4 ms·

"Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works!

by jpm_sd 4y ago

"Its balance sheet consisted mostly of stuff it made up! Stuff it made up! You can’t do that! That’s not how balance sheets work! That’s not how anything works!" I'm picturing Matt Levine being carted away by nice men in white coats after finishing this paragraph

bena 4y ago
Now, I'm not a money scientist or anything, but I really feel as if Sam Bankman-Fried could have picked up a book or two on accounting or how to manage a balance sheet before proclaiming himself a money genius.
- bewaretheirs 4y ago
  Unfortunately nobody has distilled accounting into a series of six-paragraph blog posts. (see https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lost-16-billion-would-never-read-a-book/ https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lo...) “I’m very skeptical of books. I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that,” explains SBF. “I think, if you wrote a book, you fucked up, and it should have been a six-paragraph blog post.”
  - baxtr 4y ago
    I think that’s a bullshit quote. He actually said it but I think he understood how to stir the pot: but being eccentric and controversial.
  - whimsicalism 4y ago
    Guess he is saying his parents (both authors) fucked up in more than the obvious way.
  - Scoundreller 4y ago
    As someone that has probably read less than 10 fictional books in their life, I can see where he’s coming from. Like, I’m literate and basically read stuff all day. And I can get through a textbook as a part of a course, but force me to read a novel and by page 7 I’m falling asleep and losing track of the characters. I’m on the fence about borrowing/buying a book that was based on a podcast series because I fear 90% of what it covered was in the podcast.
  - mem0r1 4y ago
    Just wondering how this guy finished his MIT Physics undergrad studies without reading a book ? LOL
  - d11z 4y ago
    I believe that he said and thinks that way, but I can't quite put my finger on why I feel so convinced...
- cma 4y ago
  He says in the Sequoia hagiography he never would read a book.
  - bena 4y ago
    Yes. Yes. That's the joke here. That the guy who decried traditional forms of communicating information and styled himself as some sort of nu-genius philanthropist was hoisted by his own petard. That if he had even a fraction of the intelligence he thought he had he would have realized that he didn't have nearly the knowledge needed to do what he claimed he would do. His books are a mess because he had no idea of how to organize them.
- swarnie 4y ago
  Why waste the time? The scam clearly worked without all the effort.
- lazide 4y ago
  Why do you think he would want to? If he didn’t want to be doing criminal things, he has plenty of means and opportunity to do them non-criminally.
baxtr 4y ago
Anything but I fear. For Levine these kind of stories are pure fun to dissect. I can wholeheartedly recommend his Newsletter. Not the first one being so funny.
bmitc 4y ago
I made a comment elsewhere about the balance sheet. When I looked at it, it indeed looked like something Sam Bankman-Fried just typed into Excel on the weekend of their emergency meeting. How in the world is a balance sheet not a report that is generated by a system, viewable by any executive? Did they not have a CFO or any finance people or accountants?
- ericd 4y ago
  You might be surprised at the percentage of the business world that is run on spreadsheets.
  - bmitc 4y ago
    I’m not surprised by spreadsheets at all. They’re extremely powerful, and I know they’re used heavily. But this was clearly a document just basically made up by the CEO on the spot.
    - jiggawatts 4y ago
      Excel and Google Sheets can both be connected to data via APIs. Click a little refresh button and it'll pull in the latest data, run the formulas, and update all the sums and charts. This stuff goes back to the 1990s, and I've seen non-tech-literate secretaries set it up. It can be as simple as dumping CSV files to a file share and just loading that into a worksheet or two. The fact that a company managing billions of dollars couldn't even do this much is very, very telling.
- robryan 4y ago
  I was thinking about this. A chartiable explaination would be that individual companies in the group have proper balance sheets but there was no nice collation of just the material assets of the whole group.
  - lazide 4y ago
    For many businesses, such a thing isn’t really possible anyway (without manually maintaining a bunch of excel sheets for instance). A lot of large important things are done by a couple of folks poking and prodding and spreadsheets, then making decisions.

by jpm_sd 4y ago

bena 4y ago

Now, I'm not a money scientist or anything, but I really feel as if Sam Bankman-Fried could have picked up a book or two on accounting or how to manage a balance sheet before proclaiming himself a money genius.

bewaretheirs 4y ago
Unfortunately nobody has distilled accounting into a series of six-paragraph blog posts. (see https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lost-16-billion-would-never-read-a-book/ https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lo...) “I’m very skeptical of books. I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that,” explains SBF. “I think, if you wrote a book, you fucked up, and it should have been a six-paragraph blog post.”
- baxtr 4y ago
  I think that’s a bullshit quote. He actually said it but I think he understood how to stir the pot: but being eccentric and controversial.
- whimsicalism 4y ago
  Guess he is saying his parents (both authors) fucked up in more than the obvious way.
- Scoundreller 4y ago
  As someone that has probably read less than 10 fictional books in their life, I can see where he’s coming from. Like, I’m literate and basically read stuff all day. And I can get through a textbook as a part of a course, but force me to read a novel and by page 7 I’m falling asleep and losing track of the characters. I’m on the fence about borrowing/buying a book that was based on a podcast series because I fear 90% of what it covered was in the podcast.
- mem0r1 4y ago
  Just wondering how this guy finished his MIT Physics undergrad studies without reading a book ? LOL
- d11z 4y ago
  I believe that he said and thinks that way, but I can't quite put my finger on why I feel so convinced...
cma 4y ago
He says in the Sequoia hagiography he never would read a book.
- bena 4y ago
  Yes. Yes. That's the joke here. That the guy who decried traditional forms of communicating information and styled himself as some sort of nu-genius philanthropist was hoisted by his own petard. That if he had even a fraction of the intelligence he thought he had he would have realized that he didn't have nearly the knowledge needed to do what he claimed he would do. His books are a mess because he had no idea of how to organize them.
swarnie 4y ago
Why waste the time? The scam clearly worked without all the effort.
lazide 4y ago
Why do you think he would want to? If he didn’t want to be doing criminal things, he has plenty of means and opportunity to do them non-criminally.

baxtr 4y ago

Anything but I fear. For Levine these kind of stories are pure fun to dissect. I can wholeheartedly recommend his Newsletter. Not the first one being so funny.

bmitc 4y ago

I made a comment elsewhere about the balance sheet. When I looked at it, it indeed looked like something Sam Bankman-Fried just typed into Excel on the weekend of their emergency meeting. How in the world is a balance sheet not a report that is generated by a system, viewable by any executive? Did they not have a CFO or any finance people or accountants?

ericd 4y ago
You might be surprised at the percentage of the business world that is run on spreadsheets.
- bmitc 4y ago
  I’m not surprised by spreadsheets at all. They’re extremely powerful, and I know they’re used heavily. But this was clearly a document just basically made up by the CEO on the spot.
  - jiggawatts 4y ago
    Excel and Google Sheets can both be connected to data via APIs. Click a little refresh button and it'll pull in the latest data, run the formulas, and update all the sums and charts. This stuff goes back to the 1990s, and I've seen non-tech-literate secretaries set it up. It can be as simple as dumping CSV files to a file share and just loading that into a worksheet or two. The fact that a company managing billions of dollars couldn't even do this much is very, very telling.
robryan 4y ago
I was thinking about this. A chartiable explaination would be that individual companies in the group have proper balance sheets but there was no nice collation of just the material assets of the whole group.
- lazide 4y ago
  For many businesses, such a thing isn’t really possible anyway (without manually maintaining a bunch of excel sheets for instance). A lot of large important things are done by a couple of folks poking and prodding and spreadsheets, then making decisions.