The Bluestocking, vol 256
it should have been a six-paragraph blog post
Happy Friday!
Florida, huh? Now there’s a state. Where else can you see an animatronic Abraham Lincoln; cruise past a manatee; get caught in a hurricane; watch a rocket launch; try a $20,000 golf buggy in a retirement village; fire an AR-15; eat a deep-fried cheesecake and a “sushi pizza”; drive an SUV and still feel like you’re in a small car; go to a political rally at a muscle car museum?
The trip ended up being an extra 72 hours long because my flight got cancelled for Hurricane Nicole. It is possible to pinpoint the exact moment I had been travelling alone for too long.
I feel like I learned a tonne about both American life in general and Floridian politics in particular from the trip, and since Governor Ron DeSantis is in a strong position to run for president in 2024, I’m looking forward to sharing what I found. Right now, Florida is the crucible of (one style of) American politics.
Helen
FTX’s Balance Sheet Was Bad (Bloomberg)
And yet bad as all of this is, it can’t prepare you for the balance sheet itself, published by FT Alphaville, which is less a balance sheet and more a list of some tickers interspersed with hasty apologies. If you blithely add up the “liquid,” “less liquid” and “illiquid” assets, at their “deliverable” value as of Thursday, and subtract the liabilities, you do get a positive net equity of about $700 million. (Roughly $9.6 billion of assets versus $8.9 billion of liabilities.) But then there is the “Hidden, poorly internally labeled ‘fiat@’ account,” with a balance of negative $8 billion.[1] I don’t actually think that you’re supposed to subtract that number from net equity — though I do not know how this balance sheet is supposed to work! — but it doesn’t matter.
If you try to calculate the equity of a balance sheet with an entry for HIDDEN POORLY INTERNALLY LABELED ACCOUNT, Microsoft Clippy will appear before you in the flesh, bloodshot and staggering, with a knife in his little paper-clip hand, saying “just what do you think you’re doing Dave?” You cannot apply ordinary arithmetic to numbers in a cell labeled “HIDDEN POORLY INTERNALLY LABELED ACCOUNT.” The result of adding or subtracting those numbers with ordinary numbers is not a number; it is prison.
Matt Levine’s newsletter is behind a registration wall, but you can get it for free if you sign up for emails. Here, he deconstructs WTF was going on with Sam Bankman-Fried’s crypto exchange FTX, which minted two of its own coins—magic money it assigned its own value to, essentially—and then used that to secure customers’ money it was secretly loaning to another company controlled by SBF: “Last week I was shocked that one of the main assets of FTX — one of the main assets it relied on to be able to pay out customer balances — was a token it had just made up. But I was wrong! It was two tokens that it had just made up!”
The forthcoming Michael Lewis book on this—he’s been shadowing SBF for six months, and the movie rights are already for sale—is going to be whack. There is so much more to this story than the shady financial shenanigans, like the fact that FTX was headquartered in the Bahamas, where SBF kept a $40million apartment and appears to have been running a polycule. (Update: the in-house life coach says that the gang were “undersexed if anything”. Can no one in this story keep their mouth shut???) SBF has taken to doing odd, cryptic and possibly self-incriminatory twitter threads about the collapse, and DMing journalists with lolsome thoughts.
In addition to hanging with the Blessed Toblerone and Bill Clinton, SBF was a big donor to the Democrats in the last election cycle. He has also been a big proponent of effective altruism, which holds that you should give to charity based on what will yield the maximum results.
The fundamental tenets of EA are unshaken—rural roads and mosquito nets remain a good investment in the sum of human happiness—but the trendy mantra of “get as rich as you can so you can give it all away” has taken a bit of a knock. Hear me out: what if instead of individual men getting very rich so that they can distribute the largesse…. you just headquarter your business somewhere that’s not a tax haven, and pay some goddamn taxes???? But of course the underlying conceit of the tech bro version of EA is that governments are run by normies and are very wasteful and inefficient. They simply cannot compare to the glorious decision-making power of <checks notes> a guy who propped up his business by creating his own magic beans.
Fans of schadenfreude will appreciate this (now deleted) September profile of SBF, which gushes about his genius, and contains this exceptional quote: ‘“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.”’
Well, don’t I feel owned?
Bluestocking recommends: The Elon Musk Show (BBC). This three-part series covers plenty of Muskology that is now common knowledge—his hard-driving management style, his awkward interpersonal style, the fact people will not just stop blowing smoke up his ass—but the most interesting bit is the period immediately after the financial crisis when he was simultaneously leading both SpaceX and Tesla. You can see how the survival of those two companies against the odds could have made him feel infallible.
On which note, I lucked into being at Kennedy Space Center just in time for a SpaceX rocket launch. Why is shitposting so attractive to Musk when he could be doing this all day instead? Just a profoundly humbling experience.
Anyway, I wrote about Musk’s desire to play the villain here, in a piece which proved very controversial with the kind of people who only read headlines.
The Beautiful, Brutal World of Bonsai (New Yorker)
Kimura is sometimes said to have done for bonsai what Picasso did for painting—he shattered the art form and then reëngineered it. Using power tools, he performed transformations so drastic that the resulting shapes seemed almost impossible. Moreover, his new methods allowed him to execute dramatic alterations in hours as opposed to over decades. Not surprisingly, his accelerated technique was admired and imitated throughout the West.
When Neil spoke of his desire to apprentice with Kimura, many American bonsai enthusiasts warned him that Kimura was harsh, uncouth, even cruel. But Neil wasn’t easily intimidated, and he was dazzled by what he had seen.
Always love a story about a bonkers level of obsession in a domain which is unfamiliar to me. Kimura’s use of power tools is described as “similar to electrifying a guitar—the possibilities just go 3-D.”
Quick Links
A man has done classic British icons in the style of classic paintings. See Noel Edmonds Van Gogh above (Twitter).
This is 100% the way to style out being a short politician (Twitter).
I remember giving a presentation at the Reuters Institute on how some of the new publishers like BuzzFeed had turned themselves into “serfs on Facebook’s farm.” Needless to say, I had the last laugh, as this Verge piece on BuzzFeed’s rise and fall shows. “Maybe the real problem for BuzzFeed was that they cracked the formula too well. Anyone can repackage Reddit content.”
See you next time!
Many British expats are choosing life in Florida for retirement. Your bit about "American life in general" got me reminiscing. When we first arrived here, we were determined to live in America like Europeans. We scoffed at mod-cons like attached garages, lived in old apartments with no a/c, even drove a Golf and bought everything from Ikea. That frugality of mind, body and spirit lasted up until we were ready to sell our first house. After almost a decade, and years of digging through snow to take the kids to school, I asked myself, "what's the point of living here if I'm not going to live like an American?" And so the next house had a/c, we ditched the golf for a minivan, bought the biggest TV our living room wall could support, and bought a house that came with an attached double garage - now we could get in the car in house clothes and don coats only when we reached the destination. And you know what? We were happier for it. What looks like crass American choices is actually the distilled product of experience that said: why be miserable when life can be good? Decades later, vacationing in Florida still brings that feeling... like its 5 o clock somewhere. Nameen?
Too bad FTX couldn't have sold itself to Elon Musk before it went over the waterfall. Two birds with one stone...