In The Shadow Of Mt Hollywood

I continue to be amazed that writers on the right-wing blogs are actually paid for their output. Some guy who goes by "Bonchie" at Red State and apparently has a full time job there posed this question about Sam Bankman-Fried yesterday. My only answer has to be that google is your friend. Let's look at equivalent cases. Kenneth Lay's company, Enron, went bankrupt in 2001. It wasn't until 2004 that he was indicted by a grand jury for his role in the company's failure. The decline of Elizabeth Holmes's company, Theranos, began with adverse reporting in 2015 . It wasn't until 2018 that a federal grand jury indicted Holmes on fraud charges. The closest parallel case is Bernard Madoff. On December 10, 2008, Madoff's sons Mark and Andrew told authorities that their father had confessed to them that his firm was a massive Ponzi scheme. According to the Wikipedia entry, "The following day, agents from the Federal Bureau of Investigation a...

Now and then I see a piece that reflects on Trump's actual legacy, or perhaps what things might have been like had he won reelection. Last month I covered some revisionist opinio n that reexamined his disastrous mistakes on COVID: He imposed lockdowns and extended them when they didn't work; he elevated Dr Fauci, who promptly undermined him in the name of "science"; he sent the hospital ships to New York and LA, which proved laughably unnecessary. In contrast, Gov DeSantis's reputation is rising as a more level-headed leader. This is especially worth noting as we move into 2023 and are still recovering from lockdowns, the inflationary stimulus payments they generated, and supply chain disruptions from the same source. Although court decisions limited the worst of the the lockdown overreach, it is now accepted in at least some quarters that public health authorities can continue to impose masking, mandate vaccinations, close parks and beaches, and shut down bus...

In a remarkable unintentional exposé of our educational system, Forbes yesterday seems to think it broke the story of the year: Exclusive: Sam Bankman-Fried Knew Plenty About His Alameda Research Hedge Fund–And Sent Details To Forbes Just Months Ago . Bankman-Fried, in a series of high-profile media appearances this week, has begun offering his own working theory: Alameda took on far too much leverage to make risky investments on the FTX platform, and FTX failed to recognize and prevent it. A key claim: that Bankman-Fried himself didn’t really know what Alameda was up to. “I was frankly surprised by how big Alameda’s position was,” Bankman-Fried said at The New York Times’ DealBook Summit on Wednesday. “Alameda is not, like, a company that I monitor day-to-day,” he claimed to New York magazine in an article published Thursday. “It’s not a company I run. It’s not a company I have run for the last couple years. And Alameda’s finances I was not deeply aware of. I was only surface...

Here's more of the conventional FTX narrative that just doesn't fit. Remember that new CEO Ray's big complaint about FTX was that not only did they not keep payroll records, they basically didn't have an organization chart. It was just a bunch of millennials with ADHD playing video games in a luxury condo. Right? Here's FTX skeptic Marc Cohodes's take, as quoted by Alex Berenson : They were glorified interns, they had no experience, they had no exchange experience, they had no capital markets experience. . . which led me to believe this is a giant fraud. . . This is the basic media narrative and the received explanation, it was all Sam and Caroline and the others makin' whoopie in a yellow submarine. No org charts. No wonder! But wait a moment. The demise of cryptocurrency exchange FTX has brought an end to FTX Arena in Miami, or at least its name. Naming-rights deals, in which companies spend up to $500 million to put their names on sports facil...

Media accounts continue to be generous to Sam Bankman-Fried on the FTX scandal. This piece, I think, gives the overall current dimensions of the Overton window: In the weeks since Sam Bankman-Fried’s cryptocurrency empire was revealed to be a house of lies, mainstream news organizations and commentators have often failed to give their readers a straightforward assessment of exactly what happened. August institutions including the New York Times and Wall Street Journal have uncovered many key facts about the scandal, but they have also repeatedly seemed to downplay the facts in ways that soft-pedaled Bankman-Fried’s intent and culpability. The writer in the piece comes down on Sam Bankman-Fried as the architect of a fraud: At the heart of Bankman-Fried’s fraud are the deep and (literally) intimate ties between FTX, the exchange that enticed retail speculators, and Alameda Research, a hedge fund that Bankman-Fried co-founded. While an exchange ultimately makes money from transactio...

Let's look at some dots and see if we can connect them. Dot one: as we saw yesterday, there was a contentious sitdown that lasted into the early hours on November 11, during which prominent stakeholders at FTX induced Sam Bankman-Fried to resign as CEO. The only individual mentioned specifically among them was Sam's dad, Prof Bankman. White-shoe firm Paul, Weiss had somehow been induced to represent Sam, but they dropped him after a week due to "conflicts". I speculated that only Prof Bankman would be at a level to engage Paul, Weiss for this job at all. Once they dropped Sam, Prof Bankman induced a Stanford Law colleague to represent him. As far as I can see, both these moves were intended to keep Sam's legal defense under Dad's control. Meanwhile, after being pushed out as CEO, Sam has been anything but under control. Both new CEO Ray and Paul, Weiss have variously denounced his "incessant and disruptive tweeting" and "erratic and mislead...

I'll preface this with my usual caveat, I'm not an attorney, and all I really know of business is what I learned from reading people in my career in tech. However, I pointed out yesterday that although most commentators, if they mention new FTX CEO John Ray at all, seem to see him as some sort of corporate Dudley Do-Right of the Mounties who fixed Enron and will now fix FTX. Little as I know, I do know that Mr Ray is a lawyer (and a highly capable one), but lawyers work for clients and are obligated to promote their clients' interests. So who are Mr Ray's clients? This sent me to the FTX bankruptcy filing , available on line, readable, and as far as these things go, informative. Mr Ray identifies himself at the start: I am the Chief Executive Officer of the above-captioned debtors-in-possession (Collectively, the "Debtors"), having accepted this position in the early morning hours of November 11, 2022. I am administering the interests and affairs of the...