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What Happened at Alameda Research

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Re: What Happened at Alameda Research

#321

Post by wikfwikf »

ajross wrote: post #258
wikfwikf wrote: post #74

Earlier quoted context omitted.

The NYT article is headlined "How Sam Bankman-Friedʼs Crypto Empire Collapsed". The parts of the article which actually answer this question are, in their totality, as follows: > Alameda had accumulated a large “margin position” on FTX, essentially meaning it had borrowed funds from the exchange, Par 6. Common knowledge, finance-splained and followed by equivocation and hand-waving from SBF. > On Nov. 6, Mr. Zhao ann…

> This isn't news reporting, it's a form of entertainment journalism I don't see where you're justifying that. I read this article and it gave me a good overview of the situation. You're right, I guess, that it's not "new" investigative journalism and that if I'd been paying better attention I could have found the same info elsewhere and earlier. I don't see how a correctly-reported review piece becomes "entertainmen…

I justified it, at length, in the above comment by pointing out how little real information there was in the article about what had actually happened to BTX and Alameda.

I did not say anything about "new investigative journalism". I said it was not news reporting.

The claim that is is entertainment journalism is very simple. This type of piece is written, not to inform, but to entertain. That's why it focusses on color and character, while missing basic story details - the 5 W's, any overview of how the bankrupt businesses worked, etc. Such pieces are often designed to give the impression of information, because this impression is part of the entertainment experience. You can easily find decent and free writing on this topic which provides way better analysis and is generally accurate and honest.

As you have probably noticed, stories about scams and frauds are a very big business, and articles about them are now part of a well-worn pipeline by which books, movies and mini series are made. Very few of these have any commitment either to accuracy in general or to useful information about why such scams are possible, why they are socially important, or how they can be stopped. They exist merely to entertain and titillate. A writer like the author of this piece, will be aware that they are part of this machine, and that there is lots of career advancement to be made in writing fluff about grifters, particularly in a way which tends to get you closer to other grifters.

Wikipedia is not news reporting either. Not sure of your point, however note that the wikipedia page about Sam Bankman-Fried, while shorter than the NYT article, contains vastly more detailed information about his career, and has 85 citations to its sources.

Re: What Happened at Alameda Research

#322

Post by throwaway290 »

danaris wrote: post #274
throwaway290 wrote: post #232

Earlier quoted context omitted.

I'm not sure paying more will help. It looks like greed can be boundless, so as long as power converts to money malicious actors will keep abusing it. Perhaps we should make power unattractive to such types instead, making it not lucrative so that only crazy* individuals who are content with good enough clean salary seek it out of dumb* desire to make the world better. * In a good way, obviously.

I don't have the links at the moment, but there were some fairly well-researched articles I saw a year or two back about this. The gist was that while our Congresspeople are, indeed, paid quite well by normal-person standards, because of the things they're expected to do (for instance, keep both a home in their district and one in Washington, DC—one of the country's hottest real estate markets), the amount they are p…

> very little

I'm not saying "very little", I'm saying make them pay just enough for a reasonable life and make sure the position of power itself does not convert to money in any way.

> will limit them (even more) to people who are already wealthy, because they will be able to bankroll the expected lifestyle out of pocket.

First, you are ignoring the part about "crazy". If they are willing to go into this knowing they will only be losing money, maybe they have some clean motivations guiding them?

> Furthermore, for those who go into politics looking for money (as opposed to those who go into it looking for power, which is a related, but separate, issue), the salary is peanuts compared to the kinds of money they can get from lobbyists, or as a lobbyist themselves once they leave office

That's what I mean by "make it not lucrative". Power converting to money is a bigger problem than salaries.

As it is, people in power who are already clearly far, far from being poor effect laws just after their relatives sell/buy stocks affected--it's almost as if there's no amount you can pay them to squelch the greed.

If power should not be attractive to people with no integrity pathologically addicted to increasing wealth, then increasing salaries will achieve effect the opposite of desired. They will put their huge salary into stocks then pass laws favorable to their portfolio.

Re: What Happened at Alameda Research

#324

Post by [deleted] »

jasonwatkinspdx wrote: post #265
bee_rider wrote: post #189

Earlier quoted context omitted.

I don’t want to besmirch this particular person I’ve never met, but I definitely have met engineers who look at the stock market, look at their sophomore or junior level signal processing class and decide that all those Econ guys are a bunch of dummies and they could totally beat the market with some Fourier transforms or whatever (the fact that investing firms hired a bunch of quants is left unaddressed). So, I coul…

I'm friends with a retired quant, and one thing I learned from him is the big firms on wall street will hire the absolute most brilliant people they can even to work on utterly banal well known basic strategies. PhD's doing high school math. Because when you're moving billions, nothing is actually basic.

[deleted]

Re: What Happened at Alameda Research

#325

Post by [deleted] »

elie222 wrote: post #287
DebtDeflation wrote: post #120

> Most news accounts seem to portray the scale of the bankruptcy as relatively small. This is a key point. They lost $16B in customer deposits. LTCM lost $4.6B in investor funds. Enron lost $11B in shareholder capital. Interestingly, while Madoff is widely quoted as having lost $65B, that was almost all fabricated paper wealth, actual losses were around $18B and $14.4B of that was recovered and returned. All of these…

They haven’t lost 16b though. Unclear if we have accurate info from Sam but the situation is more like 9b in liabilities with 70% of that in liquid and illiquid assets. People getting back that much is highly optimistic but the 16b doesn’t seem accurate at all. FTX already paid users out $5b btw

[deleted]

Re: What Happened at Alameda Research

#326

Post by jjfoooo6 »

elie222 wrote: post #287
DebtDeflation wrote: post #120

> Most news accounts seem to portray the scale of the bankruptcy as relatively small. This is a key point. They lost $16B in customer deposits. LTCM lost $4.6B in investor funds. Enron lost $11B in shareholder capital. Interestingly, while Madoff is widely quoted as having lost $65B, that was almost all fabricated paper wealth, actual losses were around $18B and $14.4B of that was recovered and returned. All of these…

They haven’t lost 16b though. Unclear if we have accurate info from Sam but the situation is more like 9b in liabilities with 70% of that in liquid and illiquid assets. People getting back that much is highly optimistic but the 16b doesn’t seem accurate at all. FTX already paid users out $5b btw

It's pretty clear that "info from Sam" can't by trusted

Re: What Happened at Alameda Research

#327

Post by matthewdgreen »

tommica wrote: post #306
matthewdgreen wrote: post #260

Earlier quoted context omitted.

I wonder how much of those $16B in customer deposits were actually lightly-traded altcoins that could never have been liquidated at anything close to that value? There is no doubt they defrauded people of a lot of (real!) money, but my guess is a huge chunk of that $16B top-line figure is fantasyland dog-coin nonsense. Whereas the LTCM and Enron investors at least started with real cash.

But those coins were most likely purchased with real money?

Yes, but how much real money is the question. I'm not doubting that real money was lost, just wondering if $16B of actual customer dollars ever flowed into the exchange.

Re: What Happened at Alameda Research

#328

Post by amanaplanacanal »

joenot443 wrote: post #312
nova22033 wrote: post #136

Earlier quoted context omitted.

Ryan Salame, the co-CEO, donated heavily to the GOP.

As I've explained to others here before, there's a difference in magnitude which is relevant here. SBF pledged to donate _$1 billion_ to the Democrat party. The only person to spend more money on the Democrats this cycle was the dear George Soros. Who knows what's in store for SBF, but it's important to look at the facts here and acknowledge that this operation was heavily invested in the success of the Democratic pa…

Pledged, but it sounds like it never happened.

Re: What Happened at Alameda Research

#329

Post by MichaelCollins »

wikfwikf wrote: post #83
SilverBirch wrote: post #59

This article spends quite a bit of time talking about SBF's risk appetite and how it might be drug related. I think that's missing a fairly obvious piece of logic. In order to decide to go into crypto trading you need to have an extremely high tolerance for risk. The crypto industry is self-selected for risk in the first place, you don't need complex explanations of why they use lots of leverage on highly volatile as…

I think there's a huge difference with someone who has a huge appetite for risk, and someone who is taking risks, essentially without oversight, while on dopamine-replacing drugs. Many people who work in conventional finance are well aware of how brain chemistry changes (caused by illness, medication, illicit drugs, or emotional and life changes) can push someone from being in control while pursuing risky but profita…

Putting so much blame on the drugs seems like a way of casting Bankman-Fried as an addict/victim. In reality he's a thief and has been from the start of this scheme. He has a sociopathic disregard for others and cynically covers that with cheap talk of being an altruist.

Re: What Happened at Alameda Research

#330

Post by [deleted] »

DebtDeflation wrote: post #277
isthisthingon99 wrote: post #156

Earlier quoted context omitted.

Correct. Arrogance is not illegal (yet).

Taking customer money and using it for something else is absolutely a crime. And it has nothing to do with the regulatory status (or lack thereof) for crypto. If a car dealership takes customer down payments on cars and instead of ordering the cars they gamble the money away in Vegas, they don't get to just declare bankruptcy and say "too bad so sad", they go to jail.

[deleted]
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