I wake up every day passionate about realising entrepreneurial ideas towards better experiences
Sydney, New South Wales
Joined January 2009
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Marc Cote retweeted
Michael Burry made his investors more than $700 million on a trade against American mortgages. Goldman Sachs took the other side. Two years later, he says, Goldman wanted a bigger piece of the same trade.
The Big Short made $133 million at the box office telling that story. Burry told it himself in 2011, free, in 31 minutes at Vanderbilt, where he earned his medical degree.
Christian Bale got an Oscar nomination for playing him. The real talk has about 300,000 views in 15 years.
Burry is a medical doctor. He told the room he was "definitely 50th percentile here at Vanderbilt." He learned the mortgage market from the filings Wall Street was required to publish:
"At times I felt I was the only one reading these things."
Strip out the history and five rules are left.
Read the filings. Subprime loans sold to investors came with mandatory public filings. By summer 2005 they showed interest-only loans at over 40% of the subprime loans passing through Wall Street, up from 10% a year earlier.
Watch the payment, not the rate. With rates at 40-year lows, lenders started selling the monthly payment instead: interest-only loans, then loans where the borrower could "pay next to nothing each month." He timed the crash to 2007, when most of those teaser periods would reset.
Easy credit marks the top. "The point at which the provision of credit was most lax, in my mind, would mark the point of maximal price in the asset."
Growth with falling quality is a warning. In 2004 Countrywide's subprime lending rose 158% while its total lending fell 24%.
The top job sees it last. At nearly every failed bank and every agency, he says, someone saw it as clearly as he did. "None, zero, zero were in the top job."
Hank Paulson came to Treasury from the top job at Goldman Sachs and ran the rescues of AIG, Fannie Mae and Freddie Mac. AIG alone got up to $182 billion of public money.
Burry closed the talk with one piece of advice:
"I might recommend opening a bank account in Canada."
The talk is free on Vanderbilt's YouTube channel. The filings he read were public the whole time.
His edge was reading the pages everyone skipped. Before you sign your next loan, read the page that says what the payment becomes, not what it starts at.
Marc Cote retweeted
A month by month chart of outstanding Australian federal government gross debt since 2003, broken down by government in power.
Make of it what you will.
Marc Cote retweeted
ChatGPT has now a big problem.
Researchers at Oxford and Cambridge exposed a massive threat to large language models.”
They call it “model collapse."
Internet ecosystem is rapidly changing, and generative AI will soon contribute much of the text found online. This forces us to consider what happens to future iterations like gpt-n when they are trained on data scraped from the web that was already generated by an llm.
According to the research, indiscriminately using model-generated content in training causes "irreversible defects" in the resulting ai. the model loses the "tails of the original content distribution." in other words, it begins to forget the creative, fringe, and unique nuances of actual human writing, collapsing into a repetitive echo chamber.
This isn't just a chatgpt issue.. the researchers built theoretical intuition showing this collapse is ubiquitous across learned generative models, occurring in large language models as well as in variational autoencoders and gaussian mixture models.
Tech companies rely on scraping the internet for large-scale data to build smarter models. However, the paper warns that if we want to sustain the benefits of training on web data, model collapse must be taken seriously.
Ultimate takeaway? data collected from genuine human interactions is going to become increasingly valuable in a web filled with ai content.
Marc Cote retweeted
Interesting: 20 years ago, Friday night was the start of the weekend and a big night for seeing friends. Now it looks like any other weeknight.
Why do we think people don't hang with friends on Fridays anymore?
journals.sagepub.com/doi/ful…
Marc Cote retweeted
Single family building permits in BC and Ontario have collapsed to their lowest levels since the 1970’s.
If you own a house, congrats. They’re not making more of them in Vancouver & Toronto.
Marc Cote retweeted
Novak Djokovic in his documentary on why he refused the COVID vaccine:
"Because I didn't need it. Why should I get the vaccine? I'm healthy, I'm an athlete. I had corona. I had immunity. I wasn't a threat to anyone. There was no reason for me to get vaccinated. It's my freedom to choose which that fundamental right that you have as a human being on this planet — the freedom to choose — which was taken from a lot of people."
Marc Cote retweeted
How we got to $1 trillion in debt ... featuring John Howard, Talking Heads and the collapse in fish prices that ended the nation of Newfoundland ... smh.com.au/politics/federal/…
Marc Cote retweeted
Can we pass a law that says that Government is never allowed to say "free" and instead they must always say "tax-payer funded"?
Marc Cote retweeted
Two economists mathematically proved that AI will destroy the economy.
Researchers from Wharton and Boston University published a terryfiying paper called "The AI Layoff Trap."
They mapped out the economic end-game of the AI transition, and it exposes a fatal flaw in competitive capitalism.
When a company replaces a worker with AI, it captures 100% of the wage savings.
But that displaced worker is also a consumer. When they lose their job, they stop buying things.
The company gets all the savings, but the loss of consumer demand is spread across the entire economy.
If there are 20 competitors in a market, a CEO only absorbs 1/20th of the economic damage their layoffs just created.
So every single rational CEO has a mathematical incentive to automate as fast as possible.
They can literally see the cliff approaching, and they still step on the gas.
It triggers an unavoidable Prisoner’s Dilemma. If you don't automate, your competitors will, and they will crush you on price.
It doesn't just hurt workers. It destroys the businesses, too.
The economy gets trapped in an automation arms race. Companies fire their workforce to stay competitive, until the entire consumer base is completely hollowed out.
At the limit, the paper concludes: “Firms automate their way to boundless productivity and zero demand.”
And the scariest part?
The researchers mathematically tested every popular fix.
Universal Basic Income? Fails. It raises the living standard but doesn't change the corporate incentive to cut jobs. Retraining? Fails. Worker equity? Fails.
The paper proves that more competition actually makes the collapse happen faster. And "better" AI makes the damage worse.
The only thing that mathematically stops the collapse is a targeted automation tax, forcing companies to pay for the purchasing power they destroy before they automate the job.
