Now, I'm not a money scientist or anything, but I really feel as if Sam Bankman-Fried could have picked up a book or two on accounting or how to manage a balance sheet before proclaiming himself a money genius.

Unfortunately nobody has distilled accounting into a series of six-paragraph blog posts.

(see https://lithub.com/crypto-nerd-sam-bankman-fried-who-just-lo...)

“I’m very skeptical of books. I don’t want to say no book is ever worth reading, but I actually do believe something pretty close to that,” explains SBF. “I think, if you wrote a book, you fucked up, and it should have been a six-paragraph blog post.”

Guess he is saying his parents (both authors) fucked up in more than the obvious way.

I think that’s a bullshit quote. He actually said it but I think he understood how to stir the pot: but being eccentric and controversial.

As someone that has probably read less than 10 fictional books in their life, I can see where he’s coming from.

Like, I’m literate and basically read stuff all day. And I can get through a textbook as a part of a course, but force me to read a novel and by page 7 I’m falling asleep and losing track of the characters.

I’m on the fence about borrowing/buying a book that was based on a podcast series because I fear 90% of what it covered was in the podcast.

Just wondering how this guy finished his MIT Physics undergrad studies without reading a book ? LOL

I believe that he said and thinks that way, but I can't quite put my finger on why I feel so convinced...

He says in the Sequoia hagiography he never would read a book.

Yes. Yes. That's the joke here. That the guy who decried traditional forms of communicating information and styled himself as some sort of nu-genius philanthropist was hoisted by his own petard. That if he had even a fraction of the intelligence he thought he had he would have realized that he didn't have nearly the knowledge needed to do what he claimed he would do.

His books are a mess because he had no idea of how to organize them.

Why waste the time?

The scam clearly worked without all the effort.

Why do you think he would want to?

If he didn’t want to be doing criminal things, he has plenty of means and opportunity to do them non-criminally.

Anything but I fear. For Levine these kind of stories are pure fun to dissect.

I can wholeheartedly recommend his Newsletter. Not the first one being so funny.

I made a comment elsewhere about the balance sheet. When I looked at it, it indeed looked like something Sam Bankman-Fried just typed into Excel on the weekend of their emergency meeting.

How in the world is a balance sheet not a report that is generated by a system, viewable by any executive? Did they not have a CFO or any finance people or accountants?

I was thinking about this. A chartiable explaination would be that individual companies in the group have proper balance sheets but there was no nice collation of just the material assets of the whole group.

For many businesses, such a thing isn’t really possible anyway (without manually maintaining a bunch of excel sheets for instance). A lot of large important things are done by a couple of folks poking and prodding and spreadsheets, then making decisions.

> How in the world is a balance sheet not a report that is generated by a system, viewable by any executive? Did they not have a CFO or any finance people or accountants?

Depending on your line of business, this is actually not a simple thing when you're trying to mark assets to market in a meaningful way. When everything you own is liquid, it's one thing. When things are less liquid, it's another. This is true even of completely legitimate businesses.

But isn’t that basically the line of business of an exchange and a trading firm, supposedly one specializing in arbitrage? And despite its difficulty, which I can understand, it still seems like something that should be a bit more automated than the CEO typing them into a spreadsheet a week before the company collapses and warning readers of the “obvious” chance of typos.

Erm yes you are correct, this is the line of business they’re in and they should have had better controls for valuing their assets.

Typically there’s a 3rd party fund administrator whose core responsibilities include calculating the value (NAV) of the fund.

Sometimes funds have Level 2 or Level 3 assets, which may require management effort to value and may not have real-time pricing available.

https://www.investopedia.com/terms/l/level2_assets.asp

https://www.investopedia.com/terms/l/level3_assets.asp

> Did they not have a CFO or any finance people or accountants?

Perhaps not?

"If you take a look at the about FTX page, it shows six senior team members: the CEO, the COO, two leaders on tech and two on compliance and legal. Something is missing. For a company managing billions of client funds, $16 billion according to the Wall Street Journal (WSJ), is it not odd that there is no Chief Financial Officer (CFO)?"

https://www.ledgerinsights.com/ftx-warning-signs-no-cfo/

To be fair, it’s quite common for them to be generated by someone in finance and then distributed.

Of course, it also happens sometimes that they are cooked in some specific way, and that is used to hide that fact.

You might be surprised at the percentage of the business world that is run on spreadsheets.

I’m not surprised by spreadsheets at all. They’re extremely powerful, and I know they’re used heavily. But this was clearly a document just basically made up by the CEO on the spot.

Excel and Google Sheets can both be connected to data via APIs. Click a little refresh button and it'll pull in the latest data, run the formulas, and update all the sums and charts. This stuff goes back to the 1990s, and I've seen non-tech-literate secretaries set it up. It can be as simple as dumping CSV files to a file share and just loading that into a worksheet or two.

The fact that a company managing billions of dollars couldn't even do this much is very, very telling.