Going Infinite: Thoughts about SBF, Crypto, and the Cult of Personality

 I have finished Going Infinite, Michael Lewis' book about Sam Bankman-Fried and the Rise and Fall of FTX.  A few thoughts:

Would you give this man 15 billion dollars?

1)  Bankman-Fried has been found guilty of seven counts of fraud, and I firmly believe the evidence is correct and that he is guilty.  What I don't know is if his intention was to actually steal the money or he was just so criminally reckless with the money that it's missing or taken by other people.  The book is full of stories about how little he paid attention to any sort of guardrails to protect the financial interests of either himself or the people around him.

2)  Lewis is a great writer. (he did a better job explaining the 2008 financial crisis to me than anyone else in his book The Big Short).  He also finds Bankman-Fried a fascinating character, and paints him in a better light than most people expect.  Lewis doesn't hide the facts, but when his opinion comes out, it is more favorable on Bankman-Fried than you would expect.

3)  Bankman-Fried comes across (in my own opinion) as an idiot savant.  He's brilliant, especially at lateral thinking.  But he's also incapable of empathy, and not only believes he is smart, but that there is no point listening to other people.  At one point in the book, when he talks about how outsiders want him to bring in a CFO (Chief Financial Officer), his quote from the book:

"There's a functional religion around the CFO," said Sam.  "I'll ask them, 'Why do I need one?'  Some people cannot articulate a single thing the CFO is supposed to do.  They'll say 'keep track of the money' or 'make projections.'  I'm like, What the fuck do you think I do all day?  You think I don't know how much money we have?"

I think we see how that turned out.

4)  Here's my big question:  Why the hell did so many people give this guy so much money?  He had investors giving him 15 billion dollars.  That's $15,000,000,000.00  

I get that he's smart.  Big deal- I know lots of smart people.  I wouldn't give them my life savings.  

This isn't a Theranos situation, where the company outright lied about what they were capable of doing.  I can understand investors falling for that.  But even after reading the book, I don't understand either what his business model was supposed to be, nor why would people trust that this reckless sociopath would be the place to invest.

I admit that I'm biased- I've gone from being a skeptic of Cryptocurrency to now believing it is a complete scam.  So when a company based around Cryptocurrency is found out to be guilty of fraud, it just reinforces my beliefs.  But obviously a lot of people trusted his company- and specifically, trusted him.  Investors have decided to investor in the founder, even though they've been burned so many times before.  You'd think that people who were responsible for other people's money would expect more safeguards than invest because they think the founder is the next Steve Jobs.

Sam Bankman-Fried is an odd character; I enjoyed the book Michael Lewis wrote about him.  But I'm glad I never invested a dime in him- and I don't understand why others did.

 

The Big Short

One of the books I received this Christmas was Michael Lewis' book The Big Short.  I actually think this is one of the most important books of the last decade, and it was made into a movie.  Which, for a book about esoteric financial transactions, is pretty amazing.

The book does a great job describing what the hell happened in the 2008 financial crisis, better than anything else I have read or seen.  I'd really recommend seeing the movie or reading the book, but if you want my interpretation (which is like asking a child to describe the Mona Lisa), it's this:

We encouraged a bunch of people to buy houses they couldn't afford with financial gimmicks (subprime mortgages).  Then the banks repackages these as bonds, used tricks to make the bonds seem a lot more secure on paper than they actually were, and ended up being so leveraged that when the housing market collapsed, it took down a large number of banks.  

I'm still not sure what amount of this was criminal and what percentage was just blind stupidity.  I think it's mainly stupidity; the banks told themselves that the housing market never fell that badly, so they basically bet everything that it never would.  

I'm a capitalist by nature, and still reading about this both shocks and angers me.  Shocks me in that these banks could be so blind that they didn't realize what they were doing;  angers me in that I'm still not sure they learned their lesson.

Money

George Will wrote a column over 20 years ago that we should redo who we honor on money.  I think this is a fantastic idea.

Look- who's on the coins and bills of today?  Politicians.  Why?  We're the United States!  We mock politicians!  Besides, I hate any idea that puts politicians on a pedestal above citizens.  Yes, we've had some great leaders.  But there are far greater things in the United States than who get elected to what office.

So I'm offering my suggestion for the bills- who should be honored on each of the denominations:


$1.00 bill (Current:  George Washington).  George Washington.  Just because I want to reduce the number of politicians on our currency doesn't mean we should get rid of them altogether.  In addition to being the Father of our Country and the First President, Washington was also a great general.

$2.00 bill (Current:  Thomas Jefferson).  Norman Borlaug.  Not many people use the $2.00 bill, and not many people have heard of Norman Borlaug.  Borlaug's research into agriculture may have saved a billion lives.  He should be celebrated.

$5.00 bill (Current:  Abraham Lincoln)   Abraham Lincoln.  Still keeping the President who kept the country together.  Washington and Lincoln are the only elected officials that I'm keeping (but I'm keeping one more person)

$10.00 bill (Current:  Alexander Hamilton)  Jackie Robinson.  Americans are obsessed about sports.  I think I could argue that half the bills should have towering sports figures, from Babe Ruth to Jim Thorpe to Michael Jordan.  But the $10.00 bill is popular, and Robinson represents the best in the United States- both as an athlete and as a person.

$20.00 bill (Current:  Andrew Jackson)  Mark Twain.   Father of American literature.  "Huckleberry Finn" and "Tom Sawyer" remain classics. 

$50.00 bill (Current:  U.S. Grant)  Neil Armstrong.   There are a lot of choices to honor the scientists, inventors, and explorers- Thomas Edison, the Wright Brothers, Alexander Graham Bell.  But the Moon Landing is one of our greatest achievements, and should be celebrated.

$100.00 bill (Current:  Benjamin Franklin)  Benjamin Franklin.  I'm keeping Franklin, because he was so much more than a politician.  Inventor, writer, diplomat. 

They don't make any bills over $100.00 anymore.  But I'd like to bring back two bills, especially because prices keep rising and we might need them soon.


$500.00 bill (Formerly:  William McKinely)  Lucille Ball.  Americans love their entertainers.  And I can come up with several nominees (Frank Sinatra, Elvis Presley, Bob Hope, etc.).  Ms. Ball a star on stage, radio, and television- she can hold her own with anyone else on this platform. 


$1000.00 bill (Formerly:  Grover Cleveland)  I would like to nominate Andrew Carnegie for the $1000.00 bill, because I believe we should honor both the industrialists and the philanthropists.  And having a steel magnate on the highest currency seems appropriate.

 Thoughts and suggestions for other nominees welcomed.