Judging Sam: Michael Lewis Talks Money with Matt Levine
Oct 18, 2023
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Matt Levine, a prominent business columnist at Bloomberg News and author of the insightful newsletter "Money Stuff," joins the discussion with Michael. They delve into the chaotic world of cryptocurrencies and the infamous FTX scandal, exploring the perplexing case of Sam Bankman-Fried. The conversation highlights the emotional impact of fraud on victims and the challenges of accountability in finance. Levine also reflects on his unconventional career path and the discrepancies in crypto ideals versus traditional finance, making for an engaging and enlightening dialogue.
The podcast explores the contradictory narratives surrounding Sam Bankman-Freed, portraying him as both an innocent guy who made understandable mistakes and an evil genius who stole money for personal gain.
The podcast highlights the discrepancies between Sam Bankman-Freed's statements on risk management techniques and the actual losses incurred, shedding light on his cynical attitude towards different aspects of crypto finance.
Deep dives
The Enigmatic Personality of Sam Bankman-Freed and the Fraud Charges Against Him
The podcast episode delves into the personality and actions of Sam Bankman-Freed, the founder of FTX and Alameda Research, who is currently facing fraud charges. The episode discusses the contradictory narratives surrounding Sam, with one portraying him as an innocent guy who made understandable mistakes, and the other suggesting that he is an evil genius who stole money for personal gain. The podcast examines how these narratives intersect in the book about Sam's story, revealing a portrait of a person who takes extreme risks while convincing himself and others that they are safe. The episode explores how this behavior aligns with classic profiles of financial fraudsters. The emotional impact of Sam's trial and potential prison sentence is also discussed, highlighting the complex feelings of empathy and outrage towards his actions.
The Interactions with Sam Bankman-Freed
The podcast highlights the host's personal interactions with Sam Bankman-Freed, focusing on two specific podcast episodes. The first episode involved a discussion on crypto market structure, where Sam talked about risk management techniques at FTX and Alameda. This interaction is later presented as evidence in the trial, suggesting discrepancies between what Sam stated and the actual losses incurred. The second podcast episode tackles the topic of yield farming in decentralized finance, where Sam's description of the process is misconstrued as him confessing to running a Ponzi scheme. The episode explores the nuances and misunderstandings of these conversations, shedding light on Sam's cynical attitude towards different aspects of crypto finance.
Transition from Investment Banking to Writing
The podcast briefly delves into the host's transition from investment banking to writing. The decision to leave investment banking was driven by a waning interest in the sales aspect of the job and a desire to pursue a writing career. The host shares the path taken from being an M&A lawyer to an investment banker, and eventually a writer. The conversation touches on how the host's initial negative view of economics in college eventually evolved into an appreciation for financial markets during law school, leading to a career shift.
Unanswered Questions and Anticipating Sam's Testimony
The podcast raises questions that remain unanswered in the FTX case, such as the extent of the missing funds and their potential recovery. Theories are discussed, including the possibility of funds being lost through bad trades, political donations, or real estate investments. The episode also anticipates Sam Bankman-Freed's testimony, expecting him to present an internally coherent narrative and address moderately challenging questions. The potential reopening of FTX under bankruptcy proceedings is also mentioned, with the uncertain outcome of recovering more than deposited funds. The podcast concludes by highlighting the ongoing pursuit of answers in the trial and the significance of Sam's role in shaping the story surrounding FTX.
Today on the show, Michael talks with Matt Levine, business columnist at Bloomberg News and author of the newsletter “Money Stuff.” Matt knows more about how crypto markets work than just about anyone else. And also about how they don’t work. Like when there’s a more than eight billion dollar hole nobody seems to have been able to fill. Matt and Michael talk trial, SBF and FTX.
This conversation was recorded at 2pm on October 17.
Questions for Michael? Submit them by clicking the link in our show notes or visiting atrpodcast.com
