Dear @SBF_FTX. This is not a balance sheet. A balance sheet doesn't record "balances", it records assets on one side of the sheet and liabilities plus equity on the other. The "balance" is whether the totals on the two sides agree. #basicaccounting
Dear @SBF_FTX. Since FTX was channelling customer funds to Alameda, we already know FTX was not dependent on Alameda for liquidity. Where is the chart showing Alameda's dependence on FTX?
Dear @SBF_FTX. Valuing assets on your company's balance sheet according to "your model" is known as "mark to model" (or "mark to fantasy"). It is only acceptable if the market for the assets is too small for price discovery.
Dear @SBF_FTX. The problem with marking assets to fantasy is that you end up with wholly unrealistic valuations, and as a result you develop wholly irrational beliefs such as "an $8bn shortfall of liquid assets wasn't risky". (Also this isn't a balance sheet, as previously noted)
And this is what happens when your marks to fantasy unwind.
Switching substack posts. Dear @SBF_FTX, as noted before, this is not a balance sheet. It therefore does not, and cannot, show FTX US "overcapitalised by roughly $350m".
@SBF_FTX Dear @SBF_FTX. Contrary to the claim in your substack post, S&C's presentation does appear to include $428m in FTX US's bank accounts as an asset. It is the cash balance for the WRS silo and is included in the total cash balance of $1.7bn.
I admit I had to do some hunting to find it, as it's not immediately apparent that WRS silo includes FTX US. @SBF_FTX says he only had an hour to write that post, so maybe he didn't have time to look properly?
Alternatively, maybe @SBF_FTX misunderstood the executive summary. Total cash reported in this summary included $428m from WRS silo, which includes FTX US. The summary also reported $181m of digital assets (NOT cash) for FTX US.
The shortfalls are clearly in digital assets, not cash.
The $428m cash in WRS silo does not entirely belong to FTX US. It includes $128m of primarily restricted cash in LedgerX, which wouldn't be available to disburse to FTX US customers (tho @SBF_FTX seems to think it should).
Here's the evidence that @SBF_FTX thinks the restricted cash in LedgerX should be available to disburse to FTX US customers. In this spreadsheet, he's counted it in the $428m cash "in FTX US bank accounts".
In the substack post, @SBF_FTX says he doesn't know what the restricted cash at LedgerX is. Twenty seconds of Googling would have told him. bloomberg.com/news/articles/…
@SBF_FTX Dear @SBF_FTX, I'm afraid S&C's data does not confirm your claim that FTX US was solvent at the time of the Ch 11 filing. At that time, $250m of cash in LedgerX was set aside for a CFTC filing and could not be counted as part of FTX US's assets. So FTX US was probably insolvent.
Furthermore, customer balances are unlikely to be the only liabilities. Whether FTX US is solvent depends on whether total assets exceed total liabilities, not whether total assets exceed customer balances.
To be fair to @SBF_FTX, confusion between customer balances and total liabilities seems to be endemic in cryptoland. I do wish crypto people would learn basic accounting.
Related - the fact that total liabilities can be much more than customer balances is the reason why the Merkle tree "proof of reserves" beloved of several crypto exchanges proves absolutely nothing.
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Interesting development: Muhammad accepts donations in Bitcoin. This bypasses the suffocating constriction Israel has put on Gaza's banks, but it still falls foul of the exchange rate problem. 🧵
Nearly all transactions in Gaza are in physical cash, of which there is a fixed (and gradually declining) supply. So e-money, whether bank deposits, digital wallets or cryptocurrency, must be exchanged for physical cash before it can be used.
Money changers are charging commissions of as much as 45% of the exchanged amount. So the effective exchange rate between e-money and cash is not 1:1, it is approaching 2:1. A shekel of physical cash is worth nearly twice as much as an e-money shekel.
"In the absence of major initiatives to tackle barriers to employment, including subtle discrimination by employers, the Government’s proposed changes would simply result in higher unemployment among sick and disabled people as more of them were deemed capable of work..."
"And even for those who find work, the benefit cuts are likely to mean a vast increase in poverty.
Sick and disabled people do not deserve such harsh treatment..."
"The Green Paper’s vision of (almost) everyone working instead of living on benefits is pie in the sky. The Government must think again."
I did a better chart. PIP/DLA claimants by age group, split by those scoring 4 points in 1 or more daily living activity and those scoring less than 4 points in all daily living activities. Figures from a DWP FOI response kindly provided by Paul Bivand.
Why the 4 points/less than 4 points split? Because the Government proposes to remove PIP from those who score less than 4 points on all ten daily living activities. Those are the people in the red bars on the chart.
There seems to be a widespread belief that the Government's reform of PIP is intended to encourage young people with disabilities to find work. This is despite the fact that PIP is not an out-of-work benefit.
"Mr Trump has... continued his condemnations of the Iranian government and now abandoned the nuclear arms agreement with that nation - citing, in part, evidence presented by Mr Netanyahu."
The White House's statement issued on 8th May 2018 says:
"Intelligence recently released by Israel provides compelling details about Iran's past secret efforts to develop nuclear weapons."
Goes on to make several allegations about both JCPOA and Iran. trumpwhitehouse.archives.gov/briefings-stat…
We now know that ending JCPOA made it impossible for the IAEA to surveil and monitor Iran's nuclear programme. Its report of 28th May says that it no longer has any idea what Iran is doing. iaea.org/sites/default/…
If you want to understand Thames Water's convoluted corporate structure and those controversial dividends, Coppola Comment's in-depth analysis from last year covers it in detail. Now free to read. The link to the post is in the next tweet. 👇
The too-important-to-fail public utility is embedded in a parasitical extractive structure (see image below). The Kemble group of companies is insolvent and has been for quite some time.
The dividends that broke Ofwat's rules, and for which Thames Water has now been fined, weren't paid to external shareholders. They have not received dividends since 2017. coppolacomment.substack.com/p/thames-water…
First, let's backtrack to Pope Francis's election. He chose his papal name in honour of St. Francis of Assissi. St. Francis is my patron saint, so I know a bit about him. 1/
St. Francis had a devoted disciple and close companion, who witnessed his stigmata and nursed him in his last illness. His name was Brother Leo. 2/