Business/Markets/Stocks/Economics Random, Random

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[MJ2004]

Lol

[MJ2004]

Doing a stellar job of exemplifying the absurdity of the situation.

[ponchi101]

P2/L

...

Absolutely hysterical, in view that Buffet has been extremely vocal that crypto holds no value and is a scheme.

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[ponchi101]

And the Miami Heat naively announce that they have cancelled their agreement with FTX for the naming rights of their arena.
Nope. When the company disappears and can no longer pay you, THEY cancelled the deal.
Wonder how the Lakers/Clippers are feeling about that Crypto.com deal.

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More on FTX which will leave you shaking your head.

Investors Who Put $2 Billion Into FTX Face Scrutiny, Too
Venture capital firms and investment funds showered the failed crypto exchange and its founder with money. There were few strings attached.


Sam Bankman-Fried, FTX’s founder, once told interested investors to “support him and observe.” Credit...Erika P. Rodriguez for The New York Times
By Erin Griffith and David Yaffe-Bellany
Erin Griffith reports on start-ups and Silicon Valley, and David Yaffe-Bellany reports on crypto.

Nov. 11, 2022

Sam Bankman-Fried’s pitch to investors was not much of a pitch: It was a take-it-or-leave-it offer.

In meetings to raise money for his cryptocurrency exchange FTX over the last year, the entrepreneur left little room for negotiation, two investors said. FTX was his company, Mr. Bankman-Fried told them, and he planned to run it with little oversight. Interested investors should “support him and observe,” one investor who heard the pitch said.

They responded by giving him $500 million early this year, valuing the privately held FTX at $32 billion.

This week, Mr. Bankman-Fried met with investors again — but with a different tone. FTX had collapsed overnight, putting billions of dollars in customer funds in jeopardy, setting off a slew of government investigations and thrusting the crypto markets into chaos. He was sorry, he said. He had messed up. Without a bailout, FTX could fail.

It was a humbling fall for Mr. Bankman-Fried, 30, who had cultivated a reputation as an iconoclastic wunderkind who could multitask effortlessly and slept on a beanbag at the office. Yet more than 80 investors went along with his vision, pouring nearly $2 billion into FTX in just two years.

Now investors are under scrutiny, too, for enabling Mr. Bankman-Fried with so little oversight. It was the most dramatic example in recent history of what happens when so-called visionary founders are given lots of money with few strings attached.

The events showed that even the top investors — whose money in FTX has vaporized — can wildly miss the mark, said Kevin Werbach, a professor of business at the Wharton School of the University of Pennsylvania.

“You can look like a genius making successful big bets,” he said, “but sooner or later you’ll crash spectacularly if you weren’t doing real diligence.”

On Friday, FTX, facing a cash shortfall of $8 billion and scrambling to drum up money, filed for bankruptcy. Mr. Bankman-Fried resigned as chief executive. The Justice Department and the Securities and Exchange Commission are examining whether FTX improperly used customer funds to prop up a separate trading firm, Alameda Research, which Mr. Bankman-Fried also founded.

FTX’s list of investors spans powerful and well-known investment firms: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Sequoia Capital, SoftBank, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo.

Some of FTX’s investors declined to comment or did not respond to requests.

Four FTX investors, who declined to be identified, said they were shocked by the company’s sudden collapse. They said they had properly researched the company’s financials, which showed a healthy, growing business that provided an easy-to-use platform for people to buy, sell and store crypto. And they were completely in the dark about FTX’s possible self-dealing with Alameda, they said.

Investing in FTX gave them a piece of the hottest start-up in an emerging sector that promised to be as big as smartphone apps or the internet itself. Many investors had trumpeted their support of the deal. Sequoia even published a glowing profile of Mr. Bankman-Fried to its website.

Now the deal represents a major black eye.

Paradigm, a crypto-focused venture fund that put $278 million into FTX, told its own backers in a letter on Wednesday that the investment was likely worthless. Sequoia said in a statement that it valued its $213 million investment in FTX at $0. The venture capital arm of the Ontario Teachers’ Pension Plan, which put $95 million into FTX, said in a statement, “Not all of the investments in this early-stage asset class perform to expectations.”

FTX’s lack of oversight also left investors out of the loop about what happened this week as Mr. Bankman-Fried tried to find a last-minute bailout.

“The full nature and extent of this risk is not known at this time,” Sequoia wrote. FTX’s liquidity shortfall “will take many months to fully understand,” Paradigm said.

Mr. Bankman-Fried, who did not immediately respond to a request for comment, had never made it a secret that he thumbed his nose at tradition.

In an interview with The New York Times in April, Ramnik Arora, one of FTX’s top executives, described a video meeting last year between Mr. Bankman-Fried and partners at a top venture firm. In the meeting, Mr. Bankman-Fried delivered a well-received presentation while simultaneously playing a video game.

“The entire partner meeting, he was playing League of Legends at the same time,” Mr. Arora said.

Before another investor meeting, Mr. Arora said, the investors asked Mr. Bankman-Fried to put together a slide deck. The entrepreneur threw the presentation together in about a couple of hours.

“There’s no formatting anywhere, fonts are everywhere,” Mr. Arora said. “You can just feel discomfort — both sides — because the investors are like, ‘How the hell are we being shown a deck that clearly no one spent any time on?’”

Still, investors weren’t offended. For years, they had been loosening deal-making practices that gave them control over a company and protected their investments. It was a way to get into the best deals as money from all over the world flooded into high-growth start-ups. Last year’s overlapping investment manias in cryptocurrencies, equities and start-up valuations intensified the trend.

Some of FTX’s investors viewed the company as a way to dip a toe in cryptocurrency investing without buying volatile tokens. Others saw FTX as a safer bet than Binance, one of the largest crypto exchanges, since FTX had pushed to establish a regulatory regime in Washington while Binance has come under fire for its secrecy and for skirting financial regulations around the world.

Above all, the investors emphasized that venture capital is designed to take big risks that often fail.

But even by 2021’s frothy standards, Mr. Bankman-Fried’s latitude from investors was extreme. Despite raising $2 billion, he remained the majority owner of the company. No investors joined FTX’s board of directors, which was made up of Mr. Bankman-Fried, an FTX employee and a lawyer. (An advisory board of investors had no functional control over the company.) The company did not tell investors the nature of its business with Alameda Research, Mr. Bankman-Fried’s separate crypto trading operation.

Mr. Bankman-Fried was so averse to outside input that investors who dared suggest that a more experienced executive run the company were likely to be shut out of future rounds of funding, one investor said.

In an April interview with Bloomberg, Mr. Bankman-Fried accused venture capital investors of doing deals based on a fear of missing out, rather than financial models. “Like all the models are made up, right?” he said.

In return, investors showered Mr. Bankman-Fried with fawning praise. Orlando Bravo, whose firm, Thoma Bravo, invested $150 million into FTX, said at a conference in September that, despite his misgivings about the overall crypto industry, he believed Mr. Bankman-Fried was “one of the best entrepreneurs” he had met.

The Sequoia profile explained that Mr. Bankman-Fried “lives his life by a calculus of altruistic impact.” During a video call with the FTX founder, the profile said, Sequoia’s partners commented excitedly to one another in the chat. “I LOVE THIS FOUNDER,” one partner wrote.

This week, Sequoia replaced the article with an update. “A liquidity crunch has created solvency risk for FTX and its future is uncertain,” it said.

At the end of Mr. Bankman-Fried’s call with investors this week, several accused him of hiding details of FTX’s dealings with Alameda Research and asked for more information, a person on the call said. He sidestepped the questions and ended the conversation.

https://www.nytimes.com/2022/11/11/tech ... pital.html

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They'll be making a movie about this mess in two years.

[ponchi101]

No. They will make a SERIES, because BTCN is below $17K, and people are still clinging to this mirage.
It will take a bit longer; but there is something that needs to be done. ALL the governments in the world must make it clear that these people (the crytpo promoters) MUST not be bailed out.

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Europe Braces for Recession as Economies Falter
Britain’s economic output fell in the third quarter and European Union officials forecast weakening growth for countries across the continent.


Britain saw its highest annual rate of inflation in 40 years in September, and prices are expected to rise even more before peaking.Credit...Sam Bush for The New York Times

By Patricia Cohen and Melissa Eddy
Patricia Cohen reported from London and Melissa Eddy from Berlin.

Nov. 11, 2022
The ride down may be shallow or steep, but either way, the European Union and Britain could be starting to slide into recession.

The British economy shrank 0.2 percent over July, August and September compared with the previous three months, the Office for National Statistics reported on Friday. It was a decline that is expected to continue and spread to the continent by the end of the year.

Many countries are likely to enter a recession in the last three months of 2022, Paolo Gentiloni, the European Union’s commissioner for the economy, said on Friday. “The E.U. economy is at a turning point,” he said. “Recent survey data points to a contraction for the winter.”

But while central bankers in Britain have warned of a “prolonged” recession lasting up to two years, the European Union predicted that the 27 member-bloc would face a “short-lived and not excessively deep” one.

Indeed, Mr. Gentiloni said he expected the union to end 2022 with better-than-expected 3.3 percent growth, although that total is likely to significantly weaken next year, to just 0.3 percent.

The divergent outlooks illustrate how the economic fallout from the pandemic and the Russian invasion of Ukraine is having an uneven impact on the region’s smorgasbord of countries.

Britain and the Europe Union are suffering from the twin plagues of rising inflation and slowing or declining growth. The war and retaliatory sanctions against Russia, one of the world’s biggest energy and grain producers, have caused global fuel, food and fertilizer prices to soar. Supply chain disruptions rooted in the pandemic and continuing Covid-19 lockdowns in China — most recently in the manufacturing hub of Guangzhou — have added to the pile of economic problems, as have climate-related disasters.

In Germany, Europe’s largest economy, the annual inflation rate, according to one measure, reached 10.4 percent in October. In Britain, inflation hit 10.1 percent in September, the highest level in 40 years, and is expected to rise even more before peaking. Call-in radio talk shows on the BBC are dominated by people who are anxious about being able to afford to heat and light their homes.

“There is a tough road ahead,” Jeremy Hunt, the chancellor of the Exchequer, declared on Friday, “one which will require extremely difficult decision to restore confidence and economic stability.”

The national statistics office’s preliminary estimates showed that the slowdown in Britain was broad — including the production and services sectors — and meant that the country’s gross domestic product, or total output, remained below its prepandemic level. The drop-off was particularly sharp in September, down 0.6 percent from the previous month, although that number was affected by the death of Queen Elizabeth II, which prompted widespread, unplanned business closures.

The quarterly contraction was less than expected — economists surveyed by Bloomberg had expected a 0.5 percent decline — and after the announcement, 10-year British government bond yields briefly dropped before rising somewhat to 3.33 percent.

A recession is traditionally defined as several months of a significant decline in economic activity.

The Bank of England has emphasized its determination to halt inflation’s upward march by raising interest rates even at the risk of throwing the economy into a recession, although it has signaled that it is unlikely to raise rates as high as traders had expected. Last week, the bank again lifted its key rate, and predicted that the British economy would contract in the second half of this year and continue to shrink until the middle of 2024.

Higher interest rates, which make borrowing money for mortgages and investments more expensive, curb spending by both businesses and consumers and can increase unemployment.

Yet Britain’s economy is also suffering from a series of self-inflicted wounds by the governing Conservative Party. A widely criticized economic plan that Liz Truss, the prime minister at the time, proposed in September, and that included steep, unfunded tax cuts and big spending increases to help households afford rising energy bills, sent financial markets into a tizzy.

The political and economic instability that ensued resulted in a stunning policy reversal and Ms. Truss’s resignation. Rishi Sunak, the new prime minister, and Mr. Hunt are scheduled to announce their economic game plan next week, and it is expected to include tax increases, spending cuts and debt reduction.

The package “will reinforce Britain’s grim economic outlook,” Pantheon Macroeconomics predicted.

There is also wide agreement among economists and analysts that Britain’s decision to leave the European Union in 2016 was a major and long-lasting blow to its economy.

Very few countries in the European Union are expected to fall into the negative growth range next year, but the outlook for Germany, which has been hit hard by the loss of Russian pipeline gas, is grim. The European Union estimates that its economy will shrink 0.6 percent in 2023.

Across Europe, inflation is expected to persist at higher levels than previously forecast. A strong labor market remains what Mr. Gentiloni called “a bright spot.”

The picture is darker in Britain, where long-term illnesses are keeping roughly 2.5 million people out of the work force, leaving employment below what it was before the pandemic.

Across London, Christmas lights are going up, but throughout the country fewer consumers visited shopping centers and main streets last week than in the previous week, the statistics office reported. Consumer confidence is hovering near record lows, while businesses are reporting a decline in orders. The number of people looking to buy a house dropped last month as mortgage rates rose.

“The U.K. economy has slipped to the back of the G7 pack again,” Pantheon wrote in its daily newsletter, referring to a group of some of the world’s biggest advanced economies.

https://www.nytimes.com/2022/11/11/busi ... ssion.html

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your #1 source for absurdist true crime
@davidgerard
ya know, most zillionaires like to keep it on the down low, they don't seek out publicity. any time you hear about these guys, it's marketing. they want you to think they're Steve Jobs. for some reason they keep turning out to be Elizabeth Holmes. I wonder why that is.

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