funds

Visualizing FTX’s Balance Sheet Before Bankruptcy

In a difficult year for the crypto space that has been full of hacks, failing funds, and decentralized stablecoins going to zero, nothing has compared to FTX and Sam Bankman-Fried’s (SBF) rapid implosion.

After an astronomical rise in the crypto space over the past three years, crypto exchange FTX and its founder and CEO SBF have come crashing back down to earth, largely unraveled by their misuse of customer funds and illicit relationship with trading firm Alameda Research.

As regular readers may recall, one of the alleged reasons for the market swoon at the end of 2015 and early 2016 was what Deutsche Bank first dubbed "quantitative tightening" but not by central banks (that would come later), but by sovereign wealth funds in general - with an emphasis on petrodollar nations who were struggling to balance their budgets at a time of plunging oil prices and were forced to sell assets - and China in particular, which faced with a tumbling Yuan was forced to sell billions in US-denominated securities to halt the sharp devaluation of the Yuan.

One week ago, Deutsche Bank analysts warned that the global economic boom is about to end for one reason that has nothing to do with Trump, and everything to do with China's relentless debt injections. As DB's Oliver Harvey said, "attention has focused on President Trump, but developments on the other side of the world may prove more important. At the beginning of 2016, China embarked on its latest fiscal stimulus funded from local government land sales and a booming property market. The Chinese business cycle troughed shortly thereafter and has accelerated rapidly since."

With two months left until the French election, analysts and political experts find themselves in a quandary: on one hand, political polls show that while National Front's Marine Le Pen will likely win the first round, she is virtually assured a loss in the runoff round against either Fillon, or more recently Macron, having between 20 and 30% of the vote; on the other, all those same analysts and political experts were dead wrong with their forecasts about both Brexit and Trump, and are desperate to avoid a trifecta as being wrong 3 out of 3 just may be result in losing one's job.

This article by David Haggith was first published on The Great Recession Blog: 

Europeans must have been delighted to discover that one thing is working as well as it has since the start of the Great Recession. Behemoth banks that are failing are still able to pay their Christmas bonuses to their top executives and give nice dividends to their shareholders thanks to Super Mario Draghi.