Weekly Crystallizations #123
Weekly sensemaking update
Hey there,
Welcome to the latest edition of Weekly Crystallizations, a weekly newsletter where I highlight tweets (and occasional Telegram messages) from people making sense of what’s going on in the world today!
Silicon Valley Bank
We’ve got ourselves a bank run!
http://www.brooock.com/a/svb-collapse-exposes-cracks-in-economy
"Between 2020–2022, SVB purchased around $100B worth of long-dated government bonds that were yielding very low interest rates (said to have averaged around 1.5%). As interest rates have dramatically risen over the past year, the value of those bonds has dropped dramatically. In reporting a several billion dollar loss relating to the sale of those bonds, the company spooked its customers into one of the largest bank runs in history."
"We can’t look at the safety of 1Y bonds and compare them with the safety of 10Y bonds when we now have proof of how rapidly the government can change rates and forcefully devalue investments."
"An unintended side effect of the Federal Reserve’s massive rate hikes is that many banks and institutions are holding an unfathomable amount of low-yield debt that is now worth far less than it was a year ago."
SVB used an exemption from Basel III, which allowed it to run a riskier business, and eventually led to its implosion.
Basel III was introduced to force banks to be more conservative, and thus more safe. Downside: this also means bank is going to be less profitable.
European banks were forced to implement Basel III, while the US bankers managed to lobby a loophole for certain types of banks. And sure enough, SVB leveraged this loophole.
We don’t know if Silicon Valley Bank’s head of financial risk management was the best candidate available or a diversity hire based on skin color and sexual orientation. I find it a plausible hypothesis though. For one because clearly they lacked competence on risk management.
AI
https://simonwillison.net/2023/Mar/11/llama/
The best LLMs have been built by a small group of companies and access to them has been closely guarded through proprietary APIs. You cannot run these on your own machine.
There have been LLMs released but none of them are powerful enough, open enough
"This all changed yesterday, thanks to the combination of Facebook’s LLaMA model and llama.cpp by Georgi Gerganov."
Russo-Ukrainian War
COVID-19
Professor Jeffrey S. Morris digs into a newly released analysis into vaccine effectiveness by the UK. I didn't dive too deep into this so the following TLDR; might be a bit off. It seems that after adjusting for multiple confounders and using better adjustment methods than before, they still find that the vaccines (presumably AstraZeneca) significantly reduced the risk of hospitalization and death (albeit a lower effect than expected). Professor Morris goes one step further and normalizes the data based on all cause mortality rates (assuming the vaccines should not be impacting all cause mortality). He still finds a significant positive effect in favor of the vaccines.
Geo-politics
COVID origins
Tech
Worthwhile video where HubSpot CEO walks us through a declarative chat interface powered (I think) by ChatGPT. The idea is that you tell the system what you want it to do and it does it e.g. “how did we do in sales last month” would pull up the sales figures from last month. As I write this this sounds an awful like a chat interface — and it is a chat interface. It’s just much smarter now and able to pull things from the internet, databases and do things it wasn’t specifically programmed to do.
Misc
https://www.ft.com/content/0e2f6f8e-bb03-4fa7-8864-f48f576167d2
The more time teens spend on social media the worse they larger the negative psychological impact, worse so for girls.
An uptick in negative mental health starting in 2010 mirrors the increases seen in youth suicides
"A hyperstition is a belief which becomes true if people believe it’s true. For example, “Dogecoin is a great short-term investment and you need to buy it right now!” is true if everyone believes it is true; lots of people will buy Dogecoin and it will go way up. “The bank is collapsing and you need to get your money out right away” is likewise true; if everyone believes it, there will be a run on the bank."
Things other than words can be hyperstitious slurs.
All lives matter is a hyperstitious slur. If enough people believe it’s offensive it becomes offensive even though the literal interpretation is objectively harmless.
Coffeezilla on how celebrities fell for FTX.
“You know it's kindof too good to be true but the social proof is overwhelming and it overwhelms your kind of like alarm bells."
