MASSIVE fraud & Japan's failed yentervention

🧠 The Big Brain
Never Longing The Yen Again

We’ve been thinking about the yen too much lately. I close my eyes at night and the letters JPY flash across the backs of my eyelids.

We’re back in touching distance of intervention levels. USDJPY 150, the line in the sand and so on. But when does it actually make sense to long JPY?

It’s a relatively expensive trade to fund, so there’d need to be a seriously good reason to stay long JPY (short XXXJPY)…

Tempting fate here, but could we see new highs in USDJPY and other JPY crosses?

On the other hand, does it make sense to short JPY (long XXXJPY) up here and take on Japanese officials & their FX warchest…?

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⚡ The Spark
YES I DID FRAUD AND HE DID IT WITH ME

Paraphrasing, that’s what Gary Wang said in court yesterday. The FTX co-founder (and former CTO) chucked himself and Sam Bankman-Fried under the bus by taking the extraordinary step of uhhhh, telling the truth.

Radical stuff.

Somehow, SBF has decided, or been advised to, plead not guilty 😲 despite all of the evidence in the public domain, his own confessions (bragging?) & those pesky blockchains that recorded everything…

Michael Lewis has done his best to understand SBF’s character, and focused on the quirks and big ideas than the money-stealing.

He had a front row seat for months but it’s clear he made no attempt to really understand wtf was going on at FTX. He just fell in love with the weird cavalier magnetism and ran with it.

The book was always going to be about the personality. That oddball face of the business that went from zero to hero, (and finally to negative equity).

Lewis clearly saw no need to change that. Which is a shame.

There’s still one enormous mystery though…

Where’s this guy?!

Sam Trabucco, co-CEO of Alameda Research (the trading arm with the backdoor into FTX allowing them to borrow as much as they wanted ) left the post just a few months before it all imploded…

Yet he’s not even been asked to testify. Just upped and disappeared into the sunset. His last tweet:

Got to wonder why he hasn’t been called to the stand, and has somehow avoided the spotlight throughout all of this.

On a lighter note, an outside chance that FTX creditors might actually get a payout…

Basically, FTX invested in Anthropic a while back. They do AI. No idea if they’re any good at it.

TL;DR, if Anthropic somehow achieves a high enough valuation, and FTX can sell it’s stake, creditors could be made whole with the proceeds.

So the victims of one bubble might end up getting bailed out by the next one.

Beautiful.

💡 The Lightbulb
Highest Since 2007

Tweeted this because it’s becoming a meme. Every day we get another headline about something (mainly bond yields) being at their highest levels since 2007.

What does this mean?

Bond yields went down a lot after the GFC, now they’ve gone up again.

What doesn’t this mean?

That this is JUST LIKE 2007 all over again.

That’s it. An interesting observation, nothing more.

The entire structure of markets has changed since the GFC. There’s no signal in anything being the HIGHEST SINCE another moment in time.