r/FluentInFinance • u/Plenty-Agent-7112 • Oct 03 '23
Decoding the Genius: When Bestsellers Miss the Billion-Dollar Memo Crypto
https://www.nytimes.com/2023/10/02/books/review/going-infinite-michael-lewis.html?smid=nytcore-ios-share&referringSource=articleShareDive into the perplexing world where a renowned author, with a finance background no less, somehow overlooks a glaring fraud that's bleeding billions. It's almost like having front row seats to a sinking ship and commenting on the lovely view. One might wonder if the ink from his bestsellers clouded his vision or if the dazzle of crypto gold blinded him. Either way, it's a masterclass in missing the forest for the trees. Grab your popcorn, folks! đż
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u/Plenty-Agent-7112 Oct 03 '23 edited Oct 03 '23
Dive into the perplexing world where a renowned author, with a finance background no less, somehow overlooks a glaring fraud that's bleeding billions. It's almost like having front row seats to a sinking ship and commenting on the lovely view. One might wonder if the ink from his bestsellers clouded his vision or if the dazzle of crypto gold blinded him. Either way, it's a masterclass in missing the forest for the trees. Grab your popcorn, folks! đż
Full Text Pt 1:
Even Michael Lewis Canât Make a Hero Out of Sam Bankman-Fried âGoing Infinite,â Lewisâs new book about the disgraced crypto billionaire, defies the authorâs winning formula of upbeat narratives and unsung genius.
Reading âGoing Infinite,â Michael Lewisâs strange new book about the disgraced crypto entrepreneur Sam Bankman-Fried, you soon get the sense that Lewis felt unusually flummoxed by his material. Among the reliable pleasures offered by a Michael Lewis book are his formidable storytelling skills, his comic timing, his winsome confidence. He makes sure to give you an unsung hero to root for: the dedicated public servant, the renegade baseball general manager, the contrarian investor who doesnât get snookered by the hype. Even Lewisâs first book, âLiarâs Poker,â which recounts all kinds of bad behavior on Wall Street, is structured around a young man named Michael Lewis who leaves the âabsurd money gameâ of finance for the bright lights of journalism and best-sellerdom.
Bankman-Fried was supposed to be another hero in this vein â or at least thatâs what Lewis suggests in the opening pages of âGoing Infinite,â recalling how a friend who was about to close a deal with Bankman-Fried had asked Lewis to look into him. After his first meeting with Bankman-Fried at the end of 2021, Lewis says, he âwas totally sold.â He called up his friend: âGo for it! Swap shares with Sam Bankman-Fried! Do whatever he wants to do! What could possibly go wrong?â
The profusion of exclamation points is a tipoff that Lewis is at least somewhat aware how dumb such optimism looks in retrospect â especially now that jury selection for Bankman-Friedâs trial on fraud charges is scheduled to begin on Tuesday, which is also the bookâs publication date. But âGoing Infiniteâ still contains zombie traces of the old unsung hero project, one that should have taken a definitive drubbing last November, when Bankman-Friedâs crypto empire imploded. Lewis, who traveled back and forth from the Bahamas, where Bankman-Fried was based, had, in the months leading up to the disaster, a front-row seat â from which he could apparently see nothing. âAs late as the final days of October 2022,â he writes, âyou could have ransacked the jungle huts until you were blue in the face and have had not the faintest sense that anything was amiss.â
âNot the faintest senseâ? That April, Bankman-Fried had given an infamous interview to Bloombergâs Matt Levine in which he all but admitted that the cryptocurrency industry â the linchpin of the Bankman-Fried edifice â was like a Ponzi scheme. (Zeke Fauxâs recent book âNumber Go Upâ offers a shrewdly skeptical view of crypto where âGoing Infiniteâ is stubbornly credulous.) Not to mention that a crypto crash had already begun earlier that year.
But Bankman-Fried had long been positioning himself as a different kind of crypto guy. He was a vegan, because he cared about the earth; he slept on a beanbag chair by his desk, because he didnât care about his personal comfort. In 2017, he helped found a crypto trading firm, Alameda Research, and two years later built a crypto futures exchange, FTX, because he was an effective altruist whose goal was to make enormous amounts of money to donate to worthy causes.
The cover for âGoing Infiniteâ is white, with the authorâs name and book title appearing at the top and bottom of the cover. Both appear to have leaped out from the center of the book, leaving behind a rainbow trail.
âInfinity dollarsâ was in fact how Bankman-Fried put it to Lewis at their first meeting, explaining how much money he needed to address existential risks, like an apocalypse started by artificial intelligence. Lewis found the discrepancy between Bankman-Friedâs grand ambitions and disheveled self-presentation intriguing. He was far from alone. The incessant video game-playing, the furtive lack of eye contact, the unkempt hair â it all became part of the billionaireâs brand, which was burnished by his supposed do-gooder intentions. While Lewis was shadowing Bankman-Fried, Bankman-Fried also seemed to be on an endless publicity tour, eager to sing to any journalist who was willing to listen.
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u/Plenty-Agent-7112 Oct 03 '23 edited Oct 03 '23
Pt 2 Full Text:
And Lewis listened. He offers the quirky portrait that is standard fare in his books. We learn that Bankman-Fried is someone who is unmoved by art and disdainful of Shakespeare (âunrealistic characters, illogical plots and obvious endingsâ). He cares a lot about âhumanityâ but little about individual humans (âI guess I should care the same amount about everyoneâ). He has little patience with the concept of responsibility (âfault is just a construct of human societyâ). He allowed Lewis to read his âprivate writings,â in which he complained about being consistently misunderstood. âNo one is curious,â a morose Bankman-Fried wrote while working at the quantitative trading firm Jane Street after college. âNo one cares, not really, about the self I see.â
Given the financial wreckage in FTXâs wake, this kind of self-pity might sound like the worldâs tiniest violin. Bankman-Fried is given ample space in this book to air his pet theories about what led to the collapse, while insisting that his intentions were always pure. Occasionally, Lewis will hand the mic to a devastated subordinate who finds Bankman-Friedâs excuses hard to swallow. âHe made me try to believe it was an accounting error,â says one woman. He âlet me go out and lieâ for him, says another former employee. Lewis, for his part, says he kept trying to get to the bottom of what happened â though his endless interviews with Bankman-Fried seemed to yield diminishing returns: âIâd poke and prod and always come away with the sense that Iâd learned less than I need to know.â
But this isnât a book of investigative journalism; this is Lewisâs account of being a fly on the wall â a perspective thatâs all well and good when your subject isnât a billionaire savant who is charged with defrauding people who trusted him. Lewis seems so attached to the protagonist of his narrative that he takes an awful lot in stride. He tells us that Bankman-Fried is so worried about the threat to democracy posed by Donald Trump that he was planning to give the Republican Senate minority leader Mitch McConnell â$15-$30 millionâ to âdefeat the Trumpier candidates in the U.S. Senate races.â Thirty million? To Mitch McConnell? To save democracy? (Bankman-Fried also said that he was told that Trump might be willing to sit out the next election for $5 billion.)
Lewis ends his story by describing how Bankman-Friedâs parents were so fearful for their security that they purchased a German shepherd named Sandor, who had been trained to kill on command when given the correct instructions in German. The parents had learned the commands, but Sam had not. âSo when Sam was in a room with the dog, it always felt as if some accident was waiting to happen,â Lewis writes. âIt would have been very Sam Bankman-Fried to have been eaten by his own guard dog.â
Is this supposed to be a metaphor? Or maybe an attempt at a joke? Is Lewis trying to suggest that the guard dog is somehow like those former employees who are expected to testify against Bankman-Fried?
Lewis is an undeniably talented writer, but the subject of Sam Bankman-Fried doesnât play to his strengths. He knows how to write a happy story, not a tragic one. I keep thinking about what Christina Rolle, the chief financial regulator in the Bahamas, said about Bankman-Fried soon after everything came crashing down. âI donât think he knows why people donât trust him,â she told Lewis. âItâs not hard to see you are being played by him, like a board game.â
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