611–620 of 790 posts
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FTX should never been in this position. They are an exchange . Nobody should be able to obliterate them by playing around with their crypto.
They are an exchange that allows future trading and margin trading which require borrowing money/assets/coins. The FTT tokens were probably put up as collateral for loans. The drop of the FTT value probably triggers calls on those loans. Thus the liquidity crisis.
The only way this happens is if the prop trading business is over-leveraged somehow and the exchange bailed it out with FTT.
Customer deposits should meet liabilities 1:1. If they don't, somebody is lying.
Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined - this was yesterday/today. Of course the price of FTT crashed today. And now Binance buys FTX to help them out... smells like Binance played 4D chess all along. https://decrypt.co/1136…
FTX should never been in this position. They are an exchange . Nobody should be able to obliterate them by playing around with their crypto.
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Exactly, it's bizarre to read about the wildcat banking era in the US and why the Fed was created while simultaneously looking around at the rate of mainstream crypto scams and institutional failures nowadays. The Fed sure isn't without its issues, but it was created to solve the exact problems that we're now seeing proliferate via the crypto space.
I don't think this is correct. The FED was created in 1913 for a very specific reason - to counter the Panic of 1907 by creating a banker of last resort. It did nothing to curb the banker speculation that led to the panic of 1907 Witness LTCM, Web bubble, Subprime crisis, all fueled by banks willing to lend and overextend themselves beyond margin. The 1913 ACT did not change that one bit except make the speculators n…
This was addressed under Glass Steagall by creating the FDIC and ushering in the fractional banking system, which kept commercial and investment banking separate and imposing liquidity requirements and a review system on banks. This legislation was later repealed during the Clinton administration and was largely seen as one of the key mistakes that led to the 2008 crisis.
That doesn't mean that the Fed is failure now and should be completely done away with. The runs we're seeing on crypto exchanges are very similar to what the Fed was created to avoid.
Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined - this was yesterday/today. Of course the price of FTT crashed today. And now Binance buys FTX to help them out... smells like Binance played 4D chess all along. https://decrypt.co/1136…
> Binance was threatening to dump a huge amount of FTT tokens on the market. FTX has a big+vulnerable position in FTT. FTX asked Binance to sell them the tokens for a fixed price, so as not to crash the FTT token price. Binance declined This makes absolutely no sense and is not how markets work. If FTX was actually willing to buy unlimited FTT at a given price, Binance could not have "crashed the price" by selling be…
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FTX should never been in this position. They are an exchange . Nobody should be able to obliterate them by playing around with their crypto.
They are an exchange that allows future trading and margin trading which require borrowing money/assets/coins. The FTT tokens were probably put up as collateral for loans. The drop of the FTT value probably triggers calls on those loans. Thus the liquidity crisis.
Earlier quoted context omitted.
They are an exchange that allows future trading and margin trading which require borrowing money/assets/coins. The FTT tokens were probably put up as collateral for loans. The drop of the FTT value probably triggers calls on those loans. Thus the liquidity crisis.
It shouldn't work this way. Customer funds should be segregated from whatever prop trading the rest of the business is doing. The only way this happens is if the prop trading business is over-leveraged somehow and the exchange bailed it out with FTT. Customer deposits should meet liabilities 1:1. If they don't, somebody is lying.
That’s not how banking works. You hold illiquid assets. Sometimes they move in price. If they move enough in price you’re insolvent. Limiting bank runs is a genuinely hard problem.
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Just went over the issues on the balance sheet of Alameda Research, which is SBF's trading company. Of the $14.6 billion assets Alameda manages, almost $6 billion is FTT based. Alameda has heavy investment in Solana, Serum, and other alt-coins. It looks like the drop in their value has lowered Alameda's asset balance. Alameda borrowed FTT tokens from FTX to put them as assets in the balance sheet to shore it up. The…
> FTX issues FTT tokens (print money) => lends to Alameda to put under the asset balance => Alameda borrows money from outside against its assets or uses the asset/coins to invest in others => win with thin air! The Federal Reserve issues US dollars (print money) => US Treasury borrows money from The Federal Reserve, Japan, China and the UK against its assets or uses the asset/coins to invest in others => win with th…
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The Robert Caro books about Lyndon B Johnson detail his effort to force meme “LBJ” as a reference to him. (Mostly in terms of insisting various communications employees use it in press releases and what not). It seems he liked the iconography of it, especially in putting himself in similar company to FDR. Both his daughters have the LBJ initials, his wife is mostly known as Lady Bird Johnson (a nickname that predates…
OT: Are those books worth reading? I loved the Power Broker but the LBJ books are a whole lot to get through.
The books are designed to be standalone-ish, so later volumes spend a fair bit of time repeating things from earlier books. Caro goes deep, deep into various shady acts and new scandals which were probably shocking and relevant in 1982 but less so four decades later.
Caro also touches on a lot of the same topics as The Power Broker, and the picture he paints of LBJ ends up sounding quite a lot like Robert Moses. Is it because all powerful men inevitably end up as bullying psychopaths, or does Caro have something of an axe to grind? 50/50, maybe.
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Are you seriously asking? He lied like every other exchange does. The man's middle name is Bankman for god's sake.
I don't understand how his middle name relates to anything about this situation.