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What Happened at Alameda Research

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Re: What Happened at Alameda Research

#341

Post by enraged_camel »

danaris wrote: post #281
jasmer wrote: post #212

Earlier quoted context omitted.

? Stealing $10B is fraud. So when $10B goes missing, due to what we know is 'bad behaviour' at minimum, and all the other 'smoke' around this story - we should use that word in proper context. This is literally one of the biggest fraud cases in history. By their own 'standards' they are compelled to use the word in proper context.

While I'm sympathetic to this position, I can also easily see an argument from the NYT's side that "fraud" is a specific criminal allegation, and as such using it in an article like this could open them up to libel or defamation suits.

I mean, they can always call it "alleged fraud", right? They use that kind of language to describe all sorts of alleged crimes.

Re: What Happened at Alameda Research

#342

Post by MichaelCollins »

spaceman_2020 wrote: post #318
Yizahi wrote: post #285

Earlier quoted context omitted.

People are acting towards him like that exactly because they praised him before and were holding him at high esteem. I certainly did. Now he started to disappoint people, multiple times. Nobody cares (much) about CEO of Comcast, or BP, or Electronic Arts. They have bad reputation and when they do something bad again, people just shrug and move on. While people with good reputation doing same things are discussed a lo…

Founding multiple big successful companies in nascent industries that had been starved of capital before is a unique AND big achievement. Nobody cheers on Bezos because of Blue Origin. They praise him for building Amazon when e-commerce was still new (or when dot coms had gone out of favor). Same with Musk. There are multiple major private space ventures now. Ever car company has a heavily funded EV division. When Mu…

> Nobody cheers on Bezos because of Blue Origin.

I honestly think they would, if Blue Origin actually did anything worth cheering. Their best achievement so far is stalling ULA's Vulcan Centaur for years. By the time it flies it will most likely be utterly obsolete, because Blue Origin has fumbled the BE-4 severely. Vulcan Centaur was supposed to fly in 2019 but Blue Origin only delivered some engines about a few weeks ago. They're years late and it's hurting ULA badly. Because of Blue Origin, SpaceX's Starship will probably fly before Vulcan Centaur. Vulcan Centaur is meant to be a HLV marginally more performant than Falcon 9, but Starship should wipe the floor with both.

Re: What Happened at Alameda Research

#343

Post by searchableguy »

xdavidliu wrote: post #307
memish wrote: post #284

Earlier quoted context omitted.

He was skeptical even though SBF wanted to give him money , not the other way around. And people Elon knew were pushing for SBF. Elon ended up ghosting him anyway. Look at the chat logs that were revealed in court. Michael Grimes [IBanker at Morgan Stanley]: Do you have 5 minutes to connect on possible meeting tomorrow I believe you will want to take? Elon: Will call in about half an hour Michael: Sam Bankman Fried i…

> Elon: Blockchain twitter isn't possible, as the bandwidth and latency requirements cannot be supported by a peer to peer network, unless those "peers" are absolutely gigantic, thus defeating the purpose of a decentralized network. Anyone able to evaluate this comment? Is this another "poorly batched 1000 RPCs slowing down home timeline" remark?

No, it's true.

Theoretical TPS limit for mainnet and L2s isn't enough to support the scale of twitter. The writes will get expensive very fast unless you offload that and only send a batched proof. Putting actual content on blockchain is a non-starter as well.

Most of the blockchain based social graphs end up using centralized indexer.

Everyone is also dependent on centralized RPC providers for querying and sending transactions since it requires a lot of resources to maintain your own.

So peer to peer isn't possible at their scale depending on how you interpret it.

Re: What Happened at Alameda Research

#344

Post by prego_xo »

jpm_sd wrote: post #294
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…

Was that $16B in "real money" (dollars), $16B in "pretend money" (astronomically overvalued cryptocurrency), or some of each?

Considering that "pretend money" is purchased with "real money", this distinction doesn't matter much. I guess it just depends on if you consider property valuable despite not having a green tint and dead political figure on it.

Re: What Happened at Alameda Research

#345

Post by Naga »

ZeroGravitas wrote: post #31

I liked the chapter in Nate Sivers' Signal and the Noise when he talks about how hard it is to know if you're a good professional poker player. Been a while since I read it but feel like even after a couple of years of winning games and tracking his own performance, he had enough stats knowledge to realise that he didn't actually know if he was good or just lucky. The noise swamped the signal. This feels relevant to…

Another book in this vein is Taleb's Fooled By Randomness.

Re: What Happened at Alameda Research

#346

Post by ghufran_syed »

SilasX wrote: post #226
kumarvvr wrote: post #224

Earlier quoted context omitted.

That does not make it a fraud. They took investor money and leveraged it and made bets on basis of their mathematical models. Their models didn't work out. I don't think their intention was to rob / hide / betray / hoodwink.

I was replying to this: > A bunch of PhD traders lost their wealth That is, the only reason the losses were limited to them was because of special intervention. Otherwise, it would have caused losses for many others.

right, but if a counter-party ends up losing money because of incorrect assessment of credit or liquidity risk, isn’t that their own responsibility? It’s like when someone can’t pay the mortgage loan a bank lent them - the borrower isn’t performing under the terms of the contract, but part of the payments that borrowers make to the lender is to account for that credit risk - what matters is if the lender has accurately priced this over their portfolio, taking into account how “independent” (or otherwise…) the individual loan risks really are. The liquidity problem is usually when it turns out that the individual loans credit and liquidity risk are NOT independent at times…

Re: What Happened at Alameda Research

#347

Post by super256 »

gruez wrote: post #263
paulusthe wrote: post #202

Earlier quoted context omitted.

Crypto shorts

Ironically keeping a short position to benefit from this collapse is pretty risky. Shorting requires leverage by necessity, which means you'll have to turn to an exchange like FTX, which has the possibility of collapsing. Decentralized lending protocols aren't much better, as collapses a few months ago has shown.

CME offers micro futures at globex: METX2 and MBTX2. You can short those with your typical margin rates; my broker gives me the same leverage as legally defined by my gov.

Re: What Happened at Alameda Research

#348

Post by xhkkffbf »

kasey_junk wrote: post #61
lordnacho wrote: post #30

Makes some sense. When stuff is messy, you can do financially stupid things. I've sat on desks that lost money from not realizing some very simple things like having options with upcoming dividends. If SBF really was on drugs and playing League of Legends badly, perhaps he also didn't know what was happening in his shop. But... you have all this money. Hire an adult? Almost anyone who's had a trading desk job would t…

I’m no expert in the space but was under the impression FTX was still considered a low volume exchange. If Alameda mm was still providing substantial volume they may have felt the price they were paying being bad at trading was worth it from a marketing point of view. This was the same crew buying stadium naming rights and over paying for eSports teams. As for hiring an adult, have you seen some of the things they’ve…

Yes, the crash at FTX gets all of the press, but it's really the slow motion collapse of things liken pension funds that should really be getting our attention. SBF is just a piker compared to the pension funds.

Re: What Happened at Alameda Research

#349

Post by 55555 »

xdavidliu wrote: post #307
memish wrote: post #284

Earlier quoted context omitted.

He was skeptical even though SBF wanted to give him money , not the other way around. And people Elon knew were pushing for SBF. Elon ended up ghosting him anyway. Look at the chat logs that were revealed in court. Michael Grimes [IBanker at Morgan Stanley]: Do you have 5 minutes to connect on possible meeting tomorrow I believe you will want to take? Elon: Will call in about half an hour Michael: Sam Bankman Fried i…

> Elon: Blockchain twitter isn't possible, as the bandwidth and latency requirements cannot be supported by a peer to peer network, unless those "peers" are absolutely gigantic, thus defeating the purpose of a decentralized network. Anyone able to evaluate this comment? Is this another "poorly batched 1000 RPCs slowing down home timeline" remark?

It’s absolutely true.

Re: What Happened at Alameda Research

#350

Post by SkyMarshal »

lordnacho wrote: post #30

Makes some sense. When stuff is messy, you can do financially stupid things. I've sat on desks that lost money from not realizing some very simple things like having options with upcoming dividends. If SBF really was on drugs and playing League of Legends badly, perhaps he also didn't know what was happening in his shop. But... you have all this money. Hire an adult? Almost anyone who's had a trading desk job would t…

> I actually got Ontario into a fund I was at, and we'd have lost the investment if we hadn't behaved like adults. This is causing me some cognitive dissonance, because I don't think of the investors as the kind of people who'd even smile if they found me in the office playing a video game, let alone addled on drugs.

They might been starstruck by Sequoia more than SBF and his team, and just gone along for a ride with the most storied VC firm in the world.

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