My opinionated and annotated summary / distillation of the SBF’s account of the FTX crisis based on recent articles and interviews (particularly this Bloomberg article).
Over the past year, the macroeconomy changed and central banks raised their interest rates which led to crypto losing value. Then, after a crypto crash in May, Alameda needed billions, fast, to repay its nervous lenders or would go bust.
According to sources, Alameda’s CEO Ellison said that she, SBF, Gary Wang and Nishad Singh had a meeting re: the shortfall and decided to loan Alameda FTX user funds. If true, they knowingly committed fraud.
SBF’s account is different:
Generally, he didn’t know what was going on at Alameda anymore, despite owing 90% of it. He disengaged because he was busy running FTX and for 'conflict of interest reasons'.
He didn’t pay much attention during the meeting and it didn’t seem like a crisis, but just a matter of extending a bit more credit to Alameda (from $4B by $6B to ~$10B). Alameda already traded on margin and still had collateral worth way more than enough to cover the loan, and, despite having been the liquidity provider historically, seemed to be less important over time, as they made up an ever smaller fraction of all trades.
Yet they still had larger limits than other users, who’d get auto-liquidated if their positions got too big and risky. He didn’t realize that Alameda’s position on FTX got much more leveraged, and thought the risk was much smaller. Also, a lot of Alameda’s collatoral was FTT, ~FTX stock, which rapidly lost value.
If FTX had liquidated, Alameda and maybe even their lenders, would’ve gone bust. And even if FTX didn’t take direct losses, users would’ve lost confidence, causing a hard-to-predict cascade of events.
If FTX hadn’t margin-called there was ~70% chance everything would be OK, but even if not, downside and risk would have been much smaller, and the hole more manageable.
SBF thought FTX and Alameda’s combined accounts were:
Naively, despite some big liabilities, they should be able to cover it.
But crucially, they actually had $8B less cash, since FTX didn’t have a bank account when they first started, users sent >$5B to Alameda, and then their bad accounting double-counted by crediting both. Many users’ funds never moved from Alameda, and FTX users' accounts were credited with a notional balance that did not represent underlying assets held by FTX—users traded with crypto that did not actually exist.
This is why Alameda invested so much, while FTX didn’t have enough money when users tried to withdraw.
They spent $10.75B on:
Even after FTX/Alameda profits (at least $10B) and the VC money they raised ($2B - aside: after raising $400M in Jan, they tried to raise money again in July and then again in Sept.)—all this adds to minus $6.5B. The FT says FTX is short of $8B of ~1M users’ money. In sum, this was because he didn’t realize that they spent way more than they made, paid very little attention to expenses, was really lazy about mental math, and there was a diffusion of responsibility amongst leadership.
While FTX.US was more like a bank and highly regulated and had as much reserves as users put in, FTX int’l was an exchange. Legally, exchanges don’t lend out users' funds, but users themselves lend out their funds to other users (of which Alameda was just one of). FTX just facilitated this. An analogy: file-sharing platforms like Napster never upload music themselves illegally, but just facilitate peer-to-peer sharing.
For me, the key remaining questions are:
FTX Founder Sam Bankman-Fried Says He Can’t Account for Billions Sent to Alameda
‘We kind of lost track’: how Sam Bankman-Fried blurred lines between FTX and Alameda | Financial Times
Sam Bankman-Fried’s trading shop was given special treatment on FTX for years | Financial Times
FTX Founder Sam Bankman-Fried Says He Can’t Account for Billions Sent to Alameda
SBF Reveals FTX Was Selling Assets That Didn't Exist - The Defiant
ht/ to Ryan Carey: ‘notably some of this could be consistent with macro conditions crushing their financial position, especially the VC investments in crypto.’
I think he might refer to this: archive.ph/ATPHq#selection-1981.172-1981.301
Milky Eggs » Blog Archive » What happened at Alameda Research.
Investors Who Put $2 Billion Into FTX Face Scrutiny, Too - The New York Times
Crypto Brokerage Genesis Tries to Raise Funds and Eyes Bankruptcy
FTX in talks to raise up to $1 billion at valuation of about $32 billion, in-line with prior round
See video interview here: FTX Founder Sam Bankman-Fried Says He Can’t Account for Billions Sent to Alameda
FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall - WSJ
Crypto Exchange FTX's Token Surges 7% After Visa Partnership Report
How can we encourage people to include a 75 word Tl;dr: in every post? 75 words seems to be what is visible in the preview pane when hovering over the title of a post.
Perhaps after hitting submit, people could be prompted if they wanted to add a Tl;dr to the top of the post.
I thought this was a good idea. I have submitted this as a issue here: https://github.com/ForumMagnum/ForumMagnum/issues/4825
Would be cool if we could deploy a really great ML summarization tool to use on posts to make this sort of thing automatic.
How can you get that new toggle feature / use collapsible content as in this post?
Hi Hauke. Sadly that's an admin-only feature that involves editing raw HTML. We use it for Holden's posts because he's crossposted them from his own blog where he uses them. We have talked about adding Forum-native collapsable sections — I'll take your question as an endorsement.
There are multiple reasons this can't be opened up to all uses. The first albeit surmountable one is that it is relatively easy to add cross site scripting vulnerabilities when editing raw HTML.
I created a Zapier to post Pablo's ea.news feed of EA blogs and website to this subreddit:
I wonder how much demand there'd be for a 'Hackernews' style high-frequency link only subreddit. I feel there's too much of a barrier to post links on the EA forum. Thoughts?
~140,000 people from Hong Kong might move to the UK this year (~322k in total over the next 5 years [source]).
Are they particularly well placed to work on Sino-Western relations? (Because they're better at bridging cultural (and linguistic) gap and are likely highly determined). Should we prioritize helping them somehow?
Hong Kong linkup is a organisation for Brits to help their HK peers settle in. If you'd like a way to get to know the community of new HK immigrants, it's probably a good option. I've signed up already.
I would have thought they would be unusually badly placed, because the regime will view them as traitors, for the same reason I would not recommend using apostates for outreach to muslims.
That was precisely my point actually—just like Hirsi Ali might be well-placed to advocate for women's rights within Islam, people from Hong Kong might be well placed to highlight e.g. human rights issues in China.
Ahh, in that case I agree that HKers, or even better Uighurs, would be well placed. But my impression was that 80k etc.'s concerns about China mainly revolved around things like improving Western-Chinese coordination to reduce the risk of war, AI race or climate change, rather than human rights. I would think that putting pressure on them for human rights abuses would be likely to make this worse, as the CCP views such activism as an attack on their system. It is hard to cooperate with someone if they are denouncing you as evil and funding your dissidents.
Working on human rights were just an example, because of the comparison you raised, it could also be CSET type work.
You can quickly check what others are thinking about the articles you read online through a "bookmarklet": just one click on the bookmark in your browser takes you right to the Twitter response of any article.
In chrome you can create this by going to:chrome://bookmarks/
"Add new bookmark"Bookmark name:Twitter response
"star-manning is to not only engage with the most charitable version of your opponent’s argument, but also with the most charitable version of your opponent, by acknowledging their good intentions and your shared desires despite your disagreements. In our UBI example, star-manning would be to amend the steel man with something like, “…and you’re in favor of this because you think it will help people lead safer, freer, and more fulfilled lives—which we both want.” If used properly, star-manning can serve as an inoculant against our venomous discourse and a method for planting disputes on common ground rather than a fault line."
A draft of Eric Schwitzgebel's new book 'The Weirdness of the World' from October 26, 2021 with a few EA-relevant themes:
1 In Praise of Weirdness
2 If Materialism Is True, the United States Is Probably Conscious
3 Universal Bizarreness and Universal Dubiety
4 1% Skepticism
5 Kant Meets Cyberpunk
6 An Innocent and Wonderful Definition of Consciousness
7 Experimental Evidence for the Existence of an External World
8 The Loose Friendship of Visual Experience and Reality
9 Is There Something It’s Like to Be a Garden Snail? Or: How Sparse or Abundant Is Consciousness in the Universe?
10 The Moral Status of Future Artificial Intelligence: Doubts and a Dilemma
11 Weirdness and Wonder
"1. What I Will Argue in This Book.
Consider three huge questions: What is the fundamental structure of the cosmos? How does human consciousness fit into it? What should we value? What I will argue in this book – with emphasis on the first two questions, but also sometimes drawing implications for the third – is (1.) the answers are currently beyond our capacity to know, and (2.) we do nonetheless know at least this: Whatever the truth is, it’s weird. Careful reflection will reveal all of the viable theories on these grand topics to be both bizarre and dubious. In Chapter 3 (“Universal Bizarreness and Universal Dubiety”), I will call this the Universal Bizarreness thesis and the Universal Dubiety thesis. Something that seems almost too crazy to believe must be true, but we can’t resolve which of the various crazy-seeming options is ultimately correct. If you’ve ever wondered why every wide-ranging, foundations-minded philosopher in the history of Earth has held bizarre metaphysical or cosmological views (each philosopher holding, seemingly, a different set of bizarre views), Chapter 3 offers an explanation. I will argue that given our weak epistemic position, our best big-picture cosmology and our best theories of consciousness are tentative, modish, and strange. Strange: As I will argue, every approach to cosmology and consciousness has bizarre implications that run strikingly contrary to mainstream “common sense”. Tentative: As I will also argue, epistemic caution is warranted, partly because theories on these topics run so strikingly contrary to common sense and also partly because they test the limits of scientific inquiry. Indeed, dubious assumptions about the fundamental structure of mind and world frame or undergird our understanding of the nature and value of scientific inquiry, as I discuss in Chapters 4 (“1% Skepticism”), 5 (“Kant Meets Cyberpunk”), and 7 (“Experimental Evidence for the Existence of an External World”)
Modish: On a philosopher’s time scale – where a few decades ago is “recent” and a few decades hence is “soon” – we live in a time of change, with cosmological theories and theories of consciousness rising and receding based mainly on broad promise and what captures researchers’ imaginations. We ought not trust that the current range of mainstream academic theories will closely resemble the range in a hundred years, much less the actual truth. Even the common garden snail defies us (Chapter 9, “Is There Something It’s Like to Be a Garden Snail?”). Does it have experiences? If so, how much and of what kind? In general, how sparse or abundant is consciousness in the universe? Is consciousness – feelings and experiences of at least the simplest, least reflective kind – cheap and common, maybe even ubiquitous? Or is consciousness rare and expensive, requiring very specific conditions in the most sophisticated organisms? Our best scientific and philosophical theories conflict sharply on these questions, spanning a huge range of possible answers, with no foreseeable resolution. The question of consciousness in near-future computers or robots similarly defies resolution, but with arguably more troubling consequences: If constructions of ours might someday possess humanlike emotions and experiences, that creates moral quandaries and puzzle cases for which our ethical intuitions and theories are unprepared. In a century, the best ethical theories of 2022 might seem as quaint and inadequate as medieval physics applied to relativistic rocketships (Chapter 10, “The Moral Status of Future Artificial Intelligence: Doubts and a Dilemma”)."
The IGM booth survey of economists seems to suggests that there might be an recession next year in the US.
The Global Catastrophic Risk Management Act of 2022 is a new bipartisan bill that was proposed recently and is going to be voted on in the US. There's another bill on WMDs.
In October 2018, Bostrom published German translations of a compilation of the following of his papers under “The Future of Humanity”:
Maybe someone could turn this into a sequence?
Some other good papers by him:
The Wisdom of Nature: An Evolutionary Heuristic for Human Enhancement
Where are they? Why I hope the search for extraterrestrial life finds nothing
The Evolutionary Optimality Challenge
The question I'd have about "human enhancement" with technology, is what is one's hard limit to moral goodness, and thus one's "fatedness to the evilness of relative privation of goodness as compared to another" given that we have very little such technology at present, and how can one reliably determine it?
"RCTs in the Field of Development - A Critical Perspective" is a book that was recently published. Description below.
We cite one the chapters extensively in our "Growth and the case against randomista development" piece.
The individual chapters seem all available for free in preprint version (e.g. http://ftp.iza.org/dp12882.pdf ).
In October 2019, Abhijit Banerjee, Esther Duflo, and Michael Kremer jointly won the 51st Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel "for their experimental approach to alleviating global poverty." But what is the exact scope of their experimental method, known as randomized control trials (RCTs)? Which sorts of questions are RCTs able to address and which do they fail to answer? The first of its kind, Randomized Control Trials in the Field of Development: A Critical Perspective provides answers to these questions, explaining how RCTs work, what they can achieve, why they sometimes fail, how they can be improved and why other methods are both useful and necessary. Bringing together leading specialists in the field from a range of backgrounds and disciplines (economics, econometrics, mathematics, statistics, political economy, socioeconomics, anthropology, philosophy, global health, epidemiology, and medicine), it presents a full and coherent picture of the main strengths and weaknesses of RCTs in the field of development. Looking beyond the epistemological, political, and ethical differences underlying many of the disagreements surrounding RCTs, it explores the implementation of RCTs on the ground, outside of their ideal theoretical conditions and reveals some unsuspected uses and effects, their disruptive potential, but also their political uses. The contributions uncover the implicit worldview that many RCTs draw on and disseminate, and probe the gap between the method's narrow scope and its success, while also proposing improvements and alternatives.Without disputing the contribution of RCTs to scientific knowledge, Randomized Control Trials in the Field of Development warns against the potential dangers of their excessive use, arguing that the best use for RCTs is not necessarily that which immediately springs to mind. Written in plain language, this book offers experts and laypeople alike a unique opportunity to come to an informed and reasoned judgement on RCTs and what they can bring to development.
General Introduction, Florent Bédécarrats, Isabelle Guérin, and François Roubaud0:Randomization in the Tropics Revisited: A Theme and Eleven Variations, Sir Angus Deaton1:Should the Randomistas (Continue to) Rule?, Martin Ravallion2:Randomizing Development: Method or Madness?, Lant Pritchett3:The Disruptive Power of RCTs, Jonathan Morduch4:RCTs in Development Economics, Their Critics, and Their Evolution, Timothy Ogden5:Reducing the Knowledge Gap in Global Health Delivery: Contributions and Limitations of Randomized Controlled trials, Andres Garchitorena, Megan Murray, Bethany Hedt-Gauthier, Paul Farmer, and Matthew Bonds6:Trials and Tribulations: The Rise and Fall of the RCT in the WASH Sector, Dean Spears, Radu Ban, and Oliver Cumming7:Microfinance RCTs in Development: Miracle or Mirage?, Florent Bédécarrats, Isabelle Guérin, and François Roubaud8:The Rhetorical Superiority of Poor Economics, Agnès Labrousse9:Are the 'Randomistas' Evaluators?, Robert Picciotto10:Ethics of RCTs: Should Economists Care about Equipoise?, Michel Abramowicz and Ariane Szafarz11:Using Priors in Experimental Design: How Much Are We Leaving on the Table?, Eva Vivalt12:Epilogue: Randomization and Social Policy Evaluation Revisited, James J. HeckmanInterviews
Ideas for forum:
If we had a tag called "Links" for posts that aren't displayed on the front page, then we could have a "Hackernews"/ "Reddit" style section were people can share -without comment- external links related to EA or that could be discussed in the context of EA. This would be different from current "link posts" which might have a higher (imagined) bar to posting.
Along a similar lines, there could be a low effort way for the current Shortform function to emulate Twitter, where the 'magic' sorting algorithm also takes into account the length of the post.
I watched Bill Gates Netflix documentary and wrote down some rough critical thoughts
Likelihood of nuclear winterTwo recent 80k podcasts [1, 2] deal with nuclear winter (EA wiki link). One episode discusses bias in nuclear winter research (link to section in transcript). The modern case for nuclear winter is based on modelling by Robock, Toon, et al. (e.g. see them being acknowledged here). Some researchers have criticized them, suggesting the nuclear winter hypothesis is implausible and that the research is biased and has been instrumentalized for political reasons (e.g. paper, paper, citation trail of recent modelling work out of Los Alamos National Labs, which couldn’t replicate the nuclear winter effect). One recent paper summarizes the disagreements between the different modelling camps. Another paper suggests that nuclear war might also damage the ozone layer.
Related: New audible of 'Hacking the Bomb' on cyber nuclear security.
Inspired by Alex Berger talking about donating a kidney on the 80k podcast.
Could one increase kidney donations by subsidizing surgical excess fat removal for donors?
One might be able to remove fat and donate a kidney in one procedure.
Maybe this would raise fewer bioethical objections and make this more tractable.
Giving a kidney in exchange for money sounds less "exploitative" (I don't think it is, I am modeling public perception) than providing a kidney in exchange for beauty surgery because expectations are more explicit for money than a beauty surgery.
I think this is basically because
Gwern.net articles with an importance score of 9 or 10
[Years of life lost due to C19]
A recent meta-analysis looks at C-19-related mortality by age groups in Europe and finds the following age distribution:
< 40: 0.1%
≥ 70: 84.8%
In this spreadsheet model I combine this data with Metaculus predictions to get at the years of life lost (YLLs) due to C19.
I find C19 might cause 6m - 87m YYLs (highly dependending on # of deaths). For comparison, substance abuse causes 13m, diarrhea causes 85m YYLs.
Countries often spend 1-3x GDP per capita to avert a DALY, and so the world might want to spend $2-8trn to avert C19 YYLs (could also be a rough proxy for the cost of C19).
One of the many simplifying assumptions of this model is that excludes disability caused by C19 - which might be severe.
Are the diarrhea and substance abuse numbers annualized? (does diarrhea cost 85 m YLL/yr)
My brain dump "Potential priority areas within cognitive sciences (psychology, neuroscience, and philosophy of mind)"
Feel free to contribute by making suggested edits!