Ben Gilbert: belief

Transcript context

…Right. A bunch of playbook items, using off balance sheet partnerships to conceal billions of losses and lots of debt. To my knowledge, Sarbanes-Oxley makes this impossible now. The next one I had is more of an observation, and it's something that I was talking about the last time I was in San Francisco and we got together with our friends at Vouch. I was talking with one of the Vouch co-founders about this, the idea of correlated risk. Of course, it's huge in their business since they're in the insurance business. It's funny because this was before FTX happened. We were talking about the fact that a lot of times, people assume when they have three or four layers of coverage, they're like, well, I'm covered. I'm really secure, because there are a lot of nets below me. But you have to be really good at figuring out, well, are those actually four layers or is that one layer that looks like four? Because oftentimes, when something starts to tank, everything around it starts to tank, too. When you tie everything to this share price, and you tie everything to collateralizing it with your own stock, or in the FTX case, if you collateralize against the FTT token, which is very, very correlated to your company's enterprise value and future prospects, you end up in this correlated risk territory. I think, so many times, we're bad at seeing or don't want to see correlated risk when everything is going up. We view things as having more protection, more safety net, more separation than they do. But when you do have a bunch of risks that are all correlated together, they fall apart so fast, they unwind in a big hurry. Totally agree. I have a corollary playbook theme for me coming out of this episode to that correlated risk playbook theme.…

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