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Phone interview with Sam Bankman-Fried [audio]

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Re: Phone interview with Sam Bankman-Fried [audio]

#61

Post by c7b »

RC_ITR wrote: post #10

A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (m…

Exactly, shameful framing. But it should be noted that he veered onto the clearly wrong path even sooner than you suggest: by taking user deposits and putting them into anything other than what the users had instructed them to hold with it. In regulated stock brokers, the stocks that are held on behalf of users are put into segregated accounts, meaning that they belong to users even if the broker becomes insolvent. By breaking this 1:1 link between users' funds and the corresponding assets, he's already creating mayhem, even if the investments had turned out to be successful. A broker simply has no business whatsoever to speculate with users' funds.

Re: Phone interview with Sam Bankman-Fried [audio]

#62

Post by RC_ITR »

dibt wrote: post #58
RC_ITR wrote: post #48

Earlier quoted context omitted.

> The tokens didn't suddenly drop in value. May I point you to a chart showing the price of Solana (SBF's preferred token)? Down 80% in four months is a pretty sudden drop in value. To be clear, I think the fraud started then , but that was after the damage had been done. >He has experience as a market maker and remaining delta-neutral Yeah, but market makers in unexpectedly lopsided markets lose all the time. It's t…

These were the top tokens they held in order of how they marked them on their balance sheet: FTT $5.9B SRM $5.4B SOL $2.2B MAPS $865M Found here: https://images.squarespace-cdn.com/content/v1/596a07c029687f... >May I point you to a chart showing the price of Solana (SBF's preferred token)? Down 80% in four months is a pretty sudden drop in value. FTT, SRM, and MAPS are the garbage tokens they claimed were worth more…

I'm not sure what point you're trying to make by showing me they held $2bn of Solana in Nov-22 (itself, like all crypto, a made up and useless/worthless thing) that was worth $10bn in Nov-21.

Like sure, to make themselves feel better when they stared at Excel, they minted FTT to fill the gap, but so what?

To your point, just because I mint 1bn coins and sell one to my roommate for $1, it doesn't actually change the fact that I lost $700mn on $TSLA (the true problem).

EDIT: Maybe to make my point more clear - the one good thing about finance is that if I sell a Orange juice futures contract, I need to get the oranges from somewhere, or I can go to jail.

Crypto's innovation is eliminating the need for oranges, but turns out that's not an innovation at all

Re: Phone interview with Sam Bankman-Fried [audio]

#63

Post by TacticalCoder »

divbzero wrote: post #51
RC_ITR wrote: post #10

A very important nuance for everyone following this. SBF keeps saying there was a liquidity crisis at FTX, which is 100% not true. A liquidity crisis implies that he took deposits, flipped them into good, but illiquid investments, and ran into trouble because people asked for more cash than FTX had on hand. FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (m…

Long Term Capital Management [1] is a good example of a company with “good, but illiquid investments” that failed because they made trades that went the wrong way temporarily, ran out of margin, and had to be rescued with a bailout before the trades recovered. Market prices stabilized after the bailout and the rescuers eventually exited the trades with a small profit. I agree with your assessment that Alameda / FTX p…

> I agree with your assessment that Alameda / FTX put customer deposits into “completely inappropriate investments”

And what about customers deposits that ended up in $300m+ real-estate in the Bahamas (including some for SBF's parents, which they now said they'd be giving back to FTX: how generous once caught with the hand in the cookie jar)?

And what about the $100m or maybe more in political donation? ($40m from SBF to dems, now he says he gave the same account to reps but kept it shadow for it'd ruin his woke image and there's one of his accomplice who gave at least $12m to reps too)

That's already $400m right there that haven't been wiped out due to a market downturn.

And then the naming rights, insane ads, etc.

"Oops sorry we fucked up, we used your funds to gamble with 100x leverage like degens and lost it all (but don't pay too much attention to all the money we actually siphoned out of the system)".

I don't think you can compare LTCM to FTX/Alameda (I'm not saying you explicitely did but it's dubious). We're talking about SBF guy describing his magic ponzi box and Matt Levine answering him (april 2022 I think):

"I think of myself as like a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.".

FTX/Alameda is more Enron than LTCM.

Re: Phone interview with Sam Bankman-Fried [audio]

#64

Post by dibt »

skippyboxedhero wrote: post #60
dibt wrote: post #30

Earlier quoted context omitted.

> couldn't code but worked as a trader at JS for three years That doesn't seem odd. They need people good at math and/or creative problem solvers. The platform they execute on doesn't need to be rebuilt for each new strategy. > I think everyone assumed Alameda were doing something clever. Everyone knew the strategy they ran was to list a perpeptual futures contract for a Solana shitcoin on FTX, and short it into the…

It does seem odd. Almost everyone who they hire (in these roles) can code. If you are just hiring traders, why not hire guys who can...you know...trade? Rather than some random person from MIT. The precise competitive advantage of JS is their tech. I will say this another way...back in the early 2000s, investment banks used to hire people to do index arbs, the strat was literally press sell/buy button on Excel that w…

> If you are just hiring traders

I didn't say he was hired for his trading ability. I only suggested coding isn't a perquisite.

> random person from MIT

I didn't suggest that was the qualifier for them being hired. They do hire from universities like MIT, though, and I'm sure there are many alumni that stay connected to faculty for the purpose of finding candidates.

Only 23 of 123 open jobs for students/new grads on their site are for software engineers.

https://www.janestreet.com/join-jane-street/open-roles/?type...

They say on the site: "We look for smart people with curious minds from any background."

Re: Phone interview with Sam Bankman-Fried [audio]

#65

Post by dibt »

RC_ITR wrote: post #62
dibt wrote: post #58

Earlier quoted context omitted.

These were the top tokens they held in order of how they marked them on their balance sheet: FTT $5.9B SRM $5.4B SOL $2.2B MAPS $865M Found here: https://images.squarespace-cdn.com/content/v1/596a07c029687f... >May I point you to a chart showing the price of Solana (SBF's preferred token)? Down 80% in four months is a pretty sudden drop in value. FTT, SRM, and MAPS are the garbage tokens they claimed were worth more…

I'm not sure what point you're trying to make by showing me they held $2bn of Solana in Nov-22 (itself, like all crypto, a made up and useless/worthless thing) that was worth $10bn in Nov-21. Like sure, to make themselves feel better when they stared at Excel, they minted FTT to fill the gap, but so what? To your point, just because I mint 1bn coins and sell one to my roommate for $1, it doesn't actually change the f…

> (itself, like all crypto, a made up and useless/worthless thing)

oh... I see what's happening here. Good luck on your crusade.

Re: Phone interview with Sam Bankman-Fried [audio]

#66

Post by medvezhenok »

divbzero wrote: post #46
TacticalCoder wrote: post #31

Earlier quoted context omitted.

> FTX actually had a solvency crisis, where he took deposits, put them in completely inappropriate investments (many of which are now worthless, all of which were speculative nonsense) and is now revealed to have done that. Who was on the other side of these losing trades? People need to follow the money trail. Where did the money go? There are people who called the Alameda / FTX scam from day one, before FTX was eve…

> Who was on the other side of these losing trades? People need to follow the money trail. Where did the money go? There doesn’t have to be another side to the losses. If Alameda / FTX was holding assets that depreciate in value, they would book losses along with everyone else holding the same assets.

Any time someone loses value, someone else gains it (in the short term), short of destruction of physical or knowledge capital (i.e. WWII bombing raids). We mark things in dollars but real value is measured in resources, physical capital, and intangible capital (rather than USD). Unless any of that was lost, the $ value losses just re-accrue to someone else instead.

This is different from imaginary value inflating and disappearing (i.e. tokens that never had liquidity - where mark to market never made sense, etc). In that case the whole thing is a mirage.

But if $8 billion dollars went into FTX, that money does not just "disappear" from depreciation - someone else's (or many people's) purchasing power increased in relative terms proportional to the losses suffered by FTX's creditors/depositors.

Re: Phone interview with Sam Bankman-Fried [audio]

#67

Post by smcl »

pqdbr wrote: post #27

I didn't lose a penny in the FTX debacle but even so it's infuriating to hear this crook giving this interview with the Bahamas waves as background noise.

I’m the same, I’ve been a suspicious of crypto and openly questioned it so I’ve no doubt a few of the people who said “stay poor” to me lost money on these recent crypto collapses. But I can’t gloat, mostly because it’s not in my nature but it’s also just frustrating seeing such an obvious needless, empty boom and bust

Re: Phone interview with Sam Bankman-Fried [audio]

#68

Post by skippyboxedhero »

dibt wrote: post #64
skippyboxedhero wrote: post #60

Earlier quoted context omitted.

It does seem odd. Almost everyone who they hire (in these roles) can code. If you are just hiring traders, why not hire guys who can...you know...trade? Rather than some random person from MIT. The precise competitive advantage of JS is their tech. I will say this another way...back in the early 2000s, investment banks used to hire people to do index arbs, the strat was literally press sell/buy button on Excel that w…

> If you are just hiring traders I didn't say he was hired for his trading ability. I only suggested coding isn't a perquisite. > random person from MIT I didn't suggest that was the qualifier for them being hired. They do hire from universities like MIT, though, and I'm sure there are many alumni that stay connected to faculty for the purpose of finding candidates. Only 23 of 123 open jobs for students/new grads on…

Again, it still makes no sense. If you aren't hiring traders (and btw, JS is hiring real traders) then why you hire someone who couldn't code into a grad program.

I will say this another way: I know fundamental hedge funds that have stopped hiring people who can't code into roles IF they have no trading experience. That is how important the skill set has become. I don't know you have any function at a QUANT hedge fund if you can't trade and can't code...like what do you all day?

Right, and click on quant trader. And look at Power Trading, Options Trading, "coding skills are a plus"...I am not saying they don't hire them, what I am saying is that this is odd when you consider anything else about JS and that the rules are probably different for someone like SBF.

Re: Phone interview with Sam Bankman-Fried [audio]

#69

Post by notch656a »

maxbond wrote: post #35
shkkmo wrote: post #26

Earlier quoted context omitted.

That is incredibly bad advice to generalize. Not all mistakes one's "enemy" makes are to one's benefit. Your enemy might make a huge mistake by killing your family in front of a lot of witnesses, doesn't mean you should let him because you want to see him go to jail.

Fair, but from the perspective of a prosecutor, it makes sense to let him dig his hole deeper. Every time he lies to the public he further establishes mens rhea. But of course it would take much longer than a month to extradite him anyhow, so the most likely explanation is that they haven't had time to decide if they have enough evidence to extradite him, let alone to do it. (IANAL)

Doesn't take a month to cancel his passport. Wouldn't his stay be illegal at that point and he could easily be deported?
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