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naraburns  nihil supernum  1yr ago (text post)   31649 thread views

Culture War Roundup for the week of December 5, 2022

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I Accidentally Got SBF To Admit to Fraud

So...SBF is simply a moron. I've been trying to resist that conclusion, but now I'm asking myself why I bothered.

In the link above Youtuber Coffeezilla drops into a call with SBF (a second time! Why is he still taking calls??) and proceeds to basically get him to admit that funds were comingled.

Coffeezilla noted that SBF always deflects the issue by arguing that some accounts were trading on margin and so were deliberately open to being used by Alameda, unlike regular accounts. So literally all he does - and all any journalist needed to do - was just keep drilling down on whether the FTX only customers who weren't doing that could still get their funds. SBF obviously has no answer. Even worse, he basically screws himself by admitting that they had one withdrawal process which was him admitting to comingling funds.

So...the guy is just a moron. He doesn't have some grand legal plan to plead negligence or ignorance. He has a half-baked plan based on the idea that everyone is dumber than him (despite multiple counterexamples) and he falls apart the minute anyone puts any thought into his answers.

The entire video is actually a good look at how a journalist should view someone like SBF and his word games and deflections and how they should strategize to defeat them (and the end has the sort of pure joy at skewering the target that I bet all journalists feel but are too dignified to admit when picking up their Pulitzer). And this is coming from someone who thought the idea of people like Coffeezilla being "journalists" laughable.

But he has legitimately done the best job of questioning SBF out of everyone (Stefanopoulos was the close second)

So...the guy is just a moron.

Well, yeah. But the important thing to remember is that he's a smart moron. The embarrassing Sequoia fanboy squee article hit that point, too:

Highly mathletic, SBF breezed through Crystal Springs Uplands, an elite prep school in Hillsborough, California. Though he earned top marks, he kept to himself, spending most of his free time playing computer games (StarCraft, League of Legends) and a trading card game, Magic: The Gathering. But at MIT he found his tribe: fellow pledges at Epsilon Theta, a coed fraternity of supergeeks similarly interested in Magic, and video games. Thetans are fond of debating math, physics, computer science, linguistics, philosophy and logic problems—for fun—at alcohol-free parties.

As an aside, anyone who coins a cutesy neologism like "mathletic" should be rolling around on the floor, clutching their ears, in agony. But what is my point here?

Because the worship of intelligence/IQ I see in these circles, including on here, usually "X is really really good at STEM/maths". I've seen comments casually tossed off about 'normies', about '95 IQ rednecks', many assumptions that Ordinary People Are Dumb, and we know it because they must all be sub-100 IQ, we know that because if they were Smart Like Us they wouldn't be rednecks or normies.

Well, guys, here's one of the Smart Like Us crew who is dumber than an ordinary person when it came to "I can make yuuuuge money out of trading magic beans".

He doesn't have some grand legal plan to plead negligence or ignorance. He has a half-baked plan based on the idea that everyone is dumber than him (despite multiple counterexamples) and he falls apart the minute anyone puts any thought into his answers.

I agree that he doesn't have some grand legal plan, but I do think he is relying on "negligence or ignorance". The entire set-up at his Bahamas tax haven base (see the Sequoia article again, man that is probably the worst thing this Adam Fisher ever wrote but it's a treasure trove of nuggets about the mindset of everyone involved, from the fanboy journalist to the investors throwing money at Bankman-Fried on the basis of one Zoom call) was juvenile - it sounds like "still living like we're in college in our second year even though we're all late twenties and heading into our thirties". Everyone seems to have had an instinctive mindset that the conventional way of doing things - even business - was somehow icky, somehow.... normie. And they weren't normies! They were supersmart EA types who were going to save the world by making tons of money and having fun doing it!

So whether or not Bankman-Fried set out from the outset with fraud in mind, the setup was so chaotic, it was conducive to it. I think there is something suspicious there, because Bankman-Fried had so much ownership and control behind the scenes, but he may genuinely have thought he was a supersmart cookie who could find a new way to make zillions after his One Weird Trick dried up.

His parents are lawyers, I wouldn't be at all surprised if he imbibed some half-baked notion that "if I say X was separate from Y, and it was Y did all the fiddling around with funds, then I'm in the clear" when it comes to his technicality about "it wasn't FTX that did it, it was Alameda". I do think he's relying on technicalities to save his skin, which just shows once again that "a little knowledge is a dangerous thing".

I really hope one of the lessons people in the rationalist and rationalist-adjacent sphere, including on here, take away from this is to lose the ugly attitude around the idolisation of 'intelligence' and the corresponding denigration of 'normies' (this constant assumption, as I've said, that ordinary people are all 90-95 IQ and not the average of 100 IQ or even up to 105!).

I really hope one of the lessons people in the rationalist and rationalist-adjacent sphere, including on here, take away from this is to lose the ugly attitude around the idolisation of 'intelligence' and the corresponding denigration of 'normies' (this constant assumption, as I've said, that ordinary people are all 90-95 IQ and not the average of 100 IQ or even up to 105!).

I think that this is an affliction that affects all intelligent people, but the concentration of people who think of themselves as "underappreciated geniuses" is probably higher in EA and other nerdy spaces, fortifying the walls of the echo chamber to the point where reality can rarely penetrate to bring people back down to earth, and so you end up with midwits who think they're geniuses getting mugged by reality. It's good to have some friends who aren't college educated, don't work in tech, etc. if only to ensure that you're not completely trapped in such a bubble.

I acknowledge that there genuinely are a lot of Really Smart People in these spaces. And it's not everyone who does it, but the automatic correlation some make between "ordinary person" and "95 IQ" really annoys me (as someone who hits 105 IQ only on their best days, if I believe that Ravens Matrices test I took online). Yeah yeah yeah, "Most people (about 68 percent) have an IQ between 85 and 115. Only a small fraction of people have a very low IQ (below 70) or a very high IQ (above 130). The average IQ in the United States is 98" so really X is not being dismissive when they reach for "95 IQ" in their imaginary ordinary person.

But when we're talking about ordinary people, we are talking about "the average" which is set at 100 IQ. So a glib "95 IQ normie" is being dismissive, is saying "those dumb people are really dumb, so much dumber than me" and that's no way to think about or talk about your fellow citizens. You can disagree with the presumed opinion of the man in the street, but there is no cause to presume he's stupider than the average.

Because the worship of intelligence/IQ I see in these circles, including on here, usually "X is really really good at STEM/maths". I've seen comments casually tossed off about 'normies', about '95 IQ rednecks', many assumptions that Ordinary People Are Dumb, and we know it because they must all be sub-100 IQ, we know that because if they were Smart Like Us they wouldn't be rednecks or normies.

From personal experience posting/discussing about IQ here, this is hardly true at all. Maybe it was more true pre-2018 but not anymore. Many on the right are as equally skeptical as those on the left about the worship of IQ.

Highly mathletic, SBF breezed through Crystal Springs Uplands, an elite prep school in Hillsborough, California. Though he earned top marks, he kept to himself, spending most of his free time playing computer games (StarCraft, League of Legends) and a trading card game, Magic: The Gathering. But at MIT he found his tribe: fellow pledges at Epsilon Theta, a coed fraternity of supergeeks similarly interested in Magic, and video games. Thetans are fond of debating math, physics, computer science, linguistics, philosophy and logic problems—for fun—at alcohol-free parties.

I dunno how indictive this is of genius IQ, probably not much. It's not that hard to do well in high school. MTG would not be so popular if it was only geniuses playing it. He got into Jane Street, which is pretty damn selective, so probably an IQ of at least 140 if I had to guess.

here's one of the Smart Like Us crew who is dumber than an ordinary person when it came to "I can make yuuuuge money out of trading magic beans"

No he's not; the "ordinary people" are the ones getting rooked into buying at the top of the crypto bubble, or latching onto one of the innumerable scams out there. Running one of those scams, especially one as big as FTX, is harder. Plus, SBF did legitimately stumble into profitable bitcoin arbitrage opportunities; if he had just stopped there, and not gotten out over his skis, he would have still made a lot of money - completely legitimately! - on those "magic beans".

He did make legit fast bucks on the arbitrage, but that was something that was not sustainable and he should have known it. He took advantage of a loophole, and that loophole got stopped up. He probably did realise it, couldn't or wouldn't give up the lure of fast easy millions, and decided to go into exchange business instead.

And the ordinary people weren't the ones who gave him $1 billion in funding, it was the (presumably) smart investors at Sequoia Capital and elsewhere:

The B round raised a billion dollars. Soon afterward came the “meme round”: $420.69 million from 69 investors.

$420 million divided by 69 comes to around $6 million each, so do you count someone who can drop $6 million into an investment as "ordinary people" and if you do, then you and I have very different definitions of "ordinary people".

My understanding was that the reason the FTX scandal went from "niche finance scandal" to "world-shaking cataclysm" was that SBF wasn't just losing institutional/high net worth individual money, but instead was raiding ordinary joe-schmo funds nominally being used to buy and sell coins on FTX to transfer to Alameda. Is that incorrect?

Plus, SBF did legitimately stumble into profitable bitcoin arbitrage opportunities;

I made the point below, but how do we even know this is true? Given what we know about SBF, isn't it more likely that he was simply stealing user funds from the start?

Think about it logically. Which makes more sense?

  1. Obvious billion dollar arbitrage opportunity is discovered by SBF and no one else OR

  2. Known fraudster steals user deposits for his own purposes

He very probably did make legitimate profit off the "kimchi premium", and while it wasn't his own money and he did need to hit up investors for it, he wasn't stealing their dough, at least not at the start, because they lucked into making money faster than they could lose it. Interesting and indicative parts bolded by me in the below:

Curious, SBF had started looking into crypto—and almost immediately noticed something strange. Bitcoin was trading at a higher price in Japan and Korea than it was in the U.S. In theory, this should never happen because it represents a riskless profit opportunity—in other words, a free lunch. One simply buys Bitcoin at the lower price, sells it at the higher price, and pockets the difference. Jane Street built an empire on high-frequency trades that took advantage of fraction-of-a-cent price differences. But here was Bitcoin, trading at around $15,000 in South Korea: an unheard-of 50 percent price premium.

…Another day of work dealing with the red-tape problem netted SBF a single round-trip trade—to Asia and back—for a $20 profit. That was it: the proof of concept. There was an opportunity to be had. SBF immediately put $50,000 of his own money to work. The first job was just getting the money into the system. The operational challenges were huge. Not just anyone can walk into a foreign bank and start wiring money out of the country every day. There are know-your-customer rules, caps on withdrawals, citizenship requirements. Even worse, to any normal bank, the constant zeroing out, then maxing out, of a cash account—with the money coming and going overseas, to and from fly-by-night Bitcoin exchanges—raised every red flag in the book. It looked like laundering. It looked like drug money. There were even monetary policy concerns: The liquidity of the South Korean won is sharply limited by the country’s central bank.

Fortunately, SBF had a secret weapon: the EA community. There’s a loose worldwide network of like-minded people who do each other favors and sleep on each other’s couches simply because they all belong to the same tribe. Perhaps the most important of them was a Japanese grad student, who volunteered to do the legwork in Japan. As a Japanese citizen, he was able to open an account with the one (obscure, rural) Japanese bank that was willing, for a fee, to process the transactions that SBF—newly incorporated as Alameda Research—wanted to make. The spread between Bitcoin in Japan and Bitcoin in the U.S. was “only” 10 percent—but it was a trade Alameda found it could make every day. With SBF’s initial $50,000 compounding at 10 percent each day, the next step was to increase the amount of capital. At the time, the total daily volume of crypto trading was on the order of a billion dollars. Figuring he wanted to capture 5 percent of that, SBF went looking for a $50 million loan. Again, he reached out to the EA community. Jaan Tallinn, the cofounder of Skype, put up a good chunk of that initial $50 million.

With a goosed-up capital account, the money started piling up so fast that SBF placed what he refers to as “a market order for employees” to tend to the Rube Goldberg operation that kept the capital spinning. There were constant blowups with banks, which are wary of anything crypto. Crypto was so new that regulators in South Korea and elsewhere were constantly changing their mind about regulations—then making those changes retroactive. It was a swirling mess. …The first 15 people SBF hired, all from the EA pool, were packed together in a shabby, 600-square-foot walk-up, working around the clock. The kitchen was given over to stand-up desks, the closet was reserved for sleeping, and the entire space overrun with half-eaten take-out containers. It was a royal mess. But it was also the good old days, when Alameda was just kids on a high-stakes, big-money, earn-to-give commando operation. Fifty percent of Alameda’s profits were going to EA-approved charities.

The Bitcoin arbitrage didn’t—and couldn’t—last forever. The Japanese appetite for overpriced Bitcoin withered (or, more likely, another shadowy arbitrage outfit also found its way to the trade and collapsed it). Either way, the spread narrowed to almost nothing. But there were other trades to be had. The simple fact that crypto was new, and that the tools traders needed to handle it were still under construction, meant that there were market inefficiencies all over the place. And behind every market inefficiency is an arbitrage opportunity.

…At this point, mid-2019, SBF decided to double down again—and scratch his own itch. He would bet Alameda’s multimillion-dollar trading profits on a new venture: a trading exchange called FTX. It would combine Coinbase’s stolid, regulation-loving approach with the kinds of derivatives being offered by Binance and others.

…And, with that, he moved the nascent company to Hong Kong, a jurisdiction with a crypto-friendly regulatory regime. Hong Kong also happens to be conveniently located next door to the country that, at the time, had the largest and most enthusiastic crypto user base in the world: China.

…The problem, as Bailhe saw it, was that FTX didn’t appear to need any money. She was correct, but what she didn’t know was that SBF was starting to think about raising money anyway. Alameda had some unexpected losses due to so-called counterparty risk. Arbitrage is, in theory, riskless. But not when the rickety exchange you’re using to place your trades suddenly locks up and refuses to disburse your money. Or, worse yet, when two crypto exchanges can’t even agree on what a crypto transfer looks like, and so the act of sending crypto from one exchange to another results in tokens just disappearing into the ether. And don’t even ask about futures contracts that see their terms unilaterally changed mid-agreement: the dreaded “clawbacks.” Alameda was not immune to the exchange-level shenanigans that gave crypto as a whole its sleazy reputation. But FTX had an ambition to change that. It was built to be the exchange traders could count on. SBF needed to get the word out. He wanted FTX to be known as the respectable face of crypto. This required ad campaigns, sponsorship deals, a charitable wing—and a war chest to pay for it all.

So Alameda starting running into the problem of no more easy money and worse, losing money. Bankman-Fried decided that setting up his own exchange would be the new easy money, and getting more funding from investors was the solution to Alameda's losses. That seems to have worked for a while, too, but the losses continued and so he started dipping into the funds FTX was supposedly holding separate from Alameda.

I mean, it seems pretty easy to check. Go back and look at the buy/sell records for Korea and Japan at various points during which the "kimchi premium" was allegedly there for the taking.

The Japan-US arbitrage was known in early 2018. Even now there are still ways to make $ trading crypto. I imagine someone with enough data analytics and his intelligence could find patterns.

The discussion of IQ below lacks the proper conceptual grounding in theory of intelligence.

It is simple - four quadrants.

Einstein is a Smart Smart Guy. High IQ, very nerdy.

Jack McMoron who you've never heard of, never graduated high school and drives drunk to his McJob. He is a Dumb Dumb Guy.

Joe Rogan is a Smart Dumb Guy. Deep but often strange analysis, but internally consistent, applied to everything from politics & history, to guys beating the piss out of each other. Interests are pedestrian. Smart Dumb Guys make good friends.

Sam Bankman Fried is a Dumb Smart Guy. He's very mathematically strong, speaks eloquently, built multiple massive businesses. He also taunts the people with the power to destroy his ponzi scheme on Twitter.com, and then when it is obvious he is a criminal, decides to speak. A LOT. Against legal advice. In embarassing ways.

So where does IQ fit into this? Is IQ only for the first "smart" in the descriptor, or does high IQ mean someone is good at both?

Maybe both smarts are correlated with IQ, but the second one probably more so than the first, at least for raw IQ?

I don’t really have any stake in or have a deep understanding of this, but that’s my impression.

Joe Rogan -smart average guy

Because the worship of intelligence/IQ I see in these circles, including on here, usually "X is really really good at STEM/maths". I've seen comments casually tossed off about 'normies', about '95 IQ rednecks', many assumptions that Ordinary People Are Dumb, and we know it because they must all be sub-100 IQ, we know that because if they were Smart Like Us they wouldn't be rednecks or normies.

My favorite fake fact is that people with <100 IQ can't understand hypotheticals. I've worked minimum wage jobs and I've met some real fucking dummies - yes, they can understand hypotheticals.

Well, guys, here's one of the Smart Like Us crew who is dumber than an ordinary person when it came to "I can make yuuuuge money out of trading magic beans".

Ordinary people buy scratchcards. And honestly, who's to say that SBF even messed up as far as his own benefit is concerned. He got to spend several years as a rich and influential power broker, and may still evade severe punishment. The actual dumb people are the 110 IQ cryptophiles that got ripped off again.

The entire set-up at his Bahamas tax haven base (see the Sequoia article again, man that is probably the worst thing this Adam Fisher ever wrote but it's a treasure trove of nuggets about the mindset of everyone involved, from the fanboy journalist to the investors throwing money at Bankman-Fried on the basis of one Zoom call) was juvenile - it sounds like "still living like we're in college in our second year even though we're all late twenties and heading into our thirties".

This describes a lot of people in their late twenties nowadays. It's not abnormal.

This describes a lot of people in their late twenties nowadays. It's not abnormal.

I'm pretty sure when both Bankman-Fried and Ellison were working at Jane Street, that operation was not run out of the CEO's beanbag office with no accountancy or audit services.

This was not a bunch of kids working on their zany start-up about crocheting motor bike helmets for chihuahuas. This was a large business dealing with huge sums of money.

My favorite fake fact is that people with <100 IQ can't understand hypotheticals. I've worked minimum wage jobs and I've met some real fucking dummies - yes, they can understand hypotheticals.

I feel like I need more context on the purported relation between IQ and ability to understand hypotheticals. I'm confident a statement like "For some IQ X all people above IQ X can understand hypotheticals and no people below IQ X can understand hypotheticals" is false for any X. Like, why would it be true? Just based on the way we measure IQ what's the relationship between being able to do reverse digit span and understanding hypotheticals?

I'm happy to believe there's some IQ threshold X below which no people can understand hypotheticals, but I suspect there would also be a substantial population of people with an IQ above X that also cannot understand hypotheticals. Similarly there's probably some IQ threshold Y above which everyone can understand hypotheticals, but also a substantial population of people with IQ below Y that can understand hypotheticals.

Just based on the way we measure IQ the claim that there exists some IQ level that perfectly partitions individuals into can/not understand hypotheticals seems pretty implausible.

This is a greentext from 4chan but it's pretty funny and demonstrates the point if true - it's more about conditional hypotheticals than any hypotheticals: https://i.redd.it/i1ywg8dajac71.png

That "We did research on convicts in San Quentin. They're absolute fucking retards" - well yeah, they ended up in San Quentin. They are also fucking with you because why would a bunch of convicts go out of their way to help some nerdy white middle-class motherfucker with his science project who all too plainly is treating them like lab rats?

The part about empathy may or may not be true, but it's also "You never admit anything, you say you don't know, when the cops are questioning you". If they said "I imagine that guy I beat up felt awful, he was in pain, he was humiliated" then bozo, you have just admitted you beat the guy up, that is another X days on your sentence.

Whatever about the convicts being unable to model theory of mind, our grad student researcher also can't model why convicts in jail are not going to cop to anything an authority figure asks questions about.

The idea seems to be that «a hypothetical», as a form of syllogism, has some minimum complexity/minimum description length that cannot be represented in a mind that has e.g. working memory corresponding to a given IQ – the minimally sufficient thought, even optimally chunked thanks to experience, just breaks down from noise and signal decay, in the same way complex mathematical expressions or rich verbal statements or puzzles break down for people of somewhat higher level.

That model strikes me as implausible because a basic hypothetical is very simple and people who struggle with understanding that ought to struggle even with speech.

On the other hand, using a hypothetical in practice usually involves thinking through some scenario diverging from known reality, which recruits imagination and a mental scratchpad with some non-negligible context length. So there are at least two levels of understanding – a hypothetical is an asymmetric function of sorts; you can check if it makes sense, but you're not necessarily able to use it as the first step in a reasoning chain that the other party's trying to prompt you into. In that case, it's prudent to concede your failure, drop the entire line of argument and just output the «okay smart guy, not listening» before you're tricked.

Of course intelligence is heterogenous (modestly so, given that g accounts for most variation, but still), and hypotheticals of different nature ought to be unequal in MDL. Additionally, Wason selection task shows that some ecologically valid concepts allow for efficient application of what seems to be the same basic algorithm – we don't have general-purpose theorem provers in our heads, more like a population of heuristics and cached partial solutions for specific cases. So people can be «good» at some hypotheticals but flounder when provided a novel one. Weeding out those specific cases is what good test design is about.

That model strikes me as implausible because a basic hypothetical is very simple and people who struggle with understanding that ought to struggle even with speech.

I wouldn’t be so surprised, at least with speech; they‘re different areas of the brain (and cognition, probably), and the way Broca‘s and Wernicke’s areas correspond to speech production seem much more fundamental and binary than whatever thing is to intelligence.

A few months ago I met a guy who bought me a scratchcard and insisted I complete it for 'fun'. It was not fun. The scratching is tedious and messy and the anticipation is unpleasant because I anticipate losing.

My favorite fake fact is that people with <100 IQ can't understand hypotheticals. I've worked minimum wage jobs and I've met some real fucking dummies - yes, they can understand hypotheticals.

Every time I've run into this, it has not been presented as a fact, and the number was far lower than 100 - I think 85 or 80 maybe? Where here have you seen someone claim that it's a known fact that people of 49th percentile intelligence or lower can't understand hypotheticals?

It is likely wrong

I've never seen it here but I've seen something similar claimed on Twitter. I don't remember the exact IQ number so it could have been 90.

I saw someone on the SSC subreddit who had supposedly done IQ studies claim this. It was a very lengthy post with a lot of upvotes.

I saw a guy on 4chan claim this for under 90 IQ.

I remember that too, but thought it was <85 IQ. Camas search hasn’t found anything, though.

There was some discussion by ZorbaTHut and Naraburns here that I found interesting.

I remain confused, at best, on this topic. I've brought up the sort of incapability revealed by Gwern's review of McNamara's Folly (including with Gwern), and if you work with seriously developmentally disabled adults at all it comes across as, if anything, an understatement. But there are alternate explanations (eg, people don't take tests seriously, the lizardman's constant being high, etc), and some of the conclusions regarding how wide-spread these problems are don't seem present in the real world, even ones with far less political relevance (IQ is supposed to strongly correlate with reflexes). There are more complex explanations that might make it all work out, but I don't know how many of them are serious rather than best-fit.

Shameless link to the blog, but the Project 100,000 recruits likely had IQs between 80-90, which is average-to-below average, not developmentally disabled at all. https://greyenlightenment.com/2021/07/30/project-100000-an-analysis/

What happened was due to troop shortages, a greater quantity of low-quality soldiers was recruited than typical, but this was not unprecedented at the time. It was practiced during WW2.

Looks like the US is poised to repeat the experiment. US Navy now enlisting recruits with ASVAB score of 10. ASVAB scores are set with a mean of 50 and a standard deviation of 10, so people scoring 3-4 standard deviations below the mean test taker.

More comments

My favorite fake fact is that people with <100 IQ can't understand hypotheticals. I've worked minimum wage jobs and I've met some real fucking dummies - yes, they can understand hypotheticals

You are most likely right about this being a myth about low-IQ people, but I have personally verified, on more than one occasion, that people who don't understand hypotheticals exist.

I'll buy that people below a certain IQ threshold can't understand hypotheticals, but this IQ threshold is obviously to me far below 90. I think I have a pretty good understanding of what 85 IQ people are like and they can grasp that they would be hungry if they didn't eat breakfast. They are not very good at following logic, learning foreign languages, planning ahead, or doing math, but they can understand hypotheticals at a basic level.

To add onto this, while I don’t actually know much about the research in the area, I don’t find it actually that difficult to believe (that some very select, very stupid people can’t understand hypotheticals). All children at some point of growth don’t, just as all children at some point don’t have anything resembling a theory of mind. You just need some people who never quite get beyond that as they age (or spend way too much time getting there).

To be fair, I don't think it's stupidity, if anything it might indicate intelligence. My guess at the mechanism is people intuitively recognizing where the argument leads, and throwing a wrench into the conversation so you don't get to make it.

Because the worship of intelligence/IQ I see in these circles, including on here, usually "X is really really good at STEM/maths".

Yeah, even though I've been as critical of him as anyone I have to ask myself if that's at play in my frustration here. Like...I have an intellectual theory for why Bankman-Fried is acting this way, but it just seems to not be able to intuitively connect. So I keep instinctually looking for more and then get annoyed when I don't find it.

But, if this was some random SovCiv representing fucking himself in court, I don't know that I'd be having this same reaction at the inability to just shut the fuck up. I'd laugh at the video of the moron on /r/PublicFreakout and move on.

But SBF was supposed to be smart, even if just in an Elizabeth Holmes way.

It would be ironic if his original PR blitz is still subtly shaping my reaction despite its original purpose having fallen apart.

it sounds like "still living like we're in college in our second year even though we're all late twenties and heading into our thirties"

I was literally thinking to myself, upon hearing of them in the mansion, that "this sounds like kids playing start-up in the Bahamas with Daddy's money". Unfortunately for them, they didn't use Daddy's money.

Everyone seems to have had an instinctive mindset that the conventional way of doing things - even business - was somehow icky, somehow.... normie.

That part is debatable, because a lot of the "non-normie" stuff they did was directly in service of fraud: e.g. sending sensitive messages in a format that deleted them after some time. Now SBF is trying to cover up some of that shit (most importantly the comingling of funds) by acting like they were basically just college kids doing bullshit without following the rules cause they were innovators maaaan. But that "we moved fast and broke things" seems like a convenient cover.

But, then again, there was some shit that I can't see being beneficial to fraud and really does look like stupid/lazy people simply not bothering with rules: e.g. the revelation that they apparently paid expenses via chat emojis.

So whether or not Bankman-Fried set out from the outset with fraud in mind, the setup was so chaotic, it was conducive to it. I think there is something suspicious there, because Bankman-Fried had so much ownership and control behind the scenes, but he may genuinely have thought he was a supersmart cookie who could find a new way to make zillions after his One Weird Trick dried up.

I think it became fraud, more than it started as fraud (otherwise why lose all that money trying to do legitimate trades in Alameda? Caroline Ellison allegedly lost $1 billion....). But the whole thing had such a basic lack of any controls and regulation that it was a hop skip. If you're smart but also dumb, desperate, likely hopped off on stimulants and working/living in some weird nerd-frat house instead of a real company then maybe this seems like a good idea. And then there's no one to stop you.

But, if this was some random SovCiv representing fucking himself in court, I don't know that I'd be having this same reaction at the inability to just shut the fuck up.

It's true. Your average idiot knows enough to "shut the fuck up and lawyer up". I do think part of Bankman-Fried's problem is that he is smart but up to now hasn't really faced any (obvious) consequences of failure. He seems to have been conventionally bright, done conventionally well at school, went into a conventionally good job, then decided (and maybe this is on MacAskill and maybe not) that philanthropy was the way to get fame and good repute, and to do that he needed a lot of money, and hey he was already working in a trading firm, crypto was the new big thing all his nerdy friends were geeking out about, how about he picked up some of that easy money?

And now he really doesn't seem to realise that he did anything wrong. Everyone in crypto does sketchy stuff! If only they had given him a bit more time, he could have made all the money back! Why doesn't anyone realise he isn't the bad guy here? So he keeps giving interviews and shooting his mouth off to show how he's just misunderstood and sure he fucked up but that wasn't malicious, and he keeps digging the hole for himself deeper and deeper.

But, then again, there was some shit that I can't see being beneficial to fraud and really does look like stupid/lazy people simply not bothering with rules: e.g. the revelation that they apparently paid expenses via chat emojis.

I do not understand why handling expense claims via Discord or Slack bot is somehow problematic. This emoji thing gets repeated together with other clearly problematic ones and I do not understand it.

Because you're supposed to have a system to deal with petty cash disbursements, with expenses, with "okay hey boss I need fifty mil, fine?" "yeah sure fine".

Boring, conventional, stuffy old-fashioned business routine stuff. The problem with Discord, Slack and emojis is now all this money has gone "poof!" and nobody can say who spent what or where it went, and when they need to account for this in order to pay the creditors, that's important.

Because Discord and Slack messages are mutable after the fact, they do not create an auditable trail (depending on implementation).

Imagine an implementation that runs like this. When an expense is submitted a bot posts a summary of that expense in a Discord channel. The expense is authorized by some kind of emoji reply or react to the bots message. It would be trivial for anyone with administrator privileges on this discord (or even mere expense approver privileges) to commit fraud in this system, in a way that would be difficult to detect.

At some time t_0 our insider submits an expense they know is fraudulent. The bot posts the expense summary and the insider approves the expense. At some later time t_1 the actual disbursement of funds for the fraudulent expense occurs. Then at some later time t_2 the insider goes back and undoes their approval of the expense (they remove their react or delete their message or whatever). If the insider has admin permissions on the discord they could even delete the bots message perhaps wiping away any trace the expense existed. At some time t_3 the apparently unapproved disbursement is discovered. How do you reconstruct who approved the fraudulent disbursement?

There's a reason that software specifically for managing expenses exists. There's a reason that software records information like who submitted the expense, what the expense was for (often by line-item), and who approved. Crucially there's a reason why these expense records are immutable after they are approved and the funds disbursed.

I assumed that Slack/Discord would be used as interface, with bot archiving it to some persistent less mutable database.

Or channel being configured in way blocking editing - for example with bot reposting message.

Given that it was crypto and specifically FTX I assume that expense claim process was filled with fraud with bad implementation serving as smoke screen (deliberately or accidentally).

But I still do not see problem with emoji specifically

If the insider has admin permissions on the discord they could even delete the bots message perhaps wiping away any trace the expense existed.

That is possible also with software specifically for managing expenses, there someone with admin permissions also can tamper with database. It is also possible with paper.

It is also possible with paper.

Which is why you have two people who keep track of where the money are goin'. One of the joys (🙁) of my admin work is getting the year-end reconciliation of the petty cash dumped on me before we send the accounts off to the auditors. You have to match up receipts with expenses claimed, money out, money remaining, money drawn on to replenish imprest, etc.

I couldn't just print out a list of emojis and say "there you go, boss" as to who purchased what, where, when and for how much.

When I was keeping track of expenditure on a multi-million punt project back in the day, I certainly couldn't have got away with "here's the list of emojis by which we approved that £100,000 for buying equipment that time, dunno when exactly".

According to the Sequoia article, where the reporter was in the Bahamas sitting in on meetings and ordinary operations, this is the kind of money they were shifiting:

The next order of business is a round of belt-tightening. “In general, money is going to be tighter for everyone in our industry and other industries too—it’s not super-crypto-specific,” SBF says. “So, if you are thinking about expenses that are, say, above $100 million, we should have a chat about that,” he continues.

You really do want to be keeping a record of where even your sub-$100 million purchases are going and who approved it and who asked for it.

“So, if you are thinking about expenses that are, say, above $100 million, we should have a chat about that,”

that part is DEFINITELY insane

When I was keeping track of expenditure on a multi-million punt project back in the day, I certainly couldn't have got away with "here's the list of emojis by which we approved that £100,000 for buying equipment that time, dunno when exactly".

that is also insane - but not emoji part part - the "lol, we have not recorded what was actually approved by whom"

The bankruptcy filing is great reading because John Ray is very not happy one bit with the way things were done.

I have over 40 years of legal and restructuring experience. I have been the Chief Restructuring Officer or Chief Executive Officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance (Enron). I have supervised situations involving novel financial structures (Enron and Residential Capital) and cross-border asset recovery and maximization (Nortel and Overseas Shipholding). Nearly every situation in which I have been involved has been characterized by defects of some sort in internal controls, regulatory compliance, human resources and systems integrity.

Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.

The FTX Group did not maintain centralized control of its cash. Cash management procedural failures included the absence of an accurate list of bank accounts and account signatories, as well as insufficient attention to the creditworthiness of banking partners around the world. Under my direction, the Debtors are establishing a centralized cash management system with proper controls and reporting mechanisms.

Because of historical cash management failures, the Debtors do not yet know the exact amount of cash that the FTX Group held as of the Petition Date. The Debtors are working with Alvarez & Marsal to verify all cash positions.

The Debtors have been in contact with banking institutions that they believe hold or may hold Debtor cash. These banking institutions have been instructed to freeze withdrawals and alerted not to accept instructions from Mr. Bankman-Fried or other signatories. Proper signature authority and reporting systems are expected to be arranged shortly.

The Debtors did not have the type of disbursement controls that I believe are appropriate for a business enterprise. For example, employees of the FTX Group submitted payment requests through an on-line ‘chat’ platform where a disparate group of supervisors approved disbursements by responding with personalized emojis.

In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas.

The Debtors now are implementing a centralized disbursement approval process that reports to me as Chief Executive Officer.

More comments

Well, I didn't want to mention names so as not to be pointing fingers at specific people. Your 95 IQ rednecks comment was made in the context of that guy is not thinking about sending his son to Harvard.

No, he's not. And he's probably not thinking about sending his son to the local state college, either. Maybe he's thinking about the kid doing an apprenticeship with Uncle Carl the mechanic or Cousin Bill the electrician.

So if you're talking about "ordinary people whose kids will never get the chance to go to Harvard", why use "95 IQ redneck" as your exemplar? Maybe our redneck is 105 IQ! Maybe he's not a redneck! Maybe he's just a hard-working blue collar guy who would love it if his kids could go to college (any college) and get an education and get a nice white collar job where they don't have to bust their humps like he does! (My father was that guy).

Do you see why it comes across as dismissive and condescending?

MIT + Jane Street . if this is not high IQ, i dunno what is

It's also possible that his extensive drug use caused functional brain damage.

Or the dude is just frickin' weird and doesn't understand social cues.

Would SBF be teaching law at Stanford in your world?...I suppose that could reduce the damage, but the idea is funny.

Oh gosh, imagine if he had followed his parents! Yeah, that would be something else. But I sort of get the impression that he wasn't bright enough, or bright in the way of law? He went to MIT for the physics degree, so not the humanities type.

EDIT: I got distracted going down a rabbit-hole by looking up the school Bankman-Fried attended, and lemme tell you, meth-fuelled polycules in the Bahamas are nothing compared to what our grandparents' generation got up to! 😁

So Bankman-Fried went to Crystal Springs Uplands School, a prep school established in what was the mansion of one Charles Templeton Crocker. But the real wild child was his sister, Aimée - five marriages, a host of lovers, (alleged) conversion to Buddhism and a complicated family life:

Aimée Isabella Crocker (December 5, 1864 – February 7, 1941) was an American princess, mystic, Bohemian, and author. She was known for her cultural exploration of the Far East, for her extravagant parties in San Francisco, New York and Paris, and for her collections of husbands and lovers, adopted children, Buddhas, pearls, tattoos and snakes.

Crocker and Gouraud [husband #3] adopted three children, Reginald, Yvonne and Dolores (she would later adopt another daughter Yolanda), and acquired numerous bulldogs. The couple lived in Oriental-themed homes in Manhattan and on Long Island. They also had tattoos of each other's initials inscribed inside coiling snakes. Crocker then reunited with her daughter, Gladys [by husband #1], who went on to marry Gouraud's brother, Powers, making her daughter (who was already legally her sister [due to Aimée's mother adopting the girl, her grandchild, as her daughter]) a sister-in-law.

Aimée would marry her fifth and final husband, Prince Mstislav Galitzine, when she was 61 and he was 26. When asked by a friend who lost count of her marriages whether Mstislav was her fifth or sixth husband, she said, “The prince is my twelfth husband if I include in my matrimonial list seven Oriental husbands, not registered under the laws of the Occident.”

Interesting, that could have been one more spur for Sam to decide "I'm going to be so rich, no-one can ever bully me again!"

philosophers can comfortably engage in thought experiments about double-or-nothing without hurting anyone. Perhaps owners of crypto brokerages cannot.

Only if they don't teach people who go on to work in crypto brokerages.

In slightly more general terms, this indicates that philosophers don't fully appreciate the "nothing" side of the thought experiment. Perhaps having to make a public speech. Just something to drive home the emotional element of the "nothing", along the lines of this: https://youtube.com/watch?v=K_Kzf21cFoQ

Only if they don't teach people who go on to work in crypto brokerages.

Will MacAskill must be ruing the day he ever met this smart young guy, right now:

Not long before interning at Jane Street, SBF had a meeting with Will MacAskill, a young Oxford-educated philosopher who was then just completing his PhD. Over lunch at the Au Bon Pain outside Harvard Square, MacAskill laid out the principles of effective altruism (EA). The math, MacAskill argued, means that if one’s goal is to optimize one’s life for doing good, often most good can be done by choosing to make the most money possible—in order to give it all away. “Earn to give,” urged MacAskill.

...MacAskill couldn’t have hoped for a better recruit. Not only was SBF raised in the Bay Area as a utilitarian, but he’d already been inspired by Peter Singer to take moral action. During his freshman year, SBF went vegan and organized a campaign against factory farming. As a junior, he was wondering what to do with his life. And MacAskill—Singer’s philosophical heir—had the answer: The best way for him to maximize good in the world would be to maximize his wealth.

SBF listened, nodding, as MacAskill made his pitch. The earn-to-give logic was airtight. It was, SBF realized, applied utilitarianism. Knowing what he had to do, SBF simply said, “Yep. That makes sense.” But, right there, between a bright yellow sunshade and the crumb-strewn red-brick floor, SBF’s purpose in life was set: He was going to get filthy rich, for charity’s sake. All the rest was merely execution risk.

His course established, MacAskill gave SBF one last navigational nudge to set him on his way, suggesting that SBF get an internship at Jane Street that summer.

...After SBF quit Jane Street, he moved back home to the Bay Area, where Will MacAskill had offered him a job as director of business development at the Centre for Effective Altruism.

Can we see the math and logic he's said to have done?

I ask because I remember there being something of a dive into his League of Legends ranking based on the infamous investor call, and apparently he was not at all ranked the way a genius mathlete willing to put in the hours would be at all, and also because I myself have seen a lot of people who associate with smart, nerdy things entirely for smart, nerdy cred, and whose actual ability to engage with the crunchy, mathy, requires-focus-and-practice bits of them is completely nonexistent.

I'd absolutely believe that Sam got top marks entirely based on his family and social connections and the fact that a prep school is about making him look good for a college environment that has completely desisted from actual educational discernment. It's absolutely the case that smart people can believe very dumb things, especially when those dumb beliefs are serving as vital shields for their self-image, and that high-IQ memorize-loads-of-facts-and-do-novel-work-with-them types can end up carefully compartmentalizing against the heresies of their day and circle, and get badly bitten when their failure to think in that one context happens to arise.

But until I see Sam's math SAT scores or evaluate some complex code he's written, I'm personally going to hold off on claiming that he's smart.

He got into Jane Street. It's worth reminding that even people who have credentials suggesting very high IQ often do not get in. So, family and connections would not have worked in regard to that. I don't see what is wrong with saying he is a legit very smart dude who fucked up badly.

I wouldn't be shocked if he aced his SAT math, given MIT Physics major/Math minor, but neither would I be impressed.

Assuming that he was a decent student, but not outstanding in context, and that he organized his classes with at least a half-assed gesture towards efficiency, something like the following describes his math education:

  • 5 on the AP Calc AB exam to test out of single variable Calculus general requirement (18.01).

  • Multivariable Calculus (18.02, general req) and maybe Differential Equations (18.03, Physics major req) his freshman year.

  • Physics Flexible track with Math as his focus area--three more math classes after DiffEqs. Let's say Linear Algebra (18.06), Combinatorial Analysis (18.211), and Introduction to Numerical Analysis (18.330).

  • Two more math classes to finish off his math minor. Possibly Probability and Statistics (18.05) and Principles of Discrete Applied Mathematics (18.200).

(Also, the rest of his Physics major.)

130 IQ isn't unreasonable. Very smart; not exceptional. The above courses are roughly the minimum you'd need for his major/minor combo, and nothing I've seen indicates a student that was punching above his weight through grit, determination, and excellent organizational skills.

He attended something called Mathcamp, I don't know if this really is for mathematically-gifted students and can't be finessed, anyone who does know if this depends on pure brainpower please comment.

That his parents are lawyers but he went the STEM route would seem to indicate genuine ability there.

How much IQ would you need to cheat your way through your entire MIT education, I wonder?

My own knowledge of MIT is rudimentary, but I remember it having a strong focus on student trust and honor from looking into the Aaron Swartz fiasco. And it appears that the story of Sam was finding and exploiting high-trust environments where not even bare due-diligence against adversarial actors was being done.

Am I wrong about this? Does MIT gleefully count coup against attempted cheaters? Is there a high-publicity case of a student turning in their roommate for cheating, or a professor being recognized for diligence in uncovering a novel cheating method and bringing it to the attention of all and sundry?

Again, I assume that he needs to have reached a basic minimum to cheat competently; I'll qualify him with "probably smart, with no verys". But nothing I've seen qualifies him as one of the STEM cognitive elite other than some certifications, and in current year, I do not trust any certifiers.

The "Sam is one of the cognitive elite" narrative appears to rest on three pillars; FTX itself (now distinctly counterevidence), his job and educational history (which I don't trust at all without a deeper dive), his accidents of dress and hobby (taking interest in math, logic, debate, and LoL). For myself, I find a missing pillar; I would expect a STEMLord to need to sharpen themselves against the unyielding whetstone of reality to achieve mastery. It certainly could be that Sam was a technical genius who focused all of his productive energies on his set-up for FTX (and then growing FTX), and that he judged a better expected return from laser-like focus on that than a model rocket hobby or a few hundred Project Euler solutions. But absent any hard evidence of such, I consider that Sam could be either a cheat, a liar, and a fraud who is also a brilliant technical mind, or simply a cheat, a liar, and a fraud, and as such do not multiple entities (or properties, I guess).

And, again, if you have evidence that it would be wildly unlikely for MIT to let a cheat, a fraud, and a liar through its programs, I'd love to hear it.

MIT's selection processes is hard enough that someone who would be inclined to cheat would not get in. Given that SBF got into Jane Street, likely he was smart enough to graduate without needing to cheat.

Can you demonstrate this? I admit, I'm not seeing how making selection criteria harder would decrease the likelihood of cheating. I mean, in the extreme case, if you make a test that only one billionth of humanity could pass fairly, then the odds that any given person passed the test fairly (when there are great reputational and financial rewards for passing the test, no deep culture of investigating and calling out cheaters, and strong incentives to have everyone passively trust the process and not assume cheating as a default possibility) are fairly low.

Again, I'm not an expert on MIT's admission methods, but if, e.g., they hold their own proctored and blind-graded exam for all students they are considering admitting, I'd definitely update in the direction of considering MIT more reliable. But given that my default assumption about colleges (which is that they will cheerfully drop admissions standards into the ground to accept those of their favored demographics, and raise the standards on the unfavored demographics to compensate), I simply do not believe that MIT is honestly selecting students according to fair criteria.

Demonstrate how? It's well known that MIT is both hard to get accepted ,as is the coursework

Jane Street does not hire traders or interns who cannot pass notoriously tricky technical interviews with math problems and brainteasers. Period. This is well known in the industry.

this guy gets it

I feel like the fact that Jane Street paid Sam a very nice salary to manage crypto trades for them is pretty strong evidence against their own smarts.

But, less facetiously, I'd like to lay out my default assumption here, based on what I've seen of SBF's work and statements so far; he is not IQ <90, and he has ruthlessly exploited the high-trust presumption of society, and because of that, I trust not a single word or explanation that comes from his mouth, nor those of people who would plausibly gain by his own gains. Given his willingness to spend money on regulators and punish dissenters, the general halo effect, and the fact that I know well how easily the job interview process gets twisted in general, I am not willing to assign Jane St. the same impartial evaluation trust that I would a math SAT scantron machine, or a compiler attempting to compile code he wrote.

Again, I don't think that he is an idiot. But I do think that he has absolutely adopted the appearance of smart nerdy things consciously, as part of a presented image, and that I need to consider everything about him from an adversarial position.

I feel like the fact that Jane Street paid Sam a very nice salary to manage crypto trades for them is pretty strong evidence against their own smarts.

The crypto trades came much later, in 2018, and with his own money. Jane Street was 2014.

Fair; I am operating entirely off of a few article summaries which specifically mentioned that he traded crypto at Jane Street, and if there is evidence that Jane Street wasn't trading crypto at the time, I certainly don't have either any specialist knowledge of Jane Street or notable faith in the article summaries.

The point remains, however; if my (hypothetical) investment manager was bragging to me about how much money he made with Bernie Madoff, I would seek another investment manager, even if said investment manager decried buying into the Ponzi scheme specifically and even if Bernie had other legitimate investments. It doesn't matter if they came out ahead (plus, I, being a suspicious bastard, would figure that a smart investment manager would make damn sure to conceal the fact that they lost money by not doing basic due diligence on Bernie's fund if they did lose money in it); no matter the outcome, my own trust in someone who put money down on Bernie would go inexorably down.

But he didn't steal from them, did he? They were smart enough to know how much leash they could give a man like that to safely make use of his talents without him getting ideas. Which is probably the most important part of managing finance guys.

Did he? I honestly don't know. Has anyone done a post-fall post-mortem deep dive on SBF's time in Jane Street?

If I go by the Sequoia article, the timeline goes something like this:

(1) Bankman-Fried is doing his physics/maths degree at MIT

(2) Meets Will MacAskill, who was recruiting for earn-to-give, via people in his fraternity

(3) MacAskill steers him towards an internship in Jane Street

(4) He seems to have done okay there (but as you say, we have no idea what really went on). Meets Ellison there. Article fanboys hard over him, so take the following with a grain of salt:

In 2017, everything was going great for SBF. He was killing it at Jane Street. He was a trader’s trader: so fluent with transactions that others would come watch him work, like one might watch an esports athlete streaming on Twitch.

(5) Quits, for whatever reason (article says it's all in the service of his devotion to utilitarianism yadda yadda but again, we don't know if he was asked to leave/let go/decided to quit for unknown reasons)

(6) Goes back home to the Bay Area, gets a job - courtesy of MacAskill - as director of business development at the Centre for Effective Altruism

(7) Ellison is sent on a recruiting trip to California by Jane Street, decides to look up Bankman-Fried

(8) Turns out he set up this thing called Alameda Research with a grubstake of $50,000 (could be his own money, his parents' money, who knows) to exploit the 'kimchi premium' and is coining it

(9) But he could be making much, much more! So he goes looking for $50 million loan and gets a good chunk of that via EA contacts

(10) He puts together an admittedly ramshackle operation to exploit this hard

(11) Ellison quits Jane Street and signs up

(12) MONEY! MONEY! MONEY!

(13) But of course, all good things come to an end, and so the next step is "Hmmm, maybe I should open a crypto trading exchange, there is probably easy money to be made there, too"

(14) Founds FTX and the rest we all know

That would interesting, but JS is very secretive too. Employees are incentivized to stay quiet .

Might it be closer to 130 than 160? Sure, but he's not dumb.

He's dumb – for what he got into.

I say often that merely-smart guys like Sam have a tendency of pegging themselves, like, 20 points higher than they deserve, fancying themselves premier league players; and that can have catastrophic consequences for their circle and many others. Bill Gates is, by all accounts, a genius; he was appropriately arrogant for his level when young, and now he has matured into a superficially humble guy with wide latitude of expertise who can afford pretty large-scale shit.

Top-tier colleges are supposed to help with that by exposing a smart guy to actual geniuses and forcing to recalibrate. Certainly helped Bezos..

I say often that merely-smart guys like Sam have a tendency of pegging themselves, like, 20 points higher than they deserve

Early success or praise (which may have more to do with access to material or conscientious/education-focused parents) probably doesn't help

If it helps, a bit of information about MIT's Science Core, which is one of the graduation requirements for every undergraduate, regardless of major--two semesters of Calculus (single and multivariable), two semesters of Physics (mechanics and electricity/magnetism), one semester of Chemistry, and one semester of Biology. Also, if you have not completed every class on that list by the end of your freshman year, something has gone wrong.

As one example from the list, the course summary for 18.02 (Multivariable Calculus) is as follows, from MIT's Course Catalog:

"Calculus of several variables. Vector algebra in 3-space, determinants, matrices. Vector-valued functions of one variable, space motion. Scalar functions of several variables: partial differentiation, gradient, optimization techniques. Double integrals and line integrals in the plane; exact differentials and conservative fields; Green's theorem and applications, triple integrals, line and surface integrals in space, Divergence theorem, Stokes' theorem; applications."

I assume that you and a number of people on this board would have no trouble passing these classes, particularly when you were college-age, but the Admissions Office shouldn't be in the business of approving candidates that can't pass hard graduation requirements, and you need a bit of a pushed IQ to get through that material.

None of that material is remotely difficult to learn and get throught for the first time, if you are a student with no day job or child caring responsibilities that is.

Not that I went to MIT, but the material remains the same even if you study it somewhere else ;-)

I admit trying to learn it between say 2330 and 0000 after being busy all day and having to get up at 6am might be difficult.

Anyone about 100- 115 IQ wise really shouldn't struggle with it if they actually try imho.

Putting SBFs intelligence lower bound as...median..

Anyone about 100- 115 IQ wise really shouldn't struggle with it if they actually try imho.

You severely underestimate how stupid I am 🤣

Not that I went to MIT, but the material remains the same even if you study it somewhere else ;-)

MIT is not a plug and chug school. Their goal is to create engineers and scientists who understand the technology they use/manage on a deep level.

Deep understanding of first year undergraduate material?

Deep understanding, as relevant for scientists or engineers, of the stuff previously listed is still quite superficial.

Edit: For clarity, superficial as in a first year undergraduate course as part of training for scientists or engineers.

I do agree - comparing the deep knowledge in computer science between MIT/CMU/etc grads and even just the next tier of CS universities is night and day - but I was under the impression that much of that happens after freshman year. In which case this…

None of that material is remotely difficult to learn and get throught for the first time, if you are a student with no day job or child caring responsibilities that is.

…makes a bit more sense, even if I think @Azth rather underestimates how much difficulty the average 100-IQ person would have with something like calculus or physics. Like, for someone smart, even something like 15-213 in CMU is possibly doable solo, let alone freshman calculus (not even analysis!), physics, chemistry, and biology.

I guess what I mean is that both of you are kind of right but some statements are kind of wrong? @Azth underestimates the intelligence needed to take those classes without trouble, and you overestimate the deep learning required in such entry level courses, but would nevertheless be on point about the degree generally.

Yes, I can accept that.

Maybe I underestimate the intelligence reuqired - like stokes theorem is brought up by another poster and that is, at a deep level, implcitly obvious and formalising it is straightforward, dare I say trivial so perhaps I fell into the typical mind fallacy trap (although I am retarded).

Do you really think if you asked a sample of 100 IQ people to learn Stokes' theorem (perhaps with some monetary incentive) to the extent they could describe it and use it in applications that most would be able to?

Yes, once you filter for those who don't know calculus, other prerequisites, have sufficient time, etc. Pay them to learn the prequesites then stokes theorem. I think the main barrier would not be that people can't understand it but that they simply do not care.

Yeah, I think most of us can agree Bankman-Fried is smart. Not as smart as made out when everyone was polishing his shoes with their tongues because he was worth (notional) billions, but not an ordinary dumb criminal either.

Smart in one particular way, but not street-smart enough to know to keep his damn mouth shut. Caroline Ellison seems to be smarter than that, I think she did one NYT interview (but I might be wrong about that) but otherwise has said nothing. Singh and Wang, his co-founders, seem to have dropped off the radar altogether (although the authorities might be on their track). It's Bankman-Fried who keeps stoking the fires with interviews and appearances and what-not.

What are the odds he's making a noble sacrifice play to draw all the heat away from his partners?

I don't think so, he seems to be throwing blame around on everyone he can think of but he was only careless, not intentionally fraudulent.

More like 99%. Even legit smart guys do not get into jane street. You need another tier of intelligence above that.

That’s still just 135. 90-95% would be just 125-130. The 1% aren’t all actual geniuses.

employment at Jane Street suggest he is probably at least 90-95th percentile

That's conservative. Jane Street doesn't hire 90th percentile interns. They work pretty hard to ensure all their interns are 99+ in quantitative skills

For me, it's just parsimony. I have no faith in colleges in general any more, and Sam has demonstrated his ability to manipulate elite institutions, and is also a goober. It could be that he is high-IQ and a goober, or that he's a goober all around and simply bamboozled MIT the same way he did a bunch of others - or it might be that he simply had a lucky interpersonal-connection 'in' to MIT that would have worked whether his boiling-hot IQ was measured in C or F.

I also think it's probably fairly unlikely that we'll get hard data either way, especially now, given the extended time that's passed from any potential objective-ish evaluations like AP exams or SATs. Also, nowadays, it would be trivial for someone of his resources to game a few slightly-harder-to-fake signals, like a ghostwritten StackOverflow profile and some boilerplate personal projects on a GitHub account.

But given the sheer stupidity and utter agnosticism towards the very idea of personal consequences he has displayed so far, I feel like I can safely say he's probably real dumb, in the classic sense, excepting for his ability to lie and manipulate people (which, in fairness, is a non-trivial skill, but also one not necessarily interacting with deep math, science, and programming geekery). I predict that no actual evidence of Sam doing anything difficult and valuable with anything not vulnerable to social pressure, where the results can be verified (meaning mostly math or programming, since those are things I feel I could verify myself) will be found. I am not super-invested in this theory, and I happily admit this is purely a balance-of-probabilities as I see it; I'd be delighted for someone to turn up, e.g., a deeper dive into Sam's LoL rankings, if nothing more objective can be found.

He does seem to have some sort of charisma which, frankly, I wouldn't expect from his appearance. That Sequoia article is embarrassing in how hard the writer is squeeing over him, and it's really hard to know why, unless Bankman-Fried has some in-person ability to baffle you with his bullshit. I cannot get over the account of the Zoom call where Bankman-Fried is looking for funding and he gives some waffle in response to "so what can you do with your crypto exchange?" and they all fall over themselves to throw money at him:

Bailhe remembers it the same way: “We had a great meeting with Sam, but the last question, which I remember Alfred asking, was, ‘So, everything you’re building is great, but what is your long-term vision for FTX?’”

That’s when SBF told Sequoia about the so-called super-app: “I want FTX to be a place where you can do anything you want with your next dollar. You can buy bitcoin. You can send money in whatever currency to any friend anywhere in the world. You can buy a banana. You can do anything you want with your money from inside FTX.”

Suddenly, the chat window on Sequoia’s side of the Zoom lights up with partners freaking out.

“I LOVE THIS FOUNDER,” typed one partner.

“I am a 10 out of 10,” pinged another.

“YES!!!” exclaimed a third.

...The B round raised a billion dollars. Soon afterward came the “meme round”: $420.69 million from 69 investors.

After my interview with SBF, I was convinced: I was talking to a future trillionaire. Whatever mojo he worked on the partners at Sequoia—who fell for him after one Zoom—had worked on me, too. For me, it was simply a gut feeling. I’ve been talking to founders and doing deep dives into technology companies for decades. It’s been my entire professional life as a writer. And because of that experience, there must be a pattern-matching algorithm churning away somewhere in my subconscious. I don’t know how I know, I just do. SBF is a winner.

But that wasn’t even the main thing. There was something else I felt: something in my heart, not just my gut. After sitting ten feet from him for most of the week, studying him in the human musk of the startup grind and chatting in between beanbag naps, I couldn’t shake the feeling that this guy is actually as selfless as he claims to be.

So I find myself convinced that, if SBF can keep his wits about him in the years ahead, he’s going to slay—that, just as Alameda was a stepping stone to FTX, FTX will be to the super-app. Banking will be disrupted and transformed by crypto, just as media was transformed and disrupted by the web. Something of the sort must happen eventually, as the current system, with its layers upon layers of intermediaries, is antiquated and prone to crashing—the global financial crisis of 2008 was just the latest in a long line of failures that occurred because banks didn’t actually know what was on their balance sheets. Crypto is money that can audit itself, no accountant or bookkeeper needed, and thus a financial system with the blockchain built in can, in theory, cut out most of the financial middlemen, to the advantage of all. Of course, that’s the pitch of every crypto company out there. The FTX competitive advantage? Ethical behavior. SBF is a Peter Singer–inspired utilitarian in a sea of Robert Nozick–inspired libertarians. He’s an ethical maximalist in an industry that’s overwhelmingly populated with ethical minimalists. I’m a Nozick man myself, but I know who I’d rather trust my money with: SBF, hands-down. And if he does end up saving the world as a side effect of being my banker, all the better.

If you were familiar with the interview process at Jane Street you would know that you were wrong.

Would you care to elaborate?

I know nothing about Jane St. other than they're a finance shop that is known for brain-teasers in their interviews. If they have in-depth procedures for, e.g., double-blinding the results of applicants' written responses to their math and statistics questions, so that the person deciding "Yes, this answer shows sufficient mastery of the topic and reasoning skills." has no cues from college or name, then that's a significant data point in favor of me being wrong, and I'd welcome it being pointed out.

But I've been in IT for a while and I know exactly how much brain-teaser questions (or, for that matter, basic tests like FizzBuzz) are actually treated as hard checks when either upper management or even just the interviewer in question really wants the interviewee to pass, and it is not much at all. And I absolutely do not consider Jane Street a quasi-priesthood of intellectual integrity, and that every employee working for them cares utterly about the incorruptible truth, because (again), they hired SBF to trade crypto for them.

But again, I know no specifics, and if Jane Street has specific procedures and checks in place to stop a charismatic fraud from joining their august ranks, I'd love to hear about them in more detail.

And I absolutely do not consider Jane Street a quasi-priesthood of intellectual integrity, and that every employee working for them cares utterly about the incorruptible truth, because (again), they hired SBF to trade crypto for them.

He worked at JS in 2014-2017. The crypto trading was in 2018 with his own money or other money, unrelated to JS.

As someone who's gone through the Jane Street interview loop (no offer), I never was asked brain teasers; its questions are harder and more rigorously evaluated than any I've gotten at FAANG companies (many offers). As much as I'd like to write it off as their bias for privileged scion, there's no real reason to think that. Take that anecdote for what it's worth.

I'd be terrified of getting fizzbuzz at Jane Street; they'd be expecting something like this.

He said multiple times he played LoL to distract his brain while doing other things, and that he never cared about rank. The fact that people think his League of Legends ranking could actually correlate to his IQ in this thread is surprisingly high.

What the heck does the fact that SBF said something (in this case, something nakedly self-serving) have to do with reality, reason, or any truth about the world?

It could be that this is the case, that SBF chooses to play a competitive ranked multiplayer game and generally bring his random teammates down, and deal with a notoriously stressful and distracting environment that (to my knowledge) no one else says is a good flow-supporting distraction like music or walking, and that he puts in zero effort because he doesn't care.

Or, alternatively, he could play the game because LoL is the kind of thing that smart, nerdy, driven people play (because it's so miserable for the casual player), wholly as part of a brand-building activity, and that he not only has no real interest in the game beyond the bare superficial needed to use it as a prop, and the reason he has not gitten gud in his hundreds of hours of play is because either he is profoundly uninterested in learning, improving, and gaining skills, or because he can't, and bronze league is his natural skill ceiling. (Also, as a note: this is entirely from second-hand absorption from one of my friends who plays MOBAs and extremely cursory research. I could be absolutely wrong about the rank of his accounts, the hours he's spent playing, and what both signify. I eagerly await any LoL-players present to chime in with first-hand information.)

My current position is that everything SBF says or has said, and that everything everyone around him who would plausibly benefit from him looking good or be punished for blowing the whistle on him, is suspect. He's a super-affirmative-action-hire, basically; he could be as competent and smart as his rep and just happened to fail horribly in these few cases (or, possibly, used to have been extremely smart and competent and then fried his brain on nootropics), just as an affirmative action hire maybe possibly good have gotten their job even if they'd been evaluated fairly, but there's no real way to know.

Or, the null set is that SBF is incredibly fucked-up to the point that he somehow enjoys what would be an otherwise painful and salt-inducing experience. There are people in the world who can eat durians or jellied scorpions or whatever and actually like it, maybe mining the League of Legends angle isn't very productive and has little implications for the things we know he did.

Yeah, again from that article and things his 'psychiatrist' (the guy whose job apparently was to write prescriptions for the Adderall etc. type drugs the FTX/Alameda people were on) said, Bankman-Fried has few interests. Doesn't read books, doesn't watch movies, is a vegan, isn't interested in fine food, etc. So playing vidya games is one of the, or maybe only, hobby he has.

Or, alternatively, he could play the game because LoL is the kind of thing that smart, nerdy, driven people play (because it's so miserable for the casual player), wholly as part of a brand-building activity, and that he not only has no real interest in the game beyond the bare superficial needed to use it as a prop

This is a great point, if he truly had a crafted/scripted persona to sell to VCs and finance folks, as well as crypto maxis and regulators. I still haven't bought the whole 'he's really a genius mastermind' narrative, I think it's likely he truly was nerdy and raised in an extremely weird way, but got nerd sniped by naive utilitarianism.

The fact that people think his League of Legends ranking could actually correlate to his IQ in this thread is surprisingly high.

IQ supremacists online seem weirdly attached to proxies for IQ tests, so that they can then turn that proxy produced IQ to an indication of ability at {x}. I've noted before the difficulties with layering multiple potential correlation margins-of-error on top of each other.

I've noticed this as well - Chess was the game of choice for a long until time it was conclusively proven that there isn't a real link between IQ and chess. Helps that Magnus Carlson, the world champion of the past few years, refuses to get his IQ tested and specifically argues chess masters can't be too intelligent.

I hope there are studies being done on the link between League of Legends (or MOBAs in general) and IQ. Unfortunately studying IQ becomes less and less fashionable every year, unfortunately.

How would one equalize for effort? It seems like prep, especially in terms of research, is going to mean too much to any game outcomes for it to be a useful IQ proxy. That seems an insuperable barrier to using any casual hobby. Only things in which we can presume an average effort of "full" work as proxies for ability, things like competitive levels of sport, schools, and professions. Otherwise we're rating effort not ability.

It's worth nothing that correlations are likely to increase with ability. That is, being good at chess is not that highly correlated with IQ, but being among the best in the world is highly predictive of having a high IQ, too.

Still, there's something pretty funny about the suggestion that a guy's ranking in a video game is an indicator of intelligence. It's like suggesting that a guy who wins his fantasy league every year would be a good NFL GM.

Paul DePodesta seems to be doing pretty well career wise even if he mostly gets hired by loser teams, they tend to improve after bringing him on.

More comments

Have you ever met a < 100 - 1sd IQ person trying to bamboozle you? They are not very good at it.

I am quite sure SBF must be > 100 on the basis that he managed to run FTX and related organizations for several years. Maybe he scores better on verbal than math, but I think there are all indications he is above average, because your average manager and quant certainly are. Difficult to say if it was "boiling hot", but where did that claim from anyway? You don't need boiling hot for score > 105 or even >115, and I'd guess >50% chances he is above that cutoff.

I feel like there's a point around good toupees here; it could be that I've been bamboozled by dozens of low-IQ people and just never though to check.

As for my boiling comment, I was making a joke along the lines of room-temperature IQ, in that 212 (F) and 100 (C) are both boiling depending on your measure. And, to be clear, I don't think that SBF is significantly below average, and assume he's between 107 - 115 IQ generally just based on his heritage.

But I put no faith in his words, his presentation of himself, and any evaluation by someone who would either gain by reporting him smarter or be put at risk of retaliation by reporting him dumber as indicators of his smartness. I think that his first talent is shamelessness, and his second is creativity in exploiting trust, and his third is in presentation to limit the number of people who think to check on his first two strengths, and while he could also be quite smart at the shape-rotate-y stuff (and is probably not blisteringly incompetent at it), I see at present absolutely no reason to assume that SBF is "really really good at STEM/maths".

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