Interesting Ethereum Dustup

[Cari Machet]

goldman sachs is everywhere fucking

On Sat, Jun 18, 2016 at 2:11 AM, jim bell <jdb10987 at yahoo.com> wrote:

>
> http://www.bloomberg.com/view/articles/2016-06-17/blockchain-company-s-smart-contracts-were-dumb
>
>
> Partial quote:
>
> Blockchain Company's Smart Contracts Were Dumb
> 2
> JUNE 17, 2016 5:46 PM EDT
> By
> Matt Levine
> There's a fairly incredible trial going on in London right now. The Libyan
> Investment Authority is suing Goldman Sachs over some trades that they did
> together. To oversimplify slightly, the LIA handed Goldman a pile of money
> and signed some complicated contracts describing the circumstances in which
> Goldman would have to give LIA money back, and how much. And then everyone
> closed their eyes and counted to 10, and when they opened their eyes, poof,
> the money was gone. It was $1.2 billion. Libya is mad, and suing.
> The LIA has various arguments in its lawsuit, but none of them amount to
> "Goldman owes us money under those contracts." The contracts specified a
> set of functions that took inputs (mostly, the prices of some bank stocks)
> and produced as outputs a set of dollar amounts that Goldman was supposed
> to pay Libya. The specifications in the contracts are perfectly clear;
> there's no dispute about how to read the contracts, or about how the
> functions work. Everyone agrees that the total dollar amount produced by
> the functions is zero.
> Instead, Libya's arguments take the form of: We didn't really mean what
> those contracts said. We didn't understand them. We were bamboozled into
> signing them, overwhelmed by a "swarm" of Goldman bankers, seduced --
> literally -- by the bankers' offerings ofinternships and aftershaves and
> prostitutes. We were unsophisticated, we trusted Goldman to look out for
> our best interests, we thought the functions were something other than what
> they turned out to be.
> Whatever you think about those arguments -- my own views are complicated
> -- they are definitely the kinds of arguments that are, like, allowed in
> court. The contracts specifying the functions are important.
> Ninety-nine-point-whatever percent of the time, derivatives contracts just
> work: I pay you a premium for a call option, and you promise to pay me if
> it ends up in the money, and if it does, you do, and if it doesn't, I shrug
> and walk away. We knew what we were getting into, and we got out of it what
> we expected. But every so often, people don't know what they're getting
> into, or what they get out of it isn't what either side reasonably
> expected. And when that happens, they go to court and argue about it.
> Usually one side did well out of the deal, and argues that everything's
> fine and everyone got what they expected; the other side did poorly, and
> argues that something fundamentally unfair happened and the deal should be
> altered.
> [end of portion quoted]
>



-- 
Cari Machet
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carimachet at gmail.com
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Twitter: @carimachet <https://twitter.com/carimachet>

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