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What's In The Box
Boxes can be great. I love boxes as much as the next guy.
It’s a golden era for respected elders immolating their hard-earned reputations at the last minute, from Dianne Feinstein’s decision1 to run for reëlection in 2018 to Walter Isaacson turning hagiographer to catturd2’s increasingly Nazi-curious technical support associate Elon Musk. Three makes a trend so I guess I’m grateful to Michael Lewis for tanking his image as the perceptive truth-teller of finance with “Going Infinite,” a new book about Sam Bankman-Fried which Jennifer Szalai described with devastating restraint as “strange.” Last weekend, Lewis appeared on 60 Minutes to say:
[FTX] isn't a Ponzi scheme. Like, when you think of a Ponzi scheme, I don't know, Bernie Madoff, the problem is-- there's no real business there. The dollar coming in is being used to pay the dollar going out. And in this case, they actually had-- a great real business.
This assessment (rendered, again, just this past Sunday) differs sharply from an alternative view put forward way back in April, 2022 on the Odd Lots podcast, where crypto yield farming was described as a box with some money locked in it:
And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million…
And they’re like ‘10X’ that's insane. 1X is the norm.’… So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.
That quote of course is how Sam Bankman-Fried described his own business, prompting an audibly shook Matt Levine to reply:
I think of myself as like a fairly cynical person. And that was so much more cynical than how I would've described farming. You're just like, well, I'm in the Ponzi business and it's pretty good.
Yesterday Levine tried, in his scrupulously fair way, to come up with a plausible defense for SBF in his fraud trial which begins today. But ultimately Levine concludes that despite his impossibly cynical on-record statements, finding him innocent of fraud would require us to believe:
…that Bankman-Fried was incredibly naive. It not only requires you to believe that his lieutenants were stealing all the customer money without him noticing, that he made a series of innocent risk management mistakes while everyone else was building nefarious backdoors. It also requires you to believe that he believed in his stash of crypto, that he thought his vast imaginary wealth was real and his to spend. Obviously it turned out not to be.
If you’ve been reading Tabs for any length of time you already know that the only real use for crypto has always been crime. But according to Michael Hiltzik’s entertainingly savage LA Times review of ”Going Infinite:”
Lewis quite plainly started this book project thinking he could write the definitive foundation story of cryptocurrency as “the new new thing,” to quote the title of one of his earlier books. When the thing collapsed, he was unable to shed his initial enchantment.
Also Today in Scams (tangentially crypto-related): Devin Friedman lost $30,500 in would-be pool money to Zelle scammers.
What I'm confessing is that we sent $30,500 of our hard-earned money to email@example.com and firstname.lastname@example.org. Yes, someone emailed us and said, "Hey, will you Zelle 30 grand to a perfect stranger who goes by the name Personal Breezy and has no identification except for a Gmail account?" And our response was: Done!
This article is immaculately structured and edited, well done to whoever was responsible. I see you. 👀
How It’s Going / QT How It Started:
More on again/off again than Paris’3 relationship with bedbugs, the Biden administration will resume collecting student loan payments after pausing them eight different times over the pandemic. Forty three million-ish Americans will owe anywhere from $50 to $200 monthly, and three hundred seventy seven Democrats voted to restart the payments including Congressteen and known Pharb Maxwell Frost who took a break from crying in the shower to reply to every tweet under this thread with the explanation that Republican threats to cut Social Security and Medicare forced him to compromise. In a truly savage protest action, Debt Collective has started a petition calling for everyone with student loans to send the Department of Education a ten to twenty minute ramble of every unfiltered thought you might have about them, like a Hinge audio note but less hinged. Sure the DoE will probably ghost you, but like your student loans, maybe they’ll zombie their way back.
—Meggie Gates adamantly insists they are old enough to both make NSYNC jokes and not have student loans anymore (barely).
Hashtag Sliving! (slaying + thriving), declared Linda Yaccarino, still technically CEO of Twitter, announcing an exciting “official partnership” with Paris4 and her “next-gen media company 11:11.” 2012’s favorite social network will join forces with 2006’s hottest TV star “to create a launchpad for new initiatives in video and live video, live commerce, Spaces,” live Spaces, space commerce, video comments, and live video comment Spaces.
Ben Collins has been publicly pestering Elon Musk to answer a question for a little while now, and yesterday Collins finally dropped a story reporting that in April, 2022 (a busy month for today’s Tabs) someone “texted the billionaire and recommended an article imploring him to acquire the social network outright.” The article, from right-wing news site Revolver, claims that if he did so “The Regime would employ the “George Floyd” tool recently used to “cancel” Russia, but directed with laser-like focus on a single company and its lone brilliant, iconoclast leader.” Ok! Collins finds an entertaining number of correspondences between what the article predicts and what subsequently happened at Twitter, but it does kind of seem like a list of stuff that would obviously happen if a far right ideologue billionaire got a hold of Twitter? I’m not sure a conspiracy is necessary when David Sacks is like… right there.
Trump unveiled the best new first date conversation starter: elecstroshrution, or shark? Corrupt Supreme Court Justice Clarence Thomas recused himself in a moot case involving his former clerk John Eastman, who he apparently feels more strongly about than wife Ginni. Jack Antonoff roasted the Dimes Square scene in The Face: “what’s the export? What’s the book, what’s the band? The toxic podcast can’t be the genius cultural export.” Don’t put in the newspaper that the toxic podcast got mad.
Finally: In Politico, Keir Giles writes: “Fighting against the USSR didn’t necessarily make you a Nazi,” which is absolutely true. Unfortunately he’s trying to defend Yaroslav Hunka, who enlisted “with one of the foreign legions of the Waffen-SS, fighting Soviet forces on Germany’s eastern front.” You know what does make you a Nazi?
Today’s Song: Soltera, “Tengo Miedo”
Happy Emergency Alert Eve everyone! Don’t forget to shut off your burner phone. The alert will also emit nanoparticles that finally activate the FEMA 5G chip in your Covid vaccine, so get ready for your exciting new capabilities. Thanks to Intern Meggie and Music Intern Sam, hope I see you both in the aftermath.
I regret nothing. NOTHING.
France, not Hilton.
Hilton, not France.