The former CEO of FTX Trading goes on trial today for making $8 billion disappear in just under three years. Molly White has a precis:
About eleven months ago, the then second-largest cryptocurrency exchange in the world imploded over the course of only a few days as trust in the company crumbled and it failed to meet a surge of customer withdrawals. It rapidly became apparent that customer money was missing. A lot of it.
Since then, it’s come out that FTX allowed its sister trading firm, Alameda Research, to dip into FTX’s customer funds with effectively no limit to backstop their own trading losses. Much of FTX’s balance sheet was also revealed to be denominated in flimsy crypto tokens worth far less in reality than on paper, and a substantial portion of them had been created out of thin air by FTX itself. And the FTX group of companies had spent money they didn’t have, splashing out for extravagant celebrity endorsements and advertisements, buying real estate, and donating massive sums to curry favor among seated politicians and bankroll the industry boosters running for office.
Altogether, somewhere around $8 billion was gone.
Besides Sam Bankman-Fried, four other high-level executives at the FTX group of companies have been charged, and all four have reached plea deals. Three of them agreed to cooperate with the investigation as a part of their plea, and will almost certainly appear as witnesses at the trial. They were not just Bankman-Fried’s employees and co-workers, but also his friends, roommates, confidants, and, in one case, a former romantic partner.
There’s no question that billions of dollars of customer funds went missing from FTX. Instead, prosecutors are tasked with convincing a jury that they’re missing thanks to intentional fraud by Sam Bankman-Fried. The “intentional” part is the sticky bit, with prosecutors needing to convince all twelve jurors beyond a reasonable doubt that Bankman-Fried intended to defraud people. If even one juror holds out, Bankman-Fried could dodge a guilty verdict thanks to a hung jury — and trying to appeal to just one sympathetic juror may be his only hope in what looks like a pretty overwhelming case against him.
Since his resignation from FTX, Bankman-Fried has tried to portray himself as a colossally stupid man, who was simply too dumb to commit fraud. Unfortunately, stupidity doesn't actually exonerate criminal behavior. He only needs to have intended the actions, not the harm. And from the outside, it looks like he wasn't so much stupid as greedy, immature, narcissistic, and venal.
Get out the popcorn.
I haven't had the most productive morning ever, but I should get back into coding after I take Cassie on her lunchtime walk. Meanwhile:
Finally, just look at this wonderful creature who got a bath yesterday. She actually climbed into the tub on her own, and seems to have figured out that getting a vigorous whole-body massage with warm water, followed by an equally-vigorous toweling off, actually feels pretty good.
House Speaker Kevin McCarthy (R-CA) surprised the Crazy Caucus by moving a 45-day spending bill to keep the government open that Democrats could support:
The legislation, which the Senate then passed with broad bipartisan support, marked a stunning reversal after many in Washington expected the government to close at midnight following several failed attempts by House Republicans to agree on spending legislation over the past week.
Ultimately, House Democrats supported McCarthy’s eleventh-hour proposal for a 45-day “continuing resolution” including disaster relief funds, an extension of a federal flood insurance program and reauthorization of the Federal Aviation Administration. All but one Democrat voted to support the legislation while 90 Republicans voted against it, resulting in a vote of 335-91.
Oddly, the "lone Democrat" happens to be my Representative, Mike Quigley (D-IL), because the bill temporarily halted aid to Ukraine.
Josh Marshall explains that all McCarthy did, really, was to shoot the hostage. Of course, McCarthy's the hostage, so...
At every point this was about the House Republican caucus’s demand to get some new goodies in exchange for not shutting down the government. The only slight ambiguity there is that for some House hardliners the shutdown itself clearly was the goodie. For the House hardliners it was goodies or a shutdown. There was no getting out of that binary choice because Kevin McCarthy refused any solution that relied on Democratic votes.
Then sometime today he decided to allow a vote on a clean resolution relying on Democratic votes. It passed and that was it. That change was really all that happened.
We’ve been on this course of escalating drama for weeks or months, with all the purported big matters of principle, all the tough talk about never backing down. And then they backed down and agreed to get nothing. So it all ended with a resounding “Never Mind.” But not before holding the hold federal government and much of the economy on tenterhooks for weeks or months.
So, good news, the government will keep going. The Supreme Court can start removing more of our rights based on bullshit theories proposed, one suspects, by billionaires, and the rest of us can keep getting on.
Somehow, it's already the end of September. I realize this happens with some predictability right around this time of year, but it still seems odd to me.
Of course, most of the world seems odd these days:
Finally, just look at this happy dog and all his new human friends playing a fun game of keep-away...during a professional football game in Mexico. I've watched it about five times now. The goodest boi was having such a great time. I hope one of the players or refs adopted him.
It's only Wednesday? Sheesh...
- The Writers Guild of America got nearly everything they wanted from the Alliance of Motion Picture and Television Producers (i.e., the Astroturf organization set up by the big studios and streamers to negotiate with the Guilds), especially for young writers and for hit shows, but consumers should expect more bundling and higher monthly fees for shows in the future.
- Josh Marshall suspects that the two competing storylines about the XPOTUS (that he's about to return to power, but he's also losing every legal battle he fights) are actually just one: his "current posture of bravado and menace – while real enough as a threat – is simply his latest con, concealing a weaker and more terrified reality."
- Jamie Bouie marvels that Justice Clarence Thomas (R$) wins the trifecta: "We have had partisan justices; we have had ideological justices; we have had justices who favored, for venal reasons, one interest over another. But it is difficult to think of another justice, in the history of the Supreme Court, who has been as partisan and as ideological and as venal as Thomas...."
- Melissa Gira Grant profiles US District Court Judge Matthew Kacsmaryk (R-NDTX), a Christian nationalist who rose through the Federalist Society pipeline to a lifetime appointment where he will push his Victorian-era views on the people of Texas for the next 30 years or so.
- North Korea vomited up US Army Private 2nd Class Travis King, having used him for the little he was worth after the soon-to-be-dishonorably-discharged soldier illegally entered the kingdom in July.
- Kelli María Korducki worries that "in the age of AI, computer science is no longer the safe major," not realizing, perhaps, that the most effective programmers are and have always been liberal arts majors.
Finally, yet another fact that will make everyone I know feel old: today is Google's 25th birthday. And yes, the Daily Parker has been around longer trillion-dollar search company. We just haven't had our IPO yet.
Other than getting a little rained on this morning, I've had a pretty good day. But that didn't leave a lot of time to catch up on any of these before I started a deployment just now:
- Heather Cox Richardson examines US history through the lens of a never-ending conflict between "two Americas, one based in religious zeal, mythology, and inequality; and one grounded in rule of the people and the pursuit of equality."
- Josh Marshall ponders the difficulty of covering the XPOTUS's increasingly ghastly behavior in the "both-sides" journalism world we inhabit.
- James Fallows zooms out to look at the framing decisions that journalists and their publishers make that inhibit our understanding of the world. Like, for example, looking at the soon-to-be 4th time Republicans in Congress have shut down the Federal government and blaming all of Washington.
- Fallows also called attention to Amna Nawaz's recent interview with authoritarian Turkish president Recep Erdogan in which she kept her cool and her focus and he...didn't.
- Speaking of the impending Republican torching of the US Government (again), Krugman looks at the two clown shows in the party, but wonders why "everyone says that with the rise of MAGA, the G.O.P. has been taken over by populists. So why is the Republican Party’s economic ideology so elitist and antipopulist?"
- The Supreme Court has once again told the Alabama legislature that it can't draw legislative maps that disenfranchise most of its black citizens. Which, given the state's history, just seems so unlike them.
- The Federal Trade Commission and 17 US States have sued Amazon for a host of antitrust violations. “A single company, Amazon, has seized control over much of the online retail economy,” said the lawsuit.
- Monica Hesse dredges all the sympathy and understanding she can muster for XPOTUS attorney Cassidy Hutchinson's memoir. NB: Hutchinson is 27, which means I am way overdue for starting my own memoir.
- Chicago Sun-Times columnist David Roeder complains that the CTA's planned Red Line extension to 130th Street doesn't take advantage of the existing commuter rail lines that already serve the far south side, but forgets (even as he acknowledges) that Metra and the CTA have entirely different missions and serve different communities. Of course we need new regional transport policies; but that doesn't mean the 130th St extension is bad.
- Software producer Signal, who make the Signal private messaging app, have said they will leave the UK if the Government passes a "safety" bill that gives GCHQ a back door into the app.
- Molly White shakes her head as the mainstream press comes to terms with something she's been saying for years now: NFTs have always been worthless. Oh, and crypto scored two $200-million thefts this week alone, which could be a new record, though this year has already seen $7.1 trillion of crypto thefts, hacks, scams, and other disasters.
- After almost 20 years and a the removal of much of an abandoned hospital in my neighboorhood, the city will finally build the park it promised in 2017.
Finally, I rarely read classical music reviews as scathing as Lawrence Johnson's evisceration of the Lyric Opera's Flying Dutchman opening night last Friday. Yikes.
The Writers Guild of America's negotiating committee announced the tentative deal last night:
We can say, with great pride, that this deal is exceptional – with meaningful gains and protections for writers in every sector of the membership.
What remains now is for our staff to make sure everything we have agreed to is codified in final contract language. And though we are eager to share the details of what has been achieved with you, we cannot do that until the last “i” is dotted. To do so would complicate our ability to finish the job. So, as you have been patient with us before, we ask you to be patient again – one last time.
To be clear, no one is to return to work until specifically authorized to by the Guild. We are still on strike until then. But we are, as of today, suspending WGA picketing. Instead, if you are able, we encourage you to join the SAG-AFTRA picket lines this week.
The last bit means that writers and actors still haven't returned to work, and probably won't for a week or two. Plus, writers may choose not to cross the actors' picket lines. But after 145 days of AMPTP stonewalling, the studio CEOs who attended negotiations last week seem to have knocked some sense into their own committee.
Google Chrome is patiently letting me know that there's a "New Chrome available," so in order to avoid losing all my open tabs, I will list them here:
Finally, XKCD traces the evolution of most Americans' thoughts about urban planning and transport policy, once they start having any. I feel seen!
Senate majority leader Chuck Schumer (D-NY) forced through a vote on the top three general officer promotions that junior Senator Tommy "Coach" Tuberville (R-AL) has blocked for over six months, meaning we will have a Joint Chiefs Chair, a Commandant of the Marine Corps, and an Army Chief of Staff in the next couple of days. That leaves just over 300 admirals and general officers waiting for confirmation. No biggie.
Meanwhile:
Finally, Bob Ballard's company recently did a 40-hour underwater survey of three WWII aircraft carriers sunk at the Battle of Midway.
I didn't only read about leaf blowers today. In other news:
- For reasons no one can fathom, there seems to be a relationship between how much scrutiny the individual Justices of the United States have gotten over their conflicts of interest with billionaires and their rejection of outside ethical oversight. Oh, and the two most defiant happen to be the two most ideologically Republican. Hard to figure out why.
- Paul Krugman tries to figure out why inflation has dropped to 3%—not that he's complaining!
- Luis Rubiales, Spain's top soccer official who forcibly kissed player Jennifer Hermoso after the Spanish women's team defeated England in August, finally resigned, though he still doesn't understand what he did wrong.
- If your city needs to resurface a road, encourage them to narrow it, which would save money now, save money in the future, and improve safety all around.
- The Times shares what we know about North Korean dictator Kim Jong-un's armored train, and why he doesn't want to fly.
- Allison Davis mourns the loss of her adult friendships caused, it would seem, by the "adorable little detonators" her friends gave birth to. (I’ve learned to hide my real reaction to a new pregnancy — nobody wants their joyous announcement to be met with “Oh my God, not another one.”)
Finally, tire-manufacturer Michelin has started expanding its restaurant guide to new cities, and charging the cities for the privilege. Fortunately they haven't decided to charge the restaurants for inclusion in the Guide.