Wednesday, November 16, 2022

Nouriel Roubini's 7 Cs of crypto. Some FTX thoughts.

Pondering if I should write something about FTX, I fell on this recently posted Nouriel Roubini's 7 Cs of crypto, which he states as:

  1. Concealed
  2. Corrupt
  3. Crooks
  4. Criminals
  5. Con man
  6. Carnival barkers
  7. C... with response here
Should we add:
  1. Credulous
  2. Careless
  3. Childlike
  4. ...

Yet all of these have positive roots:

  1. Privacy
  2. Liberty
  3. Freedom
  4. Independence
  5. Society
  6. Economy
  7. Entrepreneurs
  8. Optimism
  9. Adventurous
  10. Youth
  11. ...
We might call that first extended Roubini list the crypto-challenge list, and that second, the crypto-potential list.

A challenge is that most of us learn to appreciate the crypto-potential list before we learn how to avoid the crypto-challenge list. Ranting about the crypto-challenge list does not help. And in many cases, much experience is needed to develop strategies to address the crypto-challenge list.

A bigger challenge is that risk management is done by projecting past negative events into future possibilities. Part of the game of fraud is to recast the past into a different present, and to avoid risk management by doing so, as no past negative event exists of the presented product. Caveat emptor, buyer beware, as they say.