Ben Mezrich > Quotes

“Everyone had a story he believed was worthy of a best-seller; for me, reality was rarely interesting enough to take the place of fiction.”
― Ben Mezrich, Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions

“To guys like Mark, time was another weapon of the establishment, like alphabetical order. The great engineers, hackers - they didn't function under the same time constraints as everyone else.”
― Ben Mezrich, The Accidental Billionaires: The Founding of Facebook, a Tale of Sex, Money, Genius, and Betrayal

“in other words, his story was part boast, part confession.”
― Ben Mezrich, Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions

“occurred. But there was no denying it now, the evidence was all over him. The pleasantly warm flush to his normally sallow cheeks; the relaxed, almost rubbery way he leaned against the window—a stark contrast to his usual calcified, if slightly hunched posture; and most important”
― Ben Mezrich, The Accidental Billionaires: The Founding of Facebook

“I once knew a beautiful young woman that didn't believe in forever. She became my forever.”
― Ben Mezrich, Sex on the Moon: The Amazing Story Behind the Most Audacious Heist in History

“As an entrepreneur, you had one, maybe two, but usually not more than three chances to catch lightning in a bottle; as a venture capitalist, however, you could chase lightning as long as you had cash to invest.”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“There's nothing wrong with a little delusion. Sometimes it helps you get through the day.”
― Ben Mezrich, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees

“Below, he could see down the entire Strip, from the radioactive green lion at the base of the MGM Grand to the glowing spire of the Stratosphere. The logjam street traffic just added to the visual effect: a thousand headlights blinking like neurons in the glowing spine that snaked down the center of the city.”
― Ben Mezrich, Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions

“You didn't go on MySpace to communicate, you went there to show yourself off. It was like one big narcissistic playground.”
― Ben Mezrich, The Accidental Billionaires: The Founding of Facebook, a Tale of Sex, Money, Genius, and Betrayal

“Zuckerberg had gotten lucky—in another world, the twins never would have had to approach him for coding help. In any event, Tyler and Cameron didn’t believe they were on the earth to exist; they were here to create, to build.”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“someone exceedingly loyal, a true yes-man, a cog who knew when to turn, when to stay still.”
― Ben Mezrich, Once Upon a Time in Russia: The Rise of the Oligarchs—A True Story of Ambition, Wealth, Betrayal, and Murder

“By now, though, it had been a steep learning curve, he was fairly well versed on the basics of how clearing worked: When a customer bought shares in a stock on Robinhood — say, GameStop — at a specific price, the order was first sent to Robinhood's in-house clearing brokerage, who in turn bundled the trade to a market maker for execution. The trade was then brought to a clearinghouse, who oversaw the trade all the way to the settlement.

During this time period, the trade itself needed to be 'insured' against anything that might go wrong, such as some sort of systemic collapse or a default by either party — although in reality, in regulated markets, this seemed extremely unlikely. While the customer's money was temporarily put aside, essentially in an untouchable safe, for the two days it took for the clearing agency to verify that both parties were able to provide what they had agreed upon — the brokerage house, Robinhood — had to insure the deal with a deposit; money of its own, separate from the money that the customer had provided, that could be used to guarantee the value of the trade. In financial parlance, this 'collateral' was known as VAR — or value at risk.

For a single trade of a simple asset, it would have been relatively easy to know how much the brokerage would need to deposit to insure the situation; the risk of something going wrong would be small, and the total value would be simple to calculate. If GME was trading at $400 a share and a customer wanted ten shares, there was $4000 at risk, plus or minus some nominal amount due to minute vagaries in market fluctuations during the two-day period before settlement. In such a simple situation, Robinhood might be asked to put up $4000 and change — in addition to the $4000 of the customer's buy order, which remained locked in the safe.

The deposit requirement calculation grew more complicated as layers were added onto the trading situation. A single trade had low inherent risk; multiplied to millions of trades, the risk profile began to change. The more volatile the stock — in price and/or volume — the riskier a buy or sell became.

Of course, the NSCC did not make these calculations by hand; they used sophisticated algorithms to digest the numerous inputs coming in from the trade — type of equity, volume, current volatility, where it fit into a brokerage's portfolio as a whole — and spit out a 'recommendation' of what sort of deposit would protect the trade. And this process was entirely automated; the brokerage house would continually run its trading activity through the federal clearing system and would receive its updated deposit requirements as often as every fifteen minutes while the market was open. Premarket during a trading week, that number would come in at 5:11 a.m. East Coast time, usually right as Jim, in Orlando, was finishing his morning coffee. Robinhood would then have until 10:00 a.m. to satisfy the deposit requirement for the upcoming day of trading — or risk being in default, which could lead to an immediate shutdown of all operations.

Usually, the deposit requirement was tied closely to the actual dollars being 'spent' on the trades; a near equal number of buys and sells in a brokerage house's trading profile lowered its overall risk, and though volatility was common, especially in the past half-decade, even a two-day settlement period came with an acceptable level of confidence that nobody would fail to deliver on their trades.”
― Ben Mezrich, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees

“In rowing,” Tyler said, “sometimes there’s one guy in your boat who slows the whole thing down. He might mean well. He might be trying as hard, or even harder, than anyone else, but it doesn’t matter, he’s weighing everyone down. We call that guy an anchor.”

And with that, the twins left the building.”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“Everything about the presentation--the openness, the involvement of the community, the methodical plan laid out for implementing the idea--was exactly what Ting considered science done right. Science in secret as dangerous, difficult to regulate, and people who relished secrecy usually had something to hide.”
― Ben Mezrich

“An update on the war in the Ukraine, for example, coming from an anonymous user, versus an update from a Blue Checked reporter from Reuters, with a bio that put him or her on the ground in Kiev, could be read differently.”
― Ben Mezrich, Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History

“If Jim was back at the imaginary dinner party, trying to explain what he did for a living, he'd have tried to keep it simple: clearing involved everything that took place between the moment someone started at trade — buying or selling a stock, for instance — and the moment that trade was settled — meaning the stock had officially and legally changed hands.

Most people who used online brokerages thought of that transaction as happening instantly; you wanted 10 shares of GME, you hit a button and bought 10 shares of GME, and suddenly 10 shares of GME were in your account. But that's not actually what happened. You hit the Buy button, and Robinhood might find you your shares immediately and put them into your account; but the actual trade took two days to complete, known, for that reason, in financial parlance as 'T+2 clearing.'

By this point in the dinner conversation, Jim would have fully expected the other diners' eyes to glaze over; but he would only be just beginning. Once the trade was initiated — once you hit that Buy button on your phone — it was Jim's job to handle everything that happened in that in-between world. First, he had to facilitate finding the opposite partner for the trade — which was where payment for order flow came in, as Robinhood bundled its trades and 'sold' them to a market maker like Citadel. And next, it was the clearing brokerage's job to make sure that transaction was safe and secure. In practice, the way this worked was by 10:00 a.m. each market day, Robinhood had to insure its trade, by making a cash deposit to a federally regulated clearinghouse — something called the Depository Trust & Clearing Corporation, or DTCC. That deposit was based on the volume, type, risk profile, and value of the equities being traded. The riskier the equities — the more likely something might go wrong between the buy and the sell — the higher that deposit might be.

Of course, most all of this took place via computers — in 2021, and especially at a place like Robinhood, it was an almost entirely automated system; when customers bought and sold stocks, Jim's computers gave him a recommendation of the sort of deposits he could expect to need to make based on the requirements set down by the SEC and the banking regulators — all simple and tidy, and at the push of a button.”
― Ben Mezrich, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees

“Which left only rhodium, palladium, platinum, silver, and gold—five of the eight noble metals. Rhodium and palladium wouldn’t be discovered until the 1880s, well after money had been in use for thousands of years; and platinum’s melting point would have been too high for preindustrial furnaces. By process of elimination you were left with silver and gold. Silver tarnished easily and had a much greater industrial application—too useful to make good money—leaving gold just useful enough. “Gold is valuable because of its naturally occurring properties: it’s scarce, durable, portable, divisible, fungible, hard to counterfeit, and easy to authenticate,” Tyler said. “Exactly,” Voorhees responded, “and bitcoin has all of those properties too—”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“Conhecimento popular é um oximoro. Enquanto grupo, as pessoas costumam estar errada sobre a maioria das coisas.”
― Ben Mezrich, The Midnight Ride

“You still had to use the Balkanized, legacy banking system, which was built before the internet even existed, littered with middlemen and rent-seekers all along the way. And only if the central authorities of this network allowed it to happen, would your money move at a snail’s pace from point A to point B.”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“Gold is valuable because of its naturally occurring properties: it’s scarce, durable, portable, divisible, fungible, hard to counterfeit, and easy to authenticate,”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“Maybe it was part of a larger, cultural shift, maybe it was in conjunction with a wave of excess and decadence sweeping through Silicon Valley itself, or perhaps it was just a symptom of the company’s own success, but in any case Twitter’s mission had become secondary to employees’ lifestyles. Two-hour lunch breaks morphed into two-month leaves of absence. New committees on every possible imagined cause were formed almost daily, eating up hours of productivity and usually collapsing over petty disagreements without ever accomplishing a thing. When people did, eventually, show up to work, there was a noticeable lack of focus.”
― Ben Mezrich, Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History

“Silicon Valley was a town made up of engineers who thought in frameworks, decision trees, and game theory.”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“The U.S. government stepped in during economic crises all the time. Less than five years earlier, the United States had used billions of dollars of taxpayer money to bail out Wall Street banks during the 2008 financial crisis. During the Great Depression the government had prohibited U.S. citizens from owning gold: in 1933, President Roosevelt had signed executive order 6102, requiring citizens to turn in their gold for cash. It wasn’t until 1975, when President Ford repealed this order, that it was again legal for Americans to own gold that wasn’t jewelry or coins. And all bank deposits were only insured to the tune of $250,000. “More than twenty thousand account holders at Laika, the second largest bank in Cyprus, are going to have half of their savings taken away,”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“Quantas vezes um homem pode afundar e ainda continuar vivo?”
― Ben Mezrich, The Midnight Ride

“The fragility of the US economy had nearly destroyed him. It wasn't enough that Citadel's walls were as strong and impenetrable as the name implied; the economy itself needed to be just as solid.

Over the next decade, he endeavored to place Citadel at the center of the equity markets, using his company's superiority in math and technology to tie trading to information flow. Citadel Securities, the trading and market-making division of his company, which he'd founded back in 2003, grew by leaps and bounds as he took advantage of his 'algorithmic'-driven abilities to read 'ahead of the market.' Because he could predict where trades were heading faster and better than anyone else, he could outcompete larger banks for trading volume, offering better rates while still capturing immense profits on the spreads between buys and sells. In 2005, the SEC had passed regulations that forced brokers to seek out middlemen like Citadel who could provide the most savings to their customers; in part because of this move by the SEC, Ken's outfit was able to grow into the most effective, and thus dominant, middleman for trading — and especially for retail traders, who were proliferating in tune to the numerous online brokerages sprouting up in the decade after 2008.

Citadel Securities reached scale before the bigger banks even knew what had hit them; and once Citadel was at scale, it became impossible for anyone else to compete. Citadel's efficiency, and its ability to make billions off the minute spreads between bids and asks — multiplied by millions upon millions of trades — made companies like Robinhood, with its zero fees, possible. Citadel could profit by being the most efficient and cheapest market maker on the Street. Robinhood could profit by offering zero fees to its users. And the retail traders, on their couches and in their kitchens and in their dorm rooms, profited because they could now trade stocks with the same tools as their Wall Street counterparts.”
― Ben Mezrich, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees

“In his job as a financial educator, Keith had spent a fair amount of time breaking down the act — and sometimes art — of short selling, in a way that less savvy customers could understand. When a trader believed a company was in trouble, and its stock was overvalued, they could 'borrow' shares, sell them, and then when the stock went down as they'd predicted, rebuy the shares at a lower price, return them to whoever they'd borrowed them from, and pocket the difference. If GameStop was trading at 5, you could borrow 100 shares, sell them for $500; when the stock hit 1, you bought back the 100 shares for $100, returned them, pocketing $400 for yourself. You paid a little fee to the lender for their trouble and came out with a tidy profit.

But what happened if the stock went up instead of down? What happened if GameStop figured out how to capitalize on its millions of nostalgic customers, who spent billions on video games every year? What if the stock went to 10 instead of 1?

What happened was, the short seller was royally screwed. He'd borrowed those 100 shares and sold them at 5. Now the stock was at 10, but he still needed to return his 100 shares. Buying them on the market at 10 meant spending $1000. And what was worse, when he'd borrowed the shares, he'd agreed on a timeline to return them. There was a ticking clock hanging over his head, so he had a choice — buy the shares back at 10 now, losing $500 on the deal — or wait a little longer, hoping the stock went back down before his time limit was up.

And what if he waited, and the stock kept going up? Sooner or later, he had to buy those shares back. Even if the stock went to 15, 20 — he was on the hook for those 100 shares. Theoretically, there was no limit to how much he could lose.”
― Ben Mezrich, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees

“it was an out-of-context, minor point.”
― Ben Mezrich, Breaking Twitter: Elon Musk and the Most Controversial Corporate Takeover in History

“Tyler was to his left, and to his right were the three other witnesses who had joined them for the headlining session of the first day of testimony. Directly next to Cameron sat Fred Wilson, a seasoned venture capitalist veteran who had moved into the cyber currency space in a big way, with the countenance of someone who had seen a number of technology waves, including the first dot-com boom and bust. Next to Wilson, the up-and-comer venture capitalist Jeremy Liew, a partner at Lightspeed Venture. And at the end of the bench, Barry Silbert, the founder and CEO of the startup SecondMarket.”
― Ben Mezrich, Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption

“Which meant, if somehow GameStop did start to go up, the people who had shorted the company would begin to feel pressure to buy; the more the stock went up, the heavier that pressure became. As the shorts began to cover, buying shares to return them to their lenders, the stock would rise even higher.

In financial parlance, this was something called a 'short squeeze.' It didn't happen often, but when it did, it could be spectacular. Most famously, in 2008, a surprise takeover attempt of the German automaker Volkswagen by rival Porsche drove Volkswagen's stock price up by a factor of 5 — briefly making it the most valuable company in the world — in two quick days of trading, as short selling funds struggled to cover their positions. Similarly, a battle between two hedge fund titans — Bill Ackman, of Pershing Square Capital Management, and Carl Icahn — led to a squeeze involving supplement maker — and alleged pyramid marketer — Herbalife, which cost Ackman a reported $1 billion. And perhaps the first widely reported short squeeze dated back a century, to 1923, when grocery magnate Clarence Saunders successfully decimated short sellers who had targeted his nascent chain of Piggly Wiggly grocery stores.”
― Ben Mezrich, The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees

“If you don’t have to struggle, you don’t really have to get smart or strong, you just drift along.”
― Ben Mezrich