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naraburns  nihil supernum  1yr ago (text post)   Edited 1yr ago   34413 thread views

Culture War Roundup for the week of November 14, 2022

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SBF had a long interview with NYT where they were remarkably soft on him. The whole thing can be read read here.

For my part, it seems like he has little remorse and is spinning things as "things expanded too fast and I made a mistake". The fact that his hedge fund (Alameda Research) was propped up by client deposits without their knowledge is not something he wishes to mention.

Over at Twitter, he has been consistently deleting tweets such as his Nov 7th tweet assuring everyone that FTX has a "long history of safeguarding client assets". Some are speculating that his recent gibberish tweets are in fact a way to keep his tweet count constant, so to not alert bots when a large amount of tweets are suddenly deleted (as some bots may begin to do auto-archiving). In his interview with NYT, he instead spun his new tweets as some kind of cryptic message he wants to send.

All these things re-affirm my view that he's basically a manipulative psychopath. What's disappointing but not surprising is the soft gloves treatment he gets in the NYT. One cannot help but ask whether his status as democrat megadonor plays a part in that.

With regard scammers and frauds , it's always asked " why didn't anyone warn anyone, how did this happen?"/ People do warn, it's just that no one listens . See Madoff and Harry Markopolos for example. It's possibly more profitable or net-positive to let frauds fun and accept some losses, than try to stop them and possibly cause less economic growth. For example, why does the Fed let bubbles expand instead of preemptively pop them? Because even after the bubble pops, the net gain is still higher than had they tried to stop it earlier. I have found most people do not care about frauds, only the victims care, but otherwise who cares. Let the good times roll and we will pay the tab later. I know that coinbase users are being scammed for millions due to a certain type of giveaway fraud and offered a solution to fix it but was rebuked. Society deserves the fraudsters its gets, I suppose, unless fraud prevention is valued more highly like it is in China, or fraud is tolerated less. America's approach is to administer sometimes very punitive punishments if fraud is found, but otherwise not be too vigorous in stopping it. I am not sure if this is the best approach as a deterrent.

unless fraud prevention is valued more highly like it is in China.

Is there a story about this, sounds vaguely interesting. It certainly doesn't seem like China cares about companies or consumers in other countries being defrauded by Chinese companies (which is to be expected from a national interest perspective, but it still means my main experience with China is a certain level of casual fraud).

Haven't been able to read the article, but I have seen comments elsewhere that it is indeed going soft on him.

I wonder how much of that is the lawyers saying "Well you can't even breathe a hint that anything criminal went on, or even wrong-doing, before or until the cops slap the cuffs on him, else that will be considered libellous" and how much is whatever reporter wrote it genuinely believing since the guy was a donor to the Democrats (though the company hedged its bets by donating some to the Republicans as well) and good causes, how can he be a criminal?

Has anyone posted this yet? It’s phenomenal.

https://milkyeggs.com/?p=175

Of note is the evidenced theory that SBF was on Parkinson’s dopaminergic drugs which led him to making ridiculous risks and purchases, and other information that can lead one to think the Bankman literally Fried his brains.

Thanks for the link, which includes a link to the NYT piece. It's hilarious in parts; Bankman-Fried tried to use his influence to get his rival clobbered by regulatory bodies in the USA, which pissed off the other guy and he then pulled the pin on the grenade. Too much arrogance due to (possibly) frying his brains on drugs and believing his own hype about being a wunderkind:

Perhaps Mr. Bankman-Fried’s most ambitious aim was to shape crypto regulation in Washington, where he testified to Congress and met with regulators. He also used his growing influence in the capital to criticize his biggest rival, Mr. Zhao, in private meetings, people familiar with the matter said.

Attacking Mr. Zhao “was not a good strategic move on my part,” Mr. Bankman-Fried said on Sunday. “I was pretty frustrated at a lot of what I saw happening, but I should’ve understood that it was not a good decision of me to express that.”

A former investor in FTX, Mr. Zhao still owned a large amount of FTT, a cryptocurrency that FTX invented to facilitate trading on its platform. On Nov. 6, Mr. Zhao announced on Twitter that he was selling the FTT, spooking customers who rushed to withdraw their FTX deposits.

“We won’t pretend to make love after divorce,” Mr. Zhao wrote on Twitter. “We won’t support people who lobby against other industry players behind their backs.”

When FTX collapsed, Mr. Zhao initially agreed to buy the exchange in what would have amounted to a bailout. But soon the deal fell through, after Binance found problems in the company’s financials. In a Signal group chat that included Mr. Bankman-Fried and other FTX representatives, Mr. Zhao posted a curt note, according to two people familiar with the matter.

“Sam, I’m sorry,” he wrote, “but we won’t be able to continue this deal. Way too many issues. CZ.”

Mr. Bankman-Fried scrambled to line up new financing. “I shouldn’t throw stones in a glass house, so I’ll hold back a bit,” he said in a message to employees obtained by The Times. “Except to say: probably they never really planned to go through with the deal.”

Listen, Binance is probably dodgy as fuck itself, but you have to admire the size of the balls on CZ for pulling this off 🤣 Revenge is a dish best posted on Twitter, indeed!

If SBF hadn't fucked up so badly we'd be speaking more about what was essentially a supervillain move by CZ.

Didn't batman do essentially the same thing?

I was thinking this was the more highly-apropos Batman clip

Highly recommend Matt Levine's article on FTX's balance sheet. There is no way to read this balance sheet and come away thinking that Bankman-Fried, FTX, and Alameda were merely incompetent.

In round numbers, FTX’s Thursday desperation balance sheet shows about $8.9 billion of customer liabilities against assets with a value of roughly $19.6 billion before last week’s crash, and roughly $9.6 billion after the crash (as of Thursday, per FTX’s numbers). Of that $19.6 billion of assets back in the good times, some $14.4 billion was in more-or-less FTX-associated tokens (FTT, SRM, SOL, MAPS). Only about $5.2 billion of assets — against $8.9 billion of customer liabilities — was in more-or-less normal financial stuff. (And even that was mostly in illiquid venture investments; only about $1 billion was in liquid cash, stock and cryptocurrencies — and half of that was Robinhood stock.) After the run on FTX, the FTX-associated stuff, predictably, crashed. The Thursday balance sheet valued the FTT, SRM, SOL and MAPS holdings at a combined $4.3 billion, and that number is still way too high.

I am not saying that all of FTX’s assets were made up. That desperation balance sheet lists dollar and yen accounts, stablecoins, unaffiliated cryptocurrencies, equities, venture investments, etc., all things that were not created or controlled by FTX. 5 And that desperation balance sheet reflects FTX’s position after $5 billion of customer outflows last weekend; presumably FTX burned through its more liquid normal stuff (Bitcoin, dollars, etc.) to meet those withdrawals, so what was left was the weirdo cats and dogs. 6 Still it is striking that the balance sheet that FTX circulated to potential rescuers consisted mostly of stuff it made up. Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works!

"It was obviously in good faith that we exchanged customer funds in actual things (dollars, bitcoins, whatever) with coins that we made up and whose supply we control and that could not be sold for even a fraction of their claimed value." Or having an account labelled "Hidden, poorly internally labeled ‘fiat@’ account."

At best they had "good faith' in the same way that Theranos did: telling themselves -delusionally- that they'd make it all right eventually and make all the lying worth it.

From our own point of view it's clear that SBF is grey tribe, so we've been focusing on the Effective Altruism angle, but I don't think the mainstream knows of the grey tribe yet, and if the blue tribe has recognised him as one of their own (with him being a democratic donor and all), then it makes more sense that the media would be defending him.

From our own point of view it's clear that SBF is grey tribe

Whose?

Read his and caroline's twitter history. They talk just like themotte posters. HBD, IQ maximization, nootropics, alternative lifestyles, AI risk, game theory, all the trendy topics.

They're fucking nerds dude.

But are all nerds "Grey Tribe"?, as I said in another comment, at least in the Scott piece some of the signifiers of grey tribe is using Uber, but that seems nonsensical to me when you can't afford a car but need to go somewhere on a timely manner.

"Grey tribe" is blue tribe (often the very bluest of the blue tribe) who just don't happen to agree with a fair amount of typical blue-tribe-associated political views for whatever reason.

so, blues that sometimes vote republican/third party in a nutshell?

That of the people who aren't confused by a term like "grey tribe", i.e. rationalist-adjacent people.

This sounds like consensus building more than any other thing, considering the pushback affirmations like yours got in the recent thread about this topic in the main page. Is there anything significant that separates a blue triber from this so called grey one?

It's from this.

Like any tribal or sectarian squabbles, "significant" is relative. I'm grey and I think there's significant difference. That a lot of people here were discussing the EA angle is kind of how you can tell.

I kind of agree with your comment on consensus building though.

What would you say is the characteristics that separate you from the average Blue triber?

I think he's blue. What has he done or said that makes him grey?

from wiki:

Contributions for the year 2022, through August 15, 2022, also went to members of both parties, with $105,000 donated to conservatives (0.3%) and $35,872,000 to liberals (99.7%) .[81]

What has he done or said that makes him grey?

I dunno about Fried, but Caroline was an active part of the tumblr ratsphere under worldoptimization for a few years, to the point of getting linked from Scott as an effortposter. While bluer than the reddit side on average, she was still willing to do (and able to get away with) no small amount of Darkly Hinting.

Being an effective altruist basically makes him grey, no? He's certainly politically aligned with democrats, but so is Scott, and that doesn't make him blue tribe.

After reading through his ballot discussions, there is nothing that makes me thing Scott is anything other than a party-line blue triber. In every case he is maximally charitable to the D candidate, and maximally uncharitable to the R candidate (ex: he states anyone disputing the 2020 election is an automatic no vote from him, yet conveniently forgets a large number of Ds did the same in 2016, and as happens in every presidential election). While he discusses and presents the issues in a very thoughful manner- why most of us read ACX in the firet place- I dont see him ever voting a majority not-blue ballot.

His parents teach at Stanford. His gf at MIT. His mothers been a Democratic and Biden bundler for a long time. His Aunts like Harvard and work in public health. Deep administrative state people with Democrat connections.

I remember asking a question a while ago on whether effective altruist were just Democrats who came up with new branding so they weren’t Democrats but the upper class Democrats to seperate themselves from the peons in the party.

Honestly EA just looks like Democrats to me now even more. People who want to say the ends justify the means to take other peoples money and spend it. Old school tax and spend Dems.

Perhaps grey tribe just doesn’t exists. Thiels just a conservative with edgier branding and libertarians are just conservatives.

She talked about HBD on her blog! Both of them were scott fans! A lot of the gray tribe came out of elites and top universities.

I mean, a lot of white nationalists came out of top universities. Jared Taylor went to yale. just being democrat-related doesn't tell you everything.

Sounds like you are just describing grey tribe as being a bit smarter than your tribe and a little autistic so able to think outside of social pressure.

But I basically defined him as claiming grey tribe as it lets him be in the upper intellect of blue tribe and above the peons so are definitions don’t really disagree.

He's grey in the sense that he's a Silicon Valley rationalist utilitarian who ticks all the grey-tribe boxes. See the original definition in I can tolerate anything but the outgroup

There is a partly-formed attempt to spin off a Grey Tribe typified by libertarian political beliefs, Dawkins-style atheism, vague annoyance that the question of gay rights even comes up, eating paleo, drinking Soylent, calling in rides on Uber, reading lots of blogs, calling American football “sportsball”, getting conspicuously upset about the War on Drugs and the NSA, and listening to filk – but for our current purposes this is a distraction and they can safely be considered part of the Blue Tribe most of the time

Dawkins-style atheism, vague annoyance that the question of gay rights even comes up, eating paleo, drinking Soylent, calling in rides on Uber, reading lots of blogs, calling American football “sportsball”, getting conspicuously upset about the War on Drugs and the NSA, and listening to filk

This does not constitute a basis for a political tribe, especially because permissive attitudes on gay rights and drug use are being increasingly embraced by both the right and the left.

libertarian political beliefs

This might constitute a basis for a political tribe, depending on exactly how libertarian you are, and on what issues. But, the blue tribe has already defined libertarianism as a red tribe position, and the concept of the libertarian-to-fascist pipeline is well established in highly online leftist circles, so as a libertarian you're basically red tribe, unless you're the sort of libertarian who can fit within blue tribe moral constraints, in which case you're basically blue tribe.

I'm skeptical of the utility of the concept of a "grey tribe" in the contemporary American culture war.

The Blue / Red / Grey tribe distinction is explicitly cultural rather than political.

The purpose was not for it to be a political first tribe and Scott was intentionally using non-political examples. He even calls the gray tribe a subset of the blue tribe in the piece, it's worth reading to post if for no other reason than to get acquainted with the origin of some of the jargon here.

what is the utility of this distinction? just to identify the "Efective Altruists" from among the blues?

It was more to distinguish almost all non-Blue Tribe internet-users, and probably motivated in part by the (for Scott, formative) collapse of internet atheism into left- and not-left groups in the mid-Bush era.

It's almost an Albion's Seed-type category. You're looking at a socio-cultural sub-group, like "Hot Topic goths," "preppy girls," or "theater kids" back in high-school. It's a personal tendency and personality type married to a particular set of tropes and cultural products.

The thing that sometimes confuses me is that they assign things like using Uber to this tribe (like in the Scott article), but that is almost a necessity in an urban context for all the people that don't earn enough for a car (a Tesla in case of the blues) but need to go somewhere in a timely maner.

More comments

Ah, the previous poster didn't post the actual source Keep in mind they're categories drawn in 2014. Their purpose is to identify cultural bubbles more than political parties with the understanding that there can be blue tribe Republican voters. I do recommend reading the entire, long, article. It has a firm place in the canon of this community.

Compare this with the universal revulsion heaped upon Shkreli for breaking rules which are apparently frequently broken, but without losing any investor money.

He did raise the price on a life saving drug, but he was sticking it to insurance companies that were obligated to buy it. For Medicaid and the uninsured the price was either about the same or lower than before.

Is that the truth of it? I remember the narrative at the time implied that patients would be getting screwed by the price hike (and yes, I know, don't always trust the narrative, but popular sentiment is very hard to ignore).

Like most drugs that cost thousands for insurance companies, daraprim had a program for the uninsured to provide the drug at little to no cost. Many interviews quote Shkreli on this, here's one of them: https://www.vanityfair.com/news/2015/12/martin-shkreli-pharmaceuticals-ceo-interview

The Wayback Machine confirms that the site for the drug assistance program, Daraprim Direct, was live on September 15, 2015, which was a couple of days before a story on Healio kicked off the news cycle: https://web.archive.org/web/20150401000000*/https://www.daraprimdirect.com/

Yes, it is true.

His conviction had nothing to do with raising the price of the drug. He broke the rules handling investors' money and investing it without giving notice and was sentenced for that. His bets turned out good and he returned the money with profit but rules are rules and he could have easily lost the money.

SBF most likely is going to jail for long time.

Yeah, if not for the drug price hike, no one would have cared about this guy. He may have still gone to jail but it would not have been a national story. The amount of money he handled was peanuts in the grand scheme of corporate/investor fraud.

First Elon Musk dominated the news cycle 2-4 weeks ago with twitter, and now this guy, but Elon still heavily in the news. Just more evidence that billionaires (or ex-billionaires) run the show. Hardly anyone cares about Biden that much, who is like the incredible shrinking president. Oh, war still going on in Ukraine /Russia too, which also has become background noise.

Last week people were speculating that somehow SBF hacked his own exchange or was fleeing with money; I didn't believe any of it. If he wanted to drain funds from the exchange, he didn't need a malicious app update. He could have just made a transfer of $100 million or so quietly from a cold wallet to a wallet in which he controlled the keys, and then if the money is ever discovered missing, which given that FTX is privately owned would be almost impossible short of a federal investigation, he could just say he was hacked or lost it. Given how big FTX was, and still is, this would likely go unnoticed. He's still on twitter, giving interviews. This is not typical of felons running from the law.

I think this whole thing was just a big mistake of risk management on his part, and possible mishandling of customer funds and lying about the dollar backing of FTX deposits. He was screwed either way: had he been forthright about FTX's actual financial health, the ensuing panic would have made a bad situation way worse. Thus, there is an incentive to lie and hope that the market will recover, which in the case of Bitcoin it didn't. This makes him unethical and he may go to jail, but I don't think he profited from this personally.

This apparently had nothing to do with risks management and it feels like straight theft.

The kid had the best advisors in the world. His parents are literally at the top of the regulatory game.

He should get a sentence of about 500 years. There should be no forgiveness for people who commit a crime of this magnitude who was fully informed and capable. This is plain and simple Madoff.

i still want to wait and see how this plays out before meting punishment . he lied but there is still a lot more to find out

On the less bad side he just felt a lot of pressure when Alameda blew up and did some very illegal things. 10-20 is probably the ball park.

On the very side he was raiding customer accounts far earlier to fake billionaire when he was not and funding promotions, politics, etc with customer funds and then Alameda blew up and he took way more customer funds. This would be much worse and straight up Madoff.

And he’s tough to have sympathy for. His parents were great advisors and he had plenty of smarts.

Hardly anyone cares about Biden that much, who is like the incredible shrinking president.

Do you believe that Biden is the person actually making decisions in his own administration?

No. I think his leadership has been outsourced to focus groups. He does not inspire the confidence as someone like Bill Clinton did. He fills a role, but does not lead.

I think this whole thing was just a big mistake of risk management on his part,

I don’t buy it. He was already a multi-billionaire, what normal incentive did he have to risk it all on high leverage plays?

There’s something else going on here. Either behind-the-scenes polyamorous status-jockeying, or a calculated high-risk high-reward play for something BIG.

He was likely never a billionaire, or at least not for long. His wealth was based on hypothetical , private Alameda/FTX holdings, which were probably illusory long before the very public collapse. FTX/Alameda was probably running out of money long before last week.

I think this is the case, because I can never understand why anyone who gets that big and that rich doesn't immediately diversify a minimum of 25% of their holdings into other assets, such as blue chip shares, real estate, commodities, bonds etc to financially protect themselves in case of company collapse. This goes for companies like Tesla, but especially for companies like FTX operating in unstable high risk sectors.

People who make reasonable decisions like that never become temporary crypto-billionares in the first place.

Risk-averse people usually aren't the ones getting this rich in the first place.

Also, trying to diversify out of your own company looks bad to investors and risks a crash by itself.

Also, trying to diversify out of your own company looks bad to investors

This is universally reported to be true, but it's so strange to me. Should they also refuse to get in a taxi if they see the driver wearing a seatbelt, because a really good driver wouldn't need one? Should they be suspicious if they see your software going through integration tests, because that means you're not hiring really good coders who don't write bugs?

At some point the population of "people super confident that they can't fail, because they've accurately assessed that they're just that good" you're shooting for has to be a fraction of the population of "people super confident that they can't fail, because they're fools".

I'd guess it's not just about confidence/commitment but also preventing downright scams. Theranos-style fake businesses would be a lot more common if it was easy to cash out before the fraud gets uncovered.

Hence why I said only diversify out ~25%, but I take your meaning. Investors seem to expect all in, ride or die from the builders.

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