October 3, 2024 • 48 mins
Caroline Ellison, the second most important person who worked at FTX, was sentenced to prison this week. Nate and Maria talk about how she and Sam Bankman-Fried thought about making +EV bets (with other people’s money). They discuss her role – victim? villain? – and how she played out her real-life prisoner’s dilemma. Then, Nate gives an election update, and he and Maria discuss what people can do to influence the election in the final weeks. (Hint: It’s not donating to a presidential campaign.) Plus, Nate and Maria say farewell to two degenerate gamblers who passed away this week.
Further Reading:
More on Betsy Paluck’s research
Willy Nelson’s discography
Dana Carvey’s Biden impression from SNL
For more from Nate and Maria, subscribe to their newsletters:
The Leap from Maria Konnikova
Silver Bulletin from Nate Silver
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Pushkin. Welcome back to Risky Business, a show about making
better decisions. I'm Maria Kannakova.
Speaker 2 (00:28):
I'm Nate Silver. Do you ever see the sixty minutes
thing where they're like, You're like, I'm Marley Saper, I'm
Anderson Cooper, and they go for like fifteen fucking people.
It's like too much, It is too much.
Speaker 1 (00:39):
I'm glad there's only two of us. So, Nate, what
are we going to talk about today?
Speaker 2 (00:44):
Today on the show, we'll check in on Carolyn Ellison,
the former CEO of Alametor Research and girlfriend of Sam
mcmin fried, who was sentenced to two years for her
role in the FTX fraud.
Speaker 1 (00:54):
And after that we'll have a little politics update where
we talk about the latest polling and also what actually
makes a difference to the numbers. Is there anything that
we can do in the next few weeks to push
the push the polls one or the other make our
candidate more or less likely to win?
Speaker 2 (01:13):
And then we'll say rip two. A couple of legendary
degenerate gamblers.
Speaker 1 (01:26):
So Caroline Ellison, former CEO, first co CEO, right, and
then just sole CEO of Alameda, which was the hedge
fund that was associated with FTX. We've talked about saying
by Quinfried, We've talked about FTX, but this was a
big one because Caroline was one of the biggest names
(01:48):
to testify against SBF and to kind of bring the
whole thing down, and this week she has been sentenced
herself to two years. Nate, did you get a chance
to meet Caroline when you were doing your research?
Speaker 2 (02:00):
Didn't? We put in a request, but she smartly ignored
it because unlike Sam Bateman Freed, she wasn't talking to
journalists while she was, you know, on trial for various
fraud charges. I did obtain transcripts of the three days
that Carolyn Nelson spent in court testifying about SBF, and
(02:20):
this was very compelling testimony that basically had SBF dead
to rights. In fact, the lawyer that I talked to
about the case said that he thought Sam, after Carolyn's testimony,
was stupid to testify himself, that he was going to
come across unsympathetically to a jury, was going to perjure
(02:40):
himself and get a larger sentence, which is what happened.
This BF got twenty years. That the judge is a
no nonsense. Judge. Judge Kaplan presided over many trials and
was not impressed by dear old Sam bakmanfree so things
that were a parent in her testimony. One was that
(03:02):
this was that Sam had a good deal of awareness
of what was happening, that he was where, that she
was taking on risks that could result in the bankruptcy
of the company that she had presented. It's prechuse to
him say, hey, we make these loans. If there's even
a mild downturn in crypto prices, which there is all
(03:23):
the time, then we're fucked. And he said, I don't care.
It's positive expected value because he thought, you know so
usually when people calculate expected value poke players and the like,
they are assigning some weight to the risk of ruin. Right.
The Kelly criteria is a gambling formula says, let's say
(03:44):
I want to bet on the Packers Chiefs game this weekend?
How much should I bet given my edge as a
share of my bank roll, and basically tells you how
to maximize your return without having any chance of going
truly broke.
Speaker 1 (03:57):
Now, and by the way, let's just caveat that a
little bit, because we know and you've written about the
fact that the Kelly criterion might actually not be the
best way to do this if you actually want to avoid.
Speaker 2 (04:08):
Yeah, it assumes you know your edge, and if you
know your edge, then well that's wonderful, But that's not
how real sports betting works. Most of the time, you're
estimating your edge, and most gamblers, even smart gamblers, tend
to overestimate. So therefore most most gambles have learned through
time that you want to have half Kelly, or a
quarter Kelly, even a full Kelly bet intuitively, to most
(04:29):
gamblers looks very aggressive. You could have yourself betting fifteen
percent of your entire bankroll on one game where you
have only a small.
Speaker 1 (04:37):
Edge, for example, And to gambler like SBF, though the
Kelly criterion criterion was aggressive enough, it was for.
Speaker 2 (04:44):
Wins because what it doesn't do is tell you how
to maximize your expected value if you don't care about
going broke. In the book, I ran some simulations where
you bet five x Kelly instead of point five Kelly,
and what happens is that ninety nine percent of the
time where the course of similar an NFL season, you
go broke, but one percent of the time you wind
(05:06):
up with more money than Elon Musk yep.
Speaker 1 (05:08):
And that's why you have positive expected value.
Speaker 2 (05:12):
Right. So having a one in one thousand chance of
earning two hundred and twenty five billion from a ten
thousand dollars starting bankroll, whatever simulations we made, right, is
very plus ev if you don't care about the fact
that you are in debtors prison the other ninety pet
nine percent.
Speaker 1 (05:27):
Of the exactly. So, so PSA, for our listeners, do
not try this at home. The one person who did
is currently in prison for twenty years.
Speaker 2 (05:37):
So yeah, So SBF was aware of the risks they
were taking and kind of like was ll kind of
like shrugging them off, right, you know, was aware of
the mechanism by which these traits are occurring, which is
that you open up a floodball or a floodgate between
the customer funds secured as Alameda and you know, money
(05:57):
that they were then trading with and making bets on
shit coins and other things. You know, this is the
part where Sam, when I talked to him, would get
more legalistic about saying, well, technically customer funds were wired
to X and why and you know, I I you
know the jury didn't buy his bullshit, and so I don't.
I don't really either. But they were knowingly taking customer
(06:18):
funds and making what Sam knew to be really risky bets,
and Ellison was uh was aware of this and trying
to present these risks to Sam. Now we should say
she is a government witness. Uh do you sign a
(06:39):
plea deal?
Speaker 1 (06:40):
Right?
Speaker 2 (06:40):
And that means that you're gonna be presented in a
favorable light. You know, she kind of presents herself as
some sheep in the will. Is that the right metaphor
some I don't know.
Speaker 1 (06:53):
I think I think that's not quite the right metaphor.
But I think she does present herself as a victim,
as someone who you know, jumped into the abyss. And
even the judge referred to the fact that Sam bankfint
Freed was her kryptonite, right. I was in that analogy
she would be Superman if he's if he's kryptonite, right,
(07:17):
people really screw that analogy up. I just want to
point that out. But but yes, she presented herself as
a victim, as someone who knew it was wrong but
did it anyway and then couldn't see straight because she
you know, her professional life and her private life were
too deeply intertwined. You know, she and she basically was
(07:41):
upon So I don't know, I don't know what the
sheep metaphor here would be. It's not a wolf in
sheep's clothing. That would be SBF, I think. But she, Yeah,
she is someone who was maybe a lamb.
Speaker 2 (07:53):
Haircut, was a little was a little sheep like I
suppose it was.
Speaker 1 (07:57):
It was lamb to the slaughter. I don't know. I'm trying.
I'm trying to take all my metaphors out here.
Speaker 2 (08:03):
I mean. One of the thing about FTX is that
like it's very much a cult, like uh company when
you go there. I went to the Bahamas after everyone
except for two FTX employees and Sam's mom and dad
and Sam himself had had fled. And it's not the
(08:27):
typical But from the talking to these ex employees, it's
like not the typical crypto bro finance bro atmosphere. Instead,
it's like this touchy feely effective altruist. They think they're
stealing from the rich to I don't know what to
for Sam's charitable endeavors. They are isolated, right, people. The
(08:50):
Bahamas is not actually or this part of the Bahamas
right that they're in on the southwest corner of New
Providence Island is not party central. You're away from the
Bahamar and the Atlantis and NASA and the cruise ship docks.
But yeah, but like, but so there it's kind of
a cult and like and like, and Sam makes us
(09:12):
claim that, oh, I'm doing this because I want to eventually,
you know, accumulate more money, because the marginal utility is
very high, because I'll donate it to charity, although actually
he might do things like donate to presidential candidates and
try to curry influence and favors. But so you have
true believers, and you know, and she is close to
(09:32):
this inner circle. You know one thing, clearly, Sam is
smart enough to not share his fraudulent intent widely, right,
you know, it's inner circle and not much else. Doesn't
go much further than that. So I don't know. I mean, so,
how many years did she accept as part of the
plea deal?
Speaker 1 (09:49):
Two years she just got sentenced to two years she
had as part of the plea deal. She didn't accept
anything immediately in the sense that she was still going
to await sentencing, and her lawyers and actually the prosecutors
also argued for no prison time because of how much
she cooperated, but the judge said that, you know, she
couldn't get it. I think this was literally the quote
(10:10):
get out of jail Free card. I was like, haha,
I cannot believe you just said that, but yes, that
is what happened. So she was sentenced to two years.
But you know, I think it's I think talking about
kind of this type of environment is actually quite interesting
because you use the word true believer, which we've used
(10:32):
on the show in the past when we're talking about
con artists, and the mark of a true believer is
you don't like, you don't know right that you're committing fraud,
like you actually believe in this and you believe it's
the right thing to do. And what you were just
talking about, Caroline knew she was what she was doing right,
She knew that it was wrong, she knew what the
risk of ruin was, she knew that this was defrauding,
(10:54):
but she felt, you know, her loyalty was such that
she did it anyway. So I think that we can't
call her a true believer, right, We can't call her
like a true brainwashed cult victim because she knew this
was wrong and she did it anyway. I think we
can still give her some sort of She's one of
these people who's kind of in between, because I think
(11:15):
she has some characteristics of victim, right. And I think
that the cult environment is really interesting because it makes
dissent much less likely. It means that even if you're
not a true believer, but everyone around you kind of
is because they don't know the full extent of it.
Then that kind of influences you as well, and you
start thinking, maybe I'm wrong right, maybe this isn't fraud, etcetera, etcetera, etcetera.
(11:37):
You start trying to convince yourself. But on the other hand,
because she knew it, I think she was also a perpetrator.
Instead of whistleblowing, instead of leaving, instead of going to
the authorities, she did it anyway, And so I think
that it's I'm totally on board with giving her a
lighter sentence because given the testimony, like, given what she did,
I think that that's absolutely correct, and I do see
(11:59):
that there are elements of victimhood there. Like I'm not
blaming her, I'm not giving her a complete you know,
saying oh no, she's a horrible person, and she does
seem very unlike SBF. She seems to be to feel
really really bad, or at least she's a very good
actor and saying that she feels really really bad and
that's completely absent in what he's doing. In fact, he's
(12:21):
appealing his sentence, right. He said that the judge was
biased and that he deserves to not be in jail
at all. And she seems to be kind of I
don't know if at piece is the right word, but
she seems to have accepted that, like, she did bad
and she deserves to be punished.
Speaker 2 (12:37):
I'm trying to remember the reporting. I think it was
from the Michael Lewis book. But she apparently felt like
a great sense of relief once she realized that they
were fucked, because they were fucked sooner ear late. I mean,
even when I talked to me, Sam was kind of like, well,
we could have played out the string for a few
more months and then you never know what happens, right,
(12:59):
But she knew when she realized they were fucked. She's like, Okay,
finally this has an ending. I mean, I don't know
about the by the way, just to remind you if
you just I mean she was sleeping with her boss too,
where he was sleeping with you?
Speaker 1 (13:12):
Yes she was, yes, yes, yes they were. They were
part of a relationship. I think it was even like
a polycule, right, it wasn't just a if I.
Speaker 2 (13:20):
Remember correctly heard of the story. I didn't care to
investigate that much. I don't really want to picture certain things.
Speaker 1 (13:29):
But I don't blame in it. I don't blame you.
Speaker 2 (13:33):
I mean, isn't the game theory such that, like, isn't
it aren't we giving people too many incentives to be
cooperating witnesses or not? What's the expected value? You know
what I mean of committing fraud? If like, if you're
not the principle, Oh now two years, ay, not so bad,
not so bad? Two years.
Speaker 1 (13:48):
Well, it's so funny that you say that, because I
actually read an analysis and thought I was like, no,
this isn't this analysis as fucked, This isn't true at all.
They're like, she got two years. This is going to
mean that no one's ever going to cooperate, because like
she should have just gotten off free. Like if you cooperate,
you shouldn't get any jail time. And I was like,
eh no, I don't think that's right. Like, if you
are conspiring to defraud people out of eight billion dollars,
(14:12):
like that's you know, with a B, that's a lot
of money, unless you end up in the one percent
of the simulation where you have more money than Elon Musk.
But in the other ninety nine point nine percent, you know,
the eight billion is a lot of money.
Speaker 2 (14:25):
And so about just one second prison time for every
dollar you see, it's not too bad.
Speaker 1 (14:30):
One second. I can't do that math? How long is
that going to be? Long?
Speaker 2 (14:35):
Look? I don't know. I look, I'm not good at math,
and people like I'm good at math. I have to like, yeah,
I have taculate, same with.
Speaker 1 (14:41):
Me, same with me. But anyway, Yeah, I think she's
getting off a little bit light. Other people think that
she's not getting off light enough. And I do think
that it's a really interesting I think your question is
a really really interesting one. What's the game theory here?
Speaker 2 (14:58):
Right?
Speaker 1 (14:58):
What's the game theory on fraud on trying to do
these sorts of things. If you look at SBF and
you're like, okay, you're going to jail for at least
twenty years, like that doesn't seem very good.
Speaker 2 (15:09):
But like I mean, this is this is literally the
prisoners to let.
Speaker 1 (15:11):
Yeah, it actually literally is the prisoners yes to uh
are we going to except they were allowed to communicate
because they weren't isolated from each other right away, right okay? Yeah,
but otherwise otherwise it was the.
Speaker 2 (15:23):
Two hundred and fifty three years for that's a lot
of that's a lot of seconds. We need to live
a lot of seconds cheap. That means we need to
live like three billion seconds and that's a fucking lot.
I'm wasting more seconds from now on. I didn't know
that made it burn? Yeah, No, And the game theory
of the prisoner's lema says that you ultimately do snitch
(15:46):
in your partner. Yeah, it's too hard to maintain and confidence. Yeah,
and she did.
Speaker 1 (15:51):
And she did, and that's but this was one of
those cases. It's actually really interesting. The game theory changes
depending on how much evidence there is, right, Like, it's
one of these if you have two prisoners and they
don't actually have anything on you and they need the confession,
then it's very different from we have reams of data
and we actually know, you know, we'll be able to
(16:14):
trace the finances, and we'll be able to catch you anyway,
and if you cooperate, maybe it'll be less time. And
I believe, and Nate correct me if I'm wrong, because
you know a lot more about this case than I do.
I believe that they did have enough evidence where even
without Caroline, they would have been able to have a
pretty strong case.
Speaker 2 (16:30):
Yeah, I mean, I think I think she was the
key witness, but like they I mean, they had more
evidence than they really needed.
Speaker 1 (16:37):
And they had two other witnesses. By the way, there
were three Topic executives who ended up turning and testifying
against SBF.
Speaker 2 (16:45):
By the way, the story does have a happy ending.
It looks as though most of the defrauded people will
get their money back with interest, in part because some
things that FTX did have gone well, so they invested
in Anthropic, the AI company. And also you've seen a
big rise in crypto prices since the bankruptcy.
Speaker 1 (17:06):
Oh that's good. I didn't realize that.
Speaker 2 (17:08):
Good for them, poker, good for the poker economy. Let's
pump that crypto back into some high rollers.
Speaker 1 (17:15):
Okay, guys, absolutely, let's do it. But yeah, I think
I think the bottom line here is that like Caroline is.
You know, SBF is to me, like not not particularly
complex to kind of talk about in the sense of
like was he a con artist? We have talked about that,
you know, we think I think he was, and like,
you know, he clearly knew exactly what he was doing.
(17:37):
Caroline knew what she was doing. But I do think
that she is Probably she's a more complex character here
because you do also have the power dynamic, you have
the sexual dynamic, you have all sorts of things going on.
Speaker 2 (17:53):
You want to talk some politics, Maria.
Speaker 1 (17:55):
I do want to talk some politics, Nate, and let's
do that after the break. We are now one week
closer to the election, and I know, I know that
(18:18):
sounds dramatic, but I mean it's it's getting you know,
it's getting close, right, We're we're almost are we in October? Yet?
What day is it? Is it October first? Today? It's Tuesday.
Speaker 2 (18:26):
It's October, which means that I'm late on the monthly
paid subscriber newsletter post.
Speaker 1 (18:31):
Oh no, nay, as a paid as a paid subscriber,
I'm livid. I'm so mad that you're late on this post.
Speaker 2 (18:37):
They took away the thirty first Oh no, September doesn't
September seem like it should be thirty one?
Speaker 1 (18:43):
It actually it actually does seem that way. But I
and you know what, I never remember. I actually have
to do the little rhyme. Did you ever learn that
little rhyme in school? Can I do do that? Yeah? Yeah,
I do the finger thing, but I also have my
little rhyme. Thirty days has September, April, June, and November
all thirty one?
Speaker 2 (18:59):
What month shouldn't have a thirty first day? Should we
give to September?
Speaker 1 (19:05):
I say, I would say, I would say either say.
Speaker 2 (19:10):
November or yeah, let's get rid of that November.
Speaker 1 (19:14):
November is a pretty shitty life.
Speaker 2 (19:16):
Yeah, November is thirty one. Yeah, November should be thirty.
Speaker 1 (19:21):
Wait, no, does November have thirty? November has thirty? I
just gave my rim. Thirty days has September, April, JUNEA, November.
November already has thirty. I hate November so much that
I wanted to subtract yet another one.
Speaker 2 (19:30):
All right, okay, November has twenty nine days now?
Speaker 1 (19:35):
All right, November has twenty nine days. September has thirty one. Done, guys,
we've made your life so much better this is. This
is what you come to us for. This is the
hard hitting news.
Speaker 2 (19:44):
Tuesday, September thirty, first edition.
Speaker 1 (19:46):
Of Risky Business. But okay, let's let's get to it.
We're in October, we're getting close. What's going on? Has
anything changed? And then let's talk about, you know, what
people can be doing in this lead up where we're
now like weeks away from the actual election.
Speaker 2 (20:08):
So not very much has changed. Kamala Harris has a
three point lead roughly in national polls. She is ahead
by about a point in Pennsylvania, Wisconsin, and Michigan. She's
behind by about a point in Georgia, Arizona, she's tied
nets ahead by a pointer. So Nevada in North Carolina
(20:30):
about about a tie, big hurricane. The more important thing
is Nevada. Nevada is there like the silver state. I
can just say the silver state.
Speaker 1 (20:41):
Silver. There you go, yeah, so please continue.
Speaker 2 (20:47):
All that works out to basically a toss up if
you want to play the percentages, we have Harris at
blue a fifty five point one percent chance I win
the electoral College as of this morning, Trump forty four
point seven dead heat a tie zero point three percent.
Uh like hitting I don't know what bet is three
(21:07):
hundred one. I was gonna say, like hitting the double
zero space in your life, but that's much more likely
than op point three percent. Yeah, so look, I think
if the election were held today, then you'd slightly rather
be Harris. She is uh ahead in nominally enough states
(21:28):
to win two hundred and seventy six electoral votes, including Wisconsin, Michigan, Pennsylvania,
and the Silver state Nevada. Is it Nevada or Nevada? Nevada?
Speaker 1 (21:40):
Nevada?
Speaker 2 (21:41):
Okay, so it's not Sierra Nevada. That's it's not the
fancy Nevada. Oh boy, Nevada is a pretty word, it is.
Speaker 1 (21:52):
I actually prefer Nevada, but I will.
Speaker 2 (21:55):
There's this really good substack post where they rate the
state names, and like, most state names are pretty fucking good.
You know, a great name is what California? What a
great fucking.
Speaker 1 (22:03):
Name it is? It is? It really does give you
promises of you know, beauty and sunshine. Californ rolls off.
Speaker 2 (22:11):
What's the worst state name according to subsect post.
Speaker 1 (22:14):
I don't know.
Speaker 2 (22:15):
Iowa, Okay, think about it. There aren't that many bad
state names. Yeah, if I mean, you know, a low
key bad state name is Washington, Like, I mean, yeah, maybe,
I mean, come on, wonderful state. Yeah, yeah, you're way far.
You create confusion with Washington DC. You weren't even part
of the Republic when Washington was president. I mean, come on, right, Like,
(22:38):
let's pick.
Speaker 1 (22:39):
It's also you're right, and the level of creativity there
has really just like gone down. Why did we Why
did we have to go for Washington. I'd like to
know the history of this because I love Washington. I
think it's such a gorgeous state. So other than state names,
I do think something that you said kind of gets
into one of the one of the topics that we
(22:59):
wanted to cover today, which is what actually matters. So
we've had some pretty severe storms right over the last
week with a lot of destruction. The death toll keeps rising.
I mean, it's really horrific. Do things like that in
the lead up I'm not talking like a year ago,
right Does the fact that this is happening right now?
(23:21):
Do events like that actually matter when it comes to
the election outcomes? Does the response matter, like what's actually
important or not?
Speaker 2 (23:32):
Well, clearly the candidates think it matters because there's a
lot of posturing over you know, Trump, as he is
inclined to do, is saying some things that seem exaggerated
according to the fact checkers. No, but like he's he's
saying that why isn't Biden going there and why's he
holding up relieve But the Hairris Biden administration, Biden Hairs
administration has approved relief funds and they're trying to get
(23:55):
there and the roads are out and I don't know right,
So it becomes as kind of like another cable news
cycle where you just want to tune out. But clearly,
like I mean, there are precedents. After Hurricane Sandy hit
New Jersey in the East coast, was in late twenty twelve,
and the Obama and New York I remember power, it
was fucking I didn't.
Speaker 1 (24:16):
Have I didn't have sweet, I didn't have power, and
I didn't have cell service.
Speaker 2 (24:19):
I had to go like back and forth to the
New York Times building in like this darkened tax anyway. Yeah,
but like Obama did better in some of these areas
where the storms had hit. So there's like a bipartisan
praise for a leader that can be good if it's
Hurricane Katrina and it's by partisan disputes for how it
was handled. Right, then that could be bad. I mean
(24:39):
I researched some papers for this. Uh you know, some
findings say it tends to help incumbents, which would be
good for Biden. Some just say it is more polarization,
that it just increases. You know, Team read thinks that
Republicans did this well on Team Blue, things Democrats did well,
et cetera.
Speaker 1 (24:55):
So then it's a kind of in the art.
Speaker 2 (24:58):
I would say, Look in general, Uh, this is a moment,
natural discessary moment when you appreciate having the government in
your life. Right at least they don't totally fuck up
the recovery. So if you're like a little bit a
little bit of a closet libertarian like me, then like
when there's a fucking hurricane or a snowstorm, you know,
(25:18):
like I'm really fucking glad that there are trucks plowing
the roads and we're not in some libertarian utopia where
we have to pay for private to trucks or something,
you know what I mean. So that might be good
for Democrats. It also raises the salience of climate change.
I don't want to get into a discussion over which
hurricanes are caused by climate change or the different effects
(25:41):
of hurricanes. But you know, you have had more storms
with this very bad inland flooding. And again I'll leave
it to the experts to determine how much that is
because of building patterns versus climate change versus luck basically.
Speaker 1 (25:55):
Yeah, yeah, but maybe worth noting that in this particular case. Also,
North Carolina is a swing state, right so, and Georgia
was and Georgia was affected as well, and Georgia is
sorry I forgot your latest update. Georgia is still leaning red.
Speaker 2 (26:10):
By points ahead, by point ish there, point and a
half maybe.
Speaker 1 (26:14):
Okay, yeah, so this will be interesting. I think. I
hope people are gathering data on this, and I hope
that there are some polling going on right now, because
I'd be very curious because I do think that these
sorts of events do happen, and will continue happening, and
will increase in severity. So it is interesting for me
to see whether they will matter. But now there's obviously
(26:36):
nothing that we as individuals can do about that, right Like,
that's you know, the environment. It happens, and here the
politician's response may or may not matter. But what about
people on either side of the divide, you know, Trump supporters,
Hair supporters who want to make sure that they're doing
everything they can in the run up to try to
(26:59):
get kind of the voters that may be on the
fence or undecided or don't know if they're going to
vote or or what not to actually vote. What matters,
donations matter, going door to door, does that matter? Do
any of these things actually make a meaningful difference or
do they just make us feel a little bit better,
like recycling, which doesn't actually matter.
Speaker 2 (27:18):
What helps is being a dick on social media really
helps your candidate wins. So do more. Do more of that.
By the way, if you want to donate to charity
to help the people in the Carolinas, et cetera, then
would recommend charitynavigator dot org gives you a whole list
of local charities which are usually more effective than That's
(27:38):
a little affective altruism.
Speaker 1 (27:40):
Yeah, that's a that's a that's a great recommendation.
Speaker 2 (27:45):
So look, I think that the presidential campaigns have more
money than they need. And this is not me in
a crotchety way. It's saying, like, you know, they are
running all the ads they want to the point where
the ads have diminishing returns. They have all the field
staff they want. Maybe if you started out with all
the money four years ahead of time, you could do
more ambitious things and so forth. But like they don't
(28:06):
donate to a presidential campaign, donate to a down ballot campaign.
Maybe a senate campaigns and campaigns have a lot of
money too, but you know, us House races, state Supreme
Court races, state legislature races, right, these are cases where
where a little bit of money can make more difference.
(28:27):
By the way, I think in general, I don't think
that political donations count particularly. I don't mean it like
a moral way. I think they're probably you know, donate
to charity instead of a campaign is also a balid strategy.
Most campaigns believe that door to door canvassing can help
(28:47):
a bit. One thing that happened in twenty twenty is
that Democrats were COVID shy and did not do traditional canvassing,
and lo and behold, Biden underfirms his polls by a
few points on election day. And I'm not saying it's
a major cause, but like that may have been a
mistake in.
Speaker 1 (29:06):
Retrospect, So that's to suggest, because I was about to say,
are there are there data that suggests that pultiple that
pultiple that door to door polling and canvassing and all
of that actually is effective or is it just that
politicians believe this and it's never been challenged. Do we
have do we actually have data?
Speaker 2 (29:25):
I think that's more studiable because you can kind of
it's clearly studyable. I think the academic consensus that it
does help a little bit.
Speaker 1 (29:33):
Okay, yeah, so on the margin it helps, which is important,
right because right now we're looking for on the margin.
So for either candidate, on the margin, it should help.
What about endorsements, So you know, we talked a few
weeks ago Taylor Swift obviously was a major endorsement. Do
those things matter? Does it matter? Obviously? Like there are
(29:56):
levels of endorsement, right, Like at some point I saw
the Kamala Harris campaign retweeting that, like, Meryl Streep has
endorsed her and this is huge. I'm like, I don't
think Meryl Streep's endorsement matters. I'm sorry, I love you,
Meryl Streep, but like I don't think that's going to
move the needle.
Speaker 2 (30:11):
But someone It's like when they say somebody that dies
and you're like, I thought they're already dead, right right,
It's like I thought Meryl's she already endorsed, and that's
party true right for Tayte too, is uh. I think
people assume that she was on the Harris badwagon already.
I mean, look, she apparently drove some voter registration efforts
(30:32):
and things like that, and so yeah, look, you you
definitely take that if you're if you're Harris, right, but
if like, but it's not like you see like a
big I mean, it's completive because it happened about the
same time as a debate, but it's you know, the
biggest pop star in the world endorses and you can
barely see any difference if any of the polls. So
that puts kind of a cap.
Speaker 1 (30:51):
On Sure, what I was actually wondering if maybe the
endorsement you said something which I think is really important,
which is that most people kind of already assumed right
that that she was going to be team Harris because
she had endorsed Biden. She had already kind of broken
her silence. But what about things like and here, I
(31:12):
think there's some really interesting psych research. What about things
like Willie Nelson endorsing the Democrats, right, Like you have
a white country singer, Like when you have people who
look and sound and kind of have the background of
someone who would more traditionally be a Trump supporter, do
(31:33):
we think that that actually might matter a little bit
more than a Taylor Swift in these particular circumstances.
Speaker 2 (31:42):
I mean, look, people know that the Hollywood types. You know,
I guess it's a singer, not a Hollywood type. I
take it. Maybe, I don't know. I mean, you know,
what probably did matter was, by the way, William Nelson
has quite a beautiful catalog of music going back along
way anyway, love it.
Speaker 1 (31:57):
I love the editorializing on this.
Speaker 2 (31:59):
Thus an endorsement in the race so far has probably
been RFK Junior endorsing endorsement cocided with a rough period
for Harris and the holes and like you know, and
those are those voters are lost, And I think so
that might have mattered a fair bit. Yeah, I mean
by half a point or something, but like half which.
Speaker 1 (32:19):
Is important, which is which is really important, as we
keep talking about. And there's also some psych research that's
really interesting into kind of the psychology of social influence
and having an effect on social norms and behavior. And
a lot of this research comes from Princeton University Betsy Pollock.
She won the MacArthur Genius Grant a number of years
(32:40):
ago for this work. And some of the stuff that
she shows is that you know, you need to have
the correct person say things, and they have to actually
be kind of from the background and kind of from
the from from a place that people who you're trying
to influence actually respect. Right, So, if you're trying to
(33:01):
influence potential Trump voters to vote for Kamala Harris, then
you want to be probably a white male from so
certain states with a certain background. If you want to
try to get Trump voters, if you want to get
Kamala Harris voters to vote for Trump, you probably want
someone who you know is a minority or you know female,
(33:28):
some you know someone someone who has kind of more
of a Kamala Harris vibe and then have them endorse Trump.
That would matter more. There was a really cool study
that was done on social media to see like basically,
what can you do to mitigate trolls? Right, Like, how
can you get people to change behavior? And the one
(33:49):
thing that actually worked the best was if you create
an account that's like a generic white man and he says, hey, like,
you know, this is a real person, like just you
might want to tone it down a little bit. That
actually worked as opposed to anything else. So it's I
think that when we talk about endorsements, they're not all
(34:11):
created equal, not just because of the reach like oh
you're a superstar, you're a pop star, but also like
who is your demographic, who do you represent? What is
your specific you know, voter appeal, and will you be
able to look like a person of authority to the
voters that you're trying to reach.
Speaker 2 (34:32):
Two other important stories that I think we can't not mention.
Let me start with one that's like a bit less obvious.
Port workers have gone on strike in both the East
Coast and the Gulf Coast. Something some enormous amount of
commerce passes through one of these ports, and this could
potentially have a devastating effect on the economy and shipping,
(34:57):
which is already already a little bit constrained because you
have problems with the hootis in the Red Sea? Is
that right? So you already have like some shipping channels
that are operating a less of capacity that more kind
of affects Europe than the US. But supply chains have
struggled to get back to normal and this could cause
(35:18):
big problems, yes, but hurricane and things like that that's
affected So so you know, this is a real dilemma
for a Democratic white House. Biden has said he does
not want to invoke the Taft Hartley Act that could
require these striking workers to go back to work. But
they have a lot of leverage, right, They're like, well,
(35:39):
fuck your election up unless you give us a nice
new contract. And I mean that's we understand leverage, right,
And they have a lot of leverage. So far, the
Biden Whitehouse has been able to placate problems like this
in the past. Like that to me is like a
potential October surprise that that has to play negatively for
(36:01):
for Harris and Biden.
Speaker 1 (36:02):
Absolutely, And if we just like a little caveat I
think tie into endorsements given that this is kind of
a workers strike, is that the Teamsters Union did not
endorse either Canada for the first time in a long time.
So just something to keep in mind as we as
we think about this October surprise potentially.
Speaker 2 (36:23):
Yeah, probably most Teamster members are are Trump.
Speaker 1 (36:28):
Yeah, it was actually Teamsters are leaning more Trump, even
though the Teamsters have endorsed the Democrats in the past,
and the latest survey data that I've seen the Teamsters
are heavily leaning Trump.
Speaker 2 (36:43):
The other, of course, is the re escalating conflict in
the Middle East. That's a little harder to yep, predict, right,
it's opportunities to show leadership potentially. But look, I mean,
you can make an argument that, like, foreign policy has
not gone that well under Biden. The Middle East is
(37:05):
kind of blowing up, and you know, Ukraine was invaded,
American relations with China are probably worse now than they were.
You know, if Trump were more coherent and normal, then
he could form a pretty good critique of Biden's foreign policy,
(37:26):
I think. And as a reminder of that now, voters
usually don't care about foreign policy that much. To the
extent that they do, it's kind of about I was
gonna say that, you know that it's the politics of
It's not the foreign policy, right, it's the politics of
the state of Israel and how they exist or failed
(37:47):
to coexist with Palestinians and like, and that's territory where
we you know, I have written about that sum because
it like effects American politics so much. You know, that
seemed to have died down to some degree, although although
you know two percent of the population is Arab American
and Michigan around the Dearborn area, there clearly have been
signs and polls that shifted from being a Democratic vote
(38:09):
to people who are throwing their hands up and saying
I don't know what I'm going to do, So that
has an effect on the margin. But like, but anyway,
I just want to mention those two important stories.
Speaker 1 (38:19):
Yeah, absolutely, And I think that it is interesting to
see how much anyone thing will end up affecting any
any person's decision to vote, just because we are in
such a close race, right, so much closer than than
we have been in the past, and so I think
that those things on the margin may matter, especially when
(38:42):
we're talking like back to the ports. You know, I
think that oftentimes voters are not thinking that long term.
So that's why foreign policy often doesn't end up making
that big of a difference. But if we see and
I don't think I don't know if there's enough time
to actually see any change in prices, availability, et cetera.
In the next few weeks. But if we do see that,
(39:03):
then I think that that will become a much bigger issue.
Speaker 2 (39:07):
You know, this is also a test of Biden and
his capabilities. If you have multiple crises happening at once,
you know, I mean, the media seems reluctant. I mean
once once the uh once drydent dropped out was forced
out by the way. The Dana Carvey impression of Biden
was pretty fucking good.
Speaker 1 (39:27):
It was very good. Yes, if you have not seen it,
I highly endorsed that.
Speaker 2 (39:32):
But like since in the media is not the very
interested in covering his performance issues, and this will be
a test I suppose. Yeah.
Speaker 1 (39:41):
Absolutely. After the break, let's talk about something. Uh well,
I was going to say lighter, but it involves death,
but non politics related lighter, but it involves death. After
the break, we had two people who are quite important
(40:11):
in the gambling world die since you know, in the
last few days. One of those died today is what Tuesday,
so yesterday Pete Rose and he was one of the
first people we talked about on this podcast. And the
other less well known to the mainstream public, Archie Callous
Nate do you have any thoughts on the death of
(40:33):
Pete Rose and his legacy for the world of baseball
in the world of gambling.
Speaker 2 (40:41):
Yeah, I mean Pete was a I never met him.
I think he was kind of the classic djen right
in Las Vegas till late in his life he did.
Speaker 1 (40:53):
Yeah. Yeah, after he was after he was no longer
allowed to be associated with baseball, he made the move
to Las Vegas.
Speaker 2 (41:01):
Yeah. Look, this was kind of, I don't know, the
end of a certain era for baseball. Suppose I mean
Pete Rose. If you're not a baseball fan, right, he
played the game differently than anyone else. Right, lots of
bass hits, lots of his the name was Charlie Hustle, Right,
would barrel into catchers and second basement. I mean he
(41:24):
played baseball like it was football basically. Now, people like me,
before Pete Rose was known for gambling, people like me
would I said, Oh, Pete Rose, he's a little bit overrated. Right.
It was the endly subject of you know, he does
have the most hits in Major League Baseball history. He
(41:45):
doesn't get on base that much and doesn't have that
much power. A very very good player, but we'd say yeah,
he's one of the twenty best of all time, but
not you know, having the hits record doesn't necessarily And
he also played forever. He played Cincinnati, Philadelphia, Montreal briefly
Cincinnati again, played until he was like forty some years old.
So beloved, right, But he clearly I think on baseball.
(42:10):
There's not much ambiguity about that, and baseball kind of
always was very unforgiving about ever commuting his sentence of
really letting Pete Rose participate in any ways. And I
kind of understand that, but like I'm trying to remember
some of the history.
Speaker 1 (42:24):
Originally he said that he bet on other sports but
never bet on baseball. He was still found to be
guilty of betting on baseball, and he in his memoir
admitted that, yeah, he did bet on baseball, but never
for his team to lose, because he only wanted his
(42:46):
team to win, as if that made it any better.
Speaker 2 (42:50):
But part of it is so you had this commissioner
of baseball named Bart Giamatti, who was a president of
Yale University, and like this English literature professor who was
kind of this intellectual who was going to, you know,
take baseball to some new cultural significance and he got
tied up with Pete Rose and then died of a
(43:12):
heart attack after only I.
Speaker 1 (43:14):
Think No, I think it was closer. I think it
was like weeks after he passed out the.
Speaker 2 (43:19):
Verdict as as a we sirved for commission April through
September and then but yeah, the verdict, it was just.
Speaker 1 (43:26):
Yeah, it was right after he said that Pete Rose
was not allowed to play. I think that he died
like a week after that of a broken mind.
Speaker 2 (43:37):
My theory is that this is part of why baseball
was kind of so unforgiving to Pete and the fact
that Pete Rose, I'm sure was an asshole, right, but
you know the fact that I think people I don't
I don't know this for I'm just going by the psychology.
I think they think, you know, Pete Rose somehow killed
(43:58):
Bart Jimmati through grief, died of a broken heart kind
of thing, right, Yeah, yeah.
Speaker 1 (44:04):
Yeah, Well, okay, so let's let's end that with one
question for unit. I just want to yes or no.
Does Pete Rose deserve to be in the Hall of Fame?
Speaker 2 (44:18):
No? Okay, all right, you've been on baseball. Yeah, I
got it, all right.
Speaker 1 (44:24):
And another legendary gambler died who did not play baseball
died this week Archie Carras and have you do you
know his story night? So he is someone who had
the nickname the Greek, just like another another famous gambler
(44:48):
in gambling history, and he went on one of the
most legendary runs in gambling history, and it's so legendary
that it's just known as the run with a capital
are he went from so he was just a total degen,
but in this particular case, he went from fifty dollars
to over forty million as he went on this insane
(45:12):
gambling run and then he lost it all back. And
he did this through a combination of just going on
an insane run in craps, which happens right like he
was in that percent of the distribution. Then he actually
played some poker, and people used to love playing poker
against him because he wasn't very good, but he thought
he was very good. But then he went on quite
(45:34):
the run where he ended up beating some of the
top players in the game, including Chip Reeze four millions
of dollars and yeah, and then he and then he
did some sports betting and he just did incredibly well
forty million. I think this was nineteen ninety two to
nineteen ninety four, and then he went broke, and eventually
(45:55):
he was accused of cheating multiple times, cheating in blackjack,
and then he became I believe the thirty third person,
but I might be wrong, thirty second, thirty fourth, something
along those lines, to enter the infamous Black Book of
Las Vegas casinos. Yeah, so he is became banned for
life from every single casino property in the state of Nevada,
(46:19):
and if he were to enter one, he would be
immediately arrested. So that is how he ended his days.
But how crazy is that? I just want to just say,
this is next level djon fifty dollars forty million broke.
Speaker 2 (46:34):
Could be you, audience member, No, don't, don't, don't.
Speaker 1 (46:40):
No, he was. He was clearly a sick individual.
Speaker 2 (46:42):
You get forty million, play craps, stop stop, walk away,
walk away, Invest some.
Speaker 1 (46:49):
Of it if you have. If you want to keep
playing craps, fine, like put put a one hundred thousand,
that's even too much of it back into crabs and
the rest just walk away, please, But no one ever does.
And I think that there's also the hubris there right
to think that I must be so good. And that
happened with his poker playing as well. He knew people
(47:12):
knew he wasn't good, that's why they were playing against him.
And then he just beat all of these players. And
that can happen when you're playing heads up right in
any one in any one scenario and any one iteration.
The worst player in the world can beat the best
player in the world if you just run it once,
because that's you know, poker is a game of skill,
(47:33):
but in the immediate term, in one specific hand, in
one game, there's a huge element of chance. So do
not let that chance get to you, and do not
forget that sometimes you just run ridiculously Rookie, do not
be Archie, and then take that forty million and go broke.
Rest in peace, Archie, Rest in peace, Pete. The world
has lost two gamblers of very different stripes.
Speaker 2 (47:54):
Today, think about the poker games will have in hell.
Speaker 1 (47:58):
Right, I don't know what that's a good I like
your I like your hell voice.
Speaker 2 (48:02):
You know, I know what the poke. I've been in
the the two five game at the Commerce, and so
I know what poker in hell. On that note, We'll
see you all next week.
Speaker 1 (48:13):
All right.
Speaker 2 (48:13):
Thanks for joining us and tune in again every time
we have a show.
Speaker 1 (48:17):
Oh, one more thing, we would love to leave you
with an email address for the show. If there's ever
anything you really want us to talk about. If you
have any feedback, we'd love to hear from you. Super easy,
Risky Business all one word lowercase at pushkin dot Fm.
Speaker 2 (48:36):
Risky Business is hosted by me Nate Silver and me
Maria Kanakova. The show was a co production of Pushkin
Industries and iHeartMedia. This episode was produced by Isabel Carter.
Our associate producer is Gabriel hunter Chen. Our engineer is
Sarah Bruger. Our executive producer is Jacob Goldstein.
Speaker 1 (48:53):
If you want to listen to an ad free version,
sign up for Pushkin Plus. For six ninety nine a month.
You get access to ad free listening. Thanks for tuning in.
Pushkin. Welcome back to Risky Business, a show about making
better decisions. I'm Maria Kannakova.
Speaker 2 (00:28):
I'm Nate Silver. Do you ever see the sixty minutes
thing where they're like, You're like, I'm Marley Saper, I'm
Anderson Cooper, and they go for like fifteen fucking people.
It's like too much, It is too much.
Speaker 1 (00:39):
I'm glad there's only two of us. So, Nate, what
are we going to talk about today?
Speaker 2 (00:44):
Today on the show, we'll check in on Carolyn Ellison,
the former CEO of Alametor Research and girlfriend of Sam
mcmin fried, who was sentenced to two years for her
role in the FTX fraud.
Speaker 1 (00:54):
And after that we'll have a little politics update where
we talk about the latest polling and also what actually
makes a difference to the numbers. Is there anything that
we can do in the next few weeks to push
the push the polls one or the other make our
candidate more or less likely to win?
Speaker 2 (01:13):
And then we'll say rip two. A couple of legendary
degenerate gamblers.
Speaker 1 (01:26):
So Caroline Ellison, former CEO, first co CEO, right, and
then just sole CEO of Alameda, which was the hedge
fund that was associated with FTX. We've talked about saying
by Quinfried, We've talked about FTX, but this was a
big one because Caroline was one of the biggest names
(01:48):
to testify against SBF and to kind of bring the
whole thing down, and this week she has been sentenced
herself to two years. Nate, did you get a chance
to meet Caroline when you were doing your research?
Speaker 2 (02:00):
Didn't? We put in a request, but she smartly ignored
it because unlike Sam Bateman Freed, she wasn't talking to
journalists while she was, you know, on trial for various
fraud charges. I did obtain transcripts of the three days
that Carolyn Nelson spent in court testifying about SBF, and
(02:20):
this was very compelling testimony that basically had SBF dead
to rights. In fact, the lawyer that I talked to
about the case said that he thought Sam, after Carolyn's testimony,
was stupid to testify himself, that he was going to
come across unsympathetically to a jury, was going to perjure
(02:40):
himself and get a larger sentence, which is what happened.
This BF got twenty years. That the judge is a
no nonsense. Judge. Judge Kaplan presided over many trials and
was not impressed by dear old Sam bakmanfree so things
that were a parent in her testimony. One was that
(03:02):
this was that Sam had a good deal of awareness
of what was happening, that he was where, that she
was taking on risks that could result in the bankruptcy
of the company that she had presented. It's prechuse to
him say, hey, we make these loans. If there's even
a mild downturn in crypto prices, which there is all
(03:23):
the time, then we're fucked. And he said, I don't care.
It's positive expected value because he thought, you know so
usually when people calculate expected value poke players and the like,
they are assigning some weight to the risk of ruin. Right.
The Kelly criteria is a gambling formula says, let's say
(03:44):
I want to bet on the Packers Chiefs game this weekend?
How much should I bet given my edge as a
share of my bank roll, and basically tells you how
to maximize your return without having any chance of going
truly broke.
Speaker 1 (03:57):
Now, and by the way, let's just caveat that a
little bit, because we know and you've written about the
fact that the Kelly criterion might actually not be the
best way to do this if you actually want to avoid.
Speaker 2 (04:08):
Yeah, it assumes you know your edge, and if you
know your edge, then well that's wonderful, But that's not
how real sports betting works. Most of the time, you're
estimating your edge, and most gamblers, even smart gamblers, tend
to overestimate. So therefore most most gambles have learned through
time that you want to have half Kelly, or a
quarter Kelly, even a full Kelly bet intuitively, to most
(04:29):
gamblers looks very aggressive. You could have yourself betting fifteen
percent of your entire bankroll on one game where you
have only a small.
Speaker 1 (04:37):
Edge, for example, And to gambler like SBF, though the
Kelly criterion criterion was aggressive enough, it was for.
Speaker 2 (04:44):
Wins because what it doesn't do is tell you how
to maximize your expected value if you don't care about
going broke. In the book, I ran some simulations where
you bet five x Kelly instead of point five Kelly,
and what happens is that ninety nine percent of the
time where the course of similar an NFL season, you
go broke, but one percent of the time you wind
(05:06):
up with more money than Elon Musk yep.
Speaker 1 (05:08):
And that's why you have positive expected value.
Speaker 2 (05:12):
Right. So having a one in one thousand chance of
earning two hundred and twenty five billion from a ten
thousand dollars starting bankroll, whatever simulations we made, right, is
very plus ev if you don't care about the fact
that you are in debtors prison the other ninety pet
nine percent.
Speaker 1 (05:27):
Of the exactly. So, so PSA, for our listeners, do
not try this at home. The one person who did
is currently in prison for twenty years.
Speaker 2 (05:37):
So yeah, So SBF was aware of the risks they
were taking and kind of like was ll kind of
like shrugging them off, right, you know, was aware of
the mechanism by which these traits are occurring, which is
that you open up a floodball or a floodgate between
the customer funds secured as Alameda and you know, money
(05:57):
that they were then trading with and making bets on
shit coins and other things. You know, this is the
part where Sam, when I talked to him, would get
more legalistic about saying, well, technically customer funds were wired
to X and why and you know, I I you
know the jury didn't buy his bullshit, and so I don't.
I don't really either. But they were knowingly taking customer
(06:18):
funds and making what Sam knew to be really risky bets,
and Ellison was uh was aware of this and trying
to present these risks to Sam. Now we should say
she is a government witness. Uh do you sign a
(06:39):
plea deal?
Speaker 1 (06:40):
Right?
Speaker 2 (06:40):
And that means that you're gonna be presented in a
favorable light. You know, she kind of presents herself as
some sheep in the will. Is that the right metaphor
some I don't know.
Speaker 1 (06:53):
I think I think that's not quite the right metaphor.
But I think she does present herself as a victim,
as someone who you know, jumped into the abyss. And
even the judge referred to the fact that Sam bankfint
Freed was her kryptonite, right. I was in that analogy
she would be Superman if he's if he's kryptonite, right,
(07:17):
people really screw that analogy up. I just want to
point that out. But but yes, she presented herself as
a victim, as someone who knew it was wrong but
did it anyway and then couldn't see straight because she
you know, her professional life and her private life were
too deeply intertwined. You know, she and she basically was
(07:41):
upon So I don't know, I don't know what the
sheep metaphor here would be. It's not a wolf in
sheep's clothing. That would be SBF, I think. But she, Yeah,
she is someone who was maybe a lamb.
Speaker 2 (07:53):
Haircut, was a little was a little sheep like I
suppose it was.
Speaker 1 (07:57):
It was lamb to the slaughter. I don't know. I'm trying.
I'm trying to take all my metaphors out here.
Speaker 2 (08:03):
I mean. One of the thing about FTX is that
like it's very much a cult, like uh company when
you go there. I went to the Bahamas after everyone
except for two FTX employees and Sam's mom and dad
and Sam himself had had fled. And it's not the
(08:27):
typical But from the talking to these ex employees, it's
like not the typical crypto bro finance bro atmosphere. Instead,
it's like this touchy feely effective altruist. They think they're
stealing from the rich to I don't know what to
for Sam's charitable endeavors. They are isolated, right, people. The
(08:50):
Bahamas is not actually or this part of the Bahamas
right that they're in on the southwest corner of New
Providence Island is not party central. You're away from the
Bahamar and the Atlantis and NASA and the cruise ship docks.
But yeah, but like, but so there it's kind of
a cult and like and like, and Sam makes us
(09:12):
claim that, oh, I'm doing this because I want to eventually,
you know, accumulate more money, because the marginal utility is
very high, because I'll donate it to charity, although actually
he might do things like donate to presidential candidates and
try to curry influence and favors. But so you have
true believers, and you know, and she is close to
(09:32):
this inner circle. You know one thing, clearly, Sam is
smart enough to not share his fraudulent intent widely, right,
you know, it's inner circle and not much else. Doesn't
go much further than that. So I don't know. I mean, so,
how many years did she accept as part of the
plea deal?
Speaker 1 (09:49):
Two years she just got sentenced to two years she
had as part of the plea deal. She didn't accept
anything immediately in the sense that she was still going
to await sentencing, and her lawyers and actually the prosecutors
also argued for no prison time because of how much
she cooperated, but the judge said that, you know, she
couldn't get it. I think this was literally the quote
(10:10):
get out of jail Free card. I was like, haha,
I cannot believe you just said that, but yes, that
is what happened. So she was sentenced to two years.
But you know, I think it's I think talking about
kind of this type of environment is actually quite interesting
because you use the word true believer, which we've used
(10:32):
on the show in the past when we're talking about
con artists, and the mark of a true believer is
you don't like, you don't know right that you're committing fraud,
like you actually believe in this and you believe it's
the right thing to do. And what you were just
talking about, Caroline knew she was what she was doing right,
She knew that it was wrong, she knew what the
risk of ruin was, she knew that this was defrauding,
(10:54):
but she felt, you know, her loyalty was such that
she did it anyway. So I think that we can't
call her a true believer, right, We can't call her
like a true brainwashed cult victim because she knew this
was wrong and she did it anyway. I think we
can still give her some sort of She's one of
these people who's kind of in between, because I think
(11:15):
she has some characteristics of victim, right. And I think
that the cult environment is really interesting because it makes
dissent much less likely. It means that even if you're
not a true believer, but everyone around you kind of
is because they don't know the full extent of it.
Then that kind of influences you as well, and you
start thinking, maybe I'm wrong right, maybe this isn't fraud, etcetera, etcetera, etcetera.
(11:37):
You start trying to convince yourself. But on the other hand,
because she knew it, I think she was also a perpetrator.
Instead of whistleblowing, instead of leaving, instead of going to
the authorities, she did it anyway, And so I think
that it's I'm totally on board with giving her a
lighter sentence because given the testimony, like, given what she did,
I think that that's absolutely correct, and I do see
(11:59):
that there are elements of victimhood there. Like I'm not
blaming her, I'm not giving her a complete you know,
saying oh no, she's a horrible person, and she does
seem very unlike SBF. She seems to be to feel
really really bad, or at least she's a very good
actor and saying that she feels really really bad and
that's completely absent in what he's doing. In fact, he's
(12:21):
appealing his sentence, right. He said that the judge was
biased and that he deserves to not be in jail
at all. And she seems to be kind of I
don't know if at piece is the right word, but
she seems to have accepted that, like, she did bad
and she deserves to be punished.
Speaker 2 (12:37):
I'm trying to remember the reporting. I think it was
from the Michael Lewis book. But she apparently felt like
a great sense of relief once she realized that they
were fucked, because they were fucked sooner ear late. I mean,
even when I talked to me, Sam was kind of like, well,
we could have played out the string for a few
more months and then you never know what happens, right,
(12:59):
But she knew when she realized they were fucked. She's like, Okay,
finally this has an ending. I mean, I don't know
about the by the way, just to remind you if
you just I mean she was sleeping with her boss too,
where he was sleeping with you?
Speaker 1 (13:12):
Yes she was, yes, yes, yes they were. They were
part of a relationship. I think it was even like
a polycule, right, it wasn't just a if I.
Speaker 2 (13:20):
Remember correctly heard of the story. I didn't care to
investigate that much. I don't really want to picture certain things.
Speaker 1 (13:29):
But I don't blame in it. I don't blame you.
Speaker 2 (13:33):
I mean, isn't the game theory such that, like, isn't
it aren't we giving people too many incentives to be
cooperating witnesses or not? What's the expected value? You know
what I mean of committing fraud? If like, if you're
not the principle, Oh now two years, ay, not so bad,
not so bad? Two years.
Speaker 1 (13:48):
Well, it's so funny that you say that, because I
actually read an analysis and thought I was like, no,
this isn't this analysis as fucked, This isn't true at all.
They're like, she got two years. This is going to
mean that no one's ever going to cooperate, because like
she should have just gotten off free. Like if you cooperate,
you shouldn't get any jail time. And I was like,
eh no, I don't think that's right. Like, if you
are conspiring to defraud people out of eight billion dollars,
(14:12):
like that's you know, with a B, that's a lot
of money, unless you end up in the one percent
of the simulation where you have more money than Elon Musk.
But in the other ninety nine point nine percent, you know,
the eight billion is a lot of money.
Speaker 2 (14:25):
And so about just one second prison time for every
dollar you see, it's not too bad.
Speaker 1 (14:30):
One second. I can't do that math? How long is
that going to be? Long?
Speaker 2 (14:35):
Look? I don't know. I look, I'm not good at math,
and people like I'm good at math. I have to like, yeah,
I have taculate, same with.
Speaker 1 (14:41):
Me, same with me. But anyway, Yeah, I think she's
getting off a little bit light. Other people think that
she's not getting off light enough. And I do think
that it's a really interesting I think your question is
a really really interesting one. What's the game theory here?
Speaker 2 (14:58):
Right?
Speaker 1 (14:58):
What's the game theory on fraud on trying to do
these sorts of things. If you look at SBF and
you're like, okay, you're going to jail for at least
twenty years, like that doesn't seem very good.
Speaker 2 (15:09):
But like I mean, this is this is literally the
prisoners to let.
Speaker 1 (15:11):
Yeah, it actually literally is the prisoners yes to uh
are we going to except they were allowed to communicate
because they weren't isolated from each other right away, right okay? Yeah,
but otherwise otherwise it was the.
Speaker 2 (15:23):
Two hundred and fifty three years for that's a lot
of that's a lot of seconds. We need to live
a lot of seconds cheap. That means we need to
live like three billion seconds and that's a fucking lot.
I'm wasting more seconds from now on. I didn't know
that made it burn? Yeah, No, And the game theory
of the prisoner's lema says that you ultimately do snitch
(15:46):
in your partner. Yeah, it's too hard to maintain and confidence. Yeah,
and she did.
Speaker 1 (15:51):
And she did, and that's but this was one of
those cases. It's actually really interesting. The game theory changes
depending on how much evidence there is, right, Like, it's
one of these if you have two prisoners and they
don't actually have anything on you and they need the confession,
then it's very different from we have reams of data
and we actually know, you know, we'll be able to
(16:14):
trace the finances, and we'll be able to catch you anyway,
and if you cooperate, maybe it'll be less time. And
I believe, and Nate correct me if I'm wrong, because
you know a lot more about this case than I do.
I believe that they did have enough evidence where even
without Caroline, they would have been able to have a
pretty strong case.
Speaker 2 (16:30):
Yeah, I mean, I think I think she was the
key witness, but like they I mean, they had more
evidence than they really needed.
Speaker 1 (16:37):
And they had two other witnesses. By the way, there
were three Topic executives who ended up turning and testifying
against SBF.
Speaker 2 (16:45):
By the way, the story does have a happy ending.
It looks as though most of the defrauded people will
get their money back with interest, in part because some
things that FTX did have gone well, so they invested
in Anthropic, the AI company. And also you've seen a
big rise in crypto prices since the bankruptcy.
Speaker 1 (17:06):
Oh that's good. I didn't realize that.
Speaker 2 (17:08):
Good for them, poker, good for the poker economy. Let's
pump that crypto back into some high rollers.
Speaker 1 (17:15):
Okay, guys, absolutely, let's do it. But yeah, I think
I think the bottom line here is that like Caroline is.
You know, SBF is to me, like not not particularly
complex to kind of talk about in the sense of
like was he a con artist? We have talked about that,
you know, we think I think he was, and like,
you know, he clearly knew exactly what he was doing.
(17:37):
Caroline knew what she was doing. But I do think
that she is Probably she's a more complex character here
because you do also have the power dynamic, you have
the sexual dynamic, you have all sorts of things going on.
Speaker 2 (17:53):
You want to talk some politics, Maria.
Speaker 1 (17:55):
I do want to talk some politics, Nate, and let's
do that after the break. We are now one week
closer to the election, and I know, I know that
(18:18):
sounds dramatic, but I mean it's it's getting you know,
it's getting close, right, We're we're almost are we in October? Yet?
What day is it? Is it October first? Today? It's Tuesday.
Speaker 2 (18:26):
It's October, which means that I'm late on the monthly
paid subscriber newsletter post.
Speaker 1 (18:31):
Oh no, nay, as a paid as a paid subscriber,
I'm livid. I'm so mad that you're late on this post.
Speaker 2 (18:37):
They took away the thirty first Oh no, September doesn't
September seem like it should be thirty one?
Speaker 1 (18:43):
It actually it actually does seem that way. But I
and you know what, I never remember. I actually have
to do the little rhyme. Did you ever learn that
little rhyme in school? Can I do do that? Yeah? Yeah,
I do the finger thing, but I also have my
little rhyme. Thirty days has September, April, June, and November
all thirty one?
Speaker 2 (18:59):
What month shouldn't have a thirty first day? Should we
give to September?
Speaker 1 (19:05):
I say, I would say, I would say either say.
Speaker 2 (19:10):
November or yeah, let's get rid of that November.
Speaker 1 (19:14):
November is a pretty shitty life.
Speaker 2 (19:16):
Yeah, November is thirty one. Yeah, November should be thirty.
Speaker 1 (19:21):
Wait, no, does November have thirty? November has thirty? I
just gave my rim. Thirty days has September, April, JUNEA, November.
November already has thirty. I hate November so much that
I wanted to subtract yet another one.
Speaker 2 (19:30):
All right, okay, November has twenty nine days now?
Speaker 1 (19:35):
All right, November has twenty nine days. September has thirty one. Done, guys,
we've made your life so much better this is. This
is what you come to us for. This is the
hard hitting news.
Speaker 2 (19:44):
Tuesday, September thirty, first edition.
Speaker 1 (19:46):
Of Risky Business. But okay, let's let's get to it.
We're in October, we're getting close. What's going on? Has
anything changed? And then let's talk about, you know, what
people can be doing in this lead up where we're
now like weeks away from the actual election.
Speaker 2 (20:08):
So not very much has changed. Kamala Harris has a
three point lead roughly in national polls. She is ahead
by about a point in Pennsylvania, Wisconsin, and Michigan. She's
behind by about a point in Georgia, Arizona, she's tied
nets ahead by a pointer. So Nevada in North Carolina
(20:30):
about about a tie, big hurricane. The more important thing
is Nevada. Nevada is there like the silver state. I
can just say the silver state.
Speaker 1 (20:41):
Silver. There you go, yeah, so please continue.
Speaker 2 (20:47):
All that works out to basically a toss up if
you want to play the percentages, we have Harris at
blue a fifty five point one percent chance I win
the electoral College as of this morning, Trump forty four
point seven dead heat a tie zero point three percent.
Uh like hitting I don't know what bet is three
(21:07):
hundred one. I was gonna say, like hitting the double
zero space in your life, but that's much more likely
than op point three percent. Yeah, so look, I think
if the election were held today, then you'd slightly rather
be Harris. She is uh ahead in nominally enough states
(21:28):
to win two hundred and seventy six electoral votes, including Wisconsin, Michigan, Pennsylvania,
and the Silver state Nevada. Is it Nevada or Nevada? Nevada?
Speaker 1 (21:40):
Nevada?
Speaker 2 (21:41):
Okay, so it's not Sierra Nevada. That's it's not the
fancy Nevada. Oh boy, Nevada is a pretty word, it is.
Speaker 1 (21:52):
I actually prefer Nevada, but I will.
Speaker 2 (21:55):
There's this really good substack post where they rate the
state names, and like, most state names are pretty fucking good.
You know, a great name is what California? What a
great fucking.
Speaker 1 (22:03):
Name it is? It is? It really does give you
promises of you know, beauty and sunshine. Californ rolls off.
Speaker 2 (22:11):
What's the worst state name according to subsect post.
Speaker 1 (22:14):
I don't know.
Speaker 2 (22:15):
Iowa, Okay, think about it. There aren't that many bad
state names. Yeah, if I mean, you know, a low
key bad state name is Washington, Like, I mean, yeah, maybe,
I mean, come on, wonderful state. Yeah, yeah, you're way far.
You create confusion with Washington DC. You weren't even part
of the Republic when Washington was president. I mean, come on, right, Like,
(22:38):
let's pick.
Speaker 1 (22:39):
It's also you're right, and the level of creativity there
has really just like gone down. Why did we Why
did we have to go for Washington. I'd like to
know the history of this because I love Washington. I
think it's such a gorgeous state. So other than state names,
I do think something that you said kind of gets
into one of the one of the topics that we
(22:59):
wanted to cover today, which is what actually matters. So
we've had some pretty severe storms right over the last
week with a lot of destruction. The death toll keeps rising.
I mean, it's really horrific. Do things like that in
the lead up I'm not talking like a year ago,
right Does the fact that this is happening right now?
(23:21):
Do events like that actually matter when it comes to
the election outcomes? Does the response matter, like what's actually
important or not?
Speaker 2 (23:32):
Well, clearly the candidates think it matters because there's a
lot of posturing over you know, Trump, as he is
inclined to do, is saying some things that seem exaggerated
according to the fact checkers. No, but like he's he's
saying that why isn't Biden going there and why's he
holding up relieve But the Hairris Biden administration, Biden Hairs
administration has approved relief funds and they're trying to get
(23:55):
there and the roads are out and I don't know right,
So it becomes as kind of like another cable news
cycle where you just want to tune out. But clearly,
like I mean, there are precedents. After Hurricane Sandy hit
New Jersey in the East coast, was in late twenty twelve,
and the Obama and New York I remember power, it
was fucking I didn't.
Speaker 1 (24:16):
Have I didn't have sweet, I didn't have power, and
I didn't have cell service.
Speaker 2 (24:19):
I had to go like back and forth to the
New York Times building in like this darkened tax anyway. Yeah,
but like Obama did better in some of these areas
where the storms had hit. So there's like a bipartisan
praise for a leader that can be good if it's
Hurricane Katrina and it's by partisan disputes for how it
was handled. Right, then that could be bad. I mean
(24:39):
I researched some papers for this. Uh you know, some
findings say it tends to help incumbents, which would be
good for Biden. Some just say it is more polarization,
that it just increases. You know, Team read thinks that
Republicans did this well on Team Blue, things Democrats did well,
et cetera.
Speaker 1 (24:55):
So then it's a kind of in the art.
Speaker 2 (24:58):
I would say, Look in general, Uh, this is a moment,
natural discessary moment when you appreciate having the government in
your life. Right at least they don't totally fuck up
the recovery. So if you're like a little bit a
little bit of a closet libertarian like me, then like
when there's a fucking hurricane or a snowstorm, you know,
(25:18):
like I'm really fucking glad that there are trucks plowing
the roads and we're not in some libertarian utopia where
we have to pay for private to trucks or something,
you know what I mean. So that might be good
for Democrats. It also raises the salience of climate change.
I don't want to get into a discussion over which
hurricanes are caused by climate change or the different effects
(25:41):
of hurricanes. But you know, you have had more storms
with this very bad inland flooding. And again I'll leave
it to the experts to determine how much that is
because of building patterns versus climate change versus luck basically.
Speaker 1 (25:55):
Yeah, yeah, but maybe worth noting that in this particular case. Also,
North Carolina is a swing state, right so, and Georgia
was and Georgia was affected as well, and Georgia is
sorry I forgot your latest update. Georgia is still leaning red.
Speaker 2 (26:10):
By points ahead, by point ish there, point and a
half maybe.
Speaker 1 (26:14):
Okay, yeah, so this will be interesting. I think. I
hope people are gathering data on this, and I hope
that there are some polling going on right now, because
I'd be very curious because I do think that these
sorts of events do happen, and will continue happening, and
will increase in severity. So it is interesting for me
to see whether they will matter. But now there's obviously
(26:36):
nothing that we as individuals can do about that, right Like,
that's you know, the environment. It happens, and here the
politician's response may or may not matter. But what about
people on either side of the divide, you know, Trump supporters,
Hair supporters who want to make sure that they're doing
everything they can in the run up to try to
(26:59):
get kind of the voters that may be on the
fence or undecided or don't know if they're going to
vote or or what not to actually vote. What matters,
donations matter, going door to door, does that matter? Do
any of these things actually make a meaningful difference or
do they just make us feel a little bit better,
like recycling, which doesn't actually matter.
Speaker 2 (27:18):
What helps is being a dick on social media really
helps your candidate wins. So do more. Do more of that.
By the way, if you want to donate to charity
to help the people in the Carolinas, et cetera, then
would recommend charitynavigator dot org gives you a whole list
of local charities which are usually more effective than That's
(27:38):
a little affective altruism.
Speaker 1 (27:40):
Yeah, that's a that's a that's a great recommendation.
Speaker 2 (27:45):
So look, I think that the presidential campaigns have more
money than they need. And this is not me in
a crotchety way. It's saying, like, you know, they are
running all the ads they want to the point where
the ads have diminishing returns. They have all the field
staff they want. Maybe if you started out with all
the money four years ahead of time, you could do
more ambitious things and so forth. But like they don't
(28:06):
donate to a presidential campaign, donate to a down ballot campaign.
Maybe a senate campaigns and campaigns have a lot of
money too, but you know, us House races, state Supreme
Court races, state legislature races, right, these are cases where
where a little bit of money can make more difference.
(28:27):
By the way, I think in general, I don't think
that political donations count particularly. I don't mean it like
a moral way. I think they're probably you know, donate
to charity instead of a campaign is also a balid strategy.
Most campaigns believe that door to door canvassing can help
(28:47):
a bit. One thing that happened in twenty twenty is
that Democrats were COVID shy and did not do traditional canvassing,
and lo and behold, Biden underfirms his polls by a
few points on election day. And I'm not saying it's
a major cause, but like that may have been a
mistake in.
Speaker 1 (29:06):
Retrospect, So that's to suggest, because I was about to say,
are there are there data that suggests that pultiple that
pultiple that door to door polling and canvassing and all
of that actually is effective or is it just that
politicians believe this and it's never been challenged. Do we
have do we actually have data?
Speaker 2 (29:25):
I think that's more studiable because you can kind of
it's clearly studyable. I think the academic consensus that it
does help a little bit.
Speaker 1 (29:33):
Okay, yeah, so on the margin it helps, which is important,
right because right now we're looking for on the margin.
So for either candidate, on the margin, it should help.
What about endorsements, So you know, we talked a few
weeks ago Taylor Swift obviously was a major endorsement. Do
those things matter? Does it matter? Obviously? Like there are
(29:56):
levels of endorsement, right, Like at some point I saw
the Kamala Harris campaign retweeting that, like, Meryl Streep has
endorsed her and this is huge. I'm like, I don't
think Meryl Streep's endorsement matters. I'm sorry, I love you,
Meryl Streep, but like I don't think that's going to
move the needle.
Speaker 2 (30:11):
But someone It's like when they say somebody that dies
and you're like, I thought they're already dead, right right,
It's like I thought Meryl's she already endorsed, and that's
party true right for Tayte too, is uh. I think
people assume that she was on the Harris badwagon already.
I mean, look, she apparently drove some voter registration efforts
(30:32):
and things like that, and so yeah, look, you you
definitely take that if you're if you're Harris, right, but
if like, but it's not like you see like a
big I mean, it's completive because it happened about the
same time as a debate, but it's you know, the
biggest pop star in the world endorses and you can
barely see any difference if any of the polls. So
that puts kind of a cap.
Speaker 1 (30:51):
On Sure, what I was actually wondering if maybe the
endorsement you said something which I think is really important,
which is that most people kind of already assumed right
that that she was going to be team Harris because
she had endorsed Biden. She had already kind of broken
her silence. But what about things like and here, I
(31:12):
think there's some really interesting psych research. What about things
like Willie Nelson endorsing the Democrats, right, Like you have
a white country singer, Like when you have people who
look and sound and kind of have the background of
someone who would more traditionally be a Trump supporter, do
(31:33):
we think that that actually might matter a little bit
more than a Taylor Swift in these particular circumstances.
Speaker 2 (31:42):
I mean, look, people know that the Hollywood types. You know,
I guess it's a singer, not a Hollywood type. I
take it. Maybe, I don't know. I mean, you know,
what probably did matter was, by the way, William Nelson
has quite a beautiful catalog of music going back along
way anyway, love it.
Speaker 1 (31:57):
I love the editorializing on this.
Speaker 2 (31:59):
Thus an endorsement in the race so far has probably
been RFK Junior endorsing endorsement cocided with a rough period
for Harris and the holes and like you know, and
those are those voters are lost, And I think so
that might have mattered a fair bit. Yeah, I mean
by half a point or something, but like half which.
Speaker 1 (32:19):
Is important, which is which is really important, as we
keep talking about. And there's also some psych research that's
really interesting into kind of the psychology of social influence
and having an effect on social norms and behavior. And
a lot of this research comes from Princeton University Betsy Pollock.
She won the MacArthur Genius Grant a number of years
(32:40):
ago for this work. And some of the stuff that
she shows is that you know, you need to have
the correct person say things, and they have to actually
be kind of from the background and kind of from
the from from a place that people who you're trying
to influence actually respect. Right, So, if you're trying to
(33:01):
influence potential Trump voters to vote for Kamala Harris, then
you want to be probably a white male from so
certain states with a certain background. If you want to
try to get Trump voters, if you want to get
Kamala Harris voters to vote for Trump, you probably want
someone who you know is a minority or you know female,
(33:28):
some you know someone someone who has kind of more
of a Kamala Harris vibe and then have them endorse Trump.
That would matter more. There was a really cool study
that was done on social media to see like basically,
what can you do to mitigate trolls? Right, Like, how
can you get people to change behavior? And the one
(33:49):
thing that actually worked the best was if you create
an account that's like a generic white man and he says, hey, like,
you know, this is a real person, like just you
might want to tone it down a little bit. That
actually worked as opposed to anything else. So it's I
think that when we talk about endorsements, they're not all
(34:11):
created equal, not just because of the reach like oh
you're a superstar, you're a pop star, but also like
who is your demographic, who do you represent? What is
your specific you know, voter appeal, and will you be
able to look like a person of authority to the
voters that you're trying to reach.
Speaker 2 (34:32):
Two other important stories that I think we can't not mention.
Let me start with one that's like a bit less obvious.
Port workers have gone on strike in both the East
Coast and the Gulf Coast. Something some enormous amount of
commerce passes through one of these ports, and this could
potentially have a devastating effect on the economy and shipping,
(34:57):
which is already already a little bit constrained because you
have problems with the hootis in the Red Sea? Is
that right? So you already have like some shipping channels
that are operating a less of capacity that more kind
of affects Europe than the US. But supply chains have
struggled to get back to normal and this could cause
(35:18):
big problems, yes, but hurricane and things like that that's
affected So so you know, this is a real dilemma
for a Democratic white House. Biden has said he does
not want to invoke the Taft Hartley Act that could
require these striking workers to go back to work. But
they have a lot of leverage, right, They're like, well,
(35:39):
fuck your election up unless you give us a nice
new contract. And I mean that's we understand leverage, right,
And they have a lot of leverage. So far, the
Biden Whitehouse has been able to placate problems like this
in the past. Like that to me is like a
potential October surprise that that has to play negatively for
(36:01):
for Harris and Biden.
Speaker 1 (36:02):
Absolutely, And if we just like a little caveat I
think tie into endorsements given that this is kind of
a workers strike, is that the Teamsters Union did not
endorse either Canada for the first time in a long time.
So just something to keep in mind as we as
we think about this October surprise potentially.
Speaker 2 (36:23):
Yeah, probably most Teamster members are are Trump.
Speaker 1 (36:28):
Yeah, it was actually Teamsters are leaning more Trump, even
though the Teamsters have endorsed the Democrats in the past,
and the latest survey data that I've seen the Teamsters
are heavily leaning Trump.
Speaker 2 (36:43):
The other, of course, is the re escalating conflict in
the Middle East. That's a little harder to yep, predict, right,
it's opportunities to show leadership potentially. But look, I mean,
you can make an argument that, like, foreign policy has
not gone that well under Biden. The Middle East is
(37:05):
kind of blowing up, and you know, Ukraine was invaded,
American relations with China are probably worse now than they were.
You know, if Trump were more coherent and normal, then
he could form a pretty good critique of Biden's foreign policy,
(37:26):
I think. And as a reminder of that now, voters
usually don't care about foreign policy that much. To the
extent that they do, it's kind of about I was
gonna say that, you know that it's the politics of
It's not the foreign policy, right, it's the politics of
the state of Israel and how they exist or failed
(37:47):
to coexist with Palestinians and like, and that's territory where
we you know, I have written about that sum because
it like effects American politics so much. You know, that
seemed to have died down to some degree, although although
you know two percent of the population is Arab American
and Michigan around the Dearborn area, there clearly have been
signs and polls that shifted from being a Democratic vote
(38:09):
to people who are throwing their hands up and saying
I don't know what I'm going to do, So that
has an effect on the margin. But like, but anyway,
I just want to mention those two important stories.
Speaker 1 (38:19):
Yeah, absolutely, And I think that it is interesting to
see how much anyone thing will end up affecting any
any person's decision to vote, just because we are in
such a close race, right, so much closer than than
we have been in the past, and so I think
that those things on the margin may matter, especially when
(38:42):
we're talking like back to the ports. You know, I
think that oftentimes voters are not thinking that long term.
So that's why foreign policy often doesn't end up making
that big of a difference. But if we see and
I don't think I don't know if there's enough time
to actually see any change in prices, availability, et cetera.
In the next few weeks. But if we do see that,
(39:03):
then I think that that will become a much bigger issue.
Speaker 2 (39:07):
You know, this is also a test of Biden and
his capabilities. If you have multiple crises happening at once,
you know, I mean, the media seems reluctant. I mean
once once the uh once drydent dropped out was forced
out by the way. The Dana Carvey impression of Biden
was pretty fucking good.
Speaker 1 (39:27):
It was very good. Yes, if you have not seen it,
I highly endorsed that.
Speaker 2 (39:32):
But like since in the media is not the very
interested in covering his performance issues, and this will be
a test I suppose. Yeah.
Speaker 1 (39:41):
Absolutely. After the break, let's talk about something. Uh well,
I was going to say lighter, but it involves death,
but non politics related lighter, but it involves death. After
the break, we had two people who are quite important
(40:11):
in the gambling world die since you know, in the
last few days. One of those died today is what Tuesday,
so yesterday Pete Rose and he was one of the
first people we talked about on this podcast. And the
other less well known to the mainstream public, Archie Callous
Nate do you have any thoughts on the death of
(40:33):
Pete Rose and his legacy for the world of baseball
in the world of gambling.
Speaker 2 (40:41):
Yeah, I mean Pete was a I never met him.
I think he was kind of the classic djen right
in Las Vegas till late in his life he did.
Speaker 1 (40:53):
Yeah. Yeah, after he was after he was no longer
allowed to be associated with baseball, he made the move
to Las Vegas.
Speaker 2 (41:01):
Yeah. Look, this was kind of, I don't know, the
end of a certain era for baseball. Suppose I mean
Pete Rose. If you're not a baseball fan, right, he
played the game differently than anyone else. Right, lots of
bass hits, lots of his the name was Charlie Hustle, Right,
would barrel into catchers and second basement. I mean he
(41:24):
played baseball like it was football basically. Now, people like me,
before Pete Rose was known for gambling, people like me
would I said, Oh, Pete Rose, he's a little bit overrated. Right.
It was the endly subject of you know, he does
have the most hits in Major League Baseball history. He
(41:45):
doesn't get on base that much and doesn't have that
much power. A very very good player, but we'd say yeah,
he's one of the twenty best of all time, but
not you know, having the hits record doesn't necessarily And
he also played forever. He played Cincinnati, Philadelphia, Montreal briefly
Cincinnati again, played until he was like forty some years old.
So beloved, right, But he clearly I think on baseball.
(42:10):
There's not much ambiguity about that, and baseball kind of
always was very unforgiving about ever commuting his sentence of
really letting Pete Rose participate in any ways. And I
kind of understand that, but like I'm trying to remember
some of the history.
Speaker 1 (42:24):
Originally he said that he bet on other sports but
never bet on baseball. He was still found to be
guilty of betting on baseball, and he in his memoir
admitted that, yeah, he did bet on baseball, but never
for his team to lose, because he only wanted his
(42:46):
team to win, as if that made it any better.
Speaker 2 (42:50):
But part of it is so you had this commissioner
of baseball named Bart Giamatti, who was a president of
Yale University, and like this English literature professor who was
kind of this intellectual who was going to, you know,
take baseball to some new cultural significance and he got
tied up with Pete Rose and then died of a
(43:12):
heart attack after only I.
Speaker 1 (43:14):
Think No, I think it was closer. I think it
was like weeks after he passed out the.
Speaker 2 (43:19):
Verdict as as a we sirved for commission April through
September and then but yeah, the verdict, it was just.
Speaker 1 (43:26):
Yeah, it was right after he said that Pete Rose
was not allowed to play. I think that he died
like a week after that of a broken mind.
Speaker 2 (43:37):
My theory is that this is part of why baseball
was kind of so unforgiving to Pete and the fact
that Pete Rose, I'm sure was an asshole, right, but
you know the fact that I think people I don't
I don't know this for I'm just going by the psychology.
I think they think, you know, Pete Rose somehow killed
(43:58):
Bart Jimmati through grief, died of a broken heart kind
of thing, right, Yeah, yeah.
Speaker 1 (44:04):
Yeah, Well, okay, so let's let's end that with one
question for unit. I just want to yes or no.
Does Pete Rose deserve to be in the Hall of Fame?
Speaker 2 (44:18):
No? Okay, all right, you've been on baseball. Yeah, I
got it, all right.
Speaker 1 (44:24):
And another legendary gambler died who did not play baseball
died this week Archie Carras and have you do you
know his story night? So he is someone who had
the nickname the Greek, just like another another famous gambler
(44:48):
in gambling history, and he went on one of the
most legendary runs in gambling history, and it's so legendary
that it's just known as the run with a capital
are he went from so he was just a total degen,
but in this particular case, he went from fifty dollars
to over forty million as he went on this insane
(45:12):
gambling run and then he lost it all back. And
he did this through a combination of just going on
an insane run in craps, which happens right like he
was in that percent of the distribution. Then he actually
played some poker, and people used to love playing poker
against him because he wasn't very good, but he thought
he was very good. But then he went on quite
(45:34):
the run where he ended up beating some of the
top players in the game, including Chip Reeze four millions
of dollars and yeah, and then he and then he
did some sports betting and he just did incredibly well
forty million. I think this was nineteen ninety two to
nineteen ninety four, and then he went broke, and eventually
(45:55):
he was accused of cheating multiple times, cheating in blackjack,
and then he became I believe the thirty third person,
but I might be wrong, thirty second, thirty fourth, something
along those lines, to enter the infamous Black Book of
Las Vegas casinos. Yeah, so he is became banned for
life from every single casino property in the state of Nevada,
(46:19):
and if he were to enter one, he would be
immediately arrested. So that is how he ended his days.
But how crazy is that? I just want to just say,
this is next level djon fifty dollars forty million broke.
Speaker 2 (46:34):
Could be you, audience member, No, don't, don't, don't.
Speaker 1 (46:40):
No, he was. He was clearly a sick individual.
Speaker 2 (46:42):
You get forty million, play craps, stop stop, walk away,
walk away, Invest some.
Speaker 1 (46:49):
Of it if you have. If you want to keep
playing craps, fine, like put put a one hundred thousand,
that's even too much of it back into crabs and
the rest just walk away, please, But no one ever does.
And I think that there's also the hubris there right
to think that I must be so good. And that
happened with his poker playing as well. He knew people
(47:12):
knew he wasn't good, that's why they were playing against him.
And then he just beat all of these players. And
that can happen when you're playing heads up right in
any one in any one scenario and any one iteration.
The worst player in the world can beat the best
player in the world if you just run it once,
because that's you know, poker is a game of skill,
(47:33):
but in the immediate term, in one specific hand, in
one game, there's a huge element of chance. So do
not let that chance get to you, and do not
forget that sometimes you just run ridiculously Rookie, do not
be Archie, and then take that forty million and go broke.
Rest in peace, Archie, Rest in peace, Pete. The world
has lost two gamblers of very different stripes.
Speaker 2 (47:54):
Today, think about the poker games will have in hell.
Speaker 1 (47:58):
Right, I don't know what that's a good I like
your I like your hell voice.
Speaker 2 (48:02):
You know, I know what the poke. I've been in
the the two five game at the Commerce, and so
I know what poker in hell. On that note, We'll
see you all next week.
Speaker 1 (48:13):
All right.
Speaker 2 (48:13):
Thanks for joining us and tune in again every time
we have a show.
Speaker 1 (48:17):
Oh, one more thing, we would love to leave you
with an email address for the show. If there's ever
anything you really want us to talk about. If you
have any feedback, we'd love to hear from you. Super easy,
Risky Business all one word lowercase at pushkin dot Fm.
Speaker 2 (48:36):
Risky Business is hosted by me Nate Silver and me
Maria Kanakova. The show was a co production of Pushkin
Industries and iHeartMedia. This episode was produced by Isabel Carter.
Our associate producer is Gabriel hunter Chen. Our engineer is
Sarah Bruger. Our executive producer is Jacob Goldstein.
Speaker 1 (48:53):
If you want to listen to an ad free version,
sign up for Pushkin Plus. For six ninety nine a month.
You get access to ad free listening. Thanks for tuning in.
Hosts And Creators
Maria Konnikova
Nate Silver
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