FTAV comment gold

It’s an unspoken rule in internet publishing that the quality of reader comments relates inversely to the quality of the article they’re below. Post something good and the reaction is mostly praise and sniping. Post something crap and there’s a pile-on that’s both factually corrective and ghoulishly entertaining to watch.

FT Alphaville is an oddity in that respect. Though we try not to publish crap, the reader comments are reliably the best bit. Below most posts is a camarilla of experts, polymaths, wits, nerds and blowhards who add immeasurably to any theme. We appreciate their efforts, even when they don’t appreciate ours.

Below are a few recent comment-box highlights. We’ll do one of these comment round-up posts semi-regularly so you see something particularly good or insightful, drop an email to alphaville@ft.com with “comment gold” in the subject line. (And yes, you can nominate your own. We won’t check.)

CZ wants to see your crypto cards.

Ballachulish:

We should always be careful with the F word.

If a five year old drew you a $1,000,000 note and asked you to give them candy for it, you wouldn’t call it fraud.

If you then find someone who takes the lovingly-crayoned note off your hands in exchange for an apartment in Brooklyn – is that fraud?

The note was drawn in crayon. They didn’t care.

Magic: The Slathering

NizahmH

Hasbro clearly missing a trick here – should call these Magic Tokens – list them on a reputable exchange, print millions and hold them on their balance sheet, borrow against this valuable asset and then invest the cash into something really valuable….like Bitcoin. Isn’t that how new finance is meant to work?

How the hell did Jane Street alumni end up creating FTX?

Pseudoname

The guy is an operative of US intelligence services. The exchange is an asset of US intelligence services. With the NYT conference speaking confirmed it is abundantly clear.

The point was to create the exchange for retail then blow it up, ushering in a Global Digital Central Bank using the FTX architecture under the guise of ‘protecting customers’ with absolute control over global finance the real goal.

SBF is not scared of any of the consequences of this fraud and theft because they were by design. There will be no consequences.

Mack knifed

Bathmane

Mack… ha… I will never forget being promoted to MD at Morgan Stanley, the black-tie dinner was at the museum Temple of Dendor in NYC under Mack. He stood in front of us and with a straight face said ‘we want you to have a good family life. Be good people’. Next day at an auditorium on Times Square he talked about the need to take risk, much more risk ‘we need you all to take $100m of daily V@R’ just like Goldman does. This was just as the non-US balance sheet was 48 times levered with a 3m funding leg.. Mack was a bad manager running a firm with a culture that celebrated promoting people like Colm Kelleher. It was rife with sexism, racism and utterly lacked any moral character. The fact that the idiocy of that firm was socialised and guaranteed is still unbelievable to me more than a dozen years later.

Sellside toil and trouble

WayneJ

My impression is that a lot of buysiders like to complain about sellside research BUT:

(1) will send a new / graduate analyst to meet sellsides to get a background on an industry

(2) very few buyside shops actually do real quality research inhouse

(3) a lot of buyside ‘models’ and market background relies on sellside

Indeed I have seen ‘buyside’ models that literally involved tweaking some of the numbers of a sellside model.

And buyside notes that literally copy and pasted from the sellside.

There is significant cognitive dissonance between what buyside analysts claim they do and what they actually do.

Ultimately it comes down to greed. Before Mifid2 buyside could consume all they wanted. Now they have to pay for it from their own pocket and they claim it aids no value.

There is also a misunderstanding about most research – people overly focus on the ‘recommendations’ and the ‘price target’ rather than the actual depth / breadth of deep dive pieces.

The world according to Sam Bankman-Fried

HookahBoy

One thing to note in Crypto Ponzi schemes versus traditional Ponzi schemes is that recoveries often are substantial in the latter (Madoff’s victims got a fair bit back in the end), sort of like the high recoveries in IG credits upon default. Crypto Ponzi’s are the junk bonds of Ponzi schemes it looks like.

If you are a Ponzi investor, this is something to keep in mind for future reference.

FTX balance sheet, revealed

Up Periscope!

Thats not a balance sheet, it’s evidence.