Matt Levine delivers another excellent Money Stuff piece on the house of cards known as crypto exchanges; an excerpt, where Matt is comparing this crisis to the 2008 financial crisis:

“A quick summary of 2008 is that there was a lot of demand for safe assets, for bonds with AAA ratings. The financial system obligingly manufactured those assets, taking risky assets — mostly subprime mortgages — and packaging and slicing them to achieve AAA ratings. There was so much demand for safe assets that the manufacturing process got sloppy: The subprime mortgages got ever more subprime, the slicing and repackaging got less effective, and ultimately some of the safe assets turned out not to be safe. 

Something like that seems to have happened in crypto but there is a critical difference. In crypto, there are no mortgages to speak of. You cannot really start by taking some somewhat risky cash flows and tranching them to make some of the cash flows safer. There are no cash flows. The safe assets in crypto — interest-bearing accounts at Voyager or Celsius or BlockFi or Gemini — are created by making unsecured billion-dollar loans, negotiated in a single phone call, to arbitrage trading firms that are actually just making long-term bets on the marketing abilities of blockchain entrepreneurs. Crypto shadow banks did not manufacture safe assets out of risky investments; they just relabeled the risky investments as safe assets. There were people taking wild speculative risks on brand-new, sentiment-driven crypto projects, and there were people who wanted to invest safely and earn 8%, and they were the same people.”

Jamelle Bouie again does a nice job in the NYT demolishing the inconsistencies in the right’s professed disdain for “woke capitalism.” An excerpt:

“I wrote last year about this notion of “woke capitalism” and the degree to which I think this “conflict” is little more than a performance meant to sell an illusion of serious disagreement between owners of capital and the Republican Party. As I wrote then, “The entire Republican Party is united in support of an anti-labor politics that puts ordinary workers at the mercy of capital.” Republicans don’t have a problem with corporate speech or corporate prerogatives as a matter of principle; they have a problem with them as a matter of narrow partisan politics.”

A study by Cowger and colleagues appearing in the Nov. 9 issue of the NEJM provides new evidence that the removal of universal school masking policies in Massachusetts was associated with an increased incidence of Covid-19.

From the accompanying editorial by Raifman and Green:

“The study used difference-in-differences methods, a rigorous form of causal inference for policies that are infeasible or unethical to assess in a randomized trial. During a 15-week period (March to June 2022), Covid-19 cases in school districts that had ended universal school masking policies (70 districts for most of the 15-week period) were compared with cases in school districts that sustained universal masking policies (2 districts for most of the 15-week period). The removal of universal school masking was associated with an additional 2882 Covid-19 cases among 46,530 staff (an estimated 81.7 cases per 1000 staff) and an additional 9168 Covid-19 cases among 294,084 students (an estimated 39.9 cases per 1000 students) during the 15 weeks. In school districts that had ended universal masking, approximately 40% of 7127 staff cases and 32% of 28,524 student cases were associated with the removal of universal masking policies.”