Finance

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.

[Read more…] about Was Sam Bankman-Fried Running a Ponzi Scheme?

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.

[Read more…] about Why Are All These Crypto Exchanges Going Down?

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.

[Read more…] about What is the Greater Fool Theory?

The United States slipped into a minor recession right after 9/11, so the government used its control over how much money is circulating to make it cheaper to borrow money. Because interest rates were low, people borrowed a lot of money and used much of it to buy houses. While this was happening, home prices were increasing year after year, and everyone assumed this would continue forever.

[Read more…] about What Caused The 2008 Housing Crisis?