Nov 20

Today’s News 20th November 2022

  • Conrad Black: A Step Toward National Suicide?
    Conrad Black: A Step Toward National Suicide?

    Authored by Conrad Black via The Epoch Times (emphasis ours),

    The Nov. 8 midterm elections were a watershed in modern American history. The implications of choosing a president whom the public strongly disapproves of and is generally a failure, over a controversial but undoubtedly capable and successful ex-president, are very serious.

    Democrat Party materials encouraging people to vote in the midterm general election are seen in Philadelphia on Nov, 7, 2022. (Mark Makela/Getty Images)

    That the Democrats and their lock-step allies in the national media succeeded in putting across the colossal smear that former President Donald Trump is a supporter of violence and a threat to the constitutional system could be interpreted as a long step toward the national suicide that Abraham Lincoln foresaw is the only way in which the American project could perish.

    Former CIA Director John Brennan called Trump a traitor; former National Intelligence Director James Clapper declared as a matter of settled fact that Trump was a Russian intelligence asset. The corruption of the FBI and the intelligence agencies in the dissemination of the infamous Steele dossier funded by the Hillary Clinton campaign as authentic intelligence revealing Trump as completely unsuited to public office and the profound dishonesty of former FBI Director James Comey in white-washing Clinton’s alleged destruction of subpoenaed evidence and his recourse to surveillance granted in response to false affidavits while attempting to destroy the Trump presidency have escaped legal retribution by the somnambulant Durham investigation, and there will be no retribution for any of it.

    Yet, Trump is the tainted protagonist. The Russian collusion hoax was the most monstrous defamation ever inflicted on a U.S. president. The spurious impeachment of him, for an innocuous telephone call to the president of Ukraine about the commercial activities of the Biden family in his country—now notorious but probably a matter of political suppression of the normal working of American justice—was in the same category of misuse of the political system for the lowest and most destructive partisan ends.

    It’s obvious that the potentially millions of harvested ballots that couldn’t be verified in the 2020 presidential election could easily have provided the 50,000 vote switchover needed in Pennsylvania and two other states to flip that election to Trump in the Electoral College. The dishonesty of the universal media stone wall that 2020 was a pristine presidential election is compounded by the judiciary’s abdication of its coequal role in government and reassertion of its refusal to consider overturning the apparent presidential election result.

    Democratic strategists deserve a near-perfect score for tactical judgment: They rounded up a big majority among young voters by hammering the abortion issue, emphasizing the reduction in marijuana penalties, and championing student loan forgiveness. This and the malicious and unctuous pressing of the safety of democracy as a euphemism for the defamatory nonsense that Trump was a menace to the Constitution turned the minds of an adequate number of voters to produce a dangerously perverse result. They have pretty well given up the former slanders that Trump is a racist, homophobe, and misogynist.

    Tabulating all of the votes cast for all offices contested last week, the Republicans outpolled the Democrats all over. The Democrats only took what they needed. Politics is a notoriously unjust occupation; Trump is objectively perhaps among the 10 most successful holders of that office. But he did great harm to himself by his lack of public relations judgment, and this fact in the hands of the political and social media monopoly of his enemies working with the strategists and saboteurs in the Democratic leadership have unfortunately won the match.

    But even the voters who rendered such an ambiguous result on Nov. 8 have betrayed a concern that the incompetence of the Biden administration, with the duplicity of the Democratic congressional leaders, can’t go on indefinitely. But they’ve demonstrated that Trump isn’t the man to stop them and to tear the government apart and repopulate it with people with clean hands.

    There’s still an important place for Trump to complete the task that he commenced of transporting the Republican Party from the country clubs to the championship of the disadvantaged and working and middle class of America, and to cleaning out the bipartisan infestation of placemen and decayed servitors of the federal political and administrative state. But the former president is far from blameless in his own misfortunes. He warned of the dangers of ballot harvesting in 2020 but was completely inadequate in taking preventive measures or even following up efficiently to challenge the vulnerable points. Instead, we had the well-intended but completely ineffectual efforts of Rudolph Giuliani and Sidney Powell. In order to make his case plausibly, he absolutely had to avoid precisely the sort of outrage that occurred on Jan. 6, 2021. But the fact that Speaker Nancy Pelosi and Washington Mayor Muriel Bowser paid no attention to Trump’s warnings that matters could get out of hand and his offer of 20,000 National Guardsmen indicates the Democrats’ role was a good deal less innocent than they pretend.

    But Trump knew what desperate and sleazy people he was dealing with, and he doesn’t have a credible excuse for being so reckless. This condemned him to having to continue to emphasize the 2020 election irregularities in order to justify his calling forth such a huge and discontented crowd at the Washington Elipse on Jan. 6, 2021. Of course, he no more sought an insurrection than Sens. Mitch McConnell (R-Ky.) and Chuck Schumer (D-N.Y.) did.

    The only way to complete Trump’s work and root out and politically exterminate those who have corrupted the intelligence and justice arms of the federal government and have dragooned the contemptible but still insidiously influential national political media in full metal jacket Trump-hate, is for Trump to identify and support the successor whom he favors as Republican presidential candidate.

    He shouldn’t go back to his 2016 playbook and insult all the other prominent Republicans. He has exchanged enough fire with his Republican enemies, contemptible though many of them are, and did well to win the first round and come so close in the second. The third round last week was an acute disappointment, and the Republican Party doesn’t need, and the American public doesn’t wish for, an internecine war on the scale that would rage if Trump sought another presidential nomination. But another candidate plausibly pledged to the enactment of the Trump program and supported by Trump but not stigmatized by him, could lead the desperately needed national political purgation.

    Read more here…

    Tyler Durden
    Sat, 11/19/2022 – 23:30

  • The Most And Least Reliable Cars In America
    The Most And Least Reliable Cars In America

    Toyota, Lexus and BMW are the most reliable manufacturers of new cars according to the annual survey of U.S. nonprofit Consumer Reports. Compiled by assessing issues with over 300,000 vehicles in 17 trouble spots over the past 12 months according to participant feedback, the index saw major movement compared to 2020.

    As Statista’s Florian Zandt shows in the chart below, two legacy brands, in particular, have moved up and down the ladder significantly…

    Infographic: The Most and Least Reliable Cars in America | Statista

    You will find more infographics at Statista

    While Toyota and Lexus traded places year-over-year, German manufacturer BMW climbed 10 spots and won the bronze medal in terms of reliability. Dropping 10 ranks, on the other hand, is Chevrolet, which only scored 40 out of 100 possible index points across all its models.

    Notably, seven of the 10 highest-rated brands are Japanese.

    The most valuable car company in the world, Tesla, which came in second-to-last in 2020, managed to climb four ranks. According to Reuters coverage of the report, the EV manufacturer still faces problems concerning “body hardware, steering/suspension, paint and trim, and climate system on its models.”

    Jeep and Volkswagen dropped even further compared to 2020.

    Coming in last is Mercedes-Benz, earning a reliability score of 26 out of 100.

    Consumer Reports’ annual study analyzes consumer feedback for car manufacturers with more than two models and includes only the brands with enough data. By aggregating statistically significant weak points of popular car brands in the new car market, the report offers valuable insight into the market in the United States. It is considered vital information for every branch of the domestic automobile industry.

    In case you were wondering, Consumer Reports notes that this year we have insufficient data to rank Alfa Romeo, Chrysler, Dodge, Fiat, Infiniti, Jaguar, Land Rover, Maserati, Mini, Mitsubishi, Polestar, Porsche, and Rivian.

    Tyler Durden
    Sat, 11/19/2022 – 23:00

  • Escobar: Goodbye G20, Hello BRICS+
    Escobar: Goodbye G20, Hello BRICS+

    Authored by Pepe Escobar via The Cradle,

    The increasingly irrelevant G20 Summit concluded with sure signs that BRICS+ will be the way forward for Global South cooperation…

    The redeeming quality of a tense G20 held in Bali – otherwise managed by laudable Indonesian graciousness – was to sharply define which way the geopolitical winds are blowing.

    That was encapsulated in the Summit’s two highlights: the much anticipated China-US presidential meeting – representing the most important bilateral relationship of the 21st century – and the final G20 statement.

    The 3-hour, 30-minute-long face-to-face meeting between Chinese President Xi Jinping and his US counterpart Joe Biden – requested by the White House – took place at the Chinese delegation’s residence in Bali, and not at the G20 venue at the luxury Apurva Kempinski in Nusa Dua.

    The Chinese Ministry of Foreign Affairs concisely outlined what really mattered. Specifically, Xi told Biden that Taiwan independence is simply out of the question. Xi also expressed hope that NATO, the EU, and the US will engage in “comprehensive dialogue” with Russia. Instead of confrontation, the Chinese president chose to highlight the layers of common interest and cooperation.

    Biden, according to the Chinese, made several points. The US does not seek a New Cold War; does not support “Taiwan independence;” does not support “two Chinas” or “one China, one Taiwan”; does not seek “decoupling” from China; and does not want to contain Beijing.

    However, the recent record shows Xi has few reasons to take Biden at face value.

    The final G20 statement was an even fuzzier matter: the result of arduous compromise.

    As much as the G20 is self-described as “the premier forum for global economic cooperation,” engaged to “address the world’s major economic challenges,” the G7 inside the G20 in Bali had the summit de facto hijacked by war. “War” gets almost double the number of mentions in the statement compared to “food” after all.

    The collective west, including the Japanese vassal state, was bent on including the war in Ukraine and its “economic impacts” – especially the food and energy crisis – in the statement. Yet without offering even a shade of context, related to NATO expansion. What mattered was to blame Russia – for everything.

    The Global South effect

    It was up to this year’s G20 host Indonesia – and the next host, India – to exercise trademark Asian politeness and consensus building. Jakarta and New Delhi worked extremely hard to find wording that would be acceptable to both Moscow and Beijing. Call it the Global South effect.

    Still, China wanted changes in the wording. This was opposed by western states, while Russia did not review the last-minute wording because Foreign Minister Sergey Lavrov had already departed.

    On point 3 out of 52, the statement “expresses its deepest regret over the aggression of the Russian Federation against Ukraine and demands the complete and unconditional withdrawal of armed forces from the territory of Ukraine.”

    “Russian aggression” is the standard NATO mantra – not shared by virtually the whole Global South.

    The statement draws a direct correlation between the war and a non-contextualized “aggravation of pressing problems in the global economy – slowing economic growth, rising inflation, disruption of supply chains, worsening energy, and food security, increased risks to financial stability.”

    As for this passage, it could not be more self-evident: “The use or threat of use of nuclear weapons is inadmissible. The peaceful resolution of conflicts, efforts to address crises, as well as diplomacy and dialogue, are vital. Today’s era must not be of war.”

    This is ironic given that NATO and its public relations department, the EU, “represented” by the unelected eurocrats of the European Commission, don’t do “diplomacy and dialogue.”

    Fixated with war

    Instead the US, which controls NATO, has been weaponizing Ukraine, since March, by a whopping $91.3 billion, including the latest presidential request, this month, of $37.7 billion. That happens to be 33 percent more than Russia’s total (italics mine) military spending for 2022.

    Extra evidence of the Bali Summit being hijacked by “war” was provided by the emergency meeting, called by the US, to debate what ended up being a Ukrainian S-300 missile falling on a Polish farm, and not the start of WWIII like some tabloids hysterically suggested.

    Tellingly, there was absolutely no one from the Global South in the meeting – the sole Asian nation being the Japanese vassal, part of the G7.

    Compounding the picture, we had the sinister Davos master Klaus Schwab once again impersonating a Bond villain at the B20 business forum, selling his Great Reset agenda of “rebuilding the world” through pandemics, famines, climate change, cyber attacks, and – of course – wars.

    As if this was not ominous enough, Davos and its World Economic Forum are now ordering Africa – completely excluded from the G20 – to pay $2.8 trillion to “meet its obligations” under the Paris Agreement to minimize greenhouse gas emissions.

    The demise of the G20 as we know it

    The serious fracture between Global North and Global South, so evident in Bali, had already been suggested in Phnom Penh, as Cambodia hosted the East Asia Summit this past weekend.

    The 10 members of ASEAN had made it very clear they remain unwilling to follow the US and the G7 in their collective demonization of Russia and in many aspects China.

    The Southeast Asians are also not exactly excited by the US-concocted IPEF (Indo-Pacific Economic Framework), which will be irrelevant in terms of slowing down China’s extensive trade and connectivity across Southeast Asia.

    And it gets worse. The self-described “leader of the free world” is shunning the extremely important APEC (Asia-Pacific Economic Cooperation) summit in Bangkok at the end of this week.

    For very sensitive and sophisticated Asian cultures, this is seen as an affront. APEC, established way back in 1990s to promote trade across the Pacific Rim, is about serious Asia-Pacific business, not Americanized “Indo-Pacific” militarization.

    The snub follows Biden’s latest blunder when he erroneously addressed Cambodia’s Hun Sen as “prime minister of Colombia” at the summit in Phnom Penh.

    Lining up to join BRICS

    It is safe to say that the G20 may have plunged into an irretrievable path toward irrelevancy. Even before the current Southeast Asian summit wave – in Phnom Penh, Bali and Bangkok – Lavrov had already signaled what comes next when he noted that “over a dozen countries” have applied to join BRICS (Brazil, Russia, India, China, South Africa).

    Iran, Argentina, and Algeria have formally applied: Iran, alongside Russia, India, and China, is already part of the Eurasian Quad that really matters.

    Turkey, Saudi Arabia, Egypt, and Afghanistan are extremely interested in becoming members. Indonesia just applied, in Bali. And then there’s the next wave: Kazakhstan, UAE, Thailand (possibly applying this weekend in Bangkok), Nigeria, Senegal, and Nicaragua.

    It’s crucial to note that all of the above sent their Finance Ministers to a BRICS Expansion dialogue in May. A short but serious appraisal of the candidates reveals an astonishing unity in diversity.

    Lavrov himself noted that it will take time for the current five BRICS to analyze the immense geopolitical and geoeconomic implications of expanding to the point of virtually reaching the size of the G20 – and without the collective west.

    What unites the candidates above all is the possession of massive natural resources: oil and gas, precious metals, rare earths, rare minerals, coal, solar power, timber, agricultural land, fisheries, and fresh water. That’s the imperative when it comes to designing a new resource-based reserve currency to bypass the US dollar.

    Let’s assume that it may take up to 2025 to have this new BRICS+ configuration up and running. That would represent roughly 45 percent of confirmed global oil reserves and over 60 percent of confirmed global gas reserves (and that will balloon if gas republic Turkmenistan later joins the group).

    The combined GDP – in today’s figures – would be roughly $29.35 trillion; much larger than the US ($23 trillion) and at least double the EU ($14.5 trillion, and falling).

    As it stands, BRICS account for 40 percent of the global population and 25 percent of GDP. BRICS+ would congregate 4.257 billion people: over 50 percent of the total global population as it stands.

    BRI embraces BRICS+

    BRICS+ will be striving towards interconnection with a maze of institutions: the most important are the Shanghai Cooperation Organization (SCO), itself featuring a list of players itching to become full members; strategic OPEC+, de facto led by Russia and Saudi Arabia; and the Belt and Road Initiative (BRI), China’s overarching trade and foreign policy framework for the 21st century. It is worth pointing out that early all crucial Asian players have joined the BRI.

    Then there are the close links of BRICS with a plethora of regional trade blocs: ASEAN, Mercosur, GCC (Gulf Cooperation Council), Eurasia Economic Union (EAEU), Arab Trade Zone, African Continental Free Trade Area, ALBA, SAARC, and last but not least the Regional Comprehensive Economic Partnership (RCEP), the largest trade deal on the planet, which includes a majority of BRI partners.

    BRICS+ and BRI is a match everywhere you look at it – from West Asia and Central Asia to the Southeast Asians (especially Indonesia and Thailand). The multiplier effect will be key – as BRI members will be inevitably attracting more candidates for BRICS+.

    This will inevitably lead to a second wave of BRICS+ hopefuls including, most certainly, Azerbaijan, Mongolia, three more Central Asians (Uzbekistan, Tajikistan, and gas republic Turkmenistan), Pakistan, Vietnam, and Sri Lanka, and in Latin America, a hefty contingent featuring Chile, Cuba, Ecuador, Peru, Uruguay, Bolivia, and Venezuela.

    Meanwhile, the role of the BRICS’s New Development Bank (NDB) as well as the China-led Asia Infrastructure Investment Bank (AIIB) will be enhanced – coordinating infrastructure loans across the spectrum, as BRICS+ will be increasingly shunning dictates imposed by the US-dominated IMF and the World Bank.

    All of the above barely sketches the width and depth of the geopolitical and geoeconomic realignments further on down the road – affecting every nook and cranny of global trade and supply chain networks. The G7’s obsession in isolating and/or containing the top Eurasian players is turning on itself in the framework of the G20. In the end, it’s the G7 that may be isolated by the BRICS+ irresistible force.

    Tyler Durden
    Sat, 11/19/2022 – 22:30

  • Democrat Rep. Claims Slavery Reparations Could Have Saved Black Americans From COVID
    Democrat Rep. Claims Slavery Reparations Could Have Saved Black Americans From COVID

    Leftists are now scraping the bottom of the barrel when it comes to arguments in favor of reparations for slavery.  This week, Democrat House Representative Sheila Jackson Lee from the 18th Congressional District surrounding Houston, Texas (one of the only blue districts in the entire state), “demanded” that reparations be made. 

    Her argument?  Lee presents the usual debunked social justice narratives claiming that the generations of today are somehow responsible for and benefit from the trespasses of a minority of slave owners who lived centuries ago (Only 1.4% of the population of the US were slave owners in 1860 right before the Civil War according to stats derived from the Census Bureau – This is a number the media continually claims is “not a proper metric,” and yet it is a mathematical fact.  Even if one includes the entire extended family of each slave owner in the metric as beneficiaries, the number is still only 7.4% of the population).   

    Lee, who has a noted habit of making some of the dumbest comments of any congressional representative, also insists that black Americans would have had a lesser transmission rate and death rate from covid if they had been paid reparations in advance:

    Lee does not cite the specific Harvard study she mentions in her speech that supposedly supports her assertion, but with social justice politics invading scientific inquiry the past few years, it is highly likely that said study is biased and holds no basis in fact.  One could say that ANY person might get better medical treatment if they had more money, but that is the extent of the argument and it has nothing to do with race or reparations or covid for that matter. 

    As with most things, equity is a fantasy because nature does not operate on fairness.  Covid is not fair, just as life is not fair.  The reparations game has grown tiresome, most of all because every race, every culture and every religion has faced tyranny and slavery in the past.  There are no exceptions.  Trying to maintain a running tally of who wronged who over thousands of years is impossible and pointless. 

    The political left prides itself on being “progressive” to the point that they seek to tear down the past and not let history or heritage determine the future.  Yet, they continue to cling like parasites to their own incomplete version of the history of slavery as a means to get free handouts for many years to come.  This is not progressive, this is regressive and holds our society back from true racial equality in which everyone’s future is decided by their effort and their merit, not the color of their skin.     

    Tyler Durden
    Sat, 11/19/2022 – 22:00

  • FTX Post Mortem Part 1 Of 3: WTF Really Happened?
    FTX Post Mortem Part 1 Of 3: WTF Really Happened?

    Authored by Scott Hill via BombThrower.com,

    The dust hasn’t settled, but the smoke is beginning to clear, somewhat… Here’s WTF just happened, and what happens next…

    On November 2nd Coindesk published a leaked balance sheet from FTX affiliated market maker Alameda Research.

    Ten days later the third largest Crypto exchange in the world was bankrupt and its founder was under international investigation for fraud.

    In this article I’ll go through how Crypto giant FTX fell apart. There is a lot of backstory to this situation which I’ll cover in a following article, discussing the beginnings of Alameda research and the story of how a sketchy hedge fund turned into a major exchange.

    As you’ve no doubt heard repeatedly this week, self custody of your Crypto is the safest approach until we know who is insolvent and the extent of the contagion. If you’re not confident with self custody, Coinbase and Kraken seem to be the safest Crypto exchanges, but that is still a counterparty risk that I’m not willing to take personally in these market conditions.

    The Balance Sheet Leak

    The exclusive scoop from Coindesk looked bad for Alameda Research. The firm, which performed market making on FTX as well as taking directional bets and venture capital investments, seemed insolvent on a realized value basis.

    Their balance showed $14.6 billion in assets held against $8 billion in liabilities. On paper solvent on a mark-to-market basis, but digging in there was no way that mark was reasonable.

    The most egregious example was $5.82 billion worth of FTT tokens on the asset side, around a third locked and the rest unlocked and available to trade. FTT is a token created by FTX, a sort of pseudo-equity token which represented some share of the exchange revenues. Kind of.

    FTX had been doing periodic buybacks of the token which were supposed to represent a distribution of exchange revenues to holders. Holding the token also entitled traders to a discount on trading fees. The token was at the time worth around $26. At its peak it was worth around $80.

    The main thing that FTT was used for though, was pledging as collateral by FTX and Alameda. 

    You read that right, a token which the exchange invented a little over 3 years ago was used as collateral for loans. We know for sure that it was acceptable collateral in various Solana DeFi protocols, which FTX had a significant amount of influence over; but reports are also surfacing that it may have been used to purchase real estate in the Bahamas and quite possibly with various institutional Crypto lending like Genesis which is now facing major problems.

    The problem with FTT

    There’s nothing inherently wrong with using Crypto tokens as collateral if there is a robust and deep market pricing them. If the loan goes bad, lenders can seize the collateral and sell it off, covering some of their loss.

    FTT didn’t have a deep and robust market.

    The “flywheel” scheme – via Dirty Bubble Media

    There was barely any volume. There was barely any liquidity. If a lender had to sell a large volume in a hurry there weren’t any buyers ready to step in.

    While Alameda was claiming to have $5.82 billion of its balance sheet held in FTT tokens, the entire available market cap was less than $4 billion.

    Read that again, Alameda’s balance sheet held more than the entire market cap of FTT. 

    So this wasn’t a situation where a lender might make a loss on selling the collateral, this was a situation where there were potentially billions in loans floating around in the Crypto ecosystem with essentially no collateral that could be liquidated without detonating the market.

    Just to top it off, some of this FTT was likely pledged to multiple lenders.

    Industry Reaction

    The initial reaction was general indifference. Alameda looked like it was playing with fire and had gone all in on the exchange token for its sister company FTX alongside various other FTX supported coins like Solana and Serum. It was an open secret in the industry that Alameda and FTX were more intertwined than they claimed, but if push came to shove it was assumed that Alameda would be allowed to fail and FTX would continue being the highly profitable exchange that everyone assumed it was.

    FTX was highly profitable, right?

    There were a few that were calling the bluff, but the main gripes were conflict of interest within FTX related companies and unsavory business practices by FTX, trading against customer positions and liquidating accounts improperly. The usual bucket shop tricks. No one seemed to be expecting a total insolvency across the FTX group of companies.

    But still something didn’t feel right. Caroline Ellison, the newly appointed CEO of Alameda Research tried to calm fears on Twitter, claiming that the leaked balance sheet was only a partial balance sheet, there were another $10 billion in assets elsewhere within the corporate structure, and they’ve paid down most of their loans.

    It was a strange and deeply unsettling response, shrugging the issue off as if the industry should just take her at her word.

    Enter the CZ Dragon

    Even CZ, the CEO of rival exchange Binance, didn’t seem to be suggesting that FTX was in trouble. Late on Sunday November 6 CZ announced that he would be liquidating the FTT held by Binance.

    All $500 million of it.

    Binance had been the sole investor in the seed round for FTX.  In 2021 they were bought out for $2.1 billion in cash and FTT tokens. This alone wasn’t enough to push markets into panic. CZ said he would do this over a number of months, carefully and slowly in an attempt to “minimize the market impact”. In a follow up tweet, CZ said that he was doing “post-exit risk management, learning from Luna”

    Everyone in Crypto knew what he meant by “learning from Luna”

    In May Luna detonated, dropping to zero. The protocol is now seen as a deeply flawed project in the best possible light and a blatant ponzi scheme in the more realistic assessment.

    Did CZ, the most powerful man in Crypto just call FTX a ponzi scheme?

    Panic

    Crypto industry figures were in disbelief. Surely FTX, the darling of the industry, was a highly profitable, solvent and legitimate business. But the reaction was off and deeply troubling. The CEO of Alameda Research quickly asked CZ if she could buy all of the FTT tokens off-market at a price of $22.

    The market smelled blood.

    Over the course of the next few hours FTT was aggressively shorted, Caroline had put a floor under it at $22 and traders were going to bleed Alameda dry defending that mark. Why did $22 matter? It’s only conjecture, but it seems likely that below $22 Alameda would be liquidated by its lenders and a cascade of FTT tokens would need to be sold into a market unwilling to buy them, flattening the firm.

    But traders only thought they were going after Alameda, the predatory market maker.

     In hindsight it’s obvious, you shouldn’t short an exchange token to death on the exchange that issued it, but FTX was the main venue for the fight for $22. A huge amount of volume flowed through the order books and everyone was looking forward to getting paid as the token dropped, first to $18 and later to $6.

    While the traders were battling it out, regular users were getting out.

    FTX experienced massive outflows and on-chain analysis showed some deeply troubling signs. Alameda was pulling liquidity from everywhere. Every dollar that was deployed in DeFi got pulled. Weird tokens got dumped. But the liquidity wasn’t going into Alameda’s wallet, it was going into FTX wallets to pay customers.

    Surely FTX wasn’t funding customer withdrawals from Alameda’s DeFi degen positions?

    FTX was supposed to be a full reserve exchange. As an even higher bar, the terms of depositing with FTX were that customers retained title to their assets. Assets were held on trust, they weren’t supposed to be lent out or touched except as directed by the customer.

    SBF concedes

    On Sunday afternoon, Sam Bankman-Fried (SBF), the CEO of FTX said that the problems with the Alameda balance sheet were just “unfounded rumors”. He explained that FTX had processed billions of dollars in withdrawals and that they would continue to do so. He claimed that they were hitting node capacity, something that I’ve never heard of, and needed to slow down withdrawals.

    By Sunday night, withdrawals of some assets had stopped entirely, but there was no announcement from FTX. Radio silence from the team.

    We now know that during this period SBF was frantically going to investors to do an emergency fundraise of between $6-10 billion dollars. The terms which later leaked were insane. It was obvious that no lawyer had reviewed these documents.

    They seemed to be written by a child, imitating a businessman, who was in way over his head.

    Industry insiders at the time thought that FTX had likely lost some amount of user funds, would need to take a loan to cover them and could move on with rebuilding trust. We were shocked to wake up on Tuesday to the news that Binance had made an offer to buy out FTX entirely, subject to due diligence. This isn’t what a rescue package for a competently run business looks like.

    This was a fire sale of a dumpster fire.

    The previous day SBF had claimed his exchange was fully solvent, just having minor liquidity issues. The next day he was handing the keys to their main rival. Now that balance sheets have been leaked for FTX we know what Binance would have seen as soon as they started their diligence, a balance sheet crammed with dodgy tokens and full of holes, unaudited and put together in excel with no real supporting evidence.

    The rumored sale price was one dollar.

    CZ quickly walked away from the deal, citing misuse of customer funds and regulatory concerns; leaving SBF to fix his own mess. With the exchange still operational, but withdrawals closed, SBF posted yet another long thread trying to talk his way out of the problem, claiming to be trying to set everything straight and get emergency funding. While he had not yet admitted that it was all over, he did make a bizarre reference to CZ “well played; you won”

    As we came to learn later, for this sociopath that’s all it was, just a game to be won or lost.

    The Insanity Begins

    The rejection of the deal from Binance was the first mention of misuse of customer funds. Until then there was speculation that there was a minor balance sheet hole, remember, no one knew at that time that SBF had been seeking $6-10 billion in emergency funding. The next day the news started pouring in.

    Reuters reported that there was a secret back door in the accounting at FTX which allowed customer funds to be moved around without alerting anyone. It also claimed that $10 billion dollars worth of customer funds had been secretly moved to Alameda.

    SBF remained silent, but elsewhere there was chaos. Alameda funds were moving around frantically on chain, placing gigantic bets and actively trading.

    Was SBF trying to trade out of it?

    Tether put a stop to this later in the day, freezing Alameda’s funds on the request of law enforcement.

    On the exchange the chaos was even worse. Justin Sun the founder of Tron had shown up to offer to redeem Tron tokens trapped on FTX. Prices spiked as customers flocked to get cents on the dollar via this exit ramp. There was talk of taking complicated cross-platform trades to make a synthetic exit ramp.

    The Bahamas Loophole

    As the insanity deepened, FTX posted on Twitter that they were processing a small amount of withdrawals to customers in the Bahamas as requested by local authorities. A week later we found out this was a lie, there was no request, but even at the time it seemed likely to be a way for insiders to exit their funds before the inevitable bankruptcy.

    Suddenly, traders with stuck funds were desperately trying to obtain a fraudulent Bahamian passport and complete identity checks in the Bahamas. Some even managed to do it apparently and successfully withdrew funds. Black market prices on passports spiked and a secondary market for trapped funds emerged, with accounts trading for 15 cents on the dollar.

    NFTs were being traded for entire balances in order to move the funds to an account which could still withdraw.

    On the actual exchange things were just as chaotic. Traders with trapped funds were treating their accounts like paper money, trading nonsense on high leverage and dislocating markets. FTX was removed from pricing feeds to restore order elsewhere.

    This was the first time in the whole saga that it became clear, it was all over for FTX.

    FTX US halts withdrawals

    This entire time the story had been that FTX US was a separate entity. Their funds were firewalled off from FTX international. The exchange remained open for withdrawals and appeared to be functioning properly.

    This relative calm on the US side of the company instilled some faith. Surely, despite the havoc going on in the Bahamas, the US exchange was well regulated. Surely, the books were audited and no client funds could go missing in the US.

    On Thursday afternoon, FTX US halted withdrawals.

    Bankruptcy and the Hack

    On Friday morning SBF resurfaced and announced that FTX would be put into bankruptcy. The motion was filed in the US and included FTX US. It would later be revealed that SBF had stepped down as CEO and John J Ray III, a lawyer famous for taking over Enron post-collapse, would be similarly guiding FTX through bankruptcy. Everyone breathed a sigh of relief, it was finally done.

    But the fun and games weren’t over

    Shortly after the bankruptcy was announced funds started moving on-chain. A lot of funds. Over $600 million left FTX affiliated wallets, moving to fresh wallets. The speculation was that there was a hack, perhaps by an insider looking to get the last of what they could out of FTX.

    It quickly became clear that there were two teams working. One appeared to have simply moved worthless tokens into storage, a plausible move by a “white hat” or good guy team seeking to preserve user funds from a compromised system.

    The other team, the “black hat” team, took the vast majority of the $600 million and moved it all into Ethereum DeFi, trading other coins into Ethereum tokens and consolidating them all together. This consolidation took place across multiple blockchains and traded with reckless abandoning, losing gigantic sums on slippage along the way.

    Once the dust had settled, the hacker was one of the largest individual holders of Ethereum.

    We don’t quite have the full story on what happened here yet. The Bahamian authorities claim that they seized the assets, with many assuming that they are referring to the hacked funds. It seems far more likely that they are referring to the “white hat” funds only, as the “black hat” funds demonstrated much more sophistication in blockchain use that could be expected of a regulator.

    The funds have stopped moving for now. Sitting idle with more that 241,000 ETH, a little less than $300 million worth. No one really knows what will happen with these funds.

    Where are we now?

    After a week of complete mayhem as the exchange fell apart and another week for the adults to take over and begin the clean up we have two competing bankruptcy procedures. One taking place in the US, overseen by the lawyer who cleaned up after Enron collapsed. The other taking place in the Bahamas, overseen by two accountants from PriceWaterhouseCoopers and a senior local lawyer who has a decades long history of high level appearances in the Supreme Court of the island nation.

    It’s not entirely clear which action will take precedence, but they are opposed to each other. The US bankruptcy is seeking that all the companies be wound up together and users are compensated with whatever assets are left across the entire conglomerate.

    It turns out, FTX was made up of over 100 individual companies.

    The organization chart looks like the web a drunk spider would spin. It’s not the sort of corporate structure that would be constructed for anything other than hiding funds and playing shell games.

    The Bahamian action appears to be seeking to have the main FTX company dealt with separately, screwing US customers out of funds and leaving the bankruptcy in the hands of the Bahamian government which seems to have taken some pretty significant donations from FTX in the past.

    In filings made late this week FTX was referred to as a “disorganized mess”. There was a lack of proper accounting. The auditing was done by “the first accounting firm in the metaverse” that doesn’t appear to have a physical address. There appears to have been loans made to company executives in the hundreds of millions of dollars range. There was no corporate board. There was no human resources department. There was no accounting department. There was no real tracking of customer funds.

    The lawyer handling the FTX bankruptcy also conducted the Enron bankruptcy. He says this is far worse.

    Enough for now

    This is just the walkthrough of how everything fell apart in front of our eyes. The corruption, the lies and the scandal have all been uncovered in the wake of this collapse. In another article coming shortly I will cover the rise and fall of FTX and Alameda Research, delving into the backstory that allowed this fraud to grow under the cover of one of the most well regarded companies in the industry.

    *  *  *

    Today’s post is from contributing analyst Scott Hill. To receive further updates of this series and our overall investment thesis for digital assets (even in this climate), subscribe to the Bombthrower mailing list. 

    Tyler Durden
    Sat, 11/19/2022 – 21:30

  • NASA Prepares Spacecraft For First "Powered Flyby Burn" Around Moon
    NASA Prepares Spacecraft For First “Powered Flyby Burn” Around Moon

    NASA’s Artemis 1 Orion capsule is three days into the lunar mission. The uncrewed spacecraft cruises at 1,000 mph and is 215,000 miles from Earth. It’s about 95,000 miles from the Moon and will make a very close powered flyby burn on Monday. 

    “Orion’s entry into the lunar sphere of influence will make the Moon, instead of Earth, the main gravitational force acting on the spacecraft,” the space agency wrote in a press release. 

    NASA continued: “Flight controllers will conduct an outbound powered flyby burn to harness the force from the Moon’s gravity, accelerate the spacecraft, and direct it toward a distant retrograde orbit beyond the Moon. During the outbound powered flyby, Orion will make its closest approach – approximately 80 miles – above to the lunar surface.” 

    Four days later, the second powered flyby burn will “insert Orion into distant retrograde orbit, where it will remain for about a week to test spacecraft systems,” NASA said. 

    Additional flyby details will be provided on Saturday following a meeting with NASA officials. 

    “Right now, we’re looking good, and we’re ready to go continue executing,” Artemis 1 Flight Director Jeff Radigan said during Friday’s briefing.

    NASA has laid out a detailed map of the Artemis 1 mission.

    Less than 12 hours into the flight after Orion took off from Launch Pad 39B at the space agency’s Kennedy Space Center in Florida on Wednesday, the first view of Earth from the spacecraft was released to the public. 

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    If Artemis 1 mission is successful, which would end with the Orion capsule splashing down in the Pacific Ocean on Dec. 11, then Artemis 2 and 3 flights will follow. Artemis 2 is scheduled sometime in 2024. That mission will propel four astronauts around the Moon. Then in 2025, Artemis 3 could include a return of humans back to the lunar surface. 

    Tyler Durden
    Sat, 11/19/2022 – 21:00

  • Watch: FBI Director, DHS Secretary Grilled On Tech Censorship Collusion, Targeting Everyday Americans As Terrorists
    Watch: FBI Director, DHS Secretary Grilled On Tech Censorship Collusion, Targeting Everyday Americans As Terrorists

    Authored by Steve Watson via Summit News (emphasis ours),

    Republican Senators Joh Hawley and Rand Paul took the heads of the FBI and the Department Of Homeland Security to task Thursday, with Hawley at one point directly telling Christopher Wray that he should have been fired a long time ago.

    Hawley also targeted Wray for previously leaving a committee hearing early so he could go on a vacation.

    “You were at the Senate Judiciary Committee. You remember that I think so. We had to cut that hearing short. We’re supposed to do two rounds of questions. You said you had to be somewhere, so we cut it short. Republicans were not able to ask second round as we had been informed we would,” Hawley noted.

    The Senator continued, “The press reported shortly thereafter that the reason that the hearing had to be cut short is because you were flying on a Gulfstream jet for a personal vacation in the Adirondack. Please tell me that’s not accurate.”

    It was accurate.

    “You left an oversight hearing with the Senate Judiciary Committee required by statute so you could vacation with your family,” Hawley declared, adding “I find that absolutely unbelievable and, frankly, indefensible.”

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    The Senator then provided examples of how the FBI has been overtly politicised and told Wray that he doesn’t believe he is up to the job of FBI Director anymore.

    Hawley asserted “frankly, I think you should have been gone a long time ago. And given your behavior recently, I think it only makes it more clear.”

    Hawley then twisted the knife by asking “Are there any travel plans today that we should be aware of, that you have? We’re supposed to have a second round. Will you be here for that?”

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    Elsewhere during the hearing, Hawley grilled Secretary of Homeland Security Alejandro Mayorkas regarding the Biden administration reportedly flagging social media posts it doesn’t like as “disinformation” and “pressuring Big Tech to treat American citizens as if they’re threats to Homeland.”

    “A federal judge in a federal lawsuit [has said] you are supervising the nerve center of federally directed censorship… Is that constitutional?” Hawley asked.

    Mayorkas repeatedly claimed that the allegation are false. 

    “You are leveraging private companies to carry out censorship on your behalf. It is dystopian, but worse than that, it is unconstitutional,” Hawley asserted.

    “It is also false,” Mayorkas sardonically replied.

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    Rand Paul also grilled Wray about reported collusion between the FBI and Facebook, noting “You may think it’s just jolly well to get all this stuff without a warrant that people volunteer to you, but many of us are alarmed that you’re getting this information that are private communications between people, because it is against the law.”

    “You work for the government, you should admit to us whether or not you have a program going after our speech,” Paul asserted.

    As we highlighted recently, Paul has vowed to introduce legislation that would make it illegal for government agencies and private big tech to secretly collude on such enterprises, noting that “it goes against everything that we all believe in as far as the foundation of our constitutional republic.”

    *  *  *

    In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Also, we urgently need your financial support here.

    Tyler Durden
    Sat, 11/19/2022 – 20:30

  • Trump To Be Reinstated On Twitter
    Trump To Be Reinstated On Twitter

    Update (2010ET): After 15 million people voted, Elon Musk announced on Saturday that former President Donald Trump will be reinstated on Twitter.

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    The vote came in at 52% for reinstatement, 48% against.

    And here it is:

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    Trump, meanwhile, says he won’t be back. When asked about the poll, Trump said: “He’s a character. I tend to like characters. But I have something called Truth Social. It’s doing phenomenally well. Engagement is much better. I’ll be staying there. I don’t see it. I don’t see any reason for it.”

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    *  *  *

    ‘Free speech absolutist’ Elon Musk has decided to ask the public whether Donald Trump – a former president and ostensibly Joe Biden’s 2024 GOP challenger – should be allowed to speak freely on Twitter, instead of, you know, just restoring Trump’s account on day one.

    The former president was banned from the platform because a group of fed-infiltrated Trump supporters were allowed into the Capitol and wreaked havoc on January 6, 2021, after Trump gave a speech in which he said “I know that everyone here will soon be marching over to the Capitol building to peacefully and patriotically make your voices heard.”

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    Musk’s poll on whether he should reinstate former President Donald Trump to the platform has received more than 11 million votes in less than 24 hours.

    While Trump took a large early lead, the vote tightened over Saturday morning, and currently stands at 52.3% ‘yes’ to 47.7% ‘no.’

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    “Vox Populi, Vox Dei,” Musk tweeted in a follow-up, which means “the voice of the people is the voice of God.’

    https://platform.twitter.com/widgets.jsThe poll is set to run for 24 hours.

    Musk’s departure from ‘free speech absolutism’ is undoubtedly due to the realities of the advertising market – with major companies having already suspended their campaigns on Twitter over Musk himself taking over the platform. According to Insider, advertising made up 89% of Twitter’s revenues in 2021.

    In response, Musk assured advertisers in late October that Twitter “will not become a free-for-all hellscape.”

    While Alex Jones won’t be allowed back on the platform, the Babylon Bee is back after their ban over a transgender joke, as is Jorrdan Peterson and Kathy Griffin.

    Maybe Elon should do an Alex Jones poll next? The frogs did, after all, turn out to be gay.

    Trump, meanwhile, isn’t going anywhere.

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    Tyler Durden
    Sat, 11/19/2022 – 20:08

  • NBC: Body Cam Footage Shows Paul Pelosi Opened Door For Police Before Alleged Attack
    NBC: Body Cam Footage Shows Paul Pelosi Opened Door For Police Before Alleged Attack

    The official narrative on the Paul Pelosi attack purported by Democrats and the mainstream media makes zero sense.  You don’t have to be a “conspiracy theorist” to recognize there were multiple contradictory accounts from the Department of Justice vs. local police and even some reports from journalists.

    In fact, NBC suspended one of its own correspondents, Miguel Almaguer, after he reported that on the night of the supposed attack at the Pelosi home in San Francisco that Paul Pelosi actually opened the door when police knocked, seemingly in normal health, and then walked away from the officers to talk to the alleged assailant David Depape, when Depape attacked him.  This report led many to suggest that Pelosi and Depape somehow knew each other. 

    A media firestorm ensued along with denials from the DOJ, which detailed a completely different version of events in which the police officers opened the door themselves and found Pelosi struggling with Depape who had injured him with a hammer.  NBC dropped Almaguer after many called his report “bizarre.” 

    As it turns out, Miguel Almaguer was right.  NBC now reports that police body cam footage has been made available to some media outlets and the footage clearly shows Paul Pelosi opening the door for police in seemingly perfect health.  This contradicts the DOJ report on the attack and suggests a potential cover-up. 

    NBC is forced to retract their earlier assertions that the Paul Pelosi open door event was unfounded.  Why?  Because they have to.  Eventually the police body cam footage will make it out into the public sphere for everyone to see, and NBC is front-running their own false reports.  However, they do suggest that “it doesn’t really matter” who opened the door to the Pelosi home, and that Paul Pelosi’s actions don’t support the “conspiracy theories” surrounding the attack.

    If that is the case, then why would the DOJ lie?  Surely, they have seen the same body cam footage.  If there is no conspiracy, then why is there an attempted coverup?  

    NBC has never had a problem editorializing news stories in the past and presenting biased opinions as evidence, yet suddenly now they pretend as if they have journalistic integrity?  It is incumbent upon journalists to present what they think are the facts to the general public, but they are also required to investigate potential false accounts and false information in order to separate truth from lies.  In the case of the attack on Paul Pelosi, NBC and other outlets clearly do not want to dig deeper. 

    Now that the midterm elections are over it would appear that the “MAGA attacker” story no longer serves any purpose.  The Democrats conjured their own conspiracy theory first – The claim that right-wing “extremists” are a threat to “democracy” and that the Pelosi attack proves it.  There is no evidence to support this claim.  There is, though, evidence to support the theory that Pelosi was familiar with Depape and his behavior indicates familiarity. 

    No person under threat of being beaten with a hammer by a home intruder is going to move closer to the violent stranger instead of running towards the police.  This does not happen, it’s nonsense.

    What is likely to take place as this case develops?  A media blackout on the story, much like we have witnessed with multiple cases in the past few years that make the political left look bad (the Waukesha massacre by BLM suppporter Darrell Brooks comes to mind).  Details will probably emerge which further contradict the official narrative but they will be buried and ignored.  The leftists will continue to label any suspicions as “conspiracy” as they hope and pray the general public completely forgets and moves on to other distractions.   

    Tyler Durden
    Sat, 11/19/2022 – 20:00

  • Gun Sales Skyrocket After Oregon Passes Measure Restricting Gun Rights
    Gun Sales Skyrocket After Oregon Passes Measure Restricting Gun Rights

    Authored by Scottie Barnes via The Epoch Times,

    Gun sales have skyrocketed in Oregon since the narrow passage of a strict gun control measure in last week’s midterm election.

    As gun sellers scramble to fill orders before the rule change on Dec. 8, opponents are planning to file suit against what they call the most restrictive gun control measure in the country. Several sheriffs around the state have vowed not to enforce the new legislation.

    With just three weeks until Measure 114 takes effect, background checks to purchase a gun jumped from about 850 per day before the election to 4,000 per day after, according to Oregon State Police.

    The new law, in addition to limiting sales of magazines that hold more than 10 rounds, will require buyers to obtain a permit to purchase any firearm. To obtain that permit, the measure requires buyers to complete firearms training in a class that does not yet exist in the state. It also requires law enforcement to create a publicly accessible database of those who apply for or obtain a permit.

    The measure passed with just 50.7 percent approval. The disparity of votes is consistent with Oregon’s extreme urban-rural divide.

    Voters in the seven, mostly urban, predominantly Democrat counties that voted for the measure did so by a nearly 2-1 margin. Voters in the 29, mostly rural counties, rejected the measure by nearly the same ratio.

    Multiple lawsuits will be filed after the law takes effect, Leonard Williamson, a licensed firearms dealer for 20 years who helps advise gun rights groups, told The Epoch Times.

    “Plaintiffs representing the interests of different constituencies—such as gun dealerships and hunters associations—will file,” he said.

    “Ultimately, the court will likely consolidate them under one judge.”

    Lawyers advising the Oregon Firearms Federation, the Second Amendment Foundation, the Oregon Hunters Association, and other gun rights advocates, will seek a temporary restraining order and preliminary injunction to prevent the measure from taking effect until a judge can determine if it meets constitutional muster.

    The first draft of a complaint has reportedly been written.

    “We’re still adding plaintiffs to the suit, and we’ll be ready,” according to Alan M. Gottlieb, founder of the Second Amendment Foundation, based in Bellevue, Washington.

    Meanwhile, a number of county sheriffs have publicly stated they will not enforce the measure.

    “This is a terrible law for gun owners, crime victims, and public safety,” wrote Linn County Sheriff Michelle Duncan in a Nov. 9 Facebook post. She said her office “is NOT going to be enforcing magazine capacity limits.”

    Duncan called the measure “poorly written” and said she hopes its passage will result in an immediate lawsuit.

    Her office has received calls from people who fear they’ll face criminal charges if they’re pulled over while driving and found with a magazine that holds more than 10 rounds, she added.

    “I’m not out there to try to look for their magazines and arrest anybody.”

    Union County Sheriff Cody Bowen wrote on his office social media that the measure is an “infringement on our constitutional rights and will not be enforced.”

    “[It] will only harm law abiding gun owners” and waste time, he said, vowing to “fight to the death” to defend gun owners’ constitutional rights.

    Lincoln County Sheriff Curtis Landers issued a press release promising to enforce the measure only after “it is ruled constitutional by any court challenge.”

    Nathan Sickler and Chris Kaber, sheriffs of Jackson and Klamath counties, have both said Measure 114 is “an unconstitutional restriction on the right to possess firearms.”

    Their statements come despite the Oregon State Sheriffs’ Association statement to officials that it expected its members to uphold any law created by popular vote.

    Retailers are warning customers that gun sales will be cut off immediately unless a lawsuit results in an injunction.

    Sportsman’s Warehouse issued a statement outlining the impact to its Oregon customers.

    “A valid Oregon Firearm Purchase Permit will be required to purchase any firearm,” after Dec. 8, the retailer wrote in an email to customers. “At this time, there are no known law enforcement agencies issuing the Oregon Firearm Purchase Permit.”

    In addition, “state background check delays are possible and may impact your ability to take possession of a firearm before Dec. 8, 2022.”

    To meet demand in the meantime, it is “extending store hours and resupplying rapidly.”

    The National Rifle Association (NRA) issued a statement claiming that the legislation’s ambiguous language fails to safeguard gun owner information by creating a searchable gun owner database.

    Currently, California maintains a database for owners of concealed carry permits, but Measure 114 will place every gun owner on a database, according to the legislation. After the contents of the California database were leaked in June, gun rights advocates argued that such centralized gun databases led to an abuse of power.

    Oregon joins Washington, DC, and 14 states that have enacted similar permit-to-purchase gun laws. Nine states and Washington have adopted laws banning large-capacity ammunition magazines.

    There were more than 130 proposed constitutional amendments on midterm ballots across 37 states in the Nov. 8 elections, but relatively few related to gun rights and gun control.

    The only other measure related to firearms aside from Oregon’s Measure 114 was in Iowa, where 65 percent of voters approved Amendment One, which enshrines gun rights in the state constitution by stating residents’ rights “to keep and bear arms shall not be infringed.”

    Iowa joins Alabama, Louisiana, and Missouri with that language incorporated into their state constitution, which requires that courts use “strict scrutiny,” which makes it more difficult to impose limits on gun possession, ownership, and use while preempting attempts to require more extensive background checks or to ban certain types of firearms.

    Tyler Durden
    Sat, 11/19/2022 – 19:30

  • CBS News Stops Posting On Twitter Out Of "Abundance Of Caution"
    CBS News Stops Posting On Twitter Out Of “Abundance Of Caution”

    Amid reports that Twitter’s mass-layoffs will ‘break’ the platform, allowing ‘free speech types’ to run amok, CBS News has stopped posting on the social media giant out of an “abundance of caution.”

    In a Friday announcement during the evening broadcast of “CBS Evening News with Norah O’Donnell,” the network’s national correspondent, Jonathan Gigliotti, said: “In light of the uncertainty around Twitter and out of an abundance of caution, CBS News is pausing its activity on the social media site as it continues to monitor the platform.”

    As Fox News notes,

    Coverage began with the network reporting on the mass resignations of employees offended by Musk’s “ultimatum” from earlier this week. In his quest to streamline the company, the world’s richest man emailed all employees asking them to commit to an “extremely hardcore” workload or leave the company.

    The “ultimatum,” as many disgruntled folks called it, prompted backlash from onlookers who trashed the company under Musk, some calling it a “hellscape.”

    The ensuing chaos from Musk’s email, as well as the general vitriol generated by him taking over the reins of company, did not sit well with CBS News. 

    And as Adweek notes, the move will affect all CBS-owned properties, including local news outlets.

    On Thursday, Twitter was hit with mass layoffs after many employees refused to accept Musk’s new demand, which would have required them to work for long hours at “high intensity.”

    The departure of those employees resulted in speculation that the website would become more unstable and could potentially cease functioning.

    Fortunately, none of that has come to pass, but the uncertainty following Twitter has caused one news organization to take action. -Adweek

    Tens of fans are crestfallen, we’re sure.

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    Meanwhile over at Twitter alternative Mastadon;

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    Tyler Durden
    Sat, 11/19/2022 – 19:00

  • "Lost…In The Emotion Of The Night": Attorney Who Firebombed Police Vehicle Given Just 15 Month Sentence
    “Lost…In The Emotion Of The Night”: Attorney Who Firebombed Police Vehicle Given Just 15 Month Sentence

    Authored by Jonathan Turley via jonathanturley.org,

    We previously discussed the case of two New York attorneys (Colinford Mattis and Urooj Rahman) who joined in violent protests in New York, including firebombing a police vehicle. The Biden Justice Department later gave the two lawyers an astonishingly generous plea deal that avoided long prison sentences. Now Rahman has been sentenced to 15 months after asking for no jail time for throwing the Molotov cocktail.

    Urooj Rahman holding a black and white striped scarf close to her face with one hand, and a homemade firebomb with another, as she prepared to toss the incendiary device out of the passenger-side window of a van in 2020. (Obtained by the Daily News)

    Mattis was a member of the Corporate Group at Pryor Cashman when he was arrested. Mattis graduated from New York University School of Law in 2016 and received his bachelor’s degree from Princeton University. He was also previously employed as an associate at Holland & Knight.

    Rahman had just been admitted to the New York bar in June 2019 after graduating from Fordham University School of Law.

    The police also had a picture of Rahman with the explosive. The FBI statement included the following description:

    “Officers pursued the minivan and arrested Rahman and Mattis, who was the vehicle’s driver.  The NYPD recovered several precursor items used to build Molotov Cocktails, including a lighter, a bottle filled with toilet paper and a liquid suspected to be gasoline in the vicinity of the passenger seat and a gasoline tank in the rear of the vehicle.”

    Mattis and Rahman were facing domestic terrorism charges and the possibility of 30 years in jail. The Biden Administration later agreed to a massive reduction of the charges in a plea agreement that would likely result only in a couple years of jail time. What is particularly bizarre is that the plea agreement reduced an earlier plea agreement for a more serious offense. They had agreed to the more serious offense but the Justice Department cut it down further.

    The now-disbarred attorney sought no jail time and told the court that “I completely lost my way in the emotion of the night.”

    U.S. District Judge Brian Cogan praised Rahman for her commitment to fighting social injustices: “You’re a remarkable person who did a terrible thing on one night.” Cogan, however, also criticized her “arrogance” displayed in such conduct. Firebombing seems a tad more than arrogance when you throw Molotov cocktails at police cars.

    Even with the greatly reduced charges, Cogan still elected not to give Rahman the maximum sentence of two years. While Rahman claimed to have been caught up in the moment, her texts and emails established a difficult story. In one message hours before the protest, she told Mattis “I hope they burn everything down. Need to burn all the police stations down… probably all the courts too.”

    Mattis is expected to be sentenced in December.

    Tyler Durden
    Sat, 11/19/2022 – 18:30

  • Sam Bankman-Fried's Law Firm Drops Him As A Client Amid Ongoing Bankruptcy Revelations
    Sam Bankman-Fried’s Law Firm Drops Him As A Client Amid Ongoing Bankruptcy Revelations

    With post-mortem after post-mortem after FTX port-mortem piling up, even as the questions surrounding the world’s biggest crypto fraud and bankruptcy pile up at an even faster pace amid a breathless demand for answers – like where did all that $8 billion really go – on Saturday we learned that as part of the firm’s shambolic bankruptcy process, FTX won’t even disclose its top creditors and has asked the bankruptcy judge to keep the company’s list of creditors (which previously was said to be larger than one million) under confidential seal.

    So amid the mounting confusion, on Saturday FTX Trading unveiled that it had started a “strategic review of their global assets to begin to maximize recoverable value for stakeholders“, as part of what promises to be a very lengthy bankruptcy process (which will quickly become a Chapter 7 unless someone reveals where that $8 billion stolen by SBF has been parked), and has hired Perella Weinberg Partners LP to help with the potential sale of any viable units.

    “Based on our review over the past week, we are pleased to learn that many regulated or licensed subsidiaries of FTX, within and outside of the US, have solvent balance sheets, responsible management and valuable franchises,” FTX Group’s new CEO, Enron liquidation veteran John J. Ray III said in a statement on Saturday.

    Among those with the largest identified financial positions are FTX EU Ltd., at $49.4 million in total cash available, and West Realm Shires Services — which encompasses the FTX.US crypto exchange as well as some acquisitions — at $48.1 million, a filing in Delaware on Saturday showed. FTX Ventures, which launched a $2 billion fund in January, had less than $800,000 in available cash, it said.

    In the filing, FTX said that the positions were calculated based on verifiable available books and records for the businesses. More than half of identified bank accounts have yet to have their balances verified and other accounts may exist, given the group’s “historical cash management failures and the deficiency of documentation controls.”

    Separately, the bankrupt FTX companies, known as FTX Debtors, have engaged Perella Weinberg as lead investment bank and started preparing some assets for sale or reorganization, according to the statement.

    Ray further commented, “I have instructed the team at the FTX Debtors to prioritize the preservation of franchise value as best we can in these difficult circumstances. I respectfully ask all of our employees, vendors, customers, regulators and government stakeholders to be patient with us as we put in place the arrangements that corporate governance failures at FTX prevented us from putting in place prior to filing our chapter 11 cases.”

    Also on Saturday, the FTX Debtors filed various motions with the Bankruptcy Court “seeking interim relief from the Court that, if granted, would allow the operation of a new global cash management system and the ordinary course payment critical vendors and vendors at foreign subsidiaries,” it said. The first official bankruptcy court hearing has been scheduled for Nov. 22, at 11:00 a.m. before Judge T. Dorsey at the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 5th Floor, Courtroom No. 5, Wilmington, Delaware

    Ray, who oversaw the liquidation of Enron Corp., said earlier this week in a sworn declaration that he’d never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information.” He called the chaos around the collapse “unprecedented.”

    And speaking of unprecedented, just days after FTX’s lawyers accused Bankman-Fried of undermining the bankruptcy case in their First Day Affidavit…

    … Paul, Weiss, the law firm hired by SBF, effectively fired him as a client, citing a conflict of interest.

    “We informed Mr. Bankman-Fried several days ago, after the filing of the FTX bankruptcy, that conflicts have arisen that precluded us from representing him” Paul Weiss counsel Martin Flumenbaum said in a statement, although he declined to describe the conflicts.

    While unclear what the catalyst was, starting on Nov. 14, SBF published a series of self-incriminating tweets that sparked a frenzy across Crypto Twitter, which would have made his defense extremely difficult for any law firm. In a conversation with the ultra-liberal outlet Vox – which sold SBF out after writing fawning praise about the prominent Democrat donor for months – and which was published this week, Bankman-Fried blamed FTX’s collapse in part on “messy accounting,” expressed regret at his decision to file for bankruptcy and denigrated U.S. regulators in profane terms. He later said he did not intend for the conversation to be made public.

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    Flumenbaum is a longtime litigator whose past clients include the junk-bond trader Michael Milken and AIG. He currently represents Christian Larsen, the chairman of the Ripple Labs crypto exchange. However SBF proved to be too much of a liability for someone defending such iconic criminals as Mike Milken. Then again, Paul Weiss quitting is not all that much of a shock amid growing speculation that the increasingly erratic SBF – who was convinced his millions in donations to the Democratic party would render him immune from legal challenges – would be indefensible in court.

    “There’s this old saying that a lawyer who represents himself has a fool for a client. The reverse is also true. An individual who is the subject of an investigation and tries to defend themselves in the court of public opinion has a fool for a lawyer,” said Justin Danilewitz, a white-collar defense lawyer at law firm Saul Ewing Arnstein & Lehr.

    According to media report, Bankman-Fried is now represented by Greg Joseph, former president of the American College of Trial Lawyers. Also on his legal team as an advisor is David W. Mills, who teaches criminal law at Stanford Law School, where Bankman-Fried’s parents are both professors.

    Of course, all this legal wrangling may be for nothing: after all, SBF still hasn’t been accused of a crime, and it may just be that with the bribes he paid to prominent Democrats, ultimately helping Biden get elected…

    Source: Vox

    … that the 30-year-old will be able to avoid seeing the inside of a courtroom entirely.

    Tyler Durden
    Sat, 11/19/2022 – 18:00

  • You're Living In A World Wrought By The Federal Reserve. Notice Anything Wrong?
    You’re Living In A World Wrought By The Federal Reserve. Notice Anything Wrong?

    Authored by Lynn Parramore via The Institute for New Economic Thinking,

    In her new book, veteran Wall Street watcher and economist Nomi Prins warns that central bank strategies deployed since the financial crisis are destroying the real economy, worsening inequality, and creating societal chaos.

    Ever wonder why it is that for most of the 21st century, no matter who is in the White House, no matter the state of the economy, and regardless of what ordinary people are suffering, money travels inexorably to the top?

    If you find this baffling, you’re not alone. For many, it seems that the further we travel into this acutely challenging century, the political, economic, and social rules we thought we understood increasingly fail to apply.

    Economist, journalist, and former Wall Street exec Nomi Prins is here to explain the inexplicable. Her latest book, Permanent Distortion: How the Financial Markets Abandoned the Real Economy Forever, is a highly readable and clear account of how the financial realm, with its central bank-fueled loose money and mega-wealthy financiers, has split off from the real economy, the place inhabited by regular working people who buy stuff and produce things.

    The upshot: the people’s needs are increasingly ignored in favor of market demands.

    Prins points to the 2008 financial crisis and the Federal Reserve’s response as the pivotal moment in which we jumped on a tiger that we can no longer seem to dismount. What was supposed to be an emergency response to a crisis ended up turning into an unstoppable addiction to cheap money which, Prins argues, initiated a vicious cycle of pumped-up financial markets, destabilizing inequality, a public left worse off, and a political system increasingly unable to make real progress on long-term priorities like climate change. She spoke to the Institute for New Economic Thinking about who is responsible, what the public needs to understand, and why this tiger will not take us anywhere we want to go.

    Lynn Parramore: You’ve written several books about the U.S. economy and Wall Street. Why this new book, focusing on central banks and their influence? Why is this so important to understand now?

    Nomi Prins: Since the financial crisis, one of the themes in my books is money and power. There’s a real thru-line from my 2009 book, It Takes a Pillage, which focuses on the financial crisis, to All the President’s Bankers (2014), where I go back into the history of American bankers and their political influence, on up through Collusion (2018), the global analysis of what happened from the financial crisis through the period before the pandemic.

    That thru-line concerns this external body – the central banks – which can effectively manufacture money, and how this money, just by sheer mass momentum and the players involved, goes disproportionately to financial markets relative to the real economy. This activity, in fact, is detrimental to the relationship between markets and the real economy, and also to the real economy itself.

    I wrote Permanent Distortion because to me, the distortion that money and power have created between markets and the real economy did in fact become permanent. It’s not just something we’re experiencing now, and then can we go back to a more glorious time when it wasn’t like this. It was around July 2020, when we were all locked down and not knowing what was going on with our lives, our personal economies, our health, and our families, when I realized that the Federal Reserve had doubled the size – or even more so — of its book of assets. It had created about $5 trillion worth of money in a very short period of time.

    During that time, the markets went from being very afraid and down to being very, very high. A lot of people said, well, we’re all at home using Zoom, so therefore the market just rebounded by so much. But that was just a small part of it. The bigger part was that money became available at such an immense level and therefore the distortion between where money goes in the financial markets and where it doesn’t go in the real economy became permanent. At that moment I saw that this can happen in any amount, at any time. There’s no restriction, no transparency, no responsibility.

    LP: You make a strong case that high finance has become unhinged from the economy, and you go so far as to say it has become disconnected from capitalism itself. What exactly does that mean?

    NP: When I’m talking about capitalism in that sense, I’m connecting it to the idea of financial markets supposedly being created to aggregate money in order to then funnel it into companies, and therefore into projects, and on into the real economy.

    So the idea, technically, from a capital market perspective, is that borrowing money in order to do something, or selling bonds in order to finance something, or selling shares in order to finance something, used to have a particular relationship to each other. If there was a transparent use for a company that had value to shareholders, they would be willing to effectively invest their money in order for that company to do what it does to grow whatever it’s growing. Part of that use could be profits, part could be wages, part could be cars. The point being that the relationship was more or less (though not always) transparent at a theoretical level.

    But now there is more money being thrown into the markets from an outside source. It’s not money from the actual profits of a company or its long-term strategy, or the productivity of workers, or the creation of long-term things. You end up getting an unmooring between what markets are theoretically there to do in a capitalist society and from a capital-raising standpoint. There’s this other source that comes in and kind of turbo-boosts and distorts all of those relationships.

    LP: You place the roots of this trouble in 2008, a year which, you point out, increased the power of central banks. Yet, Ben Bernanke, the very economist in charge of the Fed at that time, just won the Nobel Prize. As some have pointed out, we are living in the world he created, and many hail him as the guy who prevented the second Great Depression. How did he contribute to the alarming picture you paint of an economic system gone off the rails?

    NP: I thought the Nobel Prize for Bernanke was a bizarre choice, although it made sense if you believed the narrative that attributed to him the power to save the economy. And he also happened to have written a lot of things historically about depressions. But if you actually dig into both what he did and what he wrote to win that Nobel Prize, you find a concerning story. To understand it, you have to go back to before the crisis was apparent to everyone — both during the Great Depression and during the 2008 financial crisis.

    Back before it became apparent that a financial crisis was happening, there was an immense amount of leverage in the banking system over which Bernanke had a responsibility to regulate. There was also an immense amount of assets being created off the back of a very small amount of interest coming in from subprime loans. Those subprime loans themselves had issues, and Bernanke knew it because the banks knew about the interest payments, and their rising delinquencies, and defaults. A small amount of subprime loans were structured to feed into a large amount of other assets by said banks. As this was happening, either he didn’t want to pay attention or he thought looming problems would just go away as many banks did. But Bernanke had information from the banking system in his position at the top of the Fed and certainly through his connection to the New York Fed. He was deeply connected to those banks and their liquidity and rising delinquency and default problems and he just chose to say that everything was effectively fine.

    He did that even before the crisis became apparent. Then, in 2007, when things were absolutely crumbling and even the shares of real estate developers were plummeting, when there was so much information all over the place and reports from the FBI were going into the Fed telling them there were issues, what did Bernanke do? He did nothing.

    So when the crisis did occur, Bernanke ultimately used the tool of quantitative easing, which is basically creating electronic money in return for taking out that debt from the market and putting it on the Fed’s books for safekeeping. He put it there and most of it stayed there. Later it manifested a larger crisis, or a looming crisis, by injecting all that money into the market on the auspices of saving the real economy.

    What actually happened was the markets rose precipitously over all of the ensuing years. There’s one or two years where they wobbled a bit, but, in all the period of time during Bernanke’s chairmanship of the Fed, the real economy stumbled. To me, the narrative that he saved things from being worse is a false one. Yet that narrative was perpetuated and is still believed today by the majority of people who care to think about it, like the Nobel Committee, apparently.

    And what about Bernanke’s writing on the Great Depression that he had done back in the day – as supposedly the main reason he got this prize? Well, he’s had an aura of having such great knowledge of the Great Depression. He was the man who wasn’t going to let it happen again. Yet he forgot, or didn’t recognize, that one of the reasons the central bank did what it did from 1929 to 1931, a time when many banks collapsed, is that there was a housing bubble. There was also overleverage and a situation where Wall Street banks had been doing nefarious things with money. So one of the reasons that the crash happened and so many banks went under afterward was because of what happened before. The banks had become over-extended, over-leveraged and Fed wasn’t paying attention at the time.

    Bernanke didn’t write about this. He wrote about what happened when the Fed tightened too much too quickly and caused another leg of the Great Depression. That strategy was something he wasn’t going to have happen on his watch, but he forgot or didn’t pay attention to anything that had actually caused the crisis, to what led to Great Depression. He showed the same blind spot in his approach to the financial crisis. To me, that’s like two negatives, two false narratives. The consistency in those two false narratives is that they are both related to over-leverage in the housing market, to Wall Street taking advantage of it, and to the Fed not doing anything.

    LP: Let’s talk for a moment about economists and economic advisers that influence our political system. What can you tell us about their relationship to power? Does it cause them to have these blind spots?

    NP: The National Economic Council is generally made up of senior business leaders and bankers with current jobs, so a lot of them tend to lobby for certain policies that benefit them. In this last go-round, there’s been an oddly exorbitant amount of lobbying to the Fed directly. There are about 120 different lobby groups that lobby the Fed directly, even beyond lobbying respective politicians and on behalf of respective companies or sectors! So “the economy” is really convenient as a funnel for any policy that has to do with money going in and out of anywhere. If policies are being formulated or explained by self-interested people or people that work for self-interested companies or parties, then they’re going to be skewed toward those people or companies. You don’t have Joe the Plumber hanging out in the middle of the Economic Council saying well, here’s what’s going on with my building and my house, now what are you going to do about those? That’s not how it’s structured. It ensures a very top-heavy approach to economics.

    Take, for example, how the Fed views statistics, such as employment numbers, when it’s thinking about inflation or raising rates so quickly, which is really constraining to people on an actual budget facing other inflationary pressures, and, by the way, not actually doing anything about inflation. They’ve got the Executive Survey and the Household Survey. The Executive Survey counts every single job somebody has as a job in the economy, even if it’s the same person, whereas the Household Survey only counts one job per human. So those numbers are disparate. There’s a lot that can be interpreted in different ways and the framework has been formulated, generally, by economists who accept certain narratives, who tend to confirm or to say what needs to be confirmed or said to keep the status quo. They’re the ones that remain in those advisory positions. You do get people who might try to push the envelope a bit in terms of definitions and policies, but they don’t tend to stay around.

    LP: You note in your book that our whole society has become alarmingly top-heavy due to these top-heavy approaches. I was struck by the statistic that in a single year of the pandemic, 2020, there were 500 new billionaires created, just as regular people were losing their jobs, losing their health, and many were losing their lives.

    NP: Yes, that statistic gets people’s attention. My other favorite is from the 2022 Oxfam report, which says that the top 10 billionaires were making $15,000 per second. When I do talks on the book, I make everybody imagine that, to think about the speed of what’s going on here. It’s because those billionaires are invested in markets that their wealth is propelling up so much. All the speculation, though, is driven by this excess amount of available money, by what the Fed has done.

    LP: You refer to this as wealth accumulation without accountability. In what sense?

    NP: If you’re participating in a market that’s going up, obviously the more you’re participating, whether as the head of a company that has options for stocks, or as an investor, or as the retail person who is placing just the little bit they have on it, then you’re going to benefit from that proportion of upside because you’re in it. If you’re not in it, you’re not going to benefit from the upside. That’s just the math.

    What we’ve seen is actually more money created than what was sensibly needed to save the economy, and it’s obviously not going into the real economy. I’ve gone through the stats of the Fed’s books related to the $600 stimulus payments, the extra unemployment insurance, and even the PPP loans. The remaining money was leveraged into the financial system. What was on offer to the markets from the Fed dwarfs what actually went into the pockets of real people in the real economy.

    As a result, the money just tsunamied upward in a very short period of time. That money unmoored from the real economy and did nothing for it. There were a lot of narratives flying around and guesswork on why the markets ballooned so quickly. What you didn’t have to guess was that trillions of dollars were created, not just by the US central bank, but by central banks around the world. And this was accumulated into the financial system and financial markets.

    LP: How does this distortion impact our ability to confront long-term challenges, such as climate change?

    NP: This goes back to the question of accountability. If money is being drawn into one place or one set of financial assets, the financial markets, it doesn’t go into preserving the social contracts or the Main Street economy or the fractures in Main Street economics. I think that as a result, government leaders of both parties get lazy about pushing through longer-term strategies. Because there is this external force of money, it distorts all of the decisions. Parties argue back and forth about where money should go where and so forth, but it distorts all that just that much further because of the ease with which money can be created and multiply and go elsewhere. The idea of long-term strategies, like fighting climate change, suffer.

    Yes, we recently had a bipartisan infrastructure act passed, and that was positive (though it’s taking quite some time to actually agree on where that money’s going to go). But going back to what capitalism could be, what if that money that went to financial markets had gone to directly build solar or wind energy? Or the electrification of manufacturing plants? Or water purification?

    If it could have gone to these areas more quickly, then you would see more of a shift. The pace of getting what’s needed to fight climate change would be faster if it weren’t way easier for money to flit about, especially when created in abundance, into areas where it can just multiply itself more easily rather than in awaiting to build a whole new production center and or new energy strategy. The fact that money can multiply so quickly in the markets makes it harder for it to stick around in one of those lasting areas —to build necessary, physical things, like new or upgraded power mechanisms.

    LP: You write about developments in cryptocurrencies and the metaverse as responses to this distorted situation. How do you see them evolving in relation to it?

    NP: When I wrote about crypto, I also wrote about decentralized finance. They’re not necessarily the same thing, though they do share commonalities in that Bitcoin, for example, was created off of blockchain technology, which has been around for decades. But let’s just focus on the fact that crypto grew exponentially in the wake of the financial crisis. That’s when the famous Bitcoin white paper came out. That’s when the idea of fighting against the bailing out of banks spurred this vision of having some way of financing, borrowing, lending, and keeping money outside of the auspices of the more centralized financial system, which had shown itself to be a) reliant on the Fed and the government and b) not particularly stable.

    Even though we’ve got, obviously, centuries of the establishment of different currencies, including the dollar (with the dollar becoming stronger and the reserve currency in the last century), the idea that something else can compete on a currency basis, or at least be another avenue if it were to be regulated and safer, was a direct result of what happened and how it was handled by central banks in the wake of the financial crisis. It’s also why that idea grew exponentially again in the wake of the pandemic, when the same things happened. Instead of saving the economy by saving Wall Street, the idea was that the Fed was saving the economy by — we don’t even know what — but ultimately money gushed into the markets again. That was one thing. But the decentralized aspect of it is also an interesting area of transformation and will be for some time — the idea of using technology to do financial transactions of all kinds away from the auspices of your Chase account or your Bank of America account.

    In terms of the metaverse, I’m not talking about gaming and that type of thing, but of using technology to share, more directly, things like medical treatments or surgery secrets or what have you, across countries without everybody physically being in the same place, or engineering techniques that can allow easier fabrication of potential problems in new bridges that could be ironed out before the bridge is actually built or engineered so that you have more efficiency in the use of material. This is about pushing technology into something helpful for the building of real things and the creation of better and healthier lives for people through the auspices of virtual reality techniques.

    LP: Some of that sounds hopeful, yet you use the word “permanent” in the title of your book. It sounds like we have no way of correcting this distortion between the financial markets and the real economy.

    NP: I chose the term “permanent” specifically. It’s a big word. Given what happened in the wake of the pandemic and the fact that central banks could create so much money so quickly facing a crisis showed me that this can happen again and again. Not necessarily that big of an amount for that big of a crisis, but that we would have this unhinged, uncapped, untransparent process that can occur repeatedly.

    Since I wrote the book, we have this high inflationary environment. The Fed is raising rates quickly, as are other central banks around the world. I think that’s creating a looming debt crisis for consumers, in particular, in the process, with the cost of money becoming so high for them so quickly. We’re starting to see delinquencies, defaults, and other problems arising as a result.

    But be that as it may, in the U.K, the Bank of England, when faced with a pension crisis recently, was “forced” — as described by articles associated with it — but actually chose to create 60 billion pounds worth of money in order to buy gilts [the equivalent of U.S. Treasury securities] and to give a bid to the gilt market to raise the level of gilts. They chose to do that because gilts were declining precipitously and over-leveraged by a contingent of the pension fund community. The idea was that, as with any pension fund, you invest and the return that you get on that investment is part of what the pensioners needing to draw on their pensions get. But when there’s too much borrowing or there’s too much of a depreciation in the assets, then there’s a problem. You can’t pay what is owed to the pensioners.

    That’s what happened in the U.K. As a result, the central bank is still raising rates – tightening policy — and on the other hand, they’re creating more money — loosening policy — in order to buy those gilts. I think we’re going to continue to see these types of situations. That’s what I mean by permanent. There’s always going to be this possibility of money coming into some part of the market when it needs it because (particularly in developed countries) central banks can do that.

    How do we get out of it? We can’t. First of all, it’s important to note that this is happening and not to accept false narratives, like the story that a host of $600 stimulus checks paid out two years ago is causing inflation today. That’s just really annoying and stupid. We need to understand that the Fed didn’t inflate money in order to pay people those $600 checks or help fund the PPP loans and whatever else was going on at the time. That’s not what’s causing our inflation. There’s a bigger picture. One of the things I think we can do is literally ask ourselves the question, do you think that this monetary body in Washington has the ability to do anything that can actually make my electricity bills go down by virtue of raising the cost of my credit card debt or my personal loans or my mortgage? The answer should be no. We need to understand and think about these relationships so that at least we don’t accept what’s false and we don’t become blind, to what’s going on. The public needs to know this. Congress should know this. That’s what I hope my book can do: educate people. 

    Tyler Durden
    Sat, 11/19/2022 – 17:30

  • Ukraine Rejects Alleged Offer Of "Short Truce" By Russia
    Ukraine Rejects Alleged Offer Of “Short Truce” By Russia

    It was revealed Friday by the Ukrainian side that the Kremlin has offered Kiev the possibility of reaching an agreement to implement a “short truce”. It comes as there are more and more signals from Washington that it’s ready to see both sides come to the table for some kind of ceasefire agreement. 

    Ukrainian President Volodymyr Zelensky said Friday that Russian officials had attempted the overture, but he rejected the possibility, at a moment the Ukrainian counteroffensive has made recent gains, especially the retaking of Kherson city and many surrounding villages.

    “Russia is now looking for a short truce, a respite to regain strength. Someone may call this the war’s end, but such a respite will only worsen the situation,” the Ukrainian leader said in a virtual address before the Halifax International Security Forum.

    File image: AP

    Zelensky then reiterated his hardened resolve to not consider the possibility of talks until Russian forces are defeated. “A truly real, long-lasting and honest peace can only be the result of the complete demolition of Russian aggression,” Zelensky said.

    There was no confirmation from the Kremlin side that such a specific offer was actually made. However, Russia has lately reiterated that it has always remained open to the possibility of dialogue. During his virtual G20 address last week, Zelensky issued a 10-point plan for ceasefire, which included the hardline position that no territorial concessions would be made. 

    Despite widespread reports that Gen. Mark Milley, chairman of the US Joint Chiefs, has been pushing the White House to get Zelensky to negotiate, other influential voices such as Secretary Antony Blinken and national security advisor Jake Sullivan have said it’s “too early”.

    Gen. Milley’s position is based on the assessment that forcing Russian troops completely out of the country anytime soon remains unrealistic. 

    The Biden administration on Friday reaffirmed that only the Zelensky government can make the determination of when it is ready to negotiate, if at all. In the meantime the potential for direct confrontation between NATO and Russia remains as unpredictable as ever, especially after the deadly Polish border missile incident of last Tuesday. 

    The Poland incident, which resulted in widespread accusations that Zelensky had sought to lie NATO into war with Russia, illustrates that the longer both sides grind on in the conflict while rejecting the idea of negotiated settlement, the greater the chances are for a ‘mishap’ leading to a WWIII scenario among nuclear-armed superpowers. 

    Tyler Durden
    Sat, 11/19/2022 – 17:00

  • House Committee Advances Bill To Have Trackable Mail-In Ballots
    House Committee Advances Bill To Have Trackable Mail-In Ballots

    Authored by Mimi Nguyen Ly via The Epoch Times (emphasis ours),

    The House Oversight and Reform Committee on Thursday advanced a bill that would enable mail-in ballots for federal elections to be tracked.

    “This bill would require that any ballot mailed in a federal election include a postal service barcode on the envelop that is unique to the individual ballot,” Rep. Carolyn B. Maloney, the chairwoman of the committee, who had introduced the bill, said Thursday.

    “We can now track packages around the world, they have a barcode you can track it as a consumer. This would allow an individual to track their own ballot. This commonsense requirement would enable boards of elections to confirm when a ballot was sent and give voters confidence that their votes have been casted and counted.”

    U.S. House Minority Leader Rep. Kevin McCarthy (R-Calif.) (R) speaks as other House Republicans listen during a news conference at the East Steps of the U.S. Capitol on Sept. 29, 2022 in Washington, D.C. House Republicans held a news conference on “House Republican’s Commitment to America.” (Alex Wong/Getty Images)

    She said that the bill would also require envelopes containing ballots to include a specific identifier which “will help ensure timely sorting and delivery” of the ballots.

    “Ensuring election officials and voters have the resources to track the status of their ballots would create even more peace of mind and confidence and further protect the sanctity of our elections,” Maloney said. The bill passed the committee by a vote of 34-5.

    Rep. Carolyn Maloney (D-N.Y.) in New York City on Aug. 18, 2022. (Stephanie Keith/Getty Images)

    Rep. James Comer (R-Ky.), the ranking member of the committee, told The Hill that he supports the measure because it will “help protect the postal service from being blamed for election irregularities.”

    ‘False Sense of Security’

    Other lawmakers said the legislation is not enough to prevent potential fraud.

    “This is good, but until you have some kind of voter identification attached to your mail-in ballot that’s stronger than amateur hand-writing experts assessing somebody’s signature on the outside of an envelope, I think we’re going to have a problem,” Rep. Andy Biggs (R-Ariz.) reported The Hill.

    Rep. Clay Higgins (R-La.) said the legislation would give a “false sense of security,” because there is “no way of verifying the legitimacy” of the contents of the envelope, reported the outlet.

    Rep. Clay Higgins (R-La.) speaks during a House Committee on Oversight and Reform hearing on gun violence on Capitol Hill in Washington on June 8, 2022. (Andrew Harnik/Pool/AFP via Getty Images)

    On social media, people expressed concerns over the usefulness of the ability to track a mail ballot in the absence of voter I.D. Others expressed that the ability to track mail ballots would not prevent people from casting multiple votes.

    Amid the COVID-19 pandemic, the United States saw a shift in voting methods in 2020, in part prompted by the actions of the states. While many states did not amend their policies, some states expanded early voting, and other states issued all registered voters ballots that they could return by mail.

    Tyler Durden
    Sat, 11/19/2022 – 16:30

  • Judge Orders Unsealing Of Names Of 8 Anonymous Individuals Relating To Jeffrey Epstein
    Judge Orders Unsealing Of Names Of 8 Anonymous Individuals Relating To Jeffrey Epstein

    Authored by Tom Ozimek via The Epoch Times (emphasis ours),

    A federal judge on Friday ordered the unsealing of documents featuring the real names of some of the “John Does” relating to deceased sex trafficker Jeffrey Epstein, according to multiple media outlets.

    (Left) Jeffrey Epstein, in a booking photo in Palm Beach, Fla., on July 27, 2006. (Palm Beach Sheriff’s Office) (Right) Little Saint James Island, in the U.S. Virgin Islands, a property purchased by Epstein more than two decades ago. (Gianfranco Gaglione/AP Photo)

    Judge Loretta Preska ruled on Friday to disclose the identities of a number of previously anonymous individuals in documents filed by Epstein victim Virginia Giuffre against the convicted pedophile’s associate Ghislaine Maxwell in a defamation case, according to Insider.

    Epstein died in jail awaiting trial while Maxwell was convicted of sex trafficking and sentenced to 20 years behind bars.

    Giuffre’s civil lawsuit against Maxwell has generated a trove of documents relating to Epstein, which contain a number of redacted names, some of which Preska ordered unsealed on the premise that public interest outweighs the right to privacy, according to Daily Mail.

    Virginia Giuffre during an interview on the BBC Panorama program that aired on Dec. 2, 2019. (BBC Panorama via AP)

    Already Disclosed to the Public

    Eight “Non-Party Does” referred to in documents as Does 12, 28, 97, 107, 144, 147, 171, and 183, sought to remain anonymous amid concerns that their disclosure would harm their reputations, Fox News reported.

    Preska disagreed in some cases, saying that much of the “purportedly sensitive information” had already been disclosed to the public during Maxwell’s trial, per Daily Mail.

    While a timeline for the release of the documents and names has not been set, Preska identified some of the Epstein-linked individuals during the hearing.

    The judge identified Doe 147 as Epstein victim Sarah Ransome, who testified publicly at Maxwell’s sentencing and published a book about her experience, and granted numerous interviews, according to Insider.

    Sarah Ransome, an alleged victim of Jeffrey Epstein and Ghislaine Maxwell, right, alongside Elizabeth Stein, left, speak to members of the media outside federal court in New York, on June 28, 2022. (John Minchillo/AP Photo)

    Another individual Preska identified was Emmy Tayler, a former personal assistant to Maxwell who was accused of playing a role in the sexual abuse of some of the victims, according to Daily Mail.

    Tayler, who has denied any wrongdoing, was named in a batch of publicly available documents from another lawsuit, Preska said and ordered its release, according to Daily Mail, though it’s unclear which of the Does is used in reference to Tayler.

    ‘Intense Media Coverage’

    Preska also ordered documents relating to Doe 183 unsealed as the individual has been the “subject of intense media coverage” and their name was disclosed during Maxwell’s trial. But in order to allow Doe 183 an opportunity to appeal her decision, Preska put a stay on the release until Nov. 28.

    She also ordered the name of Tom Pritzker, billionaire executive chairman of the Hyatt Hotels, to be unsealed, according to Insider. Preska said Pritzker had only a marginal connection to Epstein as his name came up in a deposition in which a witness said they didn’t recognize him.

    Pritzker argued against the disclosure on the premise that it could harm his reputation but Preska overruled his objection.

    The judge did concede to some of the individuals who raised objections, however.

    Doe 12 will remain anonymous as they were a “classic outsider,” the judge said, describing them as “neither victim nor associated with Epstein or Maxwell,” according to Daily Mail.

    The name of Doe 28 will also remain sealed as they’re a sexual assault victim who the judge said “continues to experience trauma,” per Daily Mail.

    Meanwhile, Maxwell recently alleged that a fellow inmate plotted to kill her in her sleep.

    She also said that she found Epstein’s death, which was ruled a suicide, to be “profoundly suspicious” and that she doubts he really killed himself.

    When he died, Epstein was awaiting trial on federal sex-trafficking charges. He was convicted in 2008 on similar charges but received a light sentence.

    Tyler Durden
    Sat, 11/19/2022 – 15:30

  • US Redeploys B-1B Lancer Bomber Over Korea After North Fires Powerful ICBM
    US Redeploys B-1B Lancer Bomber Over Korea After North Fires Powerful ICBM

    Tensions are again reaching boiling point over the Korean peninsula as the US has redeployed a US B-1B Lancer long-range strategic bomber there, ostensibly for more joint aerial drills with the south’s military, even after North Korea’s vehement denunciation of similar exercises earlier this month, which resulted in Kim Jong-un ordering a record number of ballistic missile tests.

    “South Korea and the US conducted a joint air drill today with the US Air Force’s B-1B strategic bomber redeployed on the Korean Peninsula,” the South’s Joint Chiefs of Staff (JCS) confirmed in a Saturday statement.

    US Air Force’s B-1B Lancer bomber

    The statement further indicated a number of fighter jets accompanied the 1B Lancer’s flight. “Some of the most advanced jets in the US and South Korean air forces, including the F-35 stealth fighter, also joined the drill,” it said. “Through this drill, we have once again demonstrated the joint military capacity of the South Korea-US alliance and Washington’s commitment to protecting the Korean Peninsula and providing extended deterrence,” the JCS added.

    Crucially the new bomber redeployment comes the morning following another threatening North Korean ICBM launch amid warnings from the Kim regime of “fiercer military responses” to Washington to come.

    North Korean state media identified that it was a Hwasong-17 ICBM – said to be capable of flying 9,320 miles, thus making it a significant threat and warning to the United States. 

    Pyongyang accompanied the provocative ICBM launch with a severe warning, invoking the prospect of “all-out” nuclear war: 

    “Kim Jong Un solemnly declared that if the enemies continue to pose threats … our party and government will resolutely react to nukes with nuclear weapons and to total confrontation with all-out confrontation,” Pyongyang’s official Korean Central News Agency (KCNA) reported on Saturday.

    Referencing the Hwasong-17, state media described it as “the most powerful and absolute nuclear deterrence” – further calling the missile “the strongest strategic weapon in the world.”

    Kim Jong-un showed his daughter in public for the first time in relation to Friday’s ICBM launch…

    https://platform.twitter.com/widgets.js

    The Biden administration has apparently felt the need to flex American military might over the peninsula in tit-for-tat measure of late whenever these ramped up missile tests by the north occur, creating a continuing dangerous and unpredictable situation, also as Japan feels increasingly under threat, given in the recent past missiles have flown directly over the main island.

    Tyler Durden
    Sat, 11/19/2022 – 15:00

  • Grayscale Bitcoin Trust Says It Won't Confirm Its On-Chain Wallet Information Publicly
    Grayscale Bitcoin Trust Says It Won’t Confirm Its On-Chain Wallet Information Publicly

    Submitted by QTR’s Fringe Finance

    Amidst the heightened scrutiny on basically all structured crypto products following the blowup of FTX, many players in the crypto space are rushing to reassure their clients and the investing public that their assets are real, unencumbered and safe.

    The grandfather of all bitcoin structured products, the hugely popular Grayscale Bitcoin Trust, has seen its discount to NAV plunge to almost -50% from about 0% in the beginning of 2021 as bitcoin has fallen in price.

    In other words, if you want to buy bitcoin, and you trust that Grayscale’s assets are safe and sound, buying their trust here would essentially allow you to buy bitcoin for an additional 50% off its spot price.

    It sounds too good to be true, right? That’s what many skeptics continue to point out. Why would the trust trade at such a massive discount? Could it be due to a reasonable explanation? Perhaps its just a technical glitch as many people are selling at any price do to the volatility in the space right now? Perhaps it is due to forced liquidations of people who held GBTC, opening the door for opportunities to those who have cash on the sidelines?

    The truth is we just don’t really know. But…the simplest way for Grayscale to close the price/NAV gap would be to reassure investors that its trust’s holdings are exactly as they seem, making the case easy for arbitrageurs to pounce on what could be a significant discount not just if the price of bitcoin rises, but even if it falls less than the current discount but Grayscale is somehow able to shore up the difference.

    As of yesterday, the Grayscale Bitcoin Trust was trading at a massive 43% discount to its NAV, Peter Schiff, who has traded barbs with Grayscale CEO Barry Silbert on Twitter often, noted:

    Today the #Grayscale Bitcoin Trust traded at a 43% discount to its NAV. With #Bitcoin trading at $16,700, shareholders of $GBTC were willing to sell their Bitcoin for the equivalent of $9,500. What does that tell you about retail and institutional investor confidence in Bitcoin?

    And so on Friday after the market closed, Grayscale took to its Twitter account to try and make a statement to shore up investor confidence. I’m not sure the company got the reaction it was looking for.

    The company’s entire Tweet thread can be viewed here. Grayscale said they were providing “additional information about the safety and security of the assets held by our digital asset products”.

    They told readers that “each of Grayscale’s digital asset products is set up as a separate legal entity” and that the company’s “laws, regulations, and documents that define Grayscale’s digital asset products prohibit the digital assets underlying the products from being lent, borrowed, or otherwise encumbered.”

    That’s a good start.

    They also noted that all of their digital assets are being held by Coinbase Custody Trust Company, LLC. They provided a letter from Coinbase, dated November 18, 2022, that appeared to attest to the amount of digital assets Coinbase held for them – as of the end of September.

    Also a good step in the right direction.

    But that’s where the verification stopped. The company didn’t turn over any of its on-chain wallet information, instead noting that “Coinbase frequently performs on-chain validation”. It’s also unclear to me whether or not the Coinbase document attests to current holdings by the trust, as it appears to have everything dated as of September 30, 2022 – the last date of the quarter.

    Of course, FTX’s blowup took place just weeks ago, and this is the pressure point of volatility that the industry is concerned about. Should any changes in the trusts have taken place due to FTX’s turmoil and the “run on the bank”, it would have likely been after September 30, 2022.

    Grayscale continued: “Due to security concerns, we do not make such on-chain wallet information and confirmation information publicly available through a cryptographic Proof-of-Reserve, or other advanced cryptographic accounting procedure.”

    They continued: “We know the preceding point in particular will be a disappointment to some, but panic sparked by others is not a good enough reason to circumvent complex security arrangements that have kept our investors’ assets safe for years.”

    Then, they linked to the following document, with more information about their products.

    “Due to recent events, investors are understandably inquiring deeper into their crypto investments. Custody of the digital assets underlying Grayscale’s digital asset products is unaffected, and our products’ digital assets remain safe and secure,” it reads.

    It then appears to make a more recent, concrete attestation:

    For example, this means that Grayscale Bitcoin Trust (OTCQX: GBTC) holds bitcoin — and only bitcoin — and each share is backed by a proportional amount of the trust’s holdings, approximately 0.00091502 BTC per share of GBTC, as of November 18, 2022. To be perfectly clear: these digital assets are owned by GBTC and GBTC alone. 

    Get 50% off: If you enjoy this article, would like to support my work, I would love to have you as a subscriber and can offer you 50% off for life: Get 50% off forever

    I’m not one to try and weigh Grayscale’s statements versus the clarity of on-chain validation, but isn’t that what the point of the blockchain actually is? Wasn’t it sold to so many people under the guise that anybody could have access and validate anyone else’s assets?

    If Grayscale has the assets it claims, and I’m not saying that they don’t, it still seems to be outside the spirit of the entire “decentralized” and “blockchain” cult that touts its transparency and openness as one of its biggest strengths.

    Why provide confirmation from the custodian but not verification on the blockchain?

    I was also alarmed by the number of people who responded to Grayscale’s Twitter thread, thrashing the company for not providing more information.

    “No one cares until you show exact on chain proof of reserves and state of your debt vs. reserves along with how much you are sucking out exactly to every executive and employee you have,” one person responded.

    Other responses looked like these:

    Another Twitter user wrote: “Making a public statement trying to quell fears while refusing to perform a proof of reserve is far worse than not making the statement. This will exacerbate the concerns and I expect the GBTC discount will reflect this sentiment.”

    I spoke with the owner of the @Bitfinexed Twitter account, who has long been a skeptic of the industry and has predicted that blowups like FTX would be coming. When I asked them if the security angle was real, they replied:

    “No, it’s not. Showing a public bitcoin address is zero risk.”

    As an example, they provided me with Binance’s wallet address.

    “Binance can sign a message to prove that address is under their control,” they told me. “Nobody can steal it and Binance can prove it is theirs.”

    A second crypto expert, @MagooPhD on Twitter, told me that they did think there was some validity to the security argument. They told me “realistically if you expose where the coin is kept you let potential bad parties know where to start looking.”

    They continued: “Like being able to see when coin movement is done. You can start to sync that to real world events and locations. It’s like disclosing where a safe is in a house – or even that there is a safe in a house.”

    Despite this, they called Grayscale’s statement “kind of weird”, adding that no one had claimed their bitcoin didn’t exist to begin with.

    Whether or not this attempt at shoring up confidence in the trust worked or not, we’ll likely know Monday morning. The important thing to watch won’t be the price of bitcoin, it’ll be the price/NAV of the trust. If the discount gets larger, the market likely isn’t buying what Grayscale has to say. If the discount closes, it means Grayscale has added little burst of confidence to the market.

    But the old saying goes…trust, but verify. Personally, even if Grayscale’s assets are fine, as they say they are and may very well be, the company may have done itself a disservice in how they communicated this to the world, after market close, on a Friday.

    Is it 9:30AM Monday morning yet?

    —

    QTR’s Fringe Finance is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. Also, please Share this article.

    Tyler Durden
    Sat, 11/19/2022 – 14:30

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