from Patrick McKenzie | by Patrick McKenzie

Tether looks to be something like 35:1 levered long on "other assets" and "secured loans", by the way, according to their transparency report dated Nov 10th. The snapshot was taken on September 31st, so they have *again* become undercollateralized. t.co/3i03U83wNL

I wrote about this in the wake of the Luna collapse, and the mechanism is exactly the same, so just update the numbers and re-run the analysis. It is not possible to run a book with 12% risk-on assets and 0.36% equity w/o taking impairments. t.co/JQjmCTV6dN

Tether lies about it in the present and will like about it in the future much as they have lied about it in the past.

*sigh* I might have to write about this in a more formal place so that various people can cite it, because some curious cultural norms of financial journalism and regulation require A Responsible Adult to do 4th grade math before others can take note of it.

And, as highlighted by @Bitfinexed (somebody give him a Pulitzer after this is all over, please, I sincerely think he deserves it): t.co/wbMGNtxoaZ

The 4th grade math in question, by the way, in Soulver because opening Excel feels like far too much Finance Is Happening Now to dignify Tether with: t.co/KV6uwOkeeq

I here assume arguendo that Tether is not lying about the existence and composition of the remaining 87% of the reserves. I do not think Bitfinex/Tether deserves any scintilla of the benefit of the doubt, but be that as it may, they're ~certainly insolvent at their own word.

I made this thread into an essay, in case anyone needs to cite it. t.co/6jnW1wh81y