FTX Collapse

Here’s a short video summary, a thread about FTX’s strategy, and a portrait of the protagonists.

And here’s the opinion of the left:

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Here is Balaji Srinivasan on Twitter comparing the FTX collapse, occurring in a “Wild West” unregulated free market, with the 2008 meltdown in the highly-regulated, government/financial industry cartel, funny-money mortgage-backed security market and its aftermath.

I guess it’s a given that Sam Bankman-Fried, unlike Helicopter Ben Bernanke, will not get a Nobel Prize.

The crypto space is exploring alternatives in an environment with no guardrails, no bailouts for investors who chose unwisely, and no golden parachutes for those whose greed, poor judgement, and lack of scruples caused others to lose their money. This is more likely to converge upon a set of survivors that work than a heavily-regulated environment where clueless bureaucrats try to pick winners and losers and “protect” “unqualified investors” from the opportunities in emerging markets.

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FTX’s Sam Bankman-Fried seems to be a case study of what happens to ESG investments in “crypto-time”.

The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do. – Warren Buffet, Berkshire Hathaway, 1983 Annual Report

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There’s a pattern of increased openness to leveraging falsehood. In a contest between hard truth and sweet falsehood, the latter wins.

When the only path forward for the West is a bitter pill or slow death, it’s all to easy to cycle through repeated failures of wishful thinking with the two drugs they know about: cocaine (free money to invest) and codeine (free money for welfare). Now they’re about to stop working. What now?

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Not sure whether to trust him:

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To trust the SEC Chairman Gensler, or to trust FTX Spokesperson O’Leary, or both, or neither? I’d think neither.

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A more detailed backgrounder:

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Are we in a crypto or clepto era?

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A decade ago it was written:

The Global Financial Crisis (Fourth Turning, 2008-2029?) was recently catalyzed by the 2008 global financial meltdown—leading to the most severe global economic downturn since the Great Depression—and by the historic Presidential election of that same year. With public trust continuing to ebb, the regeneracy phase of this crisis (in which civic purpose begins strengthen) still seems years away, and the crisis climax is well over a decade distant. Most likely, this Fourth Turning will come to an end in the late 2020s

The connections between the regulators and FTX are quite damning.

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Delaware bankruptcy filings:

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via In FTX's bankruptcy, here are the top 10 investment and M&A holdings creditors should be looking at - CB Insights Research

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A deepfake phishing attack was employed over the weekend: https://twitter.com/jason_koebler/status/1594720003923722240

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Now the left will blame Musk. And, amazingly, Section 230 will all of a sudden not be the all powerful defense it has been.

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