SBF, 60 Minutes and Michael Lewis

What A Biased Interview

First off, I do not blame Michael Lewis for wanting to sell books. He went on 60 Minutes to sell books. Hence, he needed to be provocative, engaging, and charming which he was.

60 Minutes for it’s part tried to paint Sam Bankman Fried as some tortured hero who wanted to stop Donald Trump by using Mitch McConnell. You know, because people like Trump, Rand Paul, and JD Vance are undermining democracy by bringing transparency to it.

Please, can we keep the smoke-filled back room and the unelected bureaucrats?

That’s torturing the truth quite a bit. The program tortured it so badly that it was really a deception. The entire news business these days is full of deception. It’s how a Democratic NY Congressman that pulls a fire alarm to screw up a congressional session gets a pass from the mainstream media and they spread the story that he thought he was opening a door or calling an elevator.

60 Minutes and Lewis tried to spin a yarn about how this MIT whizkid grew up poor and minted billions of dollars. Heck, we should all follow in his path. What a trail blazer. Samuel Clemens's characters Huck Finn and Tom Sawyer would be proud.

Funny coincidence. I went to church Sunday morning and in the sermon, they talked about Eve being deceived by Satan. I never actually heard it put this way before. Satan didn’t lie so much as he deceived. 60 Minutes does the same thing.

The Serpent's Deception Genesis 3:4
…3but about the fruit of the tree in the middle of the garden, God has said, ‘You must not eat of it or touch it, or you will die.’ ” 4“You will not surely die,” the serpent told her. 5“For God knows that in the day you eat of it, your eyes will be opened and you will be like God, knowing good and evil.”…

Eve didn’t die. God did know that. The serpent was deceptive.

SBF donated $40MM to Democrats in 2022. He gave a fraction of that to Republicans; both parents are Democratic operatives. I don’t think they are inviting Mitch to any dinner parties or hosting fundraisers for him. SBF never was a Republican and he never will be. If you want to see what SBF money did, watch bought-and I am using that word specifically-Democratic Silicon Valley Congressman Ro Khanna try and rip CME boss Terry Duffy to shreds.

Who was right? The money or the CEO?

Lewis went so far as to say there is a hole in the universe that needs to be filled by someone like SBF. Really?? That’s dispassion at its finest. Let’s turn our heads away from the multi-billion dollar fraud bloodbath created by an Adderall-infused spoiled rich kid, shall we?

SBF is not some fallen hero. He was and is a fraud. Lewis tried to brush it over in the interview by stating that he wasn’t falsifying medical information like Theranos Elizabeth Holmes. Oh good, I guess. He only lost billions of other people’s money via his fraud. After all, it’s only money and money grows on trees. Super easy to scratch up some more isn’t it?

SBF used his own broker to create volume on his exchange and even lost money doing it. The folks at Citadel will tell you that is almost impossible to screw up.

He created an FTX token, and then valued it sky high inflating the value of his enterprise and using it for leverage on a risky asset, all while never doing a real audit of the firm, having any sort of compliance in place, or any concept of what it takes to operate a public market. He didn’t even have a board of directors or a human resources department. It was a clown show. A rookie operation. That is an insult to clown shows and rookies.

The VCs that invested in him screwed up more than badly. It’s clear they didn’t understand the exchange business at all. They understood it so badly they didn’t know what questions to ask in order to do the diligence on the business.

Here is a hint for them: Next time an exchange startup shows up at your door, ask them what they are going to do about clearing and settlement, that is, if you understand what I just typed.

Lewis for his part contributes to the fantasy that if the fraud underpinning FTX hadn’t been found out the business would be happily running today. Somehow, it was the Binance guy that caused the House of Cards to fall. Or if SBF and his gal pal who was running the hedge fund that was the largest single trader on his platform were on speaking terms, something might have been done. Laughable. Oh, that ignores the fact the real cause for the charade to end was the crash in crypto. When people saw prices drop they wanted to pull their money out. At 5%+ short-term rates, the risk appetite for crypto is dead. Risk preferences have changed.

The good news for the crypto market is that virtually every firm that propelled the prior bull market is out of business. The pretenders are gone. The carnival barkers are residing in Tap City. We are awaiting a new batch of pretenders or some people who will actually build businesses that are meaningful and solve problems using the unique value proposition of crypto. I saw a business the other day that is going to work with sites like The Real Real to create a blockchain to identify if luxury goods are real or fake since there are so many fakes. That’s useful and something that blockchain could do.

Our fourth estate is one of the worst things we have in America right now and is more responsible than any one person anyone can point to for undermining our precious democracy. The 60 Minutes segment on SBF is one example of that. I also heard they did a nice piece on that objective arbiter of justice Merrick Garland.