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Makes some sense. When stuff is messy, you can do financially stupid things. I've sat on desks that lost money from not realizing some very simple things like h

Makes some sense. When stuff is messy, you can do financially stupid things. I've sat on desks that lost money from not realizing some very simple things like having options with upcoming dividends. If SBF really was on drugs and playing League of Legends badly, perhaps he also didn't know what was happening in his shop. But... you have all this money. Hire an adult? Almost anyone who's had a trading desk job would tell you to clean up. You don't need to have much experience to do this part, just get one of your friends that you must know from the business? Also, WTF would this say about Ontario Teachers' Pension Fund or Sequioa if the whole team was on drugs, playing games all day, and having no idea what their balance sheet looks like? I actually got Ontario into a fund I was at, and we'd have lost the investment if we hadn't behaved like adults. This is causing me some cognitive dissonance, because I don't think of the investors as the kind of people who'd even smile if they found me in the office playing a video game, let alone addled on drugs. Also about the market making strats not working anymore, I don't see why they'd even need it. Once the exchange is jump started and you have WM/Jump/JS on board, there's MMs on the platform and it feeds itself. Just keep marketing running. Hand out some FTT or something to retail. Do silly advertisements. Just turn off the algo that doesn't work.

wikfwikf 4y ago
The Ontario Teachers' investment is outrageous. They are charging middle-class people (by definition) good money from their retirement savings to make reasonable investing decisions and do due diligence.
- thablackbull 4y ago
  OTPP has quite a solid reputation and this particular investment was a miniscule speculative bet. You can see the performance over time here [1]. [1] https://www.otpp.com/en-ca/investments/our-advantage/our-performance-and-track-record/ https://www.otpp.com/en-ca/investments/our-advantage/our-per...
  - wikfwikf 4y ago
    It's not about performance or risk management, it's about due diligence. They should not be giving any amount of money to an organization with such poor internal checks of their finances.
    - pigtailgirl 4y ago
      --if you made an investment based on audited books but the books were still cooked - what more can you do? - audit the auditer maybe - at some point you have to trust the books --
      - wikfwikf 4y ago
        What if you made an investment based on not seeing any books, there not being any reliable guide as to the company's liabilities, seen or unseen, and not being aware of any regulation or oversight preventing fraud and/or blowing up? But you had a good feeling about the company's hype and the CEO seemed like a nice young man with main character energy? If the company turns out to be a fraud and the investment worthless, are you still entitled to say "nobody could have known" and "only 1 in 10 has to be a winner"?
    - mbesto 4y ago
      I'm sorry but thats not how it works. This investment was made out of their venture fund which deliberately makes risky bets, but is a small amount of the overall pie. OTPP is fine and is going to produce returns which are favorable, let's stop with the hyperbole.
  - origin_path 4y ago
    How do you know there aren't many other bets like this on their sheets?
    - kasey_junk 4y ago
      They are quite open about their investments: https://www.otpp.com/en-ca/investments/our-investments/ https://www.otpp.com/en-ca/investments/our-investments/ Here are the other bets in their venture category: https://www.otpp.com/en-ca/investments/our-investments/teachers-venture-growth/#portfolio https://www.otpp.com/en-ca/investments/our-investments/teach...
- andromeduck 4y ago
  They have 220B AUM.
  - wikfwikf 4y ago
    Canadian teachers and retired teachers have $220b, which they paid into the plan from their not particularly opulent pay packets. Nearly $100m was given to a company based in a regulatory haven, which does not know to within $5bn how much money it has, and which was able to steal from its customers without any oversight. Ontario Teachers were an anchor investor in a round which lots of less clueless people must have passed on. Not sure why you think this is ok.
    - fatneckbeardz 4y ago
      an enormous amount of our economy is based off gaslighting and manipulation they can blur the line between honest mistake, gross negligence, nepotism, corruption, and thievery, enough that people who will applaud beating up a shoplifter for taking 20 dollars of junk will say "oh but they have nice suits and went to Stanford" about someone who gave 75 million dollars for magic beans.
    - sebzim4500 4y ago
      They accepted the risk of losing $100m because they thought there was a significant chance of getting a much bigger return. Obviously in this case the bet didn't pay off, but putting 0.05% of the AUM in a high risk investment is hardly a scandal.
      - pigtailgirl 4y ago
        -- also it was out of their early stage fund - the vast majority of their money is in traditional investments - don't understand why everyone is so up in arms - they really think they know better than the most successful investment group in Canada? --
        wikfwikf 4y ago
kasey_junk 4y ago
I’m no expert in the space but was under the impression FTX was still considered a low volume exchange. If Alameda mm was still providing substantial volume they may have felt the price they were paying being bad at trading was worth it from a marketing point of view. This was the same crew buying stadium naming rights and over paying for eSports teams. As for hiring an adult, have you seen some of the things they’ve said in public? They thought the adults were wrong! Like on a mathematical level. People that far into their own cult-think don’t want outside help. Finally, the Ontario Teachers thing feels extremely overblown. They put in 75m of ~220b aum. That’s a minuscule investment in a category that was clearly part of their highly speculative book. I think people keep bringing it up for the “think of the teachers!” benefit, but of a pension fund doesn’t have some outsized return opportunities on their book they’ll not be able to cover their outflows under certain future economic scenarios.
- tpxl 4y ago
  > FTX was still considered a low volume exchange According to a random source, they moved volume on the order of 500 billion. Transaction fees of 0.1% for 500 billion is a lot of million to keep the lights on.
  - anonymoushn 4y ago
    For a maker and taker with best fees, the exchange only made 0.5bps, not 10bps. We happen to know that top rebates were pretty hard to achieve though, so most volume probably paid at least a couple more tenths of a basis point.
    - blitzar 4y ago
      > According to a random source, they moved volume on the order of 500 billion. According to FTX, the entire market moved 250 billion including derivatives of which they were 13 billion https://ftx.com/volume-monitor https://ftx.com/volume-monitor
      - anonymoushn 4y ago
jsemrau 4y ago
>If SBF really was on drugs and playing League of Legends badly, perhaps he also didn't know what was happening in his shop You can be drunk by your own success. Without a voice of reason or an adult in the room (like sheryl sandberg) that can be quickly deadly.
SkyMarshal 4y ago
> I actually got Ontario into a fund I was at, and we'd have lost the investment if we hadn't behaved like adults. This is causing me some cognitive dissonance, because I don't think of the investors as the kind of people who'd even smile if they found me in the office playing a video game, let alone addled on drugs. They might been starstruck by Sequoia more than SBF and his team, and just gone along for a ride with the most storied VC firm in the world.

wikfwikf 4y ago

The Ontario Teachers' investment is outrageous. They are charging middle-class people (by definition) good money from their retirement savings to make reasonable investing decisions and do due diligence.

thablackbull 4y ago
OTPP has quite a solid reputation and this particular investment was a miniscule speculative bet. You can see the performance over time here [1]. [1] https://www.otpp.com/en-ca/investments/our-advantage/our-performance-and-track-record/ https://www.otpp.com/en-ca/investments/our-advantage/our-per...
- wikfwikf 4y ago
  It's not about performance or risk management, it's about due diligence. They should not be giving any amount of money to an organization with such poor internal checks of their finances.
  - pigtailgirl 4y ago
    --if you made an investment based on audited books but the books were still cooked - what more can you do? - audit the auditer maybe - at some point you have to trust the books --
    - wikfwikf 4y ago
      What if you made an investment based on not seeing any books, there not being any reliable guide as to the company's liabilities, seen or unseen, and not being aware of any regulation or oversight preventing fraud and/or blowing up? But you had a good feeling about the company's hype and the CEO seemed like a nice young man with main character energy? If the company turns out to be a fraud and the investment worthless, are you still entitled to say "nobody could have known" and "only 1 in 10 has to be a winner"?
  - mbesto 4y ago
    I'm sorry but thats not how it works. This investment was made out of their venture fund which deliberately makes risky bets, but is a small amount of the overall pie. OTPP is fine and is going to produce returns which are favorable, let's stop with the hyperbole.
- origin_path 4y ago
  How do you know there aren't many other bets like this on their sheets?
  - kasey_junk 4y ago
    They are quite open about their investments: https://www.otpp.com/en-ca/investments/our-investments/ https://www.otpp.com/en-ca/investments/our-investments/ Here are the other bets in their venture category: https://www.otpp.com/en-ca/investments/our-investments/teachers-venture-growth/#portfolio https://www.otpp.com/en-ca/investments/our-investments/teach...
andromeduck 4y ago
They have 220B AUM.
- wikfwikf 4y ago
  Canadian teachers and retired teachers have $220b, which they paid into the plan from their not particularly opulent pay packets. Nearly $100m was given to a company based in a regulatory haven, which does not know to within $5bn how much money it has, and which was able to steal from its customers without any oversight. Ontario Teachers were an anchor investor in a round which lots of less clueless people must have passed on. Not sure why you think this is ok.
  - fatneckbeardz 4y ago
    an enormous amount of our economy is based off gaslighting and manipulation they can blur the line between honest mistake, gross negligence, nepotism, corruption, and thievery, enough that people who will applaud beating up a shoplifter for taking 20 dollars of junk will say "oh but they have nice suits and went to Stanford" about someone who gave 75 million dollars for magic beans.
  - sebzim4500 4y ago
    They accepted the risk of losing $100m because they thought there was a significant chance of getting a much bigger return. Obviously in this case the bet didn't pay off, but putting 0.05% of the AUM in a high risk investment is hardly a scandal.
    - pigtailgirl 4y ago
      -- also it was out of their early stage fund - the vast majority of their money is in traditional investments - don't understand why everyone is so up in arms - they really think they know better than the most successful investment group in Canada? --
      - wikfwikf 4y ago

kasey_junk 4y ago

I’m no expert in the space but was under the impression FTX was still considered a low volume exchange. If Alameda mm was still providing substantial volume they may have felt the price they were paying being bad at trading was worth it from a marketing point of view. This was the same crew buying stadium naming rights and over paying for eSports teams. As for hiring an adult, have you seen some of the things they’ve said in public? They thought the adults were wrong! Like on a mathematical level. People that far into their own cult-think don’t want outside help. Finally, the Ontario Teachers thing feels extremely overblown. They put in 75m of ~220b aum. That’s a minuscule investment in a category that was clearly part of their highly speculative book. I think people keep bringing it up for the “think of the teachers!” benefit, but of a pension fund doesn’t have some outsized return opportunities on their book they’ll not be able to cover their outflows under certain future economic scenarios.

tpxl 4y ago
> FTX was still considered a low volume exchange According to a random source, they moved volume on the order of 500 billion. Transaction fees of 0.1% for 500 billion is a lot of million to keep the lights on.
- anonymoushn 4y ago
  For a maker and taker with best fees, the exchange only made 0.5bps, not 10bps. We happen to know that top rebates were pretty hard to achieve though, so most volume probably paid at least a couple more tenths of a basis point.
  - blitzar 4y ago
    > According to a random source, they moved volume on the order of 500 billion. According to FTX, the entire market moved 250 billion including derivatives of which they were 13 billion https://ftx.com/volume-monitor https://ftx.com/volume-monitor
    - anonymoushn 4y ago

jsemrau 4y ago

>If SBF really was on drugs and playing League of Legends badly, perhaps he also didn't know what was happening in his shop You can be drunk by your own success. Without a voice of reason or an adult in the room (like sheryl sandberg) that can be quickly deadly.

SkyMarshal 4y ago

> I actually got Ontario into a fund I was at, and we'd have lost the investment if we hadn't behaved like adults. This is causing me some cognitive dissonance, because I don't think of the investors as the kind of people who'd even smile if they found me in the office playing a video game, let alone addled on drugs. They might been starstruck by Sequoia more than SBF and his team, and just gone along for a ride with the most storied VC firm in the world.