Liana Saif describing Al-Kindi's explanation of why animal sacrifice is a magically powerful act, quoted by Dan Attrell in his translation on the Picatrix.

no piece of art or literature has ever understood me quite like this onion article

Who up stroking they sword while lamenting the social realities.

One thing I wonder about is: If you were designing a financial system from scratch, in 2024, would you come up with banking? That central traditional trick of banks — that they fund themselves with safe short-term demand deposits, and use depositors’ money to invest in risky longer-term loans, with all of the run risk and regulatory supervision and It’s a Wonderful Life-ness that that involves — would you recreate that if you were starting over?

Part of me feels like, if you started a new civilization and put smart but ahistorical tech people in charge of designing a financial system, it would never occur to them to recreate traditional banking. It is so messy and opaque and imprecise, using a shifting pile of demand deposits to fund long-term loans. Plenty of people — insurance companies, retirement savers — want to earn a return on their money and don’t need it anytime soon; their money can be locked up in long-term loans. The money that people keep in the bank just to pay rent and buy sandwiches doesn’t need to be pooled and invested in risky loans; it should just sit in the vault.

This idea — that bank deposits should just sit in the vault (or, realistically, in electronic money at the Federal Reserve), while risky loans should be funded by long-term investors who intend to take those risks — is sometimes called “narrow banking.” It has a long intellectual pedigree, it came back into vogue after the 2008 financial crisis, and it got attention again after last spring’s US regional banking crisis. All those crises! The traditional business of banking is necessarily crisis-prone; using risky long-term loans to back risk-free short-term demand deposits involves a fundamental mismatch, and every so often that flares up into a crisis.

And so, since 2008, but more visibly since last spring, banking really has become narrower. Private credit is the lending side of “narrow banking”: Private credit firms raise dedicated funds, with locked-up money, from investors who intend to invest in long-term loans to earn a return. And private credit is the hottest area of finance, making buyout loans and investment-grade corporate loans and funding consumer loans. And private credit is booming not just as a competitor to banks, but as a funding source for banks: Banks have the relationships and technology to make loans, but not the money, so they partner with private credit to fund the loans.

Meanwhile the deposit side of “narrow banking” is something like banks taking their customers’ money and parking it at the Federal Reserve. And in fact some money has shifted out of banks (which are not narrow) and into government money-market funds (which park the money in Fed repo or Treasury bills). Even within banks, there is less lending.

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That’s narrow banking. I admit I have a certain emotional soft spot for traditional banking. There is something magical about how banking transmutes risky assets (loans) into risk-free liabilities (deposits). “A banking system is a superposition of fraud and genius that interposes itself between investors and entrepreneurs,” wrote Steve Randy Waldman in 2011; it allows society to use the money of risk-averse depositors to fund risky investments in growth. But it is possible that this magic no longer works: In a world of financial transparency and fast communications technology and flighty deposits, you can’t really expect to hide the risks of the banking system; you have to fund the loans with people who know they’re funding the loans.

I will say, though, that I have also written a lot about crypto over the last few years. Crypto really created a new financial system from scratch, and it started with a very strong philosophical bias against traditional banking. And then it really did recreate traditional banking! And also traditional banking crises: In 2022, it turned out that one of the main uses of crypto was to turn customer demand deposits (of crypto) into extremely risky loans (of crypto), which ended as badly as you’d have expected. “One possibility,” I wrote last year, “is that fractional reserve banking is deeply rooted in human nature.” If you started the financial system over, maybe banking would develop again. Even if actual banking is getting narrower now.

Matt Levine on narrow banking, we talk about this a lot as banks are so fundamental to how our entire civilisation currently functions and yet they're basically just hacks that lurch from crisis to crisis, more evolved than engineered

I gave myself an electric shock by mistake when I was unplugging my kitchen mixer the other day and at first I was like “OMG I’m going to die, my heart is exploding” but after a second my brain flooded with adrenaline and I was like “that was amazing.” Now whenever im drinking caffeine im like “this is okay but it’s not as good as getting an electrical shock in my kitchen”

It bothers me how many people are morally incurious, and it bothers me even more how many people seem to think that interrogating morality is proof of immorality- because I'm pretty sure that the latter is at least partly driving the former. Asking why an action or institution is wrong does not necessarily mean that someone thinks that that action or institution is right. If you never ask yourself why something is wrong or right, then what is determining your morality? Because it's not you.

Science hasn’t come up with a new way to be gay since the discovery of nonbinary identities over a decade ago. Worrisome.