This makes them vulnerable to runs, Diamond-Dybvig, Its a Wonderful Life, etc., everyone knows all this. [1][4], After graduating Harvard, Levine was a high school Latin teacher. Most classically, they borrow short to lend long, taking checking deposits that can be withdrawn at any time, and using them to make long-term mortgages. Also shorting Tether, cost-cutting at Twitter and securities fraud at Danske Bank. Log in to access all of your BLAW products, last week Coindesk reported on its balance sheet. All Rights Reserved. 103 Production . There is a timing problem. The problem with this is that it is wrong-way risk. That was the height of the GameStop Corp. meme-stock mania: The whole worlds attention was focused on the soaring price of GameStop stock, which was leading a lot of people to sign up for Robinhood and trade GameStop, and GameStop was very volatile and so Robinhood got paid a lot for trading it. Also the Celsius bankruptcy estate and the FTX risk engine. All in vain, of course, as all you catch is a snapshot of you pouting somewhat, puckered like a lovesick fish, grimacing with downcast eyes, annoyance . To find out more about the company that provides the tech for this newsletter, visit Substack.com. 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. Colleen Levine . Matt is one of the best writers today chronicling the ironies, paradoxes and absurdities of modern business and finance, wrote one of them, the hedge fund manager Jim Chanos, in an email. Download. To contact the author of this story: Matt Levine at mlevine51@bloomberg.net. It just takes the $100 out of your envelope and replaces it with 99, etc., always keeping exactly the right amount of money (in whatever currency you like that day) in exactly your envelope. Do you think that there is a big financial firm in the US that got through the entire pandemic without any employees doing any business over WhatsApp or text messages from their personal phone? I wasnt aware that novels were allowed to be like this, and also that footnotes were allowed to be funny, he said. 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Recommended reading: Matt Levine's Money Stuff. He wants things to work in an engineer-y way, and he butts up against things that run in a lawyer-y way. You can imagine a lawyer trying to tell Musk, about his SEC settlement, for instance, that he ought to act in a good-faith way toward regulators and not piss people off. Christine Weaver . I dont have that.. For Mr. Levine, one section of The Mezzanine stood out in particular a two-page, two-column list of things the main character has thought about, organized by frequency. Also GTX claims trading, Goldman golfing and Razzlekhan. by Paul Ford, earlier) . 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. Many banks and financial institutions use customer funds for commercial purposes including lending and trading, meaning that they often hold only a fraction of their customer assets at any given time. Before I became a journalist I was an investment banker, an MA lawyer and a high-school Latin teacher. Be part of a community of people who share your interests. He later went on to become an investment banker for Goldman Sachs, where he structured and marketed corporate equity derivatives for four years. One day Customer A might come in, pay off her dollar loan, and ask to take her Bitcoin back. But selling billions of dollars of Tesla stock to fund a weird quest to buy Twitter would I mean, be a distraction at least. 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. All Rights Reserved, By submitting your email, you agree to our. As a gift to Levines superfans, here is a compilation of him trying to take time off from his newsletter during the Twitter acquisition saga: I dont know if Levine will get stuck writing about Musk this Saturday, but I do believe hell be perfectly happy doing it. 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.. He structured derivatives agreements that let companies and other Goldman clients buy and sell stocks using a variety of methods meant to help them reduce their taxes or get a better price. [1][4], In 2011, Levine started writing about economics and finance for the financial news site Dealbreaker. Here's a recap of the clues on Master Minds (Season 3) for Thursday, January 12, 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. Oliver Keens asks: has our morality changed or are we just too deferential, confused or downright hypocritical to discuss it any more? They may be the only entertaining words a financial markets professional reads all day. The whole extended . Left Coast Crime is an annual conference organised by mystery fiction fans for mystery fiction fans, first held in San Francisco in 1991. The SEC is sort of . If I short Bitcoin at $20,000 via futures and put up $4,000 of collateral, that is a leveraged trade; if Bitcoin goes above $24,000 then my collateral is gone. He began his post-collegiate career as a Latin teacher, then worked as a lawyer at Wachtell, Lipton, Rosen & Katz before advancing to Goldman. Coindesk reported on Alamedas FTT exposure, and then Changpeng CZ Zhao, the founder of Binance Holdings Ltd., the largest crypto exchange, raised eyebrows by tweeting that Binance would sell its FTT holdings due to recent revelations. People worried that this would tank the price of FTT and put pressure on FTX, so they started withdrawing money from FTX. He seasoned his analyses with humor and a nerdy, confident tone. The worst outcome is that you dont have enough capital, you go bankrupt, and Customer B does not get his money back. Each weekday, Mr. Levine, 42, wakes up at 5 in the morning. And a surprising subset of them will email me. You have 100 Customer Bs who are short Bitcoin on margin: They each have $20,000 in their account and owe you 0.5 Bitcoin. That is not in itself a reason for a run on FTX! 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. His newsletter, Money Stuff, is one of the most popular on Wall Street with over 150,000 subscribers as of October 2020. It wasnt the case that the cost of a barrel had fallen to some scary-low number. It begins with an escalator. S&P. When I was an investment banker, one thing that I did was pitch convertible bond offerings to companies. But it would not go out of business that minute. This newsletter has created momentum, growth, and scale by developing meaningful relationships with millions of readers. Now lets add one more crypto element. Everybody used WhatsApp and now everybody writes checks. His work is some of the most sophisticated analysis of what is really happening on Wall Street, said Bill Ackman, another billionaire fund manager. Bloomberg's web site requires a subscription but you can also get the Money Stuff articles as an occasional email.It arrives at most once per day. Here is my author page, possibly. Every new edition of the newsletter goes directly to your inbox. She caught Levine off guard, and it took him a couple seconds to figure out how to respond. He knows his stuff, Mr. Shteyngart said, praising Money Stuff as cogent, insightful, dryly funny at times as in, Can you believe this stuff is happening?. There was another bank employee who was also named Matt Levine, a lawyer who sometimes worked on the same deals. Your accounts show that you owe clients 100 Bitcoins and $2 million, and that they owe you back 50 Bitcoins and $1 million, and you have 50 Bitcoins and $1 million on hand, so everything balances. Its neurotic, commenting on the nature of modernity itself. 7. Learn more about a Bloomberg Law subscription. If everyone knows that you are in this situation that you have a lot of Bitcoin collateral and Bitcoin prices are falling people will expect you to have to liquidate your Bitcoin collateral, so they will expect Bitcoin prices to fall, so they will sell Bitcoin, which will cause Bitcoin prices to fall, which will cause your long-Bitcoin customers to default, which will cause you to liquidate Bitcoin at lower and lower prices, etc., until you are bankrupt. Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. To contact the editor responsible for this story: Have a large reserve. The Corporation is for sale. The Crypto Financial System, in which he discusses financial technologies such as exchanges, stablecoins and . Now you have 150,000 of FTT, worth $3 million, as collateral (and no Bitcoins or dollars). Comments disabled. Futures, risk, fraud, securities fraud and Wirefraud. Commodity futures need to be standardized and tied to a physical delivery point, which in this case was overwhelmed, wrote one publication. WhatsApp, everyone pay $200 million. Okay. In modern US stock markets, buybacks are the principal way of returning profits to shareholders, meaning that the connection between stock prices and corporate profits is in practice when there are profits the company buys back stock just like with FTT. All Rights Reserved. but it is a lot like stock in FTX. Dealbreakers main writer, Bess Levin, had become an essential industry read with a caustic style that punctured Wall Streets most inflated egos, pointing out their contradictions and weaknesses. The analogy is: Imagine a weird sort of bank. The Only Crypto Story You Need, by Matt Levine - "Where it came from, what it all means, and why it still matters." (archive; also btw What Is Code? Theyll probably lend you like $100 against $200 of their stock, in an ordinary-course transaction; they just wont do too much of it. How Is That a Good Thing? / Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. I dont know, but let me speculate a little bit. You have to pay Customer B out of your own capital, and you dont get it back from Customer A. Youve just lost money. The mysterious outage of Tweetbot and other third-party Twitter clients that began Thursday night was an intentional suspension, according to internal messages viewed by The Information. bloomberg.com. Some of Mr. Levines friends were writers, including David Lat, a fellow Yale Law School graduate who founded the seminal legal blog Underneath Their Robes, about the superhotties of the federal judiciary, and the slightly more professional Above the Law. Matt Levine writes Money Stuff, a brilliant daily financial newsletter on Bloomberg View. A bond plus CDS should be a (credit-)risk-free combination. 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. Also gambling on redemption and customer shrugs. Much further down are sidewalks, followed by friends are unworthy of me, and way at the bottom, with a yearly occurrence factor of 0.5, birds regurgitate food and feed young with it and Kant, Immanuel.. There has been a blow-up this week on the internet about Facebook's apps. My goal is to give you the knowledge and the tools that will empower you to be a better investor. Bloomberg: Balance of Power focuses on the politics and policies being shaped by the agenda of President Biden's administration. I write about finance for Bloomberg Opinion. Also profitable nonprofits, FTX assets and WWE governance. If the tenants pay more in 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. Get back to work. @matt . Your accounts show that you owe clients 100 Bitcoins and $2 million and 150,000 FTT, and they owe you back 100 Bitcoins and $2 million, and you have 150,000 FTT of collateral, so everything balances. In general it should not be possible to bankrupt an investment bank by shorting its stock. That is, the problem is not a timing mismatch, in which FTXs customers asked for their cash back but FTX did not have enough ready cash because it had long-term but money-good loans out. 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. [1], U.S. Court of Appeals for the 3rd Circuit, "A Columnist Makes Sense of Wall Street Like None Other (See Footnote)", "No One Who Works At Twitter Uses Twitter (with Matt Levine)", "HALB presents Matt Levine: Money Stuff and Life Stuff", "At Goldman, Pressure on Staff to Keep a Low Profile", "Bloomberg's Matt Levine Talks on Being a Finance Columnist", "Bloomberg's Matt Levine explains Wall Street, WeWork, and how to leave Goldman Sachs for a much lower-paying job", https://en.wikipedia.org/w/index.php?title=Matt_Levine_(columnist)&oldid=1122312552, Short description is different from Wikidata, Creative Commons Attribution-ShareAlike License 3.0, This page was last edited on 16 November 2022, at 23:13. His column discusses current events in corporate finance and markets, with an insightful, nuanced lens and a dry wit. But it sure has been a distraction! This site requires JavaScript to run correctly. You can subscribe at this link, or read the archive at this link. Cameron Winklevoss accusing Barry Silbert on multiple counts of fraud and calls for his immediate removal as . Matt Levine Matt Levine Matt Levine. DLA Piper > The Legal 500 Rankings Corporate and commercial > Corporate and commercial: Birmingham Tier 1 Known for its 'excellent transactional capabilities', the Birmingham There was a joke told by Rodney Dangerfield about trying to catch your profile as you walk by a store window, thinking that you could, you see yourself, if only for a nanosecond, in a state of not being aware that you're being observed. He writes the newsletter Money Stuff for Bloomberg, which is published every weekday. We will never repurpose your funds: We do not lend or take any action with your assets, unless you specifically instruct us to. Matt Levine is a Bloomberg Opinion columnist covering finance. Yes. The essential tech news of the moment. Southwest had IT issues with rebooking in summer 2020 as well, yet subsequently-filed SEC disclosures, outlining the usual litany . As he ascends, he reflects on the lives of his friends and his own lifes course. 2023 Vox Media, LLC. Stay up-to-date. Realism and the Audiovisual Media is a major and entirely original contribution to contemporary scholarship on realism. published Jan 18, 2018 8:39:36 AM, by Matt Levine (Bloomberg View) - Hovnanian. Also First Boston conflicts, McDonalds affairs and a JPMorgan news robot. matt levine is a columnist for Bloomberg News covering finance and business. But like they say, . "I write a lot about people who have gotten in trouble with the SEC or the Justice Department.
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