Good morning. I never would have guessed in a zillion years that, with 8 per cent inflation, the president’s party could manage a draw in a midterm election. Not sure what happened, but it’s an excellent lesson in epistemic modesty. Email us: [email protected] and [email protected].

FTX again, again

From “assets are fine” on Monday to bankruptcy on Friday, the unravelling of FTX happened faster than we could type. The weekend offered no respite. An incomplete summary of what’s transpired since Unhedged last published:

• FTX was hacked for as much as $477mn.

• Why Binance didn’t buy became clear. The FT got hold of FTX’s balance sheet as of November 10, showing an $8bn gap between liquid assets and liabilities.

• Legal trouble is brewing. The crypto exchange Kraken froze accounts associated with FTX execs after conversations with “law enforcement”. FTX said it would resume withdrawals for customers in the Bahamas, where it is based, suggesting this was at regulators’ request. The Bahamian financial regulator’s reply: we didn’t tell them to do anything. Later on Sunday, Bahamian authorities launched a probe to find “if any criminal misconduct occurred”.

• Everyone is scared of contagion. Binance’s CEO warned of “cascading effects”. Crypto traders like Genesis and Galois Capital disclosed hundreds of millions in funds trapped on FTX. The exchange Crypto.com saw a rush of customer withdrawals on fears it could be next. (20 per cent of its assets are reportedly in shiba inu coin.)

This is all very bad.