The novelist Gary Shteyngart describes him as the least offensive person in finance.. Now, he's accelerating his move from player to team owner. Also Elon Musk onthe Elon Markets Hypothesis, Coinbase on crypto regulation, andtaxi front-running. Log in to access all of your BLAW products, last week Coindesk reported on its balance sheet. Robinhood Markets Inc. is in the business of getting people to trade stock (and options, and cryptocurrencies) on their phones. Dylan LeClair / @dylanleclair_: Heavy hitting stuff. And since you were not visiting clients in person during the pandemic, or sitting in your office, you might have been a bit more inclined to use your personal cell phone to communicate. I love the shtick I do, Elon keeps ruining my life. But most of the time, I have to write on a Wednesday, and at least theres Elon to write about.. Twitter has to pay more than $1 billion a year to service its debt and seems to be driving away advertisers; maybe Musk is planning to pay its bills for a while, and needs this cash to do that. It is necessarily a leveraged trade; I cant short Bitcoin without borrowing it. Also the fact that Customer C had all that FTT in the first place is not a great sign. That is not in itself a reason for a run on FTX! Oliver Keens asks: has our morality changed or are we just too deferential, confused or downright hypocritical to discuss it any more? BeSpacific - 3rd Place. Has it been borrowing elsewhere against FTT? His newsletter is Money Stuff. ChatGPT Sounds Exactly Like Us. Three Arrows, FTX/Alameda, bribes and bonuses. Learn more about a Bloomberg Law subscription. In 2007, he took a position at Goldman Sachs, applying his knowledge of corporate law to the financial markets. A few months ago, Matt Levine, Bloomberg's ascendant tech and finance columnist, schlepped from his home in Westchester County into New York with his wife and three small children to have weekend brunch on the Upper West Side, joined by his parents, his aunt and his uncle. Often, a significant chunk of the newsletter is devoted to a legal battle between sophisticated counterparties, or a complex financial product. There was already a regular financial system, a set of abstractions and procedures built up on real-world stuff that allowed people to do things like exchange their labor for money and the money for sandwiches, or get a loan to buy a house, or start a technology business in their garage . Scary, funny, sexy, controversial - eight provocative after-dark features for night owls and the terminally curious. That is, the problem is not a timing mismatch, in which FTXs customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. "I write a lot about people who have gotten in trouble with the SEC or the Justice Department. Bankman-Frieds fortune basically vanished, as did his emperor aura. Venture capital investors in FTX which last raised money at a $32 billion valuation are probably getting zeroed, the price of FTT collapsed, and now regulators are investigating. The idea of leaving Wall Street for a precariously capitalized blog would probably strike a lot of financiers as romantic, quaint, even idiotic. I feel like people who are true celebrities must have some charming repartee they can just kind of spin up automatically, said Levine, and everyone sort of leaves feeling good about the interaction. So you say, sure, fine, Ill take your $10,000 and put $20,000 of Bitcoin in your account. Historically not so much now, but until early this year anyway cryptocurrencies were volatile and exciting and people were jazzed to trade them a lot, so you could make a lot of money by just charging fees without doing anything else with customer assets. Levine insists the interruptions werent a big deal. Carl Tack. As riveting as it was to help exceedingly rich people and companies make even more money, Mr. Levine was not happy. Also a Carvana debt truce, a Tesla margin loan, title paper and AI Money Stuff. You have 100 Customer As who are long Bitcoin on margin: They each have 1 Bitcoin in their accounts and owe you $10,000. The Only Crypto Story You Need, by Matt Levine - "Where it came from, what it all means, and why it still matters." (archive; also btw What Is Code? There are web pages / articles I still read - I'll check out things by Derek Sivers, Patrick McKenzie/Bits About Money, Money Stuff by Matt Levine, all by local HN recommendations. [1], Levine graduated Harvard University, where he majored in classics, and Yale Law School. Morgan 38-3 Richmond / Sea of Cortez Mthe straight stuff on . Puddle Jumpers Pointthe Way to Greener Aviation, What Tech Job Cuts Say About Silicon Valleyand the Rest of the Economy, With VC Funding Drying Up, Biotechs Are on a Quest for Cash, Columbia Hires Economist Nemat Shafik as First Female Leader, Southwest Pilots Plan Vote to Authorize Strike After Holiday Travel Chaos, Why Europe Is Fuming Over Americas Green Subsidies, Tesla Is on Both Offense and Defense in Its First-Ever Price War, The White House Is Considering Broad Actions to ExpandTenant Protections, The School Board Queen Endorsed by Florida Governor Ron DeSantis, The School Board Queen: How a Florida Mom Is Shaking Up US Education, Ryan Salame Invested Big In ASmall Town, Now Its Tangled Up In FTXs Fallout(Podcast), Fight to Regulate Crypto atCrossroads as Ripple Ruling Looms. Today's challengers: Alex, Tracy, Matt. Matt Levine is a finance columnist for Bloomberg Opinion . known as one of the most powerful critics of the ''war on terror'' in the Bush era. If you are a crypto exchange, you might issue your own crypto token. If you are a crypto exchange, this is a nice opportunity. How Is That a Good Thing? I mean, theres a little bit of differentiation, but not too much. The crude explanation of credit default swaps is that they are insurance against bonds defaulting. It is called The Crypto Story. One day Customer A might come in, pay off her dollar loan, and ask to take her Bitcoin back. As of yesterday's close, it had a stock price of $0.0004 and a market capitalization of about $98,000; it trades an average of about $13.26thirteen dollars and twenty-six centsworth of stock each day, though it had a big day last week when almost $400 worth of stock traded. If they all take their money out, thats a bank run. Never use a token you created as collateral suggests, to me, that FTX accepted its FTT token as collateral, probably from Alameda, probably in exchange for borrowing assets that it owes to customers. If all of the banks customers do this every day, then the bank makes plenty of money to pay for real estate and tellers and vaults and executive bonuses, without doing anything else with your money. October 7th, . He later went on to become an investment banker for Goldman Sachs, where he structured and marketed corporate equity derivatives for four years. By 2011, Mr. Levine had decided to leave Goldman. There has been a blow-up this week on the internet about Facebook's apps. I wrote a story about crypto for Bloomberg Businessweek. So the more people who sign up for Robinhoods service, and the more they trade, and the more volatile the stocks that they trade are, the more money Robinhood makes. It is not a plot-driven novel. I type really fast! Levine says. If you are a Tesla shareholder, or anyone else really, it is hard to care that much about Elon Musk dumping $4 billion of Tesla stock in November 2022. 2016 Bloomberg View O1Z5LV6KLVRT (Bloomberg View) Yahoo!?? Mr. Levine got the job, paying something north of $50,000. Finance journalism isnt known for its writerly voices. But it is also a crypto token, which means that a customer can come to you and post $100 worth of FTT as collateral and borrow $50 worth of Bitcoin, or dollars, or whatever, against that collateral, just as they would with any other token. Receive a summary of the day's top tech newsdistilled into one email. So how could this happen? Matt Levine. The main problem, actually, was that he was working on a 40,000-word Bloomberg Businessweek story about cryptocurrency. Matt Levine, the author of Money Stuff, is an oddball exception. Yes. FTX issues a token called FTT. As a gift to Levines superfans, here is a compilation of him trying to take time off from his newsletter during the Twitter acquisition saga: I dont know if Levine will get stuck writing about Musk this Saturday, but I do believe hell be perfectly happy doing it. Left Coast Crime is an annual conference organised by mystery fiction fans for mystery fiction fans, first held in San Francisco in 1991. Matt won yesterday's game and returns today to . 2. Thanks! Please Click the Donate button and support BeSpacific. Or equivalently a customer comes to you and says I have $20,000 of Bitcoin in my account, and I need some cash this month. He was an editor of Dealbreaker, an investment banker at Goldman Sachs, a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz, and a clerk for the U.S. Court of Appeals for the 3rd Circuit.". Everyone knows this, which is why crypto exchanges and securities broker-dealers, who have the same basic business model spend most of their time thinking about risk management. And now as a writer, he makes sense of it for the rest of us. Each day, Levine publishes Money Stuff, a widely read, free newsletter. I don't always remember to read Matt's blog, but when I do I always enjoy it (and learn something in the process). 7. And often I will have made fun of them, and they'll be like, 'That was p Jan 12. It begins with an escalator. So you have $100, which you exchange for 99, which you exchange for 98, which you exchange for $97, etc., paying the bank $1 each time. You know Im good for it: If I dont pay you back, you can sell my Bitcoin and pay yourself back from the proceeds.. But there are risks. But even if I post, like, $30,000 of collateral, there is still the risk that Bitcoin goes above $50,000, etc. Robinhood both increased its future value by signing up a lot of customers, and increased its present profits by extracting a lot of money from them each day. Subscribe to get full access to the newsletter and website. When I asked him what he would do if the internet went away tomorrow, he responded quickly. And in M&A, everything happens on the weekend. A $2.16 billion pile of FTT collateral., There are more FTX tokens among its $8 billion of liabilities: $292 million of locked FTT. (The liabilities are dominated by $7.4 billion of loans.). But sometimes market moves are catastrophic, and in particular, sometimes securities broker-dealers and crypto exchanges will have run on the bank risks. Sales Execs Depart in Shakeup as Profits Remain Elusive, By Jon Victor, Kevin McLaughlin and Amir Efrati, Microsoft + OpenAI: Inside Techs Hottest Romance, By Erin Woo, Aaron Holmes and Jessica E. Lessin, What OpenAIs Bonkers Deal Structure Means For Silicon Valley, Musks Twitter Intentionally Suspended Tweetbot, Third-Party Apps, Messages Show, Microsoft Prepares to Lay Off Thousands of Employees, Including in Azure-Related Units, Twitters Efforts to Court Advertisers Turns Them Off. Stock Sniper Might Have Pumped and Dumped. When FTX.com, one of the largest crypto exchanges, was instantaneously vaporized yesterday, Coinbase put out a statement, the gist of which was dont worry, we are not going to be instantaneously vaporized. The part that I want to focus on is this paragraph: There cant be a run on the bank at Coinbase. Levine's coverage and analysis of the 2012 JPMorgan Chase trading loss was featured in the Columbia Journalism Review's anthology "The Best Business Writing 2013. One reason to borrow Bitcoin is to buy dollars, that is, to short Bitcoin: I borrow one Bitcoin, I sell it for $20,000, a week later Bitcoin drops to $18,000, I buy back the one Bitcoin for $18,000, I return it to my lender and I keep the $2,000. Opposition shadows Cerberus windfall from Albertsons supermarket deal. Could you just lend me $10,000, secured by my $20,000 of Bitcoin? FTX made up the Serum token on there own. Used with permission. Some possibilities: One popular, odd theory of Musks deal for Twitter is that he just wanted to diversify his Tesla holdings. It would go out of business in fairly short order. The whole extended Levine clan was enjoying their meal when a woman stopped in her tracks and stared at him. Some of the novels contents are conveyed in footnotes that go on for several pages, as well as long lists. You have to pay Customer B out of your own capital, and you dont get it back from Customer A. Youve just lost money. But that was kind of fun! And that is a run-proof business. And then if one day every single customer walked into the bank at the same time and said we would like our money back, the bank would just hand them all their envelopes. Twitter filed its lawsuit against its now-owner, Robloxs new Creator Hub could make things a lot easier for developers. It just takes the $100 out of your envelope and replaces it with 99, etc., always keeping exactly the right amount of money (in whatever currency you like that day) in exactly your envelope. He said he thinks he might not exist as a writer if he didnt have his audience, if he couldnt sit down on weekday mornings and write his Wall Street exegeses directly for them. He got to closing and realized he didnt actually have enough cash to pay for Twitter, so. If you go to an investment bank and say lend me $1 billion, and I will post $2 billion of your stock as collateral, you are messing with very dark magic and they will say no. Recommended reading: Matt Levine's Money Stuff. Anyone can read what you share. Much further down are sidewalks, followed by friends are unworthy of me, and way at the bottom, with a yearly occurrence factor of 0.5, birds regurgitate food and feed young with it and Kant, Immanuel.. People put a price on oil they think it has value and want to own it at that value but they also put a price on not having it now, he wrote. There are variations on this trade (I borrow Bitcoin and sell it for Ethereum, betting on the relative value between the tokens, etc.). There is even an RSS. [3][4] His newsletter, Money Stuff, is one of the most popular on Wall Street with over 150,000 subscribers as of October 2020. So Levine was back the next day to write about it. He was of the place, and he found its workings genuinely interesting. 103 Production . (His column is currently on a parental leave hiatus, and will return this winter.). Eventually he called CZ himself, and they announced a non-binding letter of intent for Binance to acquire FTX and make customers whole. The solution to this is pretty much to have some extra cash some of your own capital to bridge these timing problems. All Rights Reserved. Actually thats the best outcome. I dont have that.. Well, you have to borrow it too. He doesnt write for the craft of it; hes never kept a journal, and has never attempted a short story or a novel. But the timing problem is also connected to a real economic risk. This sounds like a bad business model: The bank needs to pay for real estate and tellers and vaults, and it is not doing anything with your money. 7. Yet he gives the same impression of personalization to readers who know little about finance. Oh, various possibilities. Also WWE governance, VC shame and the origins of the jury. Sabrina is also the solo Editor, Publisher and Founder of, Accurate, Focused Research on Law, Technology and Knowledge Discovery Since 2002, Searchable Database Over 45,000 Postings. She caught Levine off guard, and it took him a couple seconds to figure out how to respond. Also a Twitter stock offering, Voyager, crypto auditors, muni blockchain and Bored Ape theft. It read like a bedtime story about West Texas Intermediate Crude. bloomberg.com. I wrote a story about crypto for Bloomberg Businessweek. As Matt describes it in his bio, he writes about the financial industry on the internet, an The US Securities and Exchange Commission and Commodity Futures Trading Commission have concluded that thats illegal, and fined all the banks for doing it, because they all did it. Matt Levine is a Bloomberg Opinion columnist covering finance. 102 Production . The problem with this is that it is wrong-way risk. But the most informed view is probably that of CZ himself, who tweeted this morning: 1: Never use a token you created as collateral. Ledgers, Bitcoin, Blockchain, in which he lays out the basics of Bitcoin's technology. One other point here is that if this is the story, then it is not a liquidity crisis but a solvency one. If the tenants pay more in So much business is about personal relationships, and texting and WhatsApp can feel more personal than your firm email account. Lets start with Coinbase. We will never repurpose your funds: We do not lend or take any action with your assets, unless you specifically instruct us to. If your brother-in-law is a senior accounting executive at a public company, and that public company is secretly in negotiations to be acquired at a premium, and your brother-in-law is working on the deal, and you talk to him . The way it makes money is that each time its customers trade stocks (or options, or cryptocurrencies), Robinhood sends their order to a market maker, and the market maker pays Robinhood a tiny fee for the right to execute the order. 00:00. Our fully audited ledger identifies your account, your fiat and crypto holdings, and tracks your account activity in real time. This newsletter has created momentum, growth, and scale by developing meaningful relationships with millions of readers. Telegram Group Inc. has pulled in $1.7 billion by selling newly created cryptocurrency to fewer than 200 . It was a cleareyed, colorful distillation of something almost no one had contemplated. Yet we seem more relaxed than ever when the great and good have done it. It is just a weird sort of one-off tax on big banks, like a backdoor windfall profits tax. Every new edition of the newsletter goes directly to your inbox. 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Their meal when a woman stopped in her tracks and stared at him you might issue own! Capital to bridge these timing problems help exceedingly rich people and companies make even more Money Mr.! I wrote a story about West Texas Intermediate crude of business in short! Dont have that.. well, you might issue your own crypto token Keens! Yet we seem more relaxed than ever when the great and good have done it, securities..., or a complex financial product these timing problems her dollar loan, title paper and AI Money,... Receive a summary of the day 's top tech newsdistilled into one email are just! Wrote a story about cryptocurrency free newsletter an investment banker for Goldman Sachs, his! Have done it blow-up this week on the bank risks his emperor aura and cryptocurrencies on! Enjoying their meal when a woman stopped in her tracks and stared at him Money Stuff often, a chunk! People to trade stock ( and options, and ask to take her Bitcoin.. 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matt levine money stuff archive