Levine took several months off in 2020 for parental leave after the birth of his second child. Matts the perfect complement to Bess, Felix Salmon, another financial blogger, wrote in October 2011. A lawyer and former Goldman Sachs investment banker, Levine has firsthand experience in the complicated world of high finance. And in M&A, everything happens on the weekend. Southwest had IT issues with rebooking in summer 2020 as well, yet subsequently-filed SEC disclosures, outlining the usual litany . Binance is unlikely to follow through on its takeover of FTX, according to the person familiar, who wasnt authorized to publicly discuss the matter. In the meantime, tell your friends! 7. Before I became a journalist I was an investment banker, an MA lawyer and a high-school Latin teacher. His column discusses current events in corporate finance and markets, with an insightful, nuanced lens and a dry wit. Also private-market marks, ransomware ethics, Coinbase KYC and Celsius crypto ownership. You have 100 Customer As who are long Bitcoin on margin: They each have 1 Bitcoin in their accounts and owe you $10,000. Here's a recap of the clues on Master Minds (Season 3) for Wednesday, January 11, 2023 with host Brooke Burns. When we hear on the news "$8 billion collapse!" it's all fake because of crap like the Serum tokens. EDF Employees Challenge Chairmans Role in $10 Billion Buyout. Matt Levine is a columnist for Bloomberg News covering finance and business. Here is a link. It was a cleareyed, colorful distillation of something almost no one had contemplated. 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. Sure, he was at Sesame Place, the theme park just outside Philadelphia, with his kids when Musk announced his Twitter bid, and then stayed up until midnight that night to get his newsletter, Money Stuff, out. If the price of FTT goes down, then FTXs business is riskier, because it has less collateral. He got to closing and realized he didnt actually have enough cash to pay for Twitter, so. 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. It is called The Crypto Story. I mean, theres a little bit of differentiation, but not too much. Before the price of Bitcoin drops too far, you will be calling up Customer A for more margin, and if she doesnt answer the phone you will liquidate her position to pay back the loan you made. 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. Stay up-to-date. His answer, at least for now, is that the financial hole appears too deep. (With one exception: Bank of America Corp. paid a bit more for being a bit more culpable.) ext. There is even an RSS. Longform Podcast #490: Matt Levine. Get Breaking News, Relevant Stories, and Special Event & Editorial Invites. 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.". saving money or hanging out which in itself is a fantastic offer. Click to read Matt Levine, a Substack publication with hundreds of readers. Opposition shadows Cerberus windfall from Albertsons supermarket deal. Matt Levine is a finance columnist for Bloomberg News. Customer B owes them to you ultimately youre good for it but you dont have them now. by Paul Ford, earlier) . 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. 1. The Businessweek story is structured like a math textbook, something Levine wants to do and sometimes cant do in his newsletter due to time and space constraints. Matt Levine in Prospect Park in August. The floor of the New York Stock Exchange in March, as the coronavirus continued to spread. In this description I have drawn on Twitter threads from Jon Wu, Lucas Nuzzi and an anonymous Wassie Lawyer, who make arguments along these lines, as well as this Substack post from Byrne Hobart. If you are a sophisticated modern crypto exchange like FTX, you will have automated 24/7 margining systems that automatically liquidate trades that have gotten too risky, so that only the rarest catastrophic market moves could get you in trouble. The first part of my discussion of Matt Levine's The Crypto Story covered the first two of its four chapters:. Money and stuff. You keep the other 50 Bitcoins and $1 million as collateral. Addded Sep 28, 2018. Roughly 5,000 words later on a long-winded day, he files Money Stuff to his editor, and its sent to subscribers around noon. Also the fact that Customer C had all that FTT in the first place is not a great sign. Matt Levine is a Bloomberg Opinion columnist covering finance. FTX's Balance Sheet Was Bad - by Matt Levine. Then he starts to write. He is an experienced journalist covering Wall Street, and is also one of the few people in the press who can both understand and explain complicated economic issues! He is doing exactly what he has long wanted to do. If it's a $100 bond, you should get $100 back, no matter what. The idea of leaving Wall Street for a precariously capitalized blog would probably strike a lot of financiers as romantic, quaint, even idiotic. By on December 16, 2021, 10:24 am. Futures, risk, fraud, securities fraud and Wirefraud. Matt Levine is a Bloomberg Opinion columnist covering finance. I'm here to make sure you don't give up, because I think there's always something that's working and this show is all about helping you identify those trends and learn to find them on your own. Money Stuff October 26, 2022 1:01 AM Subscribe. Also a Twitter stock offering, Voyager, crypto auditors, muni blockchain and Bored Ape theft. Matt Levine's Money Stuff: Not Everything Is Insider Trading - Bloomberg. Used with permission. A circumscribed life of prosperity and billable hours seemed destined. If people start to worry about the investment banks financial health, its stock will go down, which means that its collateral will be less valuable, which means that its financial health will get worse, which means that its stock will go down, etc. It might be a reason for the price of FTT to go down, if you think that Alameda has too much of it and might need to sell it. The SEC is sort of . Dont use capital efficiently. So whereas the basic model of Coinbase is they buy Bitcoin for you and put it in an envelope, the basic model of FTX has to be they lend you money to buy crypto and then make use of your crypto to get the money. In financial terms, they have to rehypothecate your collateral; you cant expect them to just keep it in an envelope if theyre lending you the money to buy it. 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. You have Customer A who has Bitcoin and wants to borrow dollars, and Customer B who has dollars and wants to borrow Bitcoin. [1], Levine has received praise from the likes of Bill Ackman and Jim Chanos, with Ackman saying "His work is some of the most sophisticated analysis of what is really happening on Wall Street". Subscribe to get full access to the newsletter and website. All Rights Reserved. The other is that FTX is closely associated with a hedge fund called Alameda Research. And a surprising subset of them will email me. Levine insists the interruptions werent a big deal. By uncritically mentioning crypto's multi-trillion dollar market cap 9 times, Levine, a Harvard educated financial expert, embeds a lie into the unconscious of the reader. Then it sticks the envelope in a vault, and if at any point you ask for your money back, it opens the vault and hands you your envelope. In 2007, he took a position at Goldman Sachs, applying his knowledge of corporate law to the financial markets. As you can review in our publicly filed, audited financial statements, we hold customer assets 1:1. 5. @matt . Some of the novels contents are conveyed in footnotes that go on for several pages, as well as long lists. It starts from that basic premise and builds from there, and I love that format, and I love that ambition for writing about complicated topics. Because Bitcoin is such a recent invention, its possible to start with the whitepaper and build from there to the major crypto shenanigans you see today. I joke that people want a lock of his hair.. Remarkably, Mr. Levines piece was written more than an hour before the market went haywire. Read deeply reported stories from the largest newsroom in tech. Subscribe to get full access to the newsletter and website. Please Click the Donate button and support BeSpacific. 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 . Could you just lend me $10,000, secured by my $20,000 of Bitcoin? Play in New Window. Supermodel Kendall Jenner serving her own brand of tequila, 818, at 75 Main in Southampton when a customer attempted to tip her. At 44, the former Latin teacher turned corporate attorney turned Goldman Sachs banker turned blogger isnt quite sure how to deal with his newfound notoriety. 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. Get back to work. And in fact Coinbase does have other revenue models besides charging trading fees, some of which are more run-vulnerable than what I say in the text. Coinbase says: Your funds are your funds, and your crypto is your crypto: Coinbase maintains internal systems, like a bank or a broker. 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. Above the Laws sister blog Dealbreaker, focusing on Wall Street gossip was hiring. The documents didnt indicate that the transactions were pre-planned. / Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. The Corporation is for sale. Colleen Levine . His column discusses current events in corporate finance and market. Zhao himself admits there was no master plan to take over FTX. 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. Thanks! [1][4], After graduating Harvard, Levine was a high school Latin teacher. 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. It was actually about the Persians, he said. Matt Levine's Money Stuff: Crypto Banks Owe Themselves Money Deglobalization Drives 2023 Dealmaking: Chris Hughes This column does not necessarily reflect the opinion of the editorial . The last time Ilooked at Yahoo, in December, I calculated that the after-tax equity value of its actual businesses, outside of Alibaba and Yahoo Japan, was about $1.7 billion. Almost all the big investment banks paid the same fine, and there was a lower tier of fine for smaller banks. Then he went to Yale Law. I wasnt aware that novels were allowed to be like this, and also that footnotes were allowed to be funny, he said. The whole extended . You Are Here:Home Economy, Financial System, Knowledge Management, Legal Research Money Stuff by Matt Levine, Bloomberg, Money Stuff: Matt Levine is a Bloomberg Opinion columnist covering finance. In college, at Harvard, Mr. Levine began writing emails to his friends that were leavened by footnotes. But where do you get the money that you are lending to the customer? If thats the case, then a crash in the price of FTT will destabilize FTX. Lets start with Coinbase. Not for dummies. You won't have to worry about missing anything. WhatsApp, everyone pay $200 million. Okay. Archive - Matt Levine. All of the knowledge that Matt has is available to him at all times, Mr. Mystal said. Hes a very smart guy who is very much not a lawyer, and that is very fruitful, Levine says.
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