We have a little tradition here at Chez Myers for Black Friday: we stay home, refuse to do any shopping, and god forbid we would be caught dead in a shopping mall. We have never seen the point of going into a frenzy of spending money just because it’s a day off, and because corporations have spent the past week dunning us with ads for “sales” that are really just them flogging the same old merchandise with greater intensity.
However, we’ve lacked a patron saint for this day. We haven’t had anything like a Santa Claus to represent the true spirit of Black Friday. We needed an icon of failed, lying, greedy capitalism run amuck, and what do you know, one has dropped into our lap.
Bankman-Fried had become a legend by pushing an image of monkish aloofness, vowing to forsake the allures of his extraordinary wealth — sleeping on beanbag chairs, driving a Toyota Corolla — and to give away his fortune for the greater good.
Yet in April, when Avedisian was hired as a master of ceremonies for a conference in the Bahamas sponsored by FTX, Bankman-Fried’s crypto exchange, she saw how the 30-year-old billionaire really lived: in a guarded island compound, every need closely catered to, the world’s elite at his beck and call.
That’s our boy. What better avatar of the spirit of the corporate world than a frumpy, disheveled, arrogant man-child who presents himself as a benevolent wise master, pretending to live a life of denial of the material world, while simultaneously indulging in the grossest excesses of greed and extravagant luxury?
Best of all, this month his lifestyle has undergone a magnificent pratfall, seeing billions of dollars evaporate, and reversing his image from wunderkind to poster child for incompetence.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” said Ray, who once oversaw the liquidation of Enron, one of America’s most infamous corporate frauds.
Poof, all gone. His Bahamian penthouse is on the chopping block, his island refuge is exposed as a shallow scam, his philosophical pretensions revealed to be a lie.
The odd behavior did not stop Bankman-Fried from building a brand as the volatile industry’s voice of reason. He’d been celebrated for pushing for crypto regulation on Capitol Hill, donating generously to pandemic-prevention efforts and Democratic politicians, and preaching a dogma known as “effective altruism” that used math and logic to determine where their donations could accomplish the most global good.
We can only hope his downfall cripples that “effective altruism” bullshit, too.
It’s also the case that SBF exposes the incompetence of investment bankers and venture capitalist. What brought him down was stupidity and greed and a lack of skill in running a big company — he was a cocky child handed a whole bunch of money by luck and persuasion, and he lost it all with the usual tawdry criminal failings. And he still has people fooled!
Pack said his firm declined to invest in Alameda after learning that Bankman-Fried had hidden $10 million in losses and planned to use their money to fund FTX, not Alameda, without telling them. The episode, he said, had many of the same issues that ultimately led to FTX’s bankruptcy: Bankman-Fried’s secrecy and deception about how money was spent; his cryptic messages and shoddy record-keeping; his excuses for losing clients’ funds.
“They were very brilliant traders. They made a lot of money … but they also lost it almost as fast as it came in,” he said. They had a “cold, emotionless, calculated approach to playing with other people’s money.”
Not brilliant at all. Give me $10 billion dollars and an indifference to the suffering of others, and I could throw it all away just as quickly by buying over-priced real estate and being stupid.
Sam Bankman-Fried is the perfect symbol of Black Friday: a dumpy, dead-eyed schlub wandering about in a vast, sterile penthouse, staring at a cell phone, going nowhere. The anti-Black Friday is sitting down in a home with your grandchild drawing and playing games and not spending a penny for the happiness of your existence. Maybe we’ll go outside later so she can ride her scooter around the block.
Elon Musk and Mark Zuckerberg are also runners-up for this distinguished symbolism. We have an embarrassment of idiots!
I don’t see why someone would pick the Bahamas as their luxurious base camp after seeing that monster Dorian park itself there.
I linked this article in the effective altruism post, but it belongs here too:
https://www.washingtonpost.com/technology/2022/11/17/effective-altruism-sam-bankman-fried-ftx-crypto/
I feel terrible for his grave misfortune, so I’ll happily show effective altruism and donate $50.00 in exchange for his island compound, provisional on it being capable of being sefl-sustaining for its new occupants.
Yeah, I’d happily make that offer right to his face.
Also from Alexandra Petri:
I’m staying home because not only do I have to work, but I also have to put in mandatory OT tonight, and on my Birthday too. Oh well, there’s always tomorrow… I only have to work two hours Saturday!
Bankman-Fried’s parents are both professors at Stanford Law School. They’re reported to have been part of the FTX associated buying of properties in the Bahamas. Barbara Fried is a co-founder of the Democratic Party oriented get out the vote charity Mind the Gap and author of the book Facing Up to Scarcity: The Logic and Limits of Nonconsequentialist Thought. Buying a fancy beachfront property in the Bahamas doesn’t sound like “facing up to scarcity” to me. Joseph Bankman is a specialist in tax law, and also has a degree in clinical psychology he’s used to counsel incoming Stanford Law students.
https://www.reuters.com/technology/exclusive-bankman-frieds-ftx-parents-bought-bahamas-property-worth-121-mln-2022-11-22/
Crypto-currency is just virtual Monopoly money and I’ve been saying that for over a decade. We used to have the silver standard, where money was backed by actual silver. There wasn’t enough silver to go around and the US government wanted to spend more money than it had. So now that $1 bill is worth one dollar’s bit of the country. Theoretically. That’s the written for a third grader version. Bitcoin on the other hand is backed by what? It’s a bunch of ones and zeros backed by literally NOTHING. It started to be worth something when people were pumping hundreds of thousands into bitcoin mining operations. End of the day, they just burned up a lot of energy and made video cards more expensive. A worthless waste of time.
@7: As a matter of fact the US dollar is backed, unlike cryptocurrencies, which are not.
The following assumes you are a US citizen subject to the laws of that country:
The backing for the US dollar is the legal requirement that US citizens must pay taxes only in that currency. If you try to pay in any other currency you will find it is not accepted, and if you try to avoid paying taxes you will find that the government has the right to put you in jail for that refusal.
There is also a law naming it and it alone as legal tender which must be accepted for payment of any debt. You can accept any other asset as payment for a debt owed to you if you wish, but you must accept US dollars in payment if they are offered.
The first is most important because it creates a need for everyone who pays taxes to get them some US dollars to pay those taxes. The US dollar and the US dollar alone has the power to pay off your tax obligations if you are a US citizen. You can of course sell some asset to get those dollars, but get them you must.
The same is true of any nation’s fiat currency for that nation.
Thankfully we don’t have “Black Friday”here in Oz ..
(See’s TV ad pushing Balck Friday sales – one of many today) .. Oh crap.
Yeah, another American import being increasingly pushed on us. Americanisation still a thing
I recommend the TV miniseries “Billionaire Boy’s Club (1987) about Joseph Henry Hunt, a rich young narcissist that throws away other people ‘s money and commits a murder when trying to avoid his downfall.
There is also a 2018 film based on the true events.
.
Narcissistic scum aggregate at the “upper” levels of business and politics.
I recall Sam Vimes’ summing it up as “scum floats to the top”. It was true in Ankh-Morpork, it is true here.
@8 That’s what I was saying. That $1 bill is worth $1 worth of the country. A microscopic fraction of all the public lands, all the roads, all the GDP, all the ships and planes and bombs in the military, and a ton of other things I can’t think of right now. Take the whole value of the USA and divide it into dollar bills and you won’t find a printing press big enough to print them. But that is how fiat currency works.
Now crypto could function as a fiat currency. There’s no reason it couldn’t. The Central African Republic is trying it out. Bitcoin is an official currency there. Personally I don’t think it’s a good idea. but I’m an American and I live in one of the wealthiest nations on Earth. We’ll see how it plays out.
@10
I always appreciate a good Pratchett reference.
Give Musk some relative credit: he’s managed to keep his private island compound with his emergency Earth escape capsule protected by a moat full of laser-equipped sharks on the down low so far.
drsteve @ 13
Naah. I will start the time machine from King Fury and bring in the laser raptors. The Muskie won’t stand a chance.
Between this dude, Musk, and Zuckerberg, had there ever been so much wealth squandered in what are, frankly, idiotic ways, in such a short period of time. And that doesn’t include the losses by those who invested in the products pushed by the 3 Amigos.
Maybe it should be “appreciate black people” day. I’ve been playing Ella Fitzgerald all morning and I’m boxing up a load of unused tech that I’m donating to a makerspace in the bronx.
Happy black friday!
Important word-use quibble @Ed Seedhouse: You’re right, up to your last sentence where you refer to all government-backed currencies generally as “fiat currencies.” A “fiat currency” is one in which either the government sets the prices of most or all goods and services by some sort of official fiat; or the government sets an official exchange rate for its currency relative to others by fiat. The Warsaw Pact countries tried to do those things back in the day, and it didn’t work all that well (for starters, there was a very lucrative and dangerous black market arising from the difference between official and actual exchange rates); and the rest of the world saw a huge difference between their fiat money and Western “hard currency.” (The USSR saw the difference too, which is why they did all sorts of things to get access to hard currency, which US cold-war-hawks constantly screamed about and tried to stop.)
After the USSR suffered its sudden massive existence failure, lots of people — mostly goldbuggers and libertarians — suddenly started using the phrase “fiat money” to mean ALL currencies not based on gold or other precious metals. It’s a serious misuse of the phrase, and it’s often done with intent to deceive or obfuscate. Not sure if that’s YOUR intent, but it’s incorrect.
This has been a public service message from your local grammar fuzz.
@Raging Bee: I never understood what about gold prices is not “fiat” – there’s a market for it (as there is for currency) but it’s hardly a free market. Weirder, to me, is that gold is just a metal. It’s pretty and has some properties, but its value is just in people’s minds. It’s not priced based on scarcity or some kind of inherent value – I can make good arguments that aluminum is more valuable (natural aluminum used to be more valuable than gold) – the gold bugs seem to be supposing that gold is inherently valuable, but that’s all in their imagination, just like the supposed value of fiat currency.
@11″ “That $1 bill is worth $1 worth of the country”
Not what I said at all…
Ed Seedhouse @ # 8: … you must accept US dollars in payment if they are offered.
Which reminds me of recent reading on the American Revolution and its immediate aftermath. Congress imposed the same requirement on the first US dollars, which promptly inflated wildly (“the continental dollar, not worth a continental damn”). So for a few years, debtors and creditors reversed their usual tango: debtors would chase creditors, sometimes literally down the street, trying to pay off what they owed in practically worthless US currency, while the creditors resorted to fancy tricks (“Oh, I sold your note to my cousin in Boston, you’ll have to go there and pay him”) not to receive their money during that period.
@17: “Important word-use quibble @Ed Seedhouse: You’re right, up to your last sentence where you refer to all government-backed currencies generally as “fiat currencies.” A “fiat currency” is one in which either the government sets the prices of most or all goods and services by some sort of official fiat”
No. A fiat currency is simply a government-issued currency that is not backed by a commodity such as gold. That’s what economists mean by the word. You give no reference for your definition so I won’t give you one for mine, though I could.
@18: @Raging Bee: I never understood what about gold prices is not “fiat”
Gold is a commodity with a limited supply. Once you’ve dug up all the gold that’s it. Fiat currencies are not so limited. Governments can create fiat currencies out of basically nothing and without technical limit. Note that “can” does not mean “should”. An economy can only produce so much, as determined by it’s available resources both physical and human. Once an economy is producing at it’s limit printing more money can’t change that and only results in inflation. BUT, not all inflation is caused by this. One can have inflation when an economy is well below it’s productive ability. And, of course, the planet itself has limits.
@20: Ah, the old inflation shibboleth. Misuse of fiat currency can cause inflation, though most inflation has other causes. That’s not an argument against fiat currencies, that’s an argument against misuse of fiat currencies.
@11: “Now crypto could function as a fiat currency”
No, because so far as I know all cryptocurrencies set limits to how much of it can be “mined” which makes just a commodity like gold. Bitcoin does this.
Fiat currencies are unlimited by supply. A government can always create more money. Which doesn’t mean that it should. When conditions are right it may need to create more money but when an economy is near it’s physical and human limits it shouldn’t.
Just stay home and enjoy the good life.
Agnes: Goodlife
https://youtu.be/hiBF-NnrMaM
A fiat currency is simply a government-issued currency that is not backed by a commodity such as gold.
That’s not how I’ve heard the phrase used anywhere, including by you — you are clearly referring to currencies in general as “fiat,” without specifying which commodities or precious metals are the basis for, say, dollars, euros, yen, sterling, etc. Which makes the phrase redundant and kind of meaningless — can you at least specify any commodity-based currency that is currently used by any country anywhere?
I gave at least some general idea of what sort of actual fiats make a “fiat currency,” and added that those fiats aren’t present in standard floating-exchange-rate currencies. So if you now want to call dollars, euros, sterling, etc. “fiat currency,” you should at least specify where/what the “fiats” are. That word has a rather specific meaning, you know.
Also, I am describing how the phrase has consistently been used in general public discourse for decades, by everyone I’ve heard talking about that subject (including, yes, an economist or two), and how that use suddenly changed after the USSR fell apart. That IS my reference, so I would appreciate you giving a reference of your own — which economists are you referring to in #21?
Fiat currencies are unlimited by supply. A government can always create more money.
Yes, but the same is true of commodity-based currencies: a government can print more of those notes than circumstances merit as well (though of course it shouldn’t, for all the same reasons), and that has in fact happened many times to gold-based currencies. So what makes “fiat currency” meaningfully different from the other kind(s)?
Now crypto could function as a fiat currency
Not really. Since it’s not backed by any sort of government fiat or policy, it’s even less “fiat-y” than currencies that are.
Raging Bee: https://en.wikipedia.org/wiki/Bitcoin_Law
I bought a jug of phosphoric acid and some vinyl gloves for my hobby.
Well, I did it. I went shopping on Black Friday.
I had to make a run to the grocery store anyway; and because today was a sunny day with a temperature around 50°F, I also made a side trip to a Best Buy near me. I was fortunate to find a parking space at all; and they didn’t have what I wanted so it was a total waste of time.
<aside>
I was looking for an “Oticon TV Adaptor 3.0”, a device that plugs into the audio outputs on my TV and generates a bluetooth signal that feeds my hearing aids directly. It also comes with an adaptor that plugs into a mini headphone jack, which will be useful during the baseball season when I’m listening to a game on the radio that goes late into the night and I don’t want to disturb others in my apartment building.
And since I’m a train-riding geek, I’d like also to use it on an upcoming Amtrak trip for listening to my scanner (also to not disturb others). That device has just a mono headphone jack, so I’ll probably make myself a little patch cord…mono plug to stereo jack…to get the sound in both ears. We’ll see…
</aside>
I’ve spread these around, but :)
@26
It’s hardly worth arguing with you since you misunderstand what I said so profoundly and appear to me to give words your own peculiar meanings.
BTW a paper based currency (or as in Canada plastic based) can be and commonly is a fiat currency. Even coinage can be part of such a currency.
A fiat is “a formal authorization or proposition; a decree”. In this case The fiat is government decree that requires you to pay taxes and to pay taxes in that government’s currency. The format of that currency is irrelevant, so long as whatever tokens used would have very little or no value were it not for the decree, and are cheaply manufactured from readily available raw materials in essentially unlimited numbers.
@ 15. Larry : Between this dude, Musk, and Zuckerberg, had there ever been so much wealth squandered in what are, frankly, idiotic ways, in such a short period of time. ”
Quite probly yes?
Tulip boom in ancient Holland? Great Depression? Wasn’t there also an earlier dot com boom and bust too? Oh and then there’s USA’s military budget in gneral -& oh yeah, the wars of choice that were and are the USA’s invasion of Iraq esp the 2003 onwards and Russia’s invasionof Ukraine this year onwards?
@32 Ed Seedhouse
You are missing a very important part of that definition. “enforced by (quite literal) force”. A decree (or a contract) is meaningless if you don’t have the power to literally force someone to obey it and to force the consequences of disobeying on them. Thus prisons and that whole shebang with justice system. And accounting and accountability.
That’s the reason that cryptocurrencies will never end state-backed fiat currency even if they occasionally take and play some of fiat currency roles. And that’s why despite all that “anti-government rhetoric” when crypto exchange or token fails, the whole story ends up in front of courts and someone usually ends up in prison. Because in the end, all contracts are enforced by some government.
Black Friday? I’m
Usually in too much of a food coma. I usually don’t even eat much just a roll or 2 the next day because I’m so stuffed. My BIL cooks so much food that you’d need 2 plates just to get a tablespoon of everything.
@34: You are missing a very important part of that definition. “enforced by (quite literal) force”.
Not a part of the definitions I found on the internet based dictionaries.
But IIRR I said quite explicitly in my original post on the subject that the Government requires you to pay taxes and that is, of course, a requirement backed in the last analysis by force. Don’t pay your taxes and the government can put you in jail.
But apparently you didn’t see that. I wonder why?
Bye the bye, governments also initiate fiat currencies in the first place by causing unemployment.
I was happy to see that Adam Conover video at the end as I was planning to link to another good one of his, there are no good billionaires…
A fiat is “a formal authorization or proposition; a decree”. In this case The fiat is government decree that requires you to pay taxes and to pay taxes in that government’s currency. The format of that currency is irrelevant, so long as whatever tokens used would have very little or no value were it not for the decree, and are cheaply manufactured from readily available raw materials in essentially unlimited numbers.
This is true of ALL forms of currency that are backed by any government (which is to say, all forms of currency that are useful and trustworthy); including gold-based currency, which is gold-based by some government’s fiat. Is there any government anywhere that creates a currency and never collects any taxes?
And no, the fact that a currency is based on rare substances like gold, does not make it intrinsically different from other currencies. That’s essentialist bullshit, and it flatly contradicts documented historical experience. (Also, you’re contradicting your earlier statement linking gold-based with commodity-based currencies.)
Your definition of the phrase “fiat currency” is utter crap because no other currency lies outside of that category — there simply is no other kind of currency; it’s a redundancy; and since your definition of that phrase is useless bullshit, I think the sensible thing to do is to scrap it and use the definition I’ve offered, because it actually recognizes a relevant distinction between different ways of managing currencies. Specifically, the old Warsaw-Pact currencies are rightly called “fiat currencies” because they were subject to far more extensive “fiats” than other currencies.
Not a part of the definitions I found on the internet based dictionaries.
You’re basing your monetary policy arguments on DICTIONARIES?! Really?! Fuck off to bed. You just plunked yourself squarely in the same bed as simpleminded transphobes whose silly-assed arguments are based solely on dictionary definitions of words like “woman” and “female.” Real life, and real word usage, are a LOT more complicated than mere dictionary definitions, even when the dictionaries aren’t written by libertarian goldbuggers and con-artists, as I strongly suspect yours was.
Seriously, the phrase “fiat currency” was widely used a certain way during the Cold War; then certain very dishonest people started using the phrase to mean something very different almost as soon as the USSR ceased to exist. Currencies that were NOT called “fiat” before that event, were called “fiat” afterword. These are known historical facts, and your “internet based dictionaries” don’t trump those facts; they just obfuscate them.
@38:
I see all you can do is hurl abuse. Count me out…
@38: You may choose to reply, but fortunately for my peace of mind I have an account blocker at my end so I won’t see you.
@39: I see all you can do is pretend I’ve only hurled abuse. Count me unsurprised.
Bye the bye, governments also initiate fiat currencies in the first place by causing unemployment.
Wow, I didn’t see that idiotic non-sequitur the first time around. Since Ed Seedy says he’s blocked me, can anyone else explain how any government “initiates fiat currencies in the first place by causing unemployment?”
@42
I have no idea and Ed didn’t come back to elaborate. I can guess that it is some libertarian drivel like “If government didn’t offer handouts for people to not work, then we would have full employment.” or something like that. My guess is that the line of logic goes like this:
Perfect market -> government messes with it -> things are not worth what they should and there is unemployment because people require more money than they are really worth, thus refusing to work for pittance.
My guess is based mostly because I heard that argument before. Anything that messes with “natural hierarchy” as dictated by perfect hand of the market is bad! And fiat currency is definitively bad, because its value is fake and inflated! Or something, I dunno.