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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!).

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.

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.

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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".