Heebie, this is like Fyre Festival to the power of Enron.
Matt Levine, rather than Molly White in this case, is probably the best person to read on the enormous FTX crypto collapse. His best guess seems to be that SBF's hedge fund, Alameda Research, made a wrong-way bet of some kind, and then used customer funds from FTX, its associated brokerage, to fill the holes and bail itself out, like a manager who keeps taking money from petty cash and losing it at the track. (See "but where did it go?" in that link.)
Also it's not shocking that an insufferable Effective Altruism type* who just did a multibillion dollar fraudulent whoopsie didn't like the (very funny and grim) Venomous Lumpsucker, a science fiction book that is in part about how effective altruism/green markets types are going to make a difference somewhere between "none at all" and "quite a bit, for the worse".
* The Tumblr's name is a Harry Potter and the Methods of Rationality reference, which confirms a lot of presuppositions for me.
I'm curious to what extent FTX collapsing hurt people who aren't crypto bros who could have known better. Their families, I guess, but any cascades?
"Who could have known better" modifying "crypto bros" in 3.
Let's give nerds money. That can't go wrong.
stephen diehl remains my go-,to source for lucid, trenchant commentary on all things bitcoin & crypto - v recent interview here https://www.currentaffairs.org/2022/11/the-entirely-predictable-collapse-of-ftx-exposes-the-failures-of-regulators-and-journalists & he has a book that i haven't tbh bothered to read & lots of other good interviews out there. i think his interview on tech won't save us iirc was particularly good at explaining diff types of fiscal instruments & how they do or in the case of crypto don't tie back to anything of value & also a nicely detailed taxonomy of scams
I don't think anyone is quite sure yet about the degree to which there's going to be spillover into real world stuff; Enron was, what, the largest utility company in America when it blew up, right? It had gas futures with everyone, was screwing around with California to trigger the Gray Davis recall, etc. etc. FTX was a huge player in the crypto world and there are going to be a lot of knock-on effects in Cryptostan, but right now the fallout seems largely limited to crypto companies, venture capitalists who backed FTX, and the various charitable organizations feeding at the FTX trough (many of which are perfectly normal charitable organizations and not of the "save the three trillion humans of the year 3500 from the dangerous of HELLMATRIX" types). The big questions are whether there will be spillover into "normal" financial organizations, and whether this triggers any kind of bank run on the even-bigger-deal-in-Cryptostan Binance/Tether, which is a whole separate story that I can't believe is still going on.
1 is great but needs more polycule
I'm so glad nothing I wrote at 26 exists anymore, except maybe one journal article and some conference papers.
9: and, hopefully, only crypto invests in crypto.
Well, only crypto and the government of El Salvador.
I second the recommendation for Matt Levine. It took me a little while to get used to his writing style, but once I did I'm convinced that he's a very, very good writer.
8: for example-- https://nitter.net/dsquareddigest/status/1591448730573901825#m
11: thank god I didn't start blogging until I was 27.
3: Yes, the Ontario Teachers Pension Plan invested a lot in FTX, but I think that's the only big "normal people" knock on effect.
i wonder if the 20 something male relative who's been surfing the crypto wave for five or so years has done anything prosecutable? 🤔
The big questions are whether there will be spillover into "normal" financial organizations
I'm guessing no. The normal financial organization who dabbled in crypto were long since burned by the plunge in bitcoin prices from $66K to $20K. The crypto market at this point is almost entirely dead-enders and true believers. The normies have already left the building.
Fucked in the head is the new norm.
David Gerard has been on this beat for awhile and is also very good
https://davidgerard.co.uk/blockchain/
i wonder if the 20 something male relative who's been surfing the crypto wave for five
My 20 something female relative was part of a crypto-couple that broke up after the crash and not long after that she attempted suicide. This thing does have some very bad outcomes.
21: so grim that i suspect age & gender will insulate my relative from this reaction. he spent at least some time - maybe even most of his time? i avoided learning details - on what i suspect was selling to new marks so my sympathy is well nonexistent. was fascinating to watch his parents strenuously avoid any understanding of what he was doing, all much too complicated, just technically waaay beyond them.
My relative was marketing NFTs to an affinity group. She really believed in what she was doing, at the time. And I would expect ended up losing quite a bit of money.
That's awful for her and her poor parents. I hope she can recover.
My personal blog is still out there (I've occasionally linked to it here). I've had it since I was 21, although there are several years with fewer than a dozen entries. Starting this winter I made it a point to update it daily, as an exercise in onanism the craft of writing whatever the usual reasons for keeping a journal are, and I've managed to stick with it since then.
Blog aside, I was a reporter for a while, and clippings of all my stories are in the basement, and should still be readable if they aren't too moldy. Someone might appreciate them someday, I guess. I think two or three news articles and one opinion piece might not be horrible.
That's right. I have my articles from when I did the college paper.
mine was, e.g., on cruise ships i suspect fleecing retirees. he's got a family cushion if he needs it. with his white collar he's unlikely to ever be prosecuted let alone do time. wouldn't be surprised tho if the facts end up making a decent case for him spending some time up river.
so grim that i suspect age & gender will insulate my relative from this reaction.
I thought men were more likely to commit suicide than women? Is it different in the US?
Women are much more likely to attempt suicide (but the vast majority survive), men are much more likely to use a gun and as a result are a majority of the fatalities.
Actually read the Rockefeller post - what "cringe" was coined for. Of course starts the story after he created a monopoly on pretty much all oil in the country, partially inspiring the first antitrust laws.
28: ref was to the differential in self awareness & susceptibility to feelings of culpability between young white comfortable women & men. my relative not a usian.
What is the following rhetorical construct called:
Jennifer Doudna is honestly kind of boring? Which is probably a good thing!
This use of an exclamation to inflect the prior sentence in a faux-informal manner is something yglesias does a lot (and I viscerally despise him - I would cast him into the same oubliette as David Brooks). It's spreading like a pox and needs to be stopped.
That's just cruel. No one deserves to be trapped with David Brooks.
Doudna is not boring, whoever wrote this is outing themselves as an idiot.
@34 That line was copied from the linked tumblr.
31: maybe we should have a pause on wishing that other people should commit suicide, especially in subthreads including people who have just announced that a relative of theirs attempted suicide.
At the one company, they were using dopamine agonist patches often prescribed for Parkinson's disease that have been "linked to the development of compulsive behaviours, especially at high doses, including addictive gambling, compulsive shopping and an excessively increased interest in sex".
36: wtf??? dude you are derangedly misreading jfc.
12. Also at one point Estonia, I believe, which is in the EU. I haven't seen any horror stories from the Baltic, so I suppose they're OK
I don't read 31 as encouraging but the talk of being "insulated" does not seem like a good topic given other posters and just my general knowledge of the topic.
I want to know significantly more, but maybe not everything, about 37. "They were using" in the sense of "the 7th floor guys were all using cocaine," or was there some business logic?
Screenshots at the bottom of https://milkyeggs.com/?p=175 are a good read on the final days as FTX went under.
Wouldn't anything that worked against Parkinson's really increase your interest in sex if you did have Parkinson's?
42: Rich people are so weird. Why would investors just give them huge sums of money without requiring a grownup around and without checking whether everyone was on drugs?
"Hey, you got your cocaine in my financial services."
"Well, you got your financial services in my cocaine."
was there some business logic?
I'm imagining an activity diagram with a diamond on it connected to lines heading in different directions labeled [does drugs], [productivity drops].
The link in 42 suggests that they did indeed justify at least some of the drug use in business terms.
The sourcing on that piece is pretty thin, admittedly, so probably everything in it should be taken with a grain of salt.
I thought salting your hash was considered good practice in the crypto community.
Gummies are better. You can get them trick or treating.
the Financial Times reported that SBF is remarkably bad at League of Legends . . . While this may initially seem like a frivolous observation, it is actually shocking that SBF was unable to rank higher than the Bronze or Silver league after years of regular play across hundreds if not thousands of individual games. It is reflective of an incredibly impaired level of cognition . . .
I skimmed quickly, got to that graf, and came away completely satisfied with my learning experience.
I don't know exactly what I had in mind with "business logic," but thinking further about it led to "Bro, listen, our dog food is so motherfucking good, man, it's SO DAMN GOOD, I just ATE ONE MILLION CANS"
For a second, I thought League of Legends was that trivia league that's impossibly hard except for Thorn and others here who inevitably do extremely well. For more than a second, actually.
I'm sure SBF would be bad at that too.
My terrible performance so far this season is therefore proof of my personal integrity.
...laydeez.
Client funds can't have sex.
I have apparently misunderstood junk bonds altogether.
54 made us laugh so hard here. (Learned League is what you're thinking of.)
59: Reminds me of that woman who got revenge with super glue.
Sadly the FTX execs don't seem to be LLamas, was curious about their trivia skills.
To invite someone you have to check a box that says "I vouch that my referral is of the highest honor, and will never cheat"; I'm not sure but I bet stealing $16 billion, even in non-trivia-related activity, would disqualify them.
(Mad respect to anyone stealing $16 billion in a trivia related heist, though. Knowing that the US state closest to the continent of Africa is Maine paid off big!)
If I understand right, they only *stole* $10B. SBF's net worth is down $16B, and the company down more than that, but that's because the company collapsed (in part, but not solely, because of the $10B they stole).
That's bullshit. New Hampshire is closer than Maine.
62. May not have used a real name. Plus, LL doesn't allow payment with crypto.
69: Is a Hamp a North American variety of hobbit?
No, that's a Hemp. A Hamp is a lovable but slightly scurrilous feral pig.
I'm waiting for crypto to be dead enough that I don't have to pay attention. Did that happen?
As long as there are rubes with money, crypto will survive.
At its core crypto is about solving the double-spend problem without a trusted third party via proof of work. Various scams will rise and fall but crypto will never go away entirely because of this kernel of beautiful and non-bullshit coolness.
It really does solve the double-spend problem without a trusted third party [albeit at the cost of a lot of electricity].
The fuck it has. There's still the very real threat someone gets 50.1% of the market and can double spent without interference.
Fair criticism. It seems you have been paying attention!
Right. I want to be able to stop though
SBF doesn't sound like he's in a headspace to be thoughtful at the moment: https://www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy
I'm not like a lawyer and this is not legal advice, but giving that kind of interview for someone in his position seems like a really, really bad idea.
Instead of calling it "double spending" they should have called it "mining decoyns."
80, 81: Yeah, maybe the drugs really did fry his brain. (Or maybe he was just never that bright to start with.)
Or being extremely wealthy fried his brain.
It may have been pre-fried. Just look at his name!
Rich people -- even "self-made" rich people -- are often dumbfucks in very ordinary ways. Ask Elon Musk.
80, 81: That's an absolutely amazing thing. Sometimes an ordinary headline can't do justice to a story. The current headline is:
Sam Bankman-Fried tries to explain himself
I would propose in the alternative:
Sam Bankman-Fried: Just read this crazy shit
Vox is probably hoping to get him to tell them more crazy shit in the future, so probably doesn't want to phrase it quite like that.
Vox straight-up calls him a dumbfuck for doing the interview:
I didn't expect him to respond -- typically, people under investigation by both the Securities and Exchange Commission and the Department of Justice don't return requests for comment. Bankman-Fried, though, apparently wanted to talk
So if your motive is to keep him as a source, you omit discussion of how dumb he is, and you say this in the headline:
Sam Bankman-Fried: Holy shit
I'm not familiar with the interviewer, but it's a spectacular piece of work.
She's been pretty sympathetic to him in the past, like a lot of Vox-adjacent people, which is presumably why he felt comfortable telling her all that.
Yeah, they're part of the same quasi-religious movement, and SBF's personal foundation was one of the major funders of "Future Perfect," the part of Vox where she works. So you can sort of see why he thought she was "on his side" or something, but obviously that's dumb and seems to utterly misunderstand the job of journalists.
I'm impressed by his ability to keep talking on the record, and I guess the story is such a big deal that reporters are going to put lots of his words in the press, but every time I look at one of the stories and start scrolling I think: why would I ever read so many of his words?
I'm going to invent an AI lawyer. It's going to be one of those dolls where you pull the string and it talks saying, "For fucks sake, shut your mouth."
Watching billionaires lose their shit has been a thing lately.
Yeah. Watching Musk set all his money on fire and use it to torch his own (previous very good!) reputation has been quite the spectacle.
twitter-backed securities
collateralized tweet obligations
Via Hilzoy, this thread of quotes from the bankruptcy lawyer is wild...
https://twitter.com/tomgara/status/1593254949508775936?s=46&t=siPV0FxpQP2ssdHaOxxaAQ
This had me laughing to tears this morning.
102: And to think, Saiselgy turned down an opportunity to work for this guy.
Several months ago, I found myself having a few mocktails and splitting vegan snacks with Sam Bankman-Fried at a restaurant near my house. We touched on, among other things, his proposal to create a new publication featuring writers he liked, including me.
https://www.slowboring.com/p/some-thoughts-on-the-ftx-implosion
104: That's actually a pretty good piece by Saiselgy, who has been generally not-great lately.
105: You didn't appreciate his mea culpa for his midterm predictions?
I generally don't read any of his stuff anymore, so I appreciated the move to a single-author substack.
I hardly read anything these days.
106: is that the one in which he said he had underestimated the ability of Democrats to overcome unpopular positions with vague but effective advertising? I was not impressed (and I often like his writing).
Actually, probably not the same post. I have a free subscription, and I was thinking of the emailed version of the 2nd anniversary post-- which looks like it had more than shows up on the web, even for an unpaid subscriber.
I'm sure everyone will be shocked to learn that SBF's "pandemic preparedness" ideas are also terrible. (Though apparently sincerely held? I don't see an obvious grifting angle for SBF personally in this stuff. The people he funded, on the other hand...)
There's a weird nexus of EA-type ideas and lab-leak conspiracy theorizing that SBF seems to have been very enmeshed in, and his money led otherwise reputable media outlets like ProPublica to sanitize and surface it. (Vox is very involved too but in a more central way less dependent on SBF's money.) It's very concerning because the specific ideas seem to be both wrong and dangerous.
Is *that* what happened with ProPublica? I was surprised by how bad that article was.
It's kind of interesting that EA people seem attracted to the notion that science is the real enemy -- the greatest dangers to humanity are virologists and AI researchers.
I didn't read the ProPublica article but I thought the Vanity Fair author was already writing lab-leak articles. The ProPublica collaboration did surprise me.
I mean, the obvious answer is "finance people."
117: "rationalists" reinventing religion.
twitter seems to have innovated a run on employees, beyond anything crypto has done to bank runs.
It's wild. They're down to like 12%. I'm amazed the site still functions.
The Dead Sea Effect would suggest those 12% aren't actually the one's you would want around to keep the place running.
It's mostly just the people on work visas still around. So probably not as incompetent as 124 would suggest.
If Twitter DOESN'T crash this weekend it's curtains for the rest of us big tech sinecurees.
Being forced to work for Elon Musk or your visa gets cancelled, that's grim.
Someone was trapped into working with me because of a visa. But he later recommended me for my current job, so I was probably nice to work with.
Or he hated the person he recommended me to.
Wouldn't it be nice if, instead of paying $44 billion to ruin Twitter, Elon had paid that money in taxes?
Because of the 1st Amendment, even though the government could have ruined Twitter for much less, they weren't allowed.
Perhaps ruining twitter is ultimately best left up to the private sector.