This Guy’s a Fraud of Historic Proportions

He Could Wreck the Financial System [The Daily Reckoning] November 16, 2022 [WEBSITE]( | [UNSUBSCRIBE]( This Guy’s a Fraud of Historic Proportions - Sam Bankman-Fried — a fraud of historic proportions… - The silver lining for investors who lost everything… - Then Jeffrey Tucker shows you why the collapse of FTX could be the Lehman moment of our time… [***1 Block From The White House***]( I just got done filming an urgent update to my thesis…recorded just one block from the U.S. White House. What’s going on? Well, if you’ve been following my predictions… …then you know I’ve helped thousands of Americans get in front of: Brexit Trump’s 2016 Victory The Coronavirus Pandemic The Global Supply Chain Shortage The Current Economic Predicament And Russia’s Military Invasion of Ukraine… But according to my newest research… What’s coming next could have could be even bigger…with a massive impact on your wealth… [Click Here To Learn More]( Annapolis, Maryland November 16, 2022 [Brian Maher] BRIAN MAHER Dear Reader , What is this disreputable little newsletter but a chronicle of human nature? More specifically, it is a chronicle of fallen human nature — of man’s long and agonized descent from the paradise of Eden. It is a chronicle of man’s skyvaulting ambition. Of his fathomless greed. Of his ceaseless dragooning and clubbing of fellow men. In brief… The Daily Reckoning is a chronicle of man’s abominable propensity to sin. History’s rogue’s gallery is accordingly extensive. See for example Mr. John Law and his Mississippi swindle. See for example Charles Ponzi and his eponymous scheme. See for example Mr. Bernard Lawrence Madoff and his fantastic impersonation of the aforesaid Ponzi. Here are but some of history’s more recognized scoundrels, knaves, sharpers and confidence men. A comprehensive list would stretch this article to several dozen pages, each single-spaced and finely printed. All roast presently in hell. Today we are pleased to add a living villain to our list — a certain Sam Bankman-Fried — former chief executive officer of FTX Trading Ltd. FTX Trading Ltd. is the popular cryptocurrency exchange presently seizing headlines for defrauding investors. And for defrauding them handsomely. The complete story is yet to be written. The FTX tentacles likely span far, wide — and deep. Our spies even report salacious rumors of money-laundering operations involving FTX, the Democratic Party and the nation of Ukraine. We cannot confirm these and other whispers at this time. Thus we had best keep them dark. Yet here Crypto Briefing gives the skeleton facts, the acknowledged facts: Former FTX CEO Sam Bankman-Fried secretly used customer funds to bail out FTX’s sister company Alameda Research, resulting in an estimated $10 billion hole in the exchange’s books. To make matters worse, Bankman-Fried covered up his fraudulent activities for months, leaving investors, customers and even his own employees in the dark right up until FTX declared bankruptcy on Nov. 10… Now the company is bankrupt and owes billions to creditors, and FTX shares are almost certainly worthless. More: It’s hard to estimate how much customers holding funds on FTX lost as reports vary, but the number is likely to be in the billions. The figure will likely have been made worse by Bankman-Fried’s since-deleted tweets in the lead-up to FTX’s bankruptcy. The former FTX CEO assured users that assets held on the exchange were fully backed at 1:1, dissuading users from withdrawing funds. In hindsight, these tweets turned out to be bald-faced lies. Mr. Bankman-Fried presently confronts a class action lawsuit by pitchfork-carrying investors. These include such eminentos as football player Tom Brady, his soon-to-be-former wife Gisele Bündchen, the basketball players past and present Shaquille O’Neal and Stephen Curry and Shark Tank personality Kevin O’Leary, to name but some. We wish them every godspeed. Yet we are vastly grateful for the fraud that is the young Sam Bankman-Fried. That is because he validates our iron disbelief in our fellow man. And a man is always grateful when his deepest convictions are affirmed. It warms and soothes him… as a cozy fire may warm and soothe him of a winter’s evening. Meantime, this fellow furnishes freshly hatched proof that another great fraud is always somewhere in the wings, awaiting only his inevitable discovery. Thus we are assured we will always have a story to cover. Because of the Sam Bankman-Frieds of this world, we are perpetually in motion. Combine them with the other fools, popinjays, world improvers, lunatics and lesser scoundrels on daily display… we well and truly loll in clover. Of course we can afford to extend our gratitude to Mr. Bankman-Fried. We were not among the defrauded and fleeced whom he cleaned out. Yet we can extend his victims this one consolation: Like Law, like Ponzi, like Madoff and the others, he too will roast. The Old Boy will collar him. This realization will not restore your losses of course. Alas, they have vanished forever into the ether. Yet even the grayest storm cloud has its silver lining… Jeffrey Tucker is a cryptocurrency crackerjack with a penetrating knowledge of this particular market. Below, Jeffrey shows you why the collapse of FTX could represent another “Lehman” moment. Could he be correct? Read on. Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: Have you seen [this urgent warning]( from Jim Rickards? Well, if you’re worried about the post-election political landscape, soaring inflation and rising geopolitical tensions… [Here’s something that could potentially be more important than any of them.]( What is it? Well, Jim says it could be coming in the next 90 days. If you want to keep ahead of what most investors have no clue about, we strongly urge you to watch this exclusive interview Jim recently conducted. But time is of the essence. This warning comes down at midnight tonight. [Go here now before the clock strikes midnight.]( [“The Situation Is Getting Worse By The Day”]( That’s what the President of the US Chamber of Commerce just said about the supply chain. If you thought the supply chain issues were over, think again… Things are about to get much, much worse. And everything from your local grocery store to your gas station could be impacted. That’s why I’m urging everyone I can to prepare now… See the #1 move to make before this problem gets any worse… [Click Here Now]( The Daily Reckoning Presents: Could the FTX collapse unravel the entire financial system?… ****************************** FTX: The Lehman of Our Time? By Jeffrey Tucker [Jeffrey Tucker] JEFFREY TUCKER Look at the years of the implausible rise of FTX: 2019⁠–2022. From $0 to $32 billion and back to $0. These were the years of stupid, as Fed credit pumped up an artificial prosperity in the midst of lockdowns and trillions were diverted from the dollar’s purchasing power to create such beasts as this. Its failure is but a sign of the times and could signal a much bigger unraveling. To believe that the rise was the result of the genius of FTX founder and CEO Sam Bankman-Fried is to believe in magic. But many silly people in the venture-capitalist realm went along with it. He mastered the caricature of the implausible wunderkind: the halting speech, the twitchy leg, the nasally intonation, the obscurantism. To that Bankman-Fried added his own special sauce: woke ideology combined with political bribes. He used depositors’ money to become the second-largest donor to the Democratic Party, winning friends and influencing people especially for the midterms. Only days after the election, his scam fell apart when it was exposed by rivals in the industry. Fake Idealism SBF isn’t much of an idealist himself, but he mastered the art of pretending to be one. Every cliche from the woke lexicon tripped off his tongue. He would get rich not to consume but to give. He believed in ESG and DEI. He was striving to be carbon neutral to do his part to stop climate change. He was for animal rights and only ate vegan. He was all for pandemic planning, particularly his brother’s nonprofit that was set up to receive a substantial piece of the $30 billion that the Biden administration allocated to the effort. Particularly interesting is the unusual relationship FTX had with the government of Ukraine. They were depositors with FTX. We all know where that money came from: U.S. taxpayers, courtesy of the Biden administration. And then where did it go? Straight to fund elections in favor of blue. Seems like money laundering — and not of the hidden sort. The whole company was founded only a week after Biden announced for president in 2019. SBF’s mother was co-founder of the political action committee called Mind the Gap. Maybe that was the whole point of FTX, to serve as a laundromat for dark money to stop the red wave. That’s not really a conspiracy theory. It’s just making sense of the facts we have. The Media A sign of what’s coming appeared in The New York Times just yesterday. Here you have an obvious con artist running a Ponzi scheme with money from workers, peasants and taxpayers. Now most of it is gone. People all over the world face frozen accounts and lost funds. How do you write a puff piece about that? The NYT somehow managed to do it. The company grew too fast, they explained, and not even the child genius could keep up with the miracles that he created. It’s all tragic, the reporter says, but hopefully the great man can get some rest after all the stress he has endured. It’s quite a contrast with the way the media reported on Bernie Madoff and Elizabeth Holmes. But having the right political views and paying the right people can buy you affectionate media coverage, even now. So I don’t think we can expect much in the way of accountability. Sam Bankman-Fried managed to become too big to jail. The lesson: Stick with the reputable exchanges. Keep custody of your assets. If it is too good to be true, it is not true. These are the old principles, and they still apply today. [Urgent Notice From Paradigm CIO Zach Scheidt!]( [Click here for more...]( Hi, Zach Scheidt here… I’m the Chief Income Officer at Paradigm Press. With inflation raging (and showing no signs of coming to an end any time soon), almost everyone in America is feeling the pain in a big way. Which is why, several months ago, I set out on a big mission… my goal was to create a complete, step-by-step plan to surviving and beating inflation… one that anyone could take advantage of. Today, after hundreds of hours of research, I’m revealing all of my findings… [Click Here To See What I Found]( Everything Old Is New We could look back at the spectacular crash of FTX as the beginning of a new era. Let us hope so. What began in 2008 and continued for the better part of 14 years appears finally to be coming to an end. The era of cheap money and credit is over. This will affect all of business life and personal finances. It will dramatically change financial decisions and affect the culture. It’s going to amount to a return to good-sense value investing, and companies that have to actually make a profit the old-fashioned way. I’m not just talking about layoffs in Big Tech. Amazon is laying off 10,000 workers in management layers in the runup to the biggest shopping season of the year. They’re watching business dry up. Such cutbacks are occurring in every major company that reached gargantuan size. Twitter was just the beginning because soon after Facebook (sorry, Meta) announced the same, while many other companies that lived off ad revenue on the internet are experiencing the profitability squeeze as we headed into a solid recession (it will become obvious in months that we are already there). It also affects real estate, the residential markets of which are already freezing up. And commercial real estate in big cities is similarly affected, particularly offices that are still only half-full. Monetary Madness For nearly a decade and a half now, short-term interest rates have been negative. By incentivizing capital to chase anything but safety, and discouraging savings in all forms, finance received a huge boost. But so did everything else, including crypto. Looking back, it seems obvious that the craze for extreme risk, the who-cares attitude about the pace of business expansion, the magic-beans environment of digital tech, the claims that society has somehow managed to commoditize attention without committing resources, not to mention out-of-control government spending – all of this was propped up by zero-interest-rate policies adopted after the last housing market crash. The innovation perhaps seemed costless at the time. What was the downside? For a while, it seemed like there was none. Anything seemed possible both in finance and government. Rates were zero, homes were affordable and credit was plentiful for everything and everyone. The corporate world came to dismiss old-fashioned concerns like serving customers and stockholders and instead pushed philanthropy and alignment with social and climate justice. It was this environment of infinite plenty that encouraged this simply because the possibilities seemed limitless and there seemed to be no cost at all. It was unsustainable, obviously, and the Fed planned an escape, which began in 2019. It did not last thanks to the pandemic response, which called on the Fed to do the unthinkable. It went crazier than before. This time the destination of the new money was different. Instead of cold storage, the new money flooded the streets as hot money to spend right away. After all these years, we now see the cost in intolerable levels of inflation. The Fed needs to put an end to it by driving up real rates above zero. Thus does the new era of tight money begin. A Tough Pill to Swallow I can’t think of a better poetic ending to the age of excess than the disgrace of the silly man Sam Bankman-Fried and his merry band of hucksters and druggies who bamboozled the whole of the ruling class into believing that they had some kind of Midas touch to mint money to fund all the causes the hard left sees as holy. FTX died a quick and fabulous death, and with it the dreams of a fully woke pool of infinite funding. The transition from fantasy to reality is going to be extremely painful for a whole generation that imagined they could live a life untethered from all norms and rules of the past. The truth is that the dollar-based world has been living a 14-year lie. That truth is going to be a hard pill to swallow. Let us end with a tip of the hat to economic forces. When the whole world is lying to us, we can still count on markets and balance sheets to reveal what is true. Regards, Jeffrey Tucker for The Daily Reckoning Ed. note: Have you seen [this urgent warning]( from Jim Rickards? Well, if you’re worried about the post-election political landscape, soaring inflation and rising geopolitical tensions… [Here’s something that could potentially be more important than any of them.]( What is it? Well, Jim says it could be coming in the next 90 days. If you want to keep ahead of what most investors have no clue about, we strongly urge you to watch this exclusive interview Jim recently conducted. But time is of the essence. This warning comes down at midnight tonight. [Go here now before the clock strikes midnight.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Jeffrey Tucker] [Jeffrey Tucker]( is an independent editorial consultant who served as Editorial Director for the American Institute for Economic Research. 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