They Lived Together, Worked Together and Lost Billions Together: Inside Sam Bankman-Fried's Doomed FTX Empire

At the Wall Street Journal, "The emerging picture of what went wrong suggests the crypto empire was a mess almost from the start, with few boundaries, financial or personal":

NASSAU, Bahamas—Sam Bankman-Fried’s $32 billion crypto-trading empire collapsed in an incandescent bankruptcy last week, prompting irate customers, crypto acolytes and Silicon Valley bigwigs to ask how something that seemed so promising could have imploded so fast.

The emerging picture suggests FTX wasn’t simply felled by a rival, or undone by a bad trade or the relentless fall this year in the value of cryptocurrencies. Instead, it had long been a chaotic mess. From its earliest days, the firm was an unruly agglomeration of corporate entities, customer assets and Mr. Bankman-Fried himself, according to court papers, company balance sheets shown to bankers and interviews with employees and investors. No one could say exactly what belonged to whom. Prosecutors are now investigating its collapse.

Mr. Bankman-Fried’s companies had neither accounting nor functioning human-resources departments, according to a filing in federal court by the executive brought in to shepherd FTX through bankruptcy. Corporate money was used to buy real estate, but records weren’t kept. There wasn’t even a roster of employees, to say nothing of the terms of their employment. Bankruptcy filings say one entity’s outstanding loans include at least $1 billion to Mr. Bankman-Fried personally and $543 million to a top lieutenant.

The lives of the people who ran FTX and its related companies were similarly blurred. Ten of them lived and worked together in a $30 million penthouse at an upscale resort in the Bahamas. The hours were punishing, and the lines between work and play were hard to discern. Romantic relationships among Mr. Bankman-Fried’s upper echelon were common, as was use of stimulants, according to former employees.

Mr. Bankman-Fried, 30 years old, kept a hectic schedule, toggling between six screens and getting by on a few hours of sleep a day. He was at times romantically involved with Caroline Ellison, the 28-year-old CEO of his trading firm, Alameda Research, according to former employees.

“Nothing like regular amphetamine use to make you appreciate how dumb a lot of normal, non-medicated human experience is,” Ms. Ellison once tweeted. A lawyer for Ms. Ellison declined to comment. To the outside world, Mr. Bankman-Fried was the mayor of cryptoland, the man charged with convincing lawmakers, investors and enthusiasts that he’d built a new kind of finance. He urged Congress and regulators to approve his model for crypto trading. On his cryptocurrency trading exchange, FTX, positions and risk were cross-checked by computers, and algorithms would react within milliseconds to protect bad trades from spilling over to hurt other customers, he said. On Twitter, he admonished competitors for practices he called unsafe.

But behind the scenes, Mr. Bankman-Fried was taking huge risks himself. Though he said publicly that Alameda was just a regular user on the exchange, the firm ran up a bill of $8 billion buying stakes in startups, trading on credit that no other user could get. Much of that money, much of which belonged to FTX’s customers, is likely gone.

FTX’s swift collapse—it went from paragon to bankrupt in just over a week—has renewed questions about crypto’s viability, its unregulated status and how so many well-heeled investors could have been misled for so long. Investors have poured hundreds of billions of dollars into digital currencies in recent years. Staid financial institutions were finally getting in on the action, too.

The executive tapped to guide Mr. Bankman-Fried’s companies through bankruptcy said the state of FTX’s affairs was the biggest mess he had seen in a decadeslong career that includes unwinding the accounting scandal that was Enron Corp. In a court filing he said many of the firm’s records of its digital assets seemed to be missing or incomplete; in many cases, he was unable to locate relevant bank accounts.

In last week’s bankruptcy papers, a Kenya-based money-transfer company was listed as an FTX entity. That surprised its CEO, Elizabeth Rossiello.

In a 2021 financial report, FTX said it had agreed to buy her company for about $220 million. FTX never did. There was no agreement, at any price, said Ms. Rossiello. “We were going to be their exclusive partner in Africa,” she said, nothing more.

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” John J. Ray III said in court papers.

A full accounting of what went wrong at FTX is likely months away, but a reconstruction of what the firm did and how its executives operated makes plain its public image—a team of brilliant quants bringing a sophisticated, digital approach to risk—was a mirage.

Mr. Bankman-Fried has blamed the misuse of customer funds on sloppy record-keeping and a flood of unexpected customer withdrawals...

Still lots more.

 

Bed Bath & Beyond to Close 150 Stores, Cut Staff, Sell Shares to Raise Cash

Probably, the most poorly managed major corporation in the country right now. They're close to going out of business.

My wife worked there briefly, years ago, but quit just a few weeks into the job. My wife's got 30 years of retail sales and management experience, so if she quit that job so fast, something was totally fucked up. 

At WSJ, "Home-goods seller to lay off 20% of corporate, supply-chain workers":

Bed Bath & Beyond Inc. BBBY -21.30%▼ said it would close roughly 20% of its namesake stores, cut its workforce and bring in fresh cash to stabilize the business through the holiday season as the retailer confronts plunging sales.

The home-goods seller is attempting to trim costs and raise money as it tries to correct recent operating missteps and navigate a challenging economic environment. It has been burning through its cash reserves for several quarters, and a shopper exodus has shaken investor and vendor confidence.

On Wednesday, executives and directors attempted to assuage its uneasy partners. In a business update, they said the company secured commitments for more than $500 million in financing and could potentially sell as many as 12 million shares of common stock to raise money. They also pledged to overhaul the assortment of goods in the company’s stores, focusing more on national brands after spending millions to develop private-label goods.

“While there is much work ahead, our road map is clear and we’re confident that the significant changes we’ve announced today will have a positive impact on our performance,” said Sue Gove, a board member who is serving as interim chief executive.

Bed Bath & Beyond’s stock fell 21% in Wednesday trading, as the plan to sell shares could dilute the holdings of existing shareholders. The stock, a favorite among meme investors, has lost more than half its value over the past two weeks.

As of Wednesday, the company’s market value was roughly $750 million. At its peak in June 2012, the company had a valuation of more than $17.3 billion, according to FactSet data.

Founded more than 50 years ago, the Union, N.J., company had several decades of rapid growth as it became known for its big-box stores stockpiled with merchandise and 20%-off coupons. In recent years, it has wrestled with falling sales and shifting strategies.

In 2019 activist investors ousted the chain’s founders and revamped the board, saying its leaders had failed to modernize the stores and capitalize on the rise of e-commerce. Mark Tritton, a former Target Corp. executive, joined the company in 2019 and sought to turn around the retailer by pushing deeper into private-label brands, among other initiatives. Those brands, however, weren’t well-received by shoppers and were hindered by pandemic-related supply-chain constraints.

Bed Bath & Beyond’s board ousted Mr. Tritton in June and installed Ms. Gove, a retail-restructuring consultant, as interim CEO. The company is working with search firm Russell Reynolds Associates to find a permanent CEO, and said Wednesday that the search process is continuing.

The retailer received another blow in August when billionaire activist Ryan Cohen sold his 10% stake in the company, about six months after acquiring his shares. The company’s stock, which had been rallying in previous weeks, slid after individuals followed Mr. Cohen’s selloff.

The business update came just days after the end of the company’s latest quarter, which showed the issues facing the retail chain. Comparable sales—reflecting sales at stores open at least a year—fell 26% in the quarter ended Aug. 27. The company’s operations also burned through about $325 million of its cash reserves during the period.

While the company plans to release its full second-quarter financial report on Sept. 29, preliminary results show that the money it is bringing in the door is leaving quickly. And the new financing only provides a short runway for the turnaround effort, analysts say.

The more than $500 million infusion, led by JPMorgan Chase & Co. and asset manager Sixth Street Partners, includes $375 million from a new loan and the expansion of a credit line. The Wall Street Journal had previously reported the company was near a new loan deal.

The new arrangement will reduce the debt exposure of the JPMorgan credit line by more than half while Bed Bath & Beyond retains access to about $800 million in borrowing capacity. The company said it ended the latest quarter with about $200 million in cash and investments...

 

What is Bitcoin?

I have no personal interest in digital money, though I'm not saying it's not a thing. It's a real big thing. But I've yet to see any conclusive evidence that bitcoin isn't one big speculative bubble where hedge-fund junkies and big-money dark-web urchins spend their time buying digital art masterpieces with blockchain non-fungible tokens. Cryptos gonna crypto, I guess. *Shrug.*

The most basic problem: Can cryptocurrencies serve the real, historical, and fundamental functions of money? Can digital money serve as a medium of exchange, a unit of account, and a store of value? I don't know. It remains to be seen. 

Meanwhile, it doesn't hurt to bone up on the trend. I mean, if you want to be hip with all the cool crypto cat blockchain bros.

At the New York Times, "The Latecomer’s Guide to Crypto":

Until fairly recently, if you lived anywhere other than San Francisco, it was possible to go days or even weeks without hearing about cryptocurrency.

Now, suddenly, it’s inescapable. Look one way, and there are Matt Damon and Larry David doing ads for crypto start-ups. Swivel your head — oh, hey, it’s the mayors of Miami and New York City, arguing over who loves Bitcoin more. Two N.B.A. arenas are now named after crypto companies, and it seems as if every corporate marketing team in America has jumped on the NFT — or nonfungible token — bandwagon. (Can I interest you in one of Pepsi’s new “Mic Drop” genesis NFTs? Or maybe something from Applebee’s “Metaverse Meals” NFT collection, inspired by the restaurant chain’s “iconic” menu items?)

Crypto! For years, it seemed like the kind of fleeting tech trend most people could safely ignore, like hoverboards or Google Glass. But its power, both economic and cultural, has become too big to overlook. Twenty percent of American adults, and 36 percent of millennials, own cryptocurrency, according to a recent Morning Consult survey. Coinbase, the crypto trading app, has landed on top of the App Store’s top charts at least twice in the past year. Today, the crypto market is valued at around $1.75 trillion — roughly the size of Google. And in Silicon Valley, engineers and executives are bolting from cushy jobs in droves to join the crypto gold rush.

As it’s gone mainstream, crypto has inspired an unusually polarized discourse. Its biggest fans think it’s saving the world, while its biggest skeptics are convinced it’s all a scam — an environment-killing speculative bubble orchestrated by grifters and sold to greedy dupes, which will probably crash the economy when it bursts.

I’ve been writing about crypto for nearly a decade, a period in which my own views have whipsawed between extreme skepticism and cautious optimism. These days, I usually describe myself as a crypto moderate, although I admit that may be a cop-out.

I agree with the skeptics that much of the crypto market consists of overvalued, overhyped and possibly fraudulent assets, and I am unmoved by the most utopian sentiments shared by pro-crypto zealots (such as the claim by Jack Dorsey, the former Twitter chief, that Bitcoin will usher in world peace).

But as I’ve experimented more with crypto — including accidentally selling an NFT for more than $500,000 in a charity auction last year — I’ve come to accept that it isn’t all a cynical money-grab, and that there are things of actual substance being built. I’ve also learned, in my career as a tech journalist, that when so much money, energy and talent flows toward a new thing, it’s generally a good idea to pay attention, regardless of your views on the thing itself.

My strongest-held belief about crypto, though, is that it is terribly explained.

Recently, I spent several months reading everything I could about crypto. But I found that most beginner’s guides took the form of boring podcasts, thinly researched YouTube videos and blog posts written by hopelessly biased investors. Many anti-crypto takes, on the other hand, were undercut by inaccuracies and outdated arguments, such as the assertion that crypto is good for criminals, notwithstanding the growing evidence that crypto’s traceable ledgers make it a poor fit for illicit activity.

What I couldn’t find was a sober, dispassionate explanation of what crypto actually is — how it works, who it’s for, what’s at stake, where the battle lines are drawn — along with answers to some of the most common questions it raises.

This guide — a mega-F.A.Q., really — is an attempt to fix that. In it, I’ll explain the basic concepts as clearly as I can, doing my best to answer the questions a curious but open-minded skeptic might pose.

Crypto boosters will likely quibble with my explanations, while dug-in opponents may find them too generous. That’s OK. My goal is not to convince you that crypto is good or bad, that it should be outlawed or celebrated, or that investing in it will make you rich or bankrupt you. It is simply to demystify things a bit. And if you want to go deeper, each section has a list of reading suggestions at the end...

Still more.

 

Electric Vehicle Batteries Exploding at General Motors' Orion Assembly Plant, Lake Orion, Michigan

You have to read the whole thing.

The Orion plant shifted to manufacturing 100 percent electricity vehicles, the Chevrolet Bolt, and with an epidemic of battery explosions, G.M. laid off the entire workforce.

Because the shift to green energy is going so swimmingly

At Pirate's Cove, "Oops: GM Electric Vehicle Batteries Keep Exploding":

The crisis involving the Chevrolet Bolt was a painful reminder for the auto industry that despite treating the electric vehicle era as essentially inevitable - a technical fait accompli - significant obstacles to manufacturing the cars, and especially their batteries, continue to threaten that future...

Yes, threatening the future, as I've been blogging recently.

Be smart. Don't buy an electric vehicle.  

Five-Star Emporium of Ambition in Kinshasha

Following-up, "A Power Struggle Over Cobalt Rattles the Clean Energy Revolution."

At NYT. "On the Banks of the Furious Congo River, a 5-Star Emporium of Ambition":

KINSHASA, Democratic Republic of Congo — The lobby of the Fleuve Congo Hotel was a swirl of double-breasted suits and tailored dresses one April morning. Shiny gold watches dangled from wrists. Stilettos clacked across marble floors. Smooth jazz played as men in designer loafers sipped espressos.

Situated on the banks of the muddy, furious Congo River, the Fleuve is an emporium of ambition in a nation that, despite extreme poverty and chronic corruption, serves up raw materials crucial to the planet’s battle against climate change.

The soil in the Democratic Republic of Congo is bursting with cobalt and other metals used in the production of electric car batteries, wind turbines and other mainstays of the green energy revolution. Practically everyone who passes through the hotel, where the air conditioning battles the sweltering heat, seems determined to grab a piece of the wealth.

Just off the lobby that day, near a sumptuous brunch buffet, sat Dikembe Mutombo, the 7-foot-2 former NBA all-star player. He had teamed up in his quest for mineral riches with Gentry Beach, a Texas hedge-fund manager who is a family friend and major fund-raiser to former President Donald J. Trump. Mr. Mutombo shared his table with a top Congolese mining lawyer turned politician whose office is conveniently located in a complex near the hotel.

As the clean energy revolution upends the centuries-long lock of fossil fuels on the global economy, dealmakers and hustlers converge on the Fleuve Congo Hotel.

Felix Tshisekedi, the Congolese president, top in the gray suit, arrived this spring at the Fleuve Congo Hotel in Kinshasa.Credit...

Situated on the banks of the muddy, furious Congo River, the Fleuve is an emporium of ambition in a nation that, despite extreme poverty and chronic corruption, serves up raw materials crucial to the planet’s battle against climate change.

The soil in the Democratic Republic of Congo is bursting with cobalt and other metals used in the production of electric car batteries, wind turbines and other mainstays of the green energy revolution. Practically everyone who passes through the hotel, where the air conditioning battles the sweltering heat, seems determined to grab a piece of the wealth.

Just off the lobby that day, near a sumptuous brunch buffet, sat Dikembe Mutombo, the 7-foot-2 former NBA all-star player. He had teamed up in his quest for mineral riches with Gentry Beach, a Texas hedge-fund manager who is a family friend and major fund-raiser to former President Donald J. Trump. Mr. Mutombo shared his table with a top Congolese mining lawyer turned politician whose office is conveniently located in a complex near the hotel.

Mr. Mutombo is among a wave of adventurers and opportunists who have filled a vacuum created by the departure of major American mining companies, and by the reluctance of other traditional Western firms to do business in a country with a reputation for labor abuses and bribery.

The list of fortune hunters includes Erik Prince, the security contractor and ex-Navy SEAL; Jide Zeitlin, the Nigerian-born former chief executive of the parent company of Coach and Kate Spade; and Aliaune Thiam, the Senegalese-American musician known as Akon.

All have been drawn to Congo’s high-risk, high-reward mining sector as the demand for cobalt has skyrocketed because automakers around the world are speeding up plans to convert from gasoline- to electric-powered fleets.

Most recently, Ford Motor, General Motors and Toyota announced they would spend billions of dollars to build battery factories in the United States. The price of cobalt has doubled since January, and more than two-thirds of the global supply is here in Congo.

The Fleuve became the go-to luxury destination after a politically connected Chinese businessman — himself a mining dealmaker — was awarded a contract to run what had once been an abandoned 1970s-era office building. The now five-star hotel has usurped the elite status of its competitor next door, built in the 1960s with U.S. government financing, and it is the kind of place where swashbucklers arrive by private plane trailed by paparazzi, and where some guests keep suitcases of cash and nuggets of gold locked in their rooms.

The frenzied atmosphere at the hotel reflects a pivotal moment for the country — and the world — as the clean energy revolution upends the centuries-long lock of fossil fuels on the global economy.

“Congo is the one who is going to deliver the EV of the future,” Mr. Mutombo, the retired basketball player, said of electric vehicles. “There is no other answer.”

But such bravado signals trouble to some seasoned business people, who see a lot of show and little substance in the new class of deal seekers.

“The country has become the prey of international adventurers,” said Jozsef M. Kovacs, who built the neighboring hotel, originally an InterContinental, which once hosted waves of executives from major Western mining companies that had billions of dollars in capital available to them and decades of mining experience. A handful of those traditional investors remain in Congo, including Robert Friedland, founder of Vancouver, B.C.-based Ivanhoe Mines. But Ivanhoe’s operations are now in large part financed by Chinese investors, who dominate the industrial mining sector in Congo.

“You don’t have a lot of these Fortune 500 mining companies,” said Luc Gerard Nyafé, a regular at the Fleuve who advises the Congolese president and is pursuing mining interests here. “That is something that needs to change.”

But for now, at least, the adventurers have taken center stage, and sometimes their ambitions converge at the Fleuve. Ambassadors, mercenaries, celebrities, musicians, athletes, entrepreneurs — they all pass through...

A Power Struggle Over Cobalt Rattles the Clean Energy Revolution

I thought I'd posted on this topic earlier. The Times has been running a series on global demand for cobalt, to supply manufacturers of electric vehicles with, apparently, the most basic mineral needed in the industry.

Behold green neoimperialism.

I'll post more, but for now, see, "The quest for Congo’s cobalt, which is vital for electric vehicles and the worldwide push against climate change, is caught in an international cycle of exploitation, greed and gamesmanship":

KISANFU, Democratic Republic of Congo — Just up a red dirt road, across an expanse of tall, dew-soaked weeds, bulldozers are hollowing out a yawning new canyon that is central to the world’s urgent race against global warming.

For more than a decade, the vast expanse of untouched land was controlled by an American company. Now a Chinese mining conglomerate has bought it, and is racing to retrieve its buried treasure: millions of tons of cobalt.

At 73, Kyahile Mangi has lived here long enough to predict the path ahead. Once the blasting starts, the walls of mud-brick homes will crack. Chemicals will seep into the river where women do laundry and dishes while worrying about hippo attacks. Soon a manager from the mine will announce that everyone needs to be relocated.

“We know our ground is rich,” said Mr. Mangi, a village chief who also knows residents will share little of the mine’s wealth.

This wooded stretch of southeast Democratic Republic of Congo, called Kisanfu, holds one of the largest and purest untapped reserves of cobalt in the world.

The gray metal, typically extracted from copper deposits, has historically been of secondary interest to miners. But demand is set to explode worldwide because it is used in electric-car batteries, helping them run longer without a charge.

Outsiders discovering — and exploiting — the natural resources of this impoverished Central African country are following a tired colonial-era pattern. The United States turned to Congo for uranium to help build the bombs dropped on Hiroshima and Nagasaki and then spent decades, and billions of dollars, seeking to protect its mining interests here.

Now, with more than two-thirds of the world’s cobalt production coming from Congo, the country is once again taking center stage as major automakers commit to battling climate change by transitioning from gasoline-burning vehicles to battery-powered ones. The new automobiles rely on a host of minerals and metals often not abundant in the United States or the oil-rich Middle East, which sustained the last energy era.

But the quest for Congo’s cobalt has demonstrated how the clean energy revolution, meant to save the planet from perilously warming temperatures in an age of enlightened self-interest, is caught in a familiar cycle of exploitation, greed and gamesmanship that often puts narrow national aspirations above all else, an investigation by The New York Times found.

The Times dispatched reporters across three continents drawn into the competition for cobalt, a relatively obscure raw material that along with lithium, nickel and graphite has gained exceptional value in a world trying to set fossil fuels aside.

More than 100 interviews and thousands of pages of documents show that the race for cobalt has set off a power struggle in Congo, a storehouse of these increasingly prized resources, and lured foreigners intent on dominating the next epoch in global energy.

In particular, a rivalry between China and the United States could have far-reaching implications for the shared goal of safeguarding the earth. At least here in Congo, China is so far winning that contest, with both the Obama and Trump administrations having stood idly by as a company backed by the Chinese government bought two of the country’s largest cobalt deposits over the past five years.

As the significance of those purchases becomes clearer, China and the United States have entered a new “Great Game” of sorts. This past week, during a visit promoting electric vehicles at a General Motors factory in Detroit, President Biden acknowledged the United States had lost some ground. “We risked losing our edge as a nation, and China and the rest of the world are catching up,” he said. “Well, we’re about to turn that around in a big, big way.”

China Molybdenum, the new owner of the Kisanfu site since late last year, bought it from Freeport-McMoRan, an American mining giant with a checkered history that five years ago was one of the largest producers of cobalt in Congo — and now has left the country entirely.

In June, just six months after the sale, the Biden administration warned that China might use its growing dominance of cobalt to disrupt the American push toward electric vehicles by squeezing out U.S. manufacturers. In response, the United States is pressing for access to cobalt supplies from allies, including Australia and Canada, according to a national security official with knowledge of the matter.

American automakers like Ford, General Motors and Tesla buy cobalt battery components from suppliers that depend in part on Chinese-owned mines in Congo. A Tesla longer-range vehicle requires about 10 pounds of cobalt, more than 400 times the amount in a cellphone.

Already, tensions over minerals and metals are rattling the electric vehicle market.

Deadly rioting in July near a port in South Africa, where much of Congo’s cobalt is exported to China and elsewhere, caused a global jump in the metal’s prices, a surge that only worsened through the rest of the year.

Last month, the mining industry’s leading forecaster said the rising cost of raw materials was likely to drive up battery costs for the first time in years, threatening to disrupt automakers’ plans to attract customers with competitively priced electric cars.

Jim Farley, Ford’s chief executive, said the mineral supply crunch needed to be confronted.

“We have to solve these things,” he said at an event in September, “and we don’t have much time.”

Automakers like Ford are spending billions of dollars to build their own battery plants in the United States, and are rushing to curb the need for newly mined cobalt by developing lithium iron phosphate substitutes or turning to recycling. As a result, a Ford spokeswoman said, “we do not see cobalt as a constraining issue.” ...

Still more. 

Terrifying: Biden Is Nominating Soviet-Trained Radicals Now

 From Stephen Green, at Pajamas:

President Joe Biden wants to put an actual Communist — self-proclaimed “radical” Cornell University law school professor Saule Omarova — in charge of the nation’s banking system.

Omarova graduated from the Soviet Union’s Moscow State University in 1989 on the Lenin Personal Academic Scholarship, according to the Wall Street Journal. As recently as 2019, she was still praising the USSR’s economic system as in some ways superior to our own. “Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best.'”

As a matter of fact, I will say what I will about the old USSR.

Teachers there were paid the same as doctors — because medicine was considered “women’s work” and both were paid crap numbers of worthless rubles. Sexism and central mismanagement, all in one murderously totalitarian package.

There’s a reason the USSR is defunct and the U.S. isn’t — at least until Omarova gets her way.

Omarova’s goal is the eventual elimination of private banking and the establishment of the Federal Reserve as the nation’s only bank...

Green's referencing this piece at WSJ, "Comptroller of the Economy":

President Biden checked off another progressive identity box last week by nominating Saule Omarova as Comptroller of the Currency. Some Trump appointees were ridiculed for having supported the elimination of their agencies. Ms. Omarova wants to eliminate the banks she’s being appointed to regulate.

The Cornell University law school professor’s radical ideas might make even Bernie Sanders blush. She graduated from Moscow State University in 1989 on the Lenin Personal Academic Scholarship. Thirty years later, she still believes the Soviet economic system was superior, and that U.S. banking should be remade in the Gosbank’s image.

“Until I came to the US, I couldn’t imagine that things like gender pay gap still existed in today’s world. Say what you will about old USSR, there was no gender pay gap there. Market doesn’t always ‘know best,’” she tweeted in 2019. After Twitter users criticized her ignorance, she added a caveat: “I never claimed women and men were treated absolutely equally in every facet of Soviet life. But people’s salaries were set (by the state) in a gender-blind manner. And all women got very generous maternity benefits. Both things are still a pipe dream in our society!”

Sure, there was a Gulag, and no private property, but maternity benefits!

Ms. Omarova thinks asset prices, pay scales, capital and credit should be dictated by the federal government. In two papers, she has advocated expanding the Federal Reserve’s mandate to include the price levels of “systemically important financial assets” as well as worker wages. As they like to say at the modern university, from each according to her ability to each according to her needs.

In a recent paper “The People’s Ledger,” she proposed that the Federal Reserve take over consumer bank deposits, “effectively ‘end banking,’ as we know it,” and become “the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy.” She’d also like the U.S. to create a central bank digital currency—as Venezuela and China are doing—to “redesign our financial system & turn Fed’s balance sheet into a true ‘People’s Ledger,’” she tweeted this summer. What could possibly go wrong?

Ms. Omarova believes capital and credit should be directed by an unaccountable bureaucracy and intelligentsia...

Genunie Communists in a Democrat presidential administration? Who woulda thunk it? 

 

Briahna Joy Gray, Former National Press Secretary for Bernie Sanders Presidential Campaign, Slams Joe Biden's Response to Question on Student Debt Forgiveness (VIDEO)

I watched parts of China Joe's "CNN Town Hall" (love-fest), and I thought his response on the student loan question was a disaster. Now, it's not that he didn't address it; he did. But Biden said he'd only go as high as $10,000, and obviously those idiot young people taking out hundreds of thousands in student loans, and who are clearly expecting a big "pay-off," in the literal sense of the federal government "forgiving" the student loans that no one forced them to take, aren't too pleased about it.

Now, this Briahna Joy Gray lady, a former Bernie spokeswoman, has some thoughts, and they're delivered in that tricky leftist kinda way, in which debt forgiveness is really about "alleviating" poverty. Shoot, we can straight-up alleviate poverty by just sending everybody a check --- and I mean everybody, like my 25-year-old son, who himself is taking out loans for college. So, what to do? Hey, if Biden caves to the progressive's debt-forgiveness crap, is he going to make that forgiveness retroactive? Because I'm still paying down the $70,000 or so I borrowed for my Ph.D. program. And while I'm not "poor," I could sure use the money, just like all those idiots youngsters taking out loans for their worthless "gender studies" degrees.

Watch, at the "Rising," with Krystal Ball and Saagar Enjeti:  

The Day Coronavirus Nearly Broke the Financial Markets

At WSJ, "The March 16 stock crash was part of a broader liquidity crisis that threatened the viability of America’s companies and municipalities":

On March 16, coronavirus brought the financial system to the brink. Few realized how close it came to going over the edge entirely. https://t.co/kGg568pU1D

— The Wall Street Journal (@WSJ) May 20, 2020

An urgent call reached Ronald O’Hanley, State Street Corp.’s chief executive, as he sat in his office in downtown Boston. It was 8 a.m. on Monday, March 16.

A senior deputy told him corporate treasurers and pension managers, panicked by the growing economic damage from the Covid-19 pandemic, were pulling billions of dollars from certain money-market funds. This was forcing the funds to try to sell some of the bonds they held.

But there were almost no buyers. Everybody was suddenly desperate for cash.

He and the deputy, asset-management executive Cyrus Taraporevala, had spoken the night before, wrestling with how investors would respond to an emergency interest-rate cut from the Federal Reserve.

Now, they had their answer. In his 34 years in finance, Mr. O’Hanley had weathered plenty of meltdowns, but never one like this.

“The market is fearing the worst,” Mr. O’Hanley told him.

March 16 was the day a microscopic virus brought the financial system to the brink. Few realized how close it came to going over the edge entirely.

The Dow Jones Industrial Average plunged nearly 13% that day, the second-biggest one-day fall in history. Stock-market volatility spiked to a record high. Investors struggled to unload even safe bonds, like Treasurys. Companies and government officials were losing access to the lending markets on which they rely to make payroll and build schools.

Prime money-market funds that are owned by big institutional investors and buy a lot of short-term corporate debt—normally safe and boring—had outflows of $60 billion in the week ending that Wednesday, financial-data firm Refinitiv said, among the worst ever. Some $56 billion in client money fled bond funds.

Interest rates on short-term corporate debt surged, peaking on March 25 at 2.43 percentage points above the federal-funds rate—the highest it has been since October 2008, according to the Federal Reserve Bank of St. Louis.

The financial system has endured numerous credit crunches and market crashes, and memories of the 1987 and 2008 crises set a high bar for market dysfunction. But longtime investors and those who make a living on Wall Street say mid-March of this year was far more severe in a short period. Moreover, the stresses to the financial system were broader than many had seen.

“The 2008 financial crisis was a car crash in slow motion,” said Adam Lollos, head of short-term credit at Citigroup Inc. “This was like, ‘Boom!’ ”

A barrage of government programs has since pulled the system back from collapse. This account of what happened on one of the worst days the financial markets have ever seen, from many of the executives, money managers and Wall Street veterans who lived it, shows why the rescue effort was so urgent.

The Federal Reserve set the stage for the downturn on Sunday, March 15. Most investors were expecting the central bank to announce its latest response to the crisis the following Wednesday. Instead, it announced at 5 p.m. that evening that it was slashing interest rates and planning to buy $700 billion in bonds to help unclog the markets.

Rather than take comfort in the Fed’s actions, many companies, governments, bankers and investors viewed the decision as reason to prepare for the worst possible outcome from the coronavirus pandemic.

A downdraft in bonds was now a rout.

Mr. O’Hanley was in a good position to see the crisis unfold. His bank provides vital, if unheralded, administrative and bookkeeping services for most of the world’s biggest investors, and runs its own trillion-dollar money manager.

Companies and pension managers have long relied on money-market funds that invest in short-term corporate and municipal-debt holdings considered safe and liquid enough to be classified as “cash equivalents.” They function almost like checking accounts—helping firms manage payroll, pay office leases and move cash around to finance their daily operations.

But that Monday, investors no longer believed certain money funds were cash-like at all. As they pulled their money out, managers struggled to sell bonds to meet redemptions.

In theory, there should have been some give in the system. U.S. regulators had rewritten the rules on money funds in the wake of the 2008 financial crisis, replacing their fixed, $1 price with a floating one that moved with the value of their holdings. The changes headed off the panic that could ensue when a fund’s price “breaks the buck,” as one prominent fund had in 2008.

But the rules couldn’t stop a panicked assault like this one. Rumors circulated that some of State Street’s rivals would be forced to prop up their funds. Within days, both Goldman Sachs Group Inc. and Bank of New York Mellon Corp. stepped in to buy assets from their money funds. Both firms declined to comment.

This was bad news for not only those funds and their investors, but also for the thousands of companies and communities dependent on short-term loan markets to pay their employees. “If junk bonds back up, people can rationalize that away,” Mr. O’Hanley said. “There’s very little ability to rationalize trouble in cash.”

A debt-investing unit of Prudential Financial Inc., one of the largest insurance companies in the world, was also struggling with normally safe securities.

When traders at PGIM Fixed Income tried that Monday to sell a batch of short-term bonds issued by highly rated companies, they found few takers. And banks were reluctant to step in as intermediaries.

“The broker-dealer community was frozen,” said Michael Collins, a senior fixed-income manager at PGIM. “It was as bad as at any point during the great financial crisis.”

Across the country in Southern California, the head of the debt-trading desk at investment firm Capital Group Cos., Vikram Rao, tried to make sense of the dysfunction.

Mr. Rao, who was working remotely that Monday, walked down the 20 steps to his home office at 4:30 a.m. to discover the debt markets were already in disarray. He started calling the senior Wall Street executives he knew at many of the big banks.

Executives told him that Sunday’s emergency Fed rate cut had swung a swath of interest-rate swap contracts in banks’ favor. Companies had locked in superlow interest rates on future debt sales over the past year. But when rates fell even further, the companies suddenly owed additional collateral.

On that Monday, banks had to account for all that new collateral as assets on their books.

So when Mr. Rao called senior executives for an explanation on why they wouldn’t trade, they had the same refrain: There was no room to buy bonds and other assets and still remain in compliance with tougher guidelines imposed by regulators after the previous financial crisis. In other words, capital rules intended to make the financial system safer were, at least in this instance, draining liquidity from the markets.

One senior bank executive leveled with him: “We can’t bid on anything that adds to the balance sheet right now.”

At the same time, the surge in stock-market volatility, along with falling prices on mortgage bonds, had forced margin calls on many investment funds. The additional collateral they owed banks was also booked as assets, adding billions more.

The slump in mortgage bonds was so vast it crushed a group of investors that had borrowed from banks to juice their returns: real-estate investment funds.

The Fed’s bond-buying program, unveiled that Sunday, had earmarked some $200 billion for mortgage-bond purchases. But by Monday bond managers discovered the Fed purchases, while well-intentioned, weren’t nearly enough.

“On that first day, the Fed got completely run over by the market,” said Dan Ivascyn, who manages one of the world’s biggest bond funds and serves as investment chief at Pacific Investment Management Co. “That’s where REITs and other leveraged-mortgage products started getting into serious trouble.”

That Tuesday, UBS Group AG closed two exchange-traded notes tied to mortgage real-estate investment trusts. By Friday, a mortgage trust run by hedge-fund firm Angelo Gordon & Co. had warned its lenders it wouldn’t be able to meet its obligations on future margin calls...

Still more.

Trump Administration Imposes New Sanctions on Russia

This is all over Memeorandum, from the Treasury Department, "Treasury Designates Russian Oligarchs, Officials, and Entities in Response to Worldwide Malign Activity."

And at LAT, "Trump administration announces Russia sanctions for 'attacks to subvert Western democracies'":

Trump administration announces new Russia sanctions for 'attacks to subvert Western democracies' https://t.co/Af5aAASC3j

— Los Angeles Times (@latimes) April 6, 2018

The Trump administration on Friday announced new sanctions against seven Russian oligarchs, 12 companies and 17 senior government officials for a variety of acts, including what one official called “attacks to subvert Western democracies.”

“Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.” Treasury Secretary Steven T. Mnuchin said in a news release.

Mnuchin criticized the Russian government for engaging in “a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities.”

President Trump has spoken of his desire to meet with Russian President Vladimir Putin and has at times spoken warmly of him, but he has also insisted his administration has been tough on the regime...

Don and Alex Tapscott, Blockchain Revolution

*BUMPED.*

At Amazon, Don Tapscott and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World.

Goldman Sachs, With Long History of Public Service, Makes Return to Washington in Trump Administration

This is pretty fascinating.

At NYT, "Goldman Sachs Completes Return From Wilderness to the White House":

“Government Sachs” is back. In the Trump administration, economic policy making is being handed to Goldman alumni. https://t.co/xOpGGxPGl3

— The New York Times (@nytimes) January 12, 2017

“Government Sachs” is back.

After eight years in the political wilderness, its name synonymous with the supposedly undue and self-serving influence in Washington that brought us the financial crisis and the Wall Street bailout, Goldman Sachs is again making its presence felt. In the Trump administration, to an unprecedented degree, economic policy making is largely being handed over to people with Goldman ties.

The Goldman alumni include Steven T. Mnuchin, the nominee for Treasury secretary; Gary D. Cohn, tapped as director of the National Economic Council and White House adviser on economic policy; and Stephen K. Bannon, who was named chief White House strategist. Jay Clayton, named to head the Securities and Exchange Commission, is a Wall Street lawyer who has represented Goldman.

This week President-elect Donald J. Trump hired Dina H. Powell, a Goldman partner who heads impact investing, as a White House adviser. Anthony Scaramucci, a Goldman alumnus (whom I spotlighted last week), is on the Trump transition committee and is expected to be named to a White House position as well.

And this after Mr. Trump campaigned against Wall Street, excoriated Senator Ted Cruz for his ties to Goldman, and castigated Hillary Clinton for giving paid speeches to big banks, Goldman among them.

The Goldman influx has so far drawn little criticism, perhaps because worries about what once would have been deemed undue influence now mix with relief that there is some adult supervision in the executive branch.

On balance, “it’s a plus,” Michael R. Bloomberg, the former New York City mayor who built his fortune on Wall Street, told me this week. “Whatever you may think of them individually, you can’t get to be a Goldman partner and survive if you’re stupid, lazy or unprofessional.” (Mr. Bloomberg is co-chairman of Goldman’s “10,000 Small Businesses” initiative, which provides support to fledgling entrepreneurs.)

Whatever bricks Mr. Trump threw at Wall Street during the campaign, investors have cheered his victory, driving the stock market to new highs. And Goldman has been a particular beneficiary, with its shares gaining 35 percent since Election Day — the top-performing stock in the Dow Jones industrial average in that time.

Mr. Trump, a spokeswoman of his told me, sees no contradiction here. There’s a difference between individuals who happen to have worked at Goldman Sachs, at some point in their careers, and Goldman Sachs itself. “He’s said from the beginning that he’ll hire the very best people for the job regardless of where they worked before, which is what he’s done throughout his career,” said the spokeswoman, Hope Hicks.

While the firm’s influence in a Trump administration may reach a new apex, Goldman alumni have long been fixtures in both Republican and Democratic administrations. The Goldman legend Sidney J. Weinberg headed Franklin D. Roosevelt’s influential Business Advisory and Planning Council.

Recent Treasury secretaries with Goldman roots include Robert E. Rubin, a former co-chairman, under Bill Clinton; and Henry M. Paulson Jr., a former chairman and chief executive, under George W. Bush.

Even in the Obama administration, where a Goldman pedigree was something akin to a scarlet letter, Gary Gensler was credited with reviving a moribund Commodity Futures Trading Commission and might have been Treasury secretary had Mrs. Clinton won in November.

Which raises the question: Why would such a disproportionate number of the “best people,” in Mr. Trump’s view, come from just one bank? After all, Goldman is hardly the only large bank, and it is also far from the biggest. It employs roughly 33,000 people; JPMorgan Chase’s work force is many times as large.

Many point to a unique Goldman culture that has long encouraged public service and philanthropy as integral to its business model.

Goldman “does seem to produce people who are very smart and have valuable experience,” Mr. Bloomberg said. “And they have a culture and a long tradition of leaving the firm for public service. The firm pushes them to do that.”

More.

'The Art of the Deal' Surging in Popularity Since Donald Trump's Election

Now a #1 Bestseller at Amazon, and among the Top 100 books.

 See Donald Trump, Trump: The Art of the Deal.

Hat Tip: CNN.

Donald Trump is a best-selling author again. "The Art of the Deal" has skyrocketed in popularity since his election https://t.co/ML1yslDDcH pic.twitter.com/5ntiqkBHER

— CNN (@CNN) December 15, 2016

Global Financial Institutions Are in Retreat

At WSJ, "When Bigger Isn’t Better: Banks Retreat From Global Ambitions":

Eighteen years ago, Sanford Weill declared the dawn of a new era in banking.

Mr. Weill, then chief executive of Travelers Group Inc., had agreed to merge with John Reed’s Citicorp, forging what would become the first financial supermarket to the world.

“Our company will be so diversified and in so many different areas that we will be able to withstand” the inevitable downturns to come, Mr. Weill said in April 1998.

Citigroup Inc., as it was christened, is still intact. But confidence in the model Messrs. Weill and Reed espoused is in decline.

After nearly two decades of breakneck expansion into ever more countries and ever more businesses, global banks are in retreat. For most of them, it is no longer a viable strategy to try to be all things to all customers around the world.

A McKinsey & Co. review of 10 global banks, conducted for The Wall Street Journal, found that those lenders were present on average in 65 countries in 2008. By last year, the average footprint had shrunk to 55 countries. And the McKinsey research doesn’t include Citigroup, which has unveiled plans in recent years to exit retail-banking businesses in at least 20 nations.

The pace has quickened this year. Barclays PLC said it would sell much of its business in Africa, while HSBC Holdings PLC is pulling out of Brazil, one of about 83 businesses around the world it has shed since 2011.

Mr. Weill, who retired as CEO in 2003, still sees value in being global.

“The economy is a global village, and we need global financial institutions that bring it together,” he said in an interview. “What would happen if we had a telecommunications system that was locally based, and couldn’t connect? It wouldn’t be very good.”

That view is now out of favor. Analysts have called for J.P. Morgan Chase & Co. and Citigroup to break up, and the issue of whether banks are too big is a recurring topic on the presidential campaign trail.

Pressured by stricter regulations, banks including Citi aren't just shrinking their geographic footprint but also getting out of a range of businesses that require too much capital or make too little money, further eroding the model Mr. Weill helped create.

In Europe, new CEOs at Barclays, Credit Suisse Group AG and Deutsche Bank AG are putting in place restructuring plans that have already been criticized by some investors for not going far enough to slim down the banks.

The expansion of global banks was initially urged on by investors, tempted by the promise of rich returns. Banks built disparate franchises on the basis they could save money by offering a wide number of services. By diversifying, the model offered additional security and the impression that size alone would produce safety.

“The financial crisis laid waste to that theory,” said Fred Cannon, director of research and Keefe, Bruyette & Woods, a boutique investment bank focused on financial companies.

Investors now complain that they can’t get their heads around huge opaque balance sheets. Large cross-border lenders have also been deemed “globally systemic” by regulators and forced to set aside billions of dollars more in capital.

Average precrisis return on equity of 14% has given way to the new normal of about 7% for big global banks.

Investors also worry chief executives can’t control franchises that stretch across multiple countries and business lines.

George Mathewson, who leading up to the crisis helped build Royal Bank of Scotland Group PLC into the world’s biggest bank by assets, is among those who now believes the global diversified bank should become extinct...

More.

Do We Really Need to Save Capitalism?

Rana Foroohar seems to think so, at Time, "American Capitalism’s Great Crisis":

This week's @TIME cover: American Capitalism’s Great Crisis https://t.co/fJ3Y5Hxgz2 via @RanaForoohar pic.twitter.com/ttvrFfKkvh

— TIMEPolitics (@TIMEPolitics) May 12, 2016

This explains Bernie and Trump: https://t.co/j9yQZOwbjs

— Rana Foroohar (@RanaForoohar) May 12, 2016

A couple of weeks ago, a poll conducted by the Harvard Institute of Politics found something startling: only 19% of Americans ages 18 to 29 identified themselves as “capitalists.” In the richest and most market-oriented country in the world, only 42% of that group said they “supported capitalism.” The numbers were higher among older people; still, only 26% considered themselves capitalists. A little over half supported the system as a whole.

This represents more than just millennials not minding the label “socialist” or disaffected middle-aged Americans tiring of an anemic recovery. This is a majority of citizens being uncomfortable with the country’s economic foundation—a system that over hundreds of years turned a fledgling society of farmers and prospectors into the most prosperous nation in human history. To be sure, polls measure feelings, not hard market data. But public sentiment reflects day-to-day economic reality. And the data (more on that later) shows Americans have plenty of concrete reasons to question their system.

This crisis of faith has had no more severe expression than the 2016 presidential campaign, which has turned on the questions of who, exactly, the system is working for and against, as well as why eight years and several trillions of dollars of stimulus on from the financial crisis, the economy is still growing so slowly. All the candidates have prescriptions: Sanders talks of breaking up big banks; Trump says hedge funders should pay higher taxes; Clinton wants to strengthen existing financial regulation. In Congress, Republican House Speaker Paul Ryan remains committed to less regulation.

All of them are missing the point. America’s economic problems go far beyond rich bankers, too-big-to-fail financial institutions, hedge-fund billionaires, offshore tax avoidance or any particular outrage of the moment. In fact, each of these is symptomatic of a more nefarious condition that threatens, in equal measure, the very well-off and the very poor, the red and the blue. The U.S. system of market capitalism itself is broken. That problem, and what to do about it, is at the center of my book Makers and Takers: The Rise of Finance and the Fall of American Business, a three-year research and reporting effort from which this piece is adapted.

To understand how we got here, you have to understand the relationship between capital markets—meaning the financial system—and businesses. From the creation of a unified national bond and banking system in the U.S. in the late 1790s to the early 1970s, finance took individual and corporate savings and funneled them into productive enterprises, creating new jobs, new wealth and, ultimately, economic growth. Of course, there were plenty of blips along the way (most memorably the speculation leading up to the Great Depression, which was later curbed by regulation). But for the most part, finance—which today includes everything from banks and hedge funds to mutual funds, insurance firms, trading houses and such—essentially served business. It was a vital organ but not, for the most part, the central one.

Over the past few decades, finance has turned away from this traditional role. Academic research shows that only a fraction of all the money washing around the financial markets these days actually makes it to Main Street businesses. “The intermediation of household savings for productive investment in the business sector—the textbook description of the financial sector—constitutes only a minor share of the business of banking today,” according to academics Oscar Jorda, Alan Taylor and Moritz Schularick, who’ve studied the issue in detail. By their estimates and others, around 15% of capital coming from financial institutions today is used to fund business investments, whereas it would have been the majority of what banks did earlier in the 20th century.

“The trend varies slightly country by country, but the broad direction is clear,” says Adair Turner, a former British banking regulator and now chairman of the Institute for New Economic Thinking, a think tank backed by George Soros, among others. “Across all advanced economies, and the United States and the U.K. in particular, the role of the capital markets and the banking sector in funding new investment is decreasing.” Most of the money in the system is being used for lending against existing assets such as housing, stocks and bonds.

To get a sense of the size of this shift, consider that the financial sector now represents around 7% of the U.S. economy, up from about 4% in 1980. Despite currently taking around 25% of all corporate profits, it creates a mere 4% of all jobs. Trouble is, research by numerous academics as well as institutions like the Bank for International Settlements and the International Monetary Fund shows that when finance gets that big, it starts to suck the economic air out of the room. In fact, finance starts having this adverse effect when it’s only half the size that it currently is in the U.S. Thanks to these changes, our economy is gradually becoming “a zero-sum game between financial wealth holders and the rest of America,” says former Goldman Sachs banker Wallace Turbeville, who runs a multiyear project on the rise of finance at the New York City—based nonprofit Demos.

It’s not just an American problem, either. Most of the world’s leading market economies are grappling with aspects of the same disease. Globally, free-market capitalism is coming under fire, as countries across Europe question its merits and emerging markets like Brazil, China and Singapore run their own forms of state-directed capitalism. An ideologically broad range of financiers and elite business managers—Warren Buffett, BlackRock’s Larry Fink, Vanguard’s John Bogle, McKinsey’s Dominic Barton, Allianz’s Mohamed El-Erian and others—have started to speak out publicly about the need for a new and more inclusive type of capitalism, one that also helps businesses make better long-term decisions rather than focusing only on the next quarter. The Pope has become a vocal critic of modern market capitalism, lambasting the “idolatry of money and the dictatorship of an impersonal economy” in which “man is reduced to one of his needs alone: consumption.”

During my 23 years in business and economic journalism, I’ve long wondered why our market system doesn’t serve companies, workers and consumers better than it does. For some time now, finance has been thought by most to be at the very top of the economic hierarchy, the most aspirational part of an advanced service economy that graduated from agriculture and manufacturing. But research shows just how the unintended consequences of this misguided belief have endangered the very system America has prided itself on exporting around the world.

America’s economic illness has a name: financialization. It’s an academic term for the trend by which Wall Street and its methods have come to reign supreme in America, permeating not just the financial industry but also much of American business. It includes everything from the growth in size and scope of finance and financial activity in the economy; to the rise of debt-fueled speculation over productive lending; to the ascendancy of shareholder value as the sole model for corporate governance; to the proliferation of risky, selfish thinking in both the private and public sectors; to the increasing political power of financiers and the CEOs they enrich; to the way in which a “markets know best” ideology remains the status quo. Financialization is a big, unfriendly word with broad, disconcerting implications.

University of Michigan professor Gerald Davis, one of the pre-eminent scholars of the trend, likens financialization to a “Copernican revolution” in which business has reoriented its orbit around the financial sector. This revolution is often blamed on bankers. But it was facilitated by shifts in public policy, from both sides of the aisle, and crafted by the government leaders, policymakers and regulators entrusted with keeping markets operating smoothly.

This is: "Economics for Dummy Leftists."

All the sources and experts cited are leftists. They hate capitalism, a term invented by Karl Marx to demonize free market economics.

The trend Faroohar is describing here is simply change. Markets and finance are changing, and innovation and concentration in the finance sector isn't a cause of growing inequality or the public despair over sluggishness.

What's harming the average worker, and preventing more regular people from improving their income and wealth, is stagnating GDP. The economy is growing at 0.5 percent. No wonder the titans of finance are the only ones who're better off. There's no rising tide to lift all boats. The Obama administration's obsessed with the phony campus rape crisis and gender neutral restrooms. Democrats don't care about improving the economic prospects of average Americans. Now that's depressing. And what's more depressing is how economically illiterate all these hacks are, from the so-called financial journalists quick to blame the "system" to the idiot Millennials who wouldn't know a production possibilities frontier if it hit them upside the head.

Keep reading, FWIW.

Identity of Zero Hedge's 'Tyler Durden' Outed by 'Disgruntled' Ex-Employee

Well, this is interesting.

At Bloomberg, "Unmasking the Men Behind Zero Hedge, Wall Street's Renegade Blog" (via Memeorandum):

Colin Lokey, also known as "Tyler Durden," is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.)

After more than a year writing for the financial website Zero Hedge under the nom de doom of the cult classic’s anarchic hero, Lokey’s going public. In doing so, he’s answering a question that has bedeviled Wall Street since the site sprang up seven years ago: Just who is Tyler Durden, anyway?

The answer, it turns out, is three people. Following an acrimonious departure this month, in which two-thirds of the trio traded allegations of hypocrisy and mental instability, Lokey, 32, decided to unmask himself and his fellow Durdens.

Lokey said the other two men are Daniel Ivandjiiski, 37, the Bulgarian-born former analyst long reputed to be behind the site, and Tim Backshall, 45, a well-known credit derivatives strategist. (Bloomberg LP competes with Zero Hedge in providing financial news and information.)

In a telephone interview, Ivandjiiski confirmed that the men had been the only Tyler Durdens on the payroll since Lokey came aboard last year, but he criticized his former colleague's decision to come forward.

He called Lokey's parting gift a case of sour grapes. Backshall, meanwhile, declined to comment, referring questions to Ivandjiiski. A political science graduate with an MBA and a Southern twang, Lokey said he had a checkered past before joining Zero Hedge. Earlier this month, overwork landed him in a hospital because he felt a panic attack coming on, he said.

“Ultimately we wish Colin all the best, he’s clearly a troubled individual in many ways, and we are frankly disappointed that he’s decided to take his displeasure with the company in such a public manner,” Ivandjiiski said...

More.

And at Zero Hedge, "The Full Story Behind Bloomberg's Attempt to 'Unmask' Zero Hedge."

Following the Hidden Money in the #PanamaPapers

A great piece, at LAT, "'My God. We've done this': Meet the reporters who probed the Panama Papers":

'My God. We've done this': Meet the reporters who probed the Panama Papers: When Gerard Ryle saw a photograph ... https://t.co/YAtmo8PHRR

— Social N Chicago (@SocialInChicago) April 6, 2016

When Gerard Ryle saw a photograph of thousands of protesters gathered outside Iceland's Parliament this week, a thought flickered through his mind: "My God. We've done this."

It was true. Iceland's prime minister stepped down from office Tuesday — the most significant fallout so far of the work by journalists collaborating with Ryle's International Consortium of Investigative Journalists.

Over the weekend, hundreds of reporters in more than 70 countries unveiled a nearly yearlong global investigation and began publishing a series of articles on millions of leaked financial documents they dubbed the "Panama Papers," a trove of information bigger than anything WikiLeaks or Edward Snowden ever obtained.

The effect has been like shining a flashlight into a series of dark rooms packed with money and lies. The documents leaked from the Panama-based law firm Mossack Fonseca — and examined by journalists at outlets including the Guardian, the BBC and the Miami Herald — have forced global leaders and public figures to answer for the massive amounts of wealth they had hidden in offshore tax havens, outside the scrutiny of auditors and voters.

But the story started small, with an anonymous writer's message to the German newspaper Sueddeutsche Zeitung in early 2015: "Hello. This is John Doe. Interested in data?"

The newspaper was interested, of course. But the source said there were conditions: "My life is in danger. We will only chat over encrypted files. No meeting, ever."

"Why are you doing this?" a journalist at the newspaper asked the source, according to an account published this weekend.

"I want to make these crimes public."

The documents sent to the newspaper stretched back decades and were unwieldy. They included bank records, emails, phone numbers and photocopies of passports held by Mossack Fonseca to track its clients. But there was no road map to show what they all meant.

It was like trying to read an MRI without a doctor.

Seeking help, the Sueddeutsche Zeitung reached out to Ryle's consortium, a global network of journalists that had handled document leaks from the HSBC bank and the tiny European nation of Luxembourg.

The network is overseen by the Washington-based Center for Public Integrity, a nonprofit known for its muckraking journalism in the United States. The two share offices on different floors of the same building...

Keep reading.

Iceland Prime Minister Resigns Amid Protests in Panama Papers Scandal (VIDEO)

Following-up from Sunday, "Iceland Prime Minister Sigmundur Davi Gunnlaugsson Pressured to Resign in #PanamaPapers Scandal (VIDEO)."

Below is video from yesterday's protests, via Euronews.

And at USA Today, "Iceland PM steps aside amid pressure over Panama Papers":

Iceland's prime minister became the first high-profile casualty over the leaked Panama Papers, stepping aside Tuesday following the disclosure of offshore assets that he and his wife held.

Prime Minister Sigmundur David Gunnlaugsson, 41, suggested that his Progressive Party's vice chairman serve as prime minister for “an unspecified amount of time,” and Gunnlaugsson will continue to be party leader, a government statement said.

Earlier in the day, Agriculture Minister Sigurdur Ingi Johannsson told Icelandic broadcaster RUV that Gunnlaugsson was stepping down, the Associated Press reported. But the statement issued by government press secretary Sigurdur Mar Jonsson said Gunnlaugsson had not resigned. Iceland’s president has not yet confirmed any leadership changes.

Gunnlaugsson was expected to face a no-confidence vote in Parliament  on Thursday, Icelandic news site Vísir reported.

Gunnlaugsson on Monday denied any wrongdoing and told parliament he would not resign. Thousands protested outside the parliament building in Reykjavik over the disclosure that he owned an offshore company in the British Virgin Islands.

That  posed a conflict of interest for him, because Gunnlaugsson had negotiated a deal for Iceland's bankrupt banks at a time when he was a claimant in those banks...

More.

British Prime Minister David Cameron's Family Embroiled in #PanamaPapers Scandal

At the Telegraph UK, "Cameron's family embroiled in tax avoidance row as details of his late father's business interests are leaked":

Downing Street has refused to deny that David Cameron’s family might have assets held offshore in Panama, reports Christopher Hope, chief political correspondent.

The Prime Minister was linked to the so-called “Panama Papers” by his late father Ian, who died in 2010.

Michael Wilkinson: Panama Papers raises serious questions for David Cameron https://t.co/3641kMNbZz pic.twitter.com/fzdzhxxFJ0

— The Telegraph (@Telegraph) April 4, 2016

"thanks dad"

PM David Cameron in multi-miilion pound #PanamaPapers inhertence dodge

1 :https://t.co/fO0yaFdMDb
2: https://t.co/5Ofgqm3ATu

— WikiLeaks (@wikileaks) April 4, 2016

David Cameron must take "real action" to crack down on offshore tax havens, opposition figures have demanded after it emerged his father was among the names released in a massive data leak which exposed the scale of efforts by the rich and powerful to hide assets.

The Prime Minister's late father Ian Cameron was reported to be among names - including those of six peers, three ex-Tory MPs and political party donors - named in relation to investments set up by Panamanian law firm Mossack Fonseca.

Downing Street said it was a "private matter" whether the Cameron family still had funds in offshore investments and insisted the PM was in the vanguard of efforts to increase the transparency of tax arrangements.

More than 11 million documents were passed to German newspaper Suddeutsche Zeitung and shared by the International Consortium of Investigative Journalists (ICIJ) to 107 media organisations including the Guardian and BBC's Panorama.

HM Revenue and Customs has approached the ICIJ for access to the data and said it would "act on it swiftly and appropriately" if there was any wrongdoing.

While there is nothing illegal about using offshore companies, the disclosures have intensified calls for international reform of the way tax havens are able to operate and claims of large-scale money laundering.

Mr Cameron has been a vocal advocate of reform and legislation forcing British companies to disclose who owns and benefits from their activities which comes into force in June.

Despite several years of pressure however, few UK Crown Dependencies and Overseas Territories - which are said to make up a large part of the tax havens referred to in the papers - have taken concrete action to open up the books.

He faces pressure to secure progress at an international summit on tackling corruption which he will chair in London in May and where the use of offshore tax havens to escape scrutiny will be high on the agenda.

Asked if Mr Cameron was prepared to legislate if there was continued inaction, the PM's official spokeswoman said: "He rules nothing out. The work with them continues."

More at the Guardian UK, "Fund run by David Cameron’s father avoided paying tax in Britain."

Disclaimer: I Hate WikiLeaks

Just because I'm posting on the Panama Papers leak, which is a WikiLeaks-style operation being promoted by WikiLeaks and the far-left Guardian newspaper, doesn't mean that I've caved to depraved leftist Anonymous-style hysteria and propaganda.

I hate WikiLeaks. I hate what they stand for. But every now and then these ghouls highlight an issue that deserves attention nevertheless; and greater governmental transparency doesn't necessarily have to be a leftist issue, particularly when the left's fundamental problematique isn't actually transparency but anarchist revolutionary politics. Frankly, WikiLeaks is a criminal enterprise and always has been.

I wrote a lot on the group, and its leader Julian Assange, back in 2010. Here's a refresher, "Exposing the WikiLeaks/Communist/Media Alliance."

Also, flashback, to My Pet Jawa, "59 Seconds of Crucial Reuters 'Murder' Video."



So, yeah. I freakin' hate these people.

Even a broken clock's right twice a day, so now and then I'll give CWCID.