11:16:22
Analyze That, 2002
Coffee and Covid on the FTX story (meanwhile, the NY Times defends FTX.com in an article titled “How Sam Bankman-Fried’s Crypto Empire Collapsed.” As Coffee and Covid put it in yesterday’s post: “They’ve already got it all figured out, and nobody even knows where Sam is the Times piece is essentially a glowing apologia for the hyphenated computer game aficionado. The Times would like you to believe that FTX’s downfall was mostly due to the company’s being TOO successful (‘growing too fast’), and because Sam was TOO hardworking (‘too ambitious’). At no point in the story does the Times ever use any words like ‘fraud,’ ‘crime,’ or ‘stole,’ or otherwise even hint that Sam may have done ANYTHING wrong, at all.”
Coffee and COVID on the FTX story from November 14, 2022:
“It was an inscrutable product multiplied by an incomprehensible investment vehicle…What we know for sure is that Sam went from being an unread but politically-connected zero in May 2019 to a billionaire in a few months, just in time to donate a metric ton of politico-bucks and help Biden (and other democrats) win the 2020 election. Bankman-Fried’s instantaneous success sort of reminds one of Jeffery Epstein’s dramatic rise from high-school teacher to international mystery man of finance, doesn’t it? I wonder if there’s a black-ops procedure sheet on this type of thing.”
As journalist Whitney Webb recently noted, people like Epstein are not an anomaly.
More from Coffee and Covid on the FTX scam:
“The FTX story is not a distraction from the election news. It IS election news. I’ll be covering it going forward until we fully understand the giant Democrat-Ukrainian-Cryptocurrency money washing machine that it sure looks like.
And boy, am I glad I covered the FTX.COM meltdown basics in Sunday’s bonus post yesterday, because it’s going to be FTX updates for a while, and you’ll need the primer to keep up. So if you aren’t up to speed, go read Sunday’s summary and then come back.
First, here’s Sam in his swanky Bahamian penthouse apartment, where he lived with his ten roommates.
Nice! Maybe one day you can also have a Bahamian penthouse apartment if you help launder money for democrats.
• For what is probably a very good reason, the World Economic Forum has deleted its web page promoting FTX. Buh bye!
There’s no apology there, though. Just an error page.
• Next, remember young Caroline Ellison? She’s a Harry Potter fan, Sam Bankman-Fried’s 28-year-old girlfriend, who chatters in interviews about how she’s bad at math (so WHAT qualifies her to run the multi-billion-dollar firm), and whose dad used to supervise Biden’s current SEC director.
Anyway, ‘somehow’ the investment analysts missed plenty of clear warning signs from Ms. Ellison, like this remarkable tweet from May, 2021:
I’m not sure I completely agree with Ms. Ellison. Regular amphetamine use might enhance your smug feelings of élite superiority, but apparently it doesn’t help you succeed in managing other people’s money. Not much, anyways.
Ellison also mused about topics on her public blog that support the rumors of bizarre “uconventional” romantic relationships among the ten roommates in Bankman-Fried’s Bahamian apartment, such as in her blog post below, which I’m including only to make the point there was plenty of material for investment analysts to work with, if they’d been doing any due diligence at all.
Well, problems are bound to pop up when you marry a nonjudgmental socialist sharing ethic with boundless hedonism.
How did the analysts miss the signs? Were they told not to look? We’re talking about some of the most sophisticated analysts in the world, including for Blackrock. Yet, for some reason, they seemed to miss truckloads of red flags. Red flags like drug use, which was apparently part of the day-to-day work lifestyle at FTX, for performance enhancement (stimulants) and limiting down time (sleeping aids).
You’ll notice in the little picture Sam’s Twitter avatar’s t-shirt logo, which I mentioned in yesterday’s post.
It is important to note that Ms. Ellison and Mr. Bankman-Fried, who infamously said books are for losers, are the generational products of our current crop of self-designated élites.
Next, FTX is leaking like a rusty sieve, and news — both corroborated and uncorroborated — is streaming out. A financial newsletter with 170K Twitter followers just estimated the amount Bankman-Fried may have scampered off with at closer to $1.7B.
Remember, Sam’s ‘trading firm, Alameda’ is the same subsidiary that was until very recently managed by his Harry-Potter loving girlfriend, Ms. Ellison.
Next, FTX and 134 of its subsidiaries and related companies filed emergency chapter 11 bankruptcy cases on Friday. Oddly, the filing paperwork was incomplete, which is typical for smaller companies filing rushed cases, but is completely NOT typical for large, complex, billion-dollar companies who always have their ducks in a row before filing a chapter 11 case.
The kinds of law firms that represent multi-billion-dollar financial companies like FTX don’t normally file incomplete paperwork. I would have expected, not just completed paperwork, but also a motion to consolidate all the cases for joint administration plus a completed proposed chapter 11 plan. All on day one.
So it’s either incompetence, a VERY last-minute poorly-thought-through decision to legally stop customers from pulling all their funds out, or an intentional bad-faith strategy to drag the case out as long as possible. I’m leaning toward the latter.
In other words, why weren’t they talking about bankruptcy weeks or months ago? Only fraudsters ride it out to the ultimate collapse, because filing bankruptcy stops them from siphoning money out. And, by filing bankruptcy themselves, instead of waiting for someone else to do it for them, they remain (for now) in control of things, including information.
If the large investors are legitimate victims, instead of political pawns, their next move will be to file an emergency motion to appoint a trustee to take control of and supervise the companies’ assets. If they don’t, I will be extremely skeptical.
Finally, corporate media has not been super helpful keeping up with this story. Maybe it’s moving too fast for them. One question I can’t resolve is, WHERE IS SAM BANKMAN-FRIED? Clearly, he’s out of the country.
On Saturday, MSN ran a story headlined, ‘Sam Bankman-Fried Claims To Be In Bahamas As Flight Tracker Shows His Private Jet Flying To Argentina.’
Nobody seems to know where Bankman-Fried and Ellison are. There are lots of rumors: still in the Bahamas, Hong Kong (Ellison), Dubai, South America. But so far, no reporter has been able to confirm his location.
To my knowledge, Bankman-Fried has not yet been charged with anything. He’s free to go wherever he wants. Presumably law enforcement is keeping up with him. I mean, I would hope they are. Like, the FBI and stuff.
You trust the FBI to keep track of Sam, don’t you?”
