Otp is the pledge of allegiance for the network state.
This is a quip that @balajis almost got to on the @PeterMcCormack podcast. I'm just rounding it off for you.
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mikesabat
910 posts
One fun part of building for families is we name all our edge cases after famous families - real and imaginary - and everyone on the team instantly knows what we're talking about.
The Don Draper problem is when someone has an entire 2nd family and breaks our data model.
The George Foreman problem is how to get AI to disambiguate kids with the same name.
The Taylor Swift problem is how to handly ambiguously gendered names.
And the Weasley problem is to make the UX responsive when you have 7 kids.
It's by far my favorite corporate jargon. And actually super useful shorthand!
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@levie @buccocapital A big issue of this current agentic era is that a huge percentage agents are decentralized on a user level, unlike centralized software. Centralizing agent operations will be required to truly replace software with agentic workflows.
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B/c having a vendor w/ 1000’s of people who wake up every day literally only thinking about solving your problems is a good feeling and worth paying for and why the vertical software selloff is stupid because SMBs don’t fucking care about benchmarks they just want. it. to. work.
Zach Abramowitz@ZachAbramowitz
Why do law firms choose Harvey and Legora over Claude? Right answers only.
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@Barchart @IPProfEvans I’m not sure how to reconcile this with housing also being the most unaffordable it’s ever been
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@engineering_bae Mine too. Weird right? Not a lot of traffic in DC either.
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The gym is hella quiet the day after the Super Bowl 👀🙌🏾
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@ChuckWalterFL Ha... So many great examples of stuff like this. I asked my 6 year old who the president was. Her answer... "Abraham Lincoln?"
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Barack and Michelle Obama left the White House two months before my younger daughter was born. I showed her his picture and she didn’t know his name. Clearly, we can’t take things for granted. #BlackHistoryMonth
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@andrewsharp Agree. The weather conditions are bad. The situation, not so much.
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This is the year where you get in the best shape of your life.
Only person stopping you is you
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@stephenfishbach Ha! Its a trend. x.com/jasonfried/sta…
Jason Fried@jasonfried
THE BIG REGRESSION My folks are in town visiting us for a couple months so we rented them a house nearby. It’s new construction. No one has lived in it yet. It’s amped up with state of the art systems. The ones with touchscreens of various sizes, IoT appliances, and interfaces that try too hard. And it’s terrible. What a regression. The lights are powered by Control4. And require a demo to understand how to use the switches, understand which ones control what, and to be sure not to hit THAT ONE because it’ll turn off all the lights in the house when you didn’t mean to. Worse. The TV is the latest Samsung which has a baffling UI just to watch CNN. My parents aren’t idiots, but definitely feel like they’re missing something obvious. They aren’t — TVs have simply gotten worse. You don’t turn them on anymore, you boot them up. The Miele dishwasher is hidden flush with the counters. That part is fine, but here’s what isn’t: It wouldn’t even operate the first time without connecting it to an app. This meant another call to the house manager to have them install an app they didn’t know they needed either. An app to clean some peanut butter off a plate? For serious? Worse. Thermostats... Nest would have been an upgrade, but these other propriety ones from some other company trying to be nest-like are baffling. Round touchscreens that take you into a dark labyrinth of options just to be sure it’s set at 68. Or is it 68 now? Or is that what we want it at, but it’s at 72? Wait... What? Which number is this? Worse. The alarm system is essentially a 10” iPad bolted to the wall that has the fucking weather forecast on it. And it’s bright! I’m sure there’s a way to turn that off, but then the screen would be so barren that it would be filled with the news instead. Why can’t the alarm panel just be an alarm panel? Worse. And the lag. Lag everywhere. Everything feels a beat or two behind. Everything. Lag is the giveaway that the system is working too hard for too little. Real-time must be the hardest problem. Now look... I’m no luddite. But this experience is close to conversion therapy. Tech can make things better, but I simply can’t see in these cases. I’ve heard the pitches too — you can set up scenes and one button can change EVERYTHING. Not buying it. It actually feels primitive, like we haven’t figured out how to make things easy yet. That some breakthrough will eventually come when you can simply knock a switch up or down and it’ll all makes sense. But that's at least 20 years down the road. It’s really the contrast that makes it alarming. We just got back from a vacation in Montana. Rented a house there. They did have a fancy TV — seems those can’t be avoided these days — but everything else was old school and clear. Physical up/down light switches in the right places. Appliances without the internet. Buttons with depth and physically-confirmed state change rather than surfaces that don’t obviously register your choice. More traditional round rotating Honeywell thermostats that are just clear and obvious. No tours, no instructions, no questions, no fearing you’re going to do something wrong, no wondering how something works. Useful and universally clear. That’s human, that’s modern.
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Verizon: We have a button here that can easily fix your connectivity problems, but before we push it you're going to need to replace all the wiring in your entire house.
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@jasonfried Don't buy a Switch2 for your kid... Worst possible onboarding experience imaginable.
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THE BIG REGRESSION
My folks are in town visiting us for a couple months so we rented them a house nearby.
It’s new construction. No one has lived in it yet. It’s amped up with state of the art systems. The ones with touchscreens of various sizes, IoT appliances, and interfaces that try too hard.
And it’s terrible. What a regression.
The lights are powered by Control4. And require a demo to understand how to use the switches, understand which ones control what, and to be sure not to hit THAT ONE because it’ll turn off all the lights in the house when you didn’t mean to. Worse.
The TV is the latest Samsung which has a baffling UI just to watch CNN. My parents aren’t idiots, but definitely feel like they’re missing something obvious. They aren’t — TVs have simply gotten worse. You don’t turn them on anymore, you boot them up.
The Miele dishwasher is hidden flush with the counters. That part is fine, but here’s what isn’t: It wouldn’t even operate the first time without connecting it to an app. This meant another call to the house manager to have them install an app they didn’t know they needed either. An app to clean some peanut butter off a plate? For serious? Worse.
Thermostats... Nest would have been an upgrade, but these other propriety ones from some other company trying to be nest-like are baffling. Round touchscreens that take you into a dark labyrinth of options just to be sure it’s set at 68. Or is it 68 now? Or is that what we want it at, but it’s at 72? Wait... What? Which number is this? Worse.
The alarm system is essentially a 10” iPad bolted to the wall that has the fucking weather forecast on it. And it’s bright! I’m sure there’s a way to turn that off, but then the screen would be so barren that it would be filled with the news instead. Why can’t the alarm panel just be an alarm panel? Worse.
And the lag. Lag everywhere. Everything feels a beat or two behind. Everything. Lag is the giveaway that the system is working too hard for too little. Real-time must be the hardest problem.
Now look... I’m no luddite. But this experience is close to conversion therapy. Tech can make things better, but I simply can’t see in these cases. I’ve heard the pitches too — you can set up scenes and one button can change EVERYTHING. Not buying it. It actually feels primitive, like we haven’t figured out how to make things easy yet. That some breakthrough will eventually come when you can simply knock a switch up or down and it’ll all makes sense. But that's at least 20 years down the road.
It’s really the contrast that makes it alarming. We just got back from a vacation in Montana. Rented a house there. They did have a fancy TV — seems those can’t be avoided these days — but everything else was old school and clear. Physical up/down light switches in the right places. Appliances without the internet. Buttons with depth and physically-confirmed state change rather than surfaces that don’t obviously register your choice. More traditional round rotating Honeywell thermostats that are just clear and obvious. No tours, no instructions, no questions, no fearing you’re going to do something wrong, no wondering how something works. Useful and universally clear. That’s human, that’s modern.
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@aakashgupta I think you did this math wrong. equity would be worth $200k more.
"You buy that $1M home with $200K down. After 10 years, the home is worth $1.48M. Your gain is $480K.
Your friend puts $200K in the S&P. It compounds at 9%. After 10 years, they have $473K.
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Actually, housing is still an awesome investment.
Let me explain.
That chart is missing leverage + tax benefits.
Let’s walk through the math step by step.
You want to buy a $1M home. You put 20% down. That’s $200K out of your pocket. The bank lends you the other $800K.
The home appreciates 4% in year one. That’s $40K in appreciation. But you only invested $200K of your own money. So your return on equity is 20%, not 4%.
Now take that same $200K and put it in the S&P 500. At 9% annual returns, you make $18K.
Same capital. The house generated $40K. The stocks generated $18K. The house wins by more than 2x.
This is leverage working in your favor. You control a $1M asset with $200K. The appreciation happens on the full $1M, but your denominator is only $200K.
Now layer in the tax advantages.
You’re paying 6% interest on $800K. That’s roughly $48K in mortgage interest during year one. If you’re in the 37% federal bracket, you can deduct that interest. That puts $17,760 back in your pocket. Your effective borrowing cost drops from 6% to about 3.8%.
Property taxes are also deductible up to the $10K SALT cap. In many states that’s another few thousand in tax savings.
Now here’s where it gets interesting.
When you sell stocks at a profit, you pay 15% to 23.8% in long-term capital gains tax. No exceptions.
When you sell your primary residence, the IRS gives you an exclusion. If you’re married and lived there two years, you can exclude $500K in gains from taxes. Completely tax-free. If you’re single, it’s $250K.
No equivalent exists for equities. None.
Let’s run a 10-year scenario.
You buy that $1M home with $200K down. It appreciates 4% annually. After 10 years, the home is worth $1.48M. Your gain is $480K. You sell, take the exclusion, and pay zero federal tax on the gain.
Your friend puts $200K in the S&P. It compounds at 9%. After 10 years, they have $473K. They sell and owe $54K in long-term capital gains tax at 20%. They keep $419K.
You kept $480K tax-free. They kept $419K after tax. And you had a place to live the entire time.
But wait. There’s more optionality in real estate that stocks don’t offer.
If you convert your home to a rental before selling, you can use a 1031 exchange. This lets you roll your gains into another investment property and defer taxes indefinitely. Your $480K in gains moves into a bigger property. No tax event. You can keep doing this your entire life. Some people die with millions in deferred gains that pass to heirs at a stepped-up basis.
Try doing that with Apple stock.
You can also depreciate rental property on a 27.5-year schedule. This creates paper losses that offset real cash flow. You collect rent, but the IRS lets you report a loss.
Stocks offer no depreciation shield.
Now consider forced appreciation. You buy a dated home, renovate the kitchen and bathrooms for $50K, and add $150K in value. You created $100K in equity through sweat and decisions. Stocks don’t let you do that. You can’t renovate your way to a higher share price.
The chart shows S&P 500 at 7000 vs median home prices around 2000, indexed from 1970.
What it doesn’t show is that almost nobody buys a home with 100% cash. The comparison treats real estate as an unleveraged asset class. It ignores that a 4% return on a 5x leveraged asset generates 20% returns on equity. It ignores tax deductions that reduce your borrowing cost. It ignores the primary residence exclusion. It ignores 1031 exchanges. It ignores depreciation. It ignores forced appreciation.
The tweet asks why people take 6% mortgages when renting is cheaper and they could earn 9% in stocks.
Because $200K in a home generates more after-tax wealth than $200K in equities over a 10-year hold in most appreciating markets.
Housing can be an amazing investment (if you get the right land in the right market at the right price).
Michael A. Arouet@MichaelAArouet
Wow, probably the most eye-opening chart you'll see today. Can someone please explain why people take 6% mortgages to buy a house if renting is cheaper? They could earn 9%+ on their equity in the stock market instead. Double loss. Does this make sense to you?
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A few months ago, I got the opportunity to sit down with @balajis for a conversation on the @ns podcast.
We talked about a # of structural issues within macro - a full table of contents & the conversation is below; a YouTube link can be found below that. Thx for having me on!
NS@ns
The US military supply chain is made in China. The US tax base is derived from the stock market. Luke Gromen analyzes the collision between the Fed’s financial video game and the physical economy. 6:43 - The Unified Luke Theory of the World 10:30 - The currency of BRICS is gold bricks 16:14 - Stocks are the US economy 21:59 - The plunge protection team 26:23 - Dollar inflation is global taxation 28:31 - Printer, printer everywhere 37:18 - Russia's GDP Is less than Italy? 46:47 - China saves in factories, not equities 50:27 - Hegseth told China there's no conflict with them 1:01:39 - You cannot fathom how amazing America was
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Proud to announce my new startup: we personally guide your parents through setting up passkeys for their Social Security, HSA, and insurance accounts — including all password resets and up to 17 rounds of MFA. Only $499 per account. Launching tomorrow at 6am ET. Wish us luck
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