Your accounts show that you owe clients 100 Bitcoins and $2 million, and that they owe you back 50 Bitcoins and $1 million, and you have 50 Bitcoins and $1 million on hand, so everything balances. There was another bank employee who was also named Matt Levine, a lawyer who sometimes worked on the same deals. Matt won yesterday's game and returns today to . I used to write at Dealbreaker. Lets accept, for the purposes of this essay, that founders and venture capitalists are engaged in a simple trade. If everyone is worried about that, they will all take their money out of FTX. Longform Podcast #490: Matt Levine. Never miss an update. Hes the least offensive person in finance, said Gary Shteyngart, the author of Super Sad True Love Story. When Mr. Shteyngart was working on his latest book, Lake Success, a darkly comic novel about a hedge funder spiraling out of control, he asked Mr. Levine to review a draft for accuracy. 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. Morgan 38-3 Richmond / Sea of Cortez Mthe straight stuff on . This is just a quick, late afternoon plug for Matt Levine's blog, Money Stuff, published by Bloomberg. My life has not been ruined by having to write about Elon Musk on Saturdays, the former mergers and acquisitions lawyer told me. The business model of real-estate companies is pretty much, you borrow a lot of money, you use it to buy buildings, and you rent out space in the buildings to tenants. Used with permission. An icon used to represent a menu that can be toggled by interacting with this icon. In modern US stock markets, buybacks are the principal way of returning profits to shareholders, meaning that the connection between stock prices and corporate profits is in practice when there are profits the company buys back stock just like with FTT. 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. Some possibilities: One popular, odd theory of Musks deal for Twitter is that he just wanted to diversify his Tesla holdings. You won't have to worry about missing anything. 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 . It was actually about the Persians, he said. The more people who sign up for accounts, and the more they trade, the happier Robinhood is. But selling billions of dollars of Tesla stock to fund a weird quest to buy Twitter would I mean, be a distraction at least. Oh, various possibilities. So much business is about personal relationships, and texting and WhatsApp can feel more personal than your firm email account. But Mr. Levine was never a high roller. One of the most successful and controversial athletes of his generation, Alex Rodriguez built a real estate empire over two decades. Matt Levine Matt Levine Matt Levine. However we do have the inevitable by a computer glitch in June 2020 but then failed to inform investors of risk to its business from IT failures. You have no Bitcoins to give to the customers to whom you owe Bitcoins, no dollars to give to the customers to whom you owe dollars. 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 . Bloomberg: Balance of Power focuses on the politics and policies being shaped by the agenda of President Biden's administration. If you own a bond, and you buy CDS, and the bond defaults, you should be made whole. Have a large reserve. 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.". Comments disabled. 4. But one general point is that while some customers will want to borrow dollars to buy Bitcoin, other customers will want to borrow Bitcoin. One day Customer A might come in, pay off her dollar loan, and ask to take her Bitcoin back. Please, Subscribe to get full access to the newsletter and, To find out more about the company that provides the tech for this newsletter, visit. If you are a crypto exchange, this is a nice opportunity. 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. About. If you read an upper-level math textbook, it starts from the dumbest thing, like, This is what a number is, he says. Customer B owes them to you ultimately youre good for it but you dont have them now. Matt Levine is a financial writer I like and he explains (the latest information about) what happened with FTX. Matt Levine (born 1978) is a columnist for Bloomberg News covering finance and business. 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. Money Stuff October 26, 2022 1:01 AM Subscribe. Levine insists the interruptions werent a big deal. Or you can subscribe to Money Stuff and other great Bloomberg newsletters here. Remarkably, Mr. Levines piece was written more than an hour before the market went haywire. The way it works is roughly that you open an account and send dollars to Coinbase, and then you tell Coinbase Id like to buy some Bitcoin with those dollars, and Coinbase buys Bitcoin and holds on to it for you and charges you a fee for that transaction. Anyone can read what you share. In August, Musk had said he was done offloading Tesla stock and that it was important to avoid an emergency sale of the shares in case he was forced to close the Twitter acquisition and struggled to bring in additional equity partners. Matt Levine (born 1978) is a columnist for Bloomberg News covering finance and business. Hovnanian will refinance its (He also says that if he were to take more time to write, hed use fewer words.). published Jan 18, 2018 8:39:36 AM, by Matt Levine (Bloomberg View) - Hovnanian. Now, he's accelerating his move from player to team owner. His readership grew, and became more obsessive. Anyway it is still early and confusing but that seems to be the story of FTX. 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? You wont have to worry about missing anything. . Bloomberg offered Mr. Levine stability and a larger platform. The mysterious outage of Tweetbot and other third-party Twitter clients that began Thursday night was an intentional suspension, according to internal messages viewed by The Information. To contact the author of this story:Matt Levine at mlevine51@bloomberg.net, To contact the editor responsible for this story:Brooke Sample at bsample1@bloomberg.net. 5. He looks at whats going on in the markets, scrolls through emails from readers and plugs into the chatter of early-to-work traders. Matt Levine is a finance columnist for Bloomberg News. Almost all the big investment banks paid the same fine, and there was a lower tier of fine for smaller banks. Tyson Foods CFO Arrest Adds to Governance Challenges for Board. Yes. Jun 23, 2021. Also SBFs Substack and premium bond taxation. Googles cloud computing unit on Thursday made sweeping changes to its leadership, including replacing its top U.S. Three years ago, as Microsoft sought to overtake Amazon and Google in cloud computing and artificial intelligence, the company made a major move. This newsletter has created momentum, growth, and scale by developing meaningful relationships with millions of readers. FTX didnt have the money, and Bankman-Fried started calling around asking for a loan or a bailout. A coverage banker an investment banker whose job was to know companies and advise them on financial topics would bring me to a meeting with the chief financial officer of one of her companies to talk about convertible bonds. I felt both that the job was bad and that I was bad at it, he said. (Most notably, there *are* loan products. 6. This week Zohar is joined by Matt Levine, Bloomberg Columnist and author of Money Stuff, to talk about the emotional life of the writer, what we can learn from the lyric poet Archilochus, the ethics of Jacob's trade with Esau, the tension between truth and politics in the workplace, the history of finance, and why delight is its own reward. He doesnt write for the craft of it; hes never kept a journal, and has never attempted a short story or a novel. It took Mr. Levine exactly one week to find his voice. By on December 16, 2021, 10:24 am. His newsletter is Money Stuff. matt levine is a columnist for Bloomberg News covering finance and business. Your accounts show that you owe clients 100 Bitcoins and $2 million and 150,000 FTT, and they owe you back 100 Bitcoins and $2 million, and you have 150,000 FTT of collateral, so everything balances. Here is my author page, possibly. Learn more about a Bloomberg Law subscription. The main problem, actually, was that he was working on a 40,000-word Bloomberg Businessweek story about cryptocurrency. Scary, funny, sexy, controversial - eight provocative after-dark features for night owls and the terminally curious. Actually thats the best outcome. 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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. Download. He began by combing through the complex legal battles stemming from the 2008 financial crisis over who deserved to be paid and who deserved not to pay, testing the strengths and weaknesses of the combatants claims. Matt Levine writes Money Stuff, a brilliant daily financial newsletter on Bloomberg View. View stories on our mobile app and tune into our weekly podcast. Recommended reading: Matt Levine's Money Stuff. 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. She told him she liked his column, he thanked her, and she soon walked awaybut his parents were taken aback: What the heck was that?, Such random fan encounters are happening more and more these days for Levine. The other is that FTX is closely associated with a hedge fund called Alameda Research. FTT goes down, leaving FTX undercapitalized, leading to customer withdrawals, leading to ruin. 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. Also WWE governance, VC shame and the origins of the jury. Oil is voluminous and oozy and poisonous and flammable and smelly, Mr. Levine wrote, beginning an exposition on monthly oil futures contracts. Im doing a bit, he says. It is not actually stock in FTX in fact FTX is a company and has stock and venture capitalists bought it, etc. A statistical examination[7] that Levine cited in Money Stuff[8] showed that his newsletter has been released 4 minutes later each month since 2015 and has gotten progressively longer over time. "Elon, Matt Levine really wants you to keep changing your mind on Twitter . Also a Carvana debt truce, a Tesla margin loan, title paper and AI Money Stuff. . Levine has previously been a lawyer, investment banker, law clerk, and has written for a number of newspapers and financial sites. 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. For starters, Binance executives quickly found themselves staring into a financial black hole -- a gap between liabilities and assets at FTX thats probably in the billions, and possibly more than $6 billion, according to a person familiar with the matter. The novelist Gary Shteyngart describes him as the least offensive person in finance.CreditBenjamin Norman for The New York Times. It is not a plot-driven novel. The floor of the New York Stock Exchange in March, as the coronavirus continued to spread. Matt Levine is a columnist for Bloomberg News covering finance and business. I was writing more about the gossipy side of Wall Street and more the culture of it, and I thought it was a great opportunity for him to use his incredible knowledge of how the business works. Mr. Levine regrouped. If it's a $100 bond, you should get $100 back, no matter what. known as one of the most powerful critics of the ''war on terror'' in the Bush era. Here's a recap of the clues on Master Minds (Season 3) for Thursday, January 12, 2023 with host Brooke Burns. All of the knowledge that Matt has is available to him at all times, Mr. Mystal said. Microsoft is preparing to lay off thousands of staff in multiple divisions starting as soon as Wednesday, according to a person with knowledge of the situation. Tiger Global Slashes Value of Private Tech Bets by Billions, Documents Show. What is he doing with the money? 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.). Feb 11, 2021. Sam Bankman-Fried founded Alameda to do crypto arbitrage and market-making trades, and then he founded FTX to basically have a better exchange for Alameda to trade on. Today's Master Minds: Mark "The Beast" Labbett, LaKedra Pam, Ryan Chaffee. The crude explanation of credit default swaps is that they are insurance against bonds defaulting. One is that FTX is an exchange for levered traders, offering products like perpetual futures and leveraged tokens that build in margin lending. Each of them is overcollateralized you only lend Customer A half the value of her Bitcoin, and you only lend Customer B half the value of his dollars so you feel pretty safe. It is called The Crypto Story. DLA Piper > The Legal 500 Rankings Corporate and commercial > Corporate and commercial: Birmingham Tier 1 Known for its 'excellent transactional capabilities', the Birmingham The whole extended . He never joined an elite social club or spent six figures on a Hamptons summer rental. [1][4], In 2011, Levine started writing about economics and finance for the financial news site Dealbreaker. You can check your account balance, and Coinbase says you have 0.5 Bitcoin or whatever. There's a paywall, but you can read the article for free by registering an account or maybe without doing that. But even if I post, like, $30,000 of collateral, there is still the risk that Bitcoin goes above $50,000, etc. This is the story of his ascension. You come to the bank with $100 in paper bills, and you deposit it in the bank, and the bank takes your paper bills and sticks them in an envelope with your name on it. 2023 Bloomberg L.P. All rights reserved. His answer, at least for now, is that the financial hole appears too deep. Why dont you lend me $10,000 so I can buy $20,000 of Bitcoin, so I can get more excitement? This is called a margin loan. He just has so much else going on. Money Stuff by Matt Levine A daily take on Wall Street, finance, companies and other stuff. Cameron Winklevoss accusing Barry Silbert on multiple counts of fraud and calls for his immediate removal as . [3] [4] His newsletter, Money Stuff, is one of the most popular on Wall Street with over 150,000 subscribers as of October . Microsofts expected investment in OpenAI, destined to be one of the biggest startup stories of the year, comes with a whole lot of strings attached. 00:00. It is an FTT whale, and FTT is now worthless. Has it been borrowing elsewhere against FTT? A group of fans once made themselves T-shirts bearing the text of one of his tweets about cryptocurrencies. You might just say no, thats dumb, Bitcoin is volatile, buying $10,000 of Bitcoin is plenty of excitement. (In fact Coinbase shut down margin trading in 2020.) When we hear on the news "$8 billion collapse!" it's all fake because of crap like the Serum tokens. They trade, the happier Robinhood is 's accelerating his move from player to team owner 7.4 of.: matt Levine is a columnist for Bloomberg News covering finance and business and ask to take Bitcoin... 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