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Credit report shows Meta keeping $27B off its books through advanced geometry

news.ycombinator.com

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Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#131

Post by cyanydeez »

bregma wrote: post #115
loeg wrote: post #77

Earlier quoted context omitted.

No one is lying or deceived here.

Investor: Is this your debt, Meta? Meta: (hiding debt behind its back) No. It's Jimmy's. Investor: Now Meta, you know lying is wrong. Meta: No it's not. All the kids do it so it's OK.

If it's related to AI, it's more like wash trading. The entire business interest in AI is making things look like there's a lot of investment when it's really just a small circle jerk of business interests.

It's just a more advanced crypto fraud.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#132

Post by jbs789 »

skybrian wrote: post #130

A quote from The Information via Matt Levine: > The bonds for the Hyperion data center priced with a coupon of almost 6.6%, roughly a percentage point higher than Meta’s outstanding corporate bonds and in line with the average junk bond. That’s a higher yield than investors would expect given that S&P rated the Hyperion bonds A+, safely within the investment-grade spectrum. Apparently the bond market is pricing the g…

If the article is correct and they are 144A then they will also be a little less liquid. But yeah, I have to imagine everyone involved knows what’s up. Just happens to work for everyone (for now).

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#133

Post by cyanydeez »

loeg wrote: post #129
austin-cheney wrote: post #118

Earlier quoted context omitted.

That's not accurate. This is debatable but subprime loans were mostly accurately rated. They were rated very low. That low rating was the ultimate precursor to the crash, because it means banks carrying those poorly rated vehicles needed to balance them with different highly rated vehicles to keep their own rating high enough to qualify carrying and lending other financial assets on their books. There were so many of…

The other parts of the 2008 crisis are even more dissimilar to this scenario than the MBS ratings.

Right, this is more like wash trading, in that companies like Meta are trying to syntehtically make it look like there's more assets involved in AI than there really are.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#135

Post by cyanydeez »

loeg wrote: post #66
gorgoiler wrote: post #32

It’s buried in the article but this about a debt vehicle created to finance a “2.064 GW hyperscale data center campus”. That’s approximately equivalent to a One-Third-Gorges Dam (one tenth of the Three Gorges Dam.) Downstream of the capex to build the data centre is, presumably, a sister capex to build a power station. At what stage do these come hand in hand? Or does this financing include provisions to pay the elec…

> Or does this financing include provisions to pay the electricity bills for the next ten years which, in turn, gets used by the power company to finance the construction of a new power plant? The power company gets some kind of heads up? Mostly things like this, yeah. The hyperscalers don't want to get into the power business.

They also need artificial demand to keep the valuations of their data centers high, so generating multiple business interests creating wash trading benefits their interests.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#136

Post by cyanydeez »

randycupertino wrote: post #41
asah wrote: post #5

LOL "The entity is named “Beignet,” presumably because “Off-Balance-Sheet Leverage Vehicle No. 5” tested poorly with focus groups."

Meta's accounting games are entirely reminiscent of Enron, who famously named their off-balance sheet debt-hiding special purpose vehicles after Star Wars "Jedi 1, Jedi 2," Jurassic Park, "Raptors 1 through 7," and the crooked CFO's kids "LJM" etc.

AI companies are running the same frauds as multiple, but I think cryptocurrency/FTX is more apt. They're creating artificial demand by trading contract with themselves and using those assets to make it look like they've got more revenues & assets of value.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#137

Post by cyanydeez »

skizm wrote: post #107

Serious questions: won't banks and ratings agencies simply treat this as Meta's debt since it it effectively Meta's debt? What changes if this was on their "official balance sheet"? How does playing with the wording actually help Meta overall?

As in the 2008 crash, the ratings agencies were disincentivized to accurately rate these vehicles because they were superficially masked and paid by the companies asking them for ratings.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#138

Post by YetAnotherNick »

htrp wrote: post #65
bdangubic wrote: post #54

Earlier quoted context omitted.

banks are not stupid… you can’t just open LLC, borrow billion bucks, spend it and then be like “oops, LLC mates, not liable”

You can if you are Meta and are willing to litigate the hell out of it.

Then why don't they do it? It's the easiest money they can ever make. Even I can litigate the hell out of it if I get $27B, take the money and close the LLC.

Re: Credit report shows Meta keeping $27B off its books through advanced geometry

#140

Post by NewsaHackO »

cyanydeez wrote: post #136
randycupertino wrote: post #41

Earlier quoted context omitted.

Meta's accounting games are entirely reminiscent of Enron, who famously named their off-balance sheet debt-hiding special purpose vehicles after Star Wars "Jedi 1, Jedi 2," Jurassic Park, "Raptors 1 through 7," and the crooked CFO's kids "LJM" etc.

AI companies are running the same frauds as multiple, but I think cryptocurrency/FTX is more apt. They're creating artificial demand by trading contract with themselves and using those assets to make it look like they've got more revenues & assets of value.

I assume you have no proof of this, correct?
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