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Comment by vishnugupta | Hacker News Reader

I liked The Big Short, movie and the book, as a story and also because the author claims that it's based on true events. Now after seeing Michael Lewis fumble all over the place about SBF I'm not sure about the latter anymore.

Maybe Michael Lewis got too attached to his subjects and was hoodwinked or maybe he knew it was not all true and went along with them because they made for a good story.

All in all he lost his credibility big time, at least among lay (i.e., outsiders of Wall Street) readers. Later I read somewhere on Twitter that apparently WS folks knew his book to be a BS anyway.

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I wonder if Lewis is going through a rough patch professionally because of the recent tragedy he suffered — his daughter died in an automobile accident.

I would not be surprised if it made him more sympathetic to a “young kid” at this point in his life. That sort of thing is soul crushing.

Didn't know that, but yeah I could totally see that making Lewis more sympathetic.

I've never particularly liked SBF even before he imploded, but I don't want him spending the rest of his life in jail for a non-violent crime. I'd rather see him banned from finance and banking and sentenced to a million or so hours of teaching programming and computer science to underserved poor children, or something similarly constructive. He has these amazing skills that could be put work benefitting society, and instead we lock him away so the prison-industrial complex can profit. Such a waste, let's rethink that.

It’s not violence by the literal definition of the word, but I’m not a fan of this particular point of view.

Financial crime at this scale absolutely causes people to die unless you think several billion dollars worth of resources is ineffective at keeping people alive.

The people who engage in fraud at this scale create far more human misery than your average mugger, though I think both should be adequately punished.

To what degree was the money lost by SBF/etc going to be put towards saving lives, versus the dreams of the average crypto person?

Well, a LOT of crypto investor are limited means and the least likely to be able to afford to lose it. Sure they shouldn’t have risked their life savings, but they aren’t getting ahead in normal ways so they hooked onto this rocket, and FTX was considered safe and above board for a long time.

There are real mental and physical impact to loss of majority of your wealth, which can lead to homelessness, exhaustion from working more to cover shortfalls, marital strife, abuse, suicide.

Considering this wasn’t just insiders like high net worth investors angel investing, but everyday people, yeah it hurts a lot of people in real ways. Probably a lot more than the Madoff crowd for example.

My view is that folks lost their life savings on crypto on FTX is only a more extreme version of those who lost their live savings on crypto on some other exchange. The fraud is terrible, but only exasperates the problems of those gambling with limited resources to absorb loses.

It's more that, if you take a meaningful amount of money from N people, the likelihood of financial hardship putting someone in mortal danger (eg, by causing them to lose access to housing or medication, or causing them to be suicidally despondent because they've lost their ability to retire) approaches 1 as N increases. When N is high enough that there are multiple people in mortal danger - it becomes pretty likely that some of them succumb.

This is even discussed in the film version of The Big Short.

Do you routinely evaluate the contents of a wallet stolen by a mugger or of a car stolen by a carjacker in this way?

I do not. My comment was in response to the parent comment saying that financial crime “absolutely causes people to die” and “create far more misery than your average mugger”.

It seems pretty easy to figure out why taking the equivalent of a hundred million wallets creates more misery than taking one of them right.

A large number of people, less than the “hundred million” that you mention (Wikipedia says FTX had “over one million” customers [0]) lost their highly speculative investment. Yes it’s a crime, and yes it’s serious. All I’m asking for is some nuance.

[0]: https://en.m.wikipedia.org/wiki/FTX

What’s the nuance, that if someone makes a “speculative investment” they deserve to have the money stolen more than if they walk down a “risky alley” or something?

> The people who engage in fraud at this scale create far more human misery than your average mugger, though I think both should be adequately punished.

Not convinced. I lost about $50k to mortgage shennanigans and about $800 to being mugged. Guess which one gives me nightmares years down the line.

Mugging is a bad example because it's not just about financial theft but for a brief period a credible threat to your life itself, so the trauma is clearly bound to scar you for a long time.

Perhaps 800$ fraud on Amazon/Ebay is a more appropriate example.

The whole point was someone claiming that we should see large fraud as equivalent to violence. I don't think anyone's denying that a large fraud is worse than a small fraud, but that's not the point in dispute.

Agreed, violence has its own characteristics, and there certainly are qualitative differences.

But as Stalin said, quantity has a quality all its own. When you steal large amounts of money like SBF did it’s different, but that doesn’t make it better.

Does SBF have amazing skills in CS (or anything) to share?

EDIT: Looks like he graduated MIT with a physics degree, so I'd hope so. Then again, maybe we don't want con men teaching kids.

Well, amazing is relative. To underserved kids in poor school districts yeah his skills are probably amazing. And while an MIT Physics degree doesn't explicitly teach software engineering craftsmanship, his first employer Jane Street has high standards for that, and may have, depending on what he actually did there.

But compared to, say, Jeff Dean, his skills are garbage, tofu-dreg, and devoid of any real craftsmanshift or integrity. Pick your point on the continuum.

But I'd rather have high-skilled conmen like Sam, Michael Milken, etc. answering for their crimes and rehabilitating by helping others and being constructive, than wasting away in jail, and potentially teaching other criminals there, or becoming more criminal themselves.

What makes you think con men would actually be constructive and teach impressionable young people useful skills?

My guess is they'd exploit the situation for their own gain, even if only subconsciously. SBF was the face of Effective Altruism for a time.

Perhaps they can clean trash off highways or work soup kitchens.

The recent book similarly made me question all of Lewis' books, which is unfortunate because I've read every one of his books and have been a fan for decades.

The latest book about SBF seems easy to fact check because the reporting, data, and primary evidence on the FTX saga has been so comprehensively available to everyone. I have followed the entire FTX saga like a soap opera and I cannot square Lewis' take with the vast evidence it contradicts.

On a side note, as someone very close to the industry, I can say The Big Short was spot on. It simplified things, but that is to be expected for a mass market publication. I hope this means most of his books were equally evidence based, and perhaps the quality has only recently suffered.

In the same vein Flash Boys is mostly about Brad Katsuyama starting IEX, and the evils of HFT. I wondered while reading it if there was another side to the story.

There absolutely is; in fact, most of the story is on the other side, and Katsuyama's premise doesn't even make much sense.

E.g., Flash Boys: Not So Fast is one example of another side. https://www.goodreads.com/en/book/show/23570025

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