this thread is for posting matt levine quotes in

JPMorgan made money that it did not, you would have to say, "deserve" to make

Probably what *this* should be called.
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Re: this thread is for posting matt levine quotes in

Post by Juri » Wed Mar 13, 2019 1:07 am

Crunchums wrote: Tue Mar 12, 2019 7:27 pm :IO
thats a julia galef quote
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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Sat Mar 16, 2019 12:55 am

I am left to the startling conclusion that, having vigorously negotiated a provision under which Vintage was entitled to extend the End Date simply by sending Rent-A-Center notice of election to do so by a date certain, Vintage and B. Riley personnel, in the context of this $1 billion-plus merger, simply forgot to give such notice. As one B. Riley principal messaged another, immediately upon learning of the failure of notice, “We are [prejudiced in the extreme].”
B. Riley Financial Inc. was Vintage’s banker on the deal. “Prejudiced in the extreme” is not what this person wrote. “In fact,” writes Vice Chancellor Glasscock in a footnote, “the message employed an Anglo-Saxon expression that, while generally unfit for publication, when used metaphorically has many meanings. I am convinced from context, however, that the meaning the message attempted to express was ‘prejudiced in the extreme.’” Ha ha ha ha lawyers. They should teach this footnote on the first day of law school. “This is what you’re getting yourselves into, kids! Are you sure?”

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Tue Mar 26, 2019 4:24 pm

When I say it like that, it sounds very illegal, but that’s only because it is very illegal.

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Re: this thread is for posting matt levine quotes in

Post by Juri » Wed Mar 27, 2019 11:40 am

Rylinks wrote: Tue Mar 26, 2019 4:24 pm When I say it like that, it sounds very illegal, but that’s only because it is very illegal.
:omg:
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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Mon Apr 08, 2019 4:27 pm

In my former career, I was in the business of structuring derivatives, which in my case often meant that I was in the business of saying no to derivatives. “Derivatives” is sort of a vague term, and there is a persistent folk belief that they have magic powers, that any legal or financial problem can somehow be solved by doing a derivative. In this folk belief, the derivative structurers are wizards with arcane powers, respected and feared as long as they can make the rains come, but also treated with great suspicion when the harvest fails. I had a lot of conversations like this:
Coverage banker: Our client has some shares of XYZ, and he would like to eliminate his downside risk in the stock. He doesn’t want to pay much for that protection, but he is willing to give up his upside exposure. Can you structure some sort of derivative to help him hedge?

Me: He owns the stock, he doesn’t want to lose money if it goes down, and he doesn’t care about making money if it goes up?

Banker: Exactly, yes, can you help him?

Me: He should just sell the stock.

Banker: Oh no he can’t do that, he signed an agreement with the company that doesn’t let him sell the stock.

Me: Did he also agree not to hedge it?

Banker: I don’t think so, I’m sure hedging is fine.

Me: Really?

Banker: Let me send you the agreement. [Sends contract]

Me: It says right here “you shall not sell, hedge, reduce your exposure, trade in options or swaps or other derivatives, or otherwise do anything at all that anyone might even think looks a little bit like hedging.”

Banker: Well but we were thinking there might be some sort of … derivative?

Me: Come on!

Banker: This is not very helpful. Are you even a real derivatives structurer?
At this point I would say I had to jump to another call, but it is important to point out that I wasn’t very good at this. If you were really good, you would construct a magical derivative that would somehow thread the needle, hedge the client’s risk and not violate the agreement. If you were slightly less good, you would construct a derivative that wouldn’t hedge the client’s risk, but you’d be a good enough salesperson to pitch it to the banker and maybe even to the client. (Short a basket of correlated stocks, sure!) If you were … let’s say, average … you would construct a derivative that would hedge the client’s risk and definitely violate the agreement, sell it to the client, and let him worry about getting sued.

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Thu Apr 18, 2019 2:08 am

When a company buys another company for cash, and hedge funds think that the deal price is too low, they can seek “appraisal,” meaning that they can go to a judge and ask him to decide what a fair price for the target company would be and make the acquirer pay them that price. His name is Travis Laster. The judge, I mean. That’s his name. If you think that a merger price was too low, you go to Travis Laster and you ask him to decide the right price, and he will then award you that price, which might be higher or lower than (or the same as) the agreed-upon deal price.

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Fri May 03, 2019 5:39 pm

The SEC had no evidence of an actual insider tip, just suspiciously well-timed trades and a suspiciously blank computer: eyebrow-raising stuff, but not proof of insider trading, and it turns out that the SEC can’t win an insider trading case without some actual evidence of an insider tip. The lesson here … look, this is probably the very least legal-advice thing I have ever typed, but … the lesson here might be, if you insider trade by buying short-dated out-of-the-money call options on a merger target, and the SEC freezes your profits, go ahead and show up in court to ask for them back as long as you’ve deleted all the evidence first. No, no, sorry, I am sticking with the original Twelfth Law, this is an absolutely terrible idea. Don’t insider trade, don’t ask for the money back if the SEC seizes it, don’t destroy evidence, none of it. Still. It seems like it might work?

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Wed May 08, 2019 7:52 pm

The Securities and Exchange Commission, as we’ve discussed before, takes the sanctity of the golf buddy relationship very seriously.

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Mon May 13, 2019 4:31 pm

Yeah, I checked a bag; I realize this is an unforgivable move and I should have been fired for it, which is part of why I didn’t submit a receipt.

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Re: this thread is for posting matt levine quotes in

Post by Crunchums » Tue May 28, 2019 9:39 pm

u gotta skate

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Tue May 28, 2019 9:42 pm

One vague dream of mine is that I would like to design and teach a course in "financial literacy." I feel like "financial literacy" as it is usually conceived is terrible, just a lot of "if your bank pays 10 percent compound interest and you start with $100 then in three years will you have more or less than $130?" and other arithmetic trivia that is of limited interest in our world of low interest rates and flourishing Ponzi schemes. "Financial literacy" will tell you that the answer is "more than $130," because compound interest Einstein blah blah blah, but the correct answer is "less than $130," and likely zero, because if your bank pays you 10 percent interest in the United States in 2018 it is a Ponzi and will steal your money. There is room for improvement is my point here.

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Re: this thread is for posting matt levine quotes in

Post by 人造 » Tue May 28, 2019 9:44 pm

is 2 plus 2 four

yes, but, have you read harry potter? if you have then you know no

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Thu May 30, 2019 4:31 pm

There is, as I say periodically about Robinhood’s payment-for-order-flow setup, nothing wrong with this. If Robinhood sends your order to a venue that (1) gives you good execution and (2) pays Robinhood to subsidize its free trading, then you have no reason to complain. But there is a sort of meta-problem with it, which is that the setup here is premised on the idea that your order is a mistake. “You shouldn’t be trading crypto on your phone” is kind of—not entirely, but kind of—the premise behind the whole operation; if you should be doing it, if you had some advantage, then no one would want your orders. The fact that they do want your orders means that you get good execution, but if they’re right then that good execution might end up being bad for you. Maybe you should listen to them!

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Tue Jun 04, 2019 4:17 pm

So for instance there is EB-5 visa fraud. The EB-5 program is meant to stimulate foreign investment and job creation in the U.S., and the way it works is that if a foreigner invests enough money in a qualifying U.S. commercial project, she can get a visa to live in the U.S. The obvious trick is to certify that you have such a project, take money from investors, and pocket it. The investor won’t get her money back, but she’ll get her visa, which is what she really wanted. Her investment returns will be negative, but she’ll be happy anyway and won’t complain much. In fact, if she complains too much—if she goes to the authorities and accuses you of fraud, for instance—then the authorities will find out that she didn’t invest in a real project and she will lose her visa. So her incentives are aligned with yours, which is what you really want in a victim of your scam.

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Wed Jun 19, 2019 4:36 pm

I have written before about my own fantasy for consumer securities regulation, which would solve all of these problems but which would probably face some political hurdles in getting enacted. It goes roughly like this:
  1. Anyone can invest all they want in a diversified portfolio of approved investments (non-penny-stock public companies, mutual funds and exchange-traded funds with modest fees, insured bank accounts, etc.).
  2. Anyone can also invest in any other dumb investment; you just have to go to the local office of the SEC and get a Certificate of Dumb Investment. (Anyone who sells dumb non-approved investments without requiring this certificate from buyers goes to prison.)
  3. To get that certificate, you sign a form. The form is one page with a lot of white space. It says in very large letters: “I want to buy a dumb investment. I understand that the person selling it will almost certainly steal all my money, and that I would almost certainly be better off just buying index funds, but I want to do this dumb thing anyway. I agree that I will never, under any circumstances, complain to anyone when this investment inevitably goes wrong. I understand that violating this agreement is a felony.”
  4. Then you take the form to an SEC employee, who slaps you hard across the face and says “really???” And if you reply “yes really” then she gives you the certificate.
  5. Then you bring the certificate to the seller and you can buy whatever dumb thing he is selling.
  6. If an article ever appears in the Wall Street Journal in which you (or your lawyer) are quoted saying that you were just a simple dentist, didn’t understand what you were buying and were swindled by the seller’s flashy sales pitch, then you go to prison.

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Re: this thread is for posting matt levine quotes in

Post by Doug » Wed Jun 19, 2019 6:10 pm

人造 wrote: Tue May 28, 2019 9:44 pm is 2 plus 2 four
In base three, 2 + 2 = 11
It's your turn in Cthulhu Wars
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Re: this thread is for posting matt levine quotes in

Post by Khaos » Wed Jun 19, 2019 6:15 pm

i enjoy this thread

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Re: this thread is for posting matt levine quotes in

Post by seathesee » Wed Jun 19, 2019 6:54 pm

人造 wrote: Tue May 28, 2019 9:44 pm is 2 plus 2 four
please enjoy a brief clip from a symposium on this matter.
with love, your good friend, seathesee

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Tue Jun 25, 2019 7:09 pm

We talk a lot around here about “various opportunistic strategies in the credit derivatives markets.”

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Re: this thread is for posting matt levine quotes in

Post by Khaos » Tue Jun 25, 2019 8:47 pm

i don't get it

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Re: this thread is for posting matt levine quotes in

Post by alright » Tue Jun 25, 2019 8:48 pm

man when arent we talking about the various opportunistic strategies in the credit derivatives markets

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Tue Jun 25, 2019 8:49 pm

Khaos wrote: Tue Jun 25, 2019 8:47 pmi don't get it
i just liked the phrasing (which is from a joint statement from the heads of the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission and the U.K. Financial Conduct Authority)

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Wed Jun 26, 2019 4:49 pm

In the second stage, those further investigations turned up just piles and piles of permanently preserved searchable electronic chats and emails in which traders said things like “let’s do crimes, specifically manipulating Libor,” or “boy I hope I won’t go to prison when people read this chat in which I confess to manipulating Libor,” except with lots of swear words and typos. Once the prosecutors get those emails and chats the game is kind of up; the banks ended up paying billions of dollars in fines, and some of those traders did, as they foreshadowed, go to prison.

[...]

Spoofing is actually sort of an interesting crime; there are good theoretical debates about what counts as spoofing, and prosecutors sometimes have a hard time proving criminal intent in spoofing trials. But one thing that definitely counts as spoofing is (1) entering orders that you don’t intend to trade on while (2) going around telling your colleagues, in permanently recorded searchable electronic communications, that you are spoofing, using the word “spoof.” They search those keywords you know! Come on.

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Re: this thread is for posting matt levine quotes in

Post by Doug » Wed Jun 26, 2019 4:58 pm

lolol
It's your turn in Cthulhu Wars
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It's your turn in Demon Wars
It's your turn in Wall Street Wars

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Re: this thread is for posting matt levine quotes in

Post by Khaos » Wed Jun 26, 2019 4:59 pm

i'm sp00fing

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Re: this thread is for posting matt levine quotes in

Post by Rylinks » Mon Jul 01, 2019 11:42 pm

I don’t follow things closely enough to have a view on whether Craig Wright is or is not Satoshi Nakamoto, the pseudonymous inventor of Bitcoin, but I will say that there could be no purer or more perfect cryptocurrency fact than Satoshi Nakamoto losing $10 billion of Bitcoins because he forgot his private key. “Bitcoin: A Peer-to-Peer System for Losing All Your Cash,” the white paper could have been called. “A purely peer-to-peer version of electronic cash would allow individuals to accumulate vast wealth online and then sheepishly confess that they’d lost their passwords and couldn’t access their money.” I love it so much.

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Re: this thread is for posting matt levine quotes in

Post by Crunchums » Tue Jul 02, 2019 1:10 am

:lol:
u gotta skate

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Re: this thread is for posting matt levine quotes in

Post by Doug » Tue Jul 02, 2019 4:41 pm

wow wth
It's your turn in Cthulhu Wars
It's your turn in Squirrel Wars
It's your turn in Demon Wars
It's your turn in Wall Street Wars

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Re: this thread is for posting matt levine quotes in

Post by Ashenai » Tue Jul 02, 2019 5:57 pm

Damn, there are a lot of good posts in this thread! (This sadly isn't one of them. I know. I'm sorry.)

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Re: this thread is for posting matt levine quotes in

Post by Crunchums » Tue Jul 02, 2019 5:58 pm

disagree; your post is good
u gotta skate

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