Had this conversation about schooling and how the way the (post)modern pedagogy bends over backwards to respect everyone’s unique perspective has some strange externalities.

As noted below, war crimes aren’t “things I don’t vibe with” and it’s disconcerting how detached…
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https://twitter.com/gravitysra1nbow/status/1748341270915801108

…sentiment has become from reality on topics like this.

It’s not a war crime to be superior at war.

It is not colonialism to exact concessions from other nations during trade.

Our pedagogical impulse to include has caused us to fall so far down the rabbit hole of…
2/5

One of the possible consequences of the Fed being so willing to offer cash for assets (often at par) might be a rates market that focuses mostly on policy risk, not duration risk.

That might seem somewhat ironic given how banks have been getting their assets handed to them…
1/ …by ignoring duration risk, except that they by and large *haven’t* gotten their asses handed to them yet, because of the Fed’s manifold accommodations.

We mused together years ago about the effect putting standing ‘buffer stock’ facilities around the policy rate may have.
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There’s this facet of game theory that I’m sure many of you already know, but it’s been a recurring touchstone for me in my quest to understand human behavior so I’ll walk it it briefly anyhow.

It starts with The Prisoner’s Dilemma, which is probably familiarr
1/ But in case it’s not, it’s a way of modeling a scenario where individual outcomes favor non-cooperation, but the best overall for both players comes from cooperating.

Communicating is the way you solve it, which is why cops try not to let cops-conspirators do that.
2/

Heh. Fine, I’ll take the bait and answer this as if it were asked genuinely since I truly can’t tell on here sometimes.

The CEO of a company is not a technician, they are a… well, they are ultimately a sort of “trust broker.”

This is covered in a bunch of business books…
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https://twitter.com/smtuffy/status/1726044477154906115

…and perhaps the most accessible one I’ve read is called ‘The E-Myth’ which can be distilled down to some very simple but important concepts.

We have this tendency to believe that if we are great at something we should start a business around it.

Like if you’re the best…
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I am fascinated by what’s happening in San Francisco.

It is both microcosm and epicenter of one of the major things driving us all mad:

A plague of revolutionaries.
1/ Silicon Valley loves a good revolutionary, you see, because when you’re placing convex illiquid bets on people, you want to preferentially bet the ones that don’t ever give up.

The perpetual call option, deep in the money.

This is what venture capital wants to purchase.
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“Just around the corner?” “Time to get rich?”

Nah, probably not.

My guess is that it’s a prolonged slow bleed — the RE equivalent of a rolling bear market that bruises the shit out of most participants.

There are a couple reasons for this.
1/ First off, bank loan books kinda suck and it may take a bit for them to remedy this.

Even if the policy rate is lowered, it would make sense for private credit to remain elevated for some time as banks shore up the aggregate profitability of their loan books.
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https://twitter.com/coloradotravis/status/1641263016711966721

So I’m listening to the latest Acid Capitalist podcast with @BobEUnlimited and it’s pretty interesting to hear him and @hendry_hugh go back and forth.

Bob’s thesis, which is well-presented, is essentially that the Covid-era restructuring of debt into longer duration…
1/ …makes the total debt levels less problematic than a more ‘normal’ (from a recent perspective) blend of debt duration might.

Households and corporations have a lot of debt, yes, but the debt servicing is not problematic because they locked in low rates.
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I’ve found that tech organizations are largely defined by their communication pathways.

This is where the bottlenecking will occur when it does, and so org structure and hierarchy is important.

There’s a reason we invented phone trees.
1/ A tree structure is efficient at disseminating information quickly, but this information must come from a reliable, canonical source.

And because of the latter, organizations that value reaction time form into hierarchies.

Of course, as the telephone game teaches us…
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People talk abstractly about “malinvestment” and how it creates bad outcomes, but it can help to walk it out.

The capital incinerators at a16z have provided us with a nice example here which illustrates malinvestment, ‘long and variable lags,’ & why venture funds are too big.
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https://twitter.com/bennetttomlin/status/1645766051509010435

In a moment of 40-watt brilliance, self-certified geniuses like Chris Dixon have elected to give the ape jpeg people $450m.

So what happens next? Well the ape people start spending it.

And they spend it on staff and other goods.
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I was chatting about this with a friend today, attempting to distill it down for an audience who isn’t deep into finance, and I think it can be done decently in a thread.
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https://twitter.com/overshoooot/status/1645578191577436160

Banks “borrow short to lend long” which means they pay in short term rates and earn in long term rates and capture the delta

So when the curve is steep enough, you can lend money into the economy (for, say, capex) and continually ‘roll’ (refinance) your cheaper borrow.
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I’m increasingly taken with the idea that when the fed does start lowering, public/private credit spreads may stay wider for longer, with private rates not respecting a change to policy rates as much as policymakers might desire.

Why? Well it’s about the banks.
1/ You see the banks all have crappy books (low rate loans that are fixed for the mid term something like 3/-7yrs) right now and deposits are being drawn down.

So independent of whether recent measures have solved their immediate solvency issues, and let’s say they have…
2/

We are now at the beginning of the window for when we might start to feel the effect of the first rate hike.

“Long and variable lags.”

Why long, and why variable? Well… the effect of monetary policy on the economy is both a structural and a psychological phenomenon.
1/ It’s structural in that rate hikes do mechanically change the value of collateral and the price of capital.

But it’s psychological in that this doesn’t matter until it starts to impact aggregate decisioning, and that takes time.
2/

Your typical knowledge worker IC (‘Individual Contributor’) caps out at about 6 productive hrs/day worth of focus work.

There’s more stuff to be done, of course — even for ICs there’s some overhead in coordinating the work and whatever else.

But of course…
1/ …people don’t typically work for free, right? So if the business wants to harness all 6 of those hours, then someone should take care to ensure that the ‘other’ stuff that’s not ficus work consumes less than 2hrs/day.

This is the central value add of management.
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I quite like collaborative decisioning but it’s very hard to do well.

The difficulty lies in the pre-work — you see, non-viable options must be discarded before the decisioning meeting happens.

‘Non-viable’ basically boils down to one of two things…
1/4 …and it’s an option that either violates some strategic imperative or is contrary to some stakeholder’s interest.

So you gotta identify all the stakeholders and kinda pre-circle everything before the decision part happens.

Fair bit of work, but that’s not the hard part.
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You can often determine the maturity of someone in Product’s craft by how much they rely on abstractions.

Reliance on abstractions is a weakness for Product roles.

Like let’s say you ask someone, “who is your audience?”
1/ The tendency early in one’s career is to rattle off a bunch of demographic information and focus on the transactional aspects: “our typical buyer is a sole proprietor of a small business that does $1-5m per year.”

A passable answer for a beginner.
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The underlying ability for all communication skills is the ability to model your counterparty’s inner world — the way they, personally, categorize the sensory signal we all receive, and the stories they tell themselves about the relationships between those categories.
1/ People tend to speak about ‘empathy’ in communication, but that’s not what this is.

Empathy is being able to resonate at a felt-sense level with “what it would be like to have an experience.”

This is useful and additive to most communication, but not the keystone.
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People often observe that “power corrupts” but those are mostly useless murmurings, since they rarely if ever opine on the transmission pathway of corruption.

I would posit that at least part of it is that with power comes bobblehead sycophants.
1/ As they surround you, you become detached from reality—your map of it gets corroded, and you begin to miscalculate your moves as a result, all the while receiving confirming signal from those who would cozy up to you for the perks.

That’s a piece of it.
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The danger of a powerful rhetorician is their ability to work *outside* the framing of logic.

They are always empaths, of course—it is a prerequisite.

And they use that ability to sense what questionable premises & fallacious logic you will be susceptible to.
1/ And then they weave their arguments around those errant premises, and those little leaps which make no sense if examined, but which you will accept anyhow.

Because it represents the fetid flight of fancy, some unreality peccadillo you have addicted your identity to.
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Hard moment here for us “I probably don’t need a snowblower” types here in Southwest Colorado.

Interminable pain for the value investor continues. Seriously, I have never shoveled this much in my adult life.

There’s this thing we tech founders snootily refer to as a ‘lifestyle business’ which basically means a software business that won’t ever reach scale since the TAM is too small.

Typically VCs sniff this out quickly and these businesses don’t get outside capital.
2/ Now the thing about entrepreneurship is that like 90% of businesses fail.

And the thing about software is that it’s expensive as hell to get off the ground, before the attractive unit economics kick in.

Combine those two…
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Watching a bitcoin core dev lose millions of dollars to a security breach reminds us, again, why the whole premise of “be your own bank” is extremely stupid.

The foolishness stems from a misconception about how security works in practice.

First off: nothing is ever ‘secure.’
1/ All forms of security are about reducing the ROI of potential attackers—you want to make the attack uneconomical.

Most home security measures can be defeated with a $15 baseball bat taken to a window.

But also, having a security system with cameras…
2/