Category: Finance

Health insurance in the USA is deliberately tedious to deal with, because it obfuscates how much you are actually paying to the insurance company versus how much they actually pay out.

The policies given out these days are mostly high deductible health plans and work the same way. There are some terms you should understand.

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People pretend to want crypto to thrive as an actual currency, and maybe some of them are genuine. But most people, including the people with actual money to throw around, are in it just to make money.

Dividends are actually quite simple, they’re just a cash payment to the stockholders.

For the most part public company’s that are making a healthy profit will keep that profit and reinvest it either in R&D or in acquisitions, but sometimes they give a portion of that profit directly to the shareholders – thats a dividend.

Typically if a company decides to pay a dividend it will be either annual or bi-annual, and the payout will be X% of the share price. So if you own 100 shares at a value of $10/share and the dividend is 1% you’ll receive a payment of $10.

SBF/Alameda’s initial strategy was arbitraging price differences between US and Korea/Japan. The different crypto exchanges in different countries would have different prices for the same coin.

In theory this was possible but in practice it was basically impossible. They lost money in Korea due to capital controls, they made some money in Japan but still lost money overall due to the enormous amounts they had to borrow and the high interest rates they were paying.

Ironically enough, Sam Bankman Fried explained it correctly and with a remarkable level of accuracy.

Imagine you have a box. It doesn’t do anything, but the exchange pretends it does some magic finance shit that gives you some stupid 25% or 15% interest if you fill it with dollars.

In finance, the greater fool theory suggests that one can sometimes make money through the purchase of overvalued assets — items with a purchase price drastically exceeding the intrinsic value — if those assets can later be resold at an even higher price.

In this context, one "fool" might pay for an overpriced asset, hoping that he can sell it to an even "greater fool" and make a profit.

This only works as long as there are enough new "greater fools" willing to pay higher and higher prices for the asset.