Remarkably, Mr. Levines piece was written more than an hour before the market went haywire. Our fully audited ledger identifies your account, your fiat and crypto holdings, and tracks your account activity in real time. By this standard, the last week of January 2021 was incredibly, incredibly good for Robinhood, an amazingly perfect week. 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Before long, Mr. Levine was charming readers who considered themselves experts in the subjects he was addressing, whether by distilling a subtle legal truth or simply explaining the significance (or absurdity) of something that had been out in the open yet overlooked. Cameron Winklevoss accusing Barry Silbert on multiple counts of fraud and calls for his immediate removal as . Mr. Levine was born in 1978 and grew up in the suburbs of Long Island. His newsletter is Money Stuff. He used 100% of the proceeds of his previous sales to pay for Twitter, and now is selling more to pay his year-end tax bill on those previous sales. (Asked about the Etruscans, Mr. Levine said he thought Mr. Mystal might be referring to one of his favorite anecdotes from Herodotus. You have loaned 50 of the Customer As Bitcoins to the Customer Bs, and $1 million of the Customer Bs dollars to the Customer As. WhatsApp, everyone pay $200 million. Okay. But it sure has been a distraction! 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. I dont want to sell my Bitcoin, because I am a true believer and also do not want to realize gains for tax purposes. We have talked a few times recently about Hovnanian Enterprises Inc., which got favorable financing from Blackstone Group's GSO Capital Partners through some credit-default-swap market machinations. Im doing a bit, he says. [4], When asked about the possibility of switching to a paid version similar to Ben Thompson's Stratechery Levine said that he enjoys the heightened fame of writing a free newsletter as it reaches more people than a paid newsletter.[6]. Twitters ad business is not recovering. chris@latitude38.com . It is a bit complicated to get this . Sorry, comments are closed for this post. 5. I have a daily newsletter called Money Stuff, which you can read here and subscribe to here. ChatGPT Sounds Exactly Like Us. You have Customer A who has Bitcoin and wants to borrow dollars, and Customer B who has dollars and wants to borrow Bitcoin. Stock Sniper Might Have Pumped and Dumped. Its single biggest asset: $3.66 billion of unlocked FTT. The third-largest entry on the assets side of the accounting ledger? No actual bank works that way. Zhao himself admits there was no master plan to take over FTX. Bloomberg: Balance of Power focuses on the politics and policiesbeing shaped by the agenda of President Biden's administration. 2016, 2017 and 2018 One of the most successful and controversial athletes of his generation, Alex Rodriguez built a real estate empire over two decades. Now, he's accelerating his move from player to team owner. Here is my author page, possibly. 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 show's format pits 3 contestants against . 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. Matt Levine writes Money Stuff, a brilliant daily financial newsletter on Bloomberg View. Click to read Matt Levine, a Substack publication with hundreds of readers. Matt Taibbi, a former Rolling Stone writer, who was famous for excoriating defenders of neoliberalism and likening Goldman Sachs to a ''great vampire squid wrapped around the face of humanity . He seasoned his analyses with humor and a nerdy, confident tone. 8. And often I will have made fun of them, and they'll be like, 'That was p But one general point is that while some customers will want to borrow dollars to buy Bitcoin, other customers will want to borrow Bitcoin. Today's Master Minds: Mark "The Beast" Labbett, LaKedra Pam, Ryan Chaffee. And that is a run-proof business. He just has so much else going on. It is just a weird sort of one-off tax on big banks, like a backdoor windfall profits tax. Never miss an update. Lets accept, for the purposes of this essay, that founders and venture capitalists are engaged in a simple trade. As you can review in our publicly filed, audited financial statements, we hold customer assets 1:1. 7. Log in to access all of your BLAW products. Levine took several months off in 2020 for parental leave after the birth of his second child. 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. By 2011, Mr. Levine had decided to leave Goldman. But like they say, . Terrible. Now lets add a few more FTX-specific elements. Similarly, I find a lot of good one-off recommendations on HN; is the hit ratio 100%, or even 50%, goodness no. Hi, I'm Matt Levine. One day Customer A might come in, pay off her dollar loan, and ask to take her Bitcoin back. It was like a combination of everything Mr. Levine had done before: Emailing friends, teaching, clerking, problem-solving on behalf of rich actors. One of the most successful and controversial athletes of his generation, Alex Rodriguez built a real estate empire over two decades. Feb 11, 2021. 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. 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. When I was an investment banker, one thing that I did was pitch convertible bond offerings to companies. Each weekday, Mr. Levine, 42, wakes up at 5 in the morning. All of the knowledge that Matt has is available to him at all times, Mr. Mystal said. It happened in the middle of the afternoon, sending stocks sharply down, and by the time the exchanges closed at 4 p.m., many financial news outlets were still struggling to explain why. Receive a summary of the day's top tech newsdistilled into one email. We use cookies for a number of reasons, such as keeping The Information reliable and secure, personalizing content and ads, providing social media features and to analyze how our sites are used. published Jan 18, 2018 8:39:36 AM, by Matt Levine (Bloomberg View) - Hovnanian. I'm hoping to rely on loyal readers rather than erratic ads. And so there was a sense of inevitability on the day in 2013 when David Shipley, the editor of the billionaire-backed Bloomberg opinion desk, took Mr. Levine to lunch and offered him a job. Simply selling billions of dollars of Tesla stock would have upset his fans, driven down the stock price and undermined his image as a committed true believer. Anyway it is still early and confusing but that seems to be the story of FTX. And you can also imagine Musk saying, I dont mind pissing people off I just want to know exactly what will get me sent to jail for contempt., I asked Levine how he gets it all done. If youd like to get Money Stuff in handy email form, right in your inbox, please subscribe at this link. 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. In this dumb model I am eliding the *exchange* function and just assuming the bank acts as principal, though in fact Coinbase mostly operates as an exchange. EDF Employees Challenge Chairmans Role in $10 Billion Buyout. I asked Mr. Levine for some examples, wanting to see exactly what shape this took, but he declined, because he considers these correspondents to be sources. As Matt describes it in his bio, he writes about the financial industry on the internet, an Get back to work. 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. And now as a writer, he makes sense of it for the rest of us. Tiger Global Slashes Value of Private Tech Bets by Billions, Documents Show. Matt Levine is a finance columnist for Bloomberg News. You take some of Customer As Bitcoin and lend it to Customer B, and you take some of Customer Bs dollars and lend them to Customer A. FTX didnt have the money, and Bankman-Fried started calling around asking for a loan or a bailout. / Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. Actually thats the best outcome. So you say, sure, fine, Ill take your $10,000 and put $20,000 of Bitcoin in your account. 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. Also GTX claims trading, Goldman golfing and Razzlekhan. ext. The problem is that FTX took its customers money and traded it for a pile of magic beans, and now the beans are worthless and theres a huge hole in the balance sheet. Often, a significant chunk of the newsletter is devoted to a legal battle between sophisticated counterparties, or a complex financial product. Bloomberg offered Mr. Levine stability and a larger platform. I dont really take vacations. The summer is usually slow for Levine, so hed blocked out three weeks to knock out a first draft of his crypto story and had announced his time off in the newsletter when Twitter filed its lawsuit against its now-owner to force Musk to complete the deal. Click to read Matt Levine, a Substack publication with hundreds of readers. ; What Does It Mean?, in which he discusses generalizations of Bitcoin, such as Ethereum. 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. Matts the perfect complement to Bess, Felix Salmon, another financial blogger, wrote in October 2011. The main problem, actually, was that he was working on a 40,000-word Bloomberg Businessweek story about cryptocurrency. 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. One group of news consumers got a more comprehensible take. But then if the value of FTT drops to zero, you have nothing. Customer B owes them to you ultimately youre good for it but you dont have them now. (The best measure of his audiences devotion may not be his 112,000 Twitter followers, but rather the 3,000 that follow @MattLevineBot, a fan account describing itself as a bot that mimics his writing style.) This essay, that founders and venture capitalists are engaged in a simple.... Or a complex financial product side of the accounting ledger can buy $ 20,000 of Bitcoin in your inbox please... Accounting ledger most successful and controversial athletes of his generation, Alex built. Shaped by the agenda of President Biden 's administration, incredibly good for Robinhood, an get to... A simple trade a finance columnist for Bloomberg News a backdoor windfall profits tax grew up in suburbs. 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