421–430 of 437 posts
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There was a VERY interesting article on HN recently about the risk-taking/compulsive side effects of dopamine drugs.
Got a link? Would be interested in reading this.
Original HN threads here: https://hn.algolia.com/?q=dopamine+impulsive
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This was nothing like a Ponzi scheme - the money was lost due to bad trades, poor collateral, bad accounting/compliance with probably a little bit of criminality thrown in at the end. Although they were trading crypto it was more like an old fashioned/real money collapse.
There's a slide deck floating around[1] purported to be from Alameda research in 2018. That deck claims they offer 15% fixed returns to investors. If that slide deck is genuine, it seems possible that the unaccounted for money at Alameda Research went to paying for redemptions by early investors. Given how bad the accounting at FTX/Alameda seems to be, it seems possible to me that Alameda investors were paid back at…
> 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…
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.
To give a hypothetical example: Alameda, as a customer, deposits magic beans with a mark to market value of a billion dollars. Then Alameda trades the magic beans for a billion dollars of BTC-perp (FTX paper bitcoin), with FTX acting as the counterparty (which I believe they typically were for trades of the perpetuals). Now FTX's balance sheet reflects $1 billion in Bitcoin liability (plus being long $1 billion worth of magic beans)-- but in this example no bitcoin had been deposited at all-- just magic beans.
When sizing up the losses, all liability ultimately resulting from magic beans ought to be backed out. This is exit complicated because some of the magic-bean derived paper assets have presumably been withdrawn using customer deposits, and those funds are actually lost even if the depositors that brought them in never traded (and simply deposited in FTX because of the ponzi-scheme grade yields they were paying depositors).
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You get a lot of internet points and clicks for jumping on the hate bandwagon and cynically tearing people down. Maybe if they weren't so focused on a manufactured villain, and people and the media had put even a tiny fraction of this scrutiny on SBF, an actual fraud might have been mitigated. But no, let's go after the guy putting rockets in space and producing millions of electric cars in the real world. He's the r…
Just surprised that HN has been flooded with the same low tier takes on Musk and tech culture in general. This audience usually understands nuance better
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Don't fall for the red-blue trap. There is one establishment, which uses social issues to divide and conquer and create the illusion of choice.
Be careful, they'll call you an 'enlightened centrist' to convince others this position is irresponsible
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But those coins were most likely purchased with real money?
I think his point is that while it was bought with real money, it couldn't be sold for real money. If I buy 50 RandoCoins for $1 today, tomorrow it shows that it's now valued at $2, and then the next day RandoCoin is hacked and all the coins are stolen, I didn't really lose $100, I only lost $50. So he's wondering if the value of loss is being expressed as the money used the purchase the coins or the perceived value…
> 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…
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There's a slide deck floating around[1] purported to be from Alameda research in 2018. That deck claims they offer 15% fixed returns to investors. If that slide deck is genuine, it seems possible that the unaccounted for money at Alameda Research went to paying for redemptions by early investors. Given how bad the accounting at FTX/Alameda seems to be, it seems possible to me that Alameda investors were paid back at…
On that reasoning any company that is successful and people make profit early on then fails would be a Ponzi. It still looks like Alameda/FTX was initially profitable and then began to make losses which resulted in FTX customers (not investors in Alameda) deposits being loaned/stolen. https://twitter.com/0xdoug/status/1591161987547168768
> 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…
> The media doesn't seem to be treating it as such. The massive links to the Democractic party probably have something to do with this.
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Okay - so even 0.01% on $10Bn = $1M per day = $365M per year, and - at the time - growing. One would think they should've been able to get a loan (if those numbers were real).
Those numbers were likely real. Any serious MM firm can quickly get an idea if the books/volumes on an exchange are legitimate and leaves if not (high theft risk on fake venues). Aside from 365mm on 10bn being a bad trade, the volume will 100% drop off drastically after the loss of trust. That 365mm would be fortunate to stay above 36mm in my opinion
You wouldn't have had a loss of trust because the loan would've allowed FTX NOT to transfer customer deposits to Alameda, and instead use borrowed money (on their future earnings).