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We will not pursue the potential acquisition of FTX

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Re: We will not pursue the potential acquisition of FTX

#191

Post by htrp »

NotYourLawyer wrote: post #165
pseudosavant wrote: post #111

Earlier quoted context omitted.

FTX going under due to magic beans reminds me so much of Lehman Brothers going under in 2008. That time the magic beans were "mortgage backed securities" that somehow took low-quality debt, mixed it up with some magic, and out came high-quality debt, only it didn't.

It feels magical, but that part is actually fine. The senior claims on that combined debt really can be pretty high quality. The junior claims are dogshit though.

But you can tranche the dogshit and come out with some high quality senior claims :-D

Re: We will not pursue the potential acquisition of FTX

#192

Post by colinsane »

nfw2 wrote: post #71

Potentially dumb question here; I am no expert on crypto or finance. Isn't the collapse of FTX in some ways evidence in favor of decentralized currency rather than against it? As evidenced by 2008, firms gambling with other people's money doesn't seem to be specific to DeFi. If coin exchanges had some legal obligation to just be wallet and marketplace services instead of investment engines, could that help prevent th…

evidence for you, and i (though i’d argue it’s transparency more than decentralization that matters in this case), but that’s certainly not the widespread sentiment. consider also the number of non-custodial failures in this space ranging all the way back to The DAO. at the end of the day, Tether market cap is and has been >> Dai market cap for almost its entire existence. that tells you all you need to know.

Re: We will not pursue the potential acquisition of FTX

#193

Post by htrp »

oliwary wrote: post #176
dragontamer wrote: post #146

Earlier quoted context omitted.

CDOs weren't the problem. You see, mixing together dog-shit __ONCE__ isn't that big of a deal. CDO-squared (CDOs of CDOs) were a problem. If you took those 60 dog-shit loans, mixed them together, and created 10 high quality loans out of them, problems began to occur. Even then, it wasn't the CDO-squared that collapsed the whole thing. It was the CDS: the "insurance" (so to speak) on the CDO-squared that made things g…

I am fascinated by the number of layers of abstractions built on top of each other in these financial products... Bankers seem to rival programmers in their ability to stack abstractions on top of each other until it is impossible to understand how the underlying system relates to the top layer.

A structured products desk is basically a microservices team

Re: We will not pursue the potential acquisition of FTX

#194

Post by rippercushions »

can16358p wrote: post #179
rr808 wrote: post #66

Earlier quoted context omitted.

CZ seems like a genius, but I'm sure he's panicking now, he doesn't benefit from killing the whole alt-coin world - which increasingly looks like happening.

I think FTX was a very big threat to Binance AND the whole crypto ecosystem. After making sure everything was or could become (practically, at any other event where FTT would crash) insolvent under the hood, CZ went on and killed FTX and actually saved a MUCH, MUCH bigger industry collapse that was impending as FTX went bigger and bigger. Not to defend him and I also agree that Binance benefited by killing its bigges…

This seems hysterically optimistic. The current crash is not going to stop with FTX, it's already crashing Solana, BTC, etc. And if Binance themselves and/or Tether come tumbling down, there will be absolute carnage in the markets.

Re: We will not pursue the potential acquisition of FTX

#195

Post by MichaelDickens »

skippyboxedhero wrote: post #171
fdgsdfogijq wrote: post #106

Earlier quoted context omitted.

That's not what I have heard. Specifically know people who have gotten offers, mostly in the 150k range with zero stock. Alameda research is also just random devs that went to MIT with a few years experience. Impressive to go to that school, but clearly not experienced enough to run a real finance operation. Zero real finance people. If they were serious they would have hired portfolio managers with decades of experi…

> Zero real finance people Debate old as time. I agree with you but this happens every cycle. RenTech doesn't have "real finance people" either. Maybe the problem was that they just had the wrong people, not their level of realness. And Alameda seemed to be mainly people from Jane Street? There is a difference between trading firms with good tech (Jane Street) and firms taking prop risk (DE Shaw)...just based on what…

> There is a difference between trading firms with good tech (Jane Street) and firms taking prop risk (DE Shaw)

What do you mean by this? What is DE Shaw doing that Jane Street isn't?

Re: We will not pursue the potential acquisition of FTX

#196

Post by xwolfi »

wfleming wrote: post #104
cellis wrote: post #86

Earlier quoted context omitted.

There’s a Bloomberg article that goes over why this is a bit more nuanced than “gambling with customers funds”. In short, it’s either one or both of poor risk management ( margin traders can’t post collateral and the collateral they had was FTT which went to zero ) and black swan bank runs ( Binance CEO tweets about risky FTT causing bank run causing further drops ). In fact “gambling with customer funds” was by desi…

FWIW you can subscribe to Matt Levine’s column as email newsletter without being a Bloomberg subscriber. (That doesn’t help for reading already-published columns, but of course there are other ways around paywalls.)

I bit the bullet and pay for Bloomberg now, it's too good too consistently.

Re: We will not pursue the potential acquisition of FTX

#197

Post by 6stringmerc »

dragontamer wrote: post #146
kristjansson wrote: post #136

Earlier quoted context omitted.

The problem with MBS was always the zero-sum nature of the alchemy. They took 100 low-quality loans in, and returned 10 high-quality loans, 30 ok-ish loans, and 60 dog-shit loans. No harm no foul, until the dog-shit tranches were marketed as ok-ish, and alchemists believed they we're really creating gold.

CDOs weren't the problem. You see, mixing together dog-shit __ONCE__ isn't that big of a deal. CDO-squared (CDOs of CDOs) were a problem. If you took those 60 dog-shit loans, mixed them together, and created 10 high quality loans out of them, problems began to occur. Even then, it wasn't the CDO-squared that collapsed the whole thing. It was the CDS: the "insurance" (so to speak) on the CDO-squared that made things g…

Actually AIG and other bond insurers really got the bailouts too.

I remember a guy bragging about helping another firm backdate its books to get bail out money. He was bragging. Still remember his name and how he got his pill head daughter a Cush company paid job in London.

Re: We will not pursue the potential acquisition of FTX

#198

Post by melony »

TheAlchemist wrote: post #53

What's even more funny is that Binance make it look like they are a stable financial institution, and it's thanks to their high standards that they won't acquire FTX. Binance is most probably much more of a fraud than FTX. Binance doesn't even have physical headquarters in any country in this world - and the reason is that they are being actively investigated or banned almost everywhere.

They are banned mainly because they like to skirt KYC and similar regulations. It doesn't mean their financial engineering is poor. Those two issues are completely orthogonal.

Re: We will not pursue the potential acquisition of FTX

#199

Post by rippercushions »

woeirua wrote: post #95

Honestly, I think this is a really dumb move by Binance. They have taken a look under the hood, determined that FTX is bankrupt and then told everyone that is the case. Now there's going to be a widespread crypto panic that is going to cause other exchanges to collapse, and ultimately I expect Binance too will go down.

Don't shoot the messenger: the actual problem is that FTX is insolvent, and that would have come to light sooner or later anyway.

Re: We will not pursue the potential acquisition of FTX

#200

Post by mrtksn »

melenaboija wrote: post #190
mrtksn wrote: post #186

Earlier quoted context omitted.

What decentralised asset?

Sorry, crypto. I don’t know much about the topic and sometimes I get confused with the concepts crypto, currency, non fungible, token and I call it asset asset to generalize. So, what makes a crypto to be a crypto?

That's just the label, nothing decentralised is left. See, as it turns out, to trade you need to find people and people are found in central locations. Okay, there are still many exchanges but this is mostly incidental and it makes sense to end up with single exchange eventually.
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