matt levine money stuff archivematt levine money stuff archive

The real world came first, then finance, then the more complicated epiphenomena of finance. Painting the tape is a common enough occurrence with standard crypto tokens, but I didnt think it was possible to talk about NFTs and avoid the subject of wash trading entirely. Its as if someone wrote a comprehensive biography about the life of Rick Astley without ever letting the words Never Gonna Give You Up touch the page. Lots of economic activity; not much trust. The quarterly reports of publically traded companies are doctored beyond belief and medias hucksterism for investing in stocks is nonstop.

Care to mention a new technology wave that did not result in a bubble, and rampant scams? I know thats not a real answer to your request, but bear it in mind ALL THE TIME when looking at things like WeWork, Uber, and other bezzles.

His newsletter, Money Stuff, is one of the most popular on Wall Street with over 150k subscribers. My goal here is not to convince you that crypto is building the future and that if you dont get on board youll stay poor. Thinking out loud here, nothing more. NASA is sending a probe, called Europa Clipper, to investigate the potential habitability of one of these ocean worlds.

Will be forwarding the link around. Since then, the shares have bumbled along. While market cap is a useful measurement in the world of equities because cash flow is tethered to real world utility, crypto has no such anchor. Token price is supported by the belief that you can fob off your magic beans to someone else for more than you paid for them. Market cap in the world of crypto is blisteringly stupid as its impossible to measure what supports it: the willingness of people to buy a useless speculative digital token that doesnt even qualify as an asset. ], [Other articles in category /ref]

I always assume this style not only reads well but consciously protects his and Bloombergs own reputation/position/ego in the process. Lately my favorite read has been Matt Levines Money Stuff articles From Doomberg, on Substack last January I think. How is the gain made?

(though this web piece disputes the centuries old view of its magnitude). For one thing, theyre more careful and technically adept, so theyre less likely to lose your Bitcoin.

If you receive my monthly email, youll already know that Im a huge fan of Matts and that Money Stuff has become my go to source of business news. There are look, there are notnoaccusations that Binance is laundering money for terrorists or secretly trading against its customers, but there are relatively few accusationslike that; again, as crypto exchanges go, thats pretty good. Levine identifies whats good for the economy and he points out that crypto doesnt do these good things, but he never manages connect the two facts and just say out loud that crypto is bad for the economy and for the civilization that depends on people doing useful things. As a general picture of crypto, Levine brilliantly covers the broad brush strokes, but something about the shading leaves me deeply uneasy. Relevant criticisms are omitted, misplaced, and generally diluted by a torrent of prose, making it all too easy for readers to drown their doubts in the bathtub.

https://www.youtube.com/watch?v=YQ_xWvX1n9g.

from you then youre fine.

Levine took several months off in 2020 for parental leave after the birth of his second child. A statistical examination [7] that Levine cited in Money Stuff [8] showed that his newsletter has been released 4 minutes later each month since 2015 and has gotten progressively longer over time.

If youre running an investment fraud, you have a few problems.

It is the Diamond-Dybvig model that won a Nobel Memorial Prize this year.

But IIRC, their liabilities exceed assets. Most impressive, though, is how they earned that revenue: During the three months ended June 30, 2020 and 2019 the Company But say they I think they are both morbid symptoms of too much easy money flooding the financial system. They could also trade out-of-the-money call options on GameStop, because thats fun and you can make memes about it, but thats an accidental feature of a financial system that mostly does serious stuff in the real world. The article tries to make the case that equities are fundamentally different than equities because the price of equities is a function of future cashflows. capacity as a U.S. senator. Also, I have to say, as someone who writes about finance, I have a soft spot for stories of fraud and market manipulation and smart people putting one over on slightly less smart people. We all have blind spots. I dont know crypto. Crypto has a reputation as a money laundering tool.

indeed, I wouldnt be surprised if crypto wasnt started by an intelligence organization, Check out the 1996 NSA white paper How to make a Mint: The Cryptography of Anonymous Digital Cash. Archive.

Welcome to Matt Levine by me, Matt Levine. In theory, a big rally could buoyToshibas stock, putting the firm in a position to negotiate a higher price.Preserving the option is tactful but seems like wishful thinking right now.

Some five or six years ago I had a conversation with a man who was a big crypto enthusiast ( If he got out in time he did REALLY well) that ended with Tom, you just dont get it, Crypto is a CONCEPT. Home. Theres a house there somewhere, under the CDO-squareds.

Token prices are determined by what Levine calls good corporate citizens, also known as centralized crypto exchanges, such as Coinbase, FTX, and Binance. We cant know how the sausage is made short of an audit, but in theory buy/sell orders on the exchange set token prices. These under- and un-regulated exchanges set token prices which then determine market cap. For Bitcoin, the current ~$17k $21k price (at time of writing) puts the market cap at around $320B $400B. But is Bitcoin actually worth that much? His newsletter is Money Stuff. My goal is to convince you that crypto is interesting, that it has found some new things to say about some old problems, and that even when those things are wrong, theyre wrong in illuminating ways.. Sign up now so you dont miss the first issue. But dont kid yourself into thinking that crypto is any less extractive. Has there ever been a pure liquidity problem at a crypto firm?

contracts at whatever the day's closing price is. Matt Levine runs the " Money Stuff " newsletter, one of the most irreverent and informative guides to the absurdities of the financial world.

There are differences with the kinds of con-tricks perpetrated in the book and those of crypto, of course (and note the chapters on the herb doctor too), but Im not sure the details of crypto, and the heady marriage of stupidity and credulousness obfuscated with techno-babble, are something Melville, or anyone writing at the time, could have possibly imagined. WebMicrosoft is preparing to lay off thousands of staff in multiple divisions starting as soon as Wednesday, according to a person with knowledge of the situation.

The ETF runs out of money when the futures hit zero; someone

The standard problem is the assets are good but long-term, and the customers want their money now. It is the problem that central banks are set up to solve.

The network is valuable because it is useful, that incentivizes network operators to make useful things and do useful work. But is there a cause for the companys Levine on the other hand may consider it to be another one of those things thats an odd use of time. Im reminded now seeing an article somewhere, a couple years ago showing those hideous Ape-coins NFTs or whatever you call them (fungible tokens?) >>Unlike tokens, share price is supported by a companys underlying cash flow. Unless an investor thought there was going to be a sudden rally in the price or a better unsolicited bid high enough to make the additional palaver worth it, there arent many reasons to stand in the way.

Indoor plumbing.

Unfortunately, Levine has drunk from the poison chalice of accepted crypto industry narratives and in so doing has fallen victim to useful delusions. Though there is hope, as I have begun to write these last sentences, the story of FTXs spectacular meltdown has begun breaching the waters of social media and the tide of institutional momentum may finally be turning. Many journalists, politicians, and investors will soon be forced to confront reality by asking uncomfortable questions, and little room will be spared for convenient excuses. This had the effect of driving up the price of all the tokens SBF was holding on to that were not public which became worth billions on paper. TS whatever.

], [ Addendum 20210207: Money Stuff is back. Levine has previously been a lawyer, investment banker, law clerk, and has written for a number of newspapers and financial sites.

As it turns out, the important question here is not just how, but who. From the Heisenberg Report: In the wake of the FTX fiasco, much of the breathless crypto coverage emanating from the financial media (mainstream, alternative and otherwise), seems to intentionally avoid addressing the elephant in the room. answer will be: Still it is a little weird. Easy, unload 20% of your contracts at a bizarre low price, to make the when the randian libertardians started yammering about crypto i knew in my bones it was a scam.

very small, just and since im not a tech person, things like blockchain and nfts always seemed ridiculous and overly complex, to me(complexity hides the knife/hand in yer pocket). They To me the article reads as if Levines editors at Bloomberg were looking for a Temple Grandin to calm the feedlot.

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The crypto thingy has always reminded me of the 17th century Dutch tulip craze, (though this web piece disputes the centuries old view of its magnitude).

Instead of being incentivized to make something useful that people want to use, crypto is costly, it demands value from users. The incentive for economic agents in such a system is to onboard as many participants as possible while doing as little real work as is required. Rather than supply side incentives for the production of positive economic output, we get weird distributed corporate bonds (tokens) where, in the case of PoW, the invested value is destroyed instead of transferred to a corporation (as with PoS). If they got rich, they did so by selling bitcoin for more than the purchase price. string them up and eat the rich. Matt Levine Feb 11, 2021 10

If you follow the newsletter, you know what the If so, they have fully taken onboard the values of the market. So you can take my explanation of market cap and cash flow as a general statement. By. People in these low-trust economies are always looking for a better mattress in which to stash their earnings.

All the sophisticated modern finance can be traced back, step by step, to the real world. Hes very careful to never commit to scenarios in his own speculation.

Ponzi schemes in general overcome that problem with obscurity. Loeffler, remains under investigation.

First, companies can and sometimes even do pay dividends. Matt Levine is a finance columnist for Bloomberg Opinion . Other Heres why. is mostly just links to his newsletter articles. The economics of crypto tokens reverse that..

The implicit assertion here is that whats left in crypto is worthwhile and valuable. Yes there were scams and speculation, but thats been dealt with. This framing doesnt let the reader consider the possibility that crypto is still a giant dumpsterfire full of swindlers. There is even an RSS. like a pet rock on meth and bath salts. Todays letter discusses a It just occurred to me what a tether is. Even if shareholders dont seem too enthused about the terms, best to take your money and call it a day..

But it quietly free-rides on peoples deep reservoir of trust in those institutions.. the Executive Chairman, which are billed on time and materials It Needs a Net, Trumps Tale of Two Cities: The Worst of Times.

It just supported the deal. Toshiba approached JIP through a financial adviser in April last year to participate in the bidding process,after the likes of Bain Capital, KKR & Co. and CVC Capital Partners had done the rounds. They could build railroads or semiconductor factories or electric cars, because they could raise money from strangers to fund their activities. Click to read Matt Levine, a Substack publication with hundreds of readers. Many many pallets.

Someone smarter than me please explain how this is not contradicted by the existence of Uber, Wework, and a hundred other never-profitable public companies. Still, it has a high and fluctuating market price; people have gotten rich buying Bitcoin. But have you missed the joke? The author comes close when they note that there is an ever greater distance between the financial economy and the real economy, which seems to imply an awareness that the connection of an equitys price to underlying value is tenuous. This week, Levine asks: Is it securities fraud for a public company to pay bribes to public

After establishing that going private was the only effective option, the firm went looking for domestic sponsors, presumably those who could offset the foreign interest and draw in local equity partners. The board has left itself wiggle room.

declared bankruptcy, and how Hertz diffidently attempted to get the Thats still commendable givenToshibas checkered past.From accounting issues to a near brush with bankruptcy, a report that put the Japanese firms efforts to block shareholders rights on display,and a $5.4 billion rescue by foreign investors to avoid a delisting, the companys misdeeds have dragged on and on. Those shares are not purely speculative bets. Almost every issue teaches me something interesting I didn't know, and

Theres no one trying to push him off the fence hes sat on, so he can comfortably sit on it while he follows amusing stories of large scale fraud. He was an editor of Dealbreaker, an investment banker at Goldman Sachs, a mergers and But another part of the answer might be that the real worldgrowing food, building housesis a smaller part of economic life than it used to be, and that manipulating symbolic objects in online databases is a bigger part. The language was then amended to say it was a reasonable exit opportunity for investors to recover their capital. Subscribe Sign in.

Many would argue that the folks at Tether are liars and criminals who applied the lessons of creative writing courses to their balance sheets and spawned a digital token used to manipulate and prop up the price of cryptocurrencies. But Levine doesnt discuss Tether as a blight on the industry, its just another little quirky crypto factoid. Bloomberg should consider notifying the NY State Attorney Generals office to let them know they made a grave error about Tethers trustworthy owners. They are supported by enormous infusions of outside money. Here Come the Leech Brands, Walmarts Automated Future Cant Just Be About Profits. This kind of desperation is why State lotteries are popular too, but nobody puts their savings into lottery tickets because it is easy to understand how foolish that would be. SEC to approve a new stock issue to cater to these idiots. in the hours before its bankruptcy may be my favorite of all time. Solar installation projects are not related to our primary operations If I accept deposits in a fake currency (Tether) and consider those deposits to be equivalent to fiat, then Im not breaking any laws. Better yet, I dont have to worry about real cash deposits needed to pump my scam and I dont have to move fiat around when wash trading. So Tether fulfils the function of maximizing deposits as well. Not only does it create synthetic liquidity, but by manipulating the prices of tokens skyward, Tether helps create fiat inflows from new suckers. Is anyone else reminded of Galbraiths bezzle?

Yes. Thats because the industrys market cap was and still is a lie. Crypto market cap is fictional, its not analogous to market capitalization for equities. While the calculation is the same, share (token) price * # of shares (tokens) = market cap, token and share prices are determined in vastly different ways. Unlike tokens, share price is supported by a companys underlying cash flow. It Can Be Avoided. One recurring theme in the newsletter is Everything is Securities To those familiar with cryptos landscape, whether skeptic or true believer, I very much recommend reading The Crypto Story.

The glow of US/globalized prestige is real.

price to dip, then their buy-at-the-end-of-the-day contracts will all

Just in February of this year I was trying to talk a Venezuelan I know out of crypto.

That would be an odd use of time. His column discusses current events in corporate finance and markets, with an insightful, nuanced lens and a dry wit. The noticewas correctedto justify the deep discount. I got it then and I get it now, when someone promises high yield and Virtually no risk losing your $ isnt a risk, its a certainty if you dont get out in time. This too is debatable, since the transactions are all public and traceable. Those are facts, not opinions, and the facts should be discussed. day-traders pushing up the price of Hertz stock after Hertz had I continue have major dubiety over crypto. That is a tenuous assertion at best.

Updated: Dec. 11, 2022 matt levine is a columnist for Bloomberg News covering finance and business. About. persuasive: I didnt dump stocks, I am a well-advised rich person, someone

My humble profession, sir.

The crypto system has attracted a lot of smart people who want to solve these problems, in part because theyre intellectually interesting problems and in part because solving them will make these people rich.. If a bank shows up at the Federal Reserve and says hi we owe depositors $100 but dont have it, we lost it all on roulette, the Fed will not help. The world can come to crypto.. Is anyone else reminded of Galbraiths bezzle?

They could buy bigger houses, because they could borrow money from banks. responsible for the demise of Terra stable coin recently.

But heavyweight hedge funds couldonly go so far., It wont get much better. But there are weird second- and third-order effects too. The crypto rebels hoped that their new creation would rival fiat currencies. Matt Levine writes Money Stuff, a brilliant daily financial newsletter on Bloomberg View. Wall Street just like crypto, is constantly scheming to push up or crash prices in order to profit.

Because people were getting rich things metastasized into straight-up fraud, but nobody in the elite western financial press or regulatory regime cared since (as in 2008) most of the victims could easily be othered.. Also, this articles mentions the unrecoverable tokens. you can also get the Money Stuff articles as an Some people manage index funds. Archive - Matt Levine Money and stuff. (2)With few prospects of business improving, servicing that debt will create a whole new burden for the firm.

Of course, this only applies if Tether is a criminal enterprise and their reserves are fraudulent. So take what I said with a grain of salt, but you start to understand why people are so interested in the details of Tethers holdings and business operations. : Matthew Brooker, Matt Levines Money Stuff: The Good Hedge Funds Always Get Paid. The presenter makes a great observation, along the lines of; Cryptocurrency does a terrible job of solving the inherent problems of existing financial structures or mechanisms, and the things it does well are only useful for addressing the problems cryptocurrency introduces.. This is an odd topic to have thought about a lot I admit But like Sal Bayat mentions, Matt Levine is an excellent writer so theres a lot of stylistic choices to think about on top of the subject matter in his columns haha!

In the meantime, tell your friends! I found

What Can CitiesDo About the Most Dangerous Drivers?

One article I particularly remember discussed the kerfuffle a while

Theres even a campaign of political bribery (lobbying) attempting to loosen regulation so new fiat in-flows can be created. Theres no mention of this, instead its implied that the blaze of crypto winter had scoured away the rot in the industry. Usually I would roll my eyes and move on, but combined with other issues and omissions, it makes me think Matts perspective on crypto is deeply flawed. The Crypto Story is a comprehensive tour de force and an excellent general overview of cryptos past and present, however, its view on cryptos future is at best naive, and at worst potentially harmful to the unaware. Despite all of Levines warnings, mockery, and colourful language, the failure to identify and highlight crypto disinformation puts those unfamiliar with the industrys fundamental flaws at risk. Though I do not think Levine intended it, his portrayal of crypto as the early days of an innovative new technology could cause members of the public to invest money into an industry whose collapse is inevitable. Conversely, I didnt sit down and write 40,000 words to tell you that crypto is dumb and worthless and will now vanish without a trace. AI Is Moving Fast Enough to Break Things. I think that covers criminal organizations AKA intelligence agencies very well He was an editor of Dealbreaker, an investment banker at Goldman Sachs, a mergers and acquisitions The author is blind to the fact that Crypto is simply copying an insight that Wall Street has leveraged for years.

shareholders.

law in order to steal money for the shareholders, and when the

already own a bunch of oil contracts. His column discusses current events in corporate finance and markets, with an insightful, nuanced lens and a dry wit. How, how? still more bewildered, do you, then, go about the world, gratis, seeking to invest peoples money for them? That makes the entire system a predator of the real economy. Money and stuff. So yes, crypto is valuable to money launderers, tax evaders, and purveyors of fine ransomware because it has real world utility for them. The corruption and injustice of the existing financial system, the de-industrialization and financialization of our economy, has driven millions into the waiting arms of crypto con artists. The public has been made desperate from decades of stagnating or declining real wages, and Cryptovangelists have been quick to inculcate the flock and prepare the faithful for a good fleecing. Despite identifying all of its pieces, this cruel irony appears to be lost on Levine. Just waiting for pension funds starting to collapse this decade as a result og regulations that forced them to become superleveraged entities by themselves, holding illiquid crap for higher returns (not too dissimilar to FTX, yet likely with better intentions).

I would agree that this belongs in the negative economic activity column.