Authored by Jeffrey Tucker via The Brownstone Institute,

A series of revealing texts and tweets by Sam Bankman-Fried, the disgraced CEO of FTX, the once high-flying but now belly-up crypto exchange, had the following to say about his image as a do-gooder: it is a “dumb game we woke westerners play where we say all the right shibboleths and so everyone likes us.” 

Very interesting. He had the whole game going: a vegan worried about climate change, supports every manner of justice (racial, social, environmental) except that which is coming for him, and shells out millions to worthy charities associated with the left. He also bought plenty of access and protection in D.C., enough to make his shady company the toast of the town. 

As part of the mix, there is this thing called pandemic planning. We should know what that is by now: it means you can’t be in charge of your life because there are bad viruses out there. As bizarre as it seems, and for reasons that are still not entirely clear, favoring lockdowns, masks, and vaccine passports became part of the woke ideological stew. 

This is particularly strange because covid restrictions have been proven, over and over, to harm all the groups about whom woke ideology claims to care so deeply. That includes even animal rights: who can forget the Danish mink slaughter of 2020?

Regardless, it’s just true. Masking became a symbol of being a good person, same as vaccinating, veganism, and flying into fits at the drop of a hat over climate change. None of this has much if anything to do with science or reality. It’s all tribal symbolism in the name of group political solidarity. And FTX was pretty good at it, throwing around hundreds of millions to prove the company’s loyalty to all the right causes. 

Among them included the pandemic-planning racket. That’s right: there were deep connections between FTX and Covid that have been cultivated for two years. Let’s have a look. 

Earlier this year, the New York Times trumpeted a study that showed no benefit at all to the use of Ivermectin. It was supposed to be definitive. The study was funded by FTX. Why? Why was a crypto exchange so interested in the debunking of repurposed drugs in order to drive governments and people into the use of patented pharmaceuticals, even those like Ramdesivir that didn’t actually work? Inquiring minds would like to know. 

Regardless, the study and especially the conclusions turned out to be bogus. David Henderson and Charles Hooper further point out an interesting fact:

“Some of the researchers involved in the TOGETHER trial had performed paid services for Pfizer, Merck, Regeneron, and AstraZeneca, all companies involved in developing COVID-19 therapeutics and vaccines that nominally compete with ivermectin.”

For some reason, SBF just knew that he was supposed to oppose repurposed drugs, though he knew nothing about the subject at all. He was glad to fund a poor study to make it true and the New York Times played its assigned role in the whole performance. 

It was just the start. A soft-peddling Washington Post investigation found that Sam and his brother Gabe, who ran a hastily founded Covid nonprofit, “have spent at least $70 million since October 2021 on research projects, campaign donations and other initiatives intended to improve biosecurity and prevent the next pandemic.”

I can do no better than to quote the Washington Post:

The shock waves from FTX’s free fall have rippled across the public health world, where numerous leaders in pandemic-preparedness had received funds from FTX funders or were seeking donations.

In other words, the “public health world” wanted more chances to say: “Give me money so I can keep advocating to lock more people down!” Alas, the collapse of the exchange, which reportedly holds a mere 0.001% of the assets it once claimed to have, makes that impossible. 

Among the organizations most affected is Guarding Against Pandemics, the advocacy group headed by Gabe that took out millions in ads to back the Biden administration’s push for $30 billion in funding. As Influence Watch notes: “Guarding Against Pandemics is a left-leaning advocacy group created in 2020 to support legislation that increases government investment in pandemic prevention plans.”

Truly it gets worse:

FTX-backed projects ranged from $12 million to champion a California ballot initiative to strengthen public health programs and detect emerging virus threats (amid lackluster support, the measure was punted to 2024), to investing more than $11 million on the unsuccessful congressional primary campaign of an Oregon biosecurity expert, and even a $150,000 grant to help Moncef Slaoui, scientific adviser for the Trump administration’s “Operation Warp Speed” vaccine accelerator, write his memoir.

Leaders of the FTX Future Fund, a spinoff foundation that committed more than $25 million to preventing bio-risks, resigned in an open letter last Thursday, acknowledging that some donations from the organization are on hold.

And worse:

The FTX Future Fund’s commitments included $10 million to HelixNano, a biotech start-up seeking to develop a next-generation coronavirus vaccine; $250,000 to a University of Ottawa scientist researching how to eradicate viruses from plastic surfaces; and $175,000 to support a recent law school graduate’s job at the Johns Hopkins Center for Health Security. “Overall, the Future Fund was a force for good,” said Tom Inglesby, who leads the Johns Hopkins center, lamenting the fund’s collapse. “The work they were doing was really trying to get people to think long-term … to build pandemic preparedness, to diminish the risks of biological threats.”

More:

Guarding Against Pandemics spent more than $1 million on lobbying Capitol Hill and the White House over the past year, hired at least 26 lobbyists to advocate for a still-pending bipartisan pandemic plan in Congress and other issues, and ran advertisements backing legislation that included pandemic-preparedness funding. Protect Our Future, a political action committee backed by the Bankman-Fried brothers, spent about $28 million this congressional cycle on Democratic candidates “who will be champions for pandemic prevention,” according to the group’s webpage.

I think you get the idea. This is all a racket. FTX, founded in 2019 following Biden’s announcement of his bid for the presidency, by the son of the co-founder of a major Democrat Party political action committee called Mind the Gap, was nothing but a magic-bean Ponzi scheme. It seized on the lockdowns for political, media, and academic cover. Its economic rationale was as nonexistent as its books. The first auditor to have a look has written: 

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. 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.”

It was the worst example of a phony perpetual-motion machine: a token to back a company that itself was backed by the token, which in turn was backed by nothing but political fashion and woke ideology that roped in Larry David, Tom Brady,  Katy Perry, Tony Blair, and Bill Clinton to provide a cloak of legitimacy. 

Tony Blair, Bill Clinton, and Sam Bankman-Fried in the Bahamas April 2022

And you can’t make this stuff up anymore: FTX had a close relationship with the World Economic Forum and was the favored crypto exchange of the Ukrainian government. It looks for all the world like the money-laundering operation of the Democratic National Committee and the entire lockdown lobby. 

I will tell you what infuriates me about these billions in fake money and deep corruptions of politics and science. For years now, my anti-lockdown friends have been hounded for being funded by supposed dark money that simply doesn’t exist. Many brave scientists, journalists, attorneys, and others gave up great careers to stand for principle, exposing the damage caused by the lockdowns, and this is how they have been treated: smeared and displaced. 

Brownstone has adopted as many in this diaspora as possible for fellowships as far as the resources (real ones, contributed by caring individuals) can go. But we cannot come anywhere near what is necessary for justice, much less complete with the 8-digit funding regime of the other side. 

The Great Barrington Declaration was signed at the offices of the American Institute for Economic Research, which, apparently, six years prior had received a long-spent $60,000 grant from the Koch Foundation, and thus became a “Koch-funded libertarian think tank” which supposedly discredited the GBD, even though none of the authors received a dime. 

This gibberish and slander has gone on for years – at the urging of government officials! – and Brownstone itself faces much of the same nonsense, with every manner of fantasy about our supposed power, money, and influence swarming the darker realms of the social-media dudgeons. In fact, the actual Koch Foundation (probably unbeknownst to its founder) was funding the pro-lockdown work of Neil Ferguson, whose ridiculous modeling terrified the world into denying human rights to billions of people the world over. 

All this time – while every type of vicious propaganda was unleashed on the world – the pro-lockdown and pro-mandate lobby, including fake scientists and fake studies, were benefiting from millions and billions thrown around by operators of a Ponzi scheme based on cheating, fraud, and $15 billion in leveraged funds that didn’t exist while its principle actors were languishing in a drug-infested $40 million villa in the Bahamas even as they preened about the virtues of “effective altruism” and their pandemic-planning machinery that has now fallen apart. 

Then the New York Times, instead of decrying this criminal conspiracy for what it is, writes puff pieces on the founder and how he let his quick-growing company grow too far, too fast, and now needs mainly rest, bless his heart. 

The rest of us are left with the bill for this obvious scam that implausibly links crypto and Covid. But just as the money was based on nothing but puffed air, the damage they have wrought on the world is all too real: a lost generation of kids, declined lifespans, millions missing from the workforce, a calamitous fall in public health, millions of kids in poverty due to supply-chain breakages, 19 straight months of falling real incomes, historically high increases in debt, and a dramatic fall in human morale the world over. 

So yes, we should all be furious and demand full accountability at the very least. Whatever the final truth, it is likely to be far worse than even the egregious facts listed above. It’s bad enough that lockdowns wrecked life and liberty. To discover that vast support for them was funded by fraud and fakery is a deeper level of corruption that not even the most cynical among us could have imagined. 

Plato once used the allegory of a Ship of Fools to push for his vision of a wise philosopher-king as the ideal pilot for a ship of state.

Looking at the most recent numbers from Morning Consult Political Intelligence’s Projections of Country Trajectories, you would be forgiven for thinking that a great many people believe that their ship of state is piloted by fools.

As Visual Capitalist’s Chris Dickert and Nick Routley detail below, with the impact of the pandemic, rising inflation, and growing geopolitical instability, it’s probably not surprising that most respondents feel their countries are on the wrong track; India and Switzerland were notable exceptions.

Below are some of the stand-out stories that we found digging through the data.

United States

Midterm elections have rarely been kind to the incumbent party in U.S. politics and the cost of living crisis, an unpopular president, and the aftermath of the global pandemic pointed towards an electoral bloodbath. This year’s election was also expected to set a new spending record, with over $9 billion raised.

Even so, despite 72% of respondents thinking that the country is on the wrong track, the governing Democrats have defied expectations and posted a historic performance during the November 8, 2022, midterm elections. To put this into context, in a president’s first term, there have been three previous instances (since 1922) of the incumbent’s party gaining (or not losing) Senate seats and losing fewer than 10 seats in the House.

Also worth noting is the large spike in negative sentiment in January 2021, following the U.S. Capitol attack, followed by the convergence of negative and positive sentiments as the peaceful transition of power became more assured.

Brazil

Horace, in Odes 1.14, describes a ship of state that is flailing at sea that eventually rights itself, claiming towards the end of the poem that “it’s my longing and no light love you carry.”

Something like that may be happening in Brazil following the loss of the often turbulent, COVID-19-denying President Jair Bolsonaro to political rival Luiz Inácio Lula da Silva in an Oct. 20, 2022, election runoff.

However, with respondents evenly split on where the country is going and the presidential election results being so close (50.9% vs. 49.1%), Lula will have his hands full governing a divided country.

India

While sentiment was overwhelmingly negative in almost every country tracked in this survey, India stood out as an outlier. India has consistently maintained a positive sentiment of between 60% and 80%, which is something only Switzerland comes close to.

The only blip was a brief period during the spring of 2021. This coincided with a deadly second wave of COVID-19 infections in the country, on top of country-wide protests against the Narendra Modi government’s deeply unpopular farm bill.

United Kingdom

The data here covers the three most recent UK Prime Ministers: Boris Johnson, Liz Truss, and now Rishi Sunak, the first South Asian to hold the post.

In January 2020, Johnson had just won a Tory majority and succeeded in “Getting Brexit Done.” Political scandals and the government’s pandemic response pushed the trendline down. It only recovered briefly in the spring of 2021, following Russia’s invasion of the Donbas region of Ukraine, which Johnson was widely seen as handling well. A personal visit to Kyiv on April 9, 2022, helped cement this.

Then followed Prime Minister Liz Truss’ disastrous mini-budget of Sept. 23, 2022, which saw the pound fall to the lowest-ever level against the dollar and the Bank of England intervene in the bond markets. The ascension of Rishi Sunak to No. 10 Downing Street has only just begun to turn around the low of 89% negative sentiment reported on Oct 23-25, 2022.

To quote the BBC comedy series, Yes, Minister, in another context, “the ship of state is the only ship that leaks from the top.”

As if throwing around billions of dollars in client money as though it was their own wasn’t enough for Sam Bankman-Fried and Alameda Research, LLC, the latter also took out a Federal Paycheck Protection Program loan, according to multiple reports and SBA.gov. 

The SBA.gov sourced list at ProPublica lists Alameda Research LLC as having received $370,518 on April 27, 2020. 

However, the Federal Government will not likely be appearing on the list of creditors in FTX bankruptcy documents, as the loan was reportedly paid back, Bloomberg wrote. And it’s hard to think that the company actually needed the money. At the time, FTX had about a $1.2 billion valuation and had attracted an investment from Binance.

FTX was founded in 2019 and in July 2021 did a $900 million funding round that valued the company at $18 billion. Later that year, it did another capital raise at a valuation of $25 billion. Investors included Tiger Global and Temasek, per Reuters. 

In 2022, the company’s valuation went to $32 billion when SoftBank invested near the top in January, putting $400 million into the business. 

We bet the company wishes it had the $370k back now…it could probably go a long way towards legal fees.

Authored by Kevin Downey Jr via PJmedia.com,

The holidays are looming, and that means several things: meals with family, cocktail nights by a cozy fire, and the Democrat Party pushing commie control on Americans for the third year in a row.

Temperatures have just begun to drop, and President Biden is already pimping for his pharma-bros.

My Administration has made progress in getting folks their updated COVID vaccine before the winter. But everyone needs to step up.

Protect yourself and get the updated COVID vaccine. https://t.co/jlrmakxHWm.

— President Biden (@POTUS) November 17, 2022

If you think the donkeys won’t try to enforce more of their bolshie cowplop restrictions, I suggest you invest in the new, hot cryptocurrency, “KDJ Coin.”

SMALL PRINT-O-RAMA! All capital invested in “KDJ Coin” will go to bourbon and cigars.

We survived some shockingly stupid COVID-19 flapdoodle, as did people around the world. All for a virus that more than 99% of Americans would survive.

Related: Reasons Never to Vote Democrat Again, Vol. I: COVID Tyranny Must Be Punished

FACT-O-RAMA! The globalists in the Democrat Party found out in May 2020 that 84% of COVID hospitalizations were from people who were locked down but stole our liberties anyway in the name of “science.”

A man was actually arrested for paddleboarding alone on the ocean after some lickspittle saw him and called the cops. If only we were as smart as the French.

A woman sunbathes at a beach with roped-off zones for social distancing in La Grande Motte as France eases lockdown measures.

📷 Clement Mahoudeau / AFP – Getty Images pic.twitter.com/2AjwX95DzA

— NBC News (@NBCNews) May 21, 2020

Grinded me with science

We were subjected to mountains of stupidity disguised as “science” by people with big titles and fancy diplomas on their walls. Here are a few of the classics. May we never forget the mental vacancy these people pushed upon us and never allow it to happen again.

Battle of the grocery stores

The libs made it seem like grocery stores were an orgy of Bat Stew Flu germs predatorily resting on produce or boxes of coffee K-Cups, waiting to pounce on the unsuspecting shopper and perhaps give them the sniffles.

High-ranking jackpuddings in New York state threw together a list of science-dodging conditions that they deemed necessary to save lives at the grocery store. Today, these protocols seem as stupid as treating asthma with cigarettes, but I recall terrified Pop-Tart shoppers excoriating me for defying the one-way aisles.

Who can forget:

• Standing on stickers on the floor.

• One family member shopping at a time.

• Wash your produce you filthy, granny-killing germ mule!

FACT-O-RAMA! The Buffalo Bills’ Cole Beasley, unvaccinated and COVID-free, was forced to quarantine after coming into contact with a vaccinated coach who tested positive for the Hong Kong Fluey.

Restaurants

We were led to believe that COVID devoured maskless people walking to their tables but showed mercy on partons as they were sitting. Apparently, COVID also preferred to hunt at night as New York restaurants were forced to close at 10 p.m. Being the jackanape that I am, I was admonished on Thanksgiving 2021 when I selfishly walked 27 steps (yes, I counted) from my table to the men’s room sans a Fauci face diaper. A safely sitting, bootlicking patron and a waiter jumped down my throat for my malfeasance. I no longer spend my currency at this establishment.

Remember when COVID was cool with glory holes but didn’t like rapists? pic.twitter.com/5X9ajHWuHl

— The Kevin Downey, Jr. Show Fri. 6-7 pm! (@KDJRadioShow) November 17, 2022

Kids and COVID

Children took a real beating during the pandemic, especially considering that so few kids actually died from China’s virus. Skate parks were filled with sand. Playgrounds were closed. Basketball rims were taken down or covered.

Kids in Portland, Ore., were introduced to some serious commie dystopian nonsense and forced to eat lunch outside, sitting on buckets, in cold weather. You know, for their own safety.

CHILD ABUSE: Kindergartners are forced to eat lunch outside in 40 degree weather at Capitol Hill Elementary School in Portland, Oregon.

They sit on buckets to social distance from their classmates. pic.twitter.com/KqFcliTFYf

— Katie Daviscourt🇺🇸 (@KatieDaviscourt) December 8, 2021

School officials actually put their hollow heads together and came up with this:

This is a high school band practice in Wenatchee,WA pic.twitter.com/q2prCJemX0

— Ari Hoffman (@thehoffather) February 24, 2021

By now you may be thinking, “Come on, KDJ. Our nation would never go back to that nonsense. Our elected leaders and medical heavyweights have learned from their mistakes.”

But then we remember how Dr. Fauci, America’s highest-paid ogre, started chirping about another lockdown back in March of 2022. A portion of China has just reached its 100th day of a brutal lockdown.

One Merry Andrew from the New York Post is half-jokingly hoping for another freedom-stealing lockdown but recalled how wonderful the first one was.

And to be honest, we failed to punish the globalists who robbed us of our liberties in the midterm elections. Sure, monkeypox fizzled, but the commies won’t stop. The Hill wrote about the possibility of a “climate lockdown” earlier this year. You know for the good of the planet.

These are just a few of the inane lockdown restrictions we endured. Please leave more in the comments section. Let’s start the conversation now and all agree that we don’t get fooled again.

Update (1415ET): U.S. District Judge Edward Davila just sentenced Elizabeth Holmes, the criminal founder of Theranos convicted of fraud, to 135 months, or 11.25 years, in prison, capping the historic downfall of what the media and the Clinton Foundation unabashedly dubbed as a “one-time Silicon Valley wunderkind.”

Prosecutors had asked the judge for a 15-year sentence, while Holmes’ defense attorneys had asked for 18 months of house arrest.

Ms. Holmes has 14 days to appeal her conviction.

The judge ordered Ms. Holmes to surrender on April 27, 2023.

Judge Davila made clear that future deterrence was a big part of his rationale for the sentence.

He called the Theranos fraud “a cautionary tale” for Silicon Valley.

Additionally, the judge said the court would set a date in the future for a hearing on restitution, having said earlier in the day that he had found enough evidence to determine there were at least 10 investors in Theranos who were victims of fraud, and that the total sum they were defrauded was $121.1 million.

The lesson here is if you want to avoid jail $39 million is the bare minimum in political donations, right @SBF_FTX? https://t.co/lgKDhJ834m

— zerohedge (@zerohedge) November 18, 2022

Elizabeth Holmes spoke briefly, and tearfully, to the court before the judge read her sentence. 

“I am devastated by my failings. Every day for the past years I have felt deep pain for what people went through because I failed them,” said Ms. Holmes.

We wonder if her voice at trial was the same fake baritone she used to scam the ‘wisest’ of investors…

Holmes’ former boyfriend and Theranos business partner Sunny Balwani in July was found guilty of 12 counts of conspiracy and fraud against certain investors and patients. Balwani is expected to be sentenced on December 7, and his attorney was on hand Friday for Holmes’ sentencing.

*  *  *

While everyone is fixated on the disgraced founder of FTX, Sam Bankman-Fried, and his collapsed cryptocurrency exchange, another Silicon Valley fraudster, Theranos CEO Elizabeth Holmes, will be sentenced in a federal courthouse Friday, putting an end to the years-long saga of her phony blood-testing startup. 

Holmes’ sentencing will take place in a San Jose, California, courtroom where she was convicted earlier this year of three felony counts of wire fraud and one count of conspiracy to commit wire fraud for scamming investors. 

Federal prosecutors wrote in court papers ahead of the sentencing hearing that Holmes’ crimes are “among the most substantial white-collar offenses Silicon Valley, or any other district, has seen” (wait until SBF’s court case…). 

AP noted US District Judge Edward Davila could sentence Holmes to federal prison for 15 years, slightly less than the federal government’s recommendation of 20 years, though her lawyers filed a request to the judge last week for leniency in the sentencing and requested 18 months of home confinement instead of prison. 

The request was accompanied by letters calling for leniency from over 130 friends, family, and even Theranos investors, as well as former company employees who described Holmes as a ‘good person.’ 

One of those letters was penned by Sen. Cory Booker (D., NJ), who said Holmes “has within her a sincere desire to help others” by fighting climate change and world hunger.

“I knew Ms. Holmes for about six years before charges were brought,” he continued. 

… and how convenient:

“Holmes, who is 38 years old, was visibly pregnant with her second child at her last court appearance. If Davila hands down a prison sentence, her pregnancy could influence when her confinement starts,” NPR pointed out. 

Judge Davila has handled her case since the collapse of Theranos after reaching a valuation of $9 billion. Criminal defense lawyers recently told Bloomberg Holmes’ sentencing could send a warning shot to Silicon Valley companies that run on hopes and dreams. 

So it turns out the idea of an electric Hummer may not have been brilliant after all…

That’s because a new report out this week from The Drive notes that skipping the costly gas pump to charge your battery could still wind up costing nearly just as much as a tank of gas, thanks to the vehicle’s massive battery pack.

One YouTube reviewer “charged a Hummer EV from zero to 100% on an Electrify America charger” and it cost them about $100. The final was $96.32 before taxes and fees to charge the 246 kWh battery with 212 kWh usable capacity, the report says. 

It took 2 hours and 32 minutes to charge the vehicle fully, the report says. The Hummer has a range of 329 miles. The Drive noted that in some instances, it could wind up costing less than $100 to charge:

At Electrify America’s standing rates of $0.43/kWh, that comes to a total of $96.32 before taxes and fees. That rounds up to over $100 for a full charge, all things considered. That drops to $69.44 before taxes for Electrify America Pass+ members, who are only charged $0.31/kWh for a $4 monthly fee. Amusingly, though, Conner was able to score a complimentary charging session, saving himself big money in the process.

Alternatively, some Electrify America stations charge per minute rather than per unit of electricity consumed. At those stations, it’s possible to fully charge the Hummer EV for around $50, or $37 for Pass+ members, given rates of $0.32/min and $0.24/min respectively. That’s assuming the Hummer EV is charging at full speed on a 350 kW charger, of course.

“It has a massive battery pack and no efficiency,” a reviewer says in a video charging the vehicle. “But you have to love the excess,” he says. He also said that AC charging at home could be cheaper, but that it may take longer. 

After draining the Hummer’s battery, he hooks it up to an Electrify America charger to give it a trough to peak charge. Despite the charging costs, the reviewer still seemed to enjoy owning the vehicle: “I am in love this with this thing. This thing rocks,” he proclaims.

Here’s a video the charge:

Authored by Dave DeCamp via AntiWar.com,

A group of House Republicans introduced a bill Thursday to audit the funds that Congress has approved to spend on the war in Ukraine. The effort is being led by Rep. Marjorie Taylor Greene (R-GA) and supported by a group of Republicans that have been critical of US aid to Ukraine. The resolution’s cosponsors include Reps. Thomas Massie (KY), Matt Gaetz (FL), Barry Moore (AL), Andrew Clyde (GA), and Cory Mills, a representative-elect from Florida.

According to The Hill, Greene introduced the bill as a privileged resolution, meaning it will be sent to the relevant committee, which will have 14 business days to either reject the legislation or approve it for a vote on the House floor.

If the bill is not discussed by the committee within 14 days, Greene has the option to force a House vote. Greene said she’s prepared to reintroduce the bill in the next Congress when Republicans have a majority in the House.

“I’ll introduce this resolution again, but I’ll also be calling for a full audit. We voted ‘no’ to send money over there, but we’re also going to audit what’s happening in Ukraine,” Greene said.

While most Republicans still support spending on the war in Ukraine, many have come out in favor of increasing oversight of the aid. House Minority Leader Kevin McCarthy (R-CA), who is set to be the speaker in the next Congress, has said a Republican-controlled House wouldn’t send a “blank check” to Ukraine.

McCarthy later downplayed his comments and said the lack of oversight was the issue, and other Republican leaders insisted they would keep arming Ukraine. But McCarthy’s comments were still enough to prompt a push to approve a massive new Ukraine aid package before the next Congress is sworn in, and the White House has asked for $37.7 billion.

If the new aid package is approved, it will bring total US spending on a proxy war on Russia’s border to about $105 billion. If it’s spent at the rate of other aid packages, the White House will likely be looking for more come spring.

Authored by Michael Maharrey via SchiffGold.com,

Walmart recently announced better-than-expected third-quarter sales growth. This may seem like great economic news until you realize the reason behind the retailer’s big jump in sales.

As it turns out, wealthier shoppers are flocking to Walmart to make ends meet as rising prices squeeze pocketbooks.

In its earnings report, Walmart said it is making “strong grocery share gains, including from high-income households.”

“Customers who came to us less frequently in the past are now shopping with us more often, including high-income customers,” Walmart CEO Doug McMillon said on a Tuesday call with investors and analysts.

Why are more affluent people shopping at Walmart? In a recent podcast, Peter Schiff said it was out of necessity.

It’s because they can’t afford to shop at the more expensive, fancier markets that they used to go to because prices are up so much, in order to put food on their tables, they’re having to trade down and buy cheaper stuff at Walmart.”

Walmart also reported strong growth in its private-brand sales, a sign shoppers are abandoning more expensive name brands and turning to lower-priced generic alternatives.

According to CNN, other discount supermarkets, along with Dollar General, reported gaining new, wealthier customers trying to manage budgets during these inflationary times.

While the CPI came in lower than expected in October, food prices continue to rise. The price of food at home increased by 0.6% month-on-month. Food at restaurants was up 0.9% on the month. Annualized, food prices were up nearly 11% in October.

Pundits and analysts like to look at core inflation, stripping out more volatile food and energy prices to gauge inflation, but consumers don’t have that luxury. They can’t just cut food out of their budgets, and Americans are struggling to cope.

Increased spending on food is forcing consumers to cut in other areas. Walmart’s third-quarter report hints at this. While grocery sales increased in the “mid-teens” last quarter, the company reported “softness in discretionary categories including electronics, home, and apparel.”

Wages are rising, but they aren’t keeping up with prices. On an annual basis, real average hourly earnings decreased by 3.0% from September 2021 to September 2022 (seasonally adjusted). It was the 18th consecutive month of declining real wages on an annual basis.

Tight budgets aren’t just altering shopping behavior. It is also forcing people to dig deeper and deeper into debt. Household debt increased at the fastest pace in 15 years during Q3, as American consumers ran up their Mastercards and Visas month after month. Credit card balances surged by 15% year-on-year in Q3, increasing by $38 billion between July and September. That was the biggest annual increase in credit card debt in more than two decades. Rising credit card debt coupled with increasing mortgage costs pushed overall household debt higher.

Economists and pundits talk about inflation as an academic exercise. They rarely reflect on the fact that rising prices have real impacts on real people. After months of rising prices, even wealthier Americans are feeling the pain. And if you happen to be somebody living on a fixed income or savings, you’re really screwed as inflation is rapidly eating away your purchasing power and your income streams aren’t increasing at all. Inflation always causes the most pain for the poor and elderly.

A major development Thursday and Friday in Iran strongly suggests the protests crisis is escalating and will grow more violent, as hundreds of demonstrators set their sights on the historic and iconic “house of Ruhollah Khomeini” – the revolutionary hardline Islamic cleric credited with founding and leading the Islamic Republic. 

The “anti-hijab” protests which have raged for two months are now attempting to destroy the republic’s most sacred symbols, after a Tehran court began handing out the country’s first death sentences to protesters, or “rioters” as state authorities have called them. 

Astonishing scenes from #Iran. Protesters have burned down the house of Ruhollah Khomeini, the Islamic Republic’s founder.

The house has been a museum for the past 30 years. This is an attack in the essence of the republic itself. pic.twitter.com/Qtk5jr5AR6

— David Patrikarakos (@dpatrikarakos) November 18, 2022

Reports AFP, “Protesters in Iran have set on fire the ancestral home of the Islamic Republic’s founder Ayatollah Ruhollah Khomeini.”

The report further confirms that “The house in the city of Khomein in the western Markazi province was shown ablaze late Thursday with crowds of jubilant protesters marching past, according to images posted on social media, verified by AFP.”

The report also cites regional gulf sources to say the anti-government crowds are declaring that current Supreme Leader Ali Khamenei “will be toppled.”

The home (now museum) of Ayatollah Khomeini, founder of the Islamic Republic, set on fire by Iranian protesters. pic.twitter.com/YLE7Fe2kAh

— Frida Ghitis (@FridaGhitis) November 18, 2022

The protests have at times gotten violent, with buildings across various cities burned down, and also with live fire used by security services to quell the unrest. Last week hardliners in parliament demanded that authorities take a harsher stance in order to finally halt the so-called “anti-hijab” demonstrations.

Likely to further fuel the anger in the streets is the increasingly harsh stance the country’s judiciary is taking toward the protests. On Thursday three more Iranians were sentenced to execution, after the first such unprecedented sentence for “rioting” was handed down earlier in the week.

 According to Al Jazeera: 

The Iranian judiciary said late on Sunday that an unnamed individual has been sentenced to execution for “setting fire to a government center, disturbing public order and collusion for committing crimes against national security” in addition to “moharebeh” (waging war against God) and “corruption on Earth”.

Five more unnamed people, who authorities described as “rioters” – a word the government uses to describe the ongoing protests and those participating in them – were handed between five and 10 years in prison on national security-related charges.

More such extreme penalties are expected, given that Tehran officials have long accused the protest movement of being fueled by Iran’s enemies such as Israeli and US intelligence, hence the charge of “collusion for committing crimes against national security.” 

The Iranian Kurdistan region has continued to be a hotbed of unrest and anti-government demonstrations: 

People chant “Ghassmlou, Ghassmlou your path continues” at the funeral of Azad Hasaanpour who was killed by Iran’s terrorist #IRGC in the Kurdish city of #Mahabad
#JinaAmini #KurdistanProtests #IranRevolution #Kurdistan #IranProtests pic.twitter.com/d5MST1j1Ew

— PDKI (@PDKIenglish) November 18, 2022

At this point at least 326 people have died, including deaths among the police and security services. The White House has meanwhile said it stands in solidarity with the protesters, in what Tehran has taken as a declaration of regime change coming from the Biden administration. 

Authored by Ryan McMaken via The Mises Institute,

The tech sector in the US has benefited from more than a decade of ultra-low interest rates and easy money. But now it looks like the easy-money era may be ending—at least for now—and that means problems for the sector so long wedded to cheap loans.

Just a year ago, the ten-year treasury’s yield was 1.4 percent. This month, however, the 10-year’s yield is up to over 3.6 percent, and throughout the economy, debtors are finding that debt service isn’t nearly as cheap as it used to be.  Employers in the tech sector are responding as one might expect. Meta/Facebook has announced 11,000 layoffs. Amazon will soon lay off 10,000 employees. Twitter has laid off at least 3,700 employees. Stripe, Microsoft, and Snap have each laid off about a thousand workers. Salesforce and Zillow have laid off hundreds. Dozens of other firms have slowed or frozen hiring.

Thanks to rising debt costs, employers need to cut costs, but many employers will soon be facing declining revenues as well. Given that a multitude of indicators point toward an approaching recession—the yield curve is now the most inverted it’s been since 1982—this is likely just the beginning.

What we’re witnessing is the end of the latest tech bubble, and what seemed like rock-solid companies set to expand effortlessly forever will suddenly be characterized more by cost-cutting, falling revenues, and a hard slog in search of more capital. 

The end of easy money will also separate the real innovators and entrepreneurs – people who build real value – from the big-talking frauds who only look smart or productive when they can just borrow more cheap money to kick the can of their failing and stagnating ventures down the road. 

Unless the central bank and governments intervene to provide bailouts and backstops, the industry will face a much-needed reckoning. This will help clear out more than a decade of malinvestments and bubbles propping up top heavy and inefficient companies that could never survive without the artificially cheap credit provided by asset purchases and ultra-low-interest rate policy at the central bank. 

Rising Interest Rates, Falling Valuations

Until very recently, interest rates had been declining for decades in the United States, and that has meant companies, at any given time, have generally been able to bank on cheaper debt not too far down the road. This has increased companies’ valuations, and has made it easier for companies to find investors. 

Even for companies that never—or almost never—turn a profit, cheap money has meant that the day of reckoning can simply be pushed further into the future. In many cases, we call these zombie companies: they don’t have real value, but they can stay “alive” by paying off older, more expensive debt with new cheaper debt. 

But, things are very different when easy money starts to get scarce. As Ryan Browne at CNBC recently noted:

Higher rates spell challenges for much of the market, but they represent a notable setback for tech firms that are losing money. Investors value companies based on the present value of future cash flow, and higher rates reduce the amount of that expected cash flow.

As a result,

Venture deal activity has been declining … Not all companies will make it through the looming economic crisis — some will fail, according to Par-Jorgen Parson, partner at VC firm Northzone. “We will see spectacular failures” of some highly valued unicorn companies in the months ahead, he told CNBC. …

The years 2020 and 2021 saw eye-watering sums slosh around equities as investors took advantage of ample liquidity in the market. Tech was a key beneficiary thanks to societal shifts brought about by Covid-19, like working from home and increased digital adoption. … In a time when monetary stimulus is unwinding, those business models have been tested.

Part of the reason investors are now less interested in “unicorns” is that as interest rates rise, investors are less desperate to search out yield even in the most unproven and risky corners of the economy. For example, when government debt and other low-risk investments are paying next-to-zero yields, investors will be much more aggressive about finding riskier investments that pay at least something above zero. That includes high-risk trendy unicorn companies that promise big returns. But, as Treasurys and similar investments begin to promise higher yields—as they are doing now—there’s less pressure to dump money in whatever flavor of the month is being put forward as the next big thing for investors. Moreover, in times of easy money, investors have more cash to throw around. 

Once the cheap money regime ends, however, newly reticent investors become more interested in actually analyzing the fundamentals of firms seeking investors. That means firms will have to actually show they’re efficient and only hiring employees who actually create value. 

Easy Money Enables More Waste

For many top-heavy companies, that means layoffs. It’s why Meta’s Mark Zuckerberg recently complained that “realistically, there are probably a bunch of people at the company who shouldn’t be here.” Zuckerberg went on to say he would deliberately be “turning up the heat” for employees in the hopes that the less committed would simply quit. (Meta shares are down more than 50 percent this year, and Meta has lost revenues as Zuckerberg’s obsession with the metaverse has not been especially popular with consumers.)

Elon Musk has been in the midst of something similar at Twitter, firing thousands of employees, and demanding that those who remains be prepared to work long hours.  While Twitter employees and ex-Twitter employees have been whining continually online about how everything was wonderful at Twitter until Musk showed up, the reality is that Twitter has only ever had two profitable years (2018 and 2019) and is neither efficient nor innovative. 

Moreover, it’s certainly not difficult to see why Zuckerberg and Musk would want to trim the fat if recent videos about “a day in the life” at Meta and Twitter are true. The two now-notorious videos show young female employees walking around Meta and Twitter offices showcasing how little work they do and how opulent the office perks are. Perks apparently include complementary gourmet food, red wine on tap, and free cappuccinos. Last May, Project Veritas reporters captured a Twitter senior engineer bragging about how little he works: 

“[B]asically went to work, like, four hours a week last quarter. And that’s just how it works in our company. … [E]ssentially, like, everyone gets to do whatever they want, no one really cares about, like, [operating expenses].” 

The engineer contrasts this approach at Twitter with “capitalists” who “care about numbers or care about how to make the business more efficient.”

If true, it’s all a perfect illustration of how the age of cheap credit has made it possible for companies to be highly valued even in the midst of senior employees who are essentially dead weight.  As debt costs rise, labor costs must fall in many cases. That makes employees who work a few hours a day ripe for trimming. 

These companies are probably looking at more hits from the revenue side as well. David Zaslav, CEO of Warner Bros. Discovery this week warned that the advertising market is worse now than at any time during the pandemic slowdown of 2020. 

Yet again, we find that as borrowing costs rise, companies have less money to spend elsewhere. Advertisers have reduced spending, and this has meant hits to the valuation of media companies like Warner Bros. Discovery. This extends to social media companies as well. 

Years of Malinvestment

The story of the last decade has in many cases been rising valuations for companies that often lose money, hire employees who barely work, and simply rake in the cash that yield-starved investors throw at them. 

In other words, much of the tech sector has all the markings of a classic bubble and the effects of years of malinvestment. The lucky business owners and employees on the receiving end of malinvestment get to live high on the hog of cheap money with rising wages, luxurious offices, and never ending “growth.” Workers and owners alike can then pat themselves on the back about how brilliant they all are. But much of it is an illusion and its existence depends largely on many years of central bank interventions designed to force down interest rates, prop up asset prices, and essentially print money to keep liquidity flowing unceasingly to firms via investors.  Yet, when price inflation finally forces the central bank to allow interest rates to rise again—as is now happening—the music stops, and it seems all the brilliant geniuses running tech companies weren’t quite so efficient, profitable, or clever after all.