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creepycoug
Member Posts: 24,389
The FTX collapse has caused one hedge fund to default on close to $40 million in debt. That's just what we know about because this is still new. Now, I'm not one who cries in his soup over the troubles of hedge funds; and have my own view about their role in a civilized society. But, I digress.
Could this be the beginning of a serious shit show? Like, when Lehman defaulted on its short term debt obligations - that it was raising at break neck pace to shore up its liquidity issues - that, in turn, caused the originators of the money market fund (the Reserve) to break the buck, with the larger shit show that followed.
Reading the background of this ... you have fucking children in charge of billions of dollars. What little I've learned in life includes the overwhelming importance of judgment obtained through years of experience. I don't care if this Binkman-Fried and Ellison chick are classic examples of Charles Murray's Super Zips; they both fucked the fuck up and neither is, I think, quite as bright as the world has suggested to them.
@godawgst @HoustonHusky @UW_Doog_Bot @anybodywithafuckingclue
@YellowSnow @DerekJohnson - this really belongs in the record shop, but Yella is a purist elitist snob.
Could this be the beginning of a serious shit show? Like, when Lehman defaulted on its short term debt obligations - that it was raising at break neck pace to shore up its liquidity issues - that, in turn, caused the originators of the money market fund (the Reserve) to break the buck, with the larger shit show that followed.
Reading the background of this ... you have fucking children in charge of billions of dollars. What little I've learned in life includes the overwhelming importance of judgment obtained through years of experience. I don't care if this Binkman-Fried and Ellison chick are classic examples of Charles Murray's Super Zips; they both fucked the fuck up and neither is, I think, quite as bright as the world has suggested to them.
@godawgst @HoustonHusky @UW_Doog_Bot @anybodywithafuckingclue
@YellowSnow @DerekJohnson - this really belongs in the record shop, but Yella is a purist elitist snob.
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Depends on the amount of side action.
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Was just thinking of you and adding you to the post. Vanilla gives us 15 minutes and you're done.Bob_C said:Depends on the amount of side action.
So, side action ... meaning how many institutions had big crypto positions on FTX that just vanished? -
Although, if I understand this correctly, FTX is just a trading platform. But the guy running it also founded Alameda, which takes positions for its own account and which was being run by the Ellison girl, who was in the FTX guy's harem of noyds. So, if I have this straight, it would be as if the NYSE were itself part of a scandal in which your equity position in XYZ corp. just vanished because the exchange was fucking around. Of course, it's a little easier to track down shares, even those held in street name. But that's the idea as I understand it.WestlinnDuck said:
It's being described as a run on a bank. Ok, sure, banks loan out money, so if the algo fails because some externality causes a run and everyone withdraws on the same day, then that's a problem because deposit liability does not equal deposit reserves on hand.
But FTX is a trading platform. How do they have a liquidity crisis unless they are taking positions for their own account? -
That, but more importantly and scary is the derivative market that is very much under the table.creepycoug said:
Was just thinking of you and adding you to the post. Vanilla gives us 15 minutes and you're done.Bob_C said:Depends on the amount of side action.
So, side action ... meaning how many institutions had big crypto positions on FTX that just vanished? -
Right. Very true.Bob_C said:
That, but more importantly and scary is the derivative market that is very much under the table.creepycoug said:
Was just thinking of you and adding you to the post. Vanilla gives us 15 minutes and you're done.Bob_C said:Depends on the amount of side action.
So, side action ... meaning how many institutions had big crypto positions on FTX that just vanished? -
If your equity position and bank assets can't be easily liquidated then you can't return depositors money. FTX had huge loans to Alameda which at best wasn't transparent and was being looted. If a customer of FTX said to buy Bitcoin, no Bitcoin was purchased, just an accounting entry. Like buying insurance and your agent just cashes your check but no insurance is purchased.creepycoug said:
Although, if I understand this correctly, FTX is just a trading platform. But the guy running it also founded Alameda, which takes positions for its own account and which was being run by the Ellison girl, who was in the FTX guy's harem of noyds. So, if I have this straight, it would be as if the NYSE were itself part of a scandal in which your equity position in XYZ corp. just vanished because the exchange was fucking around. Of course, it's a little easier to track down shares, even those held in street name. But that's the idea as I understand it.WestlinnDuck said:
It's being described as a run on a bank. Ok, sure, banks loan out money, so if the algo fails because some externality causes a run and everyone withdraws on the same day, then that's a problem because deposit liability does not equal deposit reserves on hand.
But FTX is a trading platform. How do they have a liquidity crisis unless they are taking positions for their own account? -
Given FTX is turning out to be a $$ washing machine for the @dnc and UKR, disagree.creepycoug said:The FTX collapse has caused one hedge fund to default on close to $40 million in debt. That's just what we know about because this is still new. Now, I'm not one who cries in his soup over the troubles of hedge funds; and have my own view about their role in a civilized society. But, I digress.
Could this be the beginning of a serious shit show? Like, when Lehman defaulted on its short term debt obligations - that it was raising at break neck pace to shore up its liquidity issues - that, in turn, caused the originators of the money market fund (the Reserve) to break the buck, with the larger shit show that followed.
Reading the background of this ... you have fucking children in charge of billions of dollars. What little I've learned in life includes the overwhelming importance of judgment obtained through years of experience. I don't care if this Binkman-Fried and Ellison chick are classic examples of Charles Murray's Super Zips; they both fucked the fuck up and neither is, I think, quite as bright as the world has suggested to them.
@godawgst @HoustonHusky @UW_Doog_Bot @anybodywithafuckingclue
@YellowSnow @DerekJohnson - this really belongs in the record shop, but Yella is a purist elitist snob.
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It’s a serious shiteshow, but not for the major banks and hedge funds so it won’t be a Lehman-type scenario. You’ll see some of the shady banks (looking at you Silvergate) and lots of these crypto companies/funds blow up, but the main banks got involved in just pitching the shite and taking the commissions…their money wasn’t at risk. You’ll see a few of the crazier retirement funds (*cough* Ontario looking at you *cough*) lose chunks of money as well, but the govts will just print more money to cover those folks. And all the shitecoins will be gone in a couple of years unless the govt starts the massive money printing again.
This economic mess is/will be very different than last time as they usually are…do think the Central Banks are screwed. They have to raise rates to kill inflation and demand (we are at the tip of the iceberg there), but the amount of debt piled up limits how long they can do that. But they also can’t go and massively cut rates/stimulate, because the woke idiots of the world have created a huge global energy supply problem and if/when the global economy takes off again there won’t be enough energy to go around and you’ll get another bout of global inflation real quick (one of the main reasons China is still locked down and building a shit-ton of coal power plants right now…they know it too and the ChiComs can’t afford the unrest that inflation would likely cause internally).
At least until everyone builds another magical windmill to fix the problem or tell these woke morons to go pound sand…
I do hope the Fed finally catches a clue and chooses never to go back to the insanity of 0% interest rates again…some people think they finally learned their lesson but I have my doubts. -
And yes, there are a lot of politics and govt behind FTX (does anyone really think any smart person would give that retard or his freak show of a girlfriend hundreds of millions of dollars after spending 5 minutes with either of them?). They were a front that were dumb enough to accidentally blow it up by getting greedy and stealing from it…the CIA, Democratic Party, and a bunch of other people are going to have to find new ways to launder massive amounts of money…
