[Article] SBF talks with the founder of Real Vision: What should we think about the biggest monetary tightening in economic history
Source: Real Vision website
0x711, BlockBeats
2022 年 7 月 5 日， 宏观机构 Real Vision 创始人 Raoul Pal 与 FTX 的联合创始人兼首席执行官 Sam Bankman-Fried 就宏观经济环境与加密市场进行深度讨论。 BlockBeats 节选部分对话，整理翻译如下：
On macroeconomics
Raoul:Before we get started, we'd like to get a sense of the chaos that's going on right now, and what you think about the markets.
SBF: Obviously, the last month has been very chaotic, and this is not just a crypto phenomenon. Across the economy, something similar has happened in technology, where basically all the gains that have happened over the past year have been decimated.
It was initially triggered by the Fed raising interest rates, and much more than people expected. But at this point, the carnage we're seeing in the markets is, I think, at odds with what a 3 per cent rate would normally represent.
Raoul:Yeah, I noticed that as well, in fact, WHAT I call monetary tightening, monetary tightening with changes in inflation, all of these things and the dollar,I think this is the biggest monetary tightening in economic history. And it happens very quickly.So, as you say, this is not an encrypted event. It's just a liquidity event. It's happening -- look at the oil market today. Everyone is very bullish on oil. I heard someone had a target price of $350. Today alone, they are down 10%.I'm actually very bullish on long-term assets, like tech stocks and cryptocurrencies.
SBF: As long as concerns about inflation and liquidity persist, assets with large capital inflows will be hurt. As you say, industries with a longer time horizon than oil or bread will be hurt. But it's really just a general economic event that still hurts everything, but transmission will change there.
When you have inflation, people look at all the asset prices going up, and you say, oh my God, that's a big economic change. And then all of a sudden, the Fed starts tightening monetary policy, and all the numbers are falling back, and you go, Holy shit.
But to some extent, if you look at it another way, what's happening is just a split in dollar-denominated equities. In that sense, it was a hiccup.I don't want to overstate this.
On bailouts in the crypto market
Raoul:One of my old clients has stuck in my mind for my entire career, and that isHaving cash is king in a recession. I can see you are in the good position of having cash in a recession, and opportunities are everywhere for you.
SBF:Oh, sure, there's a lot of misalignment here, and a lot of potentially very good plays to play out. If you have unlimited capital backing, of course, no one has unlimited capital backing anything. But it's still a good place to be if you have a lot but limited capital. So,I think one of the things that we think about most here is given what's going on, what should we do? Where do we deploy our money most important now?
Raoul:What is your answer to that?
SBF:Yes, one of them, and I think the one that's getting the most attention, is that in the crypto space, aside from a very severe short-term liquidity crunch, there's no problem at all. The closer you are to your ideal, the closer you are to a place where money should be deployed from every Angle. Are there good investment opportunities from both perspectives?
Maybe, but more importantly,A bailout is basically permanent in the sense that you can save some customers, you can save a company, you can stop the contagion, because it's not like a business that has to fail, it's because of short-term conditions, a business actually has a crisis of economic inefficiency.So, this is a Platonic ideal, and we're looking for something above all else. Of course, nothing is a Platonic ideal.
Raoul:No, it's not just a business. It's just for the greater good.
SBF:rightSo I don't think we just want to throw money at it. But if in some cases we are going to bail out a very good business or a business with serious customer protection issues, then what we really value is that it stops the crisis from spreading.Not just bailing out the crisis dollar for dollar, but preventing a series of crises with less capital expenditure because it prevents the whole system from being liquidated. I think that's what we value most.
Talk about CeFi crisis
Raoul:What do you think went wrong with CeFi? What didn't it get right this time, and what can it learn from it next time?
SBF:When you look at some of the CeFi companies that are crashing, there's no transparency, no way to really know what's going on. Celsius How serious is the problem? No one knows.
One of the cool things about DeFi is that it's actually very transparent. There is only one clear answer. So how much remortgage is there? You can view it on the chain. In CeFi, the answer is I don't know, maybe a lot, maybe not? Who knows?
Raoul:Yes, it reminds me of the summer of 1998. I spent a single weekend in Ireland with a group of friends in the financial markets. Everyone's asking, who's your biggest client? "How many do you have?" I had about 3 or 4 billion, and the other guy said 3 billion, and I was like, I was from Net West and I moved to Goldman Sachs. I think I've probably done $6 billion or $8 billion. We started adding them up, and the numbers were big. I thought, we're all screwed.
The exact same thing in the crypto market right now is that one client is a big part of the risk for the entire ecosystem, all the major brokers are lending a lot of money,Because they are long-term capital.Before you know it, everything has been remortgaged, and no one knows who owns what.
SBF:Yes, yes. That's absolutely true. It's definitely a reflection of what we're seeing in the CeFi market today, and yes, by the time people realize how serious it is, it's basically too late. So now, we need to clean up what happened there.
Talk about the ETH pledge
Raoul:I've been talking about this a lot,The risk-free return on cryptography is just around the corner: the ETH pledge return. I don't think people understand how big this is. I just wrote an article about it.
I think one of the most interesting things about this is that it will give us the Web3 domain"Treasury yields". And then we can price it for all of its price differentials. Then one can better understand the pricing of risk.
SBF:This is a very interesting point. I think that's right. I guess one thing I would add is what is the risk-free rate?I think the risk-free rate has been seen as an uncertain number for a long time.Is it zero in cryptocurrency value? Obviously not zero. In fact, sometimes it's like 20 percent, but sometimes it's weirdly big, and sometimes it's weirdly small. It's everywhere.
Much of this depends on capital tightening in the ecosystem. But to be honest, there is often a big arbitrage between different approximations of the risk-free rate in cryptocurrencies, with some sources effectively priced much cheaper than others. But I think very few of these sources have thought through what the risk-free rate really means. I think there's a lot of speculation here. I think some people take this too far.
Of course, risk-free is not always easy to understand.I think one of the things that's worth talking about is how long is it risk-free?The risk-free overnight rate may be quite different from the risk-free annual rate. If you have to lock it in for a year, because you can't unwind it in a liquidity crunch. These are not liquid Treasuries. And there isn't enough liquidity in the system to sell cheaply, and you saw what happened to pledged ETH when Celsius began to feel the pressure.
Raoul:Like the trade spread, it works. I think it works, and that's where liquidity risk needs to be priced, and Stake ETH is the only place to get liquidity.
SBF:Yes, that's true, but I think one of the interesting things is that I think the impact on Stake ETH, I think it's much bigger than people think. If you just look at the Stake ETH and ETH chart over time, it doesn't look like an efficient market chart to me.
In a year, everyone assumes that Stake ETH should be based on ETH plus or minus 10 basis points. And then all of a sudden, on the same day, everybody realizes that the discount number might not be zero. Everyone realized it didn't need to be anchored, and within a day, it dropped 2 percent. Then a week later, it fell another 2 percent in one day. So, I think that's part of what's going on.
Raoul:因此，流动性是每个人都错误定价的原因。但是，我真的很想看看 ETH 2.0 解锁会带来什么，因为我甚至查看了 Solana 抵押收益与潜在 ETH 抵押收益的市场定价如何？它的定价看起来大致正确，因为你基本上会说，好吧，Solana 是一个久经考验的协议，但它的波动性更大，因此收益率应该略高。完美运行。就像，好吧，我认为这对人们来说将是一个很大的解锁。
SBF:I think that's right. I think this gets to another interesting point, which is what has a market. There are a lot of cases in crypto where there is a strange assumption that there is no market for something, and people sometimes don't make that clear.
But we talk about frozen assets, as is often the assumption that assets are locked up and have no market and therefore cannot be sold or replaced in any way, and treat them as increments rather than interest rates. I think we're starting to see stETH. In other ways, the assumption has become loose.
Talk about Solana making mobile phones
Raoul:I've been looking at the Solana phone, what's your opinion?
SBF:Yes, I think it's a huge opportunity. I think a phone with native Web3 will help most people get into the Web3 world. Now, if you want to use the DeFi app on your phone, it's hard for the average person to do. So I think having a seamless wallet experience on mobile devices is actually a huge leap forward.
Raoul:Yes. And we're still in a world where you have to have different wallets for different things, which is crazy. That's not the way the world works. We don't care. But I can see it coming. I think the breakthroughs in mobile are huge. I think Web2 integration is going to be huge.
SBF:Yes. I couldn't agree more.
On whether the market has bottomed out
Raoul:So, one last question. Where do you think we are in this bear market?
SBF:I don't see any particular reason why we shouldn't be at the bottom. I'm not saying we're definitely at the bottom. But I think the liquidation that had to happen has already happened.And I think if you now see some reversal in the pricing of general risk assets, which I think is good, let it be. And I don't think there's anything that can directly prevent tomorrow from being the day that recovery really begins.
Of course, something good will happen tomorrow, that's just an assumption. If something bad happens tomorrow, it will be worse. So I'm not even sure I'm making a symmetric statement between upside and downside right now. Obviously, I'm not offering financial advice.
Raoul:Not at all. I have the same opinion.I think the macro economy has probably changed and we've moved from being worried about inflation to being worried about growth.Of course, we moved lower, and more excess liquidation came from general market concerns. But overall, I feel like big things have happened, and we usually have some instability before we get some stability. The macro background is changing and feels in the right area.
SBF:Yes, I couldn't agree more.
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