ext. 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. It begins with an escalator. Money and stuff. They may be the only entertaining words a financial markets professional reads all day. You can subscribe at. His readership grew, and became more obsessive. If the price of FTT goes down, then FTXs business is riskier, because it has less collateral. [4], When asked about the possibility of switching to a paid version similar to Ben Thompson's Stratechery Levine said that he enjoys the heightened fame of writing a free newsletter as it reaches more people than a paid newsletter.[6]. National Park Service Asks Visitors to Please Stop Licking Toads. Bankman-Frieds fortune basically vanished, as did his emperor aura. Venture capital investors in FTX which last raised money at a $32 billion valuation are probably getting zeroed, the price of FTT collapsed, and now regulators are investigating. Money Stuff October 26, 2022 1:01 AM Subscribe. A coverage banker an investment banker whose job was to know companies and advise them on financial topics would bring me to a meeting with the chief financial officer of one of her companies to talk about convertible bonds. Lets accept, for the purposes of this essay, that founders and venture capitalists are engaged in a simple trade. When I was an investment banker, one thing that I did was pitch convertible bond offerings to companies. He later went on to become an investment banker for Goldman Sachs, where he structured and marketed corporate equity derivatives for four years. Despite having made more money at white-shoe law and Wall Street firms than he does as a writer, Mr. Levine says he is happier now. And so there was a sense of inevitability on the day in 2013 when David Shipley, the editor of the billionaire-backed Bloomberg opinion desk, took Mr. Levine to lunch and offered him a job. Microsofts expected investment in OpenAI, destined to be one of the biggest startup stories of the year, comes with a whole lot of strings attached. I love the shtick I do, Elon keeps ruining my life. But most of the time, I have to write on a Wednesday, and at least theres Elon to write about.. I asked Mr. Levine for some examples, wanting to see exactly what shape this took, but he declined, because he considers these correspondents to be sources. DLA Piper > The Legal 500 Rankings Corporate and commercial > Corporate and commercial: Birmingham Tier 1 Known for its 'excellent transactional capabilities', the Birmingham So the more people who sign up for Robinhoods service, and the more they trade, and the more volatile the stocks that they trade are, the more money Robinhood makes. I feel like people who are true celebrities must have some charming repartee they can just kind of spin up automatically, said Levine, and everyone sort of leaves feeling good about the interaction. S&P. When I was an investment banker, one thing that I did was pitch convertible bond offerings to companies. Or you can subscribe to Money Stuff and other great Bloomberg newsletters here. Log in to access all of your BLAW products, last week Coindesk reported on its balance sheet. Mr. Levines favorite subjects include insider trading statutes, bond-market liquidity and the ubiquity of securities fraud, but his columns are never boring. A $2.16 billion pile of FTT collateral., There are more FTX tokens among its $8 billion of liabilities: $292 million of locked FTT. (The liabilities are dominated by $7.4 billion of loans.). 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. The business model of real-estate companies is pretty much, you borrow a lot of money, you use it to buy buildings, and you rent out space in the buildings to tenants. It seems somewhat unlikely. But your competitors probably offer loans, and it is tempting for you to do it too. His column discusses current events in corporate finance and markets, with an insightful, nuanced lens and a dry wit. 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The other is that FTX is closely associated with a hedge fund called Alameda Research. There are web pages / articles I still read - I'll check out things by Derek Sivers, Patrick McKenzie/Bits About Money, Money Stuff by Matt Levine, all by local HN recommendations. If Ms. Levin found an audience by tearing down the personalities of Wall Street, Mr. Levine set to work pulling apart its structures, to better explain the wiring in the walls. You can subscribe at this link, or read the archive at this link. Also FTX accounting and perks, hung debt and enterprise blockchain. Matt Levine: No, I agree. Anyway it is still early and confusing but that seems to be the story of 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. He was an editor of Dealbreaker, an investment banker at Goldman Sachs, a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen . In 2007, he took a position at Goldman Sachs, applying his knowledge of corporate law to the financial markets. 5. The problem with this is that it is wrong-way risk. Twitter Manager: Daily Revenue Has Dropped 40%, 500 Top Advertisers Have LeftRead Now. It is not a plot-driven novel. Roughly 5,000 words later on a long-winded day, he files Money Stuff to his editor, and its sent to subscribers around noon. The Difference Is That Biden Gave the Documents Back, That Giant Sucking Sound Is theExit From US Stocks, Europe Is Winning the Winter War by Sheer Luck, For Ukraine to Win the Maneuver War, Germany Must Move First. [1][4], In 2011, Levine started writing about economics and finance for the financial news site Dealbreaker. matt levine is a columnist for Bloomberg News covering finance and business. Also Elon Musk theories and insurance underwriting. published Jan 18, 2018 8:39:36 AM, by Matt Levine (Bloomberg View) - Hovnanian. The more people who sign up for accounts, and the more they trade, the happier Robinhood is. You take some of Customer As Bitcoin and lend it to Customer B, and you take some of Customer Bs dollars and lend them to Customer A. You wont have to worry about missing anything. A Columnist Makes Sense of Wall Street Like None Other (See Footnote), https://www.nytimes.com/2020/10/08/business/matt-levine-bloomberg.html, Matt Levine in Prospect Park in August. His work is some of the most sophisticated analysis of what is really happening on Wall Street, said Bill Ackman, another billionaire fund manager. The worst outcome is that you dont have enough capital, you go bankrupt, and Customer B does not get his money back. Levine was also a law clerk for the U.S. Court of Appeals for the 3rd Circuit. My life has not been ruined by having to write about Elon Musk on Saturdays, the former mergers and acquisitions lawyer told me. I mean, theres a little bit of differentiation, but not too much. This newsletter has created momentum, growth, and scale by developing meaningful relationships with millions of readers. I used to write at Dealbreaker. Also the fact that Customer C had all that FTT in the first place is not a great sign. But like they say, . An icon used to represent a menu that can be toggled by interacting with this icon. One classmate, the journalist Elie Mystal, had a lot to say about Mr. Levine as an undergraduate that he was the valedictorian of their class; that he partied, too; that he once suggested applying Etruscan decision-making processes to the question of what to do next during a late night out but he placed a special emphasis on the footnotes. And . Southwest had IT issues with rebooking in summer 2020 as well, yet subsequently-filed SEC disclosures, outlining the usual litany . 2. He left that profession for law school and became a mergers and acquisitions lawyer for the law firm Wachtell, Lipton, Rosen & Katz. But sometimes market moves are catastrophic, and in particular, sometimes securities broker-dealers and crypto exchanges will have run on the bank risks. Apollo Global Management Inc., Carlyle Group Inc. and KKR & Co. said in regulatory filings this week that they received letters from the Securities and Exchange Commission on their use of electronic messaging for business. Today's challengers: Alex, Tracy, Matt. Also WWE governance, VC shame and the origins of the jury. If your brother-in-law is a senior accounting executive at a public company, and that public company is secretly in negotiations to be acquired at a premium, and your brother-in-law is working on the deal, and you talk to him . It is an FTT whale, and FTT is now worthless. But who are the lenders? And in M&A, everything happens on the weekend. You can subscribe at this link, or read the archive at this link. Coinbase always holds customer assets 1:1. Bloomberg: Balance of Power focuses on the politics and policies being shaped by the agenda of President Biden's administration. Nobody cares very much about how culpable each bank is, or how many bad messages it sent. 2023 Bloomberg L.P. All rights reserved. Lets start with Coinbase. saving money or hanging out which in itself is a fantastic offer. Mr. Levine says the book may have changed his life. FTT goes down, leaving FTX undercapitalized, leading to customer withdrawals, leading to ruin. Also a Twitter markdown and a SPAC CFO YOLOs GME. This means that funds are available to our customers 24 hours a day, 7 days a week, 365 days of the year. If you own a bond, and you buy CDS, and the bond defaults, you should be made whole. Hes a very smart guy who is very much not a lawyer, and that is very fruitful.. (The best measure of his audiences devotion may not be his 112,000 Twitter followers, but rather the 3,000 that follow @MattLevineBot, a fan account describing itself as a bot that mimics his writing style.) Yet we seem more relaxed than ever when the great and good have done it. Then he went to Yale Law. Hes a very smart guy who is very much not a lawyer, and that is very fruitful, Levine says. 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. I write the Money Stuff newsletter at Bloomberg Opinion. About. A bond plus CDS should be a (credit-)risk-free combination. Thu, 06 Aug 2020. Every new edition of the newsletter goes directly to your inbox. 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. Hes the least offensive person in finance, said Gary Shteyngart, the author of Super Sad True Love Story. When Mr. Shteyngart was working on his latest book, Lake Success, a darkly comic novel about a hedge funder spiraling out of control, he asked Mr. Levine to review a draft for accuracy. Its single biggest asset: $3.66 billion of unlocked FTT. The third-largest entry on the assets side of the accounting ledger? Everybody used WhatsApp and now everybody writes checks. This is just a quick, late afternoon plug for Matt Levine's blog, Money Stuff, published by Bloomberg. 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. Left Coast Crime is an annual conference organised by mystery fiction fans for mystery fiction fans, first held in San Francisco in 1991. Customer B owes them to you ultimately youre good for it but you dont have them now. We have no gating for client loan recalls or withdrawals. He just has so much else going on. Robinhood both increased its future value by signing up a lot of customers, and increased its present profits by extracting a lot of money from them each day. Levine is known for his humorous, witty, deadpan writing style. 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], 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". Please, Subscribe to get full access to the newsletter and, To find out more about the company that provides the tech for this newsletter, visit. Theres never a situation where customer funds could be confused with corporate assets. February 4, 2016. You have no Bitcoins to give to the customers to whom you owe Bitcoins, no dollars to give to the customers to whom you owe dollars. 00:00. Ledgers, Bitcoin, Blockchain, in which he lays out the basics of Bitcoin's technology. This makes them vulnerable to runs, Diamond-Dybvig, Its a Wonderful Life, etc., everyone knows all this. Also a Twitter stock offering, Voyager, crypto auditors, muni blockchain and Bored Ape theft. In August, Musk had said he was done offloading Tesla stock and that it was important to avoid an emergency sale of the shares in case he was forced to close the Twitter acquisition and struggled to bring in additional equity partners. 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. Bloomberg offered Mr. Levine stability and a larger platform. Matt Levine is a financial writer I like and he explains (the latest information about) what happened with FTX. And then if one day every single customer walked into the bank at the same time and said we would like our money back, the bank would just hand them all their envelopes. Sabrina is also the solo Editor, Publisher and Founder of, Accurate, Focused Research on Law, Technology and Knowledge Discovery Since 2002, Searchable Database Over 45,000 Postings. It makes for a tricky decision for Zhao, known in the crypto world as CZ: Follow through with rescuing his onetime top rival and shoulder the financial and regulatory burdens, or let FTX crumble and sort through the potential wreckage? Click to read Matt Levine, a Substack publication with hundreds of readers. Welcome to Matt Levine by me, Matt Levine. 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. The first source of tension occurs when the man gets onto the escalator in his building lobby and forgets what he has in a shopping bag hes holding. To runs, Diamond-Dybvig, its a Wonderful life, etc., everyone knows all this ] in... Itself is a fantastic offer of corporate law to the financial markets reads. He lays out the basics of Bitcoin & # x27 ; s technology smart guy is! 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