- SBF, Trabucco, and Caroline were (probably) initially well-intentioned but not especially competent at running a trading firm
- Alameda Research made large amounts of book profits via leveraged longs and illiquid equity deals in the 2020-2021 bull market
- Although Alameda was likely initially profitable as a market maker, their edge eventually degraded and their systems became unprofitable
- Despite success with some discretionary positions, on net, Alameda & FTX jointly continued to lose large amounts of money and liquid cash throughout 2021-2022 as a result of excessive discretionary spending, illiquid venture investments, uncompetitive market-making strategies, risky lending practices, lackluster internal accounting, and general deficiencies in overall organizational ability
- When loans were recalled in early 2022, an emergency decision was made to use FTX users’ deposits to repay creditors
- This repayment spurred on increasingly erratic behavior and unprofitable gambling, eventually resulting in total insolvency
This is a very plain blog with quotes from and links to articles I found interesting, thought-provoking, or relevant to the times. Linking is neither endorsement nor condemnation. Run by http://willslack.com