That's a good way to not answer my question. Do we know of even one loophole Romney would close? Romney said part of his plan was closing loopholes, but the only loopholes that make any real difference are loopholes used by average middle class people such as the home mortgage interest deduction. Regardless of what tricks he has up his sleeves, either closing loopholes is a bogus promise or he should be able to give at least one example of a loophole he might want to close. It sounds like he's promising to do magic.

I have to make much the same point with his comment about cutting government funding of public broadcasting. I think he's right and that's a good example of government spending that could be cut, largely a subsidy to the rich. But if that's the best example he can come up with -- something that won't make any difference to the bottom line -- it suggests he has no better ideas and has no plan for things to actually cut that will make an actual difference.

That's a really good question. Based on long-term party history, you have to favor the Republicans on this. But based on short-term party history, neither party has done much when they were in power. It used to be that you could at least figure that if Congress and the President are from opposite parties, compromise will hold down spending. But a lot of the recent compromise has been "you spend money where I want, and I'll let you spend money where you want". Honestly, I'd say it's a pretty close tie with maybe a slight edge to Romney because he might actually return to old-school Republican reductions in government spending. But if you want tax increases to be part of the solution over cutting government services, then you may prefer Obama, even if you don't think he'll cut the deficit quite as much.

Then perhaps you can tell me which loopholes Romney could possibly close that would make his proposed tax cut revenue neutral.

Even if they mine while running the client, it won't be enough to keep the blockchain safe because of the huge computational advantage specialized hardware has over commodity hardware. However, if transaction fees aren't enough to incentivitize mining by then, it won't be worth attacking anyway.

The difference between a pyramid scheme and a similarly-structured legitimate business is that a pyramid scheme doesn't provide a real product or service that has any value and instead moves around money just by enrolling new people into the scheme who bring the new value in themselves. If bitcoins never take off as a realistic way to transfer value from one place to another and all the value comes from speculation, then bitcoin will eventually collapse for the same reason all pyramid schemes eventually collapse.

It comes down to whether you believe crypto-currencies are a real product and a viable technology for use as a medium of exchange.

It was odd. I watched the entire debate and I didn't think that Romney "won". To me, he came across as a bully and he kept insisting on things that simply couldn't be true.

I think Obama was definitely trying to play it safe and be conservative and not risk any major blunder that Romney could capitalize on. As a result, he didn't really appear as strong as he could have. Maybe that's what everyone else was picking up on.

Or maybe their expectations for Romney were just insanely low.

This is not a case of breaking a single campaign promise. This is a total change in direction and philosophy on the second-biggest issue facing our nation.

If you think Obama will continue the same things Bush was doing, then what do you think Romney is going to do?

Really you just have your choice of liars. On what is quite possibly the most serious issue where a President can actually make a difference -- Executive invocation of the State Secrets doctrine to hide the Federal Government from public scrutiny -- Obama promised to end the Bush practice of widespread invocation and "run the most transparent administration in history". Instead, Obama has launched a war on whistle blowers, prosecuting people for leaking classified information to the press twice as much in just his first term as all other previous administrations combined.

Obama released the famous "torture memos" in 2009. However, his own legal opinions justifying the drone strikes have never been released and he continues to refuse to release them.

http://www.salon.com/2009/02/10/obama_88/
See this article for more on how Obama completely abandoned his most important campaign promise -- to end the abuses Bush started.

(Of course, I certainly don't think a Romney administration would fix this.)

You still have them. Congratulations.

This is a great interview. Frankly, I still consider Nefario a scammer for delisting Goat's assets and suddenly shutting down GLBSE. His delisting of Goat's assets harmed GLBSE customers significantly and no justification for that action has yet been offered nor is there any evidence he even considered the harm it would do to his customers. His sudden shut down of GLBSE also harmed his customers and I don't see any good reason he couldn't have performed that shutdown in a more organized and gradual way. I don't see how shutting it down suddenly and chaotically reduces his legal risk over shutting it down gradually and in an organized way. And, even if so, I firmly believe that he owed it to his customers to take that risk.

Exactly. That's why a house may have a fair market value of, say, $150,000 but in many contexts, it will be valued at $120,000 or so (for example, the IRS will value it at this amount for collection purposes). While its value is well-established at $150,000, people would rather have $150,000 than the house because it costs money and takes time to sell it. It gets even worse if the value is not well-established.

It doesn't matter whether anyone is forcing you to do anything or not. A $150,000 home is not worth as much as $150,000 because you have to put in effort and time to convert the home to $150,000. It gets much worse when the value is difficult to establish. For example, if you have the only house on a block with waterfront and your house hasn't sold in a decade or more, you may have a very hard time getting significant value for that waterfront. You have no good way to establish how much value it adds to the house. It takes a healthy, functioning market to reliably establish value in a way you can expect others to be willing to rely on. There is no substitute.

No. But that will likely cause to it to recover some of its lost value.

Sure, it may be great for a buyer that prices are lower. My point is that it screws over those that hold the asset now.

We know, thanks to a functional market, that Apple stock is worth $630 right now. You can have confidence paying $630 for a share because you at least know that right now you can find other buyers who will pay that price. Such confidence will be impossible in a two-person sale with no functional market. This difficulty in selling the asset and difficulty in a potential buyer having confidence will reduce the amount people are willing to pay. In practice, almost nobody is going to pay $630 for a share of Apple stock if they aren't reasonably assured that the stock is generally valued around that level.

Because liquidity is a significant factor in their value.

My logic was about a decrease in value when an asset is suddenly less liquid than it was before. You can't apply it to situations where there isn't a sudden decrease in liquidity.

All true, but all irrelevant. The sudden loss of liquidity has a catastrophic effect on value. That the shares are backed doesn't really change this.

I'm not saying the value can't go back up if liquidity or a dividend channel is restored. I'm saying value is severely reduced now.

I guess we'll have to agree to disagree. Right now, the market says Apple stock is worth $630/share. Please tell me how you could possibly have figured that out without a functioning market. The market also tells me that an average SUV is worth $25,000. Please tell me how you could possibly have calculated this without a functioning market.

Your example of the PPTs actually makes my point -- we didn't have a functioning market and so their value was grossly overestimated.

Again, arguments about how the value might go up in the future don't translate into rebuttals to the claims that the value has gone down now.

I agree. But the point is that liquidity is a major factor in value. Something you can sell any time at low cost for $100 is worth more than something you could sell for $100 in a week or so with significant effort.

The issue has nothing much to do with DNA but much more to do with learned behavior and the effect the circumstances in which children are raised have on the adults they turn into.

Because they can't be traded and there is no anonymous way to own them. These were the major factors that created their value.

You can make all kinds of logical arguments about what the value of something should be, but the market doesn't care.

The only way to distinguish assets with real value from scampapers is with a functioning market. A market not only provides an efficient way to trade assets, but it also provides a realistic way to measure the value of assets.

An item that you can sell for $100 on an exchange any time you decide you don't want to hold the asset is worth at least $100. Not only can you actually exchange it for $100, but you know that people value it at that level because you know people are willing to buy it at that price. Take that very same asset and eliminate the ability to sell it for $100 and the certain knowledge that others are willing to buy it for $100 and it's not worth $100 any more. Liquidity is part of what makes it valuable.

"I gambled $50 at the slot machines at the casino and came back with $0. I spent money without getting any reward for it. I consider that stealing my money. Edit: Okay, it's misleading in some way."

Can you state what it was that mislead you? Or did you just not understand how it worked and not bother to try to figure it out?

Legally, they probably can't. Morally, publicly stating their desire to do so and making all future actions as shareholders consistent with that promise is sufficient in my view.

Morally, probably so. Legally, there is no higher culpability level than joint and several liability for all harms. (Other than criminal culpability, and I don't think it's likely that could hinge on how you voted.)

Legally, nothing. You can't sell an obligation even if you have a willing buyer. If you could, I'd trade all my credit card debt to some homeless guy for a beer.

Morally, again, I think publicly stating a desire to sever all ties and making all future actions consistent with an attempt to undo the harm to the extent one is able to do so is sufficient in my view. All you can ask is that people do all they reasonably can.

I'm not sure if this is supposed to be a moral argument or a legal argument. As a moral argument, it clearly fails. If shareholders, employees or customers did bad things that contributed to the failure, they are responsible for those actions. As a legal argument, it also fails. If the company is a legal person with limited liability, the company itself is responsible. If the company is not a legal person with limited liability, then all of its principals are fully responsible for the actions of their agents when their agents are acting within the scope of their agency.

The scammer tag is based on moral responsibility. So it would hinge on what actions they took that harmed others. Those who invested in Matthew's bet didn't hurt others and couldn't have done anything to prevent it, so no. As far as those who invested in Bitcoinica and pirateat40, it would depend on their culpability. There aren't simple and obvious answers everyone will agree on. Moral culpability is a slippery question.

The community can act without details if it has no choice. Scammer tags are always provisional and if people don't cooperate, we have no choice but to do the best we can. If someone makes a scam accusation against someone other than Nefario in connection with the GLBSE shutdown, that case should be evaluated based on the strength of the evidence it can present. There is no "GLSE's all Nefario's fault" get out of jail free card for everyone else. They are responsible, legally and morally, for their own actions.

Until and unless someone authorize to represent GLBSE actually makes this argument on behalf of GLBSE, I wouldn't credit it.

If so, he has to say so.

You can't prospectively refute every argument that might be made. You just have to make a case and then the other side has to choose what defense it's going to take. Otherwise, you wind up with an infinite burden of proof. Even if there's a good explanation, the people who are presently losing money deserve to hear that explanation from the people they trusted.

Scammer tags are provisional. They can be removed if new evidence appears. If someone doesn't pay you money they owe you and posts no explanation, we can give them a scammer tag even though they might have gotten hit by a bus. If we find out two weeks later they got hit by a bus and they make payments as soon as they can, we can remove the scammer tag and apologize. Scammer tags are more like warnings than findings of guilt.

Yes, exactly. This is called "common mistake". http://en.wikipedia.org/wiki/Mistake_%28contract_law%29

That's practically the definition of force majeure. http://en.wikipedia.org/wiki/Force_majeure

These are all reasons a contract won't, and shouldn't, be enforced as agreed.

I think Patrick was a fool who suckered a lot of people including himself. I'm not sorry for anything I said to or about him. He certainly doesn't deserve a thank you for what he did.

It's entirely possible his losses are entirely mythical and he is basically just keeping his investors' money. It's possible that was his plan all along. But the evidence supporting that view isn't any stronger than the evidence supporting the view that he never planned to scam anyone, was in fact as naive and foolish as his customers, and took very real losses which he is reasonably sharing with his investors.

The risk of Pirate default, GLBSE shutdown, and the like was reasonably known to both Patrick and his investors and outside the control of Patrick. Losses due to these things weren't incurred due to negligence or malfeasance on Patrick's part (other than that known by and agreed to by his customers, inherent in the fund, and part of the accepted trade-off to get such high rates).

If I borrow money from you to build a hotel and pay you 3%/year and the hotel is destroyed by an earthquake, you are entitled to pursue any assets of mine you can find. You're not a partner in the hotel. But if I borrow money from you to build a casino and pay you 1%/week and the casino is destroyed by an earthquake, you should share the losses just as you would have shared the profits. You're effectively a partner in the casino and it is totally reasonable for you to bear some of the exceptional risk just as you expected to benefit from the expected exceptional return.

I think that's certainly a significant factor. People absolutely do believe that if you use other people's resources to do something, it's "free". And there definitely are a lot of people who believe that society must encourage raising children often accompanied by some silly apocalyptic vision of what would happen if that wasn't done.

Personally, I think people who are sufficiently close to the edge that a social incentive will make the difference of whether they have children or not probably shouldn't have children. I don't see any need for social incentives until there's some kind of population shortage.