I still can't reconcile how fast this happened. Back in April SBF was willing to give billions to buy Twitter. It seemed like there was plenty of surplus or was the money he planned to invest just FTX customer holdings?
"Musk responded to the text by asking if Bankman-Fried had “huge amounts of money?” MacAskill said SBF was worth about US$24 billion at the time and could be willing to provide as much as US$8 billion to US$15 billion in financing." [1]
Ah, the magic of loaned funds with little or no demands tied to it. And you wonder why real estate prices are so high? It's largely the same principle, except the regulation is way, wayyy tighter. But in sum, the effect it has on markets is unquestionable.
It means that the contract you enter when you loan money has limitations to what you can use said funds for, and how or what it's secured with (including interest). It would seem that the creditors of Bankman-Fried gave him quite liberal limits, if it wasn't simply the byzantine structure of his many, many straw companies that made it extremely hard to understand what the money was ever used for, so much so that he may or may not have lost track himself.
FTX was making a killing, so its token that paid out trading fees was worth a lot. To bail out trading losses in Alameda, FTX sent it cash in exchange for a bunch of its own token. This might have worked out fine, except now the moment everyone expects FTX to go bankrupt, it's bankrupt.
Haseeb Qureshi said recently on his Chopping Block podcast that it was a not-so-secret secret that FTX was the least profitable exchange of any of the major exchanges, so even if they were generating a lot of revenue they weren't making much profit on it.
That's normal for trading firms. Lehman Brothers went down about this fast.
The larger finance and regulatory systems are no longer willing to tolerate long "pauses" in withdrawals from crypto companies. Now, you "pause" withdrawals for a day and you're dead. Back in the Mt. Gox days, crypto exchanges went into limbo for months before the hammer of bankruptcy came down. That's over.
most of crypto/segments of wallstreet are a giant scam using mathematics to make money, any pr is good for them. It is like that wall street movie quote "You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal."
It's Enron accounting all the way down. Except in Enron's case the accounting was actually creatively done to dodge regulators. These guys didn't even have that to worry about.
Throwaway as I used to socialize with a number of names connected to all this.
It did not “happen that fast”. It’s been forecasted and debated for weeks if not months. We were just not privy to those meetings, IMs, and calls. You’d have to be incredibly handicapped to assume behind the scenes comms aren’t occurring and merely a deluded rube to assume it’s all “nice”.
The analytics exist to predict these things and people chose to let it play out, see if it could be fixed before the bill was due.
This is the free market. Awareness exists for those with the money to build the analysis. They sit and gamble on the actual outcome that will occur.
SBF screwed up by assuming the establishment cared enough to rescue his ephemeral pet. The establishment never cares about the fallout to the average person. “Free market” to be stupid. Where being smart is kowtowing to established rule.
Because the establishment is people too. Same core motives. Same lack of obligation to buy into others bullshit. Life on Earth is sorted. It’s normalized. Actual science of net new discovery is the only true frontier, not engineering new versions of old shit. Crypto is just a new version of a manipulated value store like religious symbols and nation state currency. It has all the same upsides and pitfalls because it’s belief in nothing but the imagination of a handful of dumb apes.
As a data structure it’s not interesting; a linked list with a unique hash in place of an index. Yes yes much mathematical notation can be jotted down to explain it but the same can be said of growing lettuce and we don’t seem to feel the need to do so. Short hand recipes and experience suffice.
Crypto is former script kiddies clinging to nostalgia as humans do. It fills the same existential hole as things like superheroes, war heroes, and gods; not for everyone and demanding it should be is the same old human imperialism of thought. We don’t need crypto like we don’t need fiat currency, because special people don’t exist. Any rules for defining them are arbitrary given the unknown reason for our existence.
Elon: I'm backlogged with a mountain of critical work matters. ls this urgent?
Michael: Wants 1-Sb. Serious about partner w/you. Same security you own
Michael: Not urgent unless you want him to fly tomorrow. He has a window tomorrow then he's wed-Friday booked
Michael: Could do $5bn if everything vision lock. Would do the engineering for social media blockchain integration. Founded FTX crypto exchange. Believes in your mission. Major Democratic donor. So thought it was potentially worth an hour tomorrow a la the Orlando meeting and he said he could shake hands on 5 if you like him and I think you will. Can talk when you have more time not urgent but if tomorrow works it could get us $5bn equity in an hour
Elon: Blockchain twitter isn't possible, as the bandwidth and latency requirements cannot be supported by a peer to peer network, unless those "peers" are absolutely gigantic, thus defeating the purpose of a decentralized network.
Elon: ["disliked" "Could do $5bn ..."]
Elon: So long as I don't have to have a laborious blockchain debate
Elon: Strange that Orlando declined
Elon: Please let him know that I would like to talk and understand why he declined
Elon: Does Sam actually have $3B liquid?
Michael: I think Sam has it yes. He actually said up to 10 at one point but in writing he said up to 5. He's into you. And he specifically said the blockchain piece is only if you liked it and not gonna push it. Orlando referred Sams interest to us and will be texting you to speak to say why he (Orlando) declined. We agree orlando needs to call you and explain given everything he said to us and you. Will make that happen We can push Sam to next week but I do believe you will like him. Ultra Genius and doer builder like your formula. Built FTX from scratch after MIT physics. Second to Bloomberg in donations to Biden campaign.
I found that odd too, but I would guess it was meant to show that he was a "major player" and thus had political connections that might be useful to Musk/Twitter.
That's certainly who he started pandering to once the deal looked likely. "Democrats are the party of division and hate" in May 2022 [0]. BTW, searching for this tweet on Google is fruitless, whereas DuckDuckGo brought it up straight away (from my US-based IP).
If that was to set the stage for reinstating Trump, it seems to have backfired massively, as Trump (of all people), called him out as a BS artist and RINO.
Still, on what should have been of the busiest weeks in Twitter's history, he found time to use his Twitter bullhorn to advocate voting Republican in every race.
Elon isn't red or blue. He has leaned to voting dem in the past and now leans to voting gop for various reasons. It could change tomorrow. In the end, he thinks what he thinks and doesn't care how it aligns to a "party".
And finished it off with with “second to Bloomberg when donating to Biden”.
If any of this had happened in a non-rules based world or even at the periphery of our “civilized” world, a whole bunch of US-financed NGOs and “civil society” thingies would have been up all in arms about it, with cries of corruption and the like. But the moment when it turns out that the second largest financial donor to the US President is basically a crook and a fraudster all those voices are suddenly silent.
"Musk responded to the text by asking if Bankman-Fried had “huge amounts of money?” MacAskill said SBF was worth about US$24 billion at the time and could be willing to provide as much as US$8 billion to US$15 billion in financing." [1]
[1] https://forkast.news/sbf-wanted-to-join-elon-musk-twitter-de...