The Epic Collapse of Greensill Capital

[@wallstreetmillennial]

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[@Ryfael]

This video was just posted but the comment was made a day ago?

[@impostervt]

As soon as you hear Softbank, you know things are about to go downhill.

[@richardvonmeyer]

True. You can say that Masayoshi Dad is disappointed in his son Masayoshi Son.

[@LathropLdST]

As I see "Credit Suisse"... Same.

[@louistech112]

Loll so true

[@Jamietheroadrunner]

Also when u hear “deutsche bank”.

[@Jamietheroadrunner]

@@richardvonmeyer Now that’s a (masayoshi)dad joke I can get behind. Cause if I got in front of Masayoshi Son he’d screw me.

[@vjbk1587]

Balance sheet manipulation: 3 years in jail. Chances of prison time: virtually 0. Dude gets to stay wealthy enough to lay low and reappear 5 years from now with the next "opportunity".

[@abelardoruiz5544]

Classic

[@brandodurham]

No such thing as crime for rich white people

[@samsonsoturian6013]

Dude, we don't disposes people simply because we envy their post. We punish what we can prove.

[@aaronhpa]

@@samsonsoturian6013 it's not envy, is hatred. They get rich while we pay the bill with our savings, our jobs or our taxes 🤬🤬

[@RoIIingStoned]

That’s what happens to these crooks. They get caught. The mid and low tier get screwed and they get a “fine” but get to keep the money they made for the most part

[@forbesy33]

Reminds me of 2008 all over again. Heavily leveraged cheap capital with thin balance sheets. Lehman Brothers, Bear Stearns, RBS, Citi, AIG just long enough for the new generation of financiers to make the same mistakes again.

[@samsonsoturian6013]

Not the same derivatives or scale, but a ordinarily safe investment leveraged up to unsafe levels and systemic lack of understanding of the risks, yes.

[@tomlxyz]

AIG didn't lend tho, they technically didn't act risky on an individual level, just didn't consider systemic risk

[@tomlxyz]

@@samsonsoturian6013 Sibprime mortgages aren't safe investments

[@samsonsoturian6013]

@@tomlxyz people thought they were at one point. Just like a lot of people think investing in select disruptive techs is a no-risk bet these days.

[@davidjma7226]

No scandal would be complete without Debit Suisse!!

[@sakuraflares7054]

😂

[@jaredfischer6895]

I love the term "future accounts receivable lending." I'm going to try that out next time I need a mortgage

[@kofiamoako3098]

Sounds like a brilliant idea too.

[@mcskipper100]

Unfortunately, only companies can apply for this kind of loans Accounts receivable financing is a source of funding in which a business agrees to sell its outstanding or future receivables at a discount to a finance company. That finance company will assume the risk on the receivables and, in return, provide an approved amount of funds to the business

[@AceCrickey]

@@mcskipper100 that is literally the subject of this video.

[@cheesejrr]

that is what a mortgage is, really. they are giving you £xk on the basis of your future income.....

[@bunnylove2212]

"they used complex AI" means: 2 interns bored over spreadsheets and found what they were told to, and hide what they were forced to.

[@richardbrayshaw570]

There are a couple more rabbit holes to go down here: What is this AI technology and how did it function? Sounds like a lot of smoke and mirrors that would normally attract a fair amount of due diligence from investors and regulators. And why did Greensill pivot away from its core business model towards that GFG Foundation train crash, sticking with it until the inevitable implosion?

[@gorka9020]

Good point that passed overlooked. Was their Ai just run-of-the-mill modern day Ai (which certainly provides some value) or something closer to a fabrication?

[@fartywood3917]

I hate it when companies use fancy tech terms like AI/ML/Blockchain to artificially become a "tech" company. "Fintech" is the biggest scam of all. There is absolutely no tech in Fintech, if there is any, its basic backend tech to run the infrastructure. Thats it. By the current norms of Fintech, every bank in the 70s should have been called "Fintech" when they started using mainframes.

[@gorka9020]

@@fartywood3917 True that.

[@ebx100]

When I was a teen, I played with neural networks on my IBM PC clone. A lot of "AI" is baked over neural network technology from the 80's. I haven't seen any breakthrough technology in neural networks since then. The power of branding never ceases to amaze me.

[@gorka9020]

@@ebx100 I totally agree. Have friends working with ML, they formermly were just data analysts and have witnessed the evolution of the field. Not much real improvement over decades old techniques but a lot of hype on their opinion.

[@gathuonjoroge1736]

It's like "AI technology" is a red flag

[@eris7070]

it's presented as a magic wand and people really want to believe

[@samsonsoturian6013]

It's one of those things where most investors can't distinguish between what is easy and what is impossible. Like quantum mechanics

[@EduardoEscarez]

@@samsonsoturian6013 "Artificial Intelligence" is the "quantum" in the late 2010s - early 20s.

[@EduardoEscarez]

What they say: We build this new business with Artificial Intelligence The reality: Excel spreadsheets all the way down!

[@dollarcostbackpacker1226]

Ikr.... been thinking about that time elon musk put that man in a gimp suit. The gimp danced, and elon talked about the ai robots they were building.... instead of showing the ai robot they were buolding

[@LESTR97]

If you hear the names "Credit Suisse" & "Softbank," you know it's gonna be bad. Also, be very skeptical of companies that use "AI/machine learning" for marketing.

[@johnskilling7019]

"Future accounts receivable lending." Sounds very much like Enron, where they were logging expected future payments as payments received, or something to that effect.

[@johnstirling6597]

With a name like Skilling i suppose everything sounds like Enron.😁

[@johnskilling7019]

@@johnstirling6597 Touche' No relation to Jeff, although our last name isn't exactly common. We're could be like 10th cousins or something. Either way, I haven't seen one red cent of that money he stole.

[@johnstirling6597]

@@johnskilling7019 🙈🙉🙊

[@johnpatrick1588]

Soft Bank hit a home run on an investment years ago but between the We Work investments and Greensill investment Soft bank doesn't look so smart.

[@fksons4161]

They were never smart. It's all media hype. I sometimes wonder how stupid the investors could be putting their money in SoftBank

[@fss1704]

@fksons4161 wewoke people, webroke people

[@willleahy6958]

It's never a proper clusterf*ck unless Credit Suisse are on board.

[@amirmuneer8986]

Softbank too

[@MemoirsofaBasketcase]

Whomp I applied for a job here…guess I lucked out.

[@glennchartrand5411]

It looks to me like they started making invoice backed loans to a large customer and that customer asked for "future sales" loans as well. The company looked healthy so they did it , with the agreement that the "future sales loans" would be paid off with invoices as soon as possible. They were unaware that it would set off a chain reaction that would wipe out both companies.

[@anthonyparle7342]

The AI was a excel spread sheet, not sure that can be classed as AI.

[@fss1704]

It's the short for assumed intelligence

[@ArktosBears]

It doesn't matter what your revenue or profit margin is, if you can't remain liquid

[@armchairwomanmao2922]

FINALLY Greensill is featured. Please make a video on GFG!!

[@xcw4934]

I've heard bits and pieces in the news about this but I've not heard anywhere (including this video) arguments explaining that the fundamental reason this operation collapsed was a shortcoming of the predictive algorithms to do with creditworthiness. So I'm not sure where you're getting your concluding remarks about the disappointing performance of the AI from. It seems the fundamental problem was that Greensill misrepresented the degree of security they were receiving on the loans they were issuing and when the German banking regulator discovered this, they pulled the plug on their cash stream. This stopped them being able to continue lending to GFG which was such a massive part of Greensill's business they were co-dependent and so they collapsed together.

[@salvadoravalos9950]

I’m very surprised this page doesn’t have more subscribers - very surprised.

[@fartywood3917]

Excellent video, watched the FT video on this. but it wasnt as clear as this one!! Thanks for uploading.

[@JB-1996]

The product they started off with, which at least in the US is called invoice factoring, is a relatively low revenue product, so I’m not surprised that they shifted to basically merchant cash advance (MCA) lender, a lot more money there especially with access to cheap capital. However the fact that they sold it to investors and governments as just invoice factoring is insane.

[@abuferasabdullah]

Finally good episode like previous old ones

[@subhamagarwal6304]

The company could have been salvaged within a year of they wanted, the company didn't actually default, but were forced to default because the funds were frozen, it's like the brought the worst case scenario to prevent the worst case to catch them off-guard, instead, they should have tried to slowly legitimise operations.

[@EatingCtrlV]

LOL why is SoftBank always the one investing in all of these companies that collapse? Perhaps they should look into that.

[@socomplex2994]

You On To Something!

[@amosigil8]

Could SOFI be the next Greensill or could SOFI's trajectory avoids the pitfall that Greensill had trodden?

[@harry8912]

Comparing both business models is gullible. SOFI is a proper bank and not an investment bank. Nothing that I’ve seen from SOFI is a red flag or fishy yet.

[@msahakim]

This is nothing more than factoring financing that has been lent out by conventional banks for decades.

[@MrGlutenFree.]

Exactly and that's what people seem to forget. Also not decades my friend but more like centuries. Its crazy how when someone uses the word "tech" all of a sudden people think its a revolutionary idea

[@kevinbarry71]

David Cameron well respected on a global stage? Wrong, try again

[@bdogsp0012]

Julie Bishop respected?

[@kevinbarry71]

@@bdogsp0012 Not familiar with her

[@pampsuisselosangeles7145]

David Cameron will sell his mama for a buck, there I fixed it for ya….

[@coop3014]

I’m so tired of the word “disrupt”. That word should just be used synonymously with the word “greed”. All of this disruption is turning and/or our society into Uber and Amazon drivers. Even those two companies are pushing to eliminate humans in their business models to the greatest extent possible. What it’s doing to our economy and the masses of lives of those negatively affected is worse should be criminal. Spend 150k to go to a university to be educated, just so you can do something so mundane and make slightly above minimum wage. Really, it’s sickening how much we’ve let greed take over our country and world for that matter.

[@commonsense7754]

How'd those investments pan out Credit Suisse?

[@robertewalt7789]

This is what used to be called “factoring.” Usually specializing in one industry, like garments.

[@grahamtaylor2282]

Wework tech disruptor of office space.. Ring a bell ...?

[@matthewjohnathanwarburton8342]

"Oh yeah...that guy".

[@biffbenedict1603]

softbank seems to make so many horrible funding decisions. how do they have any money left to invest.

[@socomplex2994]

We Work.

[@Kodakcompactdisc]

First quarter last year they made $45.88B profit, a record for a Japanese company. To put that into perspective Berkshire Hathaway made $42.5B

[@darreljones8645]

"Science solves no problem without creating ten more." - George Bernard Shaw

[@RiseUp_Again]

It's not science, it's GREED that solves no problem without creating ten more problems.

[@XmarkedSpot]

12:18 lol gotta love them German compound words :D

[@youthoughtitwasbadbefore6134]

Oh what a shame. It was and still should be a brilliant business model. AI driven supply chain invoice advances. But set in stone Two rules.1: limit size of invoices per individual supplier. (to spread risk) and 2: Stick to actual verified invoices. Sign me up.

[@abelardoruiz5544]

Of course Credit Suisse is in this disaster ... Maybe we should short other businesses backed by them..

[@samsonsoturian6013]

Dude, there's a finite number of investment banks on account the business heavily favors economies of scale. The hair brained schemes of various competing departments don't reflect anyone else.

[@Ryfael]

Is this a reupload?

[@tjejojyj]

Where was the “AIl” in their procedures? If it was just machine learning, what data set was it trained on. The deficiencies of ChatGPT should convince everyone of the limitations of machine learning unless the training data is reliable.

[@cheesejrr]

Some mistakes here, Greensill didn't;t use any AI or machine learning at all.

[@sabilaahmad3731]

I got more experience within my family and network through this finance system, i think it was fall because there is lot "hidden" expense in business expansion. NPL not more than 4%, be more trustworthy for client and investor.

[@thegray5730]

Getting your picture taken with the slimiest politicians on earth isn't a red flag, it's a 5 mega ton red flare.

[@abelardoruiz5544]

Of course credit Suisse wants to give them money... Kajaajajaajaja

[@fksons4161]

One thing i have realised is that investment bankers are over-hyped . Supply chain finance is completely different and when they set up the funds, they do not hire the real supply chain finance professionals but fellow investment bankers with no clue about how SCP works.

[@gymbledore9739]

David Cameron, well respected? not sure about that.

[@johnpatrick1588]

If it sounds too good to be true it probably is.

[@maboo736]

It’s a misnomer and wrong to dub Greensill as Enron since they had not committed any accounting fraud. They made missteps by engaging Customers, such as GFG, with unverified invoices.

[@egal1780]

Why does It Always have something to do with Credit Suisse...

[@kodyclarke9696]

Don’t forget softbank

[@ErdnußRiegel6969]

These banks are worthless

[@egal1780]

@@ErdnußRiegel6969 They make Profits, so according to the discounted-cashflow-model, they're Not.

[@pampsuisselosangeles7145]

Because they have a lot of drug money 💰 they need to wash 🧼

[@mrj774]

When Michal Scott starts an invoice factoring company

[@chessplus]

I still don’t understand where the money went? Does GFG owe Greensill billions or not? What happens there? If they do are they repaying?

[@kojack635]

Evertime one of these slimy criminals gets off scot free it emboldens others to do the same

[@samsonsoturian6013]

He didn't exactly commit a crime, he committed market sins.

[@RiseUp_Again]

Instead of lending to small farmers as it was their original business model, they started financing big companies, that's where they went wrong.

[@samsonsoturian6013]

Banking favors economies of scale.

[@realsickvic]

Love the content

[@answerman9933]

It is not a financial scandal without financing from Sofbank.

[@davidjma7226]

It was financial chicanery by all the companies and intermediaries who mugged a bunch of investors. Gupta was indulging in shonky stuff too as suddenly he has all this casflow.

[@MinisterManDan]

Important to note that there were people who saw how BS this company was from the get go, it’s just they worked for FT or were on the Trashfuture podcast, and nobody listened to them

[@denken3225]

Amazing at selling to financial backers, but awful at selling their services to decent clients

[@yogi9631]

Future sales derivatives??? Dodgy invoicing 101 OMG, the warning bells would have been ringing very loud by then.....

[@DanOneOne]

I don't sell on credit and that's it. Instead of supply chain financing the producers should have agreed together to not sell on credit.

[@Andrew-lu6wp]

I think it sounds like he had really good intentions , but ultimately lost his way with greed and lending money wholesale with big returns using leverage . Seems to be a recurring theme .

[@egal1780]

14:56 but also government Run "Institutions", which lost a few Millions collectively.

[@BofaDee33]

The law ia stupid af. Steal 3 billion dollars you get 3 years. Rob 10k from someone and you get 10-15.

[@kennethhuynh28]

The GAME is about to STOP

[@benjaminmatheny6683]

Definitely a Fraud if they were representing future invoice loans as regular invoice loans. The effectiveness of the AI could be excused as marketing or an honest mistake. But a future theoretical sale being presented as a sale completed would be fraud.

[@willychefmdogo718]

Credit suisse has made very many mistakes that's why they are no longer available

[@robertoreza7399]

Why softbank is involved in every modern scam? That's suspicious 🤔

[@allwynmasc1]

So Sanjeev Gupta and gfg alliance is the only one to come out of this mess with almost $ 5B

[@districtnerfco.8390]

Credit Suisse…Financial Advice 👀🤣

[@billpugh58]

Man in expensive suit fools men in expensive suits - repeat

[@mizwequazl]

im happy that the German companies were automatically insured. Did I understand this correctly?

[@jcsjcs2]

No. Private accounts at Greensill Bank will be reimbursed up to 100,000€ per person. Those are checking and saving accounts.

[@benp9442]

One town (Monheim am Rhein) lost 46 million USD. Another town lost 2 million EUR. That's not great considering these are small towns. Monheim basically lost 1000 EUR per person. These institutional investors are not covered by the insurance

[@Golden63]

Technology has the potential to disrupt every aspect of business, given sufficient time and resources, I believe.It’s the frauds and cons that should be blamed. They will fraud money from whatever means possible, whether that technology exists or not.

[@MrScrofulous]

Pretty sure that “AI technology” was code for Lex spinning bullshit, as usual.

[@BlackJesus8463]

Why would they wait years for payment? That's crazy. lol

[@12345fowler]

Funny enough, those brave and somewhat stupid swiss bankers from Credit Suisse invested millions in that scam. Most European companies don't make it sucessfully in the U.S. because it is just another game field with different rules, but usually all what they see is the easy $. Plenty of examples of this.

[@dhvanitdesai1044]

Enron of banking? Enron IS how banking works.

[@darrylbaker5271]

Hang on! Basic audit is to sample check the existence of invoices making up a financing tranche. Sgainh auditors not doing their job.

[@peterhall6656]

I'd love to see the AI algorithm in detail. That whole space is infested with impostors.

[@issamelarmi]

High stakes gambling / printing magic money at it's best!

[@kozmaz87]

Cameron lol. After wrecking a country a company is child's play

[@peterbradshaw8018]

Just finished reading the book The Pyramid of Lies by Duncan Mavin. This man but part delusional full fabulist.

[@jonasdauerbrenner6432]

don't ever touch european fin-tech, you gonna regret it

[@samsonsoturian6013]

8:30 You say "the Swiss bank Credit Suisse" as if you don't realize that's redundant.......

[@djjohnson502]

Too much too soon…had they continued with the original BM they would have been fine…greed…

[@meowmeow1733]

No lips A classic sign of a demon

[@lenaely6146]

#5:11 😏 some of the high profile investors etc are clearly incompetent at due diligence....or just corrupt and incompetent 🙂🤷‍♀️🍟😹😐

[@Cross-xm2fr]

the epic collapse of masterworks

[@keithgoh123]

Ah credit suisse, one of the usual suspects.

[@sc562]

credit suisse taking loss upon loss on the chin. good boy.

[@harry8912]

Credit Suisse is always at the wrong place at the right time. Idk what they look for in investment bankers but they’re so shit bro. When I finish my degree I’m gonna apply just to get my foot in the door. 😂😂😭

[@gregorioj.salazarbibriesca7157]

damn .. those fools should have put all those coins into buying tacos... hmmmm tacos

[@olpkol]

and someone said that in Ukraine "corruption" ...

[@TylerMatthewHarris]

I was a billionaire and lost everything please donate to make me a billionaire again.

[@grahamelsden8973]

Why didn't Greensill stay with the morality it started with,Farm prices would be more stable especially in Ukraine at the moment and in Russia as a consequence,Running before it can walk.

[@user-ye8co7xp6m]

Because he is not interested in doing so. He fell in love with the suit and rubbing shoulders with the elite rather than farming or helping small business. Look at the people he roped in to promote his brand. David Cameron and Julie Bishop. They were both born into wealth and privilege it's a joke to think they care about the little guy. Bishop was part of perhaps the most corrupt uncaring governments Australia has ever seen. Cameron, well, find that photo of him in tails you will see what I mean. Saw this coming a mile away.

[@ronque23]

Holy shit! Do any of these fukn companies learn from Enron?!? How is this different from mark to market? Zero difference. Securing financing based on some future event you hope will happen is a fools game.

[@ronaldwilliams4053]

And they just collapsed

[@stuartegrin7543]

And of course credit Suisse is involved

[@davidjma7226]

Melon farmer spruiks 300 year old Trade Finance concept as a Fintech ! What could possibly go wrong?

[@petergoodfellow8752]

fraud

[@shwetasivasankaran6582]

Greensill is certainly a fraud. They should’ve bandied terms like blockchain and meta/ AR to their sales pitch. Mr Greensill belongs to the dungeons.

[@g.t.g1111]

Both fraudulent and expanding to rapidly.