Speaker 1: Also media a welcome back to Behind the Bastards, our
Speaker 1: special edition episodes on Sam Bankman, who is not freed
Speaker 1: because he is still in jail. That's it's the intro
Speaker 1: I've got. It's the same as the last episode.
Speaker 2: No, you're hilarious. It's still very funny. Sophie's favorite.
Speaker 1: This is the only time I've made Sophie laugh in years.
Speaker 1: That's not true. Well, okay, Switzerland on this issue. You're
Speaker 1: Swiss on this issue. Swiss you Jamie. Speaking of Switzerland,
Speaker 1: you also were neutral in World War Two? Is that correct? Yeah?
Speaker 2: I was sort of like kidding. You made me laugh again.
Speaker 1: Congrats two for two, baby, So we took a couple
Speaker 1: of days and tween recording part one and part two.
Speaker 1: Really let it sink in. How are you feeling on
Speaker 1: our technically not a Behind the Bastards on Michael Lewis,
Speaker 1: but basically a behind the Bastards on Michael Lewis, author
Speaker 1: of The Big Short.
Speaker 2: I So in the interesting days, I've talked about the
Speaker 2: Michael Lewis of it all with a couple of different people,
Speaker 2: just to see if I was like if I had
Speaker 2: just missed something. But every single person I talked to
Speaker 2: I found had a similar experience to me, where they
Speaker 2: did not know that he wrote The blind Side. Oh good, okay, yeah,
Speaker 2: and then when they found out that he wrote the
Speaker 2: blind Side, they were like, oh, yeah, I could see
Speaker 2: that he is a you know, he's an honorary bastard.
Speaker 1: Yeah, maybe he is kind of a hack. Yeah right, well.
Speaker 2: Yeah, they were like, yeah, Michael Lewis Moneyball the Big Short,
Speaker 2: And You're like, and another thing, how did that? How
Speaker 2: how do we collectively forget that he wrote that? It
Speaker 2: feels like he got away with something.
Speaker 1: Yeah, And I guess I've been thinking about what he's
Speaker 1: doing with Sam Bankman Freed as I think about the
Speaker 1: upcoming Napoleon movie, which I will have watched by the
Speaker 1: time this comes out, but it's not out yet. So
Speaker 1: excited about that time. I'm ready. Everyone, especially like all
Speaker 1: of these history Twitter podcast people, are so livid that
Speaker 1: Ridley Scott's basically like, who can say what the truth
Speaker 1: of Napoleon's life was, which is it is a ridiculous
Speaker 1: thing to say. He's very well documented. We actually know
Speaker 1: a lot about Napoleon. But also, I don't give a shit.
Speaker 1: It's the guy who made Gladiator, like well, and also.
Speaker 2: I appreciate because all biopics are you know, nonsense, yeah
Speaker 2: or shit right, And so you're like, well, this is
Speaker 2: the one director who's going to say my biopic is kind.
Speaker 1: Of horse, it's just lies, which also very appropriate for Napoleon.
Speaker 1: But what is the line with that? Why Why am
Speaker 1: I angry at Michael Lewis for what he's doing? And
Speaker 1: I don't really care.
Speaker 2: He's a journalist, there is he's a journalist.
Speaker 1: One he's not the director of fucking Gladiator, the least
Speaker 1: accurate movie about Rome ever made.
Speaker 2: It's been a great it's been a great week for
Speaker 2: like weird old guys who we could argue had have
Speaker 2: peaked creatively, although I wouldn't say that for Scorsese. But
Speaker 2: there was a great quote that was floating around in
Speaker 2: the last couple of days where I guess Scorsese said
Speaker 2: on the Killers of the Flower Moon press stor that
Speaker 2: he was like always worried about running out of time
Speaker 2: and he never knew what his last movie would be.
Speaker 2: And Ridley Scott was asked to like react to that,
Speaker 2: and he said, since he started Killers of the Flower Moon,
Speaker 2: I've made four films. No I don't think about it.
Speaker 2: I get up in the morning and say, ah, great,
Speaker 2: another day of stress.
Speaker 1: Honestly, those are both completely valid answers. Yeah, I refuse
Speaker 1: to be a part of some sort of like pretending
Speaker 1: that what Scott is saying isn't as valid as what
Speaker 1: Scorsese's saying. There are two ways to deal with mortality,
Speaker 1: one of the.
Speaker 2: Two genders of creative march Yeah.
Speaker 1: Yeah. One is oh my god, I will die and
Speaker 1: I won't have said everything I need to say, And
Speaker 1: the other is what the fuck I got I got
Speaker 1: shit to do, I gotta move, I gotta have time
Speaker 1: with the answer to this fucking question. Yeah.
Speaker 2: Meanwhile, Robert Paul Schrader is on Facebook, and Paul Schrader's
Speaker 2: posting about Taylor Swift in a kind of horny way,
Speaker 2: so like, yeah, the old men are just there on
Speaker 2: one this week, and Michael Lewis walks among them.
Speaker 1: There's only one old, great creative who has taken the reasonable,
Speaker 1: respect like answer to mortality, and it's John Carperdue, who's like, Nah,
Speaker 1: I'm done directing movies. I'm gonna get high, play video games,
Speaker 1: watch basketball the rest of my life, and God, bless God,
Speaker 1: bless him. Yeah, God bless them. There's a man who
Speaker 1: understands what's valuable in life, a thing that Sam Bankman
Speaker 1: Freed never understood. And we're and we're back. Yeah, we're back.
Speaker 1: So one of the things that comes up a lot
Speaker 1: in Michael Lewis's book is he's sort of going into
Speaker 1: the mind and psyche of Sam Bankman Freed, is that
Speaker 1: Sam had this belief that no one ever does anything
Speaker 1: useful after like age forty to forty five, somewhere around
Speaker 1: there is the last time you have a useful thought
Speaker 1: in your entire life, which I guess is relevant to
Speaker 1: our discussion of aging aging powerful men.
Speaker 2: I will say that that's true of many stand up comedians,
Speaker 2: but I can't speak of that outside of that.
Speaker 1: Yeah, yeah, I mean I think it's true, especially like
Speaker 1: once you get really rich, it's you tend to like
Speaker 1: lose complete touch with the world and go insane. So
Speaker 1: I think that is somewhat accurate, at least for some
Speaker 1: creative professions. But Sam is not in a creative profession,
Speaker 1: and it's actually kind of ridiculous to me the idea
Speaker 1: that like people in business after age forty four, like
Speaker 1: Steve Jobs did all of his best shit like well
Speaker 1: after that point, like his most influential like evil things
Speaker 1: and most like really successful businessmen are just kind of
Speaker 1: getting started by their mid forties, right, because it takes
Speaker 1: that much time to get that's momentum.
Speaker 2: You've got a lot of evil like you got.
Speaker 1: He's lot of horrible things left to do, plenty of time.
Speaker 2: First is in front of you.
Speaker 1: I think he's got three to five ethnic cleansings in
Speaker 1: a minimum minimum Jamie, Yeah, maybe eight. You know, I
Speaker 1: could see him having eight more ethnic cleansings.
Speaker 2: He does seem like someone who just will like have
Speaker 2: a kissinger like affinity for life.
Speaker 1: Yeah, so bankman Freeds, I understand belief that, like after
Speaker 1: age forty five, he's not going to be capable of
Speaker 1: having any useful ideas. This is what pushed him, you know,
Speaker 1: along with his effective altruist idea. This is why he
Speaker 1: felt like he had to he had to continually gamble
Speaker 1: rather than like taking the slow, sustainable path making money
Speaker 1: off of his exchange at like a reasonable pace. No, no, no,
Speaker 1: I only have a few more years left before my
Speaker 1: brain shrivels up. And so if I'm going to do
Speaker 1: anything good for the world, I have to keep putting
Speaker 1: every dollar I've made on a fifty to fifty bet endlessly, right,
Speaker 1: mm hmmm, which isn't it? Which is like, I don't know,
Speaker 1: you should probably get help if you feel that about
Speaker 1: the world world, because that's a deeply self destructive way
Speaker 1: to think about yourself and about your assets. This is
Speaker 1: a big part of why FTX did not have a
Speaker 1: really crucial thing for any company, particularly a financial company,
Speaker 1: to have, which is a risk officer.
Speaker 2: Right.
Speaker 1: A risk officer's job is to analyze the deals the
Speaker 1: company is doing and go, well, that's an insane risk,
Speaker 1: so let's not do that one. Or you know, that's
Speaker 1: an insane risk. We need to offset it with this stuff.
Speaker 1: They also did not have a chief financial officer or
Speaker 1: a bunch of other critical executive positions.
Speaker 2: Yeah, no CSOs, that's one I've heard of. You should
Speaker 2: have that one.
Speaker 1: It's a really basic job, and its job is basically
Speaker 1: to know how much money you have, right, Like, there's
Speaker 1: other stuff to it, but it's pretty critical. FTX also
Speaker 1: did not have a board of directors, and they're lacking
Speaker 1: a bunch of other very basic executive positions, and a
Speaker 1: big part of why is that the only people Sam
Speaker 1: feels like he can trust are like his friends, and
Speaker 1: he has this deep aversion to bringing in adults, like
Speaker 1: people who were not in their twenties, like his the
Speaker 1: friends he went to college with. And shit, he said
Speaker 1: in one interview with Michael, we tried having some grown ups,
Speaker 1: but they didn't do anything. This was true for everyone
Speaker 1: over the age of forty five. All they did was worry, which, like, again,
Speaker 1: given what happened, perhaps they auto have been.
Speaker 2: Maybe I'm just like sort of on one with the
Speaker 2: idea that very few stand ups have a valuable thought
Speaker 2: after forty five. But I would say now reflecting on it,
Speaker 2: like Sam Bankminfried is using the improv troop approach to
Speaker 2: a very high stakes business. Yes, Like he's like, no,
Speaker 2: I will only work with people I went to college with,
Speaker 2: we know best. I don't want no fucking crusties in
Speaker 2: the room, like if he I mean, And we could
Speaker 2: debate all day about whether Sam bankmdfried would have done
Speaker 2: more evil in his life so far or in his
Speaker 2: life as an improv comedian, because I think they should
Speaker 2: all be in forever jail. So it's kind of like,
Speaker 2: it's difficult, it's difficult.
Speaker 1: This is what Levenworth should be right. Military needs to
Speaker 1: take stand up comedians into custody. I've always had and
Speaker 1: I'm on a lot of lists.
Speaker 2: Yeah, you know how many bars have performed in to
Speaker 2: know people, I'm on a lot of lists.
Speaker 1: So Sam's response when he was asked by Michael, like,
Speaker 1: why don't you guys even have a CFO? That seems important?
Speaker 1: He says, there's a functional religion around the CFO. I'll
Speaker 1: ask them why do I need one? Some people cannot
Speaker 1: articulate a single thing the CFO was supposed to do.
Speaker 1: They'll say, keep track of the money or make projections,
Speaker 1: And I'm like, what the fuck do you think I
Speaker 1: do all day? You think I don't know how much
Speaker 1: money we have? Which is funny because his whole legal
Speaker 1: defense in court was I had no idea how much
Speaker 1: money we had or where it was, and that's why
Speaker 1: I didn't commit a crime, right because I just was incompetent.
Speaker 1: I didn't know where the money was. But it's all
Speaker 1: somewhere Like, very silly thing to say, given what he's
Speaker 1: about to say. Okay, So after Sam's life fell apart,
Speaker 1: Michael Lewis continued to talk and visit multiple sometimes would
Speaker 1: call like three or four times a day through the
Speaker 1: eight months that Sam was on house arrest. And it's
Speaker 1: interesting to me because, like Michael, if I was a
Speaker 1: journalist like Michael Lewis, and I had had a conversation
Speaker 1: with somebody when they were one of the biggest names
Speaker 1: in an industry, being like a CFO is useless. I
Speaker 1: know where the money is, and then their entire life
Speaker 1: explodes because they didn't know what the money is. I
Speaker 1: would at some point asked him the question, Hey, was
Speaker 1: that maybe a bad idea? Michael does not bring this
Speaker 1: up to Sam after the collapse in any of the
Speaker 1: dozens of conversations that they've had, and in fact, and
Speaker 1: this is why that's weird. The actual villain of his book,
Speaker 1: Going Infinite, the one person that Lewis is super critical
Speaker 1: of in like a really uncharitable way, is the CEO
Speaker 1: brought into takeover the FTX after Sam like leaves and
Speaker 1: declares bankruptcy, a guy named John ray the Third. Now,
Speaker 1: I am not going to go to bat for John
Speaker 1: ray the Third because he he's John His name is
Speaker 1: John ray the Third, Like that name.
Speaker 2: To go to bat Ford, Yeah.
Speaker 1: But he Is. You know, he's the guy who got
Speaker 1: brought into liquidate in Ran and he's he's kind of
Speaker 1: a corporate undertaker, right when a when there's a huge
Speaker 1: scandal at a company, when it like collapses, goes into bankruptcy,
Speaker 1: and you need someone to kind of do the post mortem.
Speaker 1: You bring in John Ray and he's like, as far
Speaker 1: as I know.
Speaker 2: Not the first or second.
Speaker 1: No, not the first or second. Those guys are useless.
Speaker 2: No fucking clowns. Okay, you're gonna want to bring in
Speaker 2: the third.
Speaker 1: You need a j R. Three.
Speaker 2: I'm with you, so yes, sir.
Speaker 1: Yeah, it's interesting, like the degree to which he has
Speaker 1: because this guy comes in later and I think because
Speaker 1: he's boring, Michael Lewis finds him disgusting. Like I haven't
Speaker 1: run into any info that he's like bad at what
Speaker 1: he does. It's certainly not his fault, but Michael is
Speaker 1: livid because he's this kind of like stodgy old businessman
Speaker 1: and he doesn't understand sam spe playground or like the
Speaker 1: wonderful thing that he built, and he's just kind of
Speaker 1: exasperated at how badly it all works.
Speaker 2: See that's fascinating to me because to me that says
Speaker 2: like Michael Lewis is, I mean, either just hates boring people,
Speaker 2: which fair enough, but you know he should know as
Speaker 2: a journalist that boring people are often and maybe most
Speaker 2: often tremendously capable of doing bad shit. But it seems
Speaker 2: like he's looking more for like, well, Bradley Cooper can't
Speaker 2: play you in a movie. You're useless to me, your garbage,
Speaker 2: you're boring.
Speaker 1: There's nothing. Yeah, there's nothing sexy about him. He's just
Speaker 1: trying to deal up, like clean up after a disaster.
Speaker 1: And there's some really funny lines in the book because
Speaker 1: like one of the things that Lewis has to do
Speaker 1: in order to kind of defend Sam as a genius
Speaker 1: is explain how he didn't steal nine billion dollars, right,
Speaker 1: And the answer that Lewis has come to is that
Speaker 1: money is all there, that he just didn't know where
Speaker 1: nine billion dollars was. Oh yeah, he didn't steal it
Speaker 1: or gamble it away. He just misplaced it, dude, rank
Speaker 1: and competence that he committed because he was too smart
Speaker 1: to keep track of things. And there's a I'm going
Speaker 1: to read you a very uh yeah, there's a really
Speaker 1: fun quote there he describes like Lewis describes FTX as
Speaker 1: a real business, but he says that John Ray, who
Speaker 1: like attacked it as the worst run company I'd ever seen,
Speaker 1: was just too much of an idiot to like understand
Speaker 1: it right. He describes Ray trying to figure out what
Speaker 1: company assets actually existed in what didn't, as quote like
Speaker 1: an amateur archaeologist who had stumbled upon a previously unknown civilization,
Speaker 1: unable to learn anything about its customs or language. He
Speaker 1: just started digging, right, Like really, he's too dumb to
Speaker 1: understand the brilliant thing that Sam built up, so he
Speaker 1: just starts like churning about in the wreckage without really
Speaker 1: appreciating everything that went into making this monufental edifice.
Speaker 2: And I really wonder, like what I mean, this is
Speaker 2: like getting into the weeds a little bit. But I'm
Speaker 2: very curious, like what, like who on Michael Lewis's editorial
Speaker 2: team is keeping him in check. It doesn't sound like
Speaker 2: he's hired a fact checkers to sound like he has
Speaker 2: a personal Jimminy Crickett, So he's just saying shit like
Speaker 2: his personal biases couldn't be more out.
Speaker 1: They wanted to rush this thing out, so you don't
Speaker 1: have much time to edit it, right, True? Yeah, a
Speaker 1: year to write and release a book is not a
Speaker 1: long time.
Speaker 2: No, not enough time one might, not enough.
Speaker 1: Time, one might argue. And also Michael Lewis has the
Speaker 1: kind of clout to make that not happen. Right, And again,
Speaker 1: I also kind of think that his hatred of Ray
Speaker 1: here is based on the fact that Ray did not
Speaker 1: fall for Sam's bullshit the way Michael did. Right. Here's
Speaker 1: what Ray said shortly after taking over and getting a
Speaker 1: look at ftx's finances, and this is from an our
Speaker 1: article in Business Insider. At the hearing, Congresswoman an Wagner
Speaker 1: of Missouri asked Ray to elaborate on the specific ways
Speaker 1: FTX was worse than quote one of the largest corporate
Speaker 1: frauds in history. Ray explained that FTX was unused and
Speaker 1: then it had no record keeping whatsoever. He said that
Speaker 1: employees would exchange invoices and expenses on Slack, the ubiquitous
Speaker 1: workplace chat room. They used QuickBooks, he added, referring to
Speaker 1: the accounting software quick Books. Congresswoman Wagner asked for clarification,
Speaker 1: QuickBooks very nice tool, not for a multi billion dollar company.
Speaker 1: Rake confirmed and that's like basically they're using the kind
Speaker 1: of thing that you would use if you're like a
Speaker 1: person keeping track of you, or maybe your small business
Speaker 1: is accounting.
Speaker 2: Yeah, I've done that and like that. That's nuts.
Speaker 1: Yeah, that is like the close attitude too.
Speaker 3: Yeah.
Speaker 2: I was like, that's the closest thing I've come to debuting. Like, Wow,
Speaker 2: if I was also the tasked with multi billion dollars,
Speaker 2: I'd be like, I don't know, yeah books, Well we
Speaker 2: go to turbo tax, what do we do? I would
Speaker 2: hire a CFO.
Speaker 1: Yeah, I would hire someone who's done that before, right.
Speaker 2: Yeah yeah QuickBooks. Holy shit.
Speaker 1: Yeah. So you can decide whose interpretation sounds more realistic
Speaker 1: John Ray recognize you can. Basically, the two possibilities are
Speaker 1: like either John Ray just recognizes basic incompetence when he
Speaker 1: sees it and gets angry, or he's just not brilliant
Speaker 1: and special enough to understand Sam's world, which is is
Speaker 1: what That's what Michael lewis, that's he in caps. That's
Speaker 1: what Michael Lewis refers to FTX as is Sam's world, right,
Speaker 1: this is a He basically treats the whole situation as like, yes,
Speaker 1: Sam's Sam lived in this magical world, and you know,
Speaker 1: his business was actually secretly good, but it encountered this
Speaker 1: temporary issue and he was forced out. And then John
Speaker 1: Ray came in and he tore it all apart because
Speaker 1: he's just the mean, old, grumpy businessman.
Speaker 3: Right.
Speaker 1: That's that's really like the thrust of Michael Lewis's book,
Speaker 1: and part of how he kind of emphasizes the magical
Speaker 1: inner world Sam lived in is this kind of obsession
Speaker 1: with gaming returning to like Lewis is just sort of
Speaker 1: fascinated with like the fact that Sam was an addict. Right,
Speaker 1: Sam is a gaming addict. That's what when you can't
Speaker 1: like handle your basic functions, but because you're too busy
Speaker 1: playing Storybook Brawl, that's an addiction, right, yeah. Yeah. And
Speaker 1: it's interesting both because Storybook Brawl was made by his
Speaker 1: childhood friend and he used consumer funds to purchase it.
Speaker 1: It seems to have been a pretty mid game. It
Speaker 1: shut down after he got arrested, so I can't play
Speaker 1: it to tell you if it's actually good. But Lewis
Speaker 1: doesn't describe it as like a middle brow app game.
Speaker 1: He describes it as like better than chess, like more
Speaker 1: complex than chess. A greater intellectual expert or exercise than chess,
Speaker 1: and he writes this paragraph about it. Sam didn't care
Speaker 1: for games like chess, where the players controlled everything and
Speaker 1: the best move was, in theory, perfectly calculable chess. He'd
Speaker 1: have liked better if robot voices wired into the board.
Speaker 1: Hollered rule changes at random intervals. Nights are now rooks,
Speaker 1: all bishops must leave the board, ponds can now fly,
Speaker 1: or almost anything, so long as the new rule forced
Speaker 1: all players to scrap whatever strategy they'd been pursuing and
Speaker 1: improvise another better one. The game Sam loved allowed for
Speaker 1: only partial knowledge of any situation. Trading crypto was like that,
Speaker 1: and I think getting.
Speaker 2: Fucking ridiculous, Like is there any chance that Sam Bankman
Speaker 2: Freed paid Michael Lewis to say this shit?
Speaker 1: Like I maybe I don't know that he was still
Speaker 1: the money one of the things.
Speaker 2: Not that there's no proof that he isn't dense, But
Speaker 2: this is like above and beyond.
Speaker 1: The reason why I get that a lot that like, well,
Speaker 1: Michael Lewis is obviously bribed, but like Michael Lewis is
Speaker 1: very rich, Like I don't know how you could bribe
Speaker 1: Michael Lewis, especially after you lose your money.
Speaker 2: Yeah, and even and even if he wasn't from money,
Speaker 2: he'd be there.
Speaker 1: Yah. Yeah, Yeah, He's always been rich and always will be.
Speaker 1: So I don't know how much I think that's that's likely.
Speaker 1: I think he just this is his first time ever
Speaker 1: hearing about games, and so he thinks Sam is brilliant
Speaker 1: and special because he played them obsessively. I also think,
Speaker 1: you know, we just did our episodes on Lord John
Speaker 1: asked and all, who is like this this British gambling
Speaker 1: maven who took away who like basically uh got the
Speaker 1: upper class of the England and like the mid century
Speaker 1: to just gamble away all of their fucking money. And
Speaker 1: a big part of why this kind of like old
Speaker 1: generation of the aristocracy lost so much is they were
Speaker 1: into these specifically games of chance like Shamanda fair, which
Speaker 1: is a kind of bacca where basically there's no skill involved.
Speaker 1: It's pure it's as close to pure chance as possible.
Speaker 1: Because there was this like change in the kind of
Speaker 1: gambling the upper class like to do that I've heard
Speaker 1: theorized it's basically just like, well, these people had nothing
Speaker 1: in their life but gambling, right, They've always been rich,
Speaker 1: they're born rich, they've always lived these super safe lives.
Speaker 1: The only thrill they had was throwing a bunch of
Speaker 1: money on like the effectively a complete chance.
Speaker 2: And for understand that, because it's like, what's the worst
Speaker 2: that's going to happen. You're going to become marginally less
Speaker 2: rich but still maintain the same quality of life.
Speaker 1: That sounds boring, Yeah, you've just they've they are just
Speaker 1: insulated from anything thrilling because they're insulated from any real danger, right.
Speaker 1: And so I think Sam being this kind of rich,
Speaker 1: sheltered kid that's Lewis interprets. It's like he's too smart
Speaker 1: to play a game like chess. He wants a game
Speaker 1: where he doesn't actually know what's going on, and a
Speaker 1: lot of that's random. It's like, well, I just see
Speaker 1: these old British gamblers and Sam Bankman freed, where again,
Speaker 1: this kid has nothing but the throw of the dice
Speaker 1: inside him and that's what he liked, right, and he
Speaker 1: put a lot of other people's money on those bets. Yeah, anyway,
Speaker 1: this is a little beside the point, but I did
Speaker 1: want to read the actual part of the book where
Speaker 1: Lewis describes Magic the gathering because it's it is very boom.
Speaker 1: Magic had been created in the early nineteen nineties by
Speaker 1: a young mathematician named Richard Garfield. It was the first
Speaker 1: kind of a new kind of game, designed perhaps for
Speaker 1: a new kind of person. Garfield had started with an
Speaker 1: odd question, could a strategic game be designed that allowed
Speaker 1: the players to come to it with different equipment? And again,
Speaker 1: Games Workshop had started making Warhammer years before Magic came out,
Speaker 1: Like all games have existed forever.
Speaker 2: I couldn't hear you over the sound of imagining Garfield
Speaker 2: the cat saying.
Speaker 1: That, Yeah, which Garfield? Bill Murray? Are we talking Chris Pratt?
Speaker 2: There's also a secret third Garfield Garfield whoever did the
Speaker 2: voice acting on Garfield and Friends, which is my canonical
Speaker 2: Garfield voice, certainly not Chris Pratt Garfield there. I forget
Speaker 2: who tweeted this, but there is a vibe with the
Speaker 2: new Garfield that Chris Pratt has been locked in a
Speaker 2: room forced to voice every major ip. It's like a
Speaker 2: it's his infinity punishment. He'll be rich, but he can
Speaker 2: never leave the room.
Speaker 1: I'm okay with that. Actually, yeah, let's keep.
Speaker 2: Him in the room. He doesn't have any good ideas.
Speaker 1: No, No, keep in the room. Every every six years
Speaker 1: he can come out to do another interminable Jurassic World movie.
Speaker 2: No, the villain was Locus.
Speaker 1: So Lewis is so ignorant of kind of the basic
Speaker 1: of youth culture to this day that he sort of
Speaker 1: transposes a lot of completely normal millennial and zoomer behaviors
Speaker 1: As evidence of Sam's unique brilliance. Here's another clip from
Speaker 1: sixty Minutes where he describes how Sam treated effective altruism.
Speaker 1: That that ties into this and this is remarkable.
Speaker 4: What it means in Sam's instance is you can go
Speaker 4: out and have a career where you do good. You
Speaker 4: can go be a doctor in Africa, or you can
Speaker 4: go out and make as much money as possible and
Speaker 4: pay people to be doctors in Africa. If you're a
Speaker 4: doctor in Africa, you get you end up saving a
Speaker 4: certain number of lives.
Speaker 5: But you're only one doctor. But if you can.
Speaker 4: Pay forty people to become doctors in Africa, you're gonna
Speaker 4: save forty times a number of lives.
Speaker 1: This is like a strategy game.
Speaker 5: Well, you don't understand sammcmcfreed. Unless you understand then he
Speaker 5: turns everything into a game. Everything is gamified.
Speaker 2: He's describing a pyramid scheme of doctors.
Speaker 1: Yes, am I like, And he's.
Speaker 2: Saying this on sixty minutes, I like, I cannot put
Speaker 2: rout my Okay, now I am like taking him being
Speaker 2: paid off like or paid on or off off the
Speaker 2: table because you're just like, this is ridiculous.
Speaker 1: This is like you stupid.
Speaker 2: Yeah, like to like the fact that people somehow collectively
Speaker 2: forgot that you wrote the blind Side on fire to
Speaker 2: say this shit on sixty minutes, it just like, is
Speaker 2: it's what he's describing a pyramid scheme.
Speaker 1: He sure is, he is describing a fucking pyramid scheme.
Speaker 1: And also like this hole he turns everything into a game,
Speaker 1: like because.
Speaker 2: The through like connection there is like Jigsaw for good.
Speaker 1: Sure, Sam could have been a doctor in Africa, but
Speaker 1: by making a lot of money, he could hire a
Speaker 1: bunch of doctors in Africa. And the through line you're
Speaker 1: meant to make is he was He was the guy
Speaker 1: who was best suited making a lot of money because
Speaker 1: he turned everything into a game. And man, that's again
Speaker 1: not unique to Sam. A significant percentage of the US economy.
Speaker 1: It's based around taking the logic and addictive strategies game
Speaker 1: developers use and applying it to every imaginable industry, right,
Speaker 1: like that's fucking everywhere, Like Sam is again not unique
Speaker 1: in this, And also the it's just such a the
Speaker 1: fact that Lewis seems to have bought into the basic
Speaker 1: logic of like, well, it's better to pay a bunch
Speaker 1: of doctors than becoming one is silly because like, well,
Speaker 1: we have a shortage of doctors. We don't have a
Speaker 1: shortage of assholes who gamble with other people's money. There's
Speaker 1: there's not actually enough doctors for the people who need them.
Speaker 2: And also, I mean to that point, it doesn't sound
Speaker 2: like would I trust, knowing what I do, of Sam
Speaker 2: Bankman Freed's ability to multitask that would I trust him
Speaker 2: doing surgery? I don't think I would. I don't think
Speaker 2: I would. I wouldn't trust him doing either of those
Speaker 2: in Africa?
Speaker 1: Yeah, yeah, no, he would, he would never have right,
Speaker 1: like but yeah, anyway, but.
Speaker 2: It sounds like he I mean, maybe I'm like, you know,
Speaker 2: giving him too much credit and he's playing a game
Speaker 2: of forty t but it doesn't seem that way, and
Speaker 2: I like, he sounds ridiculous.
Speaker 1: I kind of outside of he's just completely deluded. His
Speaker 1: two options are he's just so out of touch with
Speaker 1: the youth that he thought Sam was unique in this,
Speaker 1: or he he decided from the moment he met him.
Speaker 1: This is the framing device I want to use for
Speaker 1: Sam's genius in my book because I can think. I
Speaker 1: think they could film it easily, right, because I'm sure
Speaker 1: he thinks that way about the books he's written. He's
Speaker 1: had so many of them adapted, and like, yeah, if
Speaker 1: I you know, there's a lot of fun ways you
Speaker 1: could film this super genius solving his math problems through
Speaker 1: like imagining games out in the real world, right, hmm, yeah,
Speaker 1: So I my guess is that he just couldn't get
Speaker 1: himself off of this idea he had for like the
Speaker 1: inevitable Sam Bankman Freed movie, you know, crafted for the
Speaker 1: Big Bang Theory audience.
Speaker 2: Yeah, Like sure, he's already he's like, oh yeah, who's
Speaker 2: hot right now, Paul Mezcal, Well, well we'll dye his hair.
Speaker 2: It's gonna be fucking great.
Speaker 1: No, I think they should have had Timothy shallomeh I
Speaker 1: think they should have had Timothy Shallo may do like
Speaker 1: a you know, what's his name the Batman guy where
Speaker 1: he would like wildly change his appearance in ways that
Speaker 1: are bad for his health every since.
Speaker 2: Don't talk about Robbert Pattens in that way.
Speaker 1: Or I want to see Timothy do a Christian bale
Speaker 1: to look like Sam Bankman Freed. That's that sounds fun.
Speaker 2: I just worry about Timothy shalmy. It looks like if
Speaker 2: you like touch him, he may shatter. I just worry
Speaker 2: about him. He looks a.
Speaker 1: Frail Yeah, that's the right thing. He looks like he's
Speaker 1: got consumption. Yeah, but like that, they would say that
Speaker 1: about him in the in the in the in the
Speaker 1: distant past. Yeah.
Speaker 2: And it's like if Sam Bankman Freed is looking heartier
Speaker 2: than you are, like you're in trouble my man.
Speaker 1: Uh huh. Yeah, Well I wouldn't say that about Sam.
Speaker 1: But so there's an amusing coda to Lewis's loving descriptions
Speaker 1: of Sam as a compulsive gamer. This paragraph occurs right
Speaker 1: after the FTX customers pull a run on the bank,
Speaker 1: annihilating its cash reserves and starting its collapse. Is like
Speaker 1: the employees are all huddled inside thirty million dollar Bahamas
Speaker 1: suites to try to figure out how to fix things.
Speaker 1: Nishad was agitated with Sam in a way that Romnik
Speaker 1: had never seen, at one point, turning on him and screaming,
Speaker 1: will you please fucking stop playing storybook brawl? And I
Speaker 1: like that anecdote, But it gets to another frustrating issue
Speaker 1: with Going Infinite, which is that Michael Lewis has all
Speaker 1: the ingredients for a great modern Icarius story of Hubris
Speaker 1: and the Fall, but making it work tonally would require
Speaker 1: him to see these things that are obvious warning signs
Speaker 1: as warning signs and structure his book that way, right,
Speaker 1: and then you get some Catharsis in the payoffs. But
Speaker 1: these warning signs are just sort of scattered around. They're
Speaker 1: not given the significance he would give them if he
Speaker 1: saw them as warning signs, because he's clearly taken with
Speaker 1: all of this stuff. Another example of a valid through
Speaker 1: line Lewis seems to have missed is Bankman Freed's complete disregard,
Speaker 1: even distaste, for the competence of the women around him.
Speaker 1: Lewis spends a fair amount of time on Sam's relationship
Speaker 1: with Carolyn, and he he prints these letters between them
Speaker 1: that certainly don't make Sam look great. It began with
Speaker 1: a seriously compelling list titled arguments against this is arguments
Speaker 1: against her dating him in a lot of ways, I
Speaker 1: don't really have a soul. This is a lot more
Speaker 1: obvious in some context than others. But in the end
Speaker 1: there's a pretty decent argument that my empathy is fake,
Speaker 1: my feelings are fake, my facial reactions are fake. I
Speaker 1: don't feel happiness. What's the point in dating someone you
Speaker 1: physically can't make happy. I have a long history of
Speaker 1: getting bored in claustrophobic. This says the makings of a
Speaker 1: time when I'm less worried about it than normal, but
Speaker 1: the baseline prior might be high enough that nothing else matters.
Speaker 1: I feel conflicted about what I want. Sometimes I really
Speaker 1: want to be with you. Sometimes I want to stay
Speaker 1: at work for sixty hours straight and not think about
Speaker 1: anything else.
Speaker 2: And so I want to say that I have this
Speaker 2: amount of self love to not fall for this, but
Speaker 2: I can't even say that one hundred percent. I just
Speaker 2: really feel for Carolyn, And at a lot of points
Speaker 2: in this story, because it's oh my god, I feel
Speaker 2: like there's a version of someone who would be like,
Speaker 2: oh I can fix him, where you're like, oh no,
Speaker 2: this is like it's like queen fiction of like there's
Speaker 2: only one and she loves me. I know, I know
Speaker 2: she's a disadvantage.
Speaker 1: And it's it's difficult because like Lewis come discusses kind
Speaker 1: of Sam's inability to be like functional with the people
Speaker 1: in his life because and he clearly has a thing
Speaker 1: like he lets he funds another another exchange by another
Speaker 1: woman in Crypto who he tries to date women in CRISTI. Yeah,
Speaker 1: he's got this kind of thing going on. But Lewis
Speaker 1: kind of always writes off his his his behavior is
Speaker 1: like well, you know, he just he was too depressed.
Speaker 1: He was too he can't vooe. He's too brilliant to
Speaker 1: like be it's.
Speaker 2: A torture genius playbook of just like oh, and he's
Speaker 2: horrible to women, but only because his mind. Like there's
Speaker 2: I mean, they did the same and this happens every
Speaker 2: ten years, like that happened with Zuckerberg. They're like no,
Speaker 2: he's like he's a rampant misogynist because like his business
Speaker 2: started off of misogyny because he just had so many
Speaker 2: good ideas that it was like pressing on the woman
Speaker 2: respect Like yeah, it's ridiculous kind of.
Speaker 1: Meanwhile, when Lewis is describing like why Carolyn did what
Speaker 1: she did, he includes Lane, which she's like. He's like,
Speaker 1: he quotes someone as saying she would throw away all
Speaker 1: of her principles to be loved, Like she's the only
Speaker 1: one of the effective altruist kids who doesn't really believe
Speaker 1: in it. She's just so desperate for affection that she
Speaker 1: would like do anything for it, which like, I don't know,
Speaker 1: Like I don't know the person, but it's it's weird
Speaker 1: that Louis is so cynical about her and so full
Speaker 1: of excuses for Sam.
Speaker 2: I would have I would have a fair amount of
Speaker 2: guesses as to why that may be. Uh, And the
Speaker 2: way that it seems like in many ways that you
Speaker 2: know Lewis has seen himself in Sam, and like, if
Speaker 2: you're especially if you're used to like writing profiles of
Speaker 2: very successful, eccentric people, which he is, if this is
Speaker 2: the precedent you've set for the kind of behavior that
Speaker 2: you would excuse, such as clear racism or sexism, why
Speaker 2: would this be any different? Likes it fucking And then
Speaker 2: also on the other end of Carolyn being characterized as
Speaker 2: this like desperate for affection. Person I try to like
Speaker 2: tap into that of like God, if any of my
Speaker 2: personal correspondents came out, I'd be fucking cooked.
Speaker 1: Oh it would be devastating so.
Speaker 2: Many people and being singled out. Yeah, of course, Yeah,
Speaker 2: everyone's desperate for affection.
Speaker 1: So you know, anytime you see Lewis writing about Sam,
Speaker 1: he writes in kind of the terms Sam as one
Speaker 1: of the people in this weird effective altruism cult. He
Speaker 1: uses terms like he talks about his priors, which is
Speaker 1: like it's a way of like bringing Baysian mathematics into
Speaker 1: personal decisions, and all you all you're saying when you're
Speaker 1: saying like, well, these are my priors, is like, well,
Speaker 1: this is the shit I believe without any kind of evidence. Right,
Speaker 1: That's largely what that means. These are like my pre
Speaker 1: existing biases. But saying pre existing biases like doesn't sound
Speaker 1: as smart as my priors. And likewise, Sam would always
Speaker 1: talk about like, well, every decision I make is like
Speaker 1: a mathematical decision, and I calculate what's the expected value
Speaker 1: of this outcomers is this outcome? And then I do
Speaker 1: the thing with the highest expected value, right, which is
Speaker 1: another way of saying I do whatever will make me
Speaker 1: feel good, which is you know, a lot of us
Speaker 1: are like that a lot of the time. That's human nature.
Speaker 2: We are.
Speaker 1: Creatures of comfort in a lot of ways. But there's
Speaker 1: Sam is just dressing up selfishness in lines like this,
Speaker 1: Sam wanted to do whatever at any given moment, off
Speaker 1: her the highest expected value, and his estimate of her
Speaker 1: Carolyn's expected value seemed to peak right before they had
Speaker 1: sex and plummet immediately after. And like, oh, that's no
Speaker 1: different than a lot of guys in their twenties.
Speaker 2: It just sounds like a fucking guy.
Speaker 1: Oh so you're saying he got horny and then he
Speaker 1: didn't care about her afterwards. Well that's not special, Like.
Speaker 2: How I I can't relate?
Speaker 1: Wow, yeah, that is. That's not just millions of men,
Speaker 1: that's millions of people.
Speaker 2: Like it's so, I mean, even just outside of his
Speaker 2: relationships with women, in his relationship with Carolyn, I don't know.
Speaker 2: It gives me sort of like mensa PTSD, where there
Speaker 2: is this like two hander where it's either, uh, you
Speaker 2: can't understand what I'm doing because I am a super
Speaker 2: genius and you are not operating on my level. You
Speaker 2: could never understand why I am fucking up at this
Speaker 2: tremendous rate. And then if they're challenged enough, it's like, well,
Speaker 2: actually I'm you know it. I don't know the correct
Speaker 2: way to like characterize this, but it almost becomes like
Speaker 2: internet speak where it's like, no, I'm actually just like
Speaker 2: I don't give a shit. It's actually I'm using quick
Speaker 2: books because I don't give a fuck. It's like either
Speaker 2: I am a genius or I don't care, and there's
Speaker 2: nothing in but and it's like what is in between
Speaker 2: is just the fact that they're full of shit.
Speaker 1: Yeah. Yeah, and you know who else is full of
Speaker 1: no time to head to ads? Ah? Boy, I sure
Speaker 1: do love ads. Those were some good ones. So yeah,
Speaker 1: so we're back. We're talking about Sam Bakman Free's issues
Speaker 1: with women, as chronicled by Michael Lewis, who does, to
Speaker 1: his credit, make a point of noting that all of
Speaker 1: the company's moves as CEO from the US to Hong
Speaker 1: Kong and then from Hong Kong to the Bahamas were
Speaker 1: prompted by like he and Ellison would have some big
Speaker 1: relationship conversation and she would say like, I want to
Speaker 1: have a closer relationship and then he would move the
Speaker 1: entire company without telling anybody, which, again, like the instant
Speaker 1: you hear that anecdote, you're like, oh, well, this guy,
Speaker 1: there's nothing. This guy is not a super genius, Like
Speaker 1: this guy is just a can't deal with confrontation. Like, yeah,
Speaker 1: that's not special again, millions of us.
Speaker 2: Every conflict avoidant person has their approach. It knows no gender,
Speaker 2: but it skews towards one. Yeah, my last boyfriend bought
Speaker 2: an upright base. That was how bless is sorry? I
Speaker 2: don't think.
Speaker 1: Yeah, the real shame here is that I don't think
Speaker 1: Lewis draws any sort of connection between how Sam treats
Speaker 1: the women at his company and how like Sam treats
Speaker 1: adults with the specialized financial knowledge that might have saved
Speaker 1: his company, because there is a relate. Like, I'm not
Speaker 1: trying to discount his misogyny, which is certainly a thing,
Speaker 1: but like, I think the bigger through line with Sam
Speaker 1: that is present outside of justice dealing with like the
Speaker 1: women that he was in relationships with and worked with,
Speaker 1: is that Sam doesn't think anyone besides him has worthwhile
Speaker 1: thoughts or ideas, and that anything he doesn't understand is
Speaker 1: not worth paying attention to, which is a big thing
Speaker 1: in tech guys, right, this attitude that like you're seeing
Speaker 1: it now with these AI freaks where there they don't
Speaker 1: think that there's any value in the human creation of
Speaker 1: art because they don't understand it. Like they're willing to
Speaker 1: like have an AI just like come up with some
Speaker 1: crap that's vaguely patterned off of a historical See, isn't
Speaker 1: this picture of like, you know, isolation and anomy in
Speaker 1: modern society? Better now that we've turned it into a
Speaker 1: bunch of friends having brunch outside of a cafe. Look,
Speaker 1: it's much brighter now and prettier. It's like, No, that's
Speaker 1: not the point of the art. You don't understand, but
Speaker 1: like they don't. Yeah, it's this thing.
Speaker 2: That a computer could come up with the image of
Speaker 2: Hal Walker and Brian the Dog in a convertible. No,
Speaker 2: that's a uniquely human artistically instinct we would created. Only
Speaker 2: humans would get it.
Speaker 1: This idea that like I am smart, and therefore if
Speaker 1: I don't understand something, it's not important, right, It's it's
Speaker 1: something for like people who are less than me to
Speaker 1: deal with. This is why the company fell apart, And
Speaker 1: it's interesting to me that like Lewis, he clearly does
Speaker 1: see aspects of how Sam treats women unfairly, but he
Speaker 1: doesn't make any sort of leaps between the way Sam
Speaker 1: treats like everybody who's not him and I find that interesting.
Speaker 2: I do too.
Speaker 1: Yeah, yeah, good good stuff. So perhaps the biggest major
Speaker 1: through line in Going Infinite is Michael Lewis not getting
Speaker 1: the joke. That section where he quotes SBF explaining why
Speaker 1: CFOs are dumb is a perfect example. On a casual reading,
Speaker 1: you might even assume that we were supposed to find
Speaker 1: the line what do you think I do? What the
Speaker 1: fuck do you think I do? All day? Do you
Speaker 1: think I don't know how much money we have? Funny
Speaker 1: because Sam did not know how much money they had.
Speaker 1: At the climax of the book, after FTX is crumbled,
Speaker 1: Lewis goes into detail to discuss all the money that
Speaker 1: was recovered by John Ray quote at the end of
Speaker 1: June twenty yeah the third. At the end of June
Speaker 1: twenty twenty three, John Ray filed a report on his
Speaker 1: various collections. Today the debtors have recovered an approximate least
Speaker 1: seven billion in liquid assets, he wrote, and they anticipate
Speaker 1: additional recoveries seven point three billion to be exact. Ray
Speaker 1: was inching towards an answer to the question I'd been
Speaker 1: asking from the day of the collapse, where did all
Speaker 1: that money go? The answer was nowhere. It was still there,
Speaker 1: And that's not true. The reason he's writing this is
Speaker 1: that earlier in Sam's career, a bunch of people leave
Speaker 1: Alameda because he loses four million dollars and they think
Speaker 1: that he's lost four million dollars in investor money, and
Speaker 1: he's a dick about it, and later they find it
Speaker 1: like he had just misplaced it, basically, and so Lewis
Speaker 1: is being like, that's just what happened. They were never
Speaker 1: really in bankruptcy. See, it was a good business. Like
Speaker 1: they just didn't have any record keeping, so they lost
Speaker 1: the money. In this meanie, John Ray thinks it's bad
Speaker 1: to lose several billion dollars, but Lewis is saying is
Speaker 1: not true. He is kind of lying here. Maybe he
Speaker 1: just maybe it's an honest mistake. I don't know, but
Speaker 1: it's not accurate because for one thing, seven ish seven
Speaker 1: point three billion has been found, almost nine billion is missing.
Speaker 1: So that's one and a half billion dollars unaccounted for. Still,
Speaker 1: that's still one of the largest financial frauds in history.
Speaker 2: Right, significant, that's why maybe as much as two billion, yeah,
Speaker 2: does even if you're trying to get through to someone
Speaker 2: who knows nothing about finance, the second number, the missing number,
Speaker 2: is bigger than the first.
Speaker 1: The number if not good. He tries to cut close
Speaker 1: that hole by being like, and a lot of that
Speaker 1: money is in these you know, money they paid to
Speaker 1: these companies that they'll probably get back. And it's like,
Speaker 1: why would you think that a lot of that money
Speaker 1: went to other shady crypto people who don't bank in
Speaker 1: the US. Why do you think the money's gonna come back?
Speaker 2: Well, see, this is interesting because now, ugh, I feel
Speaker 2: back because I know Michael Lewis is not the bastard
Speaker 2: of the episode. However, he's kind of applying Yeah, Sam,
Speaker 2: if we're applying Sam bankman Free's theory that you do
Speaker 2: not do any valuable work after forty five, that may
Speaker 2: in fact apply to Michael Lewis. Yeah, Like, maybe he's
Speaker 2: lost the thread because it's the way that he's talking
Speaker 2: about money. I mean, and I have not read this book.
Speaker 1: Well, you're just.
Speaker 2: That's why they pay you the big buss, But like
Speaker 2: to hear how he talks about money in this book
Speaker 2: and to know that his most famous works have to
Speaker 2: do with finance, with the exception of the of the Blindside,
Speaker 2: which everyone forgets that he wrote like it calls his
Speaker 2: entire body of.
Speaker 1: Work in the question yeah yeah, and it's like, yeah,
Speaker 1: just the ridiculousness of being like, well, look, guys, seven
Speaker 1: you know, they've recovered seven billion out of nine point
Speaker 1: three billion, so things are basically good, Like that's insane.
Speaker 1: But also, as we'll get to later, he is he
Speaker 1: that even that doesn't tell the whole truth, Like this
Speaker 1: idea that everyone's going to get their money back is
Speaker 1: not true. But Lewis in order to continue believing that
Speaker 1: Sam was a super genius, he has to have this
Speaker 1: kind of tragic store where like he didn't really lose
Speaker 1: the money, it was a misunderstanding. It's all unfair. And
Speaker 1: because he needs to believe this, I think for the
Speaker 1: sake of his own ego, bringing up the fact that
Speaker 1: there's a lot of money missing is a really easy
Speaker 1: way to piss him off. And I'm going to play
Speaker 1: you this clip. It's the most revealing clip that I
Speaker 1: found And this is from an interview he did with
Speaker 1: on a YouTube channel called Intelligence Squared after the FTX collapse,
Speaker 1: like after his book came out. So while Sam is
Speaker 1: on trial, basically.
Speaker 6: Okay, seven point three billion, So it's one point three
Speaker 6: billion that's missing plus it, and there's still.
Speaker 1: More to be and it's more than that, it's more thought.
Speaker 6: This is where today today the prosecution, the prosecution sent
Speaker 6: a motion to the court saying, can we please not
Speaker 6: talk about the possibility the customers are all going to
Speaker 6: get their money back? And that in particular, can we
Speaker 6: you're gonna let me finish?
Speaker 7: Oh my god, I think, well, I care. Is the
Speaker 7: fact that I do think it's important. I think at
Speaker 7: the very least he's irresponsible.
Speaker 6: Of course, I'm not saying he's not irresponsible. I'm saying
Speaker 6: it's just different than you think.
Speaker 2: Okay, okay. A few observations. First of all, to pay.
Speaker 2: Second of all, uploaded four second that right, his haird
Speaker 2: does not looking real colors. It's not giving matching color.
Speaker 2: Second observation upload date four weeks ago, gnarly. Third observation,
Speaker 2: obviously he cuts off a woman aggressively to be wrong,
Speaker 2: and then Finally, it's just the because the listeners cannot
Speaker 2: see the size of that venue. It gave me a
Speaker 2: brief like it. I felt it in my stomach to
Speaker 2: be like, wow, that many people will gather to be
Speaker 2: to see Michael Lewis just spew bullshit and yet fifteen
Speaker 2: people show up to watch me but chug a quart
Speaker 2: of milk.
Speaker 1: It's ridiculous, Yeah, Jamie. Though, here's the thing. This is
Speaker 1: the difference between you know, it's the same. This is
Speaker 1: the difference between what I call vulgar art, which is
Speaker 1: the stuff that will be forgotten, you know, within a generation,
Speaker 1: and immortal art, right like the Parthenon. You know, you
Speaker 1: butt chugging the contents of infinite jest was a Parthenon
Speaker 1: level work of art. It will be with us.
Speaker 2: Years time misunderstood it, just.
Speaker 1: Like the Parthenon.
Speaker 2: He's in like a fucking cathedral. Though, I mean it.
Speaker 1: Does look like Sophie. Can you bring up a freeze
Speaker 1: frame of his face at like twelve fifty seven in
Speaker 1: that because he is doing and I think you should
Speaker 1: leave face like he is. He is almost a perfect
Speaker 1: character from one of those fucking sketches.
Speaker 2: Tim Robinson could do this.
Speaker 1: Tim Robinson could do an amazing job of this. There's
Speaker 1: that sketch from the recent season where he's being like
Speaker 1: an on air pundit who like gets on his phone
Speaker 1: and gets real quiet whatever he loses an argument that
Speaker 1: like Lewis is definitely doing that kind of.
Speaker 2: Face in this God right there.
Speaker 1: That's he's doing it, Tim Robinson.
Speaker 2: He's really, oh boy, doubling down on my two on
Speaker 2: the two pay theory.
Speaker 1: Right yeah, that hair isn't to.
Speaker 2: See if we've got the if we've got the veneers
Speaker 2: to match.
Speaker 1: But he's too rich to not have veneers.
Speaker 2: I aspire to the veneers. That's I just want to
Speaker 2: have exactly that much money.
Speaker 1: I wanted to you how angry he gets there, because
Speaker 1: we're going to address the actual facts of his claim. Now,
Speaker 1: even if you take Lewis at his word, which is
Speaker 1: that it's basically fine because they were covered seven point
Speaker 1: three out of like nine point three billion dollars, he's
Speaker 1: he's obfuscating the truth. It is accurate that Ray has
Speaker 1: announced FTX customers will see ninety percent of every dollar
Speaker 1: of recovered assets returned, which I would still call that
Speaker 1: problematic because if somebody stole ten percent of your bank account.
Speaker 1: You'd be kind of miffed. But that is even not
Speaker 1: what it seems like. And I'm quoting from Investipedia here
Speaker 1: To be clear, the ninety percent number refers to the
Speaker 1: funds FTX is able to gain access to, rather than
Speaker 1: total customer deposits at the time of the exchange's collapse.
Speaker 1: That doesn't necessarily mean customers will gain access to ninety
Speaker 1: percent of their assets that were left on the exchange. Rather,
Speaker 1: customers will gain access to ninety percent of the funds
Speaker 1: FTX is able to distribute to their creditors. FTX and
Speaker 1: FTXUS had an estimated eight point seven billion dollars combined
Speaker 1: shortfall by the time the crypto firm filed for bankruptcy,
Speaker 1: roughly six point nine percent roughly six point nine billion
Speaker 1: dollars of that shortfall, including a Bahama's real estate portfolio,
Speaker 1: has been recovered. Let's consider bitcoin, the largest cryptocurrency by
Speaker 1: market capulation, as a capitalization as a proxy for the
Speaker 1: broader cryptocurrency markets. On November eleventh of last year, the
Speaker 1: petition date, bitcoin was trading at around seventeen thousand. On Friday,
Speaker 1: it crossed thirty thousand. So simply put, if the current
Speaker 1: plan goes through, you'd likely get eighty five percent of
Speaker 1: the dollar value of your cryptocurrency had held on FTX
Speaker 1: as a last November, even if the same points have
Speaker 1: almost doubled in value today. So one of those like both,
Speaker 1: he's kind of overestimating the amount that they're going to
Speaker 1: get back. And also because they lost, like they still
Speaker 1: lost access to that money for it'll probably turn out
Speaker 1: to be two or three years, Like people have had
Speaker 1: to sell their homes and shit, because like they had
Speaker 1: all of their money. Like that, there's harm here, right,
Speaker 1: that's what the courts are taking. Not only is there
Speaker 1: still money missing and not an insignificant amount, but like
Speaker 1: people suffered in the interim where they didn't have access
Speaker 1: to their money, and yeah, they're crypto gamblers. I'm not.
Speaker 1: This isn't the most sympathetic population, but that is not
Speaker 1: relevant to determining whether or not Sam has legal He's
Speaker 1: stealing fifteen or twenty percent of a bunch of people's
Speaker 1: savings accounts is a substantial crime.
Speaker 2: The legal question is is it a scam? Which like yes,
Speaker 2: you know, and I'm sure that like everyone who understandably
Speaker 2: because I walk amongst them, like everyone who was seeing
Speaker 2: this happen a couple of years ago up to very recently,
Speaker 2: We're like, yeah, you're what are you talking about? This
Speaker 2: happening is like a very you know, it's like easy
Speaker 2: to cheer it on, but it's also like, yeah, no,
Speaker 2: Sam Bankmintrede was taking advantage of every possible mark he could.
Speaker 1: Yeah, and yeah, and people are still suffering ongoing harm
Speaker 1: as a result of it. He's acting like Lewis is
Speaker 1: acting as if there wasn't really anyone hurt, and it's like, well, no,
Speaker 1: like even if all of them, which will not happen,
Speaker 1: at least about twenty percent of that money of depositor
Speaker 1: money is just gone, probably more. But even if he
Speaker 1: hadn't done that, if you're still locked out of your
Speaker 1: money for two years because a guy illegally gambled with it,
Speaker 1: are you going to be fine that it came back eventually. No,
Speaker 1: you still didn't have that money for years, and that's
Speaker 1: a problem for you. That's a crime, I.
Speaker 2: Mean, And I would be more amenable to that perspective
Speaker 2: if it was coming from someone who isn't as like
Speaker 2: historically fabulously rich as Michael Lewis is, because it's like
Speaker 2: a rich gaming the rich story can be really satisfying,
Speaker 2: but this is not the guy to be making it,
Speaker 2: and he's falling on the wrong side anyways.
Speaker 1: And it's like gaming the rich, gaming the rich because
Speaker 1: like Larry, you didn't they didn't hire Larry David to
Speaker 1: do a commercial so they could scam billionaires, right, they
Speaker 1: hired Larry David to do a commercial so they could
Speaker 1: scam your mom, you know, because your mom likes Larry David.
Speaker 1: I'm not saying the rest of the show. I mean
Speaker 1: most moms do. Right, He's pretty popular amongst the moms.
Speaker 2: In the comments. I don't know if my mom knows
Speaker 2: who I.
Speaker 1: Mean, the women in my family Seinfeld fans.
Speaker 2: Does your mom watch curb Message?
Speaker 1: No? No, no, but Seinfeld?
Speaker 2: Oh yeah, okay, I'm back, come back.
Speaker 1: Yeah. So anyway, Michael Lewis, Yeah, it's interesting to me,
Speaker 1: like the fact that the I the fact that Sam
Speaker 1: bankmin Freed stole money from depositors, because that that's what
Speaker 1: it is. When you take money out of one company
Speaker 1: illegally and use it to gamble in another company, that's stealing.
Speaker 1: Michael Lewis never uses the term stolen to describe what
Speaker 1: Sam did, and he basically goes to great lengths to
Speaker 1: claim that Sam misplaced all this money. This is again
Speaker 1: wildly inaccurate, and a good example of that is Alameda's
Speaker 1: hashtag fiat account, which is like that was one of
Speaker 1: the names for the account where they were putting all
Speaker 1: of the actual US dollars that customers put in the exchange,
Speaker 1: So customers would put US dollars into FTX and then
Speaker 1: use it to buy cryptocurrency, right, But those US dollars
Speaker 1: needed to stay in the exchange so that people could
Speaker 1: cash out their positions, right, Otherwise you're not doing legitimately
Speaker 1: what you're supposed to do as a business. FTX was
Speaker 1: not a bank. A bank is allowed only has to
Speaker 1: keep a certain amount in reserve, right, That's what a
Speaker 1: reserve currency is. This is an exchange. They were supposed
Speaker 1: to keep enough reserve in there to cover the value
Speaker 1: of their deposits. Sam instead took all that money and
Speaker 1: put it into Alameda, and there's evidence that it like
Speaker 1: never it went directly into Alameda. The money people thought
Speaker 1: they were depositing into FTX went into another company entirely,
Speaker 1: I would call that. And in fact, Sam was convicted
Speaker 1: because this is an example of fraud. Lewis depicts it
Speaker 1: as an honest mistake, and here's the New Yorker quote.
Speaker 1: Lewis finds it not only wholly implausible that this was
Speaker 1: in fact a gigantic accounting error, explained by ftx's difficulty
Speaker 1: securing bank accounts. As Lewis concludes, his story implausible as
Speaker 1: it sounded, remained irritatingly difficult to disprove. And Lewis very
Speaker 1: gently insinuates that Ellison, in over her head, might have
Speaker 1: made some very bad decisions. And in court, which again
Speaker 1: is a couple of weeks after his book comes out,
Speaker 1: it is proven with data from the company that Sam
Speaker 1: not only did not like not only knew what he
Speaker 1: was doing, but he ordered other people to obscure this
Speaker 1: fact from customers. Right, he ordered his employees to hide
Speaker 1: from customers that their money going straight into another company.
Speaker 1: This was proven when they like actually, during the court case,
Speaker 1: they had the people who programmed the exchange on Sam's
Speaker 1: behalf like post code. And I found an analysis of
Speaker 1: ftx's code by Molly White, who does a newsletter called
Speaker 1: Citation Needed, which is quite good. Molly knows code and stuff.
Speaker 1: So here's her analyzing that, prosecutors questioned Wang, who was
Speaker 1: the guy who was coding the exchange, about the FTX
Speaker 1: insurance fund, which was ostensibly supposed to protect both FDx
Speaker 1: and its customers from trades that went badly, even more
Speaker 1: quickly than the exchange's risk engine could account for. FTX
Speaker 1: published the funds supposed balance on their website and bragged
Speaker 1: widely about its existence, including a testimony to US Congress. However,
Speaker 1: according to Wang, the numbers showed on the website was falsified.
Speaker 1: And the question is like, is this a real number, Wang, No,
Speaker 1: so it's a fake number. Yes. Was the real number
Speaker 1: higher or lower than the fake number? Lower? And yeah.
Speaker 1: The way that they would do this so like they're
Speaker 1: supposed to have this urance fund, which is part of
Speaker 1: what makes FTX safer than the other exchanges is that
Speaker 1: we keep you can't do a run on the bank
Speaker 1: because our entire like like all of our deposits are
Speaker 1: backed up by cash, right, so we can't collapse the
Speaker 1: way that other exchanges do. And like to make people
Speaker 1: feel comfortable they had, they would show them they had,
Speaker 1: like you could see like what the insurance fund was.
Speaker 1: That they would regularly brag, we have this much money
Speaker 1: in our insurance fund.
Speaker 2: It can number accurate.
Speaker 1: Like No, all they were doing is so the code
Speaker 1: snippets show that, like they had Sam ordered Nashad Singing
Speaker 1: to write some code that would update the insurance fund
Speaker 1: amount randomly by adding it to the daily trading volume,
Speaker 1: like the amount of Basically they would it would calculate
Speaker 1: how much has been traded today, and that would multiply
Speaker 1: that by a random number somewhere around seventy five hundred
Speaker 1: and then divide it by a billion. So it would
Speaker 1: was how it was just describe how you do business.
Speaker 1: They're like bus, there was never an insurance a real
Speaker 1: insurance fund of any like meaningful amount of money. They
Speaker 1: just pretended it was there by having a computer do
Speaker 1: a random equation, so it seemed like it was fluctuating
Speaker 1: over time.
Speaker 2: Yeah, that's that's not legal to do.
Speaker 1: No, that's that there.
Speaker 2: And I feel like this, like this level of like
Speaker 2: splitting hairs in The New Yorker wouldn't happen unless the
Speaker 2: two main players, Michael Lewis and Sam Bak Midfried, weren't
Speaker 2: tremendously privileged like for any other people, you would be like, yeah,
Speaker 2: so this was a lie and then this happened, like
Speaker 2: you wouldn't be splitting hairs like this.
Speaker 1: To be fair. The actual thrust of that New Yorker
Speaker 1: article is like, Michael Lewis is what the fuck is
Speaker 1: happening with this guy? Because he's clearly falling, Like the
Speaker 1: New york article is very critical of him. It's bringing
Speaker 1: up that he is not calling Sam Bankman free to
Speaker 1: fucking con man when he clearly is right.
Speaker 2: So they're like headline, Michael Lewis, low key, he fell off?
Speaker 1: Yeah, looking, he fell off, that's right, Molly. I also
Speaker 1: brings up something else that was left out of court,
Speaker 1: but the prosecution published evidence of it, and I found
Speaker 1: this really telling. Elsewhere in the code, it's possible to
Speaker 1: observe that the amount of FTT, which is the token
Speaker 1: created that represented basically voting shares, was like it was
Speaker 1: ftx's funny money, was actually represented by a hard coded
Speaker 1: value in the user interface and was not pulling from
Speaker 1: an external data source to get a real number. So
Speaker 1: again they're lying about how much money is in this fund.
Speaker 1: And part of how you can tell is when you
Speaker 1: would ask to see the insurance fund, it wouldn't consult
Speaker 1: back to the servers. It was just it was doing
Speaker 1: the calculation on your own machine, right, which is evidence
Speaker 1: that like, there was never any attempt to give people
Speaker 1: accurate information. Wow, it's fun stuff. There's other fund reveals
Speaker 1: during the court case, for example, twists.
Speaker 2: Yeah.
Speaker 1: During ftx's days as a functioning business, a lot of
Speaker 1: crypto people notice there was a potential conflict of entr
Speaker 1: between FTX and Alameda. They were like, hey, it seems
Speaker 1: like you run both these companies, and traders on Alameda
Speaker 1: are our trading on FTX. Is it possible that they're
Speaker 1: getting preferential treatment on the exchange that you also owned.
Speaker 1: There's a really telling Twitter conversation on Molly's blog where
Speaker 1: someone asks this and SBF says, Alameda is the liquidity provider,
Speaker 1: but their account is just like everyone else's, and the
Speaker 1: respondent rightfully says, I guess we're just supposed to trust you.
Speaker 1: And it turned out they were right to be worried.
Speaker 1: One of the chief selling points about FTX is that
Speaker 1: it's crash proof. Right. Crypto exchanges have this weird habit,
Speaker 1: like twenty years old now, of getting really big and
Speaker 1: then collapsing, taking everyone's money with them. Sometimes this is
Speaker 1: due to hacks, but also there's a lot of because
Speaker 1: there's no regulation, a lot of times major traders will
Speaker 1: go bust and that causes losses for the whole exchange,
Speaker 1: which gets socialized. Right, everybody loses money because one bad
Speaker 1: gambler gambled too much. One of ftx's like selling points
Speaker 1: was that it was different. They had an algorithm to
Speaker 1: automatically freeze trades on an account once that account had
Speaker 1: suffered losses equal to the amount of money they'd put
Speaker 1: in the exchange, right, So you can't lose more money
Speaker 1: than you put in is the basic idea. So that's
Speaker 1: how it was supposed to work, and that's how it
Speaker 1: worked initially. But the limit that Alameda had for its
Speaker 1: gambling to make sure that it couldn't get in over
Speaker 1: its skis, was removed later on Sam Bankman Freed's orders,
Speaker 1: and in court, Gary Wang, Sam's business partner, explained how
Speaker 1: Sam directed them to do this. Wang explained that Alameda
Speaker 1: had not started out with such a high credit limit,
Speaker 1: but that periodically the trading firm had run into issues
Speaker 1: placing trades because they didn't have enough collateral. Sam Bankman
Speaker 1: Freed kept asking him to increase their credit limit to
Speaker 1: prevent it from happening. According to Wang, the limit was
Speaker 1: originally set to a few million dollars, but then it
Speaker 1: was increased to a billion. After they ran up against
Speaker 1: that limit too, bankman freed asked him to set it
Speaker 1: to a number so large they wouldn't likely hit the
Speaker 1: limit at that point. Wang set it to around sixty
Speaker 1: five billion. And when I read that, what I see
Speaker 1: is this is a gambler in Vegas who's like taking
Speaker 1: out loans to keep gambling because he's run out of money.
Speaker 2: Like he's like, hey, you just imagine like someone like
Speaker 2: on their knees in like shitty pinstripe. Ye can't being
Speaker 2: like come on, man.
Speaker 1: Yeah, give me, just give me some credit. Man, I'm
Speaker 1: good for it.
Speaker 2: But he got up to sixty five billion in credit.
Speaker 1: Yeah yeah, which is insane. Now, when you pair all
Speaker 1: this with the stories that SBF tells that Lewis tells
Speaker 1: of SBF's gaming addiction, you might conclude was this kid
Speaker 1: just a fucking gambling addict, Which is, by the way,
Speaker 1: that's my interpretation there.
Speaker 2: I mean there. To me, it sounds like this shit
Speaker 2: is Neo points to him, Like it really is. Like,
Speaker 2: if there's anything that got the millennial generation hooked on
Speaker 2: capitalism and random gambling, it was Neopets. And if anyone
Speaker 2: has proof that Sam Bankminfreed was a Neopets user, he
Speaker 2: just sounds like the worst version of a Neopets user.
Speaker 2: To me, the worst endgame for a neo Pets user
Speaker 2: is what you've been describing to me for for several hours.
Speaker 1: And I think you and I were not invested in
Speaker 1: Sam Bankmanfreed ever being particularly smart, So we can see.
Speaker 2: This, Lewis, he's a Neopets users. I bet it was
Speaker 2: better at it than him.
Speaker 1: Well, that's the other thing. He was never very good
Speaker 1: at games. Like people found his like League of Legends
Speaker 1: account and were like, yeah, he was mid Like I'm
Speaker 1: sure he wasn't good at Storybook Brawl, right, Like he's
Speaker 1: just he was never good at this.
Speaker 2: But it was the first time that Michael Lewis had
Speaker 2: heard of story But yeah, so Sam bank Fred said
Speaker 2: he was the best at it. Why not believe him?
Speaker 1: Yeah, and that's just the idea. Like again, Lewis can't
Speaker 1: be like, yeah, this kid had a gambling problem and
Speaker 1: he also owned a bank, so it became everyone's issue.
Speaker 1: But like, you're not a bank man. It's hard to
Speaker 1: portray someone as smart if they're just addicted to gambling, right,
Speaker 1: because that's not a smart person thing. It Actually a
Speaker 1: lot of smart people are horrible addicts in a variety
Speaker 1: of ways. But like, but it's a serious press in
Speaker 1: the Hollywood way. Make it look like somebody's a genius
Speaker 1: if they just can't control themselves, right.
Speaker 2: Yeah, it's a serious, serious problem.
Speaker 1: Yeah. Yeah, and again no shame on people who have
Speaker 1: that problem. But like that that does not work with
Speaker 1: how Lewis wants to portray him, right, And yeah, speaking
Speaker 1: of things that don't work.
Speaker 2: Shit, everything you're about to advertise, we.
Speaker 1: Won't have to work if you purchase these products.
Speaker 2: Okay, good good self crush. Yeah, I actually will continue
Speaker 2: to work more accurate.
Speaker 1: Yeah, both both true. We're back. So you know, I
Speaker 1: think it's clear from the stuff that came out in
Speaker 1: the court case that I just read some of there's
Speaker 1: no way Alameda NFTX would have done the things that
Speaker 1: I just described if they hadn't meant to disguise the
Speaker 1: reality of their business from the world, which is fraud. Right.
Speaker 1: The reality is that Sam Bankman Freed used to positor
Speaker 1: money to gamble, and he was gambling in part on
Speaker 1: his own chances. He wasn't just gambling. This is the
Speaker 1: thing that is important to understand past a certain point.
Speaker 1: Most of his gambling was not him betting on cryptocurrencies.
Speaker 2: Right.
Speaker 1: The big shit he did that made the news, the
Speaker 1: billion dollars that he pumped into naming, renaming that stadium
Speaker 1: in Florida, to bringing in all these celebrities to these
Speaker 1: high dollars Super Bowl ads, that was a gamble. He
Speaker 1: was pulling a slot machine on his own chances of
Speaker 1: ascending to the halls of power. Right, sounds like him, Yeah, yeah, yeah.
Speaker 1: One of my favorite aside bits from the court case
Speaker 1: is that on the stand when she was being questioned,
Speaker 1: Carolyn Ellison told everybody that Sam confided in her he
Speaker 1: thought he'd had a five percent chance of becoming president
Speaker 1: of the United States.
Speaker 2: Which, well, I mean, it sounds ridiculous, but also like,
Speaker 2: look at some of the dumbasses we've got. He's probably
Speaker 2: not wrong that he eman. He at least could have
Speaker 2: been like, who is that fucking loser from Starbucks? He
Speaker 2: could have only s been.
Speaker 1: That, Yeah, he could have. I think he could have
Speaker 1: had a failed presidential but no, like yeah, oh yeah,
Speaker 1: they're all dumb, Like Joe Biden and Donald Trump are
Speaker 1: both have both done very stupid things, different kinds of
Speaker 1: very stupid things, but they both have charisma.
Speaker 2: Right, that's true.
Speaker 1: That's they But like, like you could again say what
Speaker 1: you will about Joe Biden, he wouldn't have been in
Speaker 1: politics this long if you couldn't make enough people like him.
Speaker 1: And obviously Donald Trump is very charismatic, Sam Bankman free
Speaker 1: just isn't like you don't become the president if you
Speaker 1: are avoid of charisma.
Speaker 2: No, we and we've learned that time and time again.
Speaker 1: Yeah yeah, yeah, And that's the thing, like he was
Speaker 1: always all of his his his sudden rise to public
Speaker 1: prominence was not based on him actually being interesting. It
Speaker 1: was based on him spending tens of millions of dollars
Speaker 1: to get like Bill Clinton, to pretend to be his buddy.
Speaker 1: Like that was all there ever was to it. You know,
Speaker 1: in my general research on the crypto industry, and if
Speaker 1: you're looking for actual good reading, don't buy Going Infinite.
Speaker 1: You won't get anything valuable at it. If you do
Speaker 1: want to get something valuable in a deeper understanding about
Speaker 1: like how grifty this whole industry was, and also how
Speaker 1: grifty Sam was. There's a book called Number Go Up
Speaker 1: by Zeke Foe Zeke Faux really good book, Number Go Up,
Speaker 1: which I do recommend to people curious for the dark
Speaker 1: side of crypto. Zeke also spent time with Sam in
Speaker 1: the Bahamas, and I found this passage from his book
Speaker 1: relevant to what I just mentioned. A few hours into
Speaker 1: our conversation, Bankman Freed told me he had to make
Speaker 1: a call. I had asked him if there was anyone
Speaker 1: who'd support his version of events, and he said I
Speaker 1: could talk with one of his few remaining supporters. While
Speaker 1: I waited, in walked a haughty man with a long,
Speaker 1: scraggly beard, a pot belly, and mismatched socks, one of
Speaker 1: them with a pac Man design who was an employee
Speaker 1: of FTX who'd stuck around to help Bankman Freed try
Speaker 1: to find an investor to rescue the exchange. I threw
Speaker 1: out an easy question, why are you still here? I asked.
Speaker 1: He started off by saying he wanted to help ftx's customers, Then, unprompted,
Speaker 1: he told me he thought there wasn't much of a
Speaker 1: risk that bankment freed would ever get in trouble. I
Speaker 1: firmly believe once somebody he becomes a certain level of rich,
Speaker 1: they're never poured again. He said, they don't go to jail,
Speaker 1: nothing bad happens to them.
Speaker 2: Wait, he has his own Zuckerberg quote. He has his
Speaker 2: own You could be unethical and still be lad. That's
Speaker 2: the way I live my life. Haha. Wait, read it
Speaker 2: again for me so I can really take it in again.
Speaker 1: This is Sam's friend who stuck by him after his
Speaker 1: business collapsed. I firmly believe once somebody becomes a certain
Speaker 1: level of rich, they're never poured again. They don't go
Speaker 1: to jail, nothing bad happens to them.
Speaker 2: Poetry.
Speaker 1: Yeah, it's beautiful. It's a beautiful thing to think in
Speaker 1: that moment too, where all of the smarter people have
Speaker 1: just fled the island, and in that moment he was.
Speaker 2: Infinite that yeah, wow, wow.
Speaker 1: Yeah, I'm speechless. It's so funny too, because like I
Speaker 1: don't know, man, just historically, do you remember, like Marie
Speaker 1: Antoinette was pretty rich and like that didn't end well,
Speaker 1: you know, like like there's a lot christ had a
Speaker 1: lot of money. It didn't go well for him. You know,
Speaker 1: bad things happened to rich people too.
Speaker 2: And that's that's your main political stance, as I recall.
Speaker 1: Yeah, yeah, I will hang out with anybody rich because
Speaker 1: nothing bad can happen to them, obviously untrue. I kind
Speaker 1: of suspect that that that sort of I don't know,
Speaker 1: you know, the fact that so much of what was said,
Speaker 1: like Zeke foe Is probably is clearly someone who's smart
Speaker 1: enough to like understand when he's being lied to by
Speaker 1: these people and understand their fundamental absurdity, and that comes
Speaker 1: across in his book. I don't think Lewis got that right.
Speaker 1: He believed fundamentally in the fundamental honesty at the center
Speaker 1: of Sam Bankmin Freed, and I kind of suspect that's
Speaker 1: why he covered his face with his hands that day
Speaker 1: in court. He's not a dumb man, and he must
Speaker 1: have realized by that point the evidence that came out
Speaker 1: in the trial was undenied and made it undeniable that
Speaker 1: he got conned too. One of the most remarkable things
Speaker 1: about Going Infinite is how much detail Lewis provides about
Speaker 1: ftx's collapse without ever calling Sam a liar. The Guardian's
Speaker 1: review noted this too. He thought Bankman Freed hadn't lied
Speaker 1: to him at all, or at least that he'd only
Speaker 1: lied by a mission, not by commission. Late in the book,
Speaker 1: Lewis asks bankman Freed, what would you have done if
Speaker 1: I'd ask you specifically about FTX customer funds being used
Speaker 1: by Alameda. Bankman Freed admits that he would have changed
Speaker 1: the subject or rustled up a word salad and whatever
Speaker 1: the facades erected by other effective altruists. Lewis considers bankment
Speaker 1: Freed to be enigmatic, but essentially genuine, and certainly not
Speaker 1: out to enrich himself because he has no desire for
Speaker 1: the things that money can buy. Lewis's refusal to believe
Speaker 1: that Sam Bankman Freed is a liar in the most
Speaker 1: venal base sense of the word is based, I think,
Speaker 1: on a sense of professional pride. That explains why he's
Speaker 1: so adamant about pushing the line that there was no
Speaker 1: money missing, and it's why he continued to defend Sam's
Speaker 1: dissembling as a fun, quirky character trait while the trial
Speaker 1: was going on. See as part of the Cash in
Speaker 1: Ongoing Infinite Michael Lewis launched a podcast Judging Sam the
Speaker 1: Trial of Sam Bankman Freed.
Speaker 2: Oh it was a dough is he and oho? But
Speaker 2: everyone on this call knows that the first sign that
Speaker 2: your life is about to be fucking torched, yes, is
Speaker 2: starting a podcast.
Speaker 1: That's right, right, it's the last refuse, refuge of fools
Speaker 1: and scoundrels. Yeah, please pay for the cool sound free
Speaker 1: subscription at what do we call it, Sophie so uh.
Speaker 1: The trial Judging Sam is part of Lewis's Against the
Speaker 1: Rules podcast on Pushkin, and I can't speak for the
Speaker 1: regular episodes of that podcast. I have not listened to
Speaker 1: any of the other ones, but I can say his
Speaker 1: Sam Bankman Freed Trial podcast is an uneven effort at best.
Speaker 1: Most of the work is done by Lydia Jean. She's
Speaker 1: a journalist, she's okay. I don't have any huge issues
Speaker 1: with her. I think we get a little too much, like,
Speaker 1: here's what the court kitchen is like, here's anecdotes from
Speaker 1: the fun lives of the journalists covering it.
Speaker 2: That also gets Yeah. Then it's like my least favorite
Speaker 2: part of every public radio and I love public radio,
Speaker 2: but the broadcast where it begins with six minutes of
Speaker 2: a guy stepping on leaves, and you're like, oh my god,
Speaker 2: I get it. You're in fucking New Hampshire in.
Speaker 1: October fall, where you NPR people leave. We understand, yes,
Speaker 1: but every podcast on this trial does something like that.
Speaker 1: I think it's just because they have to. They were
Speaker 1: doing like basically daily episodes and needed to fill run time,
Speaker 1: and like, look, is that lazy? Yes? Have we all
Speaker 1: been there? Yes? So I simply can't throw stones at
Speaker 1: this classhouse.
Speaker 2: What are what are you talking about? As someone who's
Speaker 2: never had a daily podcast, I condemned this behavior because
Speaker 2: I've never had to do it.
Speaker 1: So LUs Lydia takes most of the have the lifting
Speaker 1: on this show because Lewis was on tour for his book, right,
Speaker 1: and so he couldn't be there for most of it.
Speaker 1: He was barely at the trial.
Speaker 2: Yeah, he was screaming at women in cathedrals.
Speaker 1: He was busy, Yeah, But he does occasionally come on
Speaker 1: and one of the episodes that does like he shows
Speaker 1: up to court on the day that Sam takes the
Speaker 1: trial or it takes the stand in his own defense,
Speaker 1: and you know during this portion where he's like Sam's
Speaker 1: being cross examined, he says, I don't recall more than
Speaker 1: one hundred times. Here's how a right up from the
Speaker 1: verge summarizes his time on the stand. Bankman Freed's demeanor
Speaker 1: suggested a spoiled child complaining he didn't get the biggest
Speaker 1: scoop of ice cream at his birthday party. He didn't
Speaker 1: want to answer the prosecutor's questions or his lawyer's questions.
Speaker 1: He wanted to answer his own questions, which he liked better.
Speaker 1: He often replied to yes and no questions with nonsense.
Speaker 1: We were getting introduced to a document where bankman Freed
Speaker 1: listed his priorities, including getting accounting right on FTX. Cohen
Speaker 1: and Bankman Fried, Cohens's lawyer and bankman Freed used this
Speaker 1: to show how devoted bankmn Freed was to getting to
Speaker 1: the bottom of the general fiasco with Alameda's money. The
Speaker 1: idea was to display in real time ftx's revenue in expenses,
Speaker 1: where its bank accounts were, how much investor money it had,
Speaker 1: and so on. This did reveal Bankman Fried's priorities. Getting
Speaker 1: accounting right was ranked ninth oh for the stories Bankman
Speaker 1: Freed wanted to tell, we had to rely on Bankman Freed.
Speaker 1: We moved on to bankman Freed's argument about hedging, which
Speaker 1: I still do not understand except as a way for
Speaker 1: him to say he's a smarter trader than his ex girlfriend,
Speaker 1: the former Alimeter Research CEO Carolynellis.
Speaker 2: God, this is more stand up behavior.
Speaker 1: The actual evidence suggests that Ellison is both a better
Speaker 1: trader and much savvier than Bankman Freed. She modeled out
Speaker 1: her risk scenario that matched almost exactly what happened to FTX,
Speaker 1: for instance, to try to keep him from sinking two
Speaker 1: billion into venture investing. And like, what happens is he's putting,
Speaker 1: you know, all this money and advertising into like playing celebrities.
Speaker 1: He's putting like two billion dollars into these random series
Speaker 1: of investments. And she's like, hey, we've taken depositor money
Speaker 1: to gamble with. We have to keep more cash on hand,
Speaker 1: otherwise the whole exchange could collapse. Sam ignores her, the
Speaker 1: exchange collapses, and then he blames her for not hedging right.
Speaker 1: And a hedge is when you take like a bet
Speaker 1: that one thing will happen, you take the opposite bet
Speaker 1: at a smaller amount of money, so that no matter
Speaker 1: what happens, you can't lose too much money, right, But
Speaker 1: there's no hedging the kind of risks that FDx was
Speaker 1: taking because the fundamental risk was we don't have enough
Speaker 1: money if there's a run on the bank, you.
Speaker 2: Know, well, it was like there risk goes, We're never
Speaker 2: gonna die, Like you can't, you can't hedge that.
Speaker 1: Yeah.
Speaker 2: What is wild to me is like everything you're describing
Speaker 2: is ridiculous, and it makes total sense that it fucking
Speaker 2: imploded in the catastrophic way that it did. But then
Speaker 2: you also, I mean, so much of it sounds like
Speaker 2: the kind of stuff that, for example, Michael Lewis might
Speaker 2: report on is a tremendous scam that worked out great
Speaker 2: for everybody.
Speaker 1: Yeah, and it's so you know, again, that quote from
Speaker 1: the Verge is pretty similar to how most reporters who
Speaker 1: were there at the trial described it. It is wildly
Speaker 1: different from how Michael Lewis describes how Sam reacts on
Speaker 1: the stage, right, Oh okay, Yeah, And it's interesting because
Speaker 1: like obviously most people were able to see, Oh yes,
Speaker 1: Sam is just lying on the stand, he's obfuscating, he's
Speaker 1: refusing to answer the question. But Michael Lewis not only
Speaker 1: does Michael Lewis like being lied to by Sam Bankman Freed.
Speaker 1: He thinks Sam's defensive cloud of bullshit right this like
Speaker 1: word salad, is better than the truth. And he says
Speaker 1: this in his fucking podcast Jamie, You're gonna love this clip.
Speaker 5: Today he didn't get in as much trouble as he
Speaker 5: got yesterday, though.
Speaker 3: Not as nothing, but still a little bit more than
Speaker 3: other witnesses.
Speaker 5: That's true. The bigger point is the judge is sitting
Speaker 5: there listening to see if Sam is actually answering.
Speaker 3: The question because he knows he doesn't do that yet.
Speaker 5: Or generating a word salad for us all to consume.
Speaker 5: And I was thinking about this again to day. Why
Speaker 5: Sam's word salads are so.
Speaker 8: Fun, like why he gets waiting Like most people when
Speaker 8: they don't answer a question, your alarm bells go off
Speaker 8: pretty quickly, like that you just redirected in some way.
Speaker 8: He's really really good at starting the answer in a
Speaker 8: place where you think, oh, that's where the beginning of
Speaker 8: the answer belongs, and then making a little jump into
Speaker 8: things are actually interesting to know about, so you're not bored,
Speaker 8: You're actually interested in what he's saying.
Speaker 3: You're saying like there's substance to it. He's not just
Speaker 3: saying nothing. He's saying something that's substantive and makes you
Speaker 3: think it's just not what you asked. But then you're
Speaker 3: thinking and you forget what you asked.
Speaker 5: That's exactly what happens.
Speaker 1: Yeah, so that's like he's he's just saying that, like, yeah,
Speaker 1: Sam's lies. He's really good at lying, like and it's
Speaker 1: fun to listen to him lie as if that's a
Speaker 1: defense right where they're saying, like, well, they really painted
Speaker 1: a different picture of Sam because they you know, he
Speaker 1: got to get up on the stage and bullshit, that's good.
Speaker 2: That's a very interesting exchange to listen to as well,
Speaker 2: because it's like, you know, because it's very clear that
Speaker 2: Michael Lewis has very little to do with this podcast.
Speaker 2: I don't know, like I can think of a number
Speaker 2: of examples of a like big name a podcaster coming
Speaker 2: on their show to like be combative with the people
Speaker 2: who are actually making the show for them, and that
Speaker 2: like exchange too is like no, like I know what
Speaker 2: you're saying, but yeah, and even in what she's describing,
Speaker 2: like the court approaches either he's a genius or he's
Speaker 2: like an incompetent sweetie pie, but you're just like or
Speaker 2: he's a malevolent dumb ass, or he still seem to
Speaker 2: be the.
Speaker 1: King con Man. Yeah, but like, yeah, I love this
Speaker 1: idea that like, yeah, we're getting to see the real Sam,
Speaker 1: who is a guy who never answers your actual question.
Speaker 1: But like I want to continue the clip because Lewis
Speaker 1: says something very very ridiculous right after this.
Speaker 5: Okay, he's really really good at starting the answer in
Speaker 5: a place where you think, oh, that's where the beginning
Speaker 5: of the answer belongs, and then making a little jump
Speaker 5: into things are actually interesting to know about. So you're
Speaker 5: not bored, You're actually interested in what he's saying.
Speaker 3: You're saying like there's substance to it. He's not just
Speaker 3: saying nothing. He's saying something that substantive and makes you
Speaker 3: think it's just not what you asked. But then you're
Speaker 3: thinking and you forget what you asked.
Speaker 5: That's exactly what happens. It's engaging. It's like, maybe it's
Speaker 5: even better than the answer to the question.
Speaker 1: Right, Maybe it's what you should ask Yes.
Speaker 5: Maybe it's not even what you should have asked. That's
Speaker 5: exactly right.
Speaker 1: Yeah, it's Sam. The answer the question Sam answers that
Speaker 1: aren't what he's being asked or what you should have asked, right, Like,
Speaker 1: he's smarter than you, the interviewer, and he knows what
Speaker 1: you actually should have asked, which I just thought was
Speaker 1: a wild thing for a journalist to say. This is
Speaker 1: you know, we're getting to the end here. But the
Speaker 1: last thing I wanted to bring up was maybe the
Speaker 1: most interesting case of Michael Lewis following Sam's crap, which
Speaker 1: is him believing that Sam's outfit, his hairstyle, his poor
Speaker 1: hygien oral evidence of his brilliance. Right, Sam just didn't
Speaker 1: have time to like take care of his appearance in
Speaker 1: any way. He was too smart to waste any of it,
Speaker 1: like his brain power on that And that article in
Speaker 1: Jacobin gives a really good summary of the actual testimony
Speaker 1: of Sam's former friends in court blew this idea out
Speaker 1: of the water. The prosecutor followed with questions about Sam's
Speaker 1: approach to public relations. Ellison explained he was trying to
Speaker 1: cultivate an image of himself as a sort of very
Speaker 1: smart competence somewhat acentric founder. I was sitting in an
Speaker 1: overflow room on that day. So when the prosecutor asked,
Speaker 1: how would you describe the defendant's personal appearance through twenty
Speaker 1: twenty two, the room was allowed to erupt into laughter.
Speaker 1: Ellison replied, he looked like he didn't put a lot
Speaker 1: of effort into his personal appearance. He dressed sort of sloppery, sloppily,
Speaker 1: and didn't cut his hair often. He said he thought
Speaker 1: his hair had been very valuable. He said ever since
Speaker 1: Jane Street. He thought he had gotten higher bonuses because
Speaker 1: of his hair, and it was an important part of
Speaker 1: fdx's narrative and image.
Speaker 2: God yeah, first embarrassing, but also I think, you know,
Speaker 2: clearly predicated on the dipshit billionaires that came before him,
Speaker 2: Like there is a clear aesthetic and a clear like
Speaker 2: you know, slovenly genius thing that he'd like.
Speaker 1: It's strategic and that's interesting, right, the fact that Sam
Speaker 1: is standing on the shoulders of giants of Steve Jobs,
Speaker 1: unwashed shoulders like you know, Mark Zuckerberg's hoodie and whatever.
Speaker 2: Genocideary that he wears.
Speaker 1: Yeah yeah, and it's like yeah. Lewis describes it as
Speaker 1: like everything in Sam's appearance felt less like a decision
Speaker 1: than a decision not to make it decision and no,
Speaker 1: what everyone says at FTX is like he was obsessed
Speaker 1: with like his hair. When they were spending trying to
Speaker 1: build their two hundred million dollars or whatever new headquarters.
Speaker 1: His only design note was that it should be shaped
Speaker 1: so it looked from the side like his hairs do,
Speaker 1: because he thought that, like he thought it was iconic,
Speaker 1: right like.
Speaker 2: Which is also based on the what we were just
Speaker 2: listening to. What the like logo to that podcast is
Speaker 2: is the shape of his hair. Everyone's playing into it.
Speaker 1: It's yeah, fuck, it's fucking wild. Anyway, Jamie, that's my episode.
Speaker 1: Do you think we should fire Michael Lewis into the sun?
Speaker 2: Well, I was, I was thinking earlier. I am very
Speaker 2: curious because you know, I think it's like a waste
Speaker 2: of time to ask, like, well, Michael Lewis have another
Speaker 2: opportunity to course correct his career. Of course he will,
Speaker 2: of course you will.
Speaker 1: Yes, He's gonna write seventy more books.
Speaker 2: Well, what I'm curious about is like where he goes
Speaker 2: from here. I feel like it's pretty telling if you've
Speaker 2: been con to this fucking degree, because no one clocked
Speaker 2: him in the blind Side, But now he's been pretty
Speaker 2: severely clocked as like giving in to his worst biases
Speaker 2: and reporting it as fact. And I do wonder, like,
Speaker 2: if that's the position you're in, and you will absolutely
Speaker 2: read another book because you're unkillable financially, Like, I wonder
Speaker 2: which direction he's going to go in. Is he going
Speaker 2: to be hyper cautious, is he going to play it safe?
Speaker 2: Is he going to be self reflective at all? Or
Speaker 2: is he going to double down on the falling for
Speaker 2: it kind of stuff? I genuinely don't know, because I
Speaker 2: just like it's very hard to discern what kind of
Speaker 2: person Like it seems like he's certainly, you know, like
Speaker 2: high in his own supply and is like, well, you know,
Speaker 2: of course anyone could have fallen for it, but he
Speaker 2: is sort of conceding to the fact that he fell
Speaker 2: for it. I just am curious what happens to someone
Speaker 2: from there.
Speaker 1: My suspicion, and maybe I'll be wrong about this. I
Speaker 1: think we'll know pretty soon. I think he's going to
Speaker 1: do another SAM. I specifically think he's going to yeah
Speaker 1: a second, a second SAM has hit the Michael Lewis bibliography,
Speaker 1: and it's going to be Sam Altman, like he's going
Speaker 1: to do with Sam Altman, the open AI guy who
Speaker 1: just got fired from his job. He's going to do
Speaker 1: a book on Sam Altman. I suspect you're probably right.
Speaker 2: You're probably because then he'll be like and I would
Speaker 2: know I can see through Sam's now having been conned
Speaker 2: by one. I certainly won't becoming.
Speaker 1: Sammy wants Sam on you, Sam me twice, won't get
Speaker 1: Sammed again. You know, I am just like.
Speaker 2: Other Sam Sammy chit Wow, Yeah no, that.
Speaker 1: That's my guess as to where this goes is Sam Altman.
Speaker 2: What why is Michael Lewis being presented with a second
Speaker 2: Sam doesn't seem fair?
Speaker 1: Second Sam? Is it that? Well, I've already done that
Speaker 1: joke once and it worked and all. It always works,
Speaker 1: j it always works. Yeah.
Speaker 2: Yeah, Well I don't feel well. You know, I've I
Speaker 2: would say that this is like in the top twenty
Speaker 2: percentile of Bastards episodes. I've come out feeling like, you know,
Speaker 2: I don't feel that bad. I usually feel like really dire.
Speaker 2: I feel pretty good. Yeah, he's in forever. He's in
Speaker 2: forever jail.
Speaker 1: He's in he is in forever jail, right, Yeah, speaking
Speaker 1: of forever jail, Jamie talent is like a jail that
Speaker 1: locks you into, for example, making a weekly podcast. And
Speaker 1: I am happy that you and I are about to
Speaker 1: be cell mates.
Speaker 2: We are I'm so excited. Yeah, we get to do
Speaker 2: the fun thing where we're like, we can't talk much
Speaker 2: about it yet, but there's.
Speaker 1: A weird podcast about it. But Jamie Loftus Weekly is
Speaker 1: coming to the cool Zone Network. You were going to
Speaker 1: be the cool hand Luke of our podcast.
Speaker 2: Pure welcome God. I would love to be the cool
Speaker 2: hand look of the podcast. I gotta get some new outfits.
Speaker 1: Gotta get some new outfits. Gotta No, that's not the one.
Speaker 1: Is that the one where he throws a baseball at
Speaker 1: the wall or is that the Great Escape?
Speaker 2: I feel like that was cool hand a long time.
Speaker 1: Neither of I not since I was like seven, So
Speaker 1: I don't know.
Speaker 2: Why are you a cool hand look when you were seven?
Speaker 1: Yeah, my mom loved that movie.
Speaker 2: Nice.
Speaker 1: My mom had very strict rules on like what I
Speaker 1: could watch on as movies as a kid unless it
Speaker 1: was a movie she liked, which is why I was
Speaker 1: in first grade when we watched Alien.
Speaker 2: So that explains so much about you too.
Speaker 1: She was so excited that all the men die and
Speaker 1: and and the woman didn't. But like, yeah, she wanted
Speaker 1: me to see that movie at a very young age.
Speaker 1: What a legacy, truly, The sentence because men are stupid
Speaker 1: was uttered two or three times during that.
Speaker 2: Movie, which does unpack a lot of the plot intended
Speaker 2: or not there. My mom would let me watch soap
Speaker 2: operas very young, and would I would be like, what
Speaker 2: do they mean when they say making love? And she
Speaker 2: would say, what do you think?
Speaker 1: I don't know?
Speaker 2: I'm seven?
Speaker 1: Yeah you haven't. You have not equipped me to answer
Speaker 1: that question.
Speaker 4: Mother.
Speaker 2: Well, yes, weekly podcast coming soon early next year? Was
Speaker 2: it about you? Guess? But don't contact me about it
Speaker 2: because you're wrong?
Speaker 1: Yeah? Yeah, A second Jamie has hit the cool zone.
Speaker 1: I mean, you've done more than two podcasts. This joke
Speaker 1: never worked, But.
Speaker 2: A first Jamie has hit the cool zone. Weekly. That's right, Amy,
Speaker 2: What podcast is this of ours? Oh? God? How many?
Speaker 2: How many?
Speaker 3: This is?
Speaker 2: This will be?
Speaker 4: What?
Speaker 2: Oh my god?
Speaker 1: Oh it's possible to say it's impossible.
Speaker 2: I think it's like six. Yeah, I think it's like six.
Speaker 2: We've entered the half dozen range. It's getting dangerous.
Speaker 1: That's so cool for us.
Speaker 2: I know we're forever wives, Sam Bankman freed forever, Jill
Speaker 2: ever jail us forever wives.
Speaker 1: Oh uh so, Jamie, anything else you wanted to plug
Speaker 1: before we ride on out of here, like Michael by.
Speaker 2: Raw Dog bitches. Yeah, it's the holidays. Are you looking
Speaker 2: for something to get for your loved or hated one?
Speaker 2: I won't know. Buy a copy of Raw Dog. It's
Speaker 2: my book about hot dogs. And if you don't like
Speaker 2: hot dogs, the title's funny, and I think that's you know,
Speaker 2: about sixty percent of the purchases I've gotten have been
Speaker 2: off that alone, So you should buy Raw Dog.
Speaker 1: And yeah, buy raw Dog. And now I'm not going
Speaker 1: to make a raw Dog jake. That's just gonna get
Speaker 1: me in trouble anyway. Buy a Cooler Zone Media subscription
Speaker 1: and you won't have to hear ads, Or don't buy
Speaker 1: a Cooler Zone Media subscription and continue to listen to ads.
Speaker 1: It's I don't care, live your life. I'm not your
Speaker 1: fucking dad.
Speaker 2: If you really want to hear the advertisings that Robert's disparaging,
Speaker 2: I personally think it's more fun to imagine it. So
Speaker 2: you should get a cooler Zone Media subscription.
Speaker 1: Yeah, once everyone's on cooler Zone Media, then we can
Speaker 1: finally get that sweet Lockheed Martin subscription that I've or
Speaker 1: whatever ad deals that I've been wanting to have.
Speaker 2: Robert can finally live inside a grenade like it's always
Speaker 2: been his dream.
Speaker 1: That's been my dream, that's been my dream, Jamie. Yeah,
Speaker 1: all right, we're done.
Speaker 2: We did it. Behind the Bastards is a production of
Speaker 2: cool Zone Media. For more from cool Zone Media, visit
Speaker 2: our website cool Zonemedia dot com, or check us out
Speaker 2: on the iHeartRadio app, Apple Podcasts, or wherever you get
Speaker 2: your podcasts.