Pro pace et fraternitate gentium #Bitcoin
Singapore
Joined July 2015
- Tweets24.2K
- Following2K
- Followers1.5K
- Likes64.4K
0xWatchmen retweeted
It's confusing why a major multi billion dollar law firm is going bankrupt.
So I talked to a bunch of lawyer friends about why Weil could suddenly be insolvent.
Unintuitively, law firms are basically fixed-cost businesses. Revenue comes from a concentrated core group of rainmakers.
Those rainmakers carry the whole business, while the rest of the business basically drags ass. Junior partners are rainmakers-in-training--they can't yet bring in the huge load-bearing dollars.
Everyone else--associates, back office staff--comprises one gigantic fixed cost center. Not to mention basic overhead like offices, revolver interest (for cashflow timing needs), etc.
The problem with law firms in particular, as opposed to other advisory businesses like banking, consulting, accounting, is that the clients are inherently portable.
So any partner can take their team and clients and leave. Doing so deleverages the rest of the partnership, because a small number of partners carry most of the revenue while leaving behind fixed costs.
Once there's a crisis of confidence, it no longer makes sense for partners to stay, because they're now getting underpaid in profit share relative to their revenue potential.
If they were to leave for a megafirm like Kirkland, they'd be properly compensated for their earning potential instead of being saddled by rising fixed costs as a percent of revenue.
There's also not much IP or brand moat in a law firm. Clients follow partners, and the process of crafting exceptional judgment is mostly in partners' heads (versus for instance more regimented value delivery in consulting and banking, where there can be a branded firm process).
And lastly, the partners ARE the equity in the firm. Law firms have no terminal value, so when partners leave it's as if a huge chunk of the firm equity walks out the door.
tl;dr law firm bankruptcy is basically a crisis of partner confidence, and the resulting departure spiral saddles anyone remaining with the gigantic fixed overheads of running a billion-dollar business.
0xWatchmen retweeted
A Bitcoin treasury company (@Datavault_ai $DVLT) just crashed because they informed investors that they haven't been able to withdraw BTC from the exchange (@BiconomyCom) that is holding all their treasury funds after 4 months of transfer requests.
0xWatchmen retweeted
I knew that the Anthropic S1 would have some goofy risk factors but this has to take the cake
Readers added context they thought people might want to know
This post is satire.
sec.gov/Archives/edgar…
0xWatchmen retweeted
Guys I’m scared the takeoff is starting. I swear any one of the ~10 CVEs that dropped in the last 24 hours would’ve been “one of the worst in recent years” except a new one is dropping every hour
0xWatchmen retweeted
IMO there's a low but non-zero chance this PHP exploit ends up doxxing Satoshi. Satoshi accidently revealed an IP address during an exchange with Hal. Maybe an old forum from that era gets hacked, and an LLM cross references Satoshi's IP to IP logs in a data dump and find a match
0xWatchmen retweeted
Guy on one of the aus subreddits asks why his "high growth" retirement account has been stuck at the same number for 5 months despite regularly putting money in, and gets this response:
0xWatchmen retweeted
Some very large fund is clearly getting liquidated here, hence no dead cat bounce / bottom appearing as usual.
You don't wipe out 2 trillion in market cap because Anthropic's ARR was 10% below expectations. CRWV, CBRS, SMCI hit hard while Infosys bottomed Oct, 6... Jane Street?
0xWatchmen retweeted
alright so I tried to figure out why things are blowing up
simple summary: it's geopolitics. and if the Middle East gets bad enough, then the backers for OpenAI's $1.4T funding round could pull out so that's sending shockwaves through markets bc they're the big data center tenant ppl are worried about. the incremental appears to be that Ukraine is also getting unhinged
there's not an AI specific catalyst this seems more like geopolitics. Last night TSM guided acceleration and Citi pressed if there was demand destruction on memory - TSM said no, that's already factored into the guide which means there's not some specific Korea fundamental thing -- and price action there is likely more of a margin call
Ukraine bonds have dumped 20% since July. He just asked for $70b Euros from the EU while Trump denied shutting off Starlink (Elon had said it wasn't him, so it just looks like a sht show). Trump told Zelensky to stop attacking Russian refineries. Zelensky has since crashed out and said "The block is out, we're done". And is now vowing to hit Russian refineries. And it appears he's already followed through hitting a facility in Surgut with drones
Indonesia got delisted from the MSCI and the entire country equity index is -14% in a day, increasing the likelihood of EM contagion
Iran has moved their nuclear facilities under ground in PickAxe mountain and trump has talked about using the "MOAB" which stands for Massive Ordnance Air Blast - which is just shy of a nuclear blast. THis is a 21,600 pound bomb that isn't even particularly effective at hitting underground sites so might just be generically destructive. For some reason Trump thinks that doing this after mid terms is fine - but oil is already pumping
reports from Israel meanwhile: Israel now deploying mobile bomb shelters in major cities, with 2 reportedly spotted in Ashdod and Tel Aviv within 24hs, as IDF raises its alert level to highest across all fronts amid preparations for a possible strike on Iran
fun times
0xWatchmen retweeted
people are starting to realize.
there *are* no moats left. the only true moat in existence was intelligence, and now that's out of the equation.
0xWatchmen retweeted
interpretability might be the most important scientific problem in the world right now, as I don't think we can solve alignment if we don't know what we're building. I think I have good news about it. I co-authored early work in mechanistic interpretability at OpenAI and came away pessimistic, because neural networks appeared to fold into arbitrary tangled knots. years later, I started openai's first large-scale automated interpretability project, finding about 2% of neurons legible with the primitive tools we had
with modern agentic tools and a much closer look, the picture looks totally different. the vast majority in models up to trillions of parameters are legible, and their circuits beautiful. many famous examples of tangled neurons turned out to be misunderstood. The roadblocks I expected mostly aren't there. I now think ambitious interpretability will be solved by the time we need it most, and possibly quite soon, as automated scientists keep improving. it may be a bitter lesson for interpretability: the simple thing, at absurd scale, works
already-clean.goodfire.com/
0xWatchmen retweeted
Machi(@machibigbrother) just got fully liquidated!
Over the past 4 months, Machi turned just $56K into $12.25M through trading, and now he is back down to $21.8K.
What a roller coaster!
hypurrscan.io/address/0x020c…
0xWatchmen retweeted
I am surprised this is not getting more airtime. CoreWeave CDS at 1000 bp. AI credit stress is getting acute and spreading. Neocloud players like CoreWeave and APLD have very high debt, very concentrated clients and a duration mismatch (long debt, short contracts).
1/5
0xWatchmen retweeted
I get it, there are nuances for tech-bros who are deep in the weeds. Everyone has an anecdote about why I’m wrong.
Take a step back and be a commodity-bro who’s seen enough supply/demand cycles. Tokens are a commodity. Currently, the token factories are out-stripping token demand. Pricing is the adjustment factor. Except token factories are mostly fixed-price businesses. They have take-or-pay. They have commitments. They will produce tokens at a loss rather than turn off.
I’m not saying that token demand is slowing. It’s still growing at astronomical rates. I’m saying that token production is now out-pacing demand. The cycle will turn when demand accelerates or token production slows. There’s like half a trillion $ of GPUs waiting to be installed. I don’t think token production slows anytime soon.
Yeah, I get it. Jevon’s and all. It’s great for AI consumers and innovators. But the guys owning token factories are gonna all go bust in the process, and that’s like $2T of capex to date. You cannot even restructure these things and crush the debt. They’re just stranded by new, and more efficient chips. They’re always going to be stranded by new chips. More efficient Models will strand the more expensive ones. It’s a race to the bottom against fixed costs. It’s the most godawful business misallocation I’ve seen in a while. Makes the Chinese look like prudent capital allocators🤣🤣
It’s like having iron rails when the new railroads run on steel. This bankruptcy cycle will be epic…
In a normal functioning ecosystem, when the price of tokens drops below the cost of production, the quantity of tokens declines to normalize with pricing. In this case, nothing in AI has any unit economics and you don’t see normalization because everyone is still going full-speed ahead with external funding. (Sort of like shale oil in 2016-2019). Meanwhile, compute prices are based on LT contracts that were signed at above market prices, and are now capital destructive. They’ll eventually catch down to token prices in free-fall.
What we’re seeing here is spot price negatively diverging from term pricing. Usually, when this happens in a cyclical industry, it’s INCREDIBLY BEARISH. Especially when there are take-or-pay contracts that make it difficult to ration supply at prices below cost. What we’re witnessing is a world where losses will accelerate, just as more supply comes online….
0xWatchmen retweeted
Wow another confirmed case in Singapore, this from a large shopping mall
Challenger in Vivo City
Ledger should do a complete recall of all devices sold through official resellers
bought from Challenger Singapore Vivo city unit, literally last week.
seems like this is compromised too.
@BenYorke @MagicalTux please confirm
