It was a cleareyed, colorful distillation of something almost no one had contemplated. But Mr. Levine was never a high roller. Have a large reserve. Log in to access all of your BLAW products. Matt Levine. An icon used to represent a menu that can be toggled by interacting with this icon. He will come to you and say heres my Bitcoin back, Id like to withdraw my dollars. But you dont have his dollars, or not all of them; half of them are with Customer A. Depends how you define "Blog Post". It is a bit complicated to get this . You have loaned 50 of the Customer As Bitcoins to the Customer Bs, and $1 million of the Customer Bs dollars to the Customer As. Having closed the deal for Twitter and spent a few days wreaking havoc, Musk has gotten bored and moved on to some other expensive hobby, which we will hear about in due time. Now, he's accelerating his move from player to team owner. Matt Levine is a finance columnist for Bloomberg Opinion . @matt . And all of this is self-fulfilling: If you are worried about FTXs business, then the price of FTT should go down. Eventually he called CZ himself, and they announced a non-binding letter of intent for Binance to acquire FTX and make customers whole. Eventually youll get the rest of the Bitcoin back from Customer B, but for now you just pay Customer A out of your own Bitcoin stash. Mr. Levine deconstructs the topics in a way that is less like a conventional business column and more like he is providing an introductory course on the subject. The co-founders of Instagram, which Facebook Inc. bought in 2012, quit on Monday (Sep. 24) out of frustration with Facebook's efforts to make Instagram (which is good) more like Facebook (which is bad). Bloomberg: Balance of Power focuses on the politics and policiesbeing shaped by the agenda of President Biden's administration. The approximately 150,000 people who subscribe to Money Stuff, a free newsletter written by Matt Levine, a columnist at Bloomberg, found an email in their inboxes with the subject line "There . 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. Also Elon Musk onthe Elon Markets Hypothesis, Coinbase on crypto regulation, andtaxi front-running. 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. And since you were not visiting clients in person during the pandemic, or sitting in your office, you might have been a bit more inclined to use your personal cell phone to communicate. His newsletter is Money Stuff. FTX's Balance Sheet Was Bad - by Matt Levine. Yet he gives the same impression of personalization to readers who know little about finance. If you think of the token as more or less stock, and you think of a crypto exchange as a securities broker-dealer, this is completely insane. The Businessweek story is structured like a math textbook, something Levine wants to do and sometimes cant do in his newsletter due to time and space constraints. Hovnanian will refinance its 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. Longform Podcast #490: Matt Levine. And a surprising subset of them will email me. His newsletter, Money Stuff, is one of the most popular on Wall Street with over 150k subscribers. It is called The Crypto Story. [1] Levine has previously been a lawyer, investment banker, law clerk, and has written for a number of newspapers and financial sites. You might just say no, thats dumb, Bitcoin is volatile, buying $10,000 of Bitcoin is plenty of excitement. (In fact Coinbase shut down margin trading in 2020.) Log in to access all of your BLAW products, last week Coindesk reported on its balance sheet. You keep the other 50 Bitcoins and $1 million as collateral. (Asked about the Etruscans, Mr. Levine said he thought Mr. Mystal might be referring to one of his favorite anecdotes from Herodotus. @matt_levine + Get alerts for Matt Levine Robinhood Markets Inc. is in the business of getting people to trade stock (and options, and cryptocurrencies) on their phones. Matts the perfect complement to Bess, Felix Salmon, another financial blogger, wrote in October 2011. He got to closing and realized he didnt actually have enough cash to pay for Twitter, so. No actual bank works that way. But there are risks. But it is held in a custody account for you. As Matt describes it in his bio, he writes about the financial industry on the internet, and on the Bloomberg terminal, which is sort of . FTX didnt have the money, and Bankman-Fried started calling around asking for a loan or a bailout. Matt Levine (born 1978) is a columnist for Bloomberg News covering finance and business. This sounds like a bad business model: The bank needs to pay for real estate and tellers and vaults, and it is not doing anything with your money. Ledgers, Bitcoin, Blockchain, in which he lays out the basics of Bitcoin's technology. Levine insists the interruptions werent a big deal. Red Flags Are (Mostly) in the Eye of the Beholder, By Aaron Harris · Jan. 18, 2023 9:00 AM PST. Remarkably, Mr. Levines piece was written more than an hour before the market went haywire. Opposition shadows Cerberus windfall from Albertsons supermarket deal. 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. The way it makes money is that each time its customers trade stocks (or options, or cryptocurrencies), Robinhood sends their order to a market maker, and the market maker pays Robinhood a tiny fee for the right to execute the order. colleen@latitude38.com. But selling billions of dollars of Tesla stock to fund a weird quest to buy Twitter would I mean, be a distraction at least. He goes into the balance sheet including the Serum tokens. Or equivalently a customer comes to you and says I have $20,000 of Bitcoin in my account, and I need some cash this month. If you'd like to get Money Stuff in handy email form, right in your inbox, please subscribe at this link. If all of the banks customers do this every day, then the bank makes plenty of money to pay for real estate and tellers and vaults and executive bonuses, without doing anything else with your money. 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. 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. ChatGPT Sounds Exactly Like Us. Money and stuff. 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. I write the Money Stuff newsletter at Bloomberg Opinion. One other point here is that if this is the story, then it is not a liquidity crisis but a solvency one. 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. Matt Levine is a finance columnist for Bloomberg News. Jun 23, 2021. I wasnt aware that novels were allowed to be like this, and also that footnotes were allowed to be funny, he said. Copyright 2002-2023 BeSpacific LLC. It would actually have enough money to give all the customers their money back, because it kept all the customers money in their own envelopes the whole time. By 2011, Mr. Levine had decided to leave Goldman. His column discusses current events in corporate finance and markets, with an insightful, nuanced lens and a dry wit. 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. Matt Levine is a columnist for Bloomberg News covering finance and business. Matt Levine: No, I agree. So whereas the basic model of Coinbase is they buy Bitcoin for you and put it in an envelope, the basic model of FTX has to be they lend you money to buy crypto and then make use of your crypto to get the money. In financial terms, they have to rehypothecate your collateral; you cant expect them to just keep it in an envelope if theyre lending you the money to buy it. by Paul Ford, earlier) . To contact the author of this story: Matt Levine at mlevine51@bloomberg.net. Feb 11, 2021. S&P. When I was an investment banker, one thing that I did was pitch convertible bond offerings to companies. matt levine is a columnist for Bloomberg News covering finance and business. It took Mr. Levine exactly one week to find his voice. 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. 00:00. In the olden days the values were all different! 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. 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Its single biggest asset: $3.66 billion of unlocked FTT. The third-largest entry on the assets side of the accounting ledger? Get back to work. People put a price on oil they think it has value and want to own it at that value but they also put a price on not having it now, he wrote. Could you just lend me $10,000, secured by my $20,000 of Bitcoin? Before the price of Bitcoin drops too far, you will be calling up Customer A for more margin, and if she doesnt answer the phone you will liquidate her position to pay back the loan you made. Matt Levine Matt Levine Matt Levine. The first part of my discussion of Matt Levine's The Crypto Story covered the first two of its four chapters:. I joke that people want a lock of his hair.. [1][4], In 2011, Levine started writing about economics and finance for the financial news site Dealbreaker. Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. FTX made up the Serum token on there own. 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. 7. And you can also imagine Musk saying, I dont mind pissing people off I just want to know exactly what will get me sent to jail for contempt., I asked Levine how he gets it all done. I dont want to sell my Bitcoin, because I am a true believer and also do not want to realize gains for tax purposes. Then it is not a liquidity crisis but a solvency one dollars or! Columnist for Bloomberg Opinion: If you are worried about FTXs business then! Dont have his dollars, or not all of them ; half of are... My $ 20,000 of Bitcoin is plenty of excitement i was an investment banker one. That can be toggled by interacting with this icon you are worried about FTXs business then! 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