FTX used imaginary money to get real money

Plus: The Fusion Age begins. [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a repossessed Lambo of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The [FTX debacle]( didn’t destroy so much real money. - The [fusion breakthrough]( is a big deal. - Inflation [really is in retreat](. - Just don’t expect [deflation in housing](. When Sub-Genius Failed Hey, did you know there was a financial crisis happening? Unless you are a crypto bro, it might have escaped you, because it’s primarily impacting dudes who were telling everybody to “Have fun staying poor” just six months ago. Our thoughts and prayers are with their repossessed Lambos at this difficult time. To be sure, some real money has vanished in the crypto gyre, which widened a little more with the [arrest]( of FTX’s Sam Bankman-Fried in the Bahamas. (You know you’re in trouble when even the [Bahamas]( says “That’s enough, pal.”) Countless marks customers and marks VCs pumped billions of real American dollars into crypto and its “Baby’s First Finance” constructs such as FTX. Either they were defrauded, like the prosecutors say, or they were just comically bad at evaluating risk.    But in the final analysis, [not all that much actual money was harmed]( in the making of this debacle, suggests Paul Davies. As with all currencies, crypto’s value is a function of our belief in said value — except old-timey currencies are backed by economies and sometimes nuclear weapons. Crypto’s value is too often backed by wishes and Drakkar Noir fumes. If that and a bunch of ape JPGs go poof, then how much have we lost, really?  In FTX’s case, a bunch of imaginary worth was bound up in crypto tokens it created and gave to SBF’s trading firm Alameda, which then allegedly inflated the value of said tokens and used them as collateral for loans for risky crypto bets and mansions in the Bahamas. When the bets went wrong, Alameda allegedly dipped into real FTX customer money to stay afloat, which Matt Levine writes would [fit a classic model of fraud]( that even [George Bailey]( would understand. And then of course the tokens went poof like so many ape JPGs. SBF’s defense, to anybody who will listen, is that he was just as bad at managing risk as his customers or VCs. But as Matt points out, FTX promised right on the tin to be better at managing risk than the rest of us. This could also be, you guessed it, fraud. The Fusion Age Begins We’ve reached a very strange moment in the Anthropocene, when humanity’s ability to save its environment is running neck-and-neck with its ability to destroy it. Our fossil-fuel use is [thawing]( the Arctic, but our scientists just managed to [create energy from nuclear fusion](, something previously possible only in science fiction. We’re many years from putting a fusion plant on every corner, but Bloomberg’s editorial board writes this breakthrough will attract a critical accelerant to the project: lots and lots of money. Money is also [pouring into green-hydrogen projects](. Eduardo Porter visited one in Chile, which is rich in sun and wind but lacks capacity for sharing its energy with the world. It plans to use that energy to turn water into hydrogen and then into synthetic fuel. Weird, wild stuff, but it could be a model for clean development throughout the Global South. Our technology really is becoming advanced enough to be indistinguishable from magic, as Arthur C. Clarke once put it. But then we’ll need a bit of magic to keep the planet livable. Bonus Future Reading: As it gets hotter outside, we’re increasingly [growing lettuce inside](. — Adam Minter Team Transitory Gets a W The Federal Reserve has taken a lot of abuse over the past year for moving too slowly to fight inflation. The odds are rising that, a year from now, we’ll be praising it for landing the plane gently. CPI grew last month by the [smallest]( amount in a year, a report that Jonathan Levin writes is full of genuinely encouraging signs [price pressures are finally retreating](. The Fed will still shake its rate-hike stick tomorrow, but suddenly it seems less likely to overdo things and cause a deep recession. Bonus Inflation Reading: Letting [inflation stay well above 2%]( will hurt workers. — Tyler Cowen Telltale Chart If you’re in the market for a house but holding out for lower prices or lower mortgage rates, then [you’re making a mistake](, Alexis Leondis writes. There has frankly never been a better time to buy my house. Further Reading The West shouldn’t be too eager to [cut a deal with Vladimir Putin](. — Andreas Kluth India’s hyper-nationalism is causing it to [blow its big moment on the world stage](. — Pankaj Mishra The world has almost completely [cut China off from the semiconductor]( supply chain. — Tim Culpan Crispr just [cured a girl’s cancer](. — Lisa Jarvis ICYMI Apple might let [us use third-party app stores](. [Elon Musk is no longer]( the world’s richest person. Hidden fentanyl is [driving an OD surge]( in the US. Kickers New Zealand is [banning tobacco](. Area 12-year-old designs a [water bottle you can eat](. All humans have a common approach to [softening swear words](, a gosh-darn study has shown. RIP, “Twin Peaks” composer [Angelo Badalamenti](. Notes:  Please send edible water bottles and complaints to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. 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