I read Lewis’s book - it’s basically a love song to SBF the poor misunderstood renegade. He’s just a victim of being “different”, not a soul less sociopath. And his parent are totally altruists despite his dad complaining about not getting enough money and a bigger piece of the pie. Awful and disappointing.
I'm about a third of the way through the book, and I'm having trouble continuing...too many unlikable characters. It's mostly schadenfreude keeping me going at this point.
Check out Lewis' account of the pandemic, "The Premonition." Another credulous hook-line,& sinker take from the 'outsiders'' point of view. If only we had instantaneously followed the lone geniuses advice to -- get this -- *close down all the schools*!!! Yes! The *one thing* we know turned out to be cataclysmically wrong! "A New York Times bestseller!"
I disagree. Actually, I liked The Premonition. Yes, he was wrong on the modeling, as were a lot of people, but he nailed the reason the giant bureaucracy that is the modern CDC was totally unable to respond adequately, while the South Korean equivalent did, in the story line of the plucky CA county health officer. The CDC that eradicated smallpox in the 70s is no more. It died when it was absorbed into the politicized swamp Borg that is HHS. It would always refuse to act until the evidence was incontrovertible, by which time it was too late. (That, and screwing up the first test, with FDA disallowing all others for months.)
The best other piece about CDC turned up in Wired magazine, of all places. The biggest and most dangerous scientific error of the pandemic was claiming it was spread by short-range droplets and not airborne. Linsey Marr, an atmospheric pollution scientist at VPI who also works on disease transmission, figured out it was airborne by March 2020 and was blown off by CDC and WHO for more than a year. Her grad student figured out the source of the error and they published in 2022. There was a personality conflict in the 1940s over tuberculosis between MIT engineer William Wells and CDC founder Alexander Langmuir, who refused to believe it could transmit through the air for years after Wells proved it. Search for the author, Megan Molteni, and "linsey marr covid airborne" and you'll find it. This one also reads like a good detective story.
I laugh over and over again at those fulminating about Trump being a "fraud" and "con man," when the entire Democrat party is financed by fraudsters and con men such as the Fried Bankman, Zuck and the criminal fabulists who run google. So no surprise that the Dem party is the longest running con job in US history. Now headed, appropriately, by the senile grifter and serial fraud who befouls 1600 Pennsylvania Avenue.
An unrepentant math geek with forty years of investing behind me and a clear understanding of that scam called, "fiat money," some years back I did a several-week online course in Bitcoin from that corrupt Democrat operative, now chair of the SEC, Gary Gensler.
The idea that printed paper is money is laughable. Every nation that has fallen from within has done so due to the adoption of fiat currency. To be usable as money, an entity must be: portable, durable, limited, and most importantly agreed-upon by its users. Notice that having intrinsic value itself is not a requirement, only that it be usable to set the relative value of things to each other.
Bitcoin fills all these requirements. So do gold and silver, although for large quantities of value are not very portable. Most importantly, Bitcoin is determined mathematically and cannot be printed at will by a corrupt government seeking to steal its citizens' wealth through that stealth tax known as inflation. It's no wonder the gub'ment hates cryptocurrency so much and is doing everything in its power to regulate and strangle it. (but they want us to use THEIR crypto - the one with the back door that will allow them to take ALL your money should you say the wrong thing)
Other nations - also with corrupt governments with a history of destroying their citizens' wealth through inflation - have begun accepting Bitcoin as legal tender. If this trend continues, the US will find itself pushed out of the market. Debasement of the dollar has already started the process of eliminating it as the international reserve currency.
Everything is eventually paid-for. Everything. Our corrupt government's chickens are coming home to roost. Unfortunately they will rest on us all, not those who brought it all about.
I guess my doubts would be around valuation. Bitcoin in particular is inflated in my view because demand is driven by speculation not a need for a digital vehicle of exchange. This is unsustainable long term.
I’m also a bit skeptical on government fiat but a state commitment to redemption is not nothing. Crypto should settle at a valuation that reflects its use as money and not as a security.
Sure. They want to tax it as a capital asset. That way when it goes up in value, you pay tax on the gain. Of course they know that it's not really changing in value; the value of the dollar is going down due to unrestrained money-printing. So they are taxing you on THEIR corruption and the loss of value of their currency. One of the main purposes of money is as a store of value; they want you to store dollars - not gold, silver, or Bitcoin - because it allows them to print more since THEY have the printing press and can then continue to siphon off part of the value you have - as a good citizen - saved for later. If you hold Bitcoin (whose value goes up and down due to the usual supply/demand scenario) and its dollar value goes up, they want that increase. Same with gold/silver, etc.. Big-money people buy things that have intrinsic value, like land, that itself does not change with the value of the dollar. I don't know how true this is, but the old story goes that in 1776 an ounce of gold would buy a fine suit; today an ounce of gold will buy a fine suit. How many dollars is that, and how has it changed?
Thanks for the reply Jim. You highlight the valuation problem of crypto- it’s trading at store-of-value pricing while it’s actually only a medium of exchange, albeit with a capped issuance. As you point out gold has gained zero in real terms- and it at least is tangible.
I foresee much weeping and gnashing of teeth when this party ends. Much like the dotcom bubble it will be completely foreseeable in retrospect.
"a state commitment to redemption is not nothing." Unfortunately, there hasn't been a state commitment to redemption for some time. Dollars used to be backed by gold and later by silver. Now they're backed by nothing. Like crypto, they are simply a medium of exchange.
It seems to me that the main argument made for cryptocurrency is that it is not fiat currency, and thus it is a protection against inflation. It is thus supposedly superior to paper money. I think it is pretty clear to those who used their paper currency to buy cryptocurrency, and lost $2 trillion thereby, now realize that cryptocurrency is none of the things a paper currency is. You cannot hold crypto in your hand, it is not portable (it is not legal tender in many places, and you have to use it via an exchange), it is not durable (as a whole lot of losing speculators have learned), and it is not a store of value--its price fluctuates to much to be considered a store of value. (Whereas, fiat currency is a somewhat a store of value, albeit a flawed one if inflated by government policy). Crypto is "limited" in the case of Bitcoin by reason of the algorithms used to create new bitcoin, but this doesn't make it inflation-proof. if the price of a gallon of gasoline goes from $2 to $4 per gallon, the number of units of Bitcoin needed to buy a gallon of gas will go up correspondingly (ceteris paribus); but crypto speculation--the only driver of crypto's value--could cause a unit of Bitcoin to decrease in dollar value, irrespective of supply and demand for gasoline, so a crypto investor might not be able to buy as much gasoline as he would have had had he simply held dollars.
I'm not a defender of Bitcoin, but it does have certain advantages - and disadvantages. Full disclosure: I own none of it.
1) Its price rises and falls are not "inflation" per se; it's a market phenomenon of supply and demand. If governments are unable to tamp down demand (and boy are they trying!) and more nations accept it, the price will become stratospheric, especially in fiat dollars.
Friedman noted that "Inflation is always and everywhere a monetary phenomenon." What does that mean? It means that if the population uses your paper money and you have the only printing press, you can print as much as you want for yourself - and history has shown that the (government) owner always will. ("Paper" money is just one form; mostly the process is just adding bogus numbers to the Fed's ledger.) With Bitcoin, you can't do that. That is why gold has always been and always will be money; its big advantage is that the world supply of gold increases roughly in parallel with world wealth through productivity. Bitcoin's limit is 21 million coins. Forever. A disadvantage, but one that enforces the inability to inflate through indiscriminate printing.
2) It is very portable. You do NOT have to use it via an exchange; you can pay directly to anyone who accepts it; in seconds you can transfer a payment to them. You can store it on your phone or on an electronic wallet. Using it is trivial and instantaneous.
3) It is very unforgiving of absentmindedness. If you lose or forget your electronic key, there is absolutely no way of getting your coin back, or of anyone else doing it either. This means that over time there is a risk of Bitcoins becoming even more limited in number. You are also vulnerable to the $10 Crescent-wrench hack. A burglar beats you over the head with a $10 Crescent wrench until you give him the password.
The world - especially the United States - is incredibly productive, and governments - especially in the United States - want that wealth for themselves. As long as they can print fiat money, your labor is theirs, not yours. There are enough good things produced by the Worker Bees that we could all be living happy, productive lives; that is if we could keep those governments from buying our own votes with our own money and that of our children, grandchildren, and theirs and theirs. There has to be a solution found; Bitcoin may not be it, but it's a start.
Thank you for your thoughtful comments. I am very much in sympathy with your thoughts about inflation. What has occurred in Washington DC in the last 15 years since 2008 (Quantitative Easing, e.g., manufacturing “money” via debt) is the very definition of “inflation.”
It is certainly true that inflation steals from the savings of the thrifty and productive; the desperation savers feel about protecting their assets from this theft is highly understandable.
The question before us is whether cryptocurrency offers a solution to the problem of “fiat” currency. I myself think not, for one simple reason: instead of being subject to the whims of the political class as to expansion of the money supply, I would become subject to the whims of a mob of speculators untethered to anything but their baseless speculations about the future price of a cryptocurrency.
My personal distrust of cryptocurrency is of no persuasive value to anyone else. It would be better to look to someone with mathematical skills, investing sophistication, and experience who can address the various claims made for cryptocurrencies. It just so happens that such a person has written on this very subject. His name is Nassim Nicholas Taleb; he is the author of “The Black Swan” and “Fooled by Randomness.”
This paper is a bit technical, but well worth reading. Here is the technical publication:
'Effective Altruism' is akin to: 'vaping is better than cigarettes'.
The practitioners of EA believe they're doing good, doing the right thing.
To me, having spoken with a lot of people in EA over the last 3 years or so, I'm amazed at how self-delusional they all are. "We're going to earn a ton of money from terrible things, but the terribleness doesn't matter, because we're giving it all away". Such Ivy League BS.
Ya wanna 'do good'? Start small. Network effect, VS humblebrag gigantism, which in the end has been blowing up over and over.
As I was reading about EA in Faux’s book, I couldn’t help but think they validated most of the points Ayn Rand made in her Objectivist arguments. Especially that Altruism is a false construct. Everything we do is self-motivated. And that people do/are allowed to do bad, even awful things, in the name of Altruism.
SBF has deep connections with deep pockets. He might yet go free. His parents, are rapacious sociopaths, the golden products of Silicon Valley, and Stanford U, the intellectual darling of the left. This country has become too corrupt to survive.
As someone who was both part of the team at IEX, the company featured in Flash Boys, and a former executive at ErisX, a US-based CFTC regulated crypto derivatives exchange and clearinghouse, I have first-hand knowledge of these stories in reality. Not the second-hand hearsay of friends. Was Flash Boys embellished? Absolutely. Written for accessibility and entertainment over technical accuracy? Certainly. Mostly fiction? Depends on who you ask and their motives. The list of fines and penalties levied for practices illuminated in the book in the aftermath of its publishing are evidence that it was not.
Were there reasons to have questions and concerns about FTX's operations before it collapsed? For someone sufficiently inclined there is a long-read comment letter to the CFTC from ErisX regarding FTX's margin application. For the TL;DR skip to page 9: the Appendix with Open Questions. We now have the answers to a number of those questions. There were, in fact, people raising concerns ahead of the collapse. Theirs were unpopular perspectives when the money was flowing.
I've spent almost 25 years building financial exchanges and electronic trading products. I've worked on crypto and blockchain related products and businesses for 10 years, giving me a pretty firm understanding of both traditional financial infrastructure and crypto financial infrastructure. There are a long list of frauds and manipulations and scams in crypto. They tend to be fundamentally the traditional sort that have happened for the past four centuries in traditional financial markets long before crypto was invented. That is unfortunate, but does not diminish the value and capabilities of the new technology, the business models and products that it enables that have historically not been possible. My bet is that it isn't the naysayers that will be vindicated in the long run, but crypto technologies and new modalities of finance, art, business, and gaming that they enable.
And, Patrick Mackenzie, are YOU nothing like Michael Lewis or SBF? What's your schtick, angle, scheme? Why should we expect you to be the watering hole of truth and justice? As far as I can tell, you're just the guy waiting in the wings to pull off the next big scam by playing the self-righteous seer who "sold a few software businesses and worked in financial technology." That curriculum vitae alone makes me highly suspicious.
I saw the 60 Minutes Lewis interview, and he is definitely sympathetic towards SBF, but I'm not defending Lewis. I am highly skeptical of all the hi-tech gurus who offer heaven and deliver hell.
I worked on Wall Street for 37 years. Met Bernie, yes that Bernie, and knew immediately he was full of shit. Years later I’m at my daughter’s block party and one of my son in law’s friends approached me. He asked my opinion of cryptocurrency, in its infancy at the time, so I asked how much had he invested. $10k. I told him the minute you make a decent profit sell it before it goes to $0. He just looked at me with a blank stare.
So many frauds and criminals in the crypto space. I read every crypto story I can find - my interest is personal, as I am now 4.5 years into the financial settlement of my divorce from an early crypto programmer (2013). Despite his decade + involvement in investing and writing code, he has steadfastly maintained that at date of separation, he held only 1.2 bitcoin. He obfuscates and lies constantly, and has been twice sanctioned by the courts to the tune of 34.5K thus far. Divorce is difficult in the "best" circumstances, but to be forced to hire crypto experts, in addition to lawyers is so frustrating and costly. I wish someone would do a deep dive of the plight of ex-wives of crypto crooks.
Indeed, the Bitcoin narrative is built on a foundation of half-truths, untruths, Social Darwinism, cynicism, an odd comfort with criminality, and nonchalance about the security provided by the nation-state.
Maybe this isn’t the purpose of the article, but I’m still not seeing the inherent fundamental flaw or lie in crypto. I’m only seeing how some specific people corrupted and exploited it, but isn’t that true of all financial systems?
They make movies out of books that are entertaining...not books that tell the truth. Lewis’ books are entertaining to be sure. Take them at face value and enjoy. 🤷🏻♂️
I read Lewis’s book - it’s basically a love song to SBF the poor misunderstood renegade. He’s just a victim of being “different”, not a soul less sociopath. And his parent are totally altruists despite his dad complaining about not getting enough money and a bigger piece of the pie. Awful and disappointing.
In a cast of irritating characters (pothead hipster CEO chick, boardshorts Messiah etc) his parents stick out as the most annoying.
And these are the thought leaders of our new morality. Listen up peasants.
anyone who bankrolls the left can never be evil.
It’s okay to be a corrupt, evil, fraudulent sociopath if you are a leftist. Sick.
I'm about a third of the way through the book, and I'm having trouble continuing...too many unlikable characters. It's mostly schadenfreude keeping me going at this point.
Check out Lewis' account of the pandemic, "The Premonition." Another credulous hook-line,& sinker take from the 'outsiders'' point of view. If only we had instantaneously followed the lone geniuses advice to -- get this -- *close down all the schools*!!! Yes! The *one thing* we know turned out to be cataclysmically wrong! "A New York Times bestseller!"
You've got Lewis pegged exactly.
I disagree. Actually, I liked The Premonition. Yes, he was wrong on the modeling, as were a lot of people, but he nailed the reason the giant bureaucracy that is the modern CDC was totally unable to respond adequately, while the South Korean equivalent did, in the story line of the plucky CA county health officer. The CDC that eradicated smallpox in the 70s is no more. It died when it was absorbed into the politicized swamp Borg that is HHS. It would always refuse to act until the evidence was incontrovertible, by which time it was too late. (That, and screwing up the first test, with FDA disallowing all others for months.)
The best other piece about CDC turned up in Wired magazine, of all places. The biggest and most dangerous scientific error of the pandemic was claiming it was spread by short-range droplets and not airborne. Linsey Marr, an atmospheric pollution scientist at VPI who also works on disease transmission, figured out it was airborne by March 2020 and was blown off by CDC and WHO for more than a year. Her grad student figured out the source of the error and they published in 2022. There was a personality conflict in the 1940s over tuberculosis between MIT engineer William Wells and CDC founder Alexander Langmuir, who refused to believe it could transmit through the air for years after Wells proved it. Search for the author, Megan Molteni, and "linsey marr covid airborne" and you'll find it. This one also reads like a good detective story.
He went to my high school and once defended the baseball coach in a NY times piece that made the coach sound like a sociopath. go figure
I laugh over and over again at those fulminating about Trump being a "fraud" and "con man," when the entire Democrat party is financed by fraudsters and con men such as the Fried Bankman, Zuck and the criminal fabulists who run google. So no surprise that the Dem party is the longest running con job in US history. Now headed, appropriately, by the senile grifter and serial fraud who befouls 1600 Pennsylvania Avenue.
An unrepentant math geek with forty years of investing behind me and a clear understanding of that scam called, "fiat money," some years back I did a several-week online course in Bitcoin from that corrupt Democrat operative, now chair of the SEC, Gary Gensler.
The idea that printed paper is money is laughable. Every nation that has fallen from within has done so due to the adoption of fiat currency. To be usable as money, an entity must be: portable, durable, limited, and most importantly agreed-upon by its users. Notice that having intrinsic value itself is not a requirement, only that it be usable to set the relative value of things to each other.
Bitcoin fills all these requirements. So do gold and silver, although for large quantities of value are not very portable. Most importantly, Bitcoin is determined mathematically and cannot be printed at will by a corrupt government seeking to steal its citizens' wealth through that stealth tax known as inflation. It's no wonder the gub'ment hates cryptocurrency so much and is doing everything in its power to regulate and strangle it. (but they want us to use THEIR crypto - the one with the back door that will allow them to take ALL your money should you say the wrong thing)
Other nations - also with corrupt governments with a history of destroying their citizens' wealth through inflation - have begun accepting Bitcoin as legal tender. If this trend continues, the US will find itself pushed out of the market. Debasement of the dollar has already started the process of eliminating it as the international reserve currency.
Everything is eventually paid-for. Everything. Our corrupt government's chickens are coming home to roost. Unfortunately they will rest on us all, not those who brought it all about.
Thanks for the thoughtful post Jim. A lot there.
I guess my doubts would be around valuation. Bitcoin in particular is inflated in my view because demand is driven by speculation not a need for a digital vehicle of exchange. This is unsustainable long term.
I’m also a bit skeptical on government fiat but a state commitment to redemption is not nothing. Crypto should settle at a valuation that reflects its use as money and not as a security.
Sure. They want to tax it as a capital asset. That way when it goes up in value, you pay tax on the gain. Of course they know that it's not really changing in value; the value of the dollar is going down due to unrestrained money-printing. So they are taxing you on THEIR corruption and the loss of value of their currency. One of the main purposes of money is as a store of value; they want you to store dollars - not gold, silver, or Bitcoin - because it allows them to print more since THEY have the printing press and can then continue to siphon off part of the value you have - as a good citizen - saved for later. If you hold Bitcoin (whose value goes up and down due to the usual supply/demand scenario) and its dollar value goes up, they want that increase. Same with gold/silver, etc.. Big-money people buy things that have intrinsic value, like land, that itself does not change with the value of the dollar. I don't know how true this is, but the old story goes that in 1776 an ounce of gold would buy a fine suit; today an ounce of gold will buy a fine suit. How many dollars is that, and how has it changed?
Thanks for the reply Jim. You highlight the valuation problem of crypto- it’s trading at store-of-value pricing while it’s actually only a medium of exchange, albeit with a capped issuance. As you point out gold has gained zero in real terms- and it at least is tangible.
I foresee much weeping and gnashing of teeth when this party ends. Much like the dotcom bubble it will be completely foreseeable in retrospect.
"a state commitment to redemption is not nothing." Unfortunately, there hasn't been a state commitment to redemption for some time. Dollars used to be backed by gold and later by silver. Now they're backed by nothing. Like crypto, they are simply a medium of exchange.
It seems to me that the main argument made for cryptocurrency is that it is not fiat currency, and thus it is a protection against inflation. It is thus supposedly superior to paper money. I think it is pretty clear to those who used their paper currency to buy cryptocurrency, and lost $2 trillion thereby, now realize that cryptocurrency is none of the things a paper currency is. You cannot hold crypto in your hand, it is not portable (it is not legal tender in many places, and you have to use it via an exchange), it is not durable (as a whole lot of losing speculators have learned), and it is not a store of value--its price fluctuates to much to be considered a store of value. (Whereas, fiat currency is a somewhat a store of value, albeit a flawed one if inflated by government policy). Crypto is "limited" in the case of Bitcoin by reason of the algorithms used to create new bitcoin, but this doesn't make it inflation-proof. if the price of a gallon of gasoline goes from $2 to $4 per gallon, the number of units of Bitcoin needed to buy a gallon of gas will go up correspondingly (ceteris paribus); but crypto speculation--the only driver of crypto's value--could cause a unit of Bitcoin to decrease in dollar value, irrespective of supply and demand for gasoline, so a crypto investor might not be able to buy as much gasoline as he would have had had he simply held dollars.
I'm not a defender of Bitcoin, but it does have certain advantages - and disadvantages. Full disclosure: I own none of it.
1) Its price rises and falls are not "inflation" per se; it's a market phenomenon of supply and demand. If governments are unable to tamp down demand (and boy are they trying!) and more nations accept it, the price will become stratospheric, especially in fiat dollars.
Friedman noted that "Inflation is always and everywhere a monetary phenomenon." What does that mean? It means that if the population uses your paper money and you have the only printing press, you can print as much as you want for yourself - and history has shown that the (government) owner always will. ("Paper" money is just one form; mostly the process is just adding bogus numbers to the Fed's ledger.) With Bitcoin, you can't do that. That is why gold has always been and always will be money; its big advantage is that the world supply of gold increases roughly in parallel with world wealth through productivity. Bitcoin's limit is 21 million coins. Forever. A disadvantage, but one that enforces the inability to inflate through indiscriminate printing.
2) It is very portable. You do NOT have to use it via an exchange; you can pay directly to anyone who accepts it; in seconds you can transfer a payment to them. You can store it on your phone or on an electronic wallet. Using it is trivial and instantaneous.
3) It is very unforgiving of absentmindedness. If you lose or forget your electronic key, there is absolutely no way of getting your coin back, or of anyone else doing it either. This means that over time there is a risk of Bitcoins becoming even more limited in number. You are also vulnerable to the $10 Crescent-wrench hack. A burglar beats you over the head with a $10 Crescent wrench until you give him the password.
The world - especially the United States - is incredibly productive, and governments - especially in the United States - want that wealth for themselves. As long as they can print fiat money, your labor is theirs, not yours. There are enough good things produced by the Worker Bees that we could all be living happy, productive lives; that is if we could keep those governments from buying our own votes with our own money and that of our children, grandchildren, and theirs and theirs. There has to be a solution found; Bitcoin may not be it, but it's a start.
Thank you for your thoughtful comments. I am very much in sympathy with your thoughts about inflation. What has occurred in Washington DC in the last 15 years since 2008 (Quantitative Easing, e.g., manufacturing “money” via debt) is the very definition of “inflation.”
It is certainly true that inflation steals from the savings of the thrifty and productive; the desperation savers feel about protecting their assets from this theft is highly understandable.
The question before us is whether cryptocurrency offers a solution to the problem of “fiat” currency. I myself think not, for one simple reason: instead of being subject to the whims of the political class as to expansion of the money supply, I would become subject to the whims of a mob of speculators untethered to anything but their baseless speculations about the future price of a cryptocurrency.
My personal distrust of cryptocurrency is of no persuasive value to anyone else. It would be better to look to someone with mathematical skills, investing sophistication, and experience who can address the various claims made for cryptocurrencies. It just so happens that such a person has written on this very subject. His name is Nassim Nicholas Taleb; he is the author of “The Black Swan” and “Fooled by Randomness.”
This paper is a bit technical, but well worth reading. Here is the technical publication:
“Bitcoin, Currencies, and Fragility” by Nassim Nicholas Taleb, available online at https://arxiv.org/abs/2106.14204
Taleb’s conclusions are also reported in plain English in several business-related magazines, viewable online.
We will be slaughtered financially. A blood bath.
'Effective Altruism' is akin to: 'vaping is better than cigarettes'.
The practitioners of EA believe they're doing good, doing the right thing.
To me, having spoken with a lot of people in EA over the last 3 years or so, I'm amazed at how self-delusional they all are. "We're going to earn a ton of money from terrible things, but the terribleness doesn't matter, because we're giving it all away". Such Ivy League BS.
Ya wanna 'do good'? Start small. Network effect, VS humblebrag gigantism, which in the end has been blowing up over and over.
Crypto is a scam, EA is a scam, SBF is a scamster.
I’m not opposed to any individual doing whatever the heck they want with their personal wealth. It’s a relatively free country.
I object strenuously to a company using shareholder resources to espouse an issue out of their lane.
Thus a manufacturer of barely passable shaving products does not get to redefine virility.
As I was reading about EA in Faux’s book, I couldn’t help but think they validated most of the points Ayn Rand made in her Objectivist arguments. Especially that Altruism is a false construct. Everything we do is self-motivated. And that people do/are allowed to do bad, even awful things, in the name of Altruism.
SBF has deep connections with deep pockets. He might yet go free. His parents, are rapacious sociopaths, the golden products of Silicon Valley, and Stanford U, the intellectual darling of the left. This country has become too corrupt to survive.
Looking at bankman and his girlfriend, you have to wonder who could take them seriously
In tech, not looking the part is a serious advantage.
As someone who was both part of the team at IEX, the company featured in Flash Boys, and a former executive at ErisX, a US-based CFTC regulated crypto derivatives exchange and clearinghouse, I have first-hand knowledge of these stories in reality. Not the second-hand hearsay of friends. Was Flash Boys embellished? Absolutely. Written for accessibility and entertainment over technical accuracy? Certainly. Mostly fiction? Depends on who you ask and their motives. The list of fines and penalties levied for practices illuminated in the book in the aftermath of its publishing are evidence that it was not.
Were there reasons to have questions and concerns about FTX's operations before it collapsed? For someone sufficiently inclined there is a long-read comment letter to the CFTC from ErisX regarding FTX's margin application. For the TL;DR skip to page 9: the Appendix with Open Questions. We now have the answers to a number of those questions. There were, in fact, people raising concerns ahead of the collapse. Theirs were unpopular perspectives when the money was flowing.
https://cdn.cboe.com/resources/government_relations/comment_letters/CFTC_Margin_Final.pdf
I've spent almost 25 years building financial exchanges and electronic trading products. I've worked on crypto and blockchain related products and businesses for 10 years, giving me a pretty firm understanding of both traditional financial infrastructure and crypto financial infrastructure. There are a long list of frauds and manipulations and scams in crypto. They tend to be fundamentally the traditional sort that have happened for the past four centuries in traditional financial markets long before crypto was invented. That is unfortunate, but does not diminish the value and capabilities of the new technology, the business models and products that it enables that have historically not been possible. My bet is that it isn't the naysayers that will be vindicated in the long run, but crypto technologies and new modalities of finance, art, business, and gaming that they enable.
And, Patrick Mackenzie, are YOU nothing like Michael Lewis or SBF? What's your schtick, angle, scheme? Why should we expect you to be the watering hole of truth and justice? As far as I can tell, you're just the guy waiting in the wings to pull off the next big scam by playing the self-righteous seer who "sold a few software businesses and worked in financial technology." That curriculum vitae alone makes me highly suspicious.
It’s not the first review I’ve read that views Lewis as over-enamored with SBF.
I saw the 60 Minutes Lewis interview, and he is definitely sympathetic towards SBF, but I'm not defending Lewis. I am highly skeptical of all the hi-tech gurus who offer heaven and deliver hell.
Patrick McKenzie, also known as patio11, is not much like either Michael Lewis or SBF. You can read his self-bio here: https://www.kalzumeus.com/start-here-if-youre-new/
BTW, in my "self-bio" I am a wizard in the stock market.
I'm sure he's one of the good geeks with no ax to grind or snake-oil to sell. I'm just naturally suspicious of the "experts" with the inside scoop.
I worked on Wall Street for 37 years. Met Bernie, yes that Bernie, and knew immediately he was full of shit. Years later I’m at my daughter’s block party and one of my son in law’s friends approached me. He asked my opinion of cryptocurrency, in its infancy at the time, so I asked how much had he invested. $10k. I told him the minute you make a decent profit sell it before it goes to $0. He just looked at me with a blank stare.
Indeed Patrick. Meet the new boss (SBF) same as the old boss (John Gutfreund).
So many frauds and criminals in the crypto space. I read every crypto story I can find - my interest is personal, as I am now 4.5 years into the financial settlement of my divorce from an early crypto programmer (2013). Despite his decade + involvement in investing and writing code, he has steadfastly maintained that at date of separation, he held only 1.2 bitcoin. He obfuscates and lies constantly, and has been twice sanctioned by the courts to the tune of 34.5K thus far. Divorce is difficult in the "best" circumstances, but to be forced to hire crypto experts, in addition to lawyers is so frustrating and costly. I wish someone would do a deep dive of the plight of ex-wives of crypto crooks.
Indeed, the Bitcoin narrative is built on a foundation of half-truths, untruths, Social Darwinism, cynicism, an odd comfort with criminality, and nonchalance about the security provided by the nation-state.
--Michael W. Green, May 14 2021
SBF fraud is “okay” because he is a leftist. Pure political bullshit as usual.
Maybe this isn’t the purpose of the article, but I’m still not seeing the inherent fundamental flaw or lie in crypto. I’m only seeing how some specific people corrupted and exploited it, but isn’t that true of all financial systems?
They make movies out of books that are entertaining...not books that tell the truth. Lewis’ books are entertaining to be sure. Take them at face value and enjoy. 🤷🏻♂️