To: Hidden Recipient Date: Mon, 13 Oct 2025 18:45:10 +0000 Content-Type: multipart/alternative; boundary="_----NGGvfJDVo/L7epS6d7peUA===_1B/BB-43977-6B84DE86" MIME-Version: 1.0 Subject: Money Stuff: OpenAI Keeps Doing Deals From: "Matt Levine" X-Hiring: We are hiring, reach out at header-hacker@emailshot.io X-EmailShot-Signature: mJh8kXVnPuX6spVC-yXzrh96pabqEcUxxIBK-NyFPtc1wMK3koIsyM1u8hxcSWwvAWYQePYNt6nkUw-xdmweug== --_----NGGvfJDVo/L7epS6d7peUA===_1B/BB-43977-6B84DE86 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset="UTF-8" Money Stuff =0A Liquidations, -3x ETF, buybacks, iPad. =0A=0AView in browse= r =0A =0A=0A =0A=0A =0A=0A=0A=0A=0AOpenAI=0A=0AThe essen= ce of finance is time travel . In the =0Afuture, = your factory will make widgets and you will sell them profitably, so =0Ayou= can borrow money, today, to build the factory to make the widgets to sell = =0Ato repay the money. If you go to a bank with an architect=E2=80=99s plan= s for the =0Awidget factory, and a business plan for making and selling the= widgets, and a =0Agood track record of profitably manufacturing and sellin= g widgets, the bank =0Awill be happy to lend you the money to build the fac= tory. The bank has people =0Awho understand widgets; it can model up a widg= et factory pretty easily. It will =0Afigure out an appropriate leverage lev= el for the factory and lend you that =0Aamount of money at, like, 8% intere= st.=0A=0ATech startups are an extreme version of this. In the future, human= life will =0Abe utterly transformed by your invention: We will live on Mar= s or socialize in =0Athe metaverse [1] <> or commute in self-driving flyin= g cars or have omniscient =0Arobots in our pockets that can fulfill every h= uman desire. Presumably, also, =0Ayou can turn that into money. So you can = raise money, today, to build the =0Ametaverse or cars or robots. I oncewrot= e about Nikola Corp. =0A, the hydrogen-powered tr= uck startup:=0A=0AWhat you want, when you invest in a startup, is a founder= who combines (1) an =0Ainsanely ambitious vision with (2) a clear-eyed pla= n to make it come trueand =0A(3) the ability to make people believe in the = visionnow. =E2=80=9CWe=E2=80=99ll tinker with =0Ahydrogen for a while and m= aybe in a decade or so a fuel-cell-powered truck will =0Acome out of it=E2= =80=9D:True, yes, but a bad pitch. The pitch is, like, you put your =0Aarm = around the shoulder of an investor, you gesture sweepingly into the =0Adist= ance, you close your eyes, she closes her eyes, and you say in mellifluous = =0Atones: =E2=80=9CCan=E2=80=99t you see the trucks rolling off the assembl= y line right now=3F =0AAren=E2=80=99t they beautiful=3F So clean and effici= ent, look at how nicely they drive, =0Alook at all those components, all bu= ilt in-house, aren=E2=80=99t they amazing=3F Here, =0Ahold out your hand, y= ou cantouch the truck right now. Let=E2=80=99s go for a drive.=E2=80=9D =0A= That=E2=80=99s not true, but it=E2=80=99s a nice metaphor; the goal is to g= et the investor to =0Asee the future, so she=E2=80=99ll give you money toda= y, so that you can build the =0Afuture tomorrow.=0A=0AThis is harder to mod= el, though. How much money will you make selling the =0Ametaverse or the om= niscient robots=3F A large amount, probably, but you are not =0Agoing to ha= ve a detailed spreadsheet projecting your margins to a tenth of a =0Apercen= tage point. =E2=80=9CEhhh omniscient robots, come on,=E2=80=9D you say to i= nvestors, and =0Athey say =E2=80=9Cyes of course=E2=80=9D and give you mone= y. But this will be based more on =0Afeel and enthusiasm and competitive dy= namics than on detailed financial =0Amodeling. Also it will beequity. Inves= tors will give you money now in exchange =0Afor a slice of the enormous pro= fits of your world-changing vision, not for a =0Afixed 8% return.=0A=0AHow = much will they give you=3F Well, if you are very very very very good at =0A= pitching your vision, they might give you tens of billions of dollars. Glob= al =0Aventure capital investment is something like$368 billion per year =0A= ; getting 10% of that would be an astonishing fea= t.=0A=0AWhat if you want, say, $1 trillion=3F That is harder. You can go to= Masayoshi =0ASon with your vision, and you can put your arm around his sho= ulder and gesture =0Asweepingly into the distance and whisper =E2=80=9Comni= scient robots,=E2=80=9D and he might say =0A=E2=80=9Cyes, here is all the m= oney I have,=E2=80=9D but that=E2=80=99s still not $1 trillion. To raise = =0A$1 trillion, you need more than a compelling science-fiction vision of y= our =0Aworld-changing product. You need a compelling science-fiction vision= of =0Aworld-changing financial engineering.=0A=0ABy this metric Sam Altman= is surely the greatest tech founder in history. Sure =0Asure sure sure sur= e chatbots, butlook at this, man :=0A=0AAltman re= cently told employees that OpenAI wanted to build 250 gigawatts of =0Anew c= omputing capacity by 2033, according to people familiar with the matter, a = =0Aplan that would cost over $10 trillion by today=E2=80=99s standards. He = has said that =0AOpenAI would have to create new financing tools to help fu= nd this massive =0Abuild-out but hasn=E2=80=99t shared many details on what= that would look like.=0A=0ANo! Wrong! He has shared tons of details of wha= t his new financing tools will =0Alook like! He shares more every day!Here= =E2=80=99s today=E2=80=99s :=0A=0ABroadcom Inc. s= hares jumped after OpenAI agreed to buy the company=E2=80=99s custom =0Achi= ps and networking equipment in a multiyear deal, part of an ambitious plan = =0Aby the startup to add artificial intelligence infrastructure. =E2=80=A6= =0A=0AInvestors sent Broadcom shares up as as much as 11% on Monday, bettin= g that =0Athe OpenAI alliance will generate hundreds of billions of dollars= in new =0Arevenue for the chipmaker. But the details of how OpenAI will pa= y for the =0Aequipment aren=E2=80=99t spelled out. While the AI startup has= shown it can easily =0Araise funding from investors, it=E2=80=99s burning = through wads of cash and doesn=E2=80=99t =0Aexpect to be cash-flow positive= until around the end of this decade.=0A=0AThe financing tool is, you go to= Broadcom and you put your arm around their =0Ashoulder and you gesture swe= epingly in the distance and whisper =E2=80=9Comniscient =0Arobots=E2=80=9D = and they whisper =E2=80=9Cyesssss=E2=80=9D and you say =E2=80=9Cwe=E2=80=99= ll need a few hundred =0Abillions dollars of chips and equipment from you= =E2=80=9D and they say =E2=80=9Cof course=E2=80=9D and =0Ayou say =E2=80=9C= good=E2=80=9D and they say =E2=80=9Cdo you have hundreds of billions of dol= lars=E2=80=9D and =0Ayou whisper =E2=80=9Comniscient robots=E2=80=9D again = and they are enlightened. And then you =0Aannounce the deal and Broadcom=E2= =80=99s stock adds $150 billion of market =0Acapitalization and you=E2=80= =99re like =E2=80=9Csee=E2=80=9D and they=E2=80=99re like =E2=80=9Cyes=E2= =80=9D and you=E2=80=99re like =0A=E2=80=9Comniscient robots=E2=80=9D and t= hey=E2=80=99re like =E2=80=9CI know right.=E2=80=9D That is the financing = =0Atool! In some loose postmodern sense, OpenAI hasborrowed hundreds of bil= lions =0Aof dollars from Broadcom. You can buy hundreds of billions of doll= ars of =0Aequipment to build the robots to sell for money to pay for the eq= uipment, =0Abecause you=E2=80=99ve gotten everyone to believe.=0A=0AThe Fin= ancial Times explains :=0A=0AThe mammoth chip ord= er means OpenAI could spend another $350bn to $500bn on =0Atop of the rough= ly $1tn of chip and data centre deals it has signed in recent =0Amonths as = it races to secure the computing power to run services such as =0AChatGPT. = ...=0A=0AThe deals have bound some of the world=E2=80=99s biggest tech gro= ups to OpenAI=E2=80=99s =0Afortunes, despite questions about how OpenAI wil= l fund them as the cost dwarfs =0Athe start-up=E2=80=99s existing revenues.= =0A=0AAlso :=0A=0AThe deals have bound some of th= e world=E2=80=99s biggest tech groups to OpenAI=E2=80=99s =0Aability to bec= ome a profitable business that can meet its increasingly steep =0Afinancial= obligations.=0A=0A=E2=80=9COpenAI is in no position to make any of these c= ommitments,=E2=80=9D said Gil Luria, =0Aanalyst at DA Davidson, who added i= t could lose about $10bn this year.=0A=0A=E2=80=9CPart of Silicon Valley=E2= =80=99s =E2=80=98fake it until you make it=E2=80=99 ethos is to get people = =0Ato have skin in the game. Now a lot of big companies have a lot of skin = in the =0Agame on OpenAI,=E2=80=9D he added.=0A=0AIf you owe the bank $100,= that=E2=80=99s your problem . If =0Ayou owe Broa= dcom$500 billion, that=E2=80=99s Broadcom=E2=80=99s problem. If you owe eve= ry big =0Atech company hundreds of billions of dollars, that is their probl= em. Surely =0Athey=E2=80=99ll find a solution! Or you will. The money will = figure itself out.=0A=0AHow=3F Well, in a world with insatiable demand for = AI inference, probably you =0Acan raise quite a lot of money indebt to pay = for the data centers. The bet here =0Ais something like =E2=80=9Cby the tim= e we are actually building these data centers, =0Athey will be less like sc= ience-fiction speculation and more like widget =0Afactories, and people wil= l be comfortable financing them based on cash-flow =0Amodels.=E2=80=9D But,= for now, backstopping that theory is another theory, something =0Alike =E2= =80=9COpenAI has a $500 billion equity value so surely it could raise more = =0Amoney to pay its bills.=E2=80=9D TheFinancial Times notes :=0A=0AOpenAI=E2=80=99s recent blockbuster deals have added a = new layer to its complicated =0Aownership structure, leading to more uncert= ainty over when and how its powerful =0Ashareholders will get an eventual p= ayout. =E2=80=A6=0A=0AOpenAI=E2=80=99s boundless capital requirements meant= its backers =E2=80=94 including =0AMicrosoft, SoftBank and Josh Kushner=E2= =80=99s Thrive Capital =E2=80=94 would see their =0Ashareholding diluted th= rough further fundraising, said people familiar with the =0Acompany=E2=80= =99s plans. ...=0A=0A=E2=80=9CMost people would prefer to have a smaller pi= ece of a bigger pie,=E2=80=9D said a =0Asenior OpenAI executive.=0A=0AThe W= all Street Journal adds :=0A=0AOpenAI=E2=80=99s d= eals with chip and cloud companies in the past few months have =0Ahelped fu= el a global rally in tech stocks. Each agreement has raised the =0Aalready = high expectations set by Altman in describing the seemingly infinite =0Aamo= unt of compute needed to bring forth the AI revolution. The deals have =0As= urprised some competitors who have far more modest projections of their =0A= computing costs.=0A=0ALast week, we discussed Op= enAI=E2=80=99s deal with Advanced =0AMicro Devices Inc., in which OpenAI es= sentiallyspent some of that global tech =0Arally on chips: OpenAI agreed to= pay AMD tens of billions of dollars for chips, =0Abut it took back warrant= s on AMD=E2=80=99s stock; those warrants instantly became worth =0Atens of = billions of dollars as AMD=E2=80=99s stock rallied on news of the deal. The= =0ABroadcom deal does not have that sort of explicit monetization of OpenA= I=E2=80=99s =0Aability to add equity value to every company it touches. But= does itimplicitly =0Amonetize that ability=3F=0A=0AI have previously writt= en that =E2=80=9Cnobody in history =0Ahas ever b= een better at, like, business negging than Sam Altman.=E2=80=9DAnd =0A:=0A=0AWhen Sam Altman, the chief executive officer of= OpenAI, goes around publicly =0Aworrying that AI might kill us all, what h= e isreally saying is =E2=80=9CI am building a =0Atechnology that is unimagi= nably powerful and will transform every aspect of =0Ahuman life, so it sure= must be worth a lot of money.=E2=80=9D If he justsaid that, you =0Amight b= e skeptical; it is obviously in his self-interest to talk about how =0Apowe= rful his technology is. But instead he goes aroundworrying about it, which = =0Amakes him seem more credible: It isnot obviously in his self-interest to= talk =0Aabout how dangerous his technology is and how carefully he needs t= o be checked. =0AIt=E2=80=99s more subtly in his self-interest to do that.= =0A=0ASame with the computing costs. =E2=80=9CThe deals have surprised some= competitors who =0Ahave far more modest projections of their computing cos= ts,=E2=80=9D because he isbetter =0Aat thisthan they are. If you go around = saying =E2=80=9CI am going to build =0Atransformative AI efficiently,=E2=80= =9D how transformative can it be=3F If you go around =0Asaying =E2=80=9CI a= m going to need 1,000 new nuclear plants to build my product,=E2=80=9D =0Ae= veryone knows that it will be a big deal.=0A=0A =0A=0A= =0A =0A=0A=0ACrypto liquidations=0A=0ASchematically here= is how crypto market structure works. I think Dogecoin will =0Ago up. You = think Dogecoin will go down. Dogecoin is trading at, let=E2=80=99s say, =0A= $0.20. I go to a crypto exchange and make a bet on Dogecoin. I put down $10= 0 =0Afor my bet, at 20-to-1 leverage; effectively, I have bought $2,000 wor= th of =0ADogecoin (10,000 coins) for $100. If Dogecoin goes up to $0.25, my= position is =0Aworth $2,500; I have made $500 of profit on my $100 bet. If= Dogecoin goes down =0Ato $0.19, my position is worth $0; I have lost my $1= 00 bet, and my bet is =0Aclosed out.=0A=0AYou, meanwhile, put down $100 for= a 20-to-1 levered bet against Dogecoin. If =0ADogecoin goes down to $0.15,= you make $500 of profit on your $100 bet. If =0ADogecoin goes up to $0.21,= your position is worth $0; you have lost your $100 =0Abet, and your bet is= closed out.=0A=0ANotice, though, that my $100 bet was on $2,000 worth of D= ogecoins. How does =0Athe crypto exchange get $2,000 worth of Dogecoins, if= I have only given it =0A$100=3F One possible answer is =E2=80=9Cthe crypto= exchange borrows $1,900 from someone =0Aelse to buy my $2,000 worth of Dog= ecoins,=E2=80=9D but a moment=E2=80=99s reflection will tell =0Ayou that th= at=E2=80=99s not the answer. The answer is that the crypto exchangedoesn=E2= =80=99t =0Abuy any Dogecoins. The crypto exchange is not in the business of= buying =0ADogecoins; it is in the business of matching bets. I bet $100 th= at Dogecoin =0Awill go up, and you bet $100 that Dogecoin will go down, and= the crypto =0Aexchange matches our bets against each other. If I win, you = lose, and vice =0Aversa; there are no actual Dogecoins involved.=0A=0AThis = is not the only crypto market structure : There = =0Aare many exchanges where you can give the exchange $2,000 and get $2,000= worth =0Aof Dogecoin, which the exchange really holds in your account. The= re are =0Aprobably some exchanges where you can give the exchange $1,000 an= d get $2,000 =0Aworth of Dogecoin, with the exchange finding someone else t= o finance the other =0A$1,000 to actually buy the Dogecoin. But if you are = getting 20-to-1 leverage on =0ADogecoin, nobody is buying any Dogecoin. You= are making a pure derivative bet =0Aon the price of Dogecoin.=0A=0AIn cryp= to this sort of derivative bet is conventionally called a =E2=80=9Cperpetua= l =0Afutures contract ,=E2=80=9D or =E2=80=9Cperp= .=E2=80=9D In other markets it =0Ahas other names. European stock traders = might call it a =E2=80=9Ccontract for difference=0A .=E2=80=9D Old-timey American stock traders would have =0Acalled it =E2= =80=9Cbucketing .=E2=80=9D =0A=0AI have simplifie= d things by saying that you and I bet against each other. =0AActually in th= e first instance we bet against the exchange: I have a perp that =0Awill pa= y me if Dogecoin will go up, but I do not look to you for payment; I =0Aloo= k to the exchange. The exchange will probably run a matched book (if I am = =0Along $2,000 of Dogecoin someone else has to be short $2,000 of Dogecoin)= , =0Aparticularly if it is a decentralized exchange with no balance sheet o= f its =0Aown. But that is not a law of nature, and sometimes crypto exchang= es are in =0Aeffect long or short massive amounts of crypto bets against th= eir customers. =0AThe famous exampleis of course FTX .=0A=0ABut let=E2=80=99s assume there=E2=80=99s a matched book: The onl= y bets at the exchange are me =0Abetting that $2,000 worth of Dogecoin will= go up, and you betting that it will =0Ago down. Let=E2=80=99s say Dogecoin= (actual Dogecoin, traded on other, less leveraged =0Aexchanges) goes down = to $0.17. In theory, I have lost $300 (my account has =0Anegative $200 in i= t) and you have made $300 (your account has positive $400 in =0Ait). But in= practice my account balance on a decentralized crypto exchange can =0Aneve= r be negative: I set up that account with a crypto wallet, not my name and = =0Acredit card, and there=E2=80=99s no recourse to me. If my balance gets b= elow zero, my =0Aaccount is liquidated but no one can ask me for more money= . So really what =0Ahappens is that my account has zero, your account has = positive $400, and the =0Aexchange has the $200 of collateral ($100 each) t= hat we posted. The exchange =0Aowes you $400 but only has $200. So the exch= ange calls you up and says =E2=80=9Chey =0Asorry actually your short Dogeco= in bet is closed, and it was closed at $0.19. =0AHere=E2=80=99s the $200 yo= u made.=E2=80=9D And if you are like =E2=80=9Cwait no Dogecoin is at $0.17,= =E2=80=9D =0Athat=E2=80=99s not the exchange=E2=80=99s problem.=0A=0AThis i= s called =E2=80=9Cauto-deleveraging.=E2=80=9D Here is how Hyperliquid, a bi= g =0Adecentralized exchange,describes it :=0A=0AI= f a user's account value or isolated position value becomes negative, the = =0Ausers on the opposite side of the position are ranked by unrealized pnl = and =0Aleverage used. ... Those traders' positions are closed at the previo= us mark =0Aprice against the now underwater user, ensuring that the platfor= m has no bad =0Adebt.=0A=0AAuto-deleveraging is an important final safeguar= d on the solvency of the =0Aplatform. There is a strict invariant that unde= r all operations, a user who has =0Ano open positions will not socialize an= y losses of the platform.=0A=0AThe people with winning positions socialize = the losses. If you have a winning =0Abet, someone has a losing bet. If the = people with losing bets have lost more =0Athan they had, then you don=E2=80= =99t get all of your winnings.=0A=0A(Incidentally I once discussed this str= ucture with =0ASam Bankman-Fried, of FTX, on Blo= omberg=E2=80=99sOdd Lots podcast. He was quite =0Adismissive of it, arguing= that FTX had a much better liquidation system to =0Aprevent winning bettor= s from socializing losses. It did, until it didn=E2=80=99t.)=0A=0AAnyway th= is is a bummer for you if you were betting that Dogecoin would go =0Adown: = You were right, and you only got a portion of your winnings. It is more =0A= annoying if you weren=E2=80=99t doing that. What if you were an arbitrageur= =3F You saw =0Athat traders on the decentralized exchange wanted to be long= Dogecoin, so you =0Adid an arbitrage: You bought $2,000 of Dogecoin in rea= l life, and you sold =0A$2,000 of Dogecoin (via perp futures) on the decent= ralized exchange, =0Aeffectively =E2=80=9Cmanufacturing=E2=80=9D the future= s out of spot Dogecoin. The price of =0ADogecoin drops to $0.17, and:=0A=0A= * You have a $300 loss on your spot position. =0A * You should have a $300= gain on your perp position, but you don=E2=80=99t, because I =0Ahave walke= d away from my bet and there=E2=80=99s only $100 to pay you. =0A * You have= a net $200 loss on your hedged position. =0A * Also, though, your short po= sition is closed, but your long position isn=E2=80=99t: =0AYou still own $1= ,700 of Dogecoin =E2=80=9Cnaked,=E2=80=9D without an offsetting short posit= ion. =0A * You might as well sell your Dogecoin to cut your losses and get = back to =0Aflat. =0AThe upshot is that when Dogecoin goes down by 5% (from = $0.20 to $0.19), (1) =0Agamblers who are long 20-to-1 levered perpetual Dog= ecoin futures get wiped out, =0A(2) arbitrageurs who wereshort perpetual Do= gecoin futures are auto-deleveraged =0Aand have to sell Dogecoin to remain = hedged, (3) there=E2=80=99s lots of selling and no =0Abuying, (4) prices go= down even more, (5) gamblers who were long 10-to-1 =0Alevered perpetual Do= gecoin futures get wiped out, (6) etc.=0A=0AWhere is the limit=3F Well, in = theory, at some level of liquidations, long-term =0Afundamental value inves= tors will see value. They will say =E2=80=9Cokay when Dogecoin =0Afell from= $0.20 to $0.18, that was one thing, but now Dogecoin is trading at =0Ajust= $0.15, which is well below its fundamental value.=E2=80=9D So they will st= ep in =0Aand buy Dogecoin, planning to make money when rationality sets in = and the price =0Aof Dogecoin returns to its fundamental value. You see the = problem here don=E2=80=99t =0Ayou=3F [2] <>=0A=0AAnyway. There was a crypt= o crash last week. Bloomberg=E2=80=99s Muyao Shen and Olga =0AKharif report= ed :=0A=0AA record $19 billion in bets evaporated= and crypto prices tumbled, due in =0Alarge part to newly severe China tari= ffs announced by President Donald Trump. A =0Acombination of factors =E2=80= =94 leverage, automatically triggered sales, a lack of =0Aliquidity at odd = hours for global trading =E2=80=94 fueled what might have been a less =0Adr= amatic obliteration of positions.=0A=0AFrom the morning hours in Asia throu= gh the afternoon in the US on Saturday, =0Atraders, executives and market-d= ata analysts were wondering who, exactly, had =0Asuffered losses. Did a lar= ge entity get completely hosed =E2=80=94 or was this a case =0Aof a lot of = small bettors watching their holdings evaporate to zero=3F More than =0A1.6= million traders were liquidated, according to data tracker CoinGlass. =E2= =80=A6=0A=0AThat said, liquidations were concentrated on smaller coins beyo= nd Bitcoin and =0AEther, known as altcoins. Leverage tends to be higher and= liquidity much lower =0Ain those less familiar tokens.=0A=0AQuite a lot of= crypto traders were making levered perp bets on altcoins, =0Acrypto exchan= ges regularly offer40 or 50 =0A or 100 to 1 leverage, and so when prices move =0Aslightly all tho= se bets go to zero. Also the people who were making levered bets=0Aagainstt= hose altcoins had their own trouble, as the losing bettors got =0Aliquidate= d:=0A=0ADespite being smaller than rival Binance, Hyperliquid experienced t= he most =0Aextinguished trades in dollar value during the 24-hour-period se= lloff, at $10 =0Abillion, according to CoinGlass.=0A=0A=E2=80=9CHyperliquid= had the most amount of long liquidation, and least amount of =0Aliquidity = to match,=E2=80=9D said Ebtikar.=0A=0AA risk-management mechanism called au= to-deleveraging, or ADL, contributed.=0A=0AADL is designed to automatically= close profitable or highly leveraged =0Apositions when liquidated trades e= xceed a certain capacity covered by =0Ainsurance. Exchanges incorporate it = to protect them from losses during extreme =0Amarket volatility, but many m= arket participants also blamed ADL for making the =0Aselloff worse. =E2=80= =A6=0A=0A=E2=80=9CThis mechanism is not without complications, especially f= or participants with =0Amore complex portfolios,=E2=80=9D said Spencer Hall= arn, global head of OTC trading at =0Acrypto investment firm GSR.=0A=0A=E2= =80=9CQuantitative liquidity providers and market-neutral participants can = quickly =0Afind the winning sides of their trades closed prematurely due to= ADL, leaving =0Atheir overall books imbalanced and subject to market beta = which can lead to =0Aproblems, and a necessity to quickly pare imbalanced r= isk,=E2=80=9D he said.=0A=0ARight, yes, if a ton of crypto market structure= consists of 40-to-1 levered =0Abets, then you are going to have a lot of l= evered losing bettors blowing up, =0Abut you are also going to have a lot o= f weird results for the leveredwinning =0Abettors. They can only get paid o= ut of the losing bets.=0A=0AHere is a more cynical take from John Hempton:=0A=0ALots of [altcoins] will make 10-15% moves i= n discontinuous markets. The way =0Ayour exchange guards against going bust= is by not actually buying all the =0Acrypto that [the customer] thinks he = owns.=0A=0AAn exchange that doesn=E2=80=99t buy the underlying asset they h= ave promised their =0Aclients is known as a =E2=80=9Cbucket shop.=E2=80=9D = This comes from the 1920s practice of =0Agambling houses =E2=80=9Ctrading= =E2=80=9D in stocks but really keeping all the money in a =0Abucket. =E2=80= =A6=0A=0ABucket shops do not buy all the shares (or coins) necessary to hed= ge every =0Aclient position. This is because they can=E2=80=99t manage the = risk of a market plunge.=0A=0ABut as a result, they have a big problem in a= bull market.=0A=0AImagine your little crypto exchange, now a bucket shop, = does not actually buy =0A$100K of $ATOM on [the customer=E2=80=99s] behalf.= Then suppose $ATOM doubles =E2=80=94 a =0Arealistic outcome in the recent = bull market. Now you owe [the customer=E2=80=99s] a net =0A$110k and you si= mply haven=E2=80=99t earned it. You have a very big shortfall. =E2=80=A6=0A= =0AThere is a solution to this insolvency, a simple one. One that was known= in =0Athe 1920s as a =E2=80=9Cbucket shop drive=E2=80=9D and was a discuss= ion point in Reminiscences =0Aof a Stock Operator.=0A=0AThe idea is that, i= f you are a bucket shop that is systematically short crypto =0Ato your high= ly levered customers, an occasional 10% price drop can be very good =0Afor = business: The customers all get wiped out and you keep their deposits. I = =0Adon=E2=80=99t think that this explanation is necessary, just because sta= ndard crypto =0Amarket structureexplicitly buckets customer orders into mat= ched books, but it =0Ais fun to think about.=0A=0A=0A-3x ETF=0A=0AIn arguab= ly related news, my Money Stuff podcast co-host Katie Greifeld =0Areported = last week :=0A=0AA violent rally in shares of Adv= anced Micro Devices this week forced the =0Ademise of the GraniteShares 3x = Short AMD exchange-traded product, which aimed =0Ato offer three times the = inverse performance of the stock. The extinction event =0Awas a stunning su= rge of as much as 38% in AMD on Monday after the chipmaker =0Aannounced a d= eal with OpenAI, sinking the ETP and cratering its net-asset value =0Ato ze= ro. As such, =E2=80=9Cno redemptions payments will be made,=E2=80=9D accord= ing to the =0AGraniteShares website. The issuer declined to comment to Bloo= mberg News.=0A=0AIf you have 50x levered Dogecoin, a 2% move will wipe you = out. If you have 3x =0Alevered short AMD, a 38% move will wipe you out. Can= =E2=80=99t really complain about =0Athat; you got the experience you paid f= or.=0A=0A=0APeople are worried about stock buybacks=0A=0AOne simple model o= f the stock market is:=0A=0A * Lots of investors allocate X% of their asset= s to stocks. The actual X will =0Avary from investor to investor: Instituti= ons might have a 60/40 portfolio (60% =0Ain stocks), individuals might foll= ow the =E2=80=9C100 minus age =0A=E2=80=9D rule o= f thumb, etc. Also some investors will have =0Aexplicit numerical asset-all= ocation mandates, while others will just follow a =0Avague gut instinct of = =E2=80=9CI should have some stocks and some bonds and check =0Aperiodically= to make sure it=E2=80=99s not way out of line.=E2=80=9D And these target = =0Aallocations can shift over time: Once upon a time prudent investors didn= =E2=80=99t put =0Athat much money in stocks, but over the years it has beco= me more normal to =0Ainvest more in stocks, and now investors are increasin= gly crypto-curious. Still =0Ayou can sort of average all of this out and sa= y =E2=80=9Cover the medium term the =0Amarket as a whole targets roughly an= X% allocation to stocks,=E2=80=9D for some X. =0A * The stock market keeps= shrinking: Public companies get bought by private =0Aequity, giant private= companies like SpaceX and OpenAI delay going public =0Abecause there is pl= enty of money available in private markets, and the public =0Acompanies tha= t are left tend to be big and profitable and mature and spend a =0Alot of t= heir profits on stock buybacks, which further reduce the supply of =0Astock= s. =0A * Therefore stock-market valuations have to go up: People want to ke= ep the =0Asame percentage of their portfolio in stocks, but the supply of s= tocks keeps =0Ashrinking, so the value of the remaining scarce stocks has t= o go up. =0AThis model does not necessarily make economic sense. From a str= ictly rational =0Aeconomic perspective, you might say =E2=80=9CI buy stocks= to get long-term exposure to =0Aeconomic growth, and as the public stock m= arket shrinks and becomes more =0Amature, it provides a smaller share of fu= ture economic growth, so I should =0Areduce my allocation to public stocks = and buy more private equity or crypto or =0Awhatever.=E2=80=9D But those ar= e complicated conversations, and if you have a simple =0Aheuristic like =E2= =80=9C60% stocks,=E2=80=9D it might be sticky even as the makeup of the sto= ck =0Amarket changes.=0A=0AVictor Haghani and James White have a fun paper = out along these lines on =E2=80=9CThe =0AImpact of U.S. Stock Buybacks: The= ory vs Practice ,=E2=80=9D =0Anoting that buyback= s =E2=80=94 which shrink the total size of the stock market =E2=80=94 shoul= d =0Ahave alevered impact on prices:=0A=0AThe impact of buybacks on share p= rices arises from many investors using =0Aincomplete heuristics to determin= e how much of an asset they want to hold. For =0Aexample, if they want to h= old a constant proportional amount of some asset, and =0Athe available amou= nt of the asset is reduced, the only way this can be =0Aaccommodated is for= the price of the asset to go up. =E2=80=A6 [For] fixed-weight =0Aallocator= s (e.g. 50% equities / 50% other assets): To absorb 3% of stock =0Arepurcha= ses, prices must rise ~6%. =E2=80=A6=0A=0AFixed-weight asset allocators are= probably the most common investor type, =0Aconsidering the trillions of do= llars invested in target date funds, balanced =0Afunds, and in endowments, = pension funds and foundations who very infrequently =0Achange their asset a= llocation. =E2=80=A6 We can see how buybacks on the order of 3% =0Acould pl= ausibly push up prices by 3 =E2=80=93 5%.=0A=0AIt is interesting to note th= at over the past ten years, the US Price-Earnings =0Amultiple has increased= by 4% per annum. The 3% =E2=80=93 5% per annum potential impact =0Aof buyb= acks provides one explanation of this increase.=0A=0AI should say that this= is not just a story about buybacks; it is more broadly =0Aa story about sh= rinking public stock markets and =E2=80=9Cprivate markets are the new =0Apu= blic markets.=E2=80=9D There=E2=80=99s a trillion dollars of stock value = =E2=80=94 about 1.5% of the =0Avalue of all publicly listed US stocks =E2= =80=94 just inOpenAI =0A, SpaceX and Stripe =0A; if those companies wen= t public, they would more or =0Aless offset the $1.2 trillion of estimated = buybacks this year. If the big =0Aprivate companies stay private and the bi= g public companies keep buying back =0Astock, then public stocks will get m= ore scarce, which might make them more =0Aexpensive.=0A=0A=0AWelcome gift= =0A=0AWhat is the state of the art methodology for stealing quantitative t= rading =0Asecrets from your employer when you le= ave to take a =0Anew job at a different quantitative trading firm=3F Obviou= sly, like, =E2=80=9Cemail all =0Aof the trading algorithms to your Gmail=E2= =80=9D doesn=E2=80=99t work; your old employer tracks =0Aand probably block= s that. =E2=80=9CDownload them to a thumb drive,=E2=80=9D or =E2=80=9Cprint= them on =0Athe office printer,=E2=80=9D will also probably get you caught.= =E2=80=9CPull up the trading =0Aalgorithms on your work laptop over the we= ekend, and then use your personal =0AiPad to take photographs of your lapto= p screen=E2=80=9D is maybe somewhat better =0Atradecraft. =E2=80=9CTake the= photographs using an iPad provided to you by your new =0Aemployer=E2=80=9D= is I suppose a nice touch. This is not any sort of advice.=0A=0AHere is a = UK judicial ruling in a lawsuit brought =0Aby G-= Research against a data scientist named Pierre Allain, who worked there =0A= from 2021 until 2025. =E2=80=9COn Friday 21 March 2025, the defendant accep= ted a job =0Aoffer from one of G-Research=E2=80=99s principal competitors, = Citadel Securities LLC=E2=80=9D; =0Aon Monday, March 24, he resigned from G= -Research. Over the weekend, he did this:=0A=0AOver a three day period betw= een Saturday 22 and Monday 24 March 2025, the day =0Athat he resigned (and = when he should have been at work), the defendant took =0A1,087 photographs = which contain the claimants=E2=80=99 confidential information (as =0Adispla= yed on his laptop screen which was logged in remotely to the first =0Aclaim= ant=E2=80=99s IT systems) using a personal iPad that had been given to him = as a =0Awelcome gift by Citadel Securities just days before; and (ii) over = a period of =0Amonths, dating back to at least 17 July 2024, the defendant = had created, and =0Afrequently amended, several text files in markdown form= at which contain the =0Aclaimants=E2=80=99 confidential information. Over 4= 00 of the photographs relate to =0A=E2=80=98Humber=E2=80=99, which the clai= mants allege is a highly valuable trading strategy, =0Aonly recently develo= ped by the first claimant following the expenditure of =0Asignificant time = and resources. In the text files, the defendant repeatedly =0Arecorded that= he could (amongst other things) =E2=80=9Creplicate=E2=80=9D Humber for a = =0Acompetitor.=0A=0AHis defense is that =E2=80=9Cthe photographs were part = of an aide memoire, and that he =0Aacted impulsively in taking them=E2=80= =9D and never shared them with his new employer.=0A=0A=0AThings happen=0A= =0AFrom Tricolor to Saks , Bonds Are Now Crashing= at =0ABreakneck Speed.Bank deregulation set to = unlock =0A$2.6tn of Wall Street lending capacity. Thinking Machines Lab Co-= FounderDeparts =0Afor Meta . Warner Bros. Is =0ASaid to Rebuff Paramount Takeover Approach. Param= ountCircling Warner Bros. =0ADiscovery After Reb= uffed Approach. First Brands=E2=80=99 =0A Founder= Patrick James Steps Down as CEO. Jefferies =0A D= efends First Brands Deals, Says Losses Manageable. =0ABrookfield to Acquire= RemainingOaktree Stake for $3 =0ABillion. Silve= r Roars Higher asShort Squeeze Rocks =0Athe Lond= on Market.Kalshi Raises Funds at $5 Billion =0AV= aluation, to Expand Overseas.Senegal Raises $795= =0AMillion in Oversubscribed Regional Bond Sale. US Lifeline Buys Argentin= a Time =0Aas Investors UrgeFX Overhaul . Warren A= sks Hedge Fund =0AGroup If It Played Argentina Bailout Role . The =0AFormer Banker Betting on Unprofitable Business ofFlood = Insurance =0A. The Real AI Risk is =E2=80=98Meh= =E2=80=99 Technology That Takes =0AJobs and Annoys Us All . Amateur gold prospecting =0A. NIL inju= ry insurance .=0A=0AIf you'd like to get Money St= uff in handy email form, right in your inbox, =0Apleasesubscribe at this li= nk . Or you can subscribe =0Ato Money Stuff and o= ther great Bloomberg newslettershere =0A. Thanks!= =0A=0A[1] Lol, remember=3F=0A=0A[2] In reality, Binance=E2=80=99s postmorte= m on the crypto =0Adeleveraging says: =E2=80=9CH= istorical limit orders (some dating back years, as far as =0A2019, e.g., IO= TX, ATOM) had remained open on the platform. During extreme =0Amarket sell-= off and the lack of buying orders, sell orders continue to execute =0Aagain= st these long-standing limit orders, pushing token prices to sharply drop = =0Amomentarily.=E2=80=9D Instead of value investors stepping in, what happe= ns is that =0Apeople who put in buy orders in 2019 and forgot about them ha= d those orders =0Aexecuted when prices dropped far enough.=0A=0A=0A =0A=0AFollow Us =0A Get the newsletter =0A=0A=0ALike getting this newsletter=3F Subscribe to= Bloomberg.com =0A=0A for unlimited access to trusted, data-driven jou= rnalism and subscriber-only =0Ainsights.=0A=0ABefore it=E2=80=99s here, it= =E2=80=99s on the Bloomberg Terminal. Find out more about how the =0ATermin= al delivers information and analysis that financial professionals can=E2=80= =99t =0Afind anywhere else.Learn more =0A=0A.=0A=0AWant to sponsor this newsletter=3F Get in touch here =0A=0A.=0A=0A You received this message becaus= e you are subscribed to Bloomberg's Money =0AStuff newsletter. =0AUnsubscri= be =0A=0A |Bloomberg.com | Con= tact Us =0A =0A=0A | = =0ABloomberg L.P. 731 Lexington, New York, NY, = 10022 =0A --_----NGGvfJDVo/L7epS6d7peUA===_1B/BB-43977-6B84DE86 Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="UTF-8" = = Money Stuff<= /title> <!--[if (mso)|(mso 16)]><style type=3D"text/css">a{text-decoration:= none}</style><![endif]--> <style>body{width:100%;-webkit-font-smoothing:ant= ialiased;font-family:Helvetica,Arial,sans-serif;font-size:16px;line-height:= 150%;margin:0;padding:0}img{max-width:550px}.body-component a:visited{color= :#000;text-decoration:none!important;border-bottom:1px solid #000;backgroun= d-color:#ccc}.body-component h1 a:visited{text-decoration:none;color:#000}@= media only screen and (max-width:480px){.lihide{display:none!important}.lis= how{display:block!important;width:auto!important;overflow:visible!important= ;float:none!important;max-height:inherit!important;line-height:inherit!impo= rtant}.email-ssl-image{width:100%!important;height:auto!important}.body-ima= ge img{width:100%!important}.logo-image{width:100%!important}}</style></hea= d> <body style=3D"width: 100%; 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font-famil= y: Helvetica, Arial, sans-serif; font-size: 16px; max-width: 550px; width: = 100% !important;"> <!--[if mso]><center> <tr><td> <table border=3D"0" cellp= adding=3D"0" cellspacing=3D"0" width=3D"550"><![endif]--> <tr> <td style=3D= "border-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt;">= <div style=3D"display: none; max-height: 0px; overflow: hidden;"> Liquidat= ions, -3x ETF, buybacks, iPad. </div> </td> </tr> <tr> <td style=3D"border-= collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt; padding-b= ottom: 15px;"> <table width=3D"100%" border=3D"0" cellspacing=3D"0" cellpad= ding=3D"0"> <tr> <td align=3D"center" style=3D"border-collapse: collapse; m= so-table-lspace: 0pt; mso-table-rspace: 0pt; padding: 20px 0px 10px;"> <a h= ref=3D"https://links.message.bloomberg.com/s/c/R2p17ssczE-b-5DoGXeEz0lcK9-Q= RS2pOqUUQlLVbHmkEFzrX1IMFKmAnt7aRlh2AJ9GMr8qVSlglU92Mvo52yNgHlWxj-NkYW1TfcR= BY4lIH62iKZaWTNwa8yeBbtSg1IourbDZ_saj9IsV8by48CZ9h_XkCEyloYnJZRZDwTQcHuCkCc= CsSSaAcqgIQFWQMz8evnAYGw-diK1G6B3axIBqJO8lSsnbVBzFG9U2c0n8KyHqMmPYddqeGts20= NmGUluCxiANBLcIXaxrUt972vWonHO3bWq1eSxkC-dfrjt616Za3wuzNBDT71biTwDrM7nmWODJ= JmfK-kz9LsSS2wrHjkFHKyuTwSedZTfx_qr6zNFzWfHhE73Saw/ZWKJ0pT97kgdMCNzA0FtxzOZ= UmvkslIQ/13" style=3D"font-family: Helvetica, Arial, sans-serif; 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width: 530px; display: block;"/><!--[if mso= ]></div><![endif]--></a> </td> </tr> </table><table align=3D"center" border= =3D"0" cellpadding=3D"0" cellspacing=3D"0" data-lt-version=3D"3.0.0"> <tr> = <td colspan=3D"2" align=3D"center" style=3D"line-height: 1px"> <img src=3D"= https://sli.bloomberg.com/imp=3Fs=3D1149004&li=3D15283072&m=3D1e618= ca1ed3ef770bf0b25ef3db247f4&p=3D10132025&lctg=3D6ab2b7de-2e48-4d78-= b91a-0ecf23e38de5&stpe=3Dstatic" border=3D"0" style=3D"display: block; = max-height: 12px !important"/> </td> </tr> <tr> <td colspan=3D"2" style=3D"= line-height: 1px"> <a href=3D"https://links.message.bloomberg.com/s/c/vC6SV= H5P76_xDmGFypR1nNjIyyT_U4DamfM0In6ErfXyasr-ZF7vxPvVIcZZdaO2WtwtdQ7ffIrU9vKp= _wfICzjcVMO7TcRw56Gv9aYgnzzA2LX156ZK_Dt-f-YzGKFet_fo4_TJ6AKcPj2J9w7Yrq9SvTS= 6RvE3OQXQYfEtPo1Szl7xYVM8HlYQTGy5TGZPd7glCENAixfbeUWkUB7N_YbJ_g9nO5UyO2SHZu= NIf0dc8aLzNcmylbOR0m5eH6JXs4NhGkE5QlbCJnijTH8FBEJS2LGnJfJR6eIwyt9MJ1_IDTjyd= OYf9wag9uZp9Gt1AZk28a7voCDa-t9r0IuDNkPhZrhwu1PwTLg5rJPAaCX66BsijAuqGo8O-IZo= mkfkD5VFvIpOq5-KJVsX0LiaxFDuFHF3kIBU3eTHSIdDIZR54CLFxeFT_35yHLKF9HrdgJavM-I= fQbynm2g8rolsLOvySSOQ3HAvC6oXiayE3Jd-PP95G-Hi-7hmo6L8uIFqNvgHI-GFmukIVC5p28= xFDW3pT_FWrDZ4XAOTfIQ2YliSynm32aYzYnt3VLHCZW4n-A8NYB3Qk6sRsHF8k8x5vI3lmAMLH= XpixkGGe2SH1w0ir9wGMXCjKUzw7hST0l-sA8zgqx-0NTsA9hCiD63ziCGT6lXsPaPij91hnoT0= -UCEZIAxqTFD4x4cBMjFc4I/hliQsaubg1nlHVR3fGobojOC2SuKxFWT/13" rel=3D"nofollo= w" target=3D"_blank"> <img src=3D"https://sli.bloomberg.com/imp=3Fs=3D11490= 04&li=3D15283072&m=3D1e618ca1ed3ef770bf0b25ef3db247f4&p=3D10132025&lctg=3D6= ab2b7de-2e48-4d78-b91a-0ecf23e38de5&stpe=3Ddefault&li_coord=3Ddesktop&colla= pse_width=3D550" border=3D"0" width=3D"550" style=3D"display: block; 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widt= h: 100% !important; max-width: 550px !important;"/> </a> </td> </tr> <!--<!= [endif]--> </table> </td> </tr> <tr> <td style=3D"border-collapse: collapse= ; mso-table-lspace: 0pt; mso-table-rspace: 0pt;"> <table width=3D"100%" bor= der=3D"0" cellspacing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"border-col= lapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt; line-height:= 150%; padding: 0 10px;"> <table width=3D"100%" border=3D"0" cellspacing=3D= "0" cellpadding=3D"0"> <tr> <td style=3D"border-collapse: collapse; mso-tab= le-lspace: 0pt; mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: bold; fo= nt-family: "Arial Black", Arial, Helvetica, sans-serif; letter-sp= acing: -1px; font-size: 20px; border-bottom-width: 1px; border-bottom-style= : dotted; margin: 0px; padding: 16px 0px 5px;">OpenAI</h2> </td> </tr> </ta= ble> <p style=3D"margin: 16px 0;">The essence of finance is <a href=3D"http= s://links.message.bloomberg.com/s/c/u5nIHKOXAFm2Dg9kUdhKRShahDBhKwVcTaoxM9P= zyYq-967c_mKxTqG6sKCjHisQletNJ64C6uSAJlT9PfKhmr2-pB5IRf9omLZswxwg83ZHbXyDdk= Go0i7hdUyJog6XGO8sOM29Ue1aCfJj4R_aUpRvDgpwy4J56Hsi7lr49swKRamPsnjud9i4_0l2-= XuzfKQ5hF49Om76EFh-Ow4Y2U6sUYlRlkEIsImMR2QO6cT25lD7_jpttxQLM2G9bXWS4O_RUh_4= coMKZLxH7SWjqlr75vVjC45T6XkVx38icJOEcgtJW9f0n9edrOWwiWtlTxNbxW9A5Nk6Tbm0G_0= _0h9tH_2dDsDsZBVw6H95xX-Rt8mMx5jQyXHL5g/KIuav6cQs3hI8bD1QbtidKb6qbr5rKaM/13= " itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D= "color: #000000; text-decoration: none !important; border-bottom-width: 1px= ; border-bottom-color: #000000; border-bottom-style: solid; background-colo= r: #ccc;">time travel</a>. In the future, your factory will make widgets an= d you will sell them profitably, so you can borrow money, today, to build t= he factory to make the widgets to sell to repay the money. If you go to a b= ank with an architect=E2=80=99s plans for the widget factory, and a busines= s plan for making and selling the widgets, and a good track record of profi= tably manufacturing and selling widgets, the bank will be happy to lend you= the money to build the factory. The bank has people who understand widgets= ; it can model up a widget factory pretty easily. It will figure out an app= ropriate leverage level for the factory and lend you that amount of money a= t, like, 8% interest.</p> <p style=3D"margin: 16px 0;">Tech startups are an= extreme version of this. In the future, human life will be utterly transfo= rmed by your invention: We will live on Mars or socialize in the metaverse<= a href=3D"#footnote-1" style=3D"color: #000000; text-decoration: none !impo= rtant; border-bottom-width: 1px; border-bottom-color: #000000; border-botto= m-style: none !important; background-color: transparent !important; display= : inline-block;"> <span>[1]</span> </a>=C2=A0or commute in self-driving fly= ing cars or have omniscient robots in our pockets that can fulfill every hu= man desire. Presumably, also, you can turn that into money. So you can rais= e money, today, to build the metaverse or cars or robots.=C2=A0I once <a hr= ef=3D"https://links.message.bloomberg.com/s/c/PU8eyF-RlzFfXF3KAf4RZPNwuOHBk= 1xfqi83pQdoZ52_iLgE0frtjCy4sxL4FPE_mvU0mKid23xoCJHslbFMuiUmg3BaNZF5AhxFis6j= UdlJH-griSeqEVRS3-UyDDvXJIMoUmuMMo4WvBtx41xRqkQFo1PWkU6O-KL-kbs-WV1eak6GYjC= AQKf7veicieaC4aHVvs_GFKRejezAp5O_MxUXBU_djx3hE4tiRl0932-a6nuK6ijDOrShhkue1z= f_KDBADFmGJBdo5b7Y6eIKY1WZiGG9hJArK4GmKDCrZbIa15Ivab_Vq7OcWQsq1-txaCPiR-jaA= bsO3u6py3VBCRZ8L3V-J5MrkMbcqn8RE6cGoQj2ZZNbpvnfXg/PwHv9fe7i0q6x04G-IHTExHzK= V_vvVgw/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank= " style=3D"color: #000000; text-decoration: none !important; border-bottom-= width: 1px; border-bottom-color: #000000; border-bottom-style: solid; backg= round-color: #ccc;">wrote about Nikola Corp.</a>, the hydrogen-powered truc= k startup:</p> <blockquote><p style=3D"margin: 16px 0;">What you want, when= you invest in a startup, is a founder who combines (1) an insanely ambitio= us vision with (2) a clear-eyed plan to make it come true=C2=A0<em>and=C2= =A0</em>(3) the ability to make people believe in the vision=C2=A0<em>now</= em>. =E2=80=9CWe=E2=80=99ll tinker with hydrogen for a while and maybe in a= decade or so a fuel-cell-powered truck will come out of it=E2=80=9D:=C2=A0= <em>True</em>, yes, but a bad=C2=A0<em>pitch</em>. The=C2=A0<em>pitch=C2=A0= </em>is, like, you put your arm around the shoulder of an investor, you ges= ture sweepingly into the distance, you close your eyes, she closes her eyes= , and you say in mellifluous tones: =E2=80=9CCan=E2=80=99t you see the truc= ks rolling off the assembly line right now=3F Aren=E2=80=99t they beautiful= =3F So clean and efficient, look at how nicely they drive, look at all thos= e components, all built in-house, aren=E2=80=99t they amazing=3F Here, hold= out your hand, you can=C2=A0<em>touch=C2=A0</em>the truck right now. Let= =E2=80=99s go for a drive.=E2=80=9D That=E2=80=99s not<em>=C2=A0true</em>, = but it=E2=80=99s a nice=C2=A0<em>metaphor</em>; the goal is to get the inve= stor to see the future, so she=E2=80=99ll give you money today, so that you= can build the future tomorrow.</p></blockquote> <p style=3D"margin: 16px 0= ;">This is harder to model, though. How much money will you make selling th= e metaverse or the omniscient robots=3F A large amount, probably, but you a= re not going to have a detailed spreadsheet projecting your margins to a te= nth of a percentage point. =E2=80=9CEhhh omniscient robots, come on,=E2=80= =9D you say to investors, and they say =E2=80=9Cyes of course=E2=80=9D and = give you money. But this will be based more on feel and enthusiasm and comp= etitive dynamics than on detailed financial modeling. Also it will be <em>e= quity</em>. Investors will give you money now in exchange for a slice of th= e enormous profits of your world-changing vision, not for a fixed 8% return= .</p> <p style=3D"margin: 16px 0;">How much will they give you=3F Well, if= you are very very very very good at pitching your vision, they might give = you tens of billions of dollars. Global venture capital investment is somet= hing like <a href=3D"https://links.message.bloomberg.com/s/c/VMXKs8UBHhP29m= m8fwjDb7-dZwANilh5tSq6Neq25bf4-zUYRS_oOMDnsGk__yJF5ng_Sqq32rLyJWgF5OtpjADzd= swhQZ3BOrscFDHfdUk8P_911nkftnJVUGay0R0Kr0N-bDFPXP5i3myDHbalrp-OOdfQ8x9p4ImO= 8YFlYlUhy1-9sjTGp5YpS1nKu5WHXCZZMd0ELaO8AhoIv0n4dD7W4XSA6RTwzlSaqcjZgNBjSdd= DQr9bVTAbgxQYt5_-Ps8JE88G_jq6AZApi2PCmt8VoTnfSfnYHFlaE7KUnd38n1XyAi1rRT10ey= adCceg_KitCJvudIR1BjjJFWS0auL45A-9CwfCzYjKa3hKaYd9HNNjdZ_aKHMpNQ/1HA_PMW3jN= P-7lJRA9qc9vIBniUmncPX/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" t= arget=3D"_blank" style=3D"color: #000000; text-decoration: none !important;= border-bottom-width: 1px; border-bottom-color: #000000; border-bottom-styl= e: solid; background-color: #ccc;">$368 billion per year</a>; getting 10% o= f that would be an astonishing feat.</p> <p style=3D"margin: 16px 0;">What = if you want, say, $1 trillion=3F That is harder. You can go to Masayoshi So= n with your vision, and you can put your arm around his shoulder and gestur= e sweepingly into the distance and whisper =E2=80=9Comniscient robots,=E2= =80=9D and he might say =E2=80=9Cyes, here is all the money I have,=E2=80= =9D but that=E2=80=99s still not $1 trillion. To raise $1 trillion, you nee= d more than a compelling science-fiction vision of your world-changing prod= uct. You need a compelling science-fiction vision of world-changing financi= al engineering.=C2=A0</p> <p style=3D"margin: 16px 0;">By this metric Sam A= ltman is surely the greatest tech founder in history. Sure sure sure sure s= ure chatbots, but <a href=3D"https://links.message.bloomberg.com/s/c/_oqARh= B3nUpIWhqAQ8rCyKyGCmfIsCNApzr_DyRAocEy31KwJyy9VhvhTHcAdP3abuko_3NaE8Bs9RFcU= Gb3z9LhNGSoJHxD9v1ym826kaidExyEmzLHGCuI1dYkkqzlGCnuceNdj8vReiLVq9fJ5oLyw2dL= icom9ckM9STYQMTx-rAHd-kiULsBIeK_AUxnuqpkGknCjM55t0hJ0JvUEktJzf_Rwa8TBGEkWnG= Prv3Tb37KtfdsGXyMOV-mH1d-M8Z5w9niW4EvsRbbB1yWqsro14_LeHomfGXOG1ge6mFnspVwye= 0mMrPatOuJrHqyBHXwZi6E1rX1GhJ4y3XRDT5-jylTa9XuXQXwQw69sauPPzQIKPh20LwKcw/Ai= fPFfcYXdjg0ymAP1k-XQMqt9xn5_4S/13" itemprop=3D"StoryLink" itemscope=3D"item= scope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !im= portant; border-bottom-width: 1px; border-bottom-color: #000000; border-bot= tom-style: solid; background-color: #ccc;">look at this, man</a>:</p> <bloc= kquote><p style=3D"margin: 16px 0;">Altman recently told employees that Ope= nAI wanted to build 250 gigawatts of new computing capacity by 2033, accord= ing to people familiar with the matter, a plan that would cost over $10 tri= llion by today=E2=80=99s standards. He has said that OpenAI would have to c= reate new financing tools to help fund this massive build-out but hasn=E2= =80=99t shared many details on what that would look like.</p></blockquote> = <p style=3D"margin: 16px 0;">No! Wrong! He has shared tons of details of wh= at his new financing tools will look like! He shares more every day! <a hre= f=3D"https://links.message.bloomberg.com/s/c/FSrKcx_72rQbf1PkrQ3jhK_PzQn8_B= A77xt-VfHNh59aVP23uhsMYJQ7yXe9sxk5LnnP7YXvRDz9Qf23Sfi6ZIw_yLkFkN-EscpYs_JzX= f9vWO6WoE-tMN0ssDiM821cWRztGYQiZD8uPTzzEvPb-TDgBHSN-UBCIHrCdATgeihhccMt4Gvp= 1DFZT7A2-z8s94SetmBqiLalObQf6Iae2xjCUINpsEEWQtxF1TYQfJFZDry2mvrlzdoSHXNEN4r= 2XwmX3NEBhFY-UwNNUZdBmesrTR4-HgK-ZW0sml7Akm-gK_2ttNuXT3LV8waBb0OMYwF5oGqphZ= WHHShlPFBKm318GO0V04fXw5m7mm8D20KpDCIy5rLD4Hp-dMU/o0t1VPOskQE_6dr4W535UBmAz= mU8quMP/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank= " style=3D"color: #000000; text-decoration: none !important; border-bottom-= width: 1px; border-bottom-color: #000000; border-bottom-style: solid; backg= round-color: #ccc;">Here=E2=80=99s today=E2=80=99s</a>:</p> <blockquote> <p= style=3D"margin: 16px 0;">Broadcom Inc. shares jumped after OpenAI agreed = to buy the company=E2=80=99s custom chips and networking equipment in a mul= tiyear deal, part of an ambitious plan by the startup to add artificial int= elligence infrastructure. =E2=80=A6</p> <p style=3D"margin: 16px 0;">Invest= ors sent Broadcom shares up as as much as 11% on Monday, betting that the O= penAI alliance will generate hundreds of billions of dollars in new revenue= for the chipmaker. But the details of how OpenAI will pay for the equipmen= t aren=E2=80=99t spelled out. While the AI startup has shown it can easily = raise funding from investors, it=E2=80=99s burning through wads of cash and= doesn=E2=80=99t expect to be cash-flow positive until around the end of th= is decade.</p> </blockquote> <p style=3D"margin: 16px 0;">The financing too= l is, you go to Broadcom and you put your arm around their shoulder and you= gesture sweepingly in the distance and whisper =E2=80=9Comniscient robots= =E2=80=9D and they whisper =E2=80=9Cyesssss=E2=80=9D and you say =E2=80=9Cw= e=E2=80=99ll need a few hundred billions dollars of chips and equipment fro= m you=E2=80=9D and they say=C2=A0=E2=80=9Cof course=E2=80=9D and you say = =E2=80=9Cgood=E2=80=9D and they say =E2=80=9Cdo you have hundreds of billio= ns of dollars=E2=80=9D and you whisper =E2=80=9Comniscient robots=E2=80=9D = again and they are enlightened. And then you announce the deal and Broadcom= =E2=80=99s stock adds $150 billion of market capitalization and you=E2=80= =99re like =E2=80=9Csee=E2=80=9D and they=E2=80=99re like =E2=80=9Cyes=E2= =80=9D and you=E2=80=99re like =E2=80=9Comniscient robots=E2=80=9D and they= =E2=80=99re like =E2=80=9CI know right.=E2=80=9D That is the financing tool= ! In some loose postmodern sense, OpenAI has <em>borrowed </em>hundreds of = billions of dollars from Broadcom.=C2=A0You can buy hundreds of billions of= dollars of equipment to build the robots to sell for money to pay for the = equipment, because you=E2=80=99ve gotten everyone to believe.</p> <p style= =3D"margin: 16px 0;">The <a href=3D"https://links.message.bloomberg.com/s/c= /Ge90kAyQRF2w5icUZmZ5e4tYxG-TffMMgAIBPDYTxRst4xU8SqQgMtY8pbRG_DSSjzhyTQNdoW= pj7VmAyh17lcUC2kabA36tAWLhzD4cmZMWEUBxlj1uHzqp68Jbw_6ulKLi5cccM62f9oG3fLGNZ= dlbfZS5F5Oyl8PEzSzGkwxpewzSfsQjJDcLCfvsjFrTp49hBUfVwcCEGvlH4OrNfpiTnE5agbN3= DcOJyNfw6p7zR49uD_2riNObUzXAx_pmZJI_TDzUJazVgvqL4gN2SsBozICrxSerrjv_ijvXFq_= yf_S5MGB3gc6y2VddV0sKCcfgQQEYRwifkG5hUKcPal8OfCP18YbPezTWgqvFOpsjvZtzXXz3DV= Ro5jc/L89tI68Bq0k-dHBtm9TESHFnm9pbE8hm/13" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">Financial Times explains= </a>:</p> <blockquote> <p style=3D"margin: 16px 0;">The mammoth chip order = means OpenAI could spend another $350bn to $500bn on top of the roughly $1t= n of chip and data centre deals it has signed in recent months as it races = to secure the computing power to run services such as ChatGPT. ...</p> <p s= tyle=3D"margin: 16px 0;">The deals have bound some of the world=E2=80=99s b= iggest tech groups to OpenAI=E2=80=99s fortunes, despite questions about ho= w OpenAI will fund them as the cost dwarfs the start-up=E2=80=99s existing = revenues.</p> </blockquote> <p style=3D"margin: 16px 0;"><a href=3D"https:/= /links.message.bloomberg.com/s/c/NloEvyt7dEoLmABpioMGbX420mf6c5bWLH_UlZTuFg= h_5NcDhv9cmXB7UzkKFX_x0bivXbAMx7ET4wX8torHxpdPxeg3WEb5FoJQpUUyicVgYGcg-UUOf= wEzIyXEGayAQ9DpXVNiWzqpQJxmoCefS6Pt_8lmOnsNVJxDZcnojvHltTwc7XuxJM-0i74wwflH= 7scvaxqIyIRhcnfMwat-VMZDHMBcTxUtDSIfiAhbtQNfCoPI6GXISWILSvRgSsNczavHxbN3j4g= txdx_M6jkPuMgz6pEra0GvZxhagXcy7BXhJiLLkvEEdK8iuI42BcLZUlDYXnRre34lfzBW9_t_K= JNzPgHNaJ20XGrYIXmDpAVsdQYvDP47oR1OCI/nMk8oEwqE8t6EvXzwkzuFXrXt2yrJPHo/13" = itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"c= olor: #000000; text-decoration: none !important; border-bottom-width: 1px; = border-bottom-color: #000000; border-bottom-style: solid; background-color:= #ccc;">Also</a>:</p> <blockquote> <p style=3D"margin: 16px 0;">The deals h= ave bound some of the world=E2=80=99s biggest tech groups to OpenAI=E2=80= =99s ability to become a profitable business that can meet its increasingly= steep financial obligations.</p> <p style=3D"margin: 16px 0;">=E2=80=9COpe= nAI is in no position to make any of these commitments,=E2=80=9D said Gil L= uria, analyst at DA Davidson, who added it could lose about $10bn this year= .</p> <p style=3D"margin: 16px 0;">=E2=80=9CPart of Silicon Valley=E2=80= =99s =E2=80=98fake it until you make it=E2=80=99 ethos is to get people to = have skin in the game. Now a lot of big companies have a lot of skin in the= game on OpenAI,=E2=80=9D he added.</p> </blockquote> <p style=3D"margin: 1= 6px 0;">If you owe the bank $100, <a href=3D"https://links.message.bloomber= g.com/s/c/3RPrmY_8hBG3dj9i-Xs_zA3hve6h_t12CpvVBBAhKtSfwH1LdEZNCVSJqAPBtOsA0= cJ_4D-J91rTqpCRalDsSmQaexJety6zvyiio2ldmB5t_YX1c70KCoM0eSFeFNR6uuVFAK4g70Z0= xrXAXu7vtY0rRJdLRWwaxFApsRsNDX5362g3I9AW6D3o1HdTg7uIKXL5-56U3w0sT8ogKYTyWud= rBSsnWYIW4nCtLxSHZzY3SQcA6bYysR7bQs1qp6qsxAk5x051s0KaAjm0eifEBATkpy67QLiJi5= G78fdKbJv-QhF_T99XlWq83uYE6OEdMhPWTa4O-cZFylRTJN2VwphGNHexZM60-XzrzOYDiNS_J= TfEMfc-cM6i5vA/lk-zxsYXXBPg_SDdnkf2Y-7uVcRbhMjx/13" itemprop=3D"StoryLink" = itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-dec= oration: none !important; border-bottom-width: 1px; border-bottom-color: #0= 00000; border-bottom-style: solid; background-color: #ccc;">that=E2=80=99s = your problem</a>. If you owe Broadcom=C2=A0<em>$500 billion</em>, that=E2= =80=99s Broadcom=E2=80=99s problem. If you owe every big tech company hundr= eds of billions of dollars, that is their problem. Surely they=E2=80=99ll f= ind a solution! Or you will. The money will figure itself out.</p> <p style= =3D"margin: 16px 0;">How=3F Well, in a world with insatiable demand for AI = inference, probably you can raise quite a lot of money in <em>debt </em>to = pay for the data centers. The bet here is something like =E2=80=9Cby the ti= me we are actually building these data centers, they will be less like scie= nce-fiction speculation and more like widget factories, and people will be = comfortable financing them based on cash-flow models.=E2=80=9D But, for now= , backstopping that theory is another theory, something like =E2=80=9COpenA= I has a $500 billion equity value so surely it could raise more money to pa= y its bills.=E2=80=9D The <a href=3D"https://links.message.bloomberg.com/s/= c/GnGlL-eAFtc6juk37PuWJZgYXSsbwA6SmHO-4upoKFMjaJuHw6gBU_1yDF-QfWuZKuB_VcdpL= uWORhy-T4XYR0FTuEiQnAPZjNW5UJnh8a_HDNx6JFWa7kZd8aesgVuI1N6KIqohzDg46a1FK-vP= jHiKnvwOeVdiA1i09Pp_nyUtIDJRu1VVbRHb0zTerB0AIs3M2lbIyUDCXTZ0qXbFxNUY662Eu8c= 5D3Axxa9SRG-LRrnNeIKoGIyZGY3kfzeQP4vCkyFY946UGyWOQQXjFj3CGT8sZ4UIxQKsFhsbri= Wymd739RZIbcc_EVxpa7WtXvOVTMGEhy5SOTXE8F0xDfenkKgbZqXAH_H28_bZdetsfx9W9w8z9= dPtgDU/i3xpXPtI3tbuNChLZE_XNmUgNIQJjcJH/13" itemprop=3D"StoryLink" itemscop= e=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration:= none !important; border-bottom-width: 1px; border-bottom-color: #000000; b= order-bottom-style: solid; background-color: #ccc;">Financial Times notes</= a>:</p> <blockquote> <p style=3D"margin: 16px 0;">OpenAI=E2=80=99s recent b= lockbuster deals have added a new layer to its complicated ownership struct= ure, leading to more uncertainty over when and how its powerful shareholder= s will get an eventual payout. =E2=80=A6</p> <p style=3D"margin: 16px 0;">O= penAI=E2=80=99s boundless capital requirements meant its backers =E2=80=94 = including Microsoft, SoftBank and Josh Kushner=E2=80=99s Thrive Capital =E2= =80=94 would see their shareholding diluted through further fundraising, sa= id people familiar with the company=E2=80=99s plans. ...</p> <p style=3D"ma= rgin: 16px 0;">=E2=80=9CMost people would prefer to have a smaller piece of= a bigger pie,=E2=80=9D said a senior OpenAI executive.</p> </blockquote> <= p style=3D"margin: 16px 0;">The <a href=3D"https://links.message.bloomberg.= com/s/c/jFxb9Dbb8NHjuE9G1BbfaQMDAmVBoQHO7x9BNizjTRR0RsryInSfHOezK7wD3IzWLi0= 6SpZ4ucoXmCKfnSX0Lvigz236f0JRodNHUioAmWKdU0czGZngSOrFt1dyhhnOKcbqf-X8KXphek= ijY8LANRKsgHB-LLqsmdAxe9puBnia57lnfPa4R9aijfNOIwr2qyRgN9LbLUZ_z7lZUdZNMRSFh= i4u9p2xXeNXwhn7iTCrpf5zNIG3QDgbBVsVQyq4Y8-b3Q72CCREXMymYj1vBEXV_MfOs7lIDn2p= Jt1_Vt1WHYN4N17QE9U16rXdPsbQoeaF0Rl7HIxAuLzOlx8MjyE7gM2sqspPOw-hYhM-0c-uIIH= ryVNKB96Bojo/JCDTJreJ-FP984LL1FZ0pvCYNbmMRSWA/13" itemprop=3D"StoryLink" it= emscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decor= ation: none !important; border-bottom-width: 1px; border-bottom-color: #000= 000; border-bottom-style: solid; background-color: #ccc;">Wall Street Journ= al adds</a>:</p> <blockquote><p style=3D"margin: 16px 0;">OpenAI=E2=80=99s = deals with chip and cloud companies in the past few months have helped fuel= a global rally in tech stocks. Each agreement has raised the already high = expectations set by Altman in describing the seemingly infinite amount of c= ompute needed to bring forth the AI revolution. The deals have surprised so= me competitors who have far more modest projections of their computing cost= s.</p></blockquote> <p style=3D"margin: 16px 0;">Last week, <a href=3D"http= s://links.message.bloomberg.com/s/c/LdaH2oaUk58d5hMMR9IhRhr0dOC1uqDQc_TQYz5= p8YhU1MM5hIUp013T0Y4tv-0ZRZe__aIACpO_AfrfnW4q8UB6HElPIki3b4cm-bbUtn2MtHeJnE= I2yKhf9b76VXgQcwESAFkGcmyJhsr8rnrYAw6fN_x2chkW1YMBoKh5WLu9mjN2KNWBJrUnhXQU7= eQSXLM0v1ICXKWuDGBmdNrtgbL0jd1reytjpqGVzHIosqUql2LVg5qXp_7d7jrQ_E38kQlKfXUn= OlsEta3phHx0DnbtISqWnsZo1wNeuO3M2PtYsLOulDzJuZYPyVZegCir1cV9T8LtjKoSuBxEFU1= MYTAxaK6DyYOdiTKLgtJNpIEHLX7dVAXQ-PkrucU/5uwCjXilsKvo2rs628GzcOKMPqRdanS7/1= 3" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style= =3D"color: #000000; text-decoration: none !important; border-bottom-width: = 1px; border-bottom-color: #000000; border-bottom-style: solid; background-c= olor: #ccc;">we discussed</a> OpenAI=E2=80=99s deal with Advanced Micro Dev= ices Inc., in which OpenAI essentially=C2=A0<em>spent=C2=A0</em>some of tha= t global tech rally on chips: OpenAI agreed to pay AMD tens of billions of = dollars for chips, but it took back warrants on AMD=E2=80=99s stock; those = warrants instantly became worth tens of billions of dollars as AMD=E2=80=99= s stock rallied on news of the deal. The Broadcom deal does not have that s= ort of explicit monetization of OpenAI=E2=80=99s ability to add equity valu= e to every company it touches. But does it <em>implicitly=C2=A0</em>monetiz= e that ability=3F=C2=A0</p> <p style=3D"margin: 16px 0;">I have <a href=3D"= https://links.message.bloomberg.com/s/c/ZVsaaqnsTnFi5htZvxfH8Sw6OHli7TtNZYL= Vin61dFWmGrk6n1uNw8pq_74vcmdYCqsASbQCy_8-8TXETvmpdrVgzyy4s9JeEQ_0qAVuMqrKUb= 1Q84b7Z23kf42TuH3poBo-TvpY4-THYEk7aeNiwK4WW4Rn9POxC5ueg16B0PtgLJZvHq6OYZnJL= jZz_BBdFTadXXbVSYnAd1r-tCEb1EmdOl6WbN9bbCpj6bfPxP8EiyDbgpOsPrXYVI9pnszHnnYk= YeeIsKa4xq38BOOoLvXUnrsJDw0YnJioRJOd5KPbzzEqYVooPs5N99PjlPNt7cYqa7H2WygxyEi= uX7YQdDga_2E-suuhoL7SDzIO2ZYrBWn3fZaYdpKHtjo/gXMjJsmkCZ4Vn0H5lKl_z2lZNKbZF8= xO/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" sty= le=3D"color: #000000; text-decoration: none !important; border-bottom-width= : 1px; border-bottom-color: #000000; border-bottom-style: solid; background= -color: #ccc;">previously written</a> that =E2=80=9Cnobody in history has e= ver been better at, like, business negging than Sam Altman.=E2=80=9D <a hre= f=3D"https://links.message.bloomberg.com/s/c/DF8r8yEPEiK5XQ5ktdpqh1qJ6k4PTE= B1E1xepkbrUq0SMj_JTPkC4GLlUPtcaiifxfNVLT8i5dXx-cJ2s6LJkfD1GYZNebxi7P3Vh918n= Ul9b4wY9K2KjqYDTbo5VqaiXQkdW5mAJ-knr5zt93U6indPTCFvAs-un4MHbm9NFEixCDC3F5ml= byJzZGY7rZZLm83yqApVFA3R6umLSQCiD_UOlHJGhOIdeGHFG9Dimy3Vdb4WiLRvAwgAS26SozH= rDijKpeYxVXtOlflFS5yG9UBaKfBOEHm9e-x5wY_A5ANmw3KOVh63uMZO0cTaxdRbx6RwTDmO1s= 38-x41bGfRwny9i5Qm5pvLvcZeEXO6pm0w3HJMde2g7ACOLNM/JCkPmC_JIThIXw3zqLCSNxYPY= MM5QvXg/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank= " style=3D"color: #000000; text-decoration: none !important; border-bottom-= width: 1px; border-bottom-color: #000000; border-bottom-style: solid; backg= round-color: #ccc;">And</a>:</p> <blockquote><p style=3D"margin: 16px 0;">W= hen Sam Altman, the chief executive officer of OpenAI, goes around publicly= worrying that AI might kill us all, what he is=C2=A0<em>really=C2=A0</em>s= aying is =E2=80=9CI am building a technology that is unimaginably powerful = and will transform every aspect of human life, so it sure must be worth a l= ot of money.=E2=80=9D If he just=C2=A0<em>said=C2=A0</em>that, you might be= skeptical; it is obviously in his self-interest to talk about how powerful= his technology is. But instead he goes around=C2=A0<em>worrying=C2=A0</em>= about it, which makes him seem more credible: It is=C2=A0<em>not=C2=A0</em>= obviously in his self-interest to talk about how dangerous his technology i= s and how carefully he needs to be checked. It=E2=80=99s more subtly in his= self-interest to do that.</p></blockquote> <p style=3D"margin: 16px 0;">Sa= me with the computing costs. =E2=80=9CThe deals have surprised some competi= tors who have far more modest projections of their computing costs,=E2=80= =9D because he is <em>better at this=C2=A0</em>than they are. If you go aro= und saying =E2=80=9CI am going to build transformative AI efficiently,=E2= =80=9D how transformative can it be=3F If you go around saying =E2=80=9CI a= m going to need 1,000 new nuclear plants to build my product,=E2=80=9D ever= yone knows that it will be a big deal.</p> <table width=3D"auto" cellpaddin= g=3D"0" cellspacing=3D"0" align=3D"center"> <tr> <td colspan=3D"2" align=3D= "center" valign=3D"top" style=3D"padding:0 0px"> <a href=3D"https://links.m= essage.bloomberg.com/s/c/0PLjMDQusgYLk6uBr5jvKw4LMpvN9m2dhIAb5Snlwot7GviJ22= 7FSbZ16GUVG7iYSWY6xWiCN_bUaW87_qktKsZES9tcEpuN9o5sjzs74D0WCXYQ5KPVOyn5wLYuJ= 8zSVPAKi_78LoSx0GrghB3QYSTVVeD9YErHSDRTS01tMEH-pe9bvq_D4NibepuxZ0e8l6izzgqM= XLLwt4H8SOO2MlzBFmxzCiqm_UNwVNKfSiiqpsvB-7f3ja2L1L4XGZyASTkqj4ilCCkEcVLROrN= VxcL3d5p_oj7o-3DJUlJTDLy5Wh0n6SEqo38td_MXtf3pPOpokSaAbEhepD89w4SOQGVtKfyJ05= SrLhlriEd3OMT0KDtDQj0CUAK7hfJMMBQrdMP6U_f4KCcSangfSSneRcyBPIaOBmNUOqyR_JTU2= o8q1nQET_JWwbo-yUHCNUgjtIUjOw3d5dy5WmfGhaUIuJ6rqXj2SbOg-H1hhEFNyf63IrALXdFN= loQp1Kh1ShDHc6bocXvv2uBROjeKwgqdga2misbuCAg65S_lqw7WzLu2K-0GTZ9TanqGQW5ylj1= u6fha1ha1iNWGc0mzcrlJ-o-DAb3VSH4dj1NbB_5ozJ4ZNpqJ5EXvbIwsxEfW_eivGFFHovD_Wx= 7S3kzyENu2bVn6yEOxeQBQftBFaOxcdXa0WRq2yhKDPVs0K05AfA/8jttfcetwWTWC_5tvwSZHq= GllP9vBQit/13" target=3D"_blank"> <img src=3D"https://sli.bloomberg.com/imp= =3Fs=3D868432&stpe=3Ddefault&li_coord=3Ddesktop&collapse_width=3D550&li=3D1= 5283072&m=3D1e618ca1ed3ef770bf0b25ef3db247f4&p=3D10132025&lctg=3D6ab2b7de-2= e48-4d78-b91a-0ecf23e38de5" width=3D"550" border=3D"0" style=3D"display:blo= ck;height:auto;width:100%;max-width:550px;" alt=3D"" class=3D"lihide"/> </a= > </td> </tr> <tr> <td colspan=3D"2" align=3D"center" valign=3D"top"> <!--[= if !mso]><!--> <div style=3D"display:none; overflow:hidden; width:0; max-he= ight:0; line-height:0;" class=3D"lishow"> <table width=3D"auto" cellpadding= =3D"0" cellspacing=3D"0" align=3D"center"> <tr> <td align=3D"center" valign= =3D"top" style=3D"padding:0 0px"> <a href=3D"https://links.message.bloomber= g.com/s/c/mUz_F_WZ3kTlt12oxY8swxu_h7qFka4FHK-53UxoNcMxc0Shbz7oOdR_tJ5FQaHCk= i5FS7pwD2NzPkcg8iRMa7L9VTdl86rdly51Dq73UjaglbSHcAjXYQUuJLbhB6F2_gg8j7usBB7T= ZKsHodfuiYTLNpZii9KtKVgZ2LCnbeXbUY6hVpH4UjB4v60IR-6qoVK6wUyfIlzW6MSX43IgQoE= WLZwGUwx7YaU3koufr5Wbi4YyoqjFjG-nG4JHO568hykVLXTnmrKHtdnlJ6xpoVEv48K5mrtUXk= v3pSQid9-st6VX2Mp1VemmkDLe87Y6vQ1axZKDLcYeDZgneasP_VWWdBR5qIkLoZYqlb0NkDjVz= pIbZBCRV2mJrazFARkxKWkkSQh2zftXOfTAr3u-8NtVStfifrpUlvii63kxjCNJ9C7evCwGGU2r= P8p5GWtgOZWoO7-eeIbA8QUu-kA7uGtrbbZ_GomYPoNH_kAg-Ng-rW_GsZTMhsPMEyZ3N9rHF1v= fDbZQqUUR0fgCgb8oaK-RjHBlg8CIvguqN2TpE0GeWF8FRZcTUpjEmxk8xmVUnWV5r217EDMsAU= bG2W9g6HHbM9Ar1xSTNRITrUhv98W8oLDe6CjfYljmb85c0IwokoqWfhmewwaIpytOfegshCA2Q= KpoW6xioFKXbkymodp1AxnESYc65RAX6NQ0Hg/ZaCGysNOKcAi015itNiCtBTHjEShuMAp/13" = target=3D"_blank"> <img src=3D"https://sli.bloomberg.com/imp=3Fs=3D868432&s= tpe=3Ddefault&li_coord=3Dmobile&collapse_width=3D550&li=3D15283072&m=3D1e61= 8ca1ed3ef770bf0b25ef3db247f4&p=3D10132025&lctg=3D6ab2b7de-2e48-4d78-b91a-0e= cf23e38de5" width=3D"100%" border=3D"0" style=3D"display:block;height:auto;= " alt=3D""/> </a> </td> </tr> </table> </div> <!--<![endif]--> </td> </tr> = </table> <table width=3D"100%" border=3D"0" cellspacing=3D"0" cellpadding= =3D"0"> <tr> <td style=3D"border-collapse: collapse; mso-table-lspace: 0pt;= mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: bold; font-family: &quo= t;Arial Black", Arial, Helvetica, sans-serif; letter-spacing: -1px; fo= nt-size: 20px; border-bottom-width: 1px; border-bottom-style: dotted; margi= n: 0px; padding: 16px 0px 5px;">Crypto liquidations</h2> </td> </tr> </tabl= e> <p style=3D"margin: 16px 0;">Schematically here is how crypto market str= ucture works. I think Dogecoin will go up. You think Dogecoin will go down.= Dogecoin is trading at, let=E2=80=99s say, $0.20.=C2=A0I go to a crypto ex= change and make a bet on Dogecoin. I put down $100 for my bet, at 20-to-1 l= everage; effectively, I have bought $2,000 worth of Dogecoin (10,000 coins)= for $100. If Dogecoin goes up to $0.25, my position is worth $2,500; I hav= e made $500 of profit on my $100 bet. If Dogecoin goes down to $0.19, my po= sition is worth $0; I have lost my $100 bet, and my bet is closed out.</p> = <p style=3D"margin: 16px 0;">You, meanwhile, put down $100 for a 20-to-1 le= vered bet=C2=A0<em>against </em>Dogecoin. If Dogecoin goes down to $0.15, y= ou make $500 of profit on your $100 bet. If Dogecoin goes up to $0.21, your= position is worth $0; you have lost your $100 bet, and your bet is closed = out.</p> <p style=3D"margin: 16px 0;">Notice, though, that my $100 bet was = on $2,000 worth of Dogecoins. How does the crypto exchange get $2,000 worth= of Dogecoins, if I have only given it $100=3F One possible answer is =E2= =80=9Cthe crypto exchange borrows $1,900 from someone else to buy my $2,000= worth of Dogecoins,=E2=80=9D but a moment=E2=80=99s reflection will tell y= ou that that=E2=80=99s not the answer. The answer is that the crypto exchan= ge=C2=A0<em>doesn=E2=80=99t=C2=A0</em>buy any Dogecoins. The crypto exchang= e is not in the business of buying Dogecoins; it is in the business of matc= hing bets. I bet $100 that Dogecoin will go up, and you bet $100 that Dogec= oin will go down, and the crypto exchange matches our bets against each oth= er. If I win, you lose, and vice versa; there are no actual Dogecoins invol= ved.</p> <p style=3D"margin: 16px 0;">This is <a href=3D"https://links.mess= age.bloomberg.com/s/c/irARRZbgC2LNo6YI48dpJfJZUoxNxuBQBIFeMmRUS3pmbHF_RGNd2= Eo-lhoF7xmVywBa7WiJlvJOpuzBMeXvboIzypL9isV9mTdgj5PLHDAhccuU9DsPixylVqy5FKNb= 70_p2a-RX5XGniiz58kylDMJU6oRmA0asH33guPCIVlFbDRp5xFMUZep8_2yBFNaYlk6uOcx56b= crsRwMIQYT_Pb3xtfn24hYbqRSPofyf8_RwnbuSGJWOMPF0Is4LUTpzFufjQBlSYGUAHsQ-lXo_= O3YEC-rZXmwfWj9cejJptfvwKLoXM6bkLPoVNj53vtk-M8S3nX21iiPtG3RIcanUrIIeLNF18MJ= pdgo6Xbpy0KkHMo6SHjGmYRNPc/8sRw5YAYKVE6N3K7Z-lodbFrJRMitKrE/13" itemprop=3D= "StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #0000= 00; text-decoration: none !important; border-bottom-width: 1px; border-bott= om-color: #000000; border-bottom-style: solid; background-color: #ccc;">not= the=C2=A0<em>only=C2=A0</em>crypto market structure</a>: There are many ex= changes where you can give the exchange $2,000 and get $2,000 worth of Doge= coin, which the exchange really holds in your account. There are probably s= ome exchanges where you can give the exchange $1,000 and get $2,000 worth o= f Dogecoin, with the exchange finding someone else to finance the other $1,= 000 to actually buy the Dogecoin. But if you are getting 20-to-1 leverage o= n Dogecoin, nobody is buying any Dogecoin. You are making a pure derivative= bet on the price of Dogecoin.</p> <p style=3D"margin: 16px 0;">In crypto t= his sort of derivative bet is conventionally called a =E2=80=9C<a href=3D"h= ttps://links.message.bloomberg.com/s/c/yT1IE7cZggHh8ytdc2fHm5arSh76E-wUZ3R5= bOX5DJBxcKJf4T0JirxbMNxHZG_ggdQypUWZpHrg-H1YvgBtW0gR7VzAzkoYkS26zq7VFpWeTp_= n3SnSd3eWOJWFkhUSkaS1wM7c7LQcwCsksuMjuve0DUaZ08DU2lwt5_n3b90AOXOl9X5YgRETlC= 9LZ0ymBDsEGQwY5HTA52V9zZMYT19wgbyroWmpNY3L-d5fMAekJdIIztGNbrPOFupqFk3WZn-85= ZeL73fk4qbIdDaTW6a4WWLqNCbHDGBeDGMH3CuRYtjPRqqVy-FedjHSf0E0-9Z_fW1pPNzW9Nhv= 5_SvkSrD_ldTCyrJgUuFfFn0XZ3vHE89HUvFgbPCEiY/emyQkKeyElJyem1zaVEIXS4J89o2Hrv= O/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" styl= e=3D"color: #000000; text-decoration: none !important; border-bottom-width:= 1px; border-bottom-color: #000000; border-bottom-style: solid; background-= color: #ccc;">perpetual futures contract</a>,=E2=80=9D or =E2=80=9Cperp.=E2= =80=9D In other markets it has other names. European stock traders might ca= ll it a =E2=80=9C<a href=3D"https://links.message.bloomberg.com/s/c/vpNLXBN= Rv4wmjTbt1G-RfPA22JPCiBOLvGHaluTujnk-UBgqTOKrbkB8MPnJUXj-pQ8y-uBBEcpz74ZlrM= u8rA58Natm-g4O9Oeob4UW35PdTR0QCIO0iRIqHOb1iLaHbrdA9pxz0WpaHWgrA4FdTUAmHfi8g= Fb8C_KcgXdJ6Bgqp41OPGokW0a5gZA2VURwk4lYNFq2UoBcGlIqOPGrw7Idl8JfBLCcVu6IxqWI= zXAvOrhni-MfJfq_LZ2Azh_10hTX8DCEhF8_keaYi_LUt8kAZFblG4iFS7_pbftgXXX2lRQ3El3= y9j_Fl1bvwIkovDSeuWQIA87Q622P2yGTC7SUdmTZ_xO9lbbKURybtLKDoHui8v9xDYyk5tc/Eq= wmL_RZNvAPZ3mJFAAPNw80HoJfqUzi/13" itemprop=3D"StoryLink" itemscope=3D"item= scope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !im= portant; border-bottom-width: 1px; border-bottom-color: #000000; border-bot= tom-style: solid; background-color: #ccc;">contract for difference</a>.=E2= =80=9D Old-timey American stock traders would have called it =E2=80=9C<a hr= ef=3D"https://links.message.bloomberg.com/s/c/EIJAJtUZrRIKM4jhtHvFv8Kx-_ux1= e1b45CmAUx0nAutJWk72mDfDRAEzwwLR_Udo6LtCCfHnJzVLpQkD-gxGlnDwq9sJZrr9EIcxZF6= FOstq_2dKaLaJZYdb-8NDgNBtz2MLpKN-XGAWdpVmfMByjxB8Mah4ojg1PQ1wMNtuLt9Wmeu9v-= nLvPFa6Gvhb0y2NZHpHj41iIdENgfzYnbozujMVr41zukLd_Vyfo1FPbc-Dif9BZlo097nwyMPp= kIftasrDTqze_ajHZyISUbMmQoGFKKgwYWjmIUi1-ZcS1x_v0PYEYE0b0W1vbxvFmm1KITdXASm= 8xSpu0drgu8B9BhPmd21XT4QWlOBl7IttpRlg3XkFLF4OJoklU/4IaOTDnTNRpLpb0z7slox_Cz= x5HYFmn-/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blan= k" style=3D"color: #000000; text-decoration: none !important; border-bottom= -width: 1px; border-bottom-color: #000000; border-bottom-style: solid; back= ground-color: #ccc;">bucketing</a>.=E2=80=9D=C2=A0</p> <p style=3D"margin: = 16px 0;">I have simplified things by saying that you and I bet against each= other. Actually in the first instance we bet against the exchange: I have = a perp that will pay me if Dogecoin will go up, but I do not look to you fo= r payment; I look to the exchange. The exchange will probably run a matched= book (if I am long $2,000 of Dogecoin someone else has to be short $2,000 = of Dogecoin), particularly if it is a decentralized exchange with no balanc= e sheet of its own. But that is not a law of nature, and sometimes crypto e= xchanges are in effect long or short massive amounts of crypto bets against= their customers. The famous example <a href=3D"https://links.message.bloom= berg.com/s/c/nnwuL_zChAsR5D8iIZLKzUNi593wkn0jYDSTnGrObbzVB4UXoR9Fk7JmlQSV38= ys9dqpOFuFyrApPJAhvJeqpBFtTuh_tBZqLqLtE-tyh-tCMtqvp6T3jn7Ifch4HOlUPHi_PXIF2= _zxQez9XU3odn6vH1apb4HsJIAdJqhHsTRAL4dRRG2vokZc5D2M3eL7OVZRsn44l8JVYWgMwN3E= 4KhexwEm0O8ji7gUv-NxrAhdQgOH1i8MdK8HKH_vAc6xPoYvdG8fTngIizGfZ2WTPTZanRkwPwA= t93D-QrPyHj_c47Y8LkC6pzEq3RtMSMlbAVn9C0TLx6DVBnZhuPLg3gJ030kZ14o71MXzX7klXs= JgV-bgQzZXvUtrA6U/F4U4sY0QVg1MN9g7KFEGuYeexM4fPBWR/13" itemprop=3D"StoryLin= k" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-= decoration: none !important; border-bottom-width: 1px; border-bottom-color:= #000000; border-bottom-style: solid; background-color: #ccc;">is of course= FTX</a>.</p> <p style=3D"margin: 16px 0;">But let=E2=80=99s assume there= =E2=80=99s a matched book: The only bets at the exchange are me betting tha= t $2,000 worth of Dogecoin will go up, and you betting that it will go down= . Let=E2=80=99s say Dogecoin (actual Dogecoin, traded on other, less lever= aged exchanges) goes down to $0.17. In theory, I have lost $300 (my account= has negative $200 in it) and you have made $300 (your account has positive= $400 in it). But in practice my account balance on a decentralized crypto = exchange can never be negative: I set up that account with a crypto wallet,= not my name and credit card, and there=E2=80=99s no recourse to me. If my = balance gets below zero, my account is liquidated but no one can ask me for= more money. So really what happens is that my account has zero, your accou= nt has positive $400, and the exchange has the $200 of collateral ($100 eac= h) that we posted. The exchange owes you $400 but only has $200. So the exc= hange calls you up and says =E2=80=9Chey sorry actually your short Dogecoin= bet is closed, and it was closed at $0.19. Here=E2=80=99s the $200 you mad= e.=E2=80=9D And if you are like =E2=80=9Cwait no Dogecoin is at $0.17,=E2= =80=9D that=E2=80=99s not the exchange=E2=80=99s problem.</p> <p style=3D"m= argin: 16px 0;">This is called =E2=80=9Cauto-deleveraging.=E2=80=9D Here is= how Hyperliquid, a big decentralized exchange, <a href=3D"https://links.me= ssage.bloomberg.com/s/c/FCw_G0PMh8Uej_eZg8Oc3HlH65EOoQAEfPK1HkNAIk3JMOAVbzf= M7adoCZaKHu53BhsiY7NLCM1AdlwyP0lPKQN0CrNBFA_K_J4UjxT-PKEQHjmVwXc1pi8sx8QcI9= QkbRsM2jkYPZJ5Eo4KwsHZpmwTE6qelIsDhxQmBzpBrJ4rUnxqlhEdgexfwOIAuWg3lQiSP6VQu= MYlG_AoIicXg7aeOcu0xdTx6Mpk5mPOxzHeYGccOBOIRtmhX-nyKK15HjY_n-RmPNr5FjOfQnqT= h0WXMTAcNOHa9JoBQGqrWoOq81VYqGCoSaT0eChPqcGRX18gI9LGho-OTJtBqbnWXSoJILij29i= 9Yj2aIfuS94QDK6y2pBsuENUYDqg/ujI9XUNeSXOjFsOUZWRf06KXFxB-fOGG/13" itemprop= =3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #0= 00000; text-decoration: none !important; border-bottom-width: 1px; border-b= ottom-color: #000000; border-bottom-style: solid; background-color: #ccc;">= describes it</a>:</p> <blockquote> <p style=3D"margin: 16px 0;">If a user's= account value or isolated position value becomes negative, the users on th= e opposite side of the position are ranked by unrealized pnl and leverage u= sed. ... Those traders' positions are closed at the previous mark price aga= inst the now underwater user, ensuring that the platform has no bad debt.= =C2=A0</p> <p style=3D"margin: 16px 0;">Auto-deleveraging is an important f= inal safeguard on the solvency of the platform. There is a strict invariant= that under all operations, a user who has no open positions will not socia= lize any losses of the platform.</p> </blockquote> <p style=3D"margin: 16px= 0;">The people with=C2=A0<em>winning=C2=A0</em>positions socialize the los= ses. If you have a winning bet, someone has a losing bet. If the people wit= h losing bets have lost more than they had, then you don=E2=80=99t get all = of your winnings.=C2=A0</p> <p style=3D"margin: 16px 0;">(Incidentally I <a= href=3D"https://links.message.bloomberg.com/s/c/S2wCzj062wWkDy-kq-THxi46BG= dml2EI2CMcdfyp4F1RNJOEQw1e8ZZK4x7RQ3LFbRc850RzZt1Tnovw3p3VOHsfrGPxgM-YU_0VV= uAiKlmN8OGj3Ogs3SyqH3AKyYmwePTNUxVrmr8TRapbtR_-NIDGssq7ENEiIkguALCdzfK4rra5= mV7bQNywh19_wkd0f-HFQ_bKTUI6-LLQYbq56sasuY47d1h7fO6cRrYBpYVL6ZdKRXCsKXGQGaz= F1LvMpliNw8WsJEVK-h_1vAMQoChCuzqav9U1abWemffz9FQnkRKGanHpu2ppPFIDEFcWMhr2u7= 11Rrc1lJG_GYJ4e8WKnMocZr-OG5O-oLNvmbCFAciTocUNSE5B8wc/f4BbVjJrD2tP1h5NRPSJ7= pSKVbPmX6z7/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_b= lank" style=3D"color: #000000; text-decoration: none !important; border-bot= tom-width: 1px; border-bottom-color: #000000; border-bottom-style: solid; b= ackground-color: #ccc;">once discussed this structure</a> with Sam Bankman-= Fried, of FTX, on Bloomberg=E2=80=99s=C2=A0<em>Odd Lots=C2=A0</em>podcast. = He was quite dismissive of it, arguing that FTX had a much better liquidati= on system to prevent=C2=A0winning bettors=C2=A0from socializing losses. It = did, until it didn=E2=80=99t.)=C2=A0</p> <p style=3D"margin: 16px 0;">Anywa= y this is a bummer for you if you were betting that Dogecoin would go down:= You were right, and you only got a portion of your winnings. It is more an= noying if you weren=E2=80=99t doing that. What if you were an arbitrageur= =3F You saw that traders on the decentralized exchange wanted to be long Do= gecoin, so you did an arbitrage: You bought $2,000 of Dogecoin in real life= , and you sold $2,000 of Dogecoin (via perp futures) on the decentralized e= xchange, effectively =E2=80=9Cmanufacturing=E2=80=9D the futures out of spo= t Dogecoin. The price of Dogecoin drops to $0.17, and:</p> <ol style=3D"lis= t-style-type: decimal; padding-left: 40px; margin: 16px 0;"> <li style=3D"m= argin-bottom: 5px;">You have a $300 loss on your spot position.</li> <li st= yle=3D"margin-bottom: 5px;">You should have a $300 gain on your perp positi= on, but you don=E2=80=99t, because I have walked away from my bet and there= =E2=80=99s only $100 to pay you.</li> <li style=3D"margin-bottom: 5px;">You= have a net $200 loss on your hedged position.</li> <li style=3D"margin-bot= tom: 5px;">Also, though, your short position is closed, but your long posit= ion isn=E2=80=99t: You still own $1,700 of Dogecoin =E2=80=9Cnaked,=E2=80= =9D without an offsetting short position.</li> <li style=3D"margin-bottom: = 5px;">You might as well sell your Dogecoin to cut your losses and get back = to flat.</li> </ol> <p style=3D"margin: 16px 0;">The upshot is that when Do= gecoin goes down by 5% (from $0.20 to $0.19), (1) gamblers who are long 20-= to-1 levered perpetual Dogecoin futures get wiped out, (2) arbitrageurs who= were=C2=A0<em>short=C2=A0</em>perpetual Dogecoin futures are auto-delevera= ged and have to sell Dogecoin to remain hedged, (3) there=E2=80=99s lots of= selling and no buying, (4) prices go down even more, (5) gamblers who were= long 10-to-1 levered perpetual Dogecoin futures get wiped out, (6) etc.</p= > <p style=3D"margin: 16px 0;">Where is the limit=3F Well, in theory, at so= me level of liquidations, long-term fundamental value investors will see va= lue. They will say =E2=80=9Cokay when Dogecoin fell from $0.20 to $0.18, th= at was one thing, but now Dogecoin is trading at just $0.15, which is well = below its fundamental value.=E2=80=9D So they will step in and buy Dogecoin= , planning to make money when rationality sets in and the price of Dogecoin= returns to its fundamental value. You see the problem here don=E2=80=99t y= ou=3F<a href=3D"#footnote-2" style=3D"color: #000000; text-decoration: none= !important; border-bottom-width: 1px; border-bottom-color: #000000; border= -bottom-style: none !important; background-color: transparent !important; d= isplay: inline-block;"> <span>[2]</span> </a></p> <p style=3D"margin: 16px = 0;">Anyway. There was a crypto crash last week. Bloomberg=E2=80=99s <a href= =3D"https://links.message.bloomberg.com/s/c/vZ_haMxdhJuYTxYkIG0HuqcVPRusPGr= ipKf2FPJC4hqlScDYp2je_ddgxMWOQ46oYf9BhD8gDl353flqZqwJKCKzyeku-owPqM3iyR0NWp= aXRNbtUgpTuBq2GNLAF9JVH1at3nvF_uJQ6SvtFcbtfqGLSdmOLAWuQM7nNaH8tMFTO5jcfuIS3= C0YCGTrO8I-nei07cAEn2RncmkuoKAzn3RmWWZa0PqxhyRUkxS0zfrE5rUQMEaXStTfkSj3ncQy= tUUFnjRdeJ9UPSIdpgXSdaz2PBYk7vEChkBW3S7tkeeE5WO72cGWM83HaR82uNLANTGZLNOjXGh= FGsGLQi3Q8hqzDDIO1w73rK_BePxpJXBvUNN_Os8cvbAmcic/oWodTWt7ndSrDc1WSMxDMNDfit= Jn1ugU/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank"= style=3D"color: #000000; text-decoration: none !important; border-bottom-w= idth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgr= ound-color: #ccc;">Muyao Shen and Olga Kharif reported</a>:</p> <blockquote= > <p style=3D"margin: 16px 0;">A record $19 billion in bets evaporated and = crypto prices tumbled, due in large part to newly severe China tariffs anno= unced by President Donald Trump. A combination of factors =E2=80=94 leverag= e, automatically triggered sales, a lack of liquidity at odd hours for glob= al trading =E2=80=94 fueled what might have been a less dramatic obliterati= on of positions.</p> <p style=3D"margin: 16px 0;">From the morning hours in= Asia through the afternoon in the US on Saturday, traders, executives and = market-data analysts were wondering who, exactly, had suffered losses. Did = a large entity get completely hosed =E2=80=94 or was this a case of a lot o= f small bettors watching their holdings evaporate to zero=3F More than 1.6 = million traders were liquidated, according to data tracker CoinGlass. =E2= =80=A6</p> <p style=3D"margin: 16px 0;">That said, liquidations were concen= trated on smaller coins beyond Bitcoin and Ether, known as altcoins. Levera= ge tends to be higher and liquidity much lower in those less familiar token= s.</p> </blockquote> <p style=3D"margin: 16px 0;">Quite a lot of crypto tra= ders were making levered perp bets on altcoins, crypto exchanges regularly = offer <a href=3D"https://links.message.bloomberg.com/s/c/zeD4HHdVYDqsUDW6KU= BP69R7sU5vKnFRfaKwLc0-_tCTkitNNXqjBRVhm2-kHb-dv91TrzU5-m3S9tHgJLZs7waQUln3C= L60Cc4ubc1fGi9A4Vc7qBcl8x6kKblixyVEaRUAVIS44zFbYxiIjszXorB6-C_8u0PopGL2F_8P= hf2rHbHamJpCdfmi9VGR-ji9t65cvCHGv29AU6l9nFLmT5N0xLbu_nJanwhPBCQ6Qg4XpJbxjwi= 7rMH0zwzpoyxqXLj8XHfb459G2-35K1vRvJkq_rc8LRtgDlEj13KKVdjvzWiT6ZkaawAoCVwDvo= wNu4WhYukWOEgUo-rMvoRbB4JD-h3fHLlceK_DkRaXpLQX195Vl6kx9LlE2CE/mpRXOKcnSwC0X= Uj6wE1HOa1Uq_VI00E3/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" targ= et=3D"_blank" style=3D"color: #000000; text-decoration: none !important; bo= rder-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style: = solid; background-color: #ccc;">40</a> or <a href=3D"https://links.message.= bloomberg.com/s/c/91bWvhWYC0C-b5H5iEO2sHI91KtJXirTcIhZxIkRMVD2mFHOGHConicKC= oninCCb5oFVtTIrtffZiX0jOrGZFvfIl2gDjtXH4YHhQVgX7W8wODiZEIVhAK5b1M9gae7ft2AX= IeiMY5EYOt1jKRTvA_SPvBAMMHZ8-FuNvx5BAVsYEoVA3Bfw-ZUbqZG9e0Ht0Z5N-sHjKGUis11= frZOuOluMWATqMlxwo7u4FKYsXcItKdsD-vIqPo0-A0ZN7BHXhOKNWclaUIEGbo9J3Cuetziv9Z= TkYfJXI4NUFO0NLi_qS3kP12lyAnv4JGkvJq5fPlKbiXVFJbzKs3saRfkuW1qnWHbDQkeYXRdkH= 07HD1E2lV0IKOFcYcKu4m0/QeMyyERuLLy6p_bQ6upFBSckNwsXJ_W8/13" itemprop=3D"Sto= ryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; = text-decoration: none !important; border-bottom-width: 1px; border-bottom-c= olor: #000000; border-bottom-style: solid; background-color: #ccc;">50</a> = or 100 to 1 leverage, and so when prices move slightly all those bets go to= zero. Also the people who were making levered bets=C2=A0<em>against=C2=A0<= /em>those altcoins had their own trouble, as the losing bettors got liquida= ted:</p> <blockquote> <p style=3D"margin: 16px 0;">Despite being smaller th= an rival=C2=A0Binance, Hyperliquid experienced the most extinguished trades= in dollar value during the 24-hour-period selloff, at $10 billion, accordi= ng to CoinGlass.</p> <p style=3D"margin: 16px 0;">=E2=80=9CHyperliquid had = the most amount of long liquidation, and least amount of liquidity to match= ,=E2=80=9D said Ebtikar.</p> <p style=3D"margin: 16px 0;">A risk-management= mechanism called auto-deleveraging, or ADL, contributed.</p> <p style=3D"m= argin: 16px 0;">ADL is designed to automatically close profitable or highly= leveraged positions when liquidated trades exceed a certain capacity cover= ed by insurance. Exchanges incorporate it to protect them from losses durin= g extreme market volatility, but many market participants also blamed ADL f= or making the selloff worse. =E2=80=A6</p> <p style=3D"margin: 16px 0;">=E2= =80=9CThis mechanism is not without complications, especially for participa= nts with more complex portfolios,=E2=80=9D said Spencer Hallarn, global hea= d of OTC trading at crypto investment firm GSR.</p> <p style=3D"margin: 16p= x 0;">=E2=80=9CQuantitative liquidity providers and market-neutral particip= ants can quickly find the winning sides of their trades closed prematurely = due to ADL, leaving their overall books imbalanced and subject to market be= ta which can lead to problems, and a necessity to quickly pare imbalanced r= isk,=E2=80=9D he said.</p> </blockquote> <p style=3D"margin: 16px 0;">Right= , yes, if a ton of crypto market structure consists of 40-to-1 levered bets= , then you are going to have a lot of levered losing bettors blowing up, bu= t you are also going to have a lot of weird results for the levered <em>win= ning</em> bettors. They can only get paid out of the losing bets.</p> <p st= yle=3D"margin: 16px 0;">Here is a <a href=3D"https://links.message.bloomber= g.com/s/c/vl3eRiPkLPAJZ1hJ06ldb_sujDiHOgSloeTYpXj79zg1gXAJeSK5wbsb0Y_lFLjlp= -3bFPdkRsiBktpwtV0S1ASV0JsykhNvkTYvpJxKexdFMuQ7rOnoSY0cLURwi0Jgzrr3m7Prlda2= t_Y1ZxruUqpqCG5klXYfRl4Wq_YIsJIIjNqz8wn_dg5W2uDdRPdcdx3grJAgxIBi1UkhI4U2kGP= XUFyeuNhDRBYh3VRBeR3y5Oju6r90Of91sUawFaVaKhxAhRdgLvbzIfrvEq6yPWxdbglxIhL8cC= CjPTXGfLHmMumzNGeFmXxE83mz0Vlyp0NfxXQCc0zj0zRM68dRM32FT0oucDzfaP0mS1tO4GNAm= 09dgJRlAjqFRV0/yf7gfGQUONkmuqZa-wRoslblA-XyRdX6/13" itemprop=3D"StoryLink" = itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-dec= oration: none !important; border-bottom-width: 1px; border-bottom-color: #0= 00000; border-bottom-style: solid; background-color: #ccc;">more cynical ta= ke</a> from John Hempton:</p> <blockquote> <p style=3D"margin: 16px 0;">Lot= s of [altcoins] will make 10-15% moves in discontinuous markets. The way yo= ur exchange guards against going bust is by not actually buying all the cry= pto that [the customer] thinks he owns.</p> <p style=3D"margin: 16px 0;">An= exchange that doesn=E2=80=99t buy the underlying asset they have promised = their clients is known as a =E2=80=9Cbucket shop.=E2=80=9D This comes from = the 1920s practice of gambling houses =E2=80=9Ctrading=E2=80=9D in stocks b= ut really keeping all the money in a bucket. =E2=80=A6</p> <p style=3D"marg= in: 16px 0;">Bucket shops do not buy all the shares (or coins) necessary to= hedge every client position. This is because they can=E2=80=99t manage the= risk of a market plunge.</p> <p style=3D"margin: 16px 0;">But as a result,= they have a big problem in a bull market.</p> <p style=3D"margin: 16px 0;"= >Imagine your little crypto exchange, now a bucket shop, does not actually = buy $100K of $ATOM on [the customer=E2=80=99s]=C2=A0behalf. Then suppose $A= TOM doubles =E2=80=94 a realistic outcome in the recent bull market. Now yo= u owe [the customer=E2=80=99s] a net $110k and you simply haven=E2=80=99t e= arned it. You have a very big shortfall. =E2=80=A6</p> <p style=3D"margin: = 16px 0;">There is a solution to this insolvency, a simple one. One that was= known in the 1920s as a =E2=80=9Cbucket shop drive=E2=80=9D and was a disc= ussion point in Reminiscences of a Stock Operator.</p> </blockquote> <p sty= le=3D"margin: 16px 0;">The idea is that, if you are a bucket shop that is s= ystematically short crypto to your highly levered customers, an occasional = 10% price drop can be very good for business: The customers all get wiped o= ut and you keep their deposits.=C2=A0I don=E2=80=99t think that this explan= ation is necessary, just because standard crypto market structure <em>expli= citly=C2=A0</em>buckets customer orders into matched books, but it is fun t= o think about.</p> <table width=3D"100%" border=3D"0" cellspacing=3D"0" cel= lpadding=3D"0"> <tr> <td style=3D"border-collapse: collapse; mso-table-lspa= ce: 0pt; mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: bold; font-fami= ly: "Arial Black", Arial, Helvetica, sans-serif; letter-spacing: = -1px; font-size: 20px; border-bottom-width: 1px; border-bottom-style: dotte= d; margin: 0px; padding: 16px 0px 5px;">-3x ETF</h2> </td> </tr> </table> <= p style=3D"margin: 16px 0;">In arguably related news, my Money Stuff podcas= t co-host Katie Greifeld <a href=3D"https://links.message.bloomberg.com/s/c= /xSOmF6f0jnF8QX8L_MgVzEPRhQjXYZYG7_jIbxFFGHonYuUAdtlbj5nTXecSPgyyCJkJUH0mbk= iz1d4jo4eh-w6SWLs_7bi4ce1AACCzgq_kyooFhmwOqaRrd3OR5vrVALvP3Db4mkXF_xtMt90V-= ueLUhtiKXvl-4MA6N2GWJat2Q4XBTDfVMOXaA_BTDeZ9aNeSJ6Q_YrCRP_zckW0w1UYRcUXEFfY= TFxTMWbGHUXJ4uzUc_EwUZbgllYiTSC_FXQqZANbrUmP-mR__VIvmMk4LmimFYVjL7ZP1qRw_bq= v6Cb014gap0z6cGWIhyJP2DRrXQxymnaN_gh8z8aaUIo9RhfXo4GVGkoyzzhP_13kSG0EYqnXav= ZGQPk/MGyyilpgf-nxdAG6K6YowDSWToO7uamo/13" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">reported last week</a>:<= /p> <blockquote><p style=3D"margin: 16px 0;">A violent rally in shares of A= dvanced Micro Devices this week forced the demise of the GraniteShares 3x S= hort AMD exchange-traded product, which aimed to offer three times the inve= rse performance of the stock. The extinction event was a stunning surge of = as much as 38% in AMD on Monday after the chipmaker announced a deal with O= penAI, sinking the ETP and cratering its net-asset value to zero. As such, = =E2=80=9Cno redemptions payments will be made,=E2=80=9D according to the Gr= aniteShares website. The issuer declined to comment to Bloomberg News.</p><= /blockquote> <p style=3D"margin: 16px 0;">If you have 50x levered Dogecoin,= a 2% move will wipe you out. If you have 3x levered short AMD, a 38% move = will wipe you out. Can=E2=80=99t really complain about that; you got the ex= perience you paid for.</p> <table width=3D"100%" border=3D"0" cellspacing= =3D"0" cellpadding=3D"0"> <tr> <td style=3D"border-collapse: collapse; mso-= table-lspace: 0pt; mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: bold;= font-family: "Arial Black", Arial, Helvetica, sans-serif; letter= -spacing: -1px; font-size: 20px; border-bottom-width: 1px; border-bottom-st= yle: dotted; margin: 0px; padding: 16px 0px 5px;">People are worried about = stock buybacks</h2> </td> </tr> </table> <p style=3D"margin: 16px 0;">One s= imple model of the stock market is:</p> <ol style=3D"list-style-type: decim= al; padding-left: 40px; margin: 16px 0;"> <li style=3D"margin-bottom: 5px;"= >Lots of investors allocate X% of their assets to stocks. The actual X will= vary from investor to=C2=A0investor: Institutions might have a 60/40 portf= olio (60% in stocks), individuals might follow the =E2=80=9C<a href=3D"http= s://links.message.bloomberg.com/s/c/TWlqZhHzqmRMRarLFidRHPUehsZoacmnFQDBBMZ= 1LU_ccDepmCjC4Vmclajona8f11EVGYmTOlG6vzqrCL-gFrrIVcFkfcsNCDcFLJpD7V2qi8sfTv= EE_d2X6BOl-Wpn0Uhv3YlyVMnmJT56ukaHcQzmRmYy5W46mC1UKMmv-ohpQ6SpcU77LSk-adu75= T_CSD9J1japH4VO3QC9rGPGfQ_atFeEOR47aA3lnxlhI1Dkzpetnv2_YiQIWx46PI8owGLYRB8s= Erqd16c2PjMEE7d7QN1qs16SA7TqvR2fvJNFRC10qgfGeHlXM4LX6BruZ1pskWkezaom6AWzsZZ= bk1QIpJAXUpkuUzC92I9AIrKxTUAcJHKgJzbtmNs/6eQ8-Cnlxxep4bpnW28IJMoTTYuck7sO/1= 3" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style= =3D"color: #000000; text-decoration: none !important; border-bottom-width: = 1px; border-bottom-color: #000000; border-bottom-style: solid; background-c= olor: #ccc;">100 minus age</a>=E2=80=9D rule of thumb, etc. Also some inves= tors will have explicit numerical asset-allocation mandates, while others w= ill just follow a vague gut instinct of =E2=80=9CI should have some stocks = and some bonds and check periodically to make sure it=E2=80=99s not way out= of line.=E2=80=9D And these target allocations can shift over time: Once u= pon a time prudent investors didn=E2=80=99t put that much money in stocks, = but over the years it has become more normal to invest more in stocks, and = now investors are increasingly crypto-curious. Still you can sort of averag= e all of this out and say =E2=80=9Cover the medium term the market as a who= le targets roughly an X% allocation to stocks,=E2=80=9D for some X.</li> <l= i style=3D"margin-bottom: 5px;">The stock market keeps=C2=A0<em>shrinking:= =C2=A0</em>Public companies get bought by private equity, giant private com= panies like SpaceX and OpenAI delay going public because there is plenty of= money available in private markets, and the public companies that are left= tend to be big and profitable and mature and spend a lot of their profits = on stock buybacks, which further reduce the supply of stocks.</li> <li styl= e=3D"margin-bottom: 5px;">Therefore stock-market valuations have to go up: = People want to keep the same percentage of their portfolio in stocks, but t= he supply of stocks keeps shrinking, so the value of the remaining scarce s= tocks has to go up.</li> </ol> <p style=3D"margin: 16px 0;">This model does= not necessarily make economic sense. From a strictly rational economic per= spective, you might say =E2=80=9CI buy stocks to get long-term exposure to = economic growth, and as the public stock market shrinks and becomes more ma= ture, it provides a smaller share of future economic growth, so I should re= duce my allocation to public stocks and buy more private equity or crypto o= r whatever.=E2=80=9D But those are complicated conversations, and if you ha= ve a simple heuristic like =E2=80=9C60% stocks,=E2=80=9D it might be sticky= even as the makeup of the stock market changes.</p> <p style=3D"margin: 16= px 0;">Victor Haghani and James White have a fun paper out along these line= s on =E2=80=9C<a href=3D"https://links.message.bloomberg.com/s/c/E0QGbdWUK0= rZ3I8govv9xQj-6tG2hA0GQUcUgt3Ezkd1n6HU9taKCWifepPJQ1taVK0SWwJ1LxUR-tVjZtlq2= CNNr9666yqGudeTWKU_w3dR3QD-v5QWyPKNqZllfZSTc753jsdYxnZ5QN-AUcTu0_N-r7XpHSSQ= -_Non39PkE73vMBAzCY0f_3zB4M4sheJgxRI7wcIoLE3gAq-Zdtrg0K_VTIEpZQPpoTF0JKffSj= EEOHMv2f658l2uBfoF_IUc0kZlNfm4Dd6KCG-hEBvAPVHldfIBFotVuw570Kc1jq-lr398Rmkxo= 1xAj52Ww0cF-Sfw422kxHDraYgXCQlAw7YiYVSjQ33hqtWJfkbGvgIbVwUC_DoJvK0CMU/qPzLb= 7NKltCXcmjsJtzEXZwTzJxPxolI/13" itemprop=3D"StoryLink" itemscope=3D"itemsco= pe" target=3D"_blank" style=3D"color: #000000; text-decoration: none !impor= tant; border-bottom-width: 1px; border-bottom-color: #000000; border-bottom= -style: solid; background-color: #ccc;">The Impact of U.S. Stock Buybacks: = Theory vs Practice</a>,=E2=80=9D noting that buybacks =E2=80=94=C2=A0which = shrink the total size of the stock market =E2=80=94=C2=A0should have a=C2= =A0<em>levered </em>impact on prices:</p> <blockquote> <p style=3D"margin: = 16px 0;">The impact of buybacks on share prices arises from many investors = using incomplete heuristics to determine how much of an asset they want to = hold. For example, if they want to hold a constant proportional amount of s= ome asset, and the available amount of the asset is reduced, the only way t= his can be accommodated is for the price of the asset to go up. =E2=80=A6 [= For] fixed-weight allocators (e.g. 50% equities / 50% other assets): To abs= orb 3% of stock repurchases, prices must rise ~6%. =E2=80=A6</p> <p style= =3D"margin: 16px 0;">Fixed-weight asset allocators are probably the most co= mmon investor type, considering the trillions of dollars invested in target= date funds, balanced funds, and in endowments, pension funds and foundatio= ns who very infrequently change their asset allocation.=C2=A0=E2=80=A6=C2= =A0We can see how buybacks on the order of 3% could plausibly push up price= s by 3 =E2=80=93 5%.</p> <p style=3D"margin: 16px 0;">It is interesting to = note that over the past ten years, the US Price-Earnings multiple has incre= ased by 4% per annum. The 3% =E2=80=93 5% per annum potential impact of buy= backs provides one explanation of this increase.</p> </blockquote> <p style= =3D"margin: 16px 0;">I should say that this is not=C2=A0<em>just=C2=A0</em>= a story about buybacks; it is more broadly a story about shrinking public s= tock markets and =E2=80=9Cprivate markets are the new public markets.=E2=80= =9D There=E2=80=99s a trillion dollars of stock value =E2=80=94=C2=A0about = 1.5% of the value of all publicly listed US stocks =E2=80=94=C2=A0just in <= a href=3D"https://links.message.bloomberg.com/s/c/QKBqLLJ8JtLswQ8-H_jBOpOa0= E5ZE3UZSxcinBlZdZHBOCx5JuiMErNECvJFN6X89hZn9zS2W5NVi39qwk4t82Aa5FBT7FnZ7MqG= 5eUZhC0tjVUAzLLwxbQ1fbh2QqF9GX4xyoY2AQtbkGBl6643wM7iUzZ7LkEhibyClVLMDod6tfo= BlHTrNh98HVbHqJ5QZgsBg8W8bCYptQ-BSo93m52y-KAlHWlq0fsbeiSHEW-3dXYiBElSJ-2tPL= igTxXMRAD5YJWcR8BzJWAEanw1avVFQz3Dzt0TeiwIwcJW-kTZQwzz1T88CmQiz4-BXtspXH0-w= hcsFAUZJfekx-oZ0Y_uszWZUMshmaqVZvS0WkBt03M_CFikENQEBTA/ZupvjGNHNr2p6PfD5vFW= sjacUd0rrJh5/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_= blank" style=3D"color: #000000; text-decoration: none !important; border-bo= ttom-width: 1px; border-bottom-color: #000000; border-bottom-style: solid; = background-color: #ccc;">OpenAI</a>, <a href=3D"https://links.message.bloom= berg.com/s/c/OyiQXMvfur7mA3goeG06xoU5UzN3HAdsyvtz0P68Xs6GD8ZPwAx61_VIsvGj3l= GthkdHsAc8koqSQBe9juRBRZGWlaEXkEs3GKaV4kf4MiqM_Dn93azyANLH2cPMMS4eweQaUqn77= FHl5gZ1RdkcVaNV8AU599BGNqUMyo11iLT-eUeZozfEg38ovetIOn5fbjUB7jrX-8dcBhgJrdl0= ssDqMFgj1SWBCb5XPVGDYF7D78DyczNtvZ6lEmxL6zyb3Liau9b5Q41Ajt9tDlwR5Uni3bUXdfV= wjDsMlomNtKOkwwhKtDaBxHSgl7hzDXsiYv4UEQsT0bmKZF7A57Tu2FvhwBUTikF7d7HDaPqRpv= UJHxF8285y551bDuo/WmNlE-K6NyQE_kB2P_xAPG5CawOkjLl5/13" itemprop=3D"StoryLin= k" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-= decoration: none !important; border-bottom-width: 1px; border-bottom-color:= #000000; border-bottom-style: solid; background-color: #ccc;">SpaceX</a> a= nd <a href=3D"https://links.message.bloomberg.com/s/c/wodXwDQG7BwuQNg9RpPKh= auVbeChhhnLhWc_tAGJamxNSndZ1H5DoQ2685rRdXI_LJNhPGLElA5yEYKqWnLOKSjh5HA41pgu= eByL4v3Bvxs1vcJW69AlzkLlxmmq8qMPpYE5gM6BxmGep4uJfGzXfzMct0n_g7uDRAt6wMCpZ2R= hE5zIibz0hzxK5Xosbt3372zWBlcYDpRr_4NxUiuKwkZMdrvBmHFjPqdX9sGEsHQtXKT3RKzeLy= CXq8a4bAyDyYIaAXKIZA55kE_L7Cr6F-Y3K5Jl66AypYYZUCzDDVIcrqttOzqvQwj7V7pHMk1qC= tnnq2Kmo94BnleTCM99LLz0wBLmATgge79zCdoKj8lP9VQEPD94qupLL2A/Gcj0RzH0K3ROeXaP= l40VU9pxCRVPqoum/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target= =3D"_blank" style=3D"color: #000000; text-decoration: none !important; bord= er-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style: so= lid; background-color: #ccc;">Stripe</a>; if those companies went public, t= hey would more or less offset the $1.2 trillion of estimated buybacks this = year. If the big private companies stay private and the big public companie= s keep buying back stock, then public stocks will get more scarce, which mi= ght make them more expensive.</p> <table width=3D"100%" border=3D"0" cellsp= acing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"border-collapse: collapse;= mso-table-lspace: 0pt; mso-table-rspace: 0pt;"> <h2 style=3D"font-weight: = bold; font-family: "Arial Black", Arial, Helvetica, sans-serif; l= etter-spacing: -1px; font-size: 20px; border-bottom-width: 1px; border-bott= om-style: dotted; margin: 0px; padding: 16px 0px 5px;">Welcome gift</h2> </= td> </tr> </table> <p style=3D"margin: 16px 0;">What is the state of the ar= t methodology for <a href=3D"https://links.message.bloomberg.com/s/c/GKS2G4= tO9Wuovo278ZaZF3zVToeAkNKOlk6festo9bQvS2YKZx5dLDiW5BOREUQiW007z1O86E3hfy1xk= ca8mbLjC0je-HJ1dCf_nkZMZE73P7ra99UD7zgLMFtxnrDlOFw95LzP6-HkFYI5Iq6tmu5DNRAh= JuHRkyH06IUzCEyreCeUhRCJoc-88hxfkLXPZgzvTdxYZ28wAgybOmmXEozhvbA9XZL9n5SE7qT= sbysU5TQrYgRzTuN_ymbX59cK4FQZqmKof13AATv1sB2ujJBOEZAlsF2b0V2md_jh1qmeQcz-_E= 6w4MRN4FkJ3RKMdYmXzad19G8g6rFKCIbMzwyeraz-rsi6uy2QXpyhljMiGSBfvXEv-nc1DdI/x= 050Pahe8VkWduJN0uRrCtRYvemibjZs/13" itemprop=3D"StoryLink" itemscope=3D"ite= mscope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !i= mportant; border-bottom-width: 1px; border-bottom-color: #000000; border-bo= ttom-style: solid; background-color: #ccc;"> stealing quantitative trading = secrets</a> from your employer when you leave to take a new job at a differ= ent quantitative trading firm=3F Obviously, like, =E2=80=9Cemail all of the= trading algorithms to your Gmail=E2=80=9D doesn=E2=80=99t work; your old e= mployer tracks and probably blocks that. =E2=80=9CDownload them to a thumb = drive,=E2=80=9D or =E2=80=9Cprint them on the office printer,=E2=80=9D will= also probably get you caught. =E2=80=9CPull up the trading algorithms on y= our work laptop over the weekend, and then use your personal iPad to take p= hotographs of your laptop screen=E2=80=9D is maybe somewhat better tradecra= ft. =E2=80=9CTake the photographs using an iPad provided to you by your new= employer=E2=80=9D is I suppose a nice touch. This is not any sort of advic= e.</p> <p style=3D"margin: 16px 0;">Here is a <a href=3D"https://links.mess= age.bloomberg.com/s/c/w8c80Te75Ln0Pdgz95Kc9aq_EpP_vyWcySoOjNbADB98p5gMhUeuo= dC9U_wnaCmOBnVwnTk1wZQuDdm99rcTI-73u8yRkLWREUFdd6M31_HBa-QmTOPP3SE9k8Cbk9CA= 4zmpCOuuzCU919P0eBslsRpUhVllgaqZGw0FiHThkP2JpVc6ghGr29BOHvCgF4h2Xc1yVAUbwRK= ILuxb5o8g7y-7NYiAuJwx6z7f_DFhCiuPpO4US4f25oEuT6pU7V60EzEJDSbeLliYSGcsraUY4z= ErSQqERijCd8KmExUPhZ-oefFr58oiCOwpTrDjRaVkxNO3OfYjI9vmrOfz9DG4C4-1irCYiN6Fg= 2pPLz4G4JEpdb5pMuPi-cMFCL4/LtAu6Mf0FMaN-Ax1llzmT_FHDIkb2y-J/13" itemprop=3D= "StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #0000= 00; text-decoration: none !important; border-bottom-width: 1px; border-bott= om-color: #000000; border-bottom-style: solid; background-color: #ccc;">UK = judicial ruling</a> in a lawsuit brought by G-Research against a data scien= tist named Pierre Allain, who worked there from 2021 until 2025. =E2=80=9CO= n Friday 21 March 2025, the defendant accepted a job offer from one of G-Re= search=E2=80=99s principal competitors, Citadel Securities LLC=E2=80=9D; on= Monday, March 24, he resigned from G-Research. Over the weekend, he did th= is:</p> <blockquote><p style=3D"margin: 16px 0;">Over a three day period be= tween Saturday 22 and Monday 24 March 2025, the day that he resigned (and w= hen he should have been at work), the defendant took 1,087 photographs whic= h contain the claimants=E2=80=99 confidential information (as displayed on = his laptop screen which was logged in remotely to the first claimant=E2=80= =99s IT systems) using a personal iPad that had been given to him as a welc= ome gift by Citadel Securities just days before; and (ii) over a period of = months, dating back to at least 17 July 2024, the defendant had created, an= d frequently amended, several text files in markdown format which contain t= he claimants=E2=80=99 confidential information. Over 400 of the photographs= relate to =E2=80=98Humber=E2=80=99, which the claimants allege is a highly= valuable trading strategy, only recently developed by the first claimant f= ollowing the expenditure of significant time and resources. In the text fil= es, the defendant repeatedly recorded that he could (amongst other things) = =E2=80=9Creplicate=E2=80=9D Humber for a competitor.=C2=A0</p></blockquote>= <p style=3D"margin: 16px 0;">His defense is that =E2=80=9Cthe photographs = were part of an aide memoire, and that he acted impulsively in taking them= =E2=80=9D and never shared them with his new employer.</p> <table width=3D"= 100%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"b= order-collapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt;"> <= h2 style=3D"font-weight: bold; font-family: "Arial Black", Arial,= Helvetica, sans-serif; letter-spacing: -1px; font-size: 20px; border-botto= m-width: 1px; border-bottom-style: dotted; margin: 0px; padding: 16px 0px 5= px;">Things happen</h2> </td> </tr> </table> <p style=3D"margin: 16px 0;">F= rom <a href=3D"https://links.message.bloomberg.com/s/c/VrAV5at3gVU0QXDh2xpe= JczoFflcdTsyJcCi_KcuKSMMI3ENLk7gBX5wFjhpCwpEq3mFDq24ceEso5XL7ngFoR5aLSAbykQ= fFsVXF32xLmCgXlyrfr4ScSqXZaCIUwJA0-HPsNd2fjs9wKPrDfVZft0TqRhUoAI8Z19eLKBqCM= oGWHCNfwViSAZnJMNopAvlFJdQ4Von1O8lruT9VOXmSqHzrGkTc80CZQKqboKKaO0qctVh3Tf2M= 30mZcYtuKLGVqqOq0qk53MjSXBA_Zgk9v3gccSIz2QwIePeIXvYkXB702VqRLahbf5UX6wplfXj= 3MecIq-FKJCWkeXsgijgRqYFtyjuHyOCRgKnlKZUylmJmkL7raGE4ogvaFM/xlOM7rTsCl4N0h6= ESiTfBfRNlWJIvKw6/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target= =3D"_blank" style=3D"color: #000000; text-decoration: none !important; bord= er-bottom-width: 1px; border-bottom-color: #000000; border-bottom-style: so= lid; background-color: #ccc;">Tricolor to Saks</a>, Bonds Are Now Crashing = at Breakneck Speed.=C2=A0<a href=3D"https://links.message.bloomberg.com/s/c= /R2-M5D7jnf7SPeqSPjqfWHLNar1tbfaza9sf-5E7Y75NPLkwFQ_yCNgIOq3M5Y4IRYHFpOSulW= 7oYv1t-1NzfAO1AxwOlV0potTyLEuaJ7qSCRkXfx-_yMVmjfHWvViQZU7y27tVvbGxpgwXxKBUV= nF9wZ2j4smIHr2Y6yRAO9Xz_7Zh2Szemgv23kftVBbUkniqovmnaxozEznzKBOtV3FohnAShC6L= ETcLBvDoql8VWPtOyZEIrEZTPSBbt64YdMHrVbstGhGQvRNuzDmHvQAkHNSG6MFq-mBOncAGpnw= _0dhL--m48IluvHx91eWwU_ldMlKY_bpsO_SfNeOP3MoFPE4k_T_1eG8Zase76SwdhwiOKHpJ4t= kKmDA/uvl5Bp1SKa69X9pGHMEvtrBzzXDu2Glh/13" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">Bank deregulation</a> se= t to unlock $2.6tn of Wall Street lending capacity.=C2=A0Thinking Machines = Lab Co-Founder <a href=3D"https://links.message.bloomberg.com/s/c/WR15MMYN8= 4xGMXTS61IF3c9Y6jFC2oF0qSLOlmQkT9gyR6MGtLUBz1_t1NWSDIeXb61PFWF62BppqA51KDnN= A3saRuFLicvxg8prUgGjr6F2y8V-t6QTQGmlHrBUJ-8yt7ptqantY-08v2lUGSDDaq7Y2yWosZ0= MA5IS3gCbG5sUfi-7ep9dv_LtZvVBIHJBiLa4htVRWHzmGJcwW8ka72-SvH57kRMxtmP5QyjOhE= tGqMBZlB26mgbLsAS05O8IWFVjNBCQSwNrOE_6DigRojO9ZjCJZyuprZdMxxwOR_wWUVuIRVOwT= 7XW_-K-PxtUuzK_nn-Lrk9ipaPlVU-n0wanDsFBpLpFKNhGNfFguNpqL4NW867oo9RrP_w/5pWh= Ul-Wa1oEUoyxkh2XPwcPnUClq8_I/13" itemprop=3D"StoryLink" itemscope=3D"itemsc= ope" target=3D"_blank" style=3D"color: #000000; text-decoration: none !impo= rtant; border-bottom-width: 1px; border-bottom-color: #000000; border-botto= m-style: solid; background-color: #ccc;">Departs for Meta</a>.=C2=A0<a href= =3D"https://links.message.bloomberg.com/s/c/-dCZ6FjZi8sIGKhzwzTjK22WmQQQ8Za= FVaz3yTLCCE5dUMXaEjqzHmagKsZax-JiSK2SsQzQy-Eb7N2W2__DnX56kh5zaaP6c7FruKDi7W= l92_Ft_EJpVnYEN8YglTk89IKSyW8PcKzEWL9HCDjT_Ey9JUwb3P7hRoNY_EdiXzedFoY8kBRzT= 181VU5DKKfpsghK2bwEirEOAxep7C9L04iJ-l7xfmYs40SDvjolWLpIkqfyFulgsjwABtyf9Dw6= 90OjWRs7L5zE5tZexipqBkswvNQgZhKo0DeuNBwt6N1-ZCc8fLYKnn5ZsfzmEOjigQQ4xmoTIlo= tdVHfuDOsI6xcTiGcqZBt65aVhgNO-bLpaVJ3qeiGVDBHv-Q/g1-UB-xGzurTYAkj1IP7IsN-EK= R8u3pQ/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank"= style=3D"color: #000000; text-decoration: none !important; border-bottom-w= idth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgr= ound-color: #ccc;">Warner Bros.</a> Is Said to Rebuff Paramount Takeover Ap= proach.=C2=A0Paramount <a href=3D"https://links.message.bloomberg.com/s/c/-= G1ilbD3zpYvEKPbXs0NCT6AgdKAtieZO2XyvJZST9BJ6Vt7Pm0evAv-Kzq40J-F1dCLLv6EBTDw= yeNV39z_scQAQiK4VeZeq-OjUu67VP69RkxYcToMyJKnHSHQoXiTdZSYz9-pMa5WJsffT64aRTt= e0rDVvk5TTQD-neZAXhuG5MtDDffTL2dTw-9Ul-oELoB6c6txTk8ZBnsaMXB2p43SG5Bm0tqLlo= _p-5ct-L8AsQ9goA2-fEBvlh2QAgEwmDS-CrxE3O0ZJBOlz2_wLmnaxrRSvsf8dLDINBNKuDPDR= 7QHcxmkHyr6cD6QCayLvDzxnFksaNFxrO5YFzy7QCRCsPONHH750zB_zSjQkyDt3oS5gpYifYLl= nJk/nzxNGplH5vW0uDTpJ_FFHOD3b7IGV-6l/13" itemprop=3D"StoryLink" itemscope= =3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration: = none !important; border-bottom-width: 1px; border-bottom-color: #000000; bo= rder-bottom-style: solid; background-color: #ccc;">Circling Warner Bros. Di= scovery</a> After Rebuffed Approach. <a href=3D"https://links.message.bloom= berg.com/s/c/H0bwmNAVht_z3R85A-faAQfFiZbHM1I53A6mnKzIjsMlDbEVNKdyEYg6lruAuh= r_XGurnizHO70I7imiOXb-kCdw_A4aj2reHkLcP_WiMBHoA1-24ekxJQMZV42a6edWnlIC27f7B= 9KXuYfDBz0efTY8g2Ftz_nGBd0vci6qM0rk5hPb1L4fMjow3s5S8jqYF43fp09yJ73vU2SDS3Q6= x-h2_Msele6W7-QGaYAVcsgjWrN3dKniupzi-1tZWs8s05G3OZEhDO1e-U1r0zQCMzG4NBW-wdw= PKaqiaCdrm3QoPVv1KazOC_GDJGzhThKsuf4WM9bl4hxcCzLnhQOWM_MZ1lD-A_uXv6rb0kvvng= z_kdZcbcYrrWunmrc/Ii6Bzs_799ig5bOhxQ1CHQpvUJzQcIC6/13" itemprop=3D"StoryLin= k" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-= decoration: none !important; border-bottom-width: 1px; border-bottom-color:= #000000; border-bottom-style: solid; background-color: #ccc;">First Brands= =E2=80=99</a> Founder Patrick James Steps Down as CEO. <a href=3D"https://l= inks.message.bloomberg.com/s/c/cPbJo_AWxVb3BlmGCqCN0NFM2GJWvJmkijW9XC7VVc3L= NbNgRm29awRFDscaB4j_Jzpc4Ids7DAFSsahtwJtRI4mIMjGpPfMGiKoL-T0RctTmmi8wJTq-WI= lXH29rJJIxdWVWClIM3wawaE9lGsctCKaFCmcFVUONRXQjtSg6ibKnL7HRTeKEK7UearYoJl_rT= T36WyOqL0hiwsuI5Wh0ftw0MPOEjjoruf9HoBRpf_tCBfQ2nbfirwdmyadPtHPkFmQOS8LAGzUP= eagDYOVLOJEicat-9WvtNF8uebxnUQB91ykdwSnQpMzuQ8uZZKoa2vZM_5mrbbFCnszKNqOlz7Z= b11yc0M3bEVRK3f5iWZnaqZtstaOSRDLItk/mk7wQ-7eqxpH-UnkKyZwqyK5c9wC5zPp/13" it= emprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"col= or: #000000; text-decoration: none !important; border-bottom-width: 1px; bo= rder-bottom-color: #000000; border-bottom-style: solid; background-color: #= ccc;">Jefferies</a> Defends First Brands Deals, Says Losses Manageable. Bro= okfield to Acquire Remaining <a href=3D"https://links.message.bloomberg.com= /s/c/v-6hCHR8-d2EjFHx6qYH9Szo4dwZuueGxuYoKCxIrZls157fNj2QtRHyLHEdYtihzNsYzz= qrBCfrBJ5gtSbtk7TTO-jPZXCyjX6nfNVcuY4Q_A_Xou0VC0LGIrSiy_9UTK2rK0sy254i9Yppn= mZFi6G50DulKuUJqBKP53Fe1YBSAc-k59FRiewLh46pBysO_pq8h96cNhVLDCf3KlOMTBAsirJM= 5aMyDNOykA6egrTKK-CdPwsjkgg6CeKgq07UdRFvZGpAcZuJ-hxUqpHkfTF3behnjDOhbWaZwL3= 92S7V4BBiP5unyWMha2dLl8jqZoLriS27iuYYeST0_IgkUYM_U2USlztnXKWiaYVDNDNEaxIlSE= jKJMCk15E/Y-bIdKLQ5LN279oUKRbd1t0T4R_f-Cm1/13" itemprop=3D"StoryLink" items= cope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decorati= on: none !important; border-bottom-width: 1px; border-bottom-color: #000000= ; border-bottom-style: solid; background-color: #ccc;">Oaktree Stake</a> fo= r $3 Billion.=C2=A0Silver Roars Higher as <a href=3D"https://links.message.= bloomberg.com/s/c/YaSzoTfAib3xFheYa-Z3U9_ufwMxiXH4-72pIoXuY3SHrQOIJInICdXNm= MXCEMvSLUBXkxZJZyr0efhmxW2F5YSMyW2iEh5wMlOyogEilJW-8-uKm6iGoMQJXZcPoFplyWhF= Majv1DCuxF1asfHh1yJ2joxUSfLmgLZZc6byvvPkV8LY_GuUr_3PjR6wm7JSqVN3twvZ-jflKif= OFC1dEZPqLg8z04wR9DY1dlii2Guuy0uiDDn88-_Cy8eMLRlVZqGkcywn5RxiL6I3zPgCfA7lMP= bEbYQC27kZlbV97MWGnuZP1r7hCs0BqqSLoJJl3T2LcfCSURrMlRrqCfl-I8tpfze0rT0SyDAyv= hg02bLd-9DcJBuyWOZecD4/4mlJNx7ZOL3tw_pJpQ3II1q7RQPV0fpz/13" itemprop=3D"Sto= ryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; = text-decoration: none !important; border-bottom-width: 1px; border-bottom-c= olor: #000000; border-bottom-style: solid; background-color: #ccc;">Short S= queeze</a> Rocks the London Market.=C2=A0<a href=3D"https://links.message.b= loomberg.com/s/c/7F8GYFLxb0SUi3exEnDn3Go_3lB5a-9mWW2hlb7QRrZWTF5F6Cj39ga0_L= l7jsSSeTFMU7R5ZkwIKn_0EbI_gJVrGuAsxRDEASZmronGrKKftvEqhzpQ10JF2zgchI2oNmTyF= 9feioEKv0-L4bNewEX7VSVMHtMamwy9ziCy1Mk1E2hwBcBMWCm77LH0UL7r5h8WvKcvuR5RbtJ-= zJkc_lXQ3nz_d3yM5SF08ym5gxN-DyFNCNRq7m6RJVIDhZBz6-Gr_XFowLhbCQUpve0K5-y1En2= WtPUVOhKjB8TiRvqPnvUd1TqQi9TMjeUlYl01B4LkSUx4eSg1ts4rt7lA6neH1ngi0o9_7j15ce= UbgJQreI74KCbV3-PHu6A/LxVELjJ8SLltE0AxCrTVwiztr7gnVpcg/13" itemprop=3D"Stor= yLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; t= ext-decoration: none !important; border-bottom-width: 1px; border-bottom-co= lor: #000000; border-bottom-style: solid; background-color: #ccc;">Kalshi</= a> Raises Funds at $5 Billion Valuation, to Expand Overseas. <a href=3D"htt= ps://links.message.bloomberg.com/s/c/2Q-J_Cy1XVzA6Ir5QI68GnouWgTFErRj7GiqSo= jDoD953PqfgWDyUoMLSlYvFnUBI7Rnub8vq49wmaFZvuZpoz1z0_nvxuysfAHMwYr9BEoGiwO40= tS0RX8yLBcEDKWg-ESge0Vj4Vj9VC8XiYSpQ1Z6pfc3KVsCeHp-BwVHuKWATkyrPycmg-hmCDKk= D9Tknoo0Qj7zhn4T8MZuBKNh0mjJs11xF40A7cRqqtoML_whgVGkDfOy5qS0ptopnMgs-eQXhRf= EbCHIZCcoozhKKQRHwg57PW9am5hxWGjCdTY5jvDmem7a6OHM5RgjVdQ4ywhsrt6u6Y7xRtomc2= LTJPuDWeembWSi0BaqpPV1d1VkmMigZctSCKTkeHY/ijMQTJe7kgGguocUDOO6iODTPp7rTKA0/= 13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style= =3D"color: #000000; text-decoration: none !important; border-bottom-width: = 1px; border-bottom-color: #000000; border-bottom-style: solid; background-c= olor: #ccc;">Senegal</a> Raises $795 Million in Oversubscribed Regional Bon= d Sale. US Lifeline Buys Argentina Time as Investors Urge <a href=3D"https:= //links.message.bloomberg.com/s/c/fOk4rKBc8xizOxLEqOC7j0i3Pa8AaVb0GGWUap1iz= Ys2sZwgAOQLTA7eh_VNl-7xbnZy4aPHYBLyWbJasnMLokgQMt5FK2l34vGW65r8i-bzSOIvJwCR= 4EZovOWNqwmI896XXKQg7AXauvC9c5bXOeZ1Y7VPZcOBH4EzMkCaWr6N5ZgnUhCTDK3oc1JVDCq= YRa95v0DZMIQleTJbmMbFNywDdKZNcPi4KIqZBYQKkmBmEs5eAwSVHEHwr8bNxzw_mHD3G-kV48= BT1olcdIOCCynwGog3VQLXuUjnpnYPo_Wy_LleQNq2O7rNX6ImKCMs76nUF4Ke5U1dzvWkpG6Au= mc_gc2cs0WxIpmR2KgJ4fuOOR8wp4rKY92TI28/U8XGQCBLpCN2BQ0xA9iSN7NxSRVETkLM/13"= itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"= color: #000000; text-decoration: none !important; border-bottom-width: 1px;= border-bottom-color: #000000; border-bottom-style: solid; background-color= : #ccc;">FX Overhaul</a>. Warren Asks Hedge Fund Group If It Played <a href= =3D"https://links.message.bloomberg.com/s/c/1iUUjbUMUZMdNC_oLRtDMGpa04C6GyR= sQDL7wmhdZRuusc0Y5xO8is4cH06-9Uj7BJZAHiU0f5q9d5F9kaxFUHdt-DC1aOsL5s67FK_J3Y= AMciQ9Dv_aTgNWg7sYLr6o4UI_g7Pz3FNqdKCmMdmP_ZTmj1VhlBpmIZCAgR2LDjECedqAimdM5= ktBxHDBOjSDdLze6tB4L17_XgLXCL3uXSxO6P7456sCof3IYPxxmM4Tf6JtEPeBcBYYQ1hrYnfa= tnKhzma0MBmyfR0OCf03laawabj4Ycm0DVlnV-9yVMRzPCZSZIF2Coj6cMLEgAm8dWkXpLA6Dja= _-uChkDoL2U2CvCCH_Yj4tSL4P9EyOtkjI4g_TFiH9XFMnM8/ag4dEbgtdVen4SMSi2CGTTB93S= Dq0B9X/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank"= style=3D"color: #000000; text-decoration: none !important; border-bottom-w= idth: 1px; border-bottom-color: #000000; border-bottom-style: solid; backgr= ound-color: #ccc;"> Argentina Bailout Role</a>. The Former Banker Betting o= n Unprofitable Business of <a href=3D"https://links.message.bloomberg.com/s= /c/4YwliGjgimpjXw5Td2Zz4bqGHbf4zHRTmQWjUO-ZcRKUfXy7EZAINDahThIZm2NAFbBmPLhp= zIK7BtnfdECtyY1u6ZogXFMtrp2hpq5KjL-E0-KaiO52IscGdsUOZ-OtXzSyoktTkcorik29hfv= lpMA0Vx0Y9xnov7QYbypGPujG-v3_rIOH6mjHUva5ciHH7z3QpywM6KdSsjpFUnlrOOArxydwqa= JFTtbEiqGI83pPrdaT2kB7WUvki-YkBFBGKWMR_qdeSCK9g9jJRfAOkL2Df4kuPoQTHWUOKMvo_= Gs3kwnn__6O8BXII19umcN0jxrbfoyPM-s18qvV2xpIneKz5tllUms9zcPY225qvQ9GJ7QfLh_l= lXzuZMM/CKkaLoa3hyY2L_v9wghdBIPcC_ueWVQp/13" itemprop=3D"StoryLink" itemsco= pe=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-decoration= : none !important; border-bottom-width: 1px; border-bottom-color: #000000; = border-bottom-style: solid; background-color: #ccc;">Flood Insurance</a>. T= he Real AI Risk is =E2=80=98Meh=E2=80=99 Technology That Takes Jobs and <a = href=3D"https://links.message.bloomberg.com/s/c/G2CJ5gNlvZPUw8hNVfaBnIeUxNf= satgzsYaPfmJ5nmLWBrEvASFZoqEC_Dv7XZwLu0j42CuYwoxJ7zQb5pbdZIfj5c_pXMxAOmCMOy= OhbUz2clhbKEpgV62j0aOedJJvK7MJRRuXYgVw8vmpAUZazqX2G1iptOGMOR22u5vkjGu29mbaT= 9gYqO8_5jZCc-OMRSilSLTizG96C63ne7s5bO2ob-ugpG6zVpb1s9fTC8HFIOwF44mizESeuiUY= _QsIdALCqxaupFbjiux0JhcaJe8hx6HX-NVtJtG0jb-Pma5beP-j5gfyfF6VAAaPV6iuCi7yKMR= cxu7elRiM311448RD85UnPMIrPrPHi9_D15lz1F8VBhuJ0vO1Ki4/cjzcWRQRL4abHlRXP35uu7= DODV7_ivCO/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_bl= ank" style=3D"color: #000000; text-decoration: none !important; border-bott= om-width: 1px; border-bottom-color: #000000; border-bottom-style: solid; ba= ckground-color: #ccc;"> Annoys Us All</a>. Amateur <a href=3D"https://links= .message.bloomberg.com/s/c/JPTiomFfvbIQOabQnoEZKFQW1w6j_ky_PKB0hAo3yt0TCEq= i5rhpbxwayT7pXG5223biHazN1IUSXszQIHoZz-OI0ZFv90QmMTjOM79xmvSS9bptpvPuo7HoPv= TR-ZHeSCpZVKTial2cDPZLpy4IQUYnRQX3IsFAGgSH_VaW8eHNvzTIZA0R4EYPWYSFfI9yEijRn= k93GGR0jOObf6qMQTLN7WZoZQI69Fa3QhDMtBV9mhSfDCdyjMSmDPj4rf9fq36-1lHgs4fuGhTm= 9t-6xfNLOc2boPpdbvHFkeTI9eqFe7kmuV0CzpXjwm4VphhVe3S4IFcvYd98fePjgZ651sFcGwY= VIIqFAX-j5qhBH39D3YaoVTdiTXgFigI/tYZS2YwInlX42OXAVaK0es-pZYT4Lkbk/13" itemp= rop=3D"StoryLink" itemscope=3D"itemscope" target=3D"_blank" style=3D"color:= #000000; text-decoration: none !important; border-bottom-width: 1px; borde= r-bottom-color: #000000; border-bottom-style: solid; background-color: #ccc= ;">gold prospecting</a>. NIL injury <a href=3D"https://links.message.bloomb= erg.com/s/c/b1OlvKdqIPRffXGw_Ourjd6vJ-oCCkEwZVuaNjjJcT5gtO5_fq6soUcbkxm0kxW= hYjpnNupeYHfhXwWiA3CtUR9MihNoa7e4w8YZK57CSVgdQvnDsKkMISZa9lhNxTQknf72oHWf-8= ggRX2nU-G7zL9U5pkQhkmYfbMjCNenysL30ekoZ7mevm97GxFumJ53OIHTeLO9ix2tXQJ2MxGd3= aD2INPjYZGZ6fbfs4JFEldhoZRbDRneI7uL4aNfF9dCGIi3-hnqQ0vnXSTfl_9nvFieIXmhL7gH= b5ougvsPBgIG5Tt2wXyiV5DZOxqZUBs_SxXTzcnc1R_mN7lbcnR34tx_B-xhpE3lcfZhO9xICOP= bQMq9PQEjzj9fBT0/Pa5OdDJDlKVhHkKp8M97kVDaTIZ5NeVa/13" itemprop=3D"StoryLink= " itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-d= ecoration: none !important; border-bottom-width: 1px; border-bottom-color: = #000000; border-bottom-style: solid; background-color: #ccc;">insurance</a>= .</p> <p style=3D"margin: 16px 0;"><span><em>If you'd like to get=C2=A0Mon= ey=C2=A0Stuff=C2=A0in handy email form, right in your inbox, please=C2=A0<a= href=3D"https://links.message.bloomberg.com/s/c/SCevrvy2QlnxDstJVMfu2rhJX3= QVr8neIwosH0KUb1Am6tQXwnU-gPio1Y3p9m5QziZ4jLQ16mHxVRJ4GzAsXe9ED8HVhcN3phw8c= isl1-FprYu_o2MOsuWHlTAFcGIN_Uea68NdefP7iX4jKI2ABXCUyMpdq7IGXIUjuggB62SxxEr7= D87jdRLy_Rb0Qk9aUnWa2pnpln4tOgxCVoKw-L27vwo5MNjsRIN9UIrD9GwbpitdcwHYikEklRj= e0UXedE8_zL-OyZWEkmr64Ji_hOUbLC_wt5-9HpJuokGqGCIpLSw8A-7jT_u_FVoXv9H6iMTJMj= O_8o1xyb6XbO507TwSM7LcbAoFoHIN1a_GhSrSW0i8w0326OLTEAQ/PJ44md8ueQuK9pscJlT5l= ajPv2ITKlNv/13" target=3D"_blank" style=3D"color: #000000; text-decoration:= none !important; border-bottom-width: 1px; border-bottom-color: #000000; b= order-bottom-style: solid; background-color: #ccc;">subscribe at this link<= /a>. Or you can subscribe to Money Stuff and other great Bloomberg newslett= ers <a href=3D"https://links.message.bloomberg.com/s/c/ktQqUpaArUZ-IMXOiMXu= ZIEcZprmjKTCdUfKpSYg7DguZoAb5T-ug4Vu2Ch1jB7znzdWSBa3i_CUSkI0Ze1AHkn5ByyDwF1= Z8mYmo6e-9VbxaqoZsywn_p5fb4oH0Jc8iVhVoZJ41m0Gq2RtpbureIrLfOn8nv3_tju6U3uPGD= fqVTl634bModFxHTv8bIRlLuj63tHFMll1MObtLLf3WNG1EeX2fvf2xrp52lBmZWEiyWZc2fofs= zUpxB1CO_tffMyxqjfKORkWqZ1E0nKXJ6N6lRPK5abn7ZtR2aN84Apn6WXoj8Nw-14ygAqBHQsw= MhnWFA99y4sziF5LM0OXclPX2ObPndFzzy-maQf7Xo5wwHQOwc9idBC6aOI/eKKGaR3FIGy9hdM= YBC2skxHpNK0-RKo_/13" itemprop=3D"StoryLink" itemscope=3D"itemscope" style= =3D"color: #000000; text-decoration: none !important; border-bottom-width: = 1px; border-bottom-color: #000000; border-bottom-style: solid; background-c= olor: #ccc;">here</a>. Thanks!</em></span></p> <div id=3D"footnote-1" style= =3D"font-style: italic;"> <p style=3D"margin: 16px 0;">[1] Lol, remember=3F= </p> </div> <div id=3D"footnote-2" style=3D"font-style: italic;"> <p style= =3D"margin: 16px 0;">[2] In reality, <a href=3D"https://links.message.bloom= berg.com/s/c/SJnWNoFrItcq4N8nFHGJnCm158NFZ0vH_upWiwdX8PwXOY-FuygcCl3ijsuC2E= kK_eh7DWd-BJtzFy1TZWmQlFmwUvOY31yKxU9mqIkBa642nB29A8JcOmYGmx4VZ5KBoJ4EfftbJ= 9_BcWeHaSVhdpQKXfN_gHXLecIDROMBIO8Kz7_6RVBLs9lXl5kyjTnYZK-MPozOyW6L4itJ0c2M= wS3OyBqygKkqn7qd6QUmozqXYExKBX6Eqoh84SP8skVtKWWcdBiY7x_7n2fWiVzMeLvthZqCDzk= tH_uY904kW9RN86YYhYNlsLhKu9a-7orfaYKhLVQ3cvVU04aobcPnmRc4dKtIBbHLNkGRMb-0ns= n7BDRirIGeB6rk_7Q/_sOKlEvT-wBj2CkpgOcWZt53jjZ44_8w/13" itemprop=3D"StoryLin= k" itemscope=3D"itemscope" target=3D"_blank" style=3D"color: #000000; text-= decoration: none !important; border-bottom-width: 1px; border-bottom-color:= #000000; border-bottom-style: solid; background-color: #ccc;">Binance=E2= =80=99s postmortem</a> on the crypto deleveraging says: =E2=80=9CHistorical= limit orders (some dating back years, as far as 2019, e.g., IOTX, ATOM) ha= d remained open on the platform. During extreme market sell-off and the lac= k of buying orders, sell orders continue to execute against these long-stan= ding limit orders, pushing token prices to sharply drop momentarily.=E2=80= =9D Instead of value investors stepping in, what happens is that people who= put in buy orders in 2019 and forgot about them had those orders executed = when prices dropped far enough.</p> </div> </td> </tr> </table> </td> </tr>= <tr> <td style=3D"border-collapse: collapse; mso-table-lspace: 0pt; mso-ta= ble-rspace: 0pt; padding: 0px 10px;"> <table width=3D"100%" border=3D"0" ce= llspacing=3D"0" cellpadding=3D"0"> <tr> <td style=3D"width: 100%; border-co= llapse: collapse; mso-table-lspace: 0pt; mso-table-rspace: 0pt;" width=3D"1= 00%"> <center> <a href=3D"https://links.message.bloomberg.com/s/c/9gv-Jf1TG= T8dNbyiuK6Vq-GGWj30eAG5KcvFCTWppdsvTShNRdVA2WLCzXmy2xnSPG0m46s0K5mq0zf5KE_-= V_Dh8dchgsuq4rRHLjZ-4kv0pq-d5TQgELFg6-AUXIzBH9O6IVFCu36jXtIsxZFp5bA5_1K-6SI= lCBgHz4k6yVjBNKE6aXV-tltWvhavWmWf4_4dpzRI4Zb3eLQymjQ5HxsUPV4S6KbO61JyB-vD4y= DRdATc9ejTdP9a7oy18a_Uihb70M8C-FVnOJ-boig1_SqmXYgG4juB2NzRYFwsmXB6IDf-KL19a= f2F4r3XJYJkKDNVCDxL5Buw3zo9oPl1Fo0FQFq6XQEI3Ykgfexw58cxYEC6MMVeUJn8mZ0/heRy= OUIQGjEff5FBptaLsn-Ji5K7kktj/13" target=3D"_blank"> <!--[if mso]><table wid= th=3D"550"><tr><td><img alt=3D"Listen to the Money Stuff Podcast" src=3D"ht= tps://assets.bwbx.io/images/users/iqjWHBFdfxIU/i6H.ue2bNPOA/v0/-1x-1.png" w= idth=3D"550"/></td></tr></table> <div style=3D"display:none"><![endif]--><i= mg src=3D"https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i6H.ue2bNPOA/v0/= -1x-1.png" alt=3D"Listen to the Money Stuff Podcast" style=3D"max-width: 55= 0px; 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