I thought this was funny.
Weird comments in the thread about how he/she should have known better.
Author is not making a complaint to demand internet outrage. There is no inflammatory justice warrior content here. Sheesh!
Author admits they screwed up, decided to share the screwup, and who hasnt been trough that exact dunder blunder?
There is a strange human phenomenon, particularly visible online. Some folk see a title like that and it triggers a "How can I blame the author?" urge within before they even open the link.
This happens whenever something bad happens to someone else, be it a car accident or a major illness or being the victim of a crime.
People want to think it wouldn’t happen to them, so they go through all the reasons they would have been able to avoid the situation so that they don’t have to fear it happening to them.
People really don’t want to admit to themselves that there are a lot of things outside our control that can happen to us.
That's mostly because people in good circumstances are usually reluctant to attribute much of it to luck.
It's so much more fun to pretend that everything good that's happened to you, you earned and deserved, rather than a lot of it just being random noise that compounded in the fortunate direction.
That's mostly because luck is only one very small component. The years and years of hard work are much more important. Yeah you need to be "lucky" to find a good opportunity - but everyone is lucky in that way, but most people do nothing about their opportunities.
I saw a video explaining where if you attribute just 5% of outcomes to luck, then the people who have the best outcomes are among the luckiest people.
It's hard to define just how much luck would matter in any given situation, but if you consider every aspect of our lives as part of luck, which I think is what people mean when they debate luck vs hard work, then I think it's a lot higher than 5% actually. That is, things like place/time of birth, parents, family, socioeconomic status at birth, schools, friends, teachers, health, timing of things, chance encounters - these things are all mostly outside of your control.
Someone on hacker news might be thinking how they worked hard for years to learn software engineering, spent time networking, practiced interview questions, applied to several places, performed well in the interviews, and landed a lucrative job. And that's all part of hard work and it's often a necessary part of success. It doesn't feel like you lucked into anything. But the lucky part was mostly all the stuff I mentioned before - things that happened at birth, or things that happened because of others' actions. If you're born an affluent white American, for example, your luck meter is highly filled from the start. Then maybe at some point you had a teacher that helped you in a meaningful way, or you met a friend that influenced your decision making. And let's not forget there are people who are just as qualified, who study hard, practice, do all the same things, and they don't get the job. Maybe because the interviewer had a hangover, or maybe it was just someone else got in before them and wowed the interview team and made up their mind before seeing them. That's luck.
North Korea is one of the very few places that you can't move away from, so I grant you that. All other people who can move freely around the world - yes, it was not luck, it was hard work.
Moving into the US - or being born there - really doesn't make you successful, you'll find yourself grinding daily if you want some success. Actually, you may find it's much harder for you there than elsewhere (where you might find less outrageous success, but with much less hard work).
> It's not luck being born without birth defects, being healthy, and still being alive to this day?
Exactly, that's modern medicine - thank scientists, doctors, engineers and insurance bankers for their hard work. Gods and fate have zero part in it.
People don't want to have to care about anyone else.
They are so burdened with looking out for themselves they only see caring about anyone else as just another burden that they shouldn't have to bear, instead of seeing it as an avenue of shared and thus relieved burden.
So, any excuse to make it so they don't have to care about any other misfortune than their own.
Hmm, not certain if I agree with that. It may boil down to defining “care.”
If people did not care, they wouldn’t read and comment, would they? We can observe there is enough attention and salience for this other person’s situation to achieve some level of “care” in other people’s minds. Maybe the caring involved is a more distant and superficial sort? Maybe it is the kind of caring that comes out of avoiding one’s own cares.
I use this thought personally to observe when I care enough to type in a comment, and which of my own cares I am avoiding when I do so.
I didn't provide enough context to illustrate that my point was about selfishness and avoiding feelings of obligation or guilt?
I am not immune myself even though I levelled the charge. I only get through the day by generous application of denial.
If I can't avoid seeing someone hungry, then plan B is figure out a way to conclude that it is within their own power to feed themselves, and so not my problem.
Failing both of those, then I have to deal with it. I either have to share my food with them or I have to consciously decide I'm ok with keeping mine and ignore their misfortune.
Obviously, intellectually, academically, I know that the world is one big continuous stream of unbelievable tragedy, and I can't actually live even one second for myself if I were to try to treat all of that the same way I do when my own partner suffers so much as a headache. So I don't. I pretend everything is fine by arranging things so that mostly everything I see is fine, and when I see something else I mostly rationalize some sway to ignore it. I drive right by that guy standing at the intersection with the sign, etc.
I just at least try to be self aware that I'm doing that and not confuse a sanity/survival strategy, however justified and necessary, for reality.
I'm saying that a lot of people don't seem to do even that last little part.
I rationalize my choice of inaction when I feel obligation or guilt to take action. I am unable to observe the interior rationalizations of others' inaction.
This is the second comment I've come across today where I read it and immediately think "what an odd comment", and both times it was from your account. I'm curious, now that I am here and experiencing this, what about your day today has tickled the spidey sense. First was the comment about what we look like wearing thongs, another was about 'medicalizing diversity'.
If you don't mind getting analytical, what about today, in your life, is different about today than other days? Just curious. My day has been the same as others, good sleep, waking up easily, tasks in line for the day, no coffee, so I am willing to assume something about your life patterns today is bringing you under my nose.
Not OP, but a lot of people find it very easy to be sociable with successful people (or who they perceive as successful anyway) and will give them preferential treatment.
This post is a fantastic example of the poverty trap. We design laws that, on paper, help the poor; and then we blame them for not taking advantage.
When in reality, they are poorly implemented, poorly advertised, and confusing.
With a $10k cap, this program is clearly intended to help people with low assets. How many people with a net worth under, say, $20k in the US? Tens of millions! How many of those would've really loved the extra $850 to offset this year's record inflation? Basically all of them! How many of them found this obscure website with awful UX and received the money? Approximately none!
That’s definitely a thing too often. The “middlebrow rejection” or something like that. But in this case the OP got a message saying they had exceeded the limit and would get a refund. Then they repeated the transaction at the limit for a total of 20k.
From reading comments here it sounds like the author both misinterpreted things and also compulsively over deposited to test the governments software.
Testing government systems as an outsider is a really bad idea.
Maybe I was primed by the author because I was reading their article, but I understood it the same way they did - the entire $10k was rejected because it put them over the limit. I probably would have tried the same $9975 transaction they did.
Maybe I still don't understand but why didn't he get any I-bonds for either the $10k or the $9975 if they're only refunding the excess? What are you supposed to do if you over-pay? Wait for your refund before buying again?
Because blaming the author means it's their fault, because they're stupid/didn't pay attention/whatever. The alternative is that they just made a mistake that anyone could make, which means the keyboard warriors would need to reconcile the fact that they might have made this mistake. And since we're all Very Smart People, we wouldn't make such a silly mistake. So clearly the author much be a bumbling idiot. It's the only possible explanation.
Another strange human phenomenon is that comments that criticise other comments are guaranteed to be on top in HN.
It's boring, not even about the article, and barely accurate (only very few comments actually criticise the article's author), yet that's the first thing you read here.
Felt like a wallstreetbets post. Inflation is only at "8%" (still remember back in 2021 calling this a conspiracy), so 8 / 12 = ~0.7% = 700 USD loss / month on 10k deposit.
Of course the only place you can get 8% return on savings is at treasury and he already maxed that out.
He’s lucky to get 1% return on a high yield savings so he lost 1/12 = .08%/month so if it takes two months for a refund he lost $16.66 in interest from where he has it parked. My bank’s high yield interest only returns .05% so if I had acted stupidly and made the same mistake I would have missed out on 83 cents for the two months.
The problem with those things is that they fluctuate based on other factors than inflation. So if you want to hedge against inflation without risk, you don’t want to buy fuel and stuff.
Savings accounts haven’t kept up with inflation for as long as I remember. So anyone with cash has plugged it into stuff other than mma. I think that’s why these Ibonds are so popular now.
Any website worth anything would have done a real time check on the users balance and only allow the leftover amount to be used to buy the bonds I.e if I already have $2K worth of bonds then I should be allowed only another $8K worth of bonds. How difficult is it to build this simple business logic into the user experience? Not a lot specially with the resources at their disposal. But unfortunately I can guarantee that the bureaucratic mechanisms , the digital divide that exists in the govt departments will ensure that there is no quick fix for this. And on top of that some of us may think of this as a feature :D and don’t realize what is wrong with this picture.
> check on the users balance and only allow the leftover amount to be used to buy the bonds I.e if I already have $2K worth of bonds then I should be allowed only another $8K worth of bonds.
Your pseudocode already failed the unit tests. The limit is 10k per year, and you can hold I bonds for 30 years. Someone can have 300k of I bonds in their account balance.
Hah, if you've ever used the TreasuryDirect site it's a disaster from the Windows XP days. Reminds me of those old Flash and Silverlight apps. The keyboard in the article is a virtual keyboard you click to type your password in for "security" reasons (yet there's no 2FA app supported).
It made sense at one point in the past when everyone was worried about keyloggers and nobody was thinking about credential stuffing. Information security has come a long way in the past 20 years.
You have not quoted the email correctly. The email says "excess purchase".
As someone who has experience with savings bonds and Treasury Direct, I still have no clue how to interpret that phrase. Savings bonds are discrete things with discrete values, even though TD has worked to smooth over that quality with arbitrary purchase amounts and partial redemptions. "Excess purchase" may very well mean a refund of the entire singular $9,975 bond that was purchased.
The way to find out is to call TD or search around web forums, but it's understandable that OP reacted to one possible implication of the message rather than taking a few hours to find out what it means.
They are probably getting a full refund of both the $10,000 and the $9,975 purchases. Eventually. It's possible they'll get $25 and $9,975 back and end up with $10,000 in bonds total, though I'd doubt it.
The website not stopping or warning you is one thing, though I think the real change needed here is on the backend: when executing the order it should check your limit before trying to transfer the money.
The way they're doing it is probably safer for them in terms of races or whatever, and who knows what ancient Treasury system it's probably interfacing with, but still.
I agree. The ending paragraph was truly funny writing with subtle self-deprecation that I appreciate. I laughed out loud for the first time this weekend
I only clicked on the article because the title said "all my money". I thought there was some glitch where the entire bank account got emptied. But it's just the author putting in the numbers that got withdrawn, and the author having 20K as all his money(if true, not confirmed in the article) is a coincidence. Clickbait title for sure if nothing else.
> They require you to enter your password by clicking on a virtual keyboard. This pseudo-security measure actually only slows down humans, not bots, because you can still edit the value of the text field using Javascript.
I don't think this is generally worth it as a security measure, but the goal is not to protect against automation. Instead, custom on-screen keyboards are attempts to thwart keyloggers.
> Instead, custom on-screen keyboards are attempts to thwart keyloggers.
Commercial malware doesn't work this way. The term "keylogger" is a misnomer.
"Keylogging" without context provides an unintelligible stream of garbage that might have well be from a random number generator. Most malware that I've seen either directly target the browser or the operating system, but in both cases they're looking for an unencrypted HTTPS stream, that they can re-package, upload, and store. With the goal to sell batches of credentials for specific websites.
Many people have this unusual belief that a user's stream of keys would look like e.g. www.example.com(13)username(9)password(13). But that isn't how users typically interact with their browsers, MOST websites are accessed via a search engine or favorites/bookmarks, and users often won't use the keystrokes to navigate between input elements.
Again, CONTEXT is everything with "keylogging," since most of the value is generated from WHERE not just WHAT. "Targeted credential theft" is a better way to describe it since they're stealing structured HTTP form data, not raw keyboard input (and even if they were steaming keycode inputs, they'd likely still be using the browser's context to do so).
So, in my opinion, most malware wouldn't even be aware or need specific support to bypass this virtual keyboard "security" because by the very nature of them they aren't operating at this layer anyway.
> Commercial malware doesn't work this way. The term "keylogger" is a misnomer.
I don't know about commercial malware, but at least in the 90s (which is when these kinds of on-screen keyboards started to appear), it was not unusual to find on a computer "infected" with malware a text file containing every key that was pressed since the malware was installed.
Yes, nowadays malware tends to be much smarter: also capturing an image of the area around the mouse pointer on every click (which is the reason some on-screen keyboards blank the keys when you click), only logging when the window has an specific title (which is the reason some online banking sites add lots of random spaces and punctuation to the window title), or even using lower-level code to hook into the browser and directly capture the form contents on submission (which is the reason several online banking sites require you to use invasive "anti-malware" plugins which attempt to prevent these kinds of hooks).
There's a surprising amount of malware out there that still actually captures keyboard input and nothing else. It's easier and more reliable to implement, especially in a malware context, and is usually plenty enough to extract what the operator wants (usually usernames and passwords for online banking). When additional context is collected it's often in the form of window titles. A lot of tools now gather screenshots and even better on-click screenshots, which defeat this type of on-screen keyboard device and is the main reason it's fallen out of use.
And yes, there is malware that collects unencrypted traffic, but that is _appreciably_ more complex to design and implement than simple keylogging. There's also malware which pulls credentials directly out of the web browser memory, although improved protections on cross-process memory access are making this much harder to do on real operating systems. Both of these are better methods, but they are harder and operating systems are intentionally implementing measure to defeat them. For mostly historic reasons straightforward keylogging remains easy and reliable on modern computers.
The top-level comment you replied to doesn’t mention malware.
In any case, both hardware and software keyloggers exist which would be thwarted by an onscreen keyboard. If I recall correctly, mouse keyboards became popular when keyloggers started being more known, and the following generation of malware took screenshots every time you clicked.
It’s a very obsolete security measure but did make sense briefly.
I think they replied to the right one, making the point that the long comment about malware is missing the point about the type of keylogger this is trying to protect against (because many people also, quite reasonably, use the term "keylogger" as a vague description for password-stealing malware).
Thank you for the general explanation of the state of the art, which makes a lot of sense if one thinks about it.
But it doesn't really refute the kind of snapshot-in-time voodoo that government websites tend to build out and then never change because if doing so were to cause a problem, then someone could get blamed. I've never seen such a UI contraption in the "private" sector of banking. Not that they don't have their own obtuse slow moving corporate bullshit like snake oil "2FA" with varying requirements, it's just less bad.
FWIW related to this topic does anyone know the details of how the IRS website just decides to spit out "Permission Denied" when trying to obtain an EIN? I think it's an Akamai? message, probably due to some user surveillance garbage, but haven't investigated further. Even coming from my own naive residential IP with surveillance-friendly Chromium I still got it. I figured I'd wait a few days and try again, but same thing. It worked fine from a vanilla iPhone on the cell connection, but unfortunately I ended up doing that too late and missed the window to lock in April's rate.
So the malware is running in the user's context, and has the browser's window handle and instead of using that to hook the child input elements directly, they're going to store an unintelligible stream of keystrokes then use the window handle to bundle that with the window's title? Is that a reasonable way to implement malware? Will it result in high quality data for resale?
One of those "Things programmers believe about malware" articles needs to be written. There's a lot of "Schrödinger's cat"-level thinking going on, wherein malware is both running with full rights of the user while ALSO somehow needs to rely on raw keystrokes to record anything.
I think a simple keylogger that also reads window titles is much easier to build, than to read and control content inside a browser.
This kind of technique would work really well if they are targeting a small group of users.
One can argue that reading browser content through a browser extension would be equally easy to implement, but that's harder to hide and limits your scope to only browser activity.
Even if a naive keylogger is only capturing keystrokes and sending that file somewhere. It's a simple script to search for email addresses and then assume the next 8-64 characters are the password. How many of us type in a web address, then go type something else. Then return to the web site and type the user name, go back to work on an email, then come back and type the password?
I would guess approximately no one does this as standard behavior.
Which is ridiculously annoying. I have to edit the HTML every single time to remove "readonly" on that field and paste in my randomly generated password.
That's why I use tampermonkey/userscripts. Make a script that removes disabled property from all form elements in the page, and set it to run when the document finishes loading on every website, then disable it so you can turn it on when necessary. I've got a number of similar scripts (the most used one is generally enabled; it prevents squarespace sites from navigating to a site login even I hit esc to stop the page from loading).
Why are some fields like that? I have never understood why. It happens a lot when entering in bank account numbers. I am almost always copying and pasting the bank account number directly from my bank's website, but yet, these fields require me to type it in, increasing the possibility of a mistake.
I wish I could remember where I saw this UX, but the best is when they not only don't let you paste, but also treat the bank account number like a password field and don't let you see what you're typing in... and you have to do it 2x.
Most likely because the amount of furor and kerfuffle that would be created when "the security system broke" would basically be equal quantities of facepalm and hustle that would phase between canceling each other out and producing undirected chaos.
Like, this brand of "security" is being persisted with, in 2022, when virtually nothing else uses this sort of approach, and the writing's been on the wall for so long you almost can't see the wall for the writing anymore. And yet.
At the end of the day from an actual-security standpoint there's a lot to be said for generally rooting this kind of thing out and doing away with it, but given the direct association to vaults and banks and government (and probably military) systems and whatnot it's one situation where the blowback might genuinely cause enough bad press to require a summary firing or two as a token of reassurance to the type of old-world mindset in charge of this sort of thing. Maybe.
*shrug* that's a worst-case-scenario imagining what might happen, at least. I honestly have no idea. I just get strong "swim away!!" vibes from it, heh
It will enrage you to find out that some sites actually track the value, and if more than one character changes per keystroke, it'll reset the value. It's rare, but I have seen it.
In fact, if you notice when you log in the next time, (for many people) your browser may offer to autocomplete your password and bypass the mouse-driven keyboard, so it's definitely not even hard to thwart.
Android keyboard always runs in its own process. No distinction between first-party and third-party either as they're both just regular apps like the launcher or browser. One simply is the default.
Screenshots wouldn't be of much help. The frequency would need to be almost like a low-fps video recording in order to capture the buttons' pressed state. At that is assuming the state is visually distinct in the first place.
The usual way a keylogger like this would work is taking a screenshot on every mouse click (and maybe every few keystrokes), with the mouse pointer location recorded alongside (if not visible in the screenshot). It is a lot more difficult than just recording keystrokes though.
My intuition tells me that nowadays, if you can embed an arbitrary program "keylogger" onto a computer, it should also log most user events, not just "keyboard events", including screenshots of areas around mouse clicks, maybe a small OCR module etc.
Of course, a physical keylogger is a different beast, but really, if you got physical access enough to install an actual piece of hardware...
I have learned the hard way that when dealing with government software (at least in the US), you must assume the least favorable/most unfavorable interpretation of any information given.
When I saw the email informing the author of the over-purchase, I knew there was no way out. Purchasing the difference, as the author did, would only cause more trouble. The questions now are how much will be refunded, whether any purchases will go through, and whether there will be a fine or legal action. Refer to the rule above for my guesses.
I think many people do not appreciate how devastating this is to public trust.
They assumed the government's software would do this:
(1) Purchase #1 for $25 successful --> reduce remaining limit from $10000 to $9975.
(2) Purchase #2 for $10000 rejected and refund pending --> DO NOT reduce limit since you know the purchase didn't go through.
(3) Purchase #3 for $9975 within limit --> allow purchase, reduce limit to exactly $0.
Instead, at step 2, the software seems to handle the purchase by unconditionally taking $10000 off the limit at purchase time and putting $10000 back later when the refund is processed. (And consequently, at step 3, it failed the purchase.)
There isn't an obvious reason to do it this way, so it's surprising. It seems like if you can reduce the limit, you can check if you've exceeded it and just fail the purchase and never modify the limit (at purchase or refund time).
Oh, I think the email is ambiguous! I had a totally different interpretation, although I absolutely see yours now.
I interpreted "refund of the excess purchase" to mean that it is a refund of the whole purchase. If it were a partial refund, they could have just written "refund of the excess".
By adding "purchase", they made it sound to me like there are two categories of purchases (excess and non-excess) and that this purchase belongs to the excess category. That is, I saw "excess" as an adjective that says why the refund is happening, not how much is being refunded.
The more I analyze the wording, the less I'm sure which interpretation is right.
Me too! My interpretation was obvious to me at first, but after reading your comments and others I can easily see it the other way. I still think my interpretation is more natural, but there’s no question that they should have been less ambiguous. How easy it would have been to use a few more words for more clarity. Also, ideally, the actual amounts in question should have been spelled out in the email.
If I have a $10K credit limit, I charge $9975 and then I pay $9975, my credit limit is automatically increased back to $10K before the payment goes through.
She didn’t have a completely incorrect mental model. But the credit card company is being a lot more lenient than the government is being and the government should be more strict.
I expect the logic for allowing a transaction looks at all 'purchases', including the current one, and sees if the total is over 10,000. If it is, throw an error, send an automated email, and let a human deal with reversing the transaction when they see what happened in the error log.
They thought they exceeded the limit by trying to send $10000+$25, so given that the $10000 was coming back, they expected that they're again $9975 under the limit.
It’s bad English. The unambiguous terminology would be simply “excess” or “excess part of the purchase”. The term “excess purchase” sounds like the entire purchase is excess i.e. the adjective “excess” is modifying the noun “purchase” [the purchase was excess]. But they intended it as a noun adjunct where the noun “purchase” is modifying the noun “excess” [the excess was a purchase]. But this parse is not at all preferably taken syntactically, only the semantics clue you into it.
Very sloppy for a consumer financial communication, but I guess that governments can get away with it.
They could purchase up to $10k in bonds. They exceeded that by $25 dollars. Each dollar or penny or half-penny is a separate portion of a bond in my mind, although I don't know how that works legally. So the excess purchase would be the $25 he was in excess of the maximum purchase. Just the way I interpreted it, but by no means the legal or actual way it's handled.
I found that ambiguous, could either read it as the excess amount or the entirety of the purchase that resulted in excess balance.
But anyway it just shows more UX issues - if it's the former then why didn't the balance update to show $10k; in either case why does it accept the payment before checking? It should just say no you've hit your limit this year, or you've already subscribed $25 this year you're limit is $9975.
It is probably backed by some old mainframe system and done in batches. Earlier the post told it took couple days for 25$ to show up.
So it is not real time system, but likely processed weekly, monthly or like. And all of the messes are bunched up and processed for single out come for period of time.
User was just stupid not to wait a week before next attempt...
'Cannot make further subscription while one is pending, try again later' then.
But I don't see why you can't just record '25' even if it won't settle for days/weeks, and not allow >$9975 in the meantime. (If the $25 doesn't go through then fine, you just end up with $25 capacity still.)
I bet it allows you to make a single >$10k payment only to reject it (on an 8-10week time frame) if it behaves like this.
The email of over payment seems to be dated 13th of April so there should have been some time left in that month. At least I think it is tied to month and not certain date in a month.
A purchase is a well defined noun, and this thing's UI was written by a lawyer that's paid to interpret US tax code.
I'm 90% sure the author will end up with a $25 bond. There's a 10% chance it won't actually cancel the $9975 purchase, due to races between the probably bolted on email part and the thing that reconciles all the transactions by scanning their (emulated?) tape drive at night.
Either way, it's pretty clearly a bug in the server implementation (unless this behavior is accidentally required by law, which wouldn't surprise me either...)
At the end, it's clear that he still thinks that, rather than that he has 10K in I bonds and 10K to be refunded, which seems more consistent with the language and events.
Actually, only the second transaction's rejection is good evidence that the author's interpretation is wrong! The wording of the interface is definitely pretty terrible.
The venn diagram of internet users that read about super specific financial products, decide to buy them, while not even understanding the need to keep an emergency fund such that a move like this leaves them with under $200 in their account seems to be growing.
It seems to be a weird mix of wall street cosplay and financial ineptitude.
I work in the financial advice industry, and I honestly personally believe current legislation in most countries have truly failed to protect normal people from bad financial advice, despite that being their entire point.
The problem is, giving financial advice en-masse is very expensive and risky for a company. You need to ask a lot of questions about the users situation (assets, debt, income, dependants, etc) to make an informed decision. If you give bad financial advice, your putting yourself at big legal risk. The language has to be very specific (aka hard to understand for normal humans). And often the advice comes out as rather un-opinionated and general, which for most people means it's hard to actually action and put in place. All in all, it's a big investment, big cost, stresses out your legal team - which means less companies choose to do it, which in turn make it less accessible.
The alternative camp is very clearly just choosing to give 0 advice. Just giving access to investment products, with a full hands off 'make your own choices man' approach. Think robinhood. This is where people make mistakes.
The weird thing is while legitimate companies are afraid of giving advice, anyone with a social media presence can get online and talk whatever smack they want, with very little worry of blowback. One of the biggest mistakes I see is somebody from one country (say AU) watching a youtuber talking about another country (say US) like it's a universal truth. Different financial systems have their own metas depending on government retirement schemes, importance of credit scores, mortgage systems etc. Most useful and practical advice is country specific.
Legislation has just fully failed to protect consumers from bad advice, by making the barrier to entry so high for legitimate companies looking to inform at scale that it's not financially viable - compared to just doing the hands off 'not our problem man' approach. They've also done nothing to stop people taking advice from randoms online (not that they really could). Unfortunately visiting a personalised financial advisor in the same way you'd visit a doctor, is just expensive and not an option for most.
> And often the advice comes out as rather un-opinionated and general, which for most people means it's hard to actually action and put in place
I agree with this. It seems that I have to make all the choices myself to shield the company from any responsibility so why should I pay some fee for the advice? No wonders that people get advice from random videos on YouTube or any equivalent source.
I have found there is really good advice out there, it's just in places most people won't look.
The first one is books. Go to a book shop, and find a book on personal finances, written by a registered financial advisor in your country, for your country. It'll be long, stuffy, boring as fuck, but you'll likely come away well informed. I think if you're reading HN this would suit.
Second one is personal financial advisers. You want to talk to an independant one, who's not tied to a company that's actually selling financial products. They shouldn't be paid a percentage commision (also called trailhead) on your money - I never understood how somebody can be 'acting in your best interests' if they're paid by how you invest. You should pay them by their time, like you would a doctor. Except it'll cost like $200
You also want a personalised financial adviser. Some advisors say like the one you'd find it you went to a bank, or a mortgage shop have a limited scope - they're only allowed to give advice about the bank's products, or mortgages specifically. You want full picture. Sometimes employee assistance programmes if you have that will actually get you a few free sessions with an adviser, use them.
Ah dang. I was a bit worried I low-balled that number. You might've already seen this, but you tried this guide for finding one? There's a register of advisers in aus, could shop around a bit?
I don't know where you could possibly get high-quality, personalized financial advice (with fiduciary standard) for 200. From my experience it's more likely it's on the order of thousands of dollars.
Question is do you need personalized financial advice? Or would covering the basics be enough? And here I'm talking about average people with somewhat middle or upper-middle class income.
For the most part, no, I don't think most people need it. A boglehead lazy portfolio will be good enough. The tricky bit is what to do if you want to buy a house in the next few years.
I'm not sure it's possible to protect people from bad financial advice without creating class stratification between those who can actually invest in useful things and those that can't.
People are desperate about the future. Gone are the times when having a good job, paying a reasonable mortgage for a reasonably paid house, saving a reasonable amount for retirement, while keeping a reasonable amount for emergencies (rare, before lay-offs become the knee jerk reaction of MBAs to fatten their bonuses).
Due to the increasing financialization of the economy, more and more people feel like they need to become wannabe speculators to protect their situations.
Thanks, Wall Street and Harvard Business School for fucking us all.
And fuck the Uniparty for squashing any real option to them.
Those times never existed for the vast majority of people. Minorities, single women, most men...... None of them had this rose colored past.
Statistically, more people now have more income in the US than ever before. Each income level is higher, some more than others (and this is a static snapshot, most people move around income quintiles throughout a career), options for goods are higher, items are safer (cars especially), and on and on.
The "life used to be so easy to make a good pay and have a great life" views are not backed by the evidence.
> Those times never existed for the vast majority of people. Minorities, single women, most men...... None of them had this rose colored past.
I don't know about that. My minority, immigrant, non-English speaking grandparents and their siblings (several are still alive and in their 90's) all own their homes and are still collecting pensions from their blue-collar private sector jobs. Some of them worked in factories sewing ladies undergarments, purses, and shoes. Some of them worked on road construction crews. And one was a janitor in an office building.
The majority of people never were in a pension plan, and even now a lot of people in pension plans don't work for that employer a full career, only getting partial payouts.
Currently the main source of retirement funds for most retirees is Social Security. So all those supposed people in wonderful pensions from the 1970s and so on either don't exist or make so little from those pensions that SS still pays more.
Don't assume your local situation is what the majority sees.
"By yearend 1960, pension plans covered 23 million persons, about one-half of all private sector workers."
"By yearend 1977, total employer contributions to defined benefit pension plans had risen [...] covering nearly 35 million active employees." [More than half.]
Add to that, the public sector workers that were (mostly) all pension and you have more than a majority of workers on pension plan during that time period. No one is wearing rose tinted glasses.
Yes, obviously today, pensions have been removed from (almost) all private sector work places and are rapidly disappearing from the public sector too. Everything has been converted to some kind of investment plan; to pump money into to Wall Street. And we saw how great these investment plans worked out for the poor folks that had planned to retire around 2008.
I like that you inject "[More than half]" when referring to the nearly 35 million workers in 1977.
Except there were over 90 million workers by then [1]. The FRED series you picked is not all employed people.
> And we saw how great these investment plans worked out for the poor folks that had planned to retire around 2008.
Ah, cherry picking, the best of all logical fallacies.
It's already known that those pensions didn't turn out too well either, since most of the people in that time now get most of their retirement income from Social Security.....
>to pump money into to Wall Street
And now the bias shows. Why not own some productive assets? What do you think pension plans do with money? Sit on it in a safe? Invest them all in the employing company, increasing risk, so that when/if the parent company fails the people get screwed? (Which happens and still happens a lot).
> Ah, cherry picking, the best of all logical fallacies.
I don't appreciate your tone here. Everything I posted was the result of a quick web search. It just so happened that the FRED data I found corroborated the numbers in the study I found. Maybe you missed it, but both the study and FRED data are specifically about private sector workers.
Here is some more data (not hidden behind a paywall like your study):
It looks like at the end of 1977 there was 85M people employed (total) in the US. Which is certainly not "moving above the 90-million mark" as your page suggests. So maybe your data is cherry picked? Is your data even US data? The page you provided doesn't say.
> It's already known that those pensions didn't turn out too well either
You didn't back this up with anything. Private pensions are protected by ERISA that was passed in 1974. It requires employers to have separate assets to cover their pensions and created the PBGC which insures them. The only pensions that I've seen go belly up are state (Kentucky) pensions where the state governments (not beholden to ERISA) raided the pension funds for other things.
> Why not own some productive assets?
If by "productive assets" you mean real estate, the price to play is way too high. And on a moral note, allowing family homes to be commoditizated into investment vehicles for the rich is part of the problem. If, instead, "productive assets" is just your fancy way of saying stocks and their derivatives then yeah; I'm invested in the market. I'm not happy about it, but there isn't another choice.
> And now the bias shows.
Yes I'm biased. Fuck Wall Street. It has nothing to do with "investing in companies". It's all about wealth extraction (from companies and now from dumb money). It produces nothing of value.
Contrary to what Americans apparently believe there is a world outside the US. Half my grandparents were black and yet they bought a house way younger than what I did
Isn’t buying a US backed bond the opposite of “speculation”?. The rate of return for a US bond has been called the “risk free rate of return” since I was in grad school over two decades ago.
In general, yes. However, unlike other bonds I-bonds have no secondary market, so there's no way to liquidate them in an emergency if you need them before their maturity date (1 year).
With I-bonds you don't need to speculate on whether the bond will default, but it does force you to speculate on what your financial situation will be over the next year.
Sorry, I'm not trying to be picky, but I cannot grok this sentence:
> Gone are the times when having a good job, paying a reasonable mortgage for a reasonably paid house, saving a reasonable amount for retirement, while keeping a reasonable amount for emergencies (rare, before lay-offs become the knee jerk reaction of MBAs fatten their bonuses).
Is there a word or half the sentence missing there? I cannot follow your meaning.
I have witnessed this working at FAANG where people usually have the choice to allocate their grants into either risky options or safe, straight cash. The amount of people I see going all-in into the riskiest option and then proceeding to not understand why they lost their "compensation" (?) when the stock drops frightens me.
It's because in tech you are paid so fucking much that any ridiculous screw up you might do only affects you momentarily, you can still afford your bizzaro happy life, if you've fucked your savings money there's always more cash for rent, bills, enjoyment, on the horizon. Life become a fucking toy on some levels. There is no fear.
A lot of FANNG is non-software roles. A lot of FANNG are contractors. A lot of FANNG is over leveraged (house, random tax liabilities, supporting family members).
I’m utterly convinced FANNG comp is overvalued due to selection bias on Blind and direct PR efforts by those companies.
When someone talks about “people working for a FAANG”, realistically no one is referring to Amazon warehouse workers neither are people talking about Uber drivers. Mostly they are talking about software engineers and adjacent roles.
Thats not meant to throw shade on warehouse workers as “lesser”. My dad is retired factory worker.
Yes, and at least at Amazon, they all pay much more than the $130K that it takes to be in the 90th percentile income level in the US if you are at least a mid level (L5) employee.
If you have ever been to any company 401K meeting, the 401K rep will always, always, encourage young people to make risky investments and encourage people closer to retirement to make conservative investments.
Because recruiters love to go on and on about how "if the stock goes to a billion, you'll make a zillion," and they never, ever, ever mention that the stock might become worthless. The other thing is that we've had absolutely stellar economic growth since the 2008 crash, and no one under the age of 32 was working before 2008, so they really have no notion that the economy won't always be growing. It's just not on their radar.
Spotify has both RSUs and options, you can choose which one you want and I think they do a very good job of explaining the differences in risk. You can also choose to be paid in cash if you want zero risk (but also zero gain)
And zero loss as I watch my unvested FAANG RSUs drop by a third. I’m glad at least the first two years were mostly a signing bonus I could use to stabilize my finances - pay off debt and build a cash reserve. My RSUs vest heavily on the back end.
Yes I know, how do you tell someone where you work without telling them where you work.
I have a colleague who just can't justify to themselves having an emergency fund while they still have debt to pay... yet buy a brand new 40k car and think about replacing it after 2 years even though they have nothing against it.
I feel like a lot of people just can't stand having money standing there doing nothing as an insurance policy when they could be making money or buying something with it.
> I have a colleague who just can't justify to themselves having an emergency fund while they still have debt to pay
Depending on the interest rates, and assuming they can keep the line of credit if they lose their job, this might make sense since it's a choice between reducing debt now vs potentially increasing debt later.
The second part is just silly, but it's probably the attitude they got them in debt in the first place.
> people just can't stand having money standing there doing nothing as an insurance policy
And then, they pay more on their actual insurance policies to have low deductibles because they can’t afford a larger deductible because they don’t save anything.
The investment is good and safe. I also bought I bonds and will buy more as I accrue cash. It’s not even really an investment as technically you make $0 in purchasing power. This is more of a UX and lack of emergency fund fail.
This move was calculated though. With incoming pay he knew that he'd be fine regardless. Sure, another emergency before the payback might suck but likely not catastrophic given the $10k coming back in a few weeks.
Oh, I didn't realize he had worked it out so that he could still cover bills, etc. I just caught the ~$300 in the savings account and didnt see the timeline on paychecks and bills.
A Venn diagram visualizes operations between sets; that's the whole point. A diagram with two overlapping circles, for example, shows the sets and their intersection. Venn diagrams can also express unions and other logical relations.
You can take the money out of an ibond with a small penalty after a relatively short time. So it's not a huge risk if you have enough short-term credit, etc, for an emergency before the time comes when you can cash the iBond.
Seriously, what the hell. Acting like this guy is blowing his future on a roulette wheel by getting some savings bonds.
Is anybody else just sick to death of the term "emergency fund"? If you go to /r/personalfinance, every other comment is reminding people to stock up their emergency fund. Towelie says, "Don't forget to bring a towel!"
I'll tell you about my real "emergency fund": In an actual, living emergency, every single dollar I have, in every account, even my IRA, and all my credit lines combined, are my emergency fund. That's the nature of an emergency. If I empty out some specially earmarked emergency fund, I don't tell the doctor to quit taking the bullets out of my spleen because I'm tapped. "Sorry, can't touch my HYSA!" (HYSAs are another butt bug of /r/pf)
What people mean by "emergency fund" obviously is their "don't stupidly overdraft your checking account fund", but they never spell that out.
It doesn’t sound like you understand the purpose of an emergency fund or what it is. It’s for when a random virus takes down society and you lose your job, but you and your family still need to pay for rent and food for 6 months. That’s why you save x months worth of expenses in cash.
If you’re young and don’t have family/debt you can just use your ira as an emergency fund. If you have a family and kids you need cash available for unexpected events. Most people don’t have tech jobs where they make 5k every two weeks. A car accident with no emergency fund means many people can’t get to work, lose their job, etc. They need safe cash for emergencies.
I agree, I get downvoted merciless on r/personalfinance when I say that my only conceivable true “emergency” is a job loss. Anything else I can use credit to income smooth and cash flow. I keep one month of bills in savings
More specifically, I have a HELOC and I’m always getting low and no interest balance transfer options from my bank.
It is also worth understanding when you situation is far more stable than most people. If you've got a stable job and considerable assets then you can basically self insure. Yes, if you surprise need $40,000 and the market is down it will suck to sell a bunch of investments from your taxable brokerage account or rapidly get a HELOC but that case is rare enough that you are willing to eat the loss in that case for additional expected growth.
Almost nobody has this. The r/personalfinance memes exist largely as "the very basics for people who don't have the first idea how to plan for their financial future."
This is just another one of those benefits of being wealthy. On average, self-insuring saves money. But for a lot of people an emergency fund is a critical thing because they don't have access to liquid assets without gargantuan 401k penalties.
This was my same thought process when I was making $80K and trying to dig myself out of bad real estate decisions post 2008 and had less than $100 in savings. Yes I know $80K isn’t a bad income in the grand scheme of things. But it is when you have five mortgages on three properties totaling a half a million dollars during the worse real estate crash in years.
Even then my focus was to always be employable and to be able to find a job quickly.
I've been in the US for 4 years and it seems like the government is just like a computer that you cannot talk to or get issues fixed somehow. It's like, if something goes wrong you're fucked. If USPS loses your documents or even your car's title, or your immigration approval notice, you're fucked, you might need to wait 2 months, or 6, or 8, and nobody cares, nobody will help you. There's no one that can help you.
It's no wonder that people vote for less government influence in the US. They just never had a good experience with it so they want to get rid of it as a band-aid solution.
And ironically, that is the entire problem in a nutshell.
People keep voting for less government (meaning workers) but not less government (meaning scope of responsibility), so the remaining workers must handle larger workloads. That's never worked out well in any industry, and it's bizarre people think it would work any better in government.
Are large organizations in other countries more human friendly? That sounds delightful. My impression from friends in the EU is that it is similar there, at least for housing and healthcare regulations.
Some “nice” bits of government I’ve hit recently in Canada:
When my kid was born I was given a convenient form to fill out that registered my child’s birth, applied for a SIN, applied for the relevant tax breaks, and registered me to be contacted about options for saving for my child’s education.
My city has a nice little online portal where I can see my tax and utility bills, register city maintenance issues, apply for local city programs, etc. It’s pretty decent.
Oh, and the CRA’s NETFILE system is pretty neat. In addition to the expected submitting of taxes online, banks, employers, etc can send documents to netfile which my tax software can automatically retrieve and ingest.
Not saying that any of the above are perfect, but government can (and does sometimes) produce decent systems. Of course, there are always bad parts - I’ve recently had friend and family deal with immigration and death systems that badly need a redesign.
As a dual-citizen, I've had some great experiences at the Swiss Consulate in the US. Though accessing the government through the Department of Foreign Affairs might yield much better service than going directly to the underlying bureaucracy.
Story: when my parents got married, my mother gained Swiss citizenship and they wanted her birth certificate. She told them she didn't have it and that it might not exist anymore, since she was born in South Vietnam, which was no longer a country. They had their colleagues in Vietnam find it for her, and even gave her a copy, without being asked.
For Belgium: The rules are often still a bureaucratic mess, owed in part to the fact that it's easier to slap bandaids on existing systems than design a new system from scratch. The bandaids compound into systems that are often unintuitive, and not always transparent.
I do feel like I benefit greatly from these systems, convoluted though they may be. The goal still is to help people.
The few times I got the short end of the stick, I managed to reach a human the same day.
With some experience in EU and in the UK - the only good experience I had with government is gov.uk information website.
The UK gov has its fair share of problems but gov.uk is great at explaining all their stupid rules.
South European governments are incredibly bad from my experience and from what my friends tell me, Germany, France and the Netherlands are fairly bad as well (in different ways). Maybe nordic countries fare better.
Russia used to be a bureaucracy nightmare but got much better in the last few years.
Government Can Do Nothing Right has been the propaganda line of the right-wing of the American business community since the end of WWII. A lot of the business community resented the social democratic reforms of that time (those ’50s white picket fence times) and so they sought to first argue that government was useless, and then later prove it through their government-sucks politicians.
This goes back way before the 1950's. The sentiment that government is a "necessary evil" is effectively what many, but certainly not all, Founders espoused.
Many Government orgs are underfunded and pay worse than private sector. FB engineers make bank compared to being a federal employee. It’s not surprising creating Fb accounts are easy. Why do we as a society value accounts on an advertisement marketplace more than essential services?
Follow the money, the government is not making money based on its performance, they just get a fixed amount from people and they can even increase it through legislation and a bit of propaganda.
In my neck of the woods (not the US) people do most government things like file their taxes through websites. And it’s for the most part a good experience.
In general, the solution to your problem is to hire an attorney. They're expensive and overkill for most things, but they know how to "talk" to the government. And just as you'd expect from Vogons, it's painful to watch.
Otherwise you're effectively left as your own lawyer, having to know tricks of how to communicate/escalate and doing online research to find out. In general if you can get a government agency on the phone they can be quite helpful (their customer service hasn't been optimized away like private companies), but you still need to know what to ask for and how to work with their bureaucratic minds.
For example, for something like a car's title, you could probably apply for a duplicate title from the DMV and get another one sent. But for immigration problems I've got no idea.
With immigration, attorneys are not a solution either. If USCIS asks them to wait 3 months before asking for re-sending a document, they shall do that. It doesn't matter if you are 2 months away from getting deported. And the papers can get lost again.
For the title, I've known a person that had the issue. It was the duplicate that was lost again, not sure why they couldn't request another one, not sure if a lawyer would have helped. But the result was a wait time of 6 months (instead of the supposed 3-5 weeks)
Similarly why it's often a great idea to get an accountant to do your taxes, as this is also an interface with the government you can just hire someone to do
The immigration system is apparently designed to do as much damage as possible. It certainly is destroying a huge portion of the global economy and polity.
Ok, but if USPS loses your important document, what do you expect them to do about it? They have no idea where it is and, unless someone paid for special tracking, no way to locate it aside from dumb luck.
Whatever agency was sending you your important document has to be the one to re-issue it and resend it. USPS has no role until it comes time to deliver it again.
I wonder: when they say "A refund of the excess purchase will be made...", does that mean they'll refund the entire $10,000 transaction, or will they keep $9,975 of it (so that you do have a $10K i-bond investment) and only refund the excess $25?
Incidentally, that exact confusion is why he made the third transaction for $9,975. The refund on his second transaction will either be for $25 or $10,000, so his third transaction will either be refunded in full or not at all.
If they refund the entirety of the second transaction, logic follows a third transaction of $9,975 would be correct if you actually wanted to buy $10k.
I suspect that's not what's going to happen though. OP will get a refund of $25 + $9,975.
You're forgetting there appears to be a race condition at play. The third transaction was marked as canceled because the second has not finished processing and so is still counting against the total. There is no guarantee the govt system will check that again once 2 completes (in fact, I'd be shocked if it did). And by the time both 2 and 3 process, the window to buy looks like it will be closed per the author's post.
The order won’t actually matter here - but even if it did, the “right” thing will happen either way depending on which interpretation of the email you have.
The third transaction got the same response as the second. Which would actually imply that the common reading of that email (he’s getting $25 back from the second deposit is correct, and he’s going to get the entire $9,975 back from the third.)
In which case, the author would have 20k locked up in the government and only $25 invested.
A horrible way to write a system of course but if the system takes 10 weeks to process a refund then it doesn't sound like the system is that great to begin with
Hopefully the folks whose desk this paperwork ends up on catches it and has the authority to just send back the $10k and transfer the other $10k to bonds.
But would you be willing to bet $850 that your interpretation of the error message is correct? Because that's the decision the author had to make. (Or I suppose they'd be betting $850 minus 8.5% of $25)
They will almost certainly refund the $40 if you call and ask nicely. I have a couple times called (various credit card companies) and said, "Look, I've been a cardholder for years, I pay off my full balance every month, I just forgot this time. Can you please refund the $70 interest fee and the $25 late payment fee"?
You took one for the team. If the world ran on good software, you'd not cautiously deposit only $25 first and you'd not be tempted to stress-test the system with the $10k deposit. If the world ran on good software, the second $9.975k deposit wouldn't have bounced. Don't worry, I'll get back at them in my work by making the users suffer until they understand what good software is!
If the software was good, it would have either returned an error prior to withdrawing funds on the 2nd transaction ($10k), or the return would be $25 (and then it's fine the 3rd transaction failed). Only as a third option would the 3rd transaction be the one that is accepted after rejecting the 2nd entirely.
I was (pleasantly) surprised to see that the analogous website for Mexico, where you buy government-issued bonds called Cetes, is significantly less confusing to use. That is not at all what I expect when comparing government websites between my native Mexico and the US! (Paying taxes is another example of something with much, much better UI/UX in Mexico, but there probably are not many other examples.)
Also, the refunds for Cetes when you go over the limit take a few days, not 8 to 10 weeks.
The system is so poorly designed, who's to say his unusual behavior will be handled properly? That second 10K might just disappear. He let curiosity override the rational, cynical side of his brain. It happens.
This'll be a good story to tell at the bar once all the money comes back. I'm still baffled by how someone thought "let's see what happens if I send $20k here when the system says it shouldn't be possible".
Strip a few zeroes from there and I guess it's worth the funny anecdote, but these are serious amounts of money that the author just sent into the black hole of bureaucracy for shits and giggles.
It’s funny that I think lots of finance assumes that people with large sums of money will do lots of due diligence. So typically people with $20k sitting in their boring old checking don’t make such stupid mistakes. And the mistakes are pretty easy given the pretty anti-UX that banking tends to use.
I think if regular people used these transactions more we’d have more errors. But then I suppose the UX would get improved because we’d have millions of transactions instead of thousands.
As it is now people spend a lot of time and so bad UX can still be successful. I probably spent 20 minutes on the treasurydirect site and their purchase/transfer page as opposed to seconds on my consumer-designed bank page.
Sounds like he will have made his intended 10k investment, there's no indication the system doesn't work as intended (even though it could work a lot better, obviously - the app could check for the investment limit right away, and an 8-week window for refunds, in a system that offers 2-month investments, is borderline scammy).
Yeah, I would think this was a dark pattern, but it was probably just simple incompetence. The refund process sounds like it must involve humans and is therefore expensive. Presumably the system had his id number, as you said, a simple data lookup and filter to avoid over deposits would make much more sense. Setting aside the authors bad decisions, he really was dealing with a ridiculously poor system design.
hmm, I'd debate whether a purchase of something that can be bought in practically continuous increements has to be seen as "all-or-nothing". If you're buying a car, of course, you can only buy a full car or none. but when your remaining purchase volume is [0,9975], I would have interpreted the excess part of a 10000 purchase as only the 10000-9975=25.
also, the 8-week window is indicative that this will be reviewed by a human being, who would hopefully understand the intention behind depositing 25 and then 10000 (the intention behind depositing another 10k might be a bit less clear lol).
So if someone makes an honest mistake and types and extra number, it's OK to both 1) don't process any amount and 2) hold the money for two months. That doesn't feel right to me.
E.g. I buy shares and mistype the ticker or buy extra. It processes but then I notice my mistake and I can either fix it by selling, or decide ir doesn't matter and keep the shares. What doesn't make any sense is the broker keeping the money for two months and not giving me any share.
One of my coworkers told me a long time ago, it's better to increase your withholding allowances. That way the government is giving you an interest free loan.
I agree that the system should be better and it's too much to hold someone's money for that long. At the same time, attempting to toy with a system you don't know is a recipe for trouble.
This is the logic I don’t follow. “Here’s a site with a weird UX responsible for my money, let’s see what happen if I do something silly with it…” Dear god no. Don’t. The red flags…?
Especially when there is two weeks left in the month... Like, maybe wait the same time it took your last transfer to show up just to be sure... Maybe some people just have more money than sense...
“A refund of the excess purchase” seems like $25 from the second purchase and then $9975, the entire third purchase… but maybe it is all but $25 like the author assumed.
"A refund of the excess purchase" seems like it might be the whole amount of the purchase assuming the "purchase" refers to the entire purchase transaction. The wording could have been clearer though and hopefully it's just the $25 from the second purchase that's returned.
Say you go to the refrigerator store and they are selling fridges for $100 each, limit 10, or as stated in this store, limit $1000 in fridges. You give them $1100 to buy 11 fridges. They refund the excess purchase, which would be $100 or one fridge. At least that's my logic here. I feel like the excess purchase is that extra $25 plus the third transaction. But who knows, honestly? It's probably tied up in some barely-known financial law and can only be purchased with exact figures.
You can describe your interpretation all you want, but the English used (excess purchase) is able to be interpreted in either way (the excess over the allowed about or a singular purchase that went over the allowed amount). There is no real way to know which is accurate in this situation unless the OP or someone who works there answers the question.
Is there a problem with me explaining my interpretation? That's all I ever said I was doing. A lot of people were only talking about the excess basically having to be the entire order, so I put in my 2 cents. I never said it was the only possibility.
Edit: I went back to double check that I hadn't replied more times than I realized or something. Nope, 3 whole comments explaining how I thought it might work out. That's if you count the first one where I honestly didn't understand how the author came to the conclusion they should input another $10k.
Are keyloggers that can’t capture screenshots still prevalent? I’d expect any software that can log keys to also be able to take screenshots, so the only thing this could potentially thwart is hardware keyloggers but they’d be a very small minority.
TLDR: this is indeed BS security theatre along the same lines of blocking password managers.
Hardware key loggers, which are impossible to find by antivirus, can't take screenshots. Software keyloggers and other such malware are defended against with antivirus, but hardware keyloggers must be defended against with design.
Your browser will probably remember your password afterwards, so the usability decrease isn't even that bad. And that's not a security flaw either, because hardware keyloggers don't see the autofill values.
Roughly the same thing happened to me on a much much bigger scale. I was making an estimated income tax prepayment (as required by law) on the ridiculous IRS direct pay site. There was no way to undo my error that I could find on the IRS websites. I foolishly thought that when the IRS web page said something like “system problem try again later” meant that I should try again later.
I feel like the agencies should just let Visa or Mastercard handle billing and collection.
In the early days of the web, I did this with college textbooks. It was the very first semester that textbook web sites were open for business. IIRC, they advertised heavily. A zillion college students got on the site all at once to save money and try out this new e-commerce concept, and the site collapsed under the load.
I went through the process 3 times and got an error each time. Eventually I gave up and decided I'd have to buy books in person the old-fashioned way. I'm pretty sure I got at least 2 sets of books delivered to me.
I had to arrange for a return, and customer service wasn't happy about it. These days, it's pretty obvious that an error on a web page doesn't conclusively mean a purchase didn't go through, but back then I don't think either they or I clearly understood that.
I had it in my mind during the Great Recession that quantitative easing was going to create a ton of inflation in the 2010s, so I started putting money in I-Bonds each year. That inflation never came, and I did pull some funds out of the I-Bonds for real estate transactions along the way (no regrets) but I've still been buying them every year as a hedge. What's great today is that the I-Bonds really have softened the blow of inflation, since after having them sit there with a low interest rate for a decade, I'm able to say "AHA! Finally! The I-Bonds were worth it!" It's a brief moment of cheer in each depressing news cycle. That enthusiasm is tempered by the fact that I'm not actually making money with them, of course.
But good lord is that TreasuryDirect site the worst site on the Internet. Every single time - and I mean every single time - I instinctively click the back button to go back to a prior screen only to be presented with an error message and thrown out of my session, requiring another visit to the god-awful virtual keyboard and navigation through menu after menu of curiously similar, poorly-worded options. They can do better.
> They're zero-risk bonds with an interest rate that always matches or exceeds inflation
The caveat is that you must agree with how your govt. calculates inflation. Also, your personal expenses might not be well represented by official inflation. Finally, like any bond, if you sell them before they mature you might get smaller (or higher) returns.
Not saying this is a bad investment though, I just rarely see those risks discussed!
> The caveat is that you must agree with how your govt. calculates inflation.
This is an easy caveat to make as there are many other parts depending on how the US government calculates inflation.
And there aren’t alternate inflation calculations out there, and certainly no consumer financial instruments pegged to them.
For all its flaws, it’s the best we have. I think it’s not discussed because it’s such a sunk risk that it’s not really anything that would change someone’s mind.
> This pseudo-security measure actually only slows down humans, not bots, because you can still edit the value of the text field using Javascript (and in fact it's easier to do it that way if you know how).
Surely this is to prevent keyloggers, no slowing down bots. With that said it is questionable if it is worth it. People would probably pick less secure password as a result.
They actually require a capital letter when creating an account. This led to a few moments of me looking for the shift key on the on-screen keyboard before noticing the note next to the password field.
This reminds me of when I gave my new work-subsidized printer my CC during the pandemic.
It tried ordering new ink based on supply levels and apparently became upset with the supply chain delays so it kept trying to order as the ink remained low. (Of course, I didn’t recognize this for a while…)
Silly me, I had assumed someone would code a simple ‘check-if’ flag in the ‘order ink’ algorithm…
I don’t see any reason to think that most of that delay is in the banking system and have every reason to think the overwhelming majority of the delay is in the US government’s system.
Correct. He’ll get the refund the day after a clerk reviews the transactions and clicks the refund button. The “Please allow N–M weeks…” verbiage you find in many types of contracts is just the other party giving themselves time to conduct that manual review. It should never be taken as an estimate of how long the other party thinks it will actually take.
More likely process for refund will start when system or someone reviews the refund and approves it. That might also take some time to be processed. I can imagine that their systems generally don't need to be exactly fast and might have very old integrations.
Yes, I would think that the ACH to the government can be easily reversed if the account were fraudulent but returning the money is not so easily reversed as a scammer would withdraw it and disappear.
Earning interest from whom? It's the US treasury, in the end they are the one that create money out of thin air. They don't need to swindle a few bucks here and there to invest in short term schemes.
Er, what? Surely he's got the wrong end of the stick and they'll be refunding the excess $25 of his second purchase, (and now the entire $9975 of his superfluous third).
It's not obvious. In general if you attempt to purchase a certain amount or quantity of some item and for some reason it is only possible for them to sell you a smaller amount of that item, with some items a smaller amount will be acceptable to you and with some items a smaller amount is not acceptable.
If the first case delivering the smaller amount and refunding the overpayment would be what the customer would want. In the second case delivering nothing and refunding the entire payment would be what the customer would want.
I could see purchases of financial instruments fall into either group. It would depend on what alternate investments are available to the person. Say I've got $10k to invest and my first choice in investment #1. I try to purchase $10k of #1 and it turns out there is a limit of $5k. My second choice is investment #2 which has no limits.
In that case I'd want $5k in #1 and the other $5k in #2 and so the behavior I'd want from the seller of #1 when I try to buy $10k is to sell me $5k and refund my $5k overpayment.
But suppose #2 has a minimum investment of $6k, and I have no good #3. In this case what I might want is all $10k in #2. When my attempt to purchase $10k of #1 fails I'd want them to sell me nothing and refund all $10k so I can buy #2.
The email is saying, rather clumsily, that the excess $25 of the second purchase will be refunded, and this interpretation is confirmed by fact that the third payment was also deemed to exceed the limit, which it would not have done if the second amount was being rejected in its entirety.
The US Government offers a special savings program called iBonds (not an apple product). Technically they’re referred to as Series I bonds.
These bonds are special. Each citizen can only purchase $10,000 per year. The thing that makes them special is that they have really favorable interest rates that are made up of two components. There’s a fixed component largely controlled by the Fed. Currently this is essential 0% though rates are rising. The second component is tied to inflation. Right now, that component is ~8% for the most recent issuance (there are two issuances per year of these bonds where they recalculate the interest rate). This rate may change if inflation goes up or down.
The bond is special because that 8% is really high compared to other risk free instruments. For example, compare that 8% to what you’re earning on your savings account. Hence why many people have taken interest in iBonds recently.
You can only purchase these instruments directly from the treasury department. Google Treasury Direct. Also there are rules about how long you have to hold them and how much interest you give up if you need to withdraw your money early. Those rules are outlined on Treasury Direct.
Note that the fixed component is fixed for the life of the bond - so bonds purchased while the fixed rate is 0% will be 0% for the lifetime of the bond.
The rate tied to inflation is set every 6 months (May 1 and November 1), and when you buy a bond, the rate holds for 6 months. So if you bought on April 25, then in October you would get approximately 3.6% of the value of the bonds you bought, and the rate would reset to the current 6 month period, which is expected to be somewhere around 9% when they announce it soon.
You can cash in the bonds after either a year or 15 months (I don't remember for sure), but if you cash them in less than 5 years, you lose 3 months of interest. I'm guessing they don't give you money if you cancel when the rate is negative which can happen.
Sorry to be a bit pedantic, but you got me curious, looks like from TreasuryDirect that one doesn’t have to be a citizen to buy and hold, just a resident with a SSN is fine [1]. Everything else right on!
> The bond is special because that 8% is really high compared to other risk free instruments. For example, compare that 8% to what you’re earning on your savings account.
Some people might call that special high interest "free money."
You missed the window to lock in the older interest rate (7.12% APY) for six months, but it is widely expected that the May rate change will increase the rate even higher.
You can still purchase I-Bonds, with the understanding that the May rate will be adjusted again in 6 months (it could go down if inflation goes down) and you won't be able to pull your funds for a minimum of one year.
Yes, if you have a Social Security Number and meet any one of these three conditions:
- United States citizen, whether you live in the U.S. or abroad
- United States resident
- Civilian employee of the United States, no matter where you live
> it dawned on me that not only did I just loan $19,975 to the government for 2 months with zero interest, but I’d locked myself out of the golden window for buying I-bonds.
This guy has less than 20 grand to his name and he's investing in I-Bonds? That's the real tragedy.
Ok, I'll bite - what should they be investing in if their investment horizon is 12 months? The stock market is in the middle of a correction, and there's no telling when that will end.
> This guy has less than 20 grand to his name and he's investing in I-Bonds? That's the real tragedy.
That was the shocking bit for me too, although I suspect (hope?) the author has more money outside that bank account.
I wouldn't recommend anyone with only $20k invest it or at least not entirely.
Sure they have (probably) the best risk-adjusted return right now but Savings I Bonds aren't a great emergency fund because of 12 month lockup and 3 month interest penalty for liquidation in the first 5 years.
Author intended (still intends) to invest only half of that though. Putting $10k in bonds with yields greater than inflation strikes me as a good plan. It's certainly better than keeping the whole amount in sub-inflation-interest bank account.
Once I was on an automated monorail at a zoo and my wife and I were the only people on the train at that moment. I wondered, what would happen if I forced the doors open? The answer is that the train stopped immediately and eventually someone came on the intercom, asked us not to bump the door, and then the train restarted.
Another time, I was using a public restroom and it contained a very large red button with a very large sign that read "ATTENTION DO NOT PUSH RED BUTTON UNLESS IT IS AN EMERGENCY"[1]. I did not push the button and my curiosity about remains unsatisfied.
Point is, just because the Federal government ordains that the limit on series I bonds is $10K purchased electronically plus $5K purchased with tax refund per tax ID[2] per calendar year, you shouldn't expect the web site itself to enforce this limit. There's all sorts of ways you can accidentally or intentionally exceed limits, sometimes systems will catch them, but sometimes not.
In prior years, you could even apparently get away with exceeding the limit with no more than a stern warning not to do it again[3].
I'm fairly confident OP misinterpreted the emails they got from Treasury Direct, and that the Treasury will refund the excess amount of the purchase, not full transaction amount. At this point, they own $10K in Series I bonds and will receive a refund for the excess $10K. I'm curious if they'll get the refund as a single transaction for $10K, or as two transactions of $25 and $9975.
Not sure how it works in the US, but in my country the inflation-indexed bonds are still subject to the capital gains tax, so they offer a true hedge only up to a certain level.
Obviously still better than regular bonds in this regard.
Seeing the US treasury website's incredibly poor UX for buying I-bonds convinced me that, as bad as TurboTax is for doing "free" tax returns (see https://www.propublica.org/article/inside-turbotax-20-year-f...), maybe we would not in fact be better off if the IRS make its own website for doing tax returns.
This reminds me of a time I played with entering data into a terrible system.
A GE MRI scanner had options in the software that could be on, or off. Rather than a check box you typed ‘1’ or ‘0’. This is relatively recently.
I tried for a while to find a field that would accept other values, and eventually found one. When the sequences ran it crashed the scanner and the patient had to be rebooked as the reboot takes a long time.
I.. wouldn't like to be trapped in an MRI machine with an operator who's typing random values into the software to try to see what it does. I mean I know MRIs are relatively safe, but they're still huge machines with moving parts you're supposed to be inside of.
The obsession with the high variable rate on ibonds right now strikes me as weird.
With a fixed rate of 0% at the moment, the ibond is an "investment" which is guaranteed to lose real value because the 'gains' from the ibond are taxed so if the fixed rate is zero it will lose real value. It will also lose value due to systematic understatement of inflation e.g. due to the substitution correction-- but even if you believe that its inflation metric is fair the taxation makes it lose value.
Now-- if your investment plans direct you to hold something cash-like which ibonds withdraw delays are still good enough to satisfy, then okay sure, it does pay more than cash. But that's the right comparison. Ibonds are not, for example, a good alternative to buying a market index with a historical return of 10% after inflation.
What are the options? Get -8% on your checking or savings or a very volatile stock market return? It’s perfect for saving for a down payment. I’d still of course max out 401ks and such in addition
I wouldn't say perfect-- in that there is no strong reason to believe that the returns on your ibonds will reflect the amounts you need for your down payment or the discounted future value of your mortgage payments (particularly since CPI excludes housing)... but it might well be the best option available if you have a short time horizon.
For a long time horizon, broad market index investments have reliably outperformed home prices.
It would be an interesting backtesting question: Imagine you have enough money for a down payment on a median priced home, consider two options: put the money into ibonds vs put the money into a market index. Then after X months, what percentage of the time is the investment still able to meet the downpayment requirements of a median priced home (at that time, which might be more or less than before)?
It's not guaranteed that the ibond option will be less volitile because what we're comparing is market vs home-market, so it might not even win out over short term. For really short windows the ibond interest clawback will hurt it too.
Since home prices have increased substantially faster than inflation the success rate of the ibond option will (assuming the future is like the past) tend to 0% success for longer time windows. Since market returns have outpaced housing costs, the market investment will tend to 100% on longer time windows.
Personally, I might well just go the market index route: Even if we presume the ibond success rate is better in a short window (I think that's a reasonable assumption), "It always takes longer than you expect, even when you take into account Hofstadter's Law" and the market index is the clear winner in the long term.
It would be sad to constantly be expecting to buy a house 1 year out, invest in underperforming investments, and as a result never be able to afford a house because they were always escaping your investment!
Best part is, I went in to login this morning to check my account and it's down for "system maintenance". At least the government is consistent with running a service that feels like it's out of 1998.
I never want to see what their backend database looks like -- probably ROT0ing the passwords.
Posts and threads like this make me so happy to be using the payment stack that is in the UK. We have the Faster Payments scheme which now allows moving £1million pretty much instantly (no card fees).
And now we have open banking which makes creating bank transfers like this trivial for the end user [disclaimer, I work for a leading open banking API company in the UK] and the right API can be just as easy as stripe to use
I guess it's in part helped that we were stuck with only a few old major banks until the last decade when the technology was ready for the new challenger banks to actually offer new interesting ideas. I think the US is stuck with thousands of smallish banks that somehow need to send cash between themselves.
There's an ACH involved here which isn't unrelated to the slow speed, but the main issue here is just that you can only buy this particular savings bond directly from the government using this one website.
“if you buy before May this year, you get a guaranteed ~8.5% return over the next 12 months”
I don’t think this is correct. They’re going to re-calculate the interest rate 6 months from May and it could be less than ~8.5%. So you’re really just guaranteed ~4.25% for half the year.
If you bought in April, you locked in the April rate for 6 months, and then the May rate for 6 more. Both values were known last month, which is why it's ~8.5%.
If you buy in May, you lock in the May rate for 6 months and then an unknown rate after that.
I'm glad to see I'm not the only internet user who wonders "will this fail?" to the point that they try the problematic action before their original, intended action. It's this kind of thinking that got me into software QA a decade ago.
They are lagging or get less of a return. The TIPS I have are yielding 6.25% right now. Still a fine place to park if you think the market might dump more or go sideways. Just pay attention to when the dividend pays and don’t sell before that
Yes. There are TIPS, which are like I-bonds in that their yield is indexed to inflation, but unlike I-bonds in that you can't buy them at an artificially low price.
I thought the OP was being hyperbolic with the description of how comically bad this website is, until today when I tried it. Among other absurdities and mistakes that not even the most junior dev would make:
* Passwords require a mix of upper/lower and special characters, however when entering your password on the ALL UPPERCASE VIRTUAL KEYBOARD, you're informed that they're not case-sensitive.
* Any use of the back button gets you to an error page, from which there is no way to get back to your account. You're now logged out.
It's as if whoever built the site never even tested it.
My understanding is that he bought $25, then another $9975 when he tried the $10k purchase, then $0 when he tried the $9975 purchase. So he should receive $10k in bonds and $25 + $9975 in refunds.
It's the US government so it's safer to assume that only a $25 transaction went through. I am surprised the person didn't rethink things after the experiment went badly with $10K in limbo. It sounds like they should just mess around on a testnet the next time they feel like bucking the system.
Anyone know when this became possible? I've been buying I-bonds for years and it's news to me. Paper bonds have been a hassle, all-online is a huge improvement.
It's not really golden. It' just i-bond inflation rates are high at the moment.
The bond rates are set per 6 month window - but you get it relative to the purchase date. So if you buy before the last possible day before the rate change date you would get 7.12% (annualized) for 6 months then 9.6% (annualized) for 6 months. If you buy after the rate change, you would get 9.6% (annualized) followed by some yet to be determined yield for 6 months.
So the undetermined inflation rate for November 2022 has to go down to less than 7.12% (annualized) for that (the April case) to be a real "golden" opportunity? How likely is that?
In my personal calculations, I've been comparing the return from I bonds to CDs. Right now, the I bond provides higher interest than CDs have provided since the 80s.
However, since the I bond term readjusts in 6 mo intervals, it's possible for CD rates to catch up in the next two years as interest rates rise.
So if there is anything 'golden' about the situation, it's the opportunity to (perhaps briefly) receive 80s-era guaranteed interest rates.
One interesting thing is that even nominal Treasuries are yielding above CDs at the moment but the difference is more like 20 bps or so.
Can you imagine the people who bought i bonds in the 2000s when the fixed yield part of the return was 3.6%? Though they obviously had their ups and downs, but right now if they held on they are sitting on a year of 10%+ yields.
Yes. I don't think anyone knows for sure - like 7.12% seemed amazing at the time but we didn't expect an oil shock or a war in europe.
Bear in mind there are some other technicalities with i-bonds. They are all documented on the treasury direct website:
- you have to hold it for a minimum of 12 months
- there are two parts of the bond a fixed rate (currently 0%) which is set for the lifetime of the bond, and the variable rate which is tried to inflation
- if you hold it for less than 5 years when you withdraw there will be a 3mo interest penalty
- you're limited to 10k purchased per SSN, you can get over 10k if you get your tax refund in i-bonds.
More like the interest rate 30y from now has to be higher than 7.12 annualized, since thats the one period that will be different, everything else is just the same but lagged
That is serious long thinking. For the comparison April versus May 2032 ibonds case I was assuming a sale after exactly 1 year (and spend it, say on a Europe trip instead of investing it). You would loose out on 3 months interest, selling ibonds before 5 years, so the numbers are a bit different.
The reason is that we don't know what the next rate will be. So if you bought in April you are guaranteed the 7.12% and then 9.6% return, versus buying in May you will get 9.6% for 6 months and then an unknown rate after that. It could be more, it could be less - most people are expecting it to be lower.
In this case, the investor will get 6 mos of interest at the 7.12% rate, then later this year will begin a full 6 mo term of interest accumulating at 9.6%
It confused me for awhile until I figured out that different people with different investment dates will have different instantaneous interest rates as a function of their date of investment.
So buying now lets you take advantage of the similarly nice previously set rate, for 6 mos, then another guaranteed (and known) nice rate for another 6 mos.
Ok you purchase $25 then you purchase $10,000 instead of $9975. Are we sure based on the message that they in that scenario that they are refunding the entire purchase of $10,000 or just the excess $25?
If that was so it would make perfect sense that the third transaction to purchase $9975 would fail because you already purchased your limit in the second transaction. In that case user would expect 2 refunds 25 and 9975 NOT 10,000 and 9975.
When I started reading and got to the portion where the author is saying that money to compensate for inflation is "free money", I immediately thought: "this person does not understand the world, should not do financial investments without professional assistance". Then the rest of the story confirmed it. There is some educational value in posting this here, but still the bar is quite low.
> Recently I learned that the US government offers a little gift called I-bonds, and that this is the month to buy them.
Basically an ordinary HNer saw that article posted here about I-bonds, and like a typical HNer, probably thinks they're a lot smarter than they actually are, so they went and tried to buy a financial product they didn't fully understand, made a mess of it, and now blames the UI.
This 8.5% calculated inflation rate is a temporary anomaly and the author expects it to drop significantly, so if you purchase after May you might get significantly lower interest on the bond.
8.5% rate is based on locking in 7.12% for first six months (Nov 2021 - Apr 2022 rate) and 9.62% for second six months (May - Nov 2022 rate). You only "get screwed" depending upon how much the rate drops in future adjustments.
I personally think this is an overblown concern given the absolute dollar amount is so tiny. We're talking about interest on $10K. It's just not that much, a few hundred dollars.
It could be that the email was ambiguous (because the refund amount was not stated in the email) and he'll get back only $10,000 total (only $25 from the first deposit), in which case he's actually purchased $10,000 worth of bonds, but he'd only find this out in 8-10 weeks.
Shoddy software like this undermines general trust in the government.
I bought on Friday and they marked me for Monday so I missed it too. BUT I don’t think inflation is going down this year so whatever. China is in lockdown, Russian energy imports are curtailed, Ukrainian grain supply is down 20% at least. If it’s a supply side issue things are only getting worse
> so the math works out such that if you buy before May this year, you get a guaranteed ~8.5% return over the next 12 months, but if you miss this month you might get screwed.
Can anybody elaborate on this? If I buy on Monday what’s the rate?
9.something. The speculation is that the next rate 6 months from now would be lower if the fed can get inflation under control. It’s a bit of a over hyped point
I-Bonds have rules. For example, you have to hold the bond for five years or you must pay back three months interest. I expect in about 12 months there will be a horde of people upset when they find that out.
It is recalculated every six months. For simplicity let us assume the 7.12% April rate stays the same for 12 months.
$10,000 individual purchase. Interest is added monthly but it does not compound, ever. After one year you have earned $712 in interest. However, if you sell at this time you must pay 3-months interest which amounts to $178. Your net gain for the year is $534 for an actual rate of 5.34%.
5.34% is pretty good for a guaranteed return, but it is significantly less than people are expecting.
...especially people such as OP who decided to seemingly purchase a Series I bond on a whim.
And those people will have gotten all their advice from a page that humorously details just how hard it is to use the website and warning them to be careful.
Am I crazy or will the author get a refund of the “excess purchase”, e.g. $25 refunded to their bank account (until they dumped in an extra $9975 anyway)
This is the case with many retailers too, I bought a faulty appliance and returned it. However I didn’t receive merchant credit til almost 8 days later.
> Obviously I was only allowed to buy another $9,975. But if I tried to buy $10,000, what would happen? It must be a common type of error. Would they let $9,975 go through and return $25? Would they reject the whole transaction? Would the rejection happen immediately, in an hour, in a day? It was a morbid curiosity. I already knew I was using lackluster software, yet I wanted to see just how inept it could be. No real damage could be done, I figured.
Does not sound like an accident, but a clickbait instead.
Are bonds issued by a dysfunctional government that is severely in debt in the middle of a couple of years of consistently tumultuous world events really “risk free” anymore though?
These bonds only match inflation as defined by the government via CPI. But there is a strong argument that real world inflation is significantly higher than CPI.
They’re as close to zero risk as you can get in the world.
If the US government defaults on debt, then I bonds will be the least of our concerns. So this is sort of an “all eggs in a single basket” type situation as USG pays a zero risk premium.
Treasuries are considered zero risk in the sense that if they default, the rest of your portfolio is going to be worthless anyways and you're probably better off investing in guns, water, and cans of food.
Because the US government prints the dollar that the debt is denominated in, there is no risk that they would be unable to repay the debt, so it would have to be their explicit choice.
Technically the USA's elected congresspeople might be able to repeal or sidestep the 14th amendment and pass legislation causing the government to willingly default on their debt, but a move like that would likely cause a global financial panic and potentially even a collapse of the dollar itself, very quickly costing them many, many multiples of the amount of "money" saved. That's if the dollar is even still considered to be money at that point.
The government would start hemorrhaging money in the bond markets far before a bill like that could actually pass, due to investors pricing in the possibility of willful default. The first moment a congressperson even proposed it seriously in a tweet, the rates would be affected in a small but measurable way.
Even in a crazy hypothetical where the USA were entirely annexed by a foreign nation, it probably still wouldn't default on its debts, because the annexing country would want to preserve the asset of the USA's reputation for repayment.
So, what's the chance of the USA repealing the 14th amendment by a bipartisan 2/3 vote, then willingly choosing to surrender all of their power to other countries on the global stage? Like I said, the word "risk" starts to lose all meaning at that point. You're better off buying some books for entertainment, because you'll need to stay in your bunker for quite a while.
When you say "there's a non-zero chance that the US Government defaults", you might as well be saying "there's a non-zero chance that everyone comes to the sudden realization that money is dumb and we should stop using it".
I don't think that's clear at all, and I don't think it's helpful for you to handwave those other risks as if everybody already knows what they are. What is an example of one other risk?
The only other risk I can think of is interest rate "risk" - the "risk" that rates go up right after you buy a bond, and you'll wish that you'd waited and gotten the better deal. But I wouldn't really consider that a true risk. The bond you bought is still perfectly good, so that's just plain old buyer's remorse.
My point exactly. These are risks inherent in buying/owning this financial instrument. Thus, procuring it is not without risk.
You might get your money back. But that money might be worth shit due to inflation. It might be impossible to sell the bond due to a shortage of liquidity, etc, etc.
It's naive and basically wrong to characterise a bond as zero risk just because there is an (almost) zero percent chance you won't get your money back on maturity. This is merely _one_ risk.
Is the US government really that bad? I hear Americans complain about it all the time but from my experience in the UK the government is mostly competent most of the time.
Example: Two weeks ago I re-entered US as a citizen. Several people ahead of me smoothly went through the border control line. I was 'randomly' chosen for inspection by border patrol, an agent fabricated a story that a dog alerted, and I was forcibly strip searched where yet another agent fabricated he saw a 'plastic baggy' coming out of my ass. This 'evidence' was used to cuff and shackle me and drive me all over the state, while the government failed to find a doctor to anally probe me against my will. A warrant was even written by a crooked agent testifying this absolute bullshit. Government incompetence cost me 16 hours of my life, cuffed and shackled and mocked by doctors and agents publicly in waiting room of multiple hospitals. After two agents examined my feces to make sure there were no 'drugs' I was released, sans the discharge paperwork that was stolen from me and sans the affidavit of the testimony the agent wrote which he conveniently neglected to hand to me when he served me the warrant.
Will you end up like the guy in front of me, smoothly going through, or will you end up cuffed and shackled while agents try to get you anally probed. It's anybody's guess.
If there are government agents out there that do that sort of thing as a matter of course, they should be prosecuted without mercy and imprisoned for decades as the criminals they are, if not lined up and shot at dawn.
Nah, prosecutors are in on the game. They don't prosecute their friends and colleagues unless there is big enough media presence or they have something to gain from the process. Usually it is well tied corrupt, nepotistic system with even the judges involved.
If the corruption is deeper that just means more officials deserve to be imprisoned for decades. The only reason not to shoot malicious prosecutors at dawn is we can't be entirely sure we have the right ones. Official malice is a threat more dangerous than an invading army.
They have done much worse than this at this port of entry (Nogales) along with their friends at Carondelet Health Network (Nogales/Tucson). Refer to federal case 4:16-cv-00334-CKJ filed in US District Court of Arizona:
------------------
'31. Even though prior searches resulted in no evidence of internal drug
smuggling, the CBP Agents and Dr. Martinez continued the intrusion on ***’s body
without her knowing, willful consent and without a warrant.
Case 4:16-cv-00334-CKJ Document 1 Filed 06/08/16 Page 7 of 17
- 8 -
32. In fact, Dr. Martinez, a male physician, entered ***’s room and, after
asking a few cursory questions, brutally invaded her body on a warrantless and unjustified
search for contraband.
33. Dr. Martinez forcefully and digitally probed ***’s vagina and anus.
34. *** had never before been to a gynecologist and, for the remainder of her
life, will always remember that her first pelvic and rectal exams were under the most
inhumane circumstances imaginable to a U.S. citizen at a hospital on U.S. soil.
35. *** was shocked and humiliated by these exceedingly intrusive searches.
That an audience of CBP Agents and Holy Cross staff observed her being probed
compounded her feeling of degradation.
36. No drugs were found inside ***, who was then discharged from Holy
Cross and transported, by CBP, back to the Port of Entry.
37. *** was released from custody without any charges at approximately 8:00
p.m., only after enduring roughly seven hours of dehumanizing, invasive and degrading
searches.
38. Throughout the unreasonable searches of ***’s body cavities, she
continually denied smuggling drugs internally and continually refused consent for each
search.
39. At no point during the searches of *** did the CBP Agents obtain a
warrant authorizing a search of her body
The searches conducted by the CBP Agents, Holy Cross and Dr. Martinez
injured *** physically, mentally and emotionally. Her labia, vaginal opening, and anus
were left raw and sore and she felt violated, demeaned and powerless as a result of the
searches
----------
This has been going on for YEARS. That case was filed in 2016. I don't link the actual report here, which I have downloaded from PACER, but it names the patient specifically so I cannot include it here without doxxing. Using the case number you can find it in PACER yourself.
While I was at the hospital, one of the agents (CBPO 'Peterson' from Nogales Port of Entry) even joked to me he had recently done this to a trans man with a surgically placed penis. They accused the penis of being a drug smuggling apparatus and did this presumably to fuck with them for being trans. A SCBPO 'Sherry' from Nogales Port of Entry, the person in charge of taking me to the hospital, bragged to me about being paid $110/hr while working overtime taking people to the hospital on these searches, mentioning other innocent people who he had subjected and 'lamenting' the 'last guy' was detained for 3 whole days. His counterpart 'Peterson' bragged of buying a ~100k truck with the pay.
The IRS is quite ok to deal with. When I was freelance i called them a few times and always got somebody to explain the situation in a competent manner. That’s better than calling support at most private companies.
As a Canadian who’s (very) thankfully becoming American I can guarantee you that American government is very incompetent. At least in comparison to a Commonwealth one. The wait times, the level of uncaring, the general attitude was jarring when I first moved here.
I even worked as for a few years for the gov, and the bureaucracy is even worse inside!
The IRS support line used to be pretty good about 10 years ago. I once called their help line to to clarify some complexity in filing and they routed me to a tax specialist who knew exactly how to resolve my issue and saved me $5k vs what the tax preparer did. But since their budget has been cut back a lot so that rich people have a harder chance getting audited. So its not incompetency but a deliberate effort to weaken is powers.
Ive grown to love Americans (of all walks of life) in way I have never loved the people of any other country I’ve lived in. Not even the people of my parent’s country - the loss of which I still mourn.
Canadians, Ive loved least despite having a best friend and close family.
I have never heard a Canadian say that, in fact as a (also) Latin American immigrant it was made clear to me that “Canada is not America you retard” in high school.
I agree with Latin Americans, for what its worth. USA is “United States of America” not “United States, America”. But its a useless fight. In Spanish Ill be precise.
Even Brazil is in America. This is why I dislike using the term "American" when referring to US citizens, it's hopelessly ambiguous: are you talking about the country or the continent?
Among native English speakers, “American” almost always means someone from the United States. That’s partly because, unlike every other country, the US doesn’t have a convenient adjective for its residents.
However, after a few years in Central America I’ve broken myself of this usage. Spanish has an adjective for US people (aside from gringo, etc.) that I can use in Spanish, and when speaking English I find some other phrase. Note also that for many people in South and Central America “America” is what US people call “the Americas”: one continent, not three.
The problem is that the adjective “United Statian” is a mouthful; Yankee (my dad’s favorite) unfair; gringo refers (used to?) to Italians in Argentina.
United States doesn't have an adjective. Colombian would be nice, but its also taken and now problematic.
>The problem is that the adjective “United Statian” is a mouthful
Even that can be confusing. United states could also refer to Mexico, which has the actual name "United Mexican States". Someone from Mexico can rightly call themselves from united states.
This is why for example when you take your car to the DMV to get a new drivers license, there is always a small chance you will leave without a license, or a car for that matter.
This guy sent $10025 and is getting a $25 refund in 8 weeks (which is a ridiculous time to process a refund) and then for some reason decided to lock up another $10k and tries to pass this off as accidential?
He seems to believe that he's getting two refunds in 8-10 weeks: one for 10000, and one for 9975, because he interpreted "excess purchase" as "the purchase that exceeded", rather than as "excess amount", which is the interpretation you used, and is consistent with rejecting the 9975 as well.
My goodness. People applying wallstreetbets thinking and Robinhood exploits to US treasuries, the safest financial instruments in the land, goes to show there’s just too much money sloshing around in the system.
Edit: I am wrong. You can only buy it two ways which is ridiculous in my view.
More to the point of the website that belongs in a museum, why can’t they update this consumer facing portal? What happened to all the people from “digitization” govt organizations? Such as 18F and usds. Oh. You mean all they do is replace the front end? Got it.
We absolutely can update this consumer facing portal, and I believe there is a Treasury team actively working to modernize this portal.
Personally, I didn't even know of this portal's existence until I signed up for an account and and went through the same process the author went through. I noted the same security theater and passed it over to my USDS team to see if there's anything we can do.
At first glance, simply replacing the front end is a solution, but there are bigger problems here that the author did not try. If one tries to change your bank account number, having typed in it wrong, they'll have to mail in a physical form to have it changed. As the author noted, going over $10k per year will also trigger unintended consequences that can span 8-10 weeks before the money is returned.
There are problems here that goes beyond just replacing the "front end".
Thank you so much and I will look forward to what you guys can do with this. It’s definitely getting used right now and am sure you can confirm that on your end.
Unfortunately, for this particular type of bond, a Series I US Savings Bond, they can only be purchased through TreasuryDirect or by way of a tax refund. Since 2012, they are no longer sold through banks [1]. For regular Treasury Bills, Notes, and Bonds, buying through a broker is an option.
But separately, it is a miracle that the author didn't hit the physical identity verification path [2] when signing up for the TreasuryDirect account.
Judging by screenshots in the article, I don't think that UI is as bad as described. Actually, it is better than UI of private commercial financial institutions. It uses black letters on a white background, links are properly underlined, no annoying notifications from CEO, no full screen popups, no timers making you hurry, no attempts to upsell something unnecessary, no asking to subscribe for a newsletter, no deceiving descriptions that mention only good sides and conceal the risks.
Regarding virtual keyboard, of course it would be better to use physical keys, but for reasons I don't understand they don't have a wide adoption that they deserve.
It honestly sounds like you have zero idea how any of this works, saw some ad about 8% and without reading anything else decided to go all in. And then you decided you wanted to try and break the software while playing around $20k to the US treasury. And now you’re shocked you have to wait 2 months for a refund that’s technically your fault.
OP should count themselves very lucky they're (eventually) getting an actual cash refund and not some sort of IOU only redeemable against future income tax due.
When you deal with an entity that has the monopoly on legitimate violence, your bargaining power is - unsurprisingly - borderline nonexistent.
Zero risk loan and guaranteed interest rate doesn't mean no risk the government won't default on repayments. If that happens, it is likely to get back the full capital + interest, but at that point in a currency worth initial capital - interest.
Lending to a government is only safe when trust of that government is high. At the moment we are at a all time low since the 30s with regards to the US government treasury.
While you have a point... it's complicated. Selective defaults are already common for companies, so there could be a chance (to emphasise, a miniscule but still-existing chance) that it'll default on this bond while still guaranteeing the value of its currency.
Yes. But these bigger issues, while taking down more than the currency with it do leave certain investment opportunities safe. E.g gold which would likely see opposite trend in value. Perhaps also crypto, cultivable land etc.
The refusal to accept governments can (and often have in history) will only make it worse for people when it happens.
Only if you ignore the risk of missed opportunities because its not like holding cash its like owning cash but someone else holds it and you can not do anything with it.
Beside that its a loan to the gov not the currency issuer which is the Federal Reserve Bank (In the US).
To qualify this, there is zero risk that the technical letter of the agreement won't be honoured.
Lending money to the US government is very high risk right now. Simple person metrics like debt to GDP indicate they're currently fighting a bigger war than WWII, and the trend-line says they are losing. If you lend the US government enough money to buy a sandwich there is a real risk that at the end of the agreement they'll return an amount of money that won't get you a sandwich.
It doesn't matter that they say "inflation protected" on the tin. Exactly what happens there is uncertain, it is quite likely that there will be games played with inflation figures. Or a simple haircut of how much money they owe ("we did owe you $100, now we owe you $75. Law says so.").
In 1933 Congress unilaterally devalued the dollar by nearly seventy percent, rewrote the gold clauses in private contracts, largely forbid the private possession of gold, and managed to get away with it. The Supreme Court conveniently decided to ignore the Constitution on that occasion.
On the flipside, at least it ultimately resulted in laying the background that politically enabled private ownership of gold again. I'd rather be able to trade away my pieces of paper for gold than play a rigged game where I buy pieces of paper that 'represent' gold I can't own.
If a state did it, it would be a straightforward violation of the Contracts Clause. With regard to Treasury bonds and gold certificates it was the government rewriting its own contracts. It was a violation of the contract on every Federal Reserve Note and bank deposit as well. Redemption in gold had been suspended before, but the value had not been, and in the late nineteenth century the government started redeeming gold certificates again at full face value after an interruption during and after the Civil War.
So if you start out by issuing an executive order requiring everyone to turn in their gold in exchange for certificates denominated in dollars and then a few months later you decide that those certificates and all other deposits are worth 70% less in gold then they were before it amounts to a systematic taking that looks like the worst violation of the Takings Clause ever. i.e. "Nor shall private property be taken for public use, without just compensation" (from the Fifth Amendment).
In theory states could do something similar under the taxing power, but Congress doesn't have the power under the Constitution to enact property taxes in any way that is practical. We have the 16th Amendment so they could do that in a practical way on incomes.
Congress just decided to jointly repossess 70% of the financial wealth of the country, and ignore every solemn representation they or anyone else had ever made to the contrary. It that is not unconstitutional it should be.
There were alternatives, they could for example have recapitalized the Federal Reserve system, with a debt for equity swap at the cost of wiping out the original shareholders, of course. The banks held title to a worthless enterprise and Congress sanctioned a massive levy of their depositors to keep them afloat.
All on 5-4 votes, which is not exactly a compelling vote of confidence for a contract case.
"Justice McReynolds wrote the dissenting opinion. He protested that gold clauses were binding contracts, and that allowing the administration's policies to stand would permanently damage faith in the government to uphold its own contracts and those of private parties. McReynolds distinguished the cases at hand from the Legal Tender Cases, arguing that in the earlier cases the government sought to continue operating until it could meet its obligations, while the Roosevelt administration apparently sought to nullify them."
Of course. And the SCOTUS under FDR was ruling under the threat of court packing. A lot of rulings from then are risible.
My favorite is telling a farmer his homegrown pig feed is illegal because it effects interstate commerce.
The one that best illustrates bad law with good intentions is the migratory birds act: protect wildlife -> good. Doing so by making international treaties supersede the constitution -> not good (that ruling has been cut back)
The key to mitigating that risk is crossing it with the same risk on the other side - for example, a mortgage. If the US dollar devalues, so does the nominal value of the mortgage.
Lending USD to USG is zero additional risk. If one wants to hedge against the risks you mention, then one has to invest in non-USG, or even non-US, assets. But for everyone living in the US, USD will continue to be quite relevant. And given the low purchase limits on series I bonds, they will only ever form a portion of someone's assets.
I'm saying that he's lending money to the people who write & interpret the rules, and those people do not intend to pay their creditors back in real terms. Indeed, they have probably crossed a practical threshold where they cannot pay back the real amount.
It doesn't matter what the rules say right now, his wealth is at risk. They can and do change the rules sometimes. They can change what the word "inflation" means. Maybe someone legislates that inflation is 1% now for paying back I-bonds, I dunno. This is risk, it could happen. Something is going to happen, the debt situation is unprecedented bad. Will that something affect these bonds? It is possible.
The US gov't so far has enough credibility that they won't manipulate the inflation figures or change the law under you to cheat you of your money.
Of course it _could_ happen - nothing prevents it. And if they did, they'd have destroyed the credibility that took over a hundred years to create, and it would remove any future possibility of people lending money to the US gov't. A rational actor would not undertake this action, unless there's some good reason (such as nuclear war).
One only needs to peer into the sausage factory that is the Bureau of Labor Statistics[1] to see that a measure of inflation is a form of opinion whose credibility is entirely wrapped up with that of the speaker.
> The US gov't so far has enough credibility that they won't manipulate the inflation figures or change the law under you to cheat you of your money.
It isn't a matter of credibility at this point, it is one of political realities. There hasn't been a plausible outcome where the debt principle gets paid back since the 1970s, but that turned out to be OK because they can keep rolling that over with new debt. Alright. Well now we're approaching debt levels where even paying back market interest rates is coming under pressure and probably going to give.
The risks here, much like the debt to GDP ratio, are starting to move off the charts. Lending the US government money can't possible be safe under these conditions. Someone here is obviously going to get screwed, some of these promises have to be broken. It could just as easily be these bonds as anything else.
Even if we assume the measurers of inflation are honest, using honest metrics, inflation is hard to measure and the measurement has a natural skew downwards.
We’ve all heard about shrink inflation by now. Theoretically that’s measurable by taking the Oz. into account.
But how about the drop in quality of goods? Raisin Bran with few raisins, cars with thinner door panels, etc. This is impossible to measure, obviously happens, and is systematic in one direction resulting in a lower reported inflation rate.
The i-bond with a fixed rate of 0% is guaranteed to return less than inflation: Even if you buy their inflation metric as faithful: The 'gains' are taxed. The tax is at income rates, not even LTCG rates.
Moreover, what they're attempting to match isn't inflation, it's a specific government inflation metric which contains many corrections which make it obviously not match inflation for the purpose of preserving purchasing power.
For example, when inflation goes up the metric assumes that purchasing will shift from high value goods (like steak) to lower value goods (like rice), which causes the metric to read lower. This is no good if your goal is preserving purchasing power: you put in enough to buy steak and the inflation metric is okay with what comes out being only enough to buy a meal of rice (not technically, since steak and rice aren't the only goods but you get my point).
Well also because there are other factors that are high. Inflation is a basket of many goods. Just because lumber is up or down doesn’t mean inflation, overall, must be up or down.
It’s not a conspiracy in this case or an official narrative. Inflation is high so reporters try to find examples. Instead of lumber, they now talk about groceries or whatever.
We know inflation is high. The conspiracy theorists are the ones who say it’s higher (20,30% etc) because their commodity of choice is up that much.
Last year that commodity was lumber. A couple of months ago it was oil.
It’s quite possible, likely even, that your personal inflation doesn’t match the official inflation, because you don’t have the same basket of goods. By all means if you want to present an alternate inflation with different weighting that’s fine, preferably show what the same weighting’s were over the last 20 years though and be transparent about the weightings like official ones
Or do a YouTube video showing different amounts of lumber and yell about how the lame stream media is lying to you.
“metrics like debt to GDP indicate they're currently fighting a bigger war than WWII,”
Meaning that the GDP trends as if we’re in a WW3 situation and loosing, not that we are. I.E the GDP/debt metric appears to be as bad as if we were loosing a war when in fact we’re not even fighting one.
Ironically I disagree with both points. Yes the economy is bad, yes it will get worse but:
- I don't think the economy is as bad as losing a world war; the US has too many fundamentals in her favor (namely resources and a strong Navy to prevent outside threats).
- Ironically enough we are in fact loosing a low intensity world war, mostly fought in diplomatic relations with third world countries. Just like the first Cold War, but with weaker fundamentals on our side.
Weaker fundamentals? Do you really think the relationships with third world countries are more strained than were during active colonization? Russia and China did a lot of work with their infrastructure programs but I am still not sure they have the upper hand.
Our industrial base is gutted and we don't have enough resources. Not enough to sustain our extravagant lifestyles.
Europe has to find a way to buy Rubles quickly or choose between freezing or damaging capital goods (there are industries that cant be shut down because they get damaged).
There’s not enough American LNG to rescue Europe, and if there were there arent enough ports to import it. Anyway, nascent American populism will make sure Americans get (cheap) gas first.
Author admits they screwed up, decided to share the screwup, and who hasnt been trough that exact dunder blunder?
Fun short read 8/10.