The Daily Parker

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:

• California governor Gavin Newsom (D) has announced he would appoint Emily's List president Laphonza Butler to serve out the remainder of the late US Senator Dianne Feinstein's term.
• The XPOTUS has shown up to his fraud trial in New York today, in what Michael Tomasky hopes will utterly ruin the man.
• In the Post, Michael Lewis examines the last year of Sam Bankman-Fried's life in the Crypto game.
• US Representative and clownish dingleberry Matt Gaetz (R-FL) threatened to call a vote on House Speaker Kevin McCarthy's (R-CA) tenure, but since just about everyone in his party can't stand him, the threat is going nowhere. But as Aaron Blake points out, my party won't save McCarthy either.

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.

Happy fin de Septembre, the last day of the 3rd quarter and possibly the last really summer-like weekend of 2023. At the moment it's a perfectly sunny 21.4°C at Inner Drive WHQ with a perfect forecast of 24°C.

The plan today: walk 4 km to a friend's house because her kids want to see Cassie, then walk 3 km to the Horner Park DFA, then another 5 km to Spiteful Brewing's Oktoberfest, then walk the last kilometer home and plotz. I am confident both Cassie and I will succeed in all aspects of this plan.

Enjoy the last few hours of September 2023. See you in October, after the Republican Party once again shuts down the US Government, something the USSR could never accomplish.

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:

• As we careen into the 4th Republican-caused government shutdown in the last 30 years, we might want to reflect on the fact that only 68,000 people elected the 8 clowns most responsible for this year's bullshit.
• New York Times editorial board member Alex Kingsbury wants people to keep top of mind the XPOTUS's promises to expand his lawlessness if re-elected.
• India's assassination of a Canadian citizen over the summer looks even weirder when you consider that Sikh separatism isn't really a thing in India—at least no more than UP separatism is a thing in Michigan.
• Sal Gentile, a writer for Seth Myers, believes the recently-ended writers' strike showed all workers, not just writers, that labor can take back its power. The Atlantic's Lora Kelley agrees.
• Edith Olmsted loves that Taylor Swift makes right-wingers' brains explode.
• Travel site Travelbag crunched the data to find Chicago has the best beer-drinking experience in the world, followed by Hanoi, Jakarta, and Nanjing. San Diego and Houston come in second and third among US cities.

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.

The senior US Senator from California, a Democratic stalwart, died overnight, according to her family:

In recent years, Ms. Feinstein, 90, had suffered from frail health and memory issues that made it difficult for her to function alone and prompted calls for her to step down, which she consistently rejected.

Her staff was being informed at 9 a.m.

A spokesman for Ms. Feinstein’s office did not immediately respond to a request for comment.

CNN had her obituary ready to go:

Feinstein broke a series of glass ceilings throughout her life, and left her fingerprints on some of Capitol Hill’s most consequential works in recent history – including the since-lapsed federal assault weapons ban in 1994 and the 2014 CIA torture report.

In her later years, the California Democrat’s health was the subject of increasing scrutiny and speculation. A hospitalization for shingles in February led to an extended absence from the Senate – stirring complaints from Democrats, as Feinstein’s time away slowed the confirmation of Democratic-appointed judicial nominees – and when she returned to Capitol Hill three months later, it was revealed that she had suffered multiple complications during her recovery, including Ramsay Hunt syndrome and encephalitis. A fall in August briefly sent her to the hospital.

Feinstein, who was the Senate’s oldest member at the time of her death, also faced questions about her mental acuity and ability to lead. She dismissed the concerns, saying, “The real question is whether I’m still an effective representative for 40 million Californians, and the record shows that I am.”

She will be missed.

The English actor does not make widgets or suffer fools:

At some point a few years back, an unholy union of like-minded tech bros, studio suits, media water-carriers and social media personalities settled on their own “widget,” a catchall phrase that would both encompass and minimize the various forms of entertainment they touch: “content.” And when news broke on Sunday night that the monthslong Writers Guild of America strike was coming to an end, Variety, the industry bible, gave this term its most skin-crawling deployment to date, noting that the W.G.A. strike had taken “a heavy toll across the content industry.”

Variety itself had run, just a few days earlier, a pointed rebuke to the term from no less an authority than the Oscar-winning actor and screenwriter Emma Thompson. “To hear people talk about ‘content’ makes me feel like the stuffing inside a sofa cushion,” she said at the Royal Television Society conference in Britain last week.

“It’s just a rude word for creative people,” she added. “I know there are students in the audience: You don’t want to hear your stories described as ‘content’ or your acting or your producing described as ‘content.’ That’s just like coffee grounds in the sink or something.”

Way back in business school, the very first thing our finance professor said was, "An asset is a series of cash flows." When I asked him if assets had intrinsic value, he said "that is not a relevant consideration in corporate finance." These are the people running the studios and streamers.

Thank you for reading my content. I hope you feel content.

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.

New York Supreme Court (i.e., trial court) judge Arthur Engoron ruled yesterday that the XPOTUS's eponymous family business committed fraud on such a scale that the company is no longer allowed to do business in New York State:

The surprising decision...is a major victory for Attorney General Letitia James in her lawsuit against Mr. Trump, effectively deciding that no trial was needed to determine that he had fraudulently secured favorable terms on loans and insurance deals.

Ms. James has argued that Mr. Trump inflated the value of his properties by as much as $2.2 billion and is seeking a penalty of about $250 million in a trial scheduled to begin as early as Monday.

Justice Engoron wrote that the annual financial statements that Mr. Trump submitted to banks and insurance companies “clearly contain fraudulent valuations that defendants used in business.”

While the trial will determine the size of the penalty, Justice Engoron’s ruling granted one of the biggest punishments Ms. James sought: the cancellation of business certificates that allow some of Mr. Trump’s New York properties to operate, a move that could have major repercussions for the Trump family business.

In his order, Justice Engoron wrote scathingly about Mr. Trump’s defenses, saying that the former president and the other defendants, including his two adult sons and his company, ignored reality when it suited their business needs. “In defendants’ world,” he wrote, “rent-regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air.”

The judge also levied sanctions on Mr. Trump’s lawyers for making arguments that he had previously rejected. He ordered each to pay $7,500, noting that he had previously warned them that the arguments in question bordered on being frivolous.

Wow. Who would have imagined that possibly the biggest grifter the United States has ever known, a man psychologically incapable of telling the truth, would have lied about his businesses? I mean, other than the sentient beings who have been laughing out loud at the man's self-description as a "billionaire" ever since he first uttered the word.

We've known for years that his "business empire" was a Potemkin village of naming rights and loans, with so many bankruptcies and defaults literally no respectable bank (and few disrespectable ones) would lend him any more money. Anyone who lived in New York as far back as the 1980s knew then that any nickels he could rub together came from someone else. But knowing he was full of shit and relying on fraudulent financial disclosures are two different things under the law.

I guess he'll have a few more bankruptcies under his immense belt soon. They'll go nicely with the 91 criminal charges against him.

And still, a third of the country think this man can do no wrong. Homines liber volunt credunt.

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.