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Money Stuff: Evergrande Borrowed From Everyone

by
Matt Levine
Money Stuff
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Evergrande

  • China Evergrande Group owes 1.6 million apartments to people who have put down cash deposits and owes billions to people who bought retail debt instruments advertised as "wealth management products."
    • The products were simultaneously advertised as "suitable for conservative investors" and sold with 11% yields.
    • Many "ordinary" people put a large chunk of their savings into these products.
    • Because of this, the government could get involved, so it isn't guaranteed that ordinary claims of seniority will apply.

Everything is securities fraud

  • The SEC has launched an investigation into Activision Blizzard Inc. regarding how the company handled employees' allegations of sexual misconduct and workplace discrimination.
    • This is weirdly considered securities fraud because Activision "misled" people that it was upholding its code of ethics when it really wasn't, which led investors to lose money.
    • The SEC is now the US's "general-purpose regulatory agency" because securities fraud encompasses almost every issue.

Analyst work/life balance

  • 13 junior investment bankers at Goldman created a slide deck titled "Working Conditions Survey," which described the toll of 120-hour workweeks. Joey Coslet, son of Goldman's CIO, played a key role.
    • Investment banks love hiring PSDs (poor, smart, and driven students).
    • They also love hiring students from wealthy banking backgrounds.
      • These are typically the ones who complain about long work hours that they aren't used to.

NFT Stuff

  • The COO of Nonfungible.com said 90% of NFTs today are totally useless and meaningless. As a result, most NFTs that sell for the first time never see another transaction.
  • Martingale Shares, a way to sell fractional interests in NFTs, could fix this issue.
    • The basic idea is that owners of individual assets could raise money by selling into a market of fungible claims on a class of assets, which are probabilistic.
    • The goal is to build markets of liquid fungible tokens to finance ownership of non-fungible tokens.
  • This is what makes NFTs interesting: they are a sandbox for building financial tools that can represent the real world in the crypto system.
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