71–80 of 211 posts
I feel bad for him, he's either going to jail for a very long time, or he'll have an "accident" after losing so many people so much money.
I still don't get who is actually trading crypto on these exchanges. I have trouble believing it is not 99% wash trades.
Earlier quoted context omitted.
"US culminating in the crash in 2011" The official date given by NBER says that the recession began in December of 2007, which put the economy into a fragile state, which was intelligently managed for another 9 months, before circumstances went beyond anything that could be managed. Then the financial meltdown began in September of 2008.
And to amend a bit, to give the whole perspective: And one of the triggers started when around 2005 the FED started raising interest rates. Which it had lowered more dramatically due to 9/11. https://www.bankrate.com/banking/federal-reserve/history-of-... Let that sync in, is my 2c. (Extra:The FED interest rates takes 2 years to kick in to Adjustable Rate Mortgages which where the first to fall.)
Question, though, and coming back on topic: Did the rising interest rates trigger this (FXT)? There might be a path here, and it would not have the two-year delay of adjustable rate mortgages.
https://twitter.com/SBF_FTX/status/1590709172936798208 "5) The full story here is one I'm still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users' margin. I thought it was way lower." Amazing
Can someone ELI5 what margin has to do with the bank run?
I guess "internal labeling of bank-related accounts" is one of those "dumb" activities that they were counting on amphetamines to take care of for them: https://twitter.com/carolinecapital/status/13790363463003054...
I still don't get who is actually trading crypto on these exchanges. I have trouble believing it is not 99% wash trades.
https://twitter.com/SBF_FTX/status/1590709172936798208 "5) The full story here is one I'm still fleshing out every detail of, but as a very high level, I fucked up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users' margin. I thought it was way lower." Amazing
Can someone ELI5 what margin has to do with the bank run?
Michael Lewis, author of The Big Short, was in the process of writing a book about the success of FTX and SBF. He personally went to the Super Bowl with them and visited them in the Bahamas multiple times. Someone on Twitter said, "he just got his perfect ending." It's gonna be a fantastic book.
Reminds me of the documentary Weiner, which was supposed to be a comeback film about Anthony Weiner's run for NYC mayor but instead became an intimate portrait of a man's life (as well as that of his unfortunate wife) utterly collapsing.
But SBF? The last interview I saw him give was I think with Levine; it was shocking because SBF was describing whence crypto derives its value. And Levine remarked that SBF was describing a Ponzi scheme.
For me, that interview showed two things. First, that SBF quite obviously has no morals whatsoever. And second, he's not nearly as smart as he's portrayed to be.
His whole cred derives from his MIT degree combined with his experience at Jane Street. Jane Street is a great firm, but what they do is really specific, and not necessarily the "coolest" way to make money. It's a lot of tech and infrastructure, less finance and trading chops. (The real badasses are RenTech, for example.)
Anyway, I watched a few videos that he made while working at his crypto hedge fund, Alameda. He described the strategies, and they sounded like the typical market maker stuff - arbing exchange discrepancies yadda yadda. Not the most inspired stuff.
Earlier quoted context omitted.
And to amend a bit, to give the whole perspective: And one of the triggers started when around 2005 the FED started raising interest rates. Which it had lowered more dramatically due to 9/11. https://www.bankrate.com/banking/federal-reserve/history-of-... Let that sync in, is my 2c. (Extra:The FED interest rates takes 2 years to kick in to Adjustable Rate Mortgages which where the first to fall.)
Interesting. Question, though, and coming back on topic: Did the rising interest rates trigger this (FXT)? There might be a path here, and it would not have the two-year delay of adjustable rate mortgages.
Recall FTX used a bunch of cash to save failing companies which would create systemic shock (ironic), acquire and invest lately, including in the Silicon Valley. My guess here: "1-2/3-4 Billion" is enough for liquidity, nobody is going to run on us, we are trusted, especially after us saving the world.
There was "bad event rolls" in the system and when they came, nobody can/will/would give them that amount of money.
I am sure in great times, they would also find liquidity/loans more easily -- which is what they are still trying to do. ("Everyone" is keeping cash to the chest, waiting to see what happens right now.)
I think this should be a warning to anyone still invested in other crypto companies or exchanges. Everything seems like it's going well, until the music stops and the exchange is insolvent. FTX is not unique. A lot of crypto exchanges are doing just as much shady stuff. When you put your money with these companies, you're betting that "no really, this one is above board!" That's an extremely risky game to play when t…
In a lot of ways, crypto is just relearning the basic lessons of finance that banks and corporations learned decades ago. Things like "don't allow customers to use your company's assets as collateral" and "using a bunch of leverage on volatile crypto" are much less frequent in traditional finance, specifically due to regulation or the fact that these strategies have tried and failed before. This isn't to say that dec…
To my way of thinking, they’re not relearning anything—they’re specifically using lessons learned from history as a playbook to make, well, illicit gains.