Friday, October 27, 2023

Going Infinite Doesn’t Say What People Want to Hear Right Now

Michael Lewis’ latest book Going Infinite: The Rise and Fall of a New Tycoon is an entertaining account of the journey of Sam Bankman-Fried and his cryptocurrency trading firm FTX.  Lewis’ many critics wanted the story to be a deep dive into Sam’s criminal activity and fraud within the cryptocurrency industry, but that’s not the story Lewis is telling.

Relative to social and business norms, Sam is an outlier of huge proportions.  So much so, that his meteoric rise in the cryptocurrency business world would have seemed impossible in advance.  This is the story Lewis told. However, Sam is currently on trial for (allegedly) swindling billions from traders and investors.  Those most interested in this story wanted to learn more details of the swindling.

Some critics accuse Lewis of having been taken in by Sam.  I didn’t get this from the book.  Lewis did discuss Sam’s seeming transgressions, he just didn’t dwell on them because they weren’t central to the story he was telling.  One example of the discussion of a potential crime is “FTX had simply loaned Alameda all of the high-frequency traders’ deposits … for free!”

In another example, Lewis at one point had done some simple accounting and had concluded that billions of dollars were missing.  He tried to press Sam about it, but “Either he didn’t know where the money had gone or he didn’t want to say.”  Note that not knowing where the money had gone is not the same as not knowing it had been taken in the first place.

Readers who don’t care much about cryptocurrencies or Sam’s guilt or innocence will likely find this story entertaining.  Lewis displays his usual skill at evoking vivid and funny images.  At a big media event “Sam emerged, looking as if he had fallen out of a dumpster.”

Going to a meeting with Mitch McConnell, Sam “carried what appeared to be a small pile of old laundry” which turned out to be a suit.  “[Sam] walked up the steps of the private plane and plopped the suit ball onto a spare seat.”  McConnell liked to be addressed as “Leader”, and Sam needed to practice to avoid saying “Dear Leader.”

“He tossed popcorn in his mouth, in a herky-jerky motion that resembled a clumsy layup.  He was shooting around 60 percent, and the popcorn was flying everywhere.”

After reading the book, I was left with the impression that Sam would very likely be convicted of financial crimes.  But the story was really about Sam Bankman-Fried and a cast of other implausible characters doing things that didn’t seem like they should have been possible.  However, it’s understandable if people who lost their life savings in FTX don’t want to hear about Sam’s interesting quirks.

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