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What’s Worth Reading: Thanksgiving Weekend Edition

by Om Malik
This post is by Om Malik from On my Om

I returned from a quick trip to London on the day of Thanksgiving, thus missing the bonhomie of the weekend. While I did miss the slices of pie, it was good to spend the time watching The Silence of Water on PBS Masterpiece (via Amazon Prime.) The Italian crime show is beautiful in location, cinematography, and acting. And despite having to follow the subtitles, it is worth binging. 

The show was an excellent way to stay away from the incessant come-hither siren call of Black Friday — a disease that has also spread to the United Kingdom. I used the opportunity to stock up on memory cards, but that’s all. For the rest of America — despite economic doldrums, it seems to be the season of shop till you drop. I call this the consumerism curse.

The long weekend was also a good time to reflect and read. 

What I am reading: 

Amazon was losing $10 billion a year on its Alexa business. Google, too needs to learn how to make its voice-interface business profitable. And Apple’s Siri is not going anywhere as, well. So what is the future of voice interfaces in this era of economic frugality? 

Talking about Apple is becoming an ad company. On its blog, Proton, the privacy company, breaks down how Apple’s tracking works. I, for one, am disgusted by this direction taken by Apple. (Related: The golden noose around Apple’s neck.)

If you are struggling with the whole FTX (Read more...)

Ranked: The World’s 100 Biggest Pension Funds

by Jenna Ross
This post is by Jenna Ross from Visual Capitalist

View the full-resolution version of this infographic

The world's 100 largest pension funds, represented as circles sized according to their total assets. The Government Pension Investment Fund in Japan is the biggest at $1.7 trillion in assets.

Ranked: The World’s 100 Biggest Pension Funds

View the high-resolution of the infographic by clicking here.

Despite economic uncertainty, pension funds saw relatively strong growth in 2021. The world’s 100 biggest pension funds are worth over $17 trillion in total, an increase of 8.5% over the previous year.

This graphic uses data from the Thinking Ahead Institute to rank the world’s biggest pension funds, and where they are located.

What is a Pension Fund?

A pension fund is a fund that is designed to provide retirement income. This ranking covers four different types:

  • Sovereign funds: Funds controlled directly by the state. This ranking only includes sovereign funds that are established by national authorities.
  • Public sector funds: Funds that cover public sector workers, such as government employees and teachers, in provincial or state sponsored plans.
  • Private independent funds: Funds controlled by private sector organizations that are authorized to manage pension plans from different employers.
  • Corporate funds: Funds that cover workers in company sponsored pension plans.

Among the largest funds, public sector funds are the most common.

The Largest Pension Funds, Ranked

Here are the top 100 pension funds, organized from largest to smallest.

RankFundMarketTotal Assets
1Government Pension Investment Fund🇯🇵 Japan$1.7T
2Government Pension Fund🇳🇴 Norway$1.4T
3National Pension🇰🇷 South Korea$798.0B
4Federal Retirement Thrift🇺🇸 U.S.$774.2B
5ABP🇳🇱 Netherlands$630.4B
6California Public Employees🇺🇸 U.S.$496.8B
7Canada Pension🇨🇦 Canada$426.7B
8National Social Security🇨🇳 China (Read more...)

How FTX built a house of cards

by Om Malik
This post is by Om Malik from On my Om

A few months ago, news broke of an insider trading ring at Coinbase, one of the many crypto exchanges hoping to make the world of magical Internet money easy for normals. SEC and other authorities acted swiftly and nailed down the perpetrators; their ill-gotten gains were around million-and-a-half dollars. The accused awaits sentencing. The swift action, in that case, is in sharp contrast to the largest cryptocurrency failure at FTX. 

The founder of the bankrupt exchange, and the man at the heart of this multi-billion dollar scandal, Sam Bankman-Fried, is instead invited to the U.S. Congress for “hearings.” 

Instead of being behind bars in custody, SBF is giving interviews to publications like Vox and The New York Times. Both these articles are a disgrace because both publications failed to ask the only question that mattered. Instead, they allowed SBF to come up with justifications, reasons, and bullshit excuses. Others are giving legitimate coverage to the likes of FTX’s house shrink and letting him make outrageous statements such as that he doesn’t see SBF knowingly committing the crime. “I just can’t see him doing that, honestly,” Lerner is quoted. If I were a house shrink getting paid outrageous money, I wouldn’t see anything wrong with the man either. 

Instead of waiting for the bankruptcy filings and being armed with more details, The New York Times interviewed SBF for a fluff piece. It only undermines my confidence in the Times’ coverage of this part of the finance sector. 

These stories are (Read more...)

Visualized: FTX’s Leaked Balance Sheet

by Niccolo Conte
This post is by Niccolo Conte from Visual Capitalist

Visualization of FTX Balance Sheet

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.

This graphic visualizes FTX’s leaked balance sheet dated to November 10th, and published by the Financial Times on November 12th. Spreadsheet shows nearly $9 billion in liabilities and not nearly enough illiquid cryptocurrency assets to cover the hole.

How did FTX wind up in this position?

How FTX’s Bankruptcy Unfolded

FTX’s eventual bankruptcy was sparked by a report on November 2nd by CoinDesk citing Alameda Research’s balance sheet. The article reported Alameda’s assets to be $14.6 billion, including $3.66 billion worth of unlocked FTT and $2.16 billion of FTT collateral.

With more than one-third of Alameda’s assets tied up in FTX’s exchange token FTT (including loans backed by the token), eyebrows were raised among the crypto community.

Four days later on November 6th, Alameda Research’s CEO, Caroline Ellison, and Sam Bankman-Fried addressed the CoinDesk story as unfounded rumors. However, on the same day, Binance CEO Changpeng Zhao (CZ) announced that Binance had decided to liquidate all remaining FTT on their books, kicking off a -7.6% decline (Read more...)

In Good Times, FOMO beats Diligence

by Om Malik
This post is by Om Malik from On my Om

red and blue light streaks
Photo by Maxim Hopman on Unsplash

Ever since the FTX story broke, I have had two recurring thoug. This energy companyrace reminds me of Enron, the energy company that wanted to make markets in everything — especially in gullibility. I wrote about their remarkable similarities in my piece for The Spectator, which is a new outlet where I have recently become a contributor.  

In my piece, I wrote:

“Tiger Global, Sequoia Capital, Softbank, Lightspeed, Temasek, Blackrock and others invested over a billion in the company which at one time was valued at $32 billion. FTX and Alameda Research’s intermingled ownership should have raised eyebrows, but history shows greed trumps diligence.”

According to media reports, Sequoia wrote off its entire $213.5 million investment in the company. The question is not just Sequoia, but how did all these giants of risk capitalism not notice the most basic of all risks? They aren’t alone: FTX investor is a who’s who of Silicon Valley and technology investing.

And no, I don’t include SoftBank in that list. The Vision Fund might as well rename itself a “vision less” fund, for they have shown a great propensity for losing a lot of other people’s money. The other investors, however, did surprise me. Paradigm is likely going to lose its $278 million investment. And they were the crypto experts. So many of the crypto insiders I have spoken to have nothing kind to say about SBF and aren’t surprised that a strong puff of wind (Read more...)