

"Every banker knows that if he has to prove he is worthy of credit, in fact his credit is gone." - Bagehot

They claim to be an exchange, not a bank, not investing user assets.

https://twitter.com/SBF_FTX/status/1589598285798707202

The Bagehot quote is not SUPPOSED to apply.

> They claim to be an exchange, not a bank

They're liars. They are literally banks with all of the drawbacks and none of the benefits. They do fractional reserve banking with user deposits.

I'm not sure why you are ruling out a Ponzi scheme so quickly.

I don't think a Ponzi scheme adequately explains the problems with centralized cryptocurrency exchanges. They're just banks. There are plenty of scammers in this space, I just don't think Binance is one of them.

The problem is they leverage user deposits as gambling money. These corporations can't bear to watch a pile of money sitting around doing nothing while in their custody. They just need to loan it out.

Did anyone actually believe they weren't loaning out user funds? How were they funding their massive leverage programs? How were they loaning all that money to SBF's trading firm?

Thanks so much, this was really helpful. Your blog post was well written!