8 ms·

It all began with a strange email (2012)

181 points by siddg 12y ago

pimlottc 12y ago
Should be tagged (2012)
- thebrettd 12y ago
  Yep - this name jumped out at me because I heard it on the radio this morning (synchronicity!). He is now the Finance Minister of Greece, so he's got some bigger fish to fry than how much that virtual hat should cost. PS Hook em.
- mbesto 12y ago
  Should be tagged....when it was submitted 3 years ago: https://news.ycombinator.com/item?id=4114295 https://news.ycombinator.com/item?id=4114295
  - notfoss 12y ago
    Holy cows, I got a very strong sense of Deja Vu, just after reading the first few paragraphs. I immediately jumped to the "posted" field and realized that I had already read it earlier, most likely through the same link that you have posted.
nailer 12y ago
For anyone unaware, this man is now the Greek finance minister, and will attempt to get Greece out of bankruptcy.
- tomp 12y ago
  More precisely, he will attempt to get Greece into bankruptcy - the situation before the elections was relatively sustainable (AFAIK), as far as the debtors are concerned, but the problem was that Greece and its people were being sucked dry - taxes increased, spending cut, public companies firesold, widespread unemployment (25%, youth 50%), GDP collapse (20%). Greeks didn't want to live like this (would you), especially since only they were suffering, not the institutions that were lending them the money in the first place ("every addict has a drug dealer"). The new party, Syriza, which Yanis is a part of, is trying to reduce the debt burden in a way that would be acceptable to the rest of EU, e.g. by shaving off part of the debt / delaying the repayment / restructuring it so that it's only paid when the economy grows (as German debt after WWII) - which technically is a bankruptcy.
  - nailer 12y ago
    Well exactly, he's acknowledging that Greece is bankrupt rather than cash-poor.
deleted 12y ago
[deleted]
huhtenberg 12y ago
Currently the Finance Minister of Greece. It was in the news that he (or possibly the prime minister) said that they are planning to employ an "unorthodox" strategy that "have never been tried before" to pull the country from the mess it is in. One one hand it's interesting to see what comes out of it, but on the other it sounds quite a bit like gambling. Except this time it's with the real economy.
- meric 12y ago
  It's a game of chicken and Yanis is an expert in the field. He is an author of multiple books on game theory. http://www.amazon.com/Game-Theory-A-Critical-Introduction/dp/0415250951 http://www.amazon.com/Game-Theory-A-Critical-Introduction/dp... http://yanisvaroufakis.eu/books/game-theory-a-critical-text/ http://yanisvaroufakis.eu/books/game-theory-a-critical-text/ Greece is in trouble. There is no way they could repay the debt if they tried, unless they confiscate everyone's savings. The only sensible thing is to default on the debt, as had happened many times before when investors made the imprudent choice bought government bonds that were never going to be paid back. It is only then the toxic assets can be cleansed out of the economy so it can continue to grow, rather than being stuck in some sort of bad zombie bank equilibrium like Japan had been for the past 20 years.
  - huhtenberg 12y ago
    > It's a game of chicken It's a game of Germany getting fed up with paying for the rest of the EU. I think it's a safe bet that if Greece is going to show a middle finger to the EU, the EU will have no choice but to reciprocate. Spain and Portugal were in a similar situation as Greece, but if you are to believe Frau Merkel, the austerity policy is working for them and they are recovering well.
    - moe 12y ago
      but if you are to believe Frau Merkel ... [Spain and Portugal] are recovering well Spain has an unemployment rate[1] of 24%. Is it optimism or cynicism to call that "recovering well"? [1] http://countryeconomy.com/unemployment/spain http://countryeconomy.com/unemployment/spain
winslow 12y ago
Side note: Yanis Varoufakis is now the Greek Finance Minister. http://yanisvaroufakis.eu/ http://yanisvaroufakis.eu/ I'm disappointed Valve employees don't blog anymore. Abrash is now at Oculus and I doubt Yanis works with Valve anymore. The linux team seems to have gone silet on blog post.
- Mahn 12y ago
  How did he go from economist at Valve to finance minister in Greece?
  - woodchuck64 12y ago
    Gabe knows greatness.
  - bananaoomarang 12y ago
    He was a leading Greek economist before being employed at Valve, I think.
  - mcv 12y ago
    As the article points out, Valve hired him because of how he described the Germany-Greece relationship, and Valve had a very similar problem with virtual economies. Apparently he was going to experiment with those virtual economies and learn some useful lessons about real economies. I'd love to know what exactly he did at Valve, but if he learned something useful there, that might help with the Greek-German problem.
    - DrStalker 12y ago
      In a few years from now it's going to be really interesting to see what lessons from Valve turned out to be helpful in the real world.
  - fnordfnordfnord 12y ago
    A cynical answer is: I bet the Greeks would take anyone they could get; because who the hell would want the job? It was either going to be someone from Goldman Sachs or a crazy person. Since the Greek people would probably tar and feather anyone sent by Goldman, it had to be a crazy person. I hope he does well. It's a lot easier to write papers and give talks than it is to assume a job like "Finance Minister of Greece in 2015".
hurin 12y ago
(2012) label please.
stingraycharles 12y ago
Needs [2012] in the title, especially because this man is now the Finance Minister of Greece, as pointed out by many others.
deleted 12y ago
[deleted]
inflatablenerd 12y ago
If anyone is interested, Yanis also guested on the EconTalk podcast in 2013, talking about Valve's corporate structure and plans for solving Greece's financial woes. http://www.econtalk.org/archives/2013/02/varoufakis_on_v.html http://www.econtalk.org/archives/2013/02/varoufakis_on_v.htm...
drabiega 12y ago
The bit about Econometrics seems a bit out of place and wrongheaded. I know this is a popular criticism of Economics in general, but I've always thought it rather non-nonsensical.
- SapphireSun 12y ago
  What's wrong with it? If you can't run a controlled trial, then it's hard to finger causality. You can consider parallel natural experiments as occur in different polities, but there are so often many confounding factors. You can grow more confident in a strategy as the stats pile up, but it's not nearly as cut and dried as a physics experiment.
kindofanger 12y ago
The last reported Gross World Product was 74.31 trillion dollars. http://www.indexmundi.com/world/gdp_%28official_exchange_rate%29.html http://www.indexmundi.com/world/gdp_%28official_exchange_rat... Current global debt is in excess of 100 trillion dollars. http://www.bloomberg.com/news/articles/2014-03-09/global-debt-exceeds-100-trillion-as-governments-binge-bis-says http://www.bloomberg.com/news/articles/2014-03-09/global-deb... That alone is enough to illustrate the situation. If you must have a cherry on top, worldwide derivatives are likely in excess of 1 quadrillion dollars. http://business.time.com/2013/03/27/why-derivatives-may-be-the-biggest-risk-for-the-global-economy/ http://business.time.com/2013/03/27/why-derivatives-may-be-t... Regulation is a nice thought.
- CyberPants 12y ago
  Entire world economy visualization: https://xkcd.com/980/huge/#x=-6432&y=-8368&z=2 https://xkcd.com/980/huge/#x=-6432&y=-8368&z=2
- jrochkind1 12y ago
  To illustrate what situation?
- poikniok 12y ago
  Can you tell me what "notational" means with regards to derivatives?
- eru 12y ago
  > That alone is enough to illustrate the situation. If you must have a cherry on top, worldwide derivatives are likely in excess of 1 quadrillion dollars. That's the `notional' of the derivatives. That's more or less a made up number, and has not much to do with how much money actually changes hands. The way the notional derivatives are defined, you'd actually want to see huge numbers there. It means that exploitable price differences are so small, that you need lots of gearing to make money off of them. Small price difference === other market participants get a fair price on buying and selling.
camperman 12y ago
OK, the penny just dropped for me. This is the same Yanis who wrote a masterful analysis of destruction and the Eve economy. The same guy who's an expert in game theory. The guy who is now finance minister of Greece.
- MikeTV 12y ago
  Link to the referenced analysis, for those interested like me: http://yanisvaroufakis.eu/2014/01/30/war-spikes-in-the-eve-online-universe-a-political-economists-account/ http://yanisvaroufakis.eu/2014/01/30/war-spikes-in-the-eve-o...
- lectrick 12y ago
  A career path of a high interestingness caliber. We should all strive for the same.
Aissen 12y ago
So what did they learn ? It was a very promising blog, but for all we know, nothing came out of his time at Valve. Even a failure to learn anything new would be an interesting report with regards to what they did (or didn't do) with the games' economies.

181 points by siddg 12y ago

pimlottc 12y ago

Should be tagged (2012)

thebrettd 12y ago
Yep - this name jumped out at me because I heard it on the radio this morning (synchronicity!). He is now the Finance Minister of Greece, so he's got some bigger fish to fry than how much that virtual hat should cost. PS Hook em.
mbesto 12y ago
Should be tagged....when it was submitted 3 years ago: https://news.ycombinator.com/item?id=4114295 https://news.ycombinator.com/item?id=4114295
- notfoss 12y ago
  Holy cows, I got a very strong sense of Deja Vu, just after reading the first few paragraphs. I immediately jumped to the "posted" field and realized that I had already read it earlier, most likely through the same link that you have posted.

nailer 12y ago

For anyone unaware, this man is now the Greek finance minister, and will attempt to get Greece out of bankruptcy.

tomp 12y ago
More precisely, he will attempt to get Greece into bankruptcy - the situation before the elections was relatively sustainable (AFAIK), as far as the debtors are concerned, but the problem was that Greece and its people were being sucked dry - taxes increased, spending cut, public companies firesold, widespread unemployment (25%, youth 50%), GDP collapse (20%). Greeks didn't want to live like this (would you), especially since only they were suffering, not the institutions that were lending them the money in the first place ("every addict has a drug dealer"). The new party, Syriza, which Yanis is a part of, is trying to reduce the debt burden in a way that would be acceptable to the rest of EU, e.g. by shaving off part of the debt / delaying the repayment / restructuring it so that it's only paid when the economy grows (as German debt after WWII) - which technically is a bankruptcy.
- nailer 12y ago
  Well exactly, he's acknowledging that Greece is bankrupt rather than cash-poor.

deleted 12y ago

[deleted]

huhtenberg 12y ago

Currently the Finance Minister of Greece. It was in the news that he (or possibly the prime minister) said that they are planning to employ an "unorthodox" strategy that "have never been tried before" to pull the country from the mess it is in. One one hand it's interesting to see what comes out of it, but on the other it sounds quite a bit like gambling. Except this time it's with the real economy.

meric 12y ago
It's a game of chicken and Yanis is an expert in the field. He is an author of multiple books on game theory. http://www.amazon.com/Game-Theory-A-Critical-Introduction/dp/0415250951 http://www.amazon.com/Game-Theory-A-Critical-Introduction/dp... http://yanisvaroufakis.eu/books/game-theory-a-critical-text/ http://yanisvaroufakis.eu/books/game-theory-a-critical-text/ Greece is in trouble. There is no way they could repay the debt if they tried, unless they confiscate everyone's savings. The only sensible thing is to default on the debt, as had happened many times before when investors made the imprudent choice bought government bonds that were never going to be paid back. It is only then the toxic assets can be cleansed out of the economy so it can continue to grow, rather than being stuck in some sort of bad zombie bank equilibrium like Japan had been for the past 20 years.
- huhtenberg 12y ago
  > It's a game of chicken It's a game of Germany getting fed up with paying for the rest of the EU. I think it's a safe bet that if Greece is going to show a middle finger to the EU, the EU will have no choice but to reciprocate. Spain and Portugal were in a similar situation as Greece, but if you are to believe Frau Merkel, the austerity policy is working for them and they are recovering well.
  - moe 12y ago
    but if you are to believe Frau Merkel ... [Spain and Portugal] are recovering well Spain has an unemployment rate[1] of 24%. Is it optimism or cynicism to call that "recovering well"? [1] http://countryeconomy.com/unemployment/spain http://countryeconomy.com/unemployment/spain

winslow 12y ago

Side note: Yanis Varoufakis is now the Greek Finance Minister. http://yanisvaroufakis.eu/ http://yanisvaroufakis.eu/ I'm disappointed Valve employees don't blog anymore. Abrash is now at Oculus and I doubt Yanis works with Valve anymore. The linux team seems to have gone silet on blog post.

Mahn 12y ago
How did he go from economist at Valve to finance minister in Greece?
- woodchuck64 12y ago
  Gabe knows greatness.
- bananaoomarang 12y ago
  He was a leading Greek economist before being employed at Valve, I think.
- mcv 12y ago
  As the article points out, Valve hired him because of how he described the Germany-Greece relationship, and Valve had a very similar problem with virtual economies. Apparently he was going to experiment with those virtual economies and learn some useful lessons about real economies. I'd love to know what exactly he did at Valve, but if he learned something useful there, that might help with the Greek-German problem.
  - DrStalker 12y ago
    In a few years from now it's going to be really interesting to see what lessons from Valve turned out to be helpful in the real world.
- fnordfnordfnord 12y ago
  A cynical answer is: I bet the Greeks would take anyone they could get; because who the hell would want the job? It was either going to be someone from Goldman Sachs or a crazy person. Since the Greek people would probably tar and feather anyone sent by Goldman, it had to be a crazy person. I hope he does well. It's a lot easier to write papers and give talks than it is to assume a job like "Finance Minister of Greece in 2015".

hurin 12y ago

(2012) label please.

stingraycharles 12y ago

Needs [2012] in the title, especially because this man is now the Finance Minister of Greece, as pointed out by many others.

deleted 12y ago

[deleted]

inflatablenerd 12y ago

If anyone is interested, Yanis also guested on the EconTalk podcast in 2013, talking about Valve's corporate structure and plans for solving Greece's financial woes. http://www.econtalk.org/archives/2013/02/varoufakis_on_v.html http://www.econtalk.org/archives/2013/02/varoufakis_on_v.htm...

drabiega 12y ago

The bit about Econometrics seems a bit out of place and wrongheaded. I know this is a popular criticism of Economics in general, but I've always thought it rather non-nonsensical.

SapphireSun 12y ago
What's wrong with it? If you can't run a controlled trial, then it's hard to finger causality. You can consider parallel natural experiments as occur in different polities, but there are so often many confounding factors. You can grow more confident in a strategy as the stats pile up, but it's not nearly as cut and dried as a physics experiment.

kindofanger 12y ago

The last reported Gross World Product was 74.31 trillion dollars. http://www.indexmundi.com/world/gdp_%28official_exchange_rate%29.html http://www.indexmundi.com/world/gdp_%28official_exchange_rat... Current global debt is in excess of 100 trillion dollars. http://www.bloomberg.com/news/articles/2014-03-09/global-debt-exceeds-100-trillion-as-governments-binge-bis-says http://www.bloomberg.com/news/articles/2014-03-09/global-deb... That alone is enough to illustrate the situation. If you must have a cherry on top, worldwide derivatives are likely in excess of 1 quadrillion dollars. http://business.time.com/2013/03/27/why-derivatives-may-be-the-biggest-risk-for-the-global-economy/ http://business.time.com/2013/03/27/why-derivatives-may-be-t... Regulation is a nice thought.

CyberPants 12y ago
Entire world economy visualization: https://xkcd.com/980/huge/#x=-6432&y=-8368&z=2 https://xkcd.com/980/huge/#x=-6432&y=-8368&z=2
jrochkind1 12y ago
To illustrate what situation?
poikniok 12y ago
Can you tell me what "notational" means with regards to derivatives?
eru 12y ago
> That alone is enough to illustrate the situation. If you must have a cherry on top, worldwide derivatives are likely in excess of 1 quadrillion dollars. That's the `notional' of the derivatives. That's more or less a made up number, and has not much to do with how much money actually changes hands. The way the notional derivatives are defined, you'd actually want to see huge numbers there. It means that exploitable price differences are so small, that you need lots of gearing to make money off of them. Small price difference === other market participants get a fair price on buying and selling.

camperman 12y ago

OK, the penny just dropped for me. This is the same Yanis who wrote a masterful analysis of destruction and the Eve economy. The same guy who's an expert in game theory. The guy who is now finance minister of Greece.

MikeTV 12y ago
Link to the referenced analysis, for those interested like me: http://yanisvaroufakis.eu/2014/01/30/war-spikes-in-the-eve-online-universe-a-political-economists-account/ http://yanisvaroufakis.eu/2014/01/30/war-spikes-in-the-eve-o...
lectrick 12y ago
A career path of a high interestingness caliber. We should all strive for the same.

Aissen 12y ago

So what did they learn ? It was a very promising blog, but for all we know, nothing came out of his time at Valve. Even a failure to learn anything new would be an interesting report with regards to what they did (or didn't do) with the games' economies.