SBF/FTX
Archived copy of the Sequoia article that I linked last week, but got taken down.
After my interview with SBF, I was convinced: I was talking to a future trillionaire.
Related: the author’s personal website. He’s available to write ‘Private History.’ Maybe a Private History is the Christmas present you didn’t know you needed. Possible uses: an heir trying to curry favor with an aging patriarch, a hilarious prank on a wealthy privacy minded friend, or a pick me up for when a talk in the mirror just isn’t enough.
What happened at Alameda Research—An excellent summary from someone with the twitter handle @0xfbifemboy. Here’s the FT’s summary.
Sorry to disappoint everyone, but the rumored SBF sex tape hasn’t surfaced yet. The site that was promising/threatening to release it has been taken down. Here’s another possible harbinger of the Apocalypse though.
The Psychopharmacology Of The FTX Crash
I think you could make an argument that dopaminergic drugs shift various complicated risk curves in the brain. But a lot of Wall Street is on stimulants of one sort or another, and most of them don’t act like FTX did. Emsam is a little stranger than the usual Wall Street stimulants, and combining it with other stimulants might amplify the effects. But I still would think in terms of “how much are we moving the risk curves, and is it really that much further than a lot of other things do all the time?” rather than “does this switch you into uncontrollable pathological gambling mode?”
Scaramucci’s SkyBridge bought $10mn of FTX token in return for investment. Did SBF tag the Mooch in a Quick Change scam?
The MacGuffin, Part 2: The Story Arc of SBF and FTX
William MacAskill’s ineffective altruism
And is it any wonder that our strongest feelings — and so our deepest moral concerns — are for those that we see most often; those most like us; those who inhabit our time, and not the unknown future victims of unknown future catastrophes? And does anyone seriously expect this to change? As Swift said, you could never reason a man out of something he was never reasoned into. As for the time-Jellybys, who would sacrifice God knows how many people to material poverty today for a 1% shot at an interplanetary, interstellar, intergalactic future in 25000AD — though MacAskill is usually more careful — well, if all they ever get is mockery, they will have got off lightly.
“we tend not to have things like stop losses…”
Kevin O’Leary isn’t just a pretty face, he’s also a moron.
More from the ‘can’t make it up’ files—from SBF’s mom—Beyond Blame—The philosophy of personal responsibility has ruined criminal justice and economic policy. It’s time to move past blame
Econ/markets
…the latest data suggest that US rent growth has slowed sharply in recent months, and at best has been growing in the low single digits and quite possibly may have actually turned slightly negative last month. If so, that is certainly no surprise, and as I said in an earlier report, I expect that US rents in 2023 will be lower than rents during this Summer and Fall.
For those interested in the topic of why rent measured by the CPI (and PCEPI) have differed so dramatically from private measures of market rents, a MUST READ is the recent (October 6, 2022) BLS Research Paper entitled “Disentangling Rent Index Differences: Data, Methods, and Scope” by Brian Adams, U.S. Bureau of Labor Statistics; Lara Loewenstein, Federal Reserve Bank of Cleveland; Hugh Montag, U.S. Bureau of Labor Statistics; and Randal Verbrugge, Federal Reserve Bank of Cleveland.
A Note on Levels and Growth Rates
I understand that concepts such as easy and tight money are subjective, so let me make my point using different terminology. I believe that the Fed’s policy error over the past 12 months has been even worse than the mistakes made in 2021. Policy in 2021 was too expansionary (at least late in the year), but the policy in 2022 is even worse, far too expansionary.
It’s possible that policy has recently become a bit less expansionary, but it’s certainly not a tight money policy by any reasonable definition. Forecasts for 4th quarter NGDP growth remain quite high. Every month of overshooting makes the subsequent correction even more painful. Stopping high inflation in 2023 will be more painful (or less effective) than it would have been if we’d bitten the bullet and brought NGDP growth down more sharply this year. Nominal wage growth has developed a lot of upward momentum, making it much harder to control.
Near-term Fed pivot almost guaranteed
Inflation will be with us for some time to come, but its rate of increase will continue to moderate. This doesn't mean the Fed has to continue to tighten, however. Just maintaining its current stance would probably be sufficient to get inflation back down to 2%. That assumes, however, that M2 growth continues to be essentially flat and the government avoids sending out another massive batch of checks funded with the printing press.
The Labor Market Mystery Deepens
the US labor market may not be quite as strong as it initially appears—although nonfarm payroll data has been growing at a steady clip employment levels and rates have stagnated since March of this year. The nonfarm payroll data—derived from surveys of business establishments—shows jobs increasing by 2.5 million since March of this year. Employment data—derived from surveys of households—shows the number of workers with jobs increasing by a comparatively meager 150,000 over the same timeframe. What explains the growing gap?
"Price is the Medium Through Which Housing Filters Up or Down": Part 1
The basic idea is that constrained supply does not make homes in a region generally more expensive. It very specifically and systematically makes homes of residents with the lowest incomes more expensive.
How Abundant Are Reserves? Evidence from the Wholesale Payment System
This suggests a potential for strategic cash hoarding when reserve balances get sufficiently low, as was the case in mid-September 2019 and mid-March 2020. A shift in the business models of banks has led reserve balances to be used increasingly for short-term funding operations, including the intermediation of FX swap markets, Treasury repo markets, and other short-term funding markets. The shrinking supply of reserve balances may come to have potentially important implications for market functioning and financial stability
The Cato Institute on monetary reform. They recommend narrowing the mandate, implementing a measurable policy rule, and a return to the ‘scarce reserve’ regime.
Masayoshi Son Now Owes SoftBank $4.7 Billion on Side Deals
Foreign
Party Time: Nuke Deal, Crypto Bomb and Digital Dollars. This is way above my pay grade, but ‘big if true,’ as they say.
Something historic and dramatic has happened in the last two weeks. First, the US seems to have quietly agreed to engage directly with Russia in talks over nuclear weapons (while denying it, which is how these things happen). China is encouraging this process, nudging Putin to the negotiating table and away from the nuclear launch codes. This is winning China global support. Why? It’s impossible to confirm, but various press reports add up to the real possibility that President Putin and the Russian military tried to launch live nuclear weapons more than once in the last few weeks. A few non-nuclear launches happened, one just in the last 48 hours, but it’s the nuclear missile launches that failed that matter more. Given the threats Putin has made, a live nuclear “test” by Russia would have to have been treated as an outright first-strike launch. Luckily for us all, the efforts failed. Was it a technical failure? Sabotage? Was it an inside job? We won’t know for years. What we do know is that these events caused a cascade of reactions, including the US agreeing to meet Putin at the negotiating table to discuss nukes (not Ukraine, but nukes and WMD). Xi met with Biden. Putin pulled out of Kherson. General Milley, the Head of the US Armed Forces, begged the White House to engage in diplomacy with Russia over Ukraine and is begging Ukraine to agree to talks with Russia as well. He basically said Ukraine may have won back some territory, but it can’t win the bigger fight, especially since Americans and NATO members are all getting quite exhausted with supporting Ukraine. Biden seems to have pressured Zelensky to the negotiating table, though denies this. All the while, President Putin’s closest allies keep committing suicide in extraordinary ways, and he himself appears to be missing (again).
The Mirage of European Sovereignty
As U.S. hegemony in Europe continued through the decades, the amount of people who can even remember a different state of affairs has grown increasingly small. In Kalergi’s lifetime, the rising generation of thinkers had been educated under still-dominant European cultures and thus could think from a European position. Today any American blockbuster, political commentary, or bestseller has had a much more direct influence on the average European than all the great literature of European nations combined. There is no longer a European intellectual sphere, but a Western one with its center in America.
American observers worried that the Taiwanese weren’t addressing their security with sufficient intensity. “Their military is so conventional and conservative,” the senior Administration official told me. If the U.S. intervened in a confrontation, the realities of economics and distance would weigh in China’s favor: China is closer to Taiwan, its industrial capacity far exceeds the United States’, and its willingness to suffer losses would undoubtedly be greater.
Putin’s Fear of Retreat. How the Cuban Missile Crisis Haunts the Kremlin
Americans tend to remember the peaceful outcome of this effort, but Russian leaders then, as now, understood the humiliation that backing down before the United States signified. In the end, Khrushchev’s efforts to repackage the events of October 1962 as some kind of victory failed. Two years after the Cuban missile crisis, Khrushchev would be removed from office by his colleagues on the Presidium for incompetence. Whereas Biden sees the importance and promise of statesmanship in the resolution of the Cuban missile crisis, Putin unsurprisingly sees only weakness.
Blowback: Italian police bust Azov-tied Nazi cell planning terror attacks
Posing like American farmers is the latest trend among Chinese influencers
Domestic/Culture/Miscellany
So, what happened? A pair of numbers leaps out of the exit polling: 32 percent of voters said that they cast their House vote to “oppose” President Joe Biden, while 28 percent said they cast their House vote to “oppose” former President Donald Trump. In other words, for every eight votes cast against Biden, all but one was negated by a vote cast against Trump. This is surely unprecedented in a midterm election.
Mar-a-Lago Model Prosecution Memo
For that reason, we do not reach an ultimate charging decision. Instead, we stop at noting that there is a strong basis to charge based upon the public record, and that charges would be called for by Department precedent in like cases.
Related: Garland appoints a special counsel—Mr. Smith Goes to Washington
There's Just Too Many Damn Elites
This is why we see something akin to Orwellian groupthink among corporate executives, investment bankers, elected politicians, civil servants, and nonprofit leaders. They all hold the same views and reinforce each other as they move laterally in their careers. Diplomats become investment bankers, investment bankers become ambassadors, generals sit on corporate boards, and corporate executives sit on nonprofit boards.
What this means is that we've created a huge surplus class of administrators in our imperial machine. And there's simply not enough things for them to do since all the manufacturing is done somewhere else.
Robber Barons in the New Gilded Age—The threat is private infrastructure, not all big business
Like the phrase “gilded age,” the term “robber baron” is often misunderstood. Today “robber baron” is used loosely as a pejorative term for “capitalist” or “rich person.” But the metaphor of the robber baron itself alludes to economic predation by owners of chokepoints in transportation. The original robber barons were medieval German aristocrats with estates along the Rhine River who forced river-borne merchants and travelers to pay tolls in order to proceed.
Under the largest spotlight in the world, Musk has proven himself to be a petty charlatan who lacks any meaningful skills necessary to run a company. While we may have been able to fool ourselves that Musk could have successfully run three or four companies at once, the truth is more likely that SpaceX and Tesla have survived his tenure as CEO rather than thrived under his leadership. The current state of Twitter is fascinating because it is the most conspicuous analysis of a company we’ve ever seen, one that has revealed exactly how little a Chief Executive can know, how foolishly a Chief Executive can act, and how ignorant one very rich man can be.
The intense online world centered on digital currencies that Olson explores—evoking a curious mixture of hope, insecurity, desperation, fear, joy, and anger, and holding out promises of personal meaning and financial salvation—is today just one among many online. From radical feminism and anti–seed oil activism to neopaganism and “esoteric” online racism, the Internet today is full of strange new quasi-faiths, many offering competing narratives of what went wrong after 2008, each offering a secret knowledge—a gnosis—through which an enlightened few can hope to escape and purify themselves.
No, the revolution I’m talking about can be described as the anti-Promethean backlash — the broad-based cultural turn away from those forms of technological progress that extend and amplify human mastery over the physical world. The quest to build bigger, go farther and faster and higher, and harness ever greater sources of power was, if not abandoned, then greatly deprioritized in the United States and other rich democracies starting in the 1960s and 70s.
Inside Wealth-Conference Con Man Anthony Ritossa’s Wild Web of Lies. I am going to look into buying some fake royal titles after reading this.
‘National Conservatism’ Is A Dead End
By the way, if you’re under the impression that the New Right think-tankers and technocrats who rail against “elites” and “libertarians” and romanticize lunch-pail unionism are going to send their kids to work in warehouses for minimum wage, I have news for you. That’s reserved for the plebs. It’s no surprise that Compact, the New Right magazine standing athwart the “libertine left and a libertarian right,” employs a Marxist editor or that so many anti-woke socialists feel comfortable allying with the New Right. That’s a Twitter realignment, however, not a real-world one.
US Gov’t Funding 'Disinformation' Video Game 'Cat Park,' Leaked State Dept Memo Reveals
To make the irony complete, this propaganda video game designed to create “behavioral modification” in young people so that they never believe conspiracy theories ends with a conspiracy theory against the other side. As it turns out, the entire disinformation campaign the player embarked on was all secretly planned by an eccentric billionaire organizing the city's populists from the shadows:
Unless a young male is immunocompromised, obese, or suffering from other serious health conditions, taking any mRNA Covid vaccines carries far more risk than benefit.