Just when you thought House Democrat, and easily one of the smartest people in Congress, Maxine Waters couldn’t humiliate herself and outrage the peasantry any further with her white-glove treatment of Sam Bankman-Fried, whose fraud was behind the largest ponzi scheme since Bernie Madoff, she has bested herself once more.

Waters, the House Financial Services Committee Chair, is not planning on subpoenaing Sam Bankman-Fried, or is that Sam Bankman-Freed – to testify at the upcoming December 13th Congressional hearing about the collapse of FTX. 

“Waters informed committee members of her decision at a private meeting Tuesday with Securities and Exchange Commission chair Gary Gensler on Capitol Hill,” CNBC reported late in the day on Wednesday. 

Waters apparently said “she wants committee staff try to convince Bankman-Fried to voluntarily testify”.

And if he disagrees? Well… oops, but that’s what all those tens of millions in donations to Democrats were for. Or is that billions?

That’s just the publicly disclosed number. His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?

— Elon Musk (@elonmusk) December 3, 2022

For those still confused, one month after the historic implosion, Bankman-Fried appears to be getting away with one of the most blatant heists in history and still has not been held to account by any regulatory agency, other than what appeared to be some perfunctory palm greasing that may have taken place in the Bahamas. 

Baffled by why there has been no consequences for Bankman-Fried, even while Democrats and the Biden administration perpetually rail against billionaires and the upper class? Well, there’s the small detail that Bankman-Fried and FTX associates gave $300,000 to the very same House Committee members that are investigating him, per the Washington Free Beacon:

Bankman-Fried and his co-founders at FTX contributed $300,351 to nine members of the House Financial Services Committee, according to Federal Election Commission records. Some of the largest contributions were to Democrats on the committee’s Digital Assets Working Group, which worked on regulation of the crypto industry. 

Recall that Maxine Waters has been already widely lampooned and ridiculed for the gentle treatment she has given Bankman-Fried thus far.  In an endearing sounding Tweet to SBF on December 2, 2022, asking him to testify in front of Conrgess, she wrote: “We appreciate that you’ve been candid in your discussions about what happened at FTX. Your willingness to talk to the public will help the company’s customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th.”

The public was not amused by Waters’ approach.

“If you don’t arrest him I will have lost all faith in our government being the tiniest bit of just,” bitcoin advocate Dan Held responded to Waters. 

“Rep. Waters, we appreciate that you’re holding a hearing on the 13th, and we look forward to substantive fact-finding about what happened at FTX. I am certain that factfinding will show that SBF has not, in fact, been candid in his discussions. He committed fraud, full stop,” commented Lawyer Jake Chervinsky.

And then Bankman-Fried himself humiliated Waters by publicly shunning her offer to testify, telling Waters he wasn’t sure if he’d be able to testify on December 13th. 

“Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain,” he wrote to her on Twitter. 

Rep. Waters, and the House Committee on Financial Services:

Once I have finished learning and reviewing what happened, I would feel like it was my duty to appear before the committee and explain.

I’m not sure that will happen by the 13th. But when it does, I will testify. https://t.co/c0P8yKlyQt

— SBF (@SBF_FTX) December 4, 2022

And to think, SBF dodging the question of an appearance before the House on December 13 came even after Waters blew Bankman-Fried a kiss…

CAUGHT: Maxine Waters appears to blow a kiss at FTX’s chief fraudster Sam Bankman-Fried at a Congressional hearing while the cameras were still rolling

She’s the one who’s supposed to grill SBF next month?

pic.twitter.com/qxWXuNsyuK

— Benny Johnson (@bennyjohnson) November 18, 2022

We guess the ole’ Willie Brown treatment doesn’t quite work with the charm it used to. Maybe Maxine can have Kamala Harris stand in for her next time. 

By Alex Kimani of OilPrice.com

Russian crude-oil exports have taken a serious hit since new sanctions and a price cap came into force earlier in the week, with the Wall Street Journal reporting that figures from two data providers on Russian crude both show a big fall, though their magnitudes differ. 

According to one commodity-analytics firm Kpler, Russia’s seaborne exports fell by nearly 500,000 barrels per day on Tuesday, a 16% decline from the November average of 3.08 million bpd. 

Meanwhile, TankerTrackers.com, which tracks sea vessels using signals and satellite images, has reported that Russia’s crude exports fell by nearly 50%. With shipments from the Black Sea and Baltic ports accounting for most of the fall.

According to Samir Madani, cofounder of TankerTrackers.com, this is a notable drop rather than a blip, “Russian exports have been moving steadily up until now. The two biggest visible snags are in the Black and Baltic seas. Pacific and Arctic regions remain unaffected, at least for now”.

Analysts at StanChart have predicted that Russia’s crude production is set to fall sharply in the coming year, noting that the key unknown is whether Russia can transport oil to its major consumers (including providing adequate insurance) without using EU or other G7 services. 

According to StanChart, Russia has acquired a large enough ‘shadow’ tanker fleet since its invasion of Ukraine that it can use to move most of the displaced volumes; however, the analysts note that the insurance aspect is likely to cause significant issues. This situation leads analysts to predict that Russian crude output is likely to fall by 1.44 million barrels per day in 2023 thanks to a progressive shortage of high-quality equipment and a lack of access to international service companies.

At the same time, we are seeing a traffic jam of more than a dozen oil tankers stuck in the Turkish Straits thanks to a dispute between maritime insurers and the local authorities due to the new sanctions and price cap.

One month ago, we sparked a frenzy across precious metals circles when we reported that a “mystery” buyer had bought some 300 tons of gold, roughly three quarters of what would be a record 399 tons of central bank gold purchases in the third quarter.

While regular readers already know the details (which we laid out here), here again is the bigger picture: Central banks bought a net 399.3 tonnes of gold in the July-September period, more than quadrupling on the year, according to the November report by the World Gold Council. The latest amount marks a steep jump from 186 tonnes in the preceding quarter and 87.7 tonnes in the first quarter, while the year-to-date total alone surpasses any full year since 1967.

Buyers such as the central banks of Turkey, Uzbekistan and India reported purchases of 31.2 tonnes, 26.1 tonnes and 17.5 tonnes, respectively. The problem, as we calculated at the start of November, is that those amounts only add up to roughly 90 tonnes – “meaning it is unclear who bought the remaining roughly 300 tonnes net.”

And while we clearly had one name as the most likely suspect behind the residual buying, it wasn’t until a report two weeks later by Japan’s Nikkei that said name emerged front and center.

According to the Nikkei, which paraphrased verbatim what we had previously said, with central banks snapping up gold this year amid uncertainty which ones are behind most of that shopping spree, “speculation emerged that China is a big player.” And citing analysts, the Nikkei then goes on to suggest that seeing how Russia has been hit by monetary sanctions by the West, “China and some other countries must be hurrying to reduce dependence on the dollar.“

“Seeing how Russia’s overseas assets were frozen after its invasion of Ukraine, anti-Western countries are eager to accumulate gold holdings on hand,” said Emin Yurumazu, a Japan-based economist from Turkey.

Those familiar with China’s gold buying patterns are all too aware that Beijing has made similar moves in the past. After keeping radio-silent since 2009, Beijing shocked the market in 2015 when it disclosed it had boosted gold holdings by about 600 tonnes. It has not reported any activity since September 2019.

“China likely bought a substantial amount of gold from Russia,” added market analyst Itsuo Toshima. According to Toshima, the People’s Bank of China likely bought a portion of the Central Bank of the Russian Federation’s gold holdings of over 2,000 tonnes.

* * *

Fast forward to today when while we still don’t know if Russia sold some of its gold to China – all we know is that Russia did sell some gold in recent months after its holdings hit a record in 2020…

… what we do know for a fact is that China was indeed loading up on gold.

We know this, because overnight the PBOC officially reported an increase in its gold reserves for the first time in more than three years, confirming that the world’s most populous country was indeed the mystery buyer in the bullion market.

In keeping with a time-honored practice of masking its purchases for years (the “dormant” period between 2009 and 2015 when China did not reveal any purchases, and then suddenly reported a 57% jump in reserves being the most famous) and then only gradually letting on how much it had purchased, on Wednesday the Chinese central bank raised its holdings by 32 tons in November from the month before and really from the last official update in Sept 2019, according to data on its website.

That brought its total to 1,980 tons (or 63.67m fine troy ounces) the sixth-biggest central bank bullion hoard in the world, but similar to previous disclosures it is likely that China has purchased far more in the past three years but will only reveal just how much in coming months. That said, China has a long way to go for its gold holdings to catch up to the US (which may or may not have the gold it represents), and even if combined with Russia’s holdings, the two countries would still not be the world’s largest gold holder.

Why now? Well, as Bloomberg reports, echoing Nikkei above, “for China, the need to find an alternative to dollars, which dominate its reserves, has rarely been greater.” Tensions with the US have been high since measures taken against its semiconductor firms, while Russia’s invasion of Ukraine has demonstrated Washington’s willingness to sanction central bank reserves. In other words, now that the US has shown it is ready to weaponize the dollar, any USD reserves held by the Fed, Western banks or any other counterparty, could and will be promptly confiscated if China does something unpalatable… like invading Taiwan. Which is why China is desperately seeking money without counterparty risk. Here it has just two choices: crypto or gold. For now, it has picked the latter.

Others echoed this dedollarization thesis which we have been pushing for years: according to UBS analyst Giovanni Staunovo, the PBOC’s purchases may be part of a plan to diversify its reserves away from the dollar: “Gold holdings in China as part of the total reserves are still very low, so there is probably room for further purchases down the road.”

As regular readers are well aware, China has previously gone long periods without disclosing changes in its gold holdings. When the central bank announced a 57% jump in reserves to 53.3 million ounces in mid-2015, it was the first update in six years. It took another breather from the end of October 2016, before resuming reporting purchases in December 2018.

While central bank buying rarely drives sustainable gold rallies, it can provide an important pillar of support when prices fall. The precious metal has been under pressure this year from the Federal Reserve’s aggressive monetary tightening, though it has held up relatively well against moves in the dollar and Treasury yields.

“As deglobalisation accelerates, the non-G-10 nations are expected to ‘re-commoditize’ and ramp up gold holdings,” said Nicky Shiels, head of strategy at MKS PAMP SA.

Meanwhile, as Zoltan Pozsar wrote yesterday in a must-read note, the role of gold may be changing as first Russia, then other countries (China) seek to force out the petrodollar and replace it with petrogold, a move which would finally lead to substantial price upside for the yellow metal which has gone nowhere in the past 2 years.

Gold rose to $1,782 an ounce by 12:30pm ET. Bullion had a shortlived rally back above $1,800 on Friday, and is down about 3% this year.

Oh, sweet irony, how you consistently amuse us…

Today’s episode of ‘consequences are best served cold’ comes from Democratic Rep. Ritchie Torres of New York, who according the Daily Caller received $40,300 from Sam Bankman-Fried, ex-CEO of FTX, and his brother, Gabriel Bankman-Fried.

Now, Torres is calling for an investigation of the U.S. Securities and Exchange Commission (SEC) for “failing to properly regulate the crypto exchange.” He has written a letter to the Government Accountability Office requesting the probe.

But just months ago, he was one of 8 members of congress to sign a letter calling into question the SEC’s authority to request disclosure of information by crypto companies. 

Gabriel Bankman-Fried had donated more than $31,000 to Torres For Congress, Torres Victory Fund and the Torres-affiliated La Bamba PAC just two weeks prior, the report says. 

Torres responded to the Washington Examiner earlier this month, telling the paper that he donated the cash he received from Bankman-Fried “to a local charity to assist with holiday food distributions to families in need.”

Prior to the March letter, the SEC was asking several crypto exchanges for more information about how they were managing customers deposits – information that could have obviously unearthed issues at FTX long before its blowup. 

NEW this morning — Rep. @RitchieTorres (D-NY) calls on the Government Accountability Office (@USGAO) to investigate the SEC’s “failure to protect the investing public from the egregious mismanagement and malfeasance of @FTX_Official” pic.twitter.com/BdT7ZVCM7X

— Alexander Grieve (@AlexanderGrieve) December 7, 2022

Now that FTX has made a complete fool out of Torres and other Democrats that it donated money to, Torres’ tone has changed significantly. 

“The SEC chose to dedicate scarce time and resources to investigating Kim Kardashian, rather than opaque crypto exchanges, leaving many to question whether the commission is operating efficiently and apolitically and whether it has its priorities in the right place,” he wrote in his letter. 

“If the SEC had done the due diligence of thoroughly investigating the financials of FTX, there would have been a greater likelihood of exposing the crypto exchange for what it truly is: a house of cars [sic] built on monopoly money printed out of thin air.”

Yeah, if only certain members of Congress weren’t questioning the SEC’s ability to “do the due diligence” in the first place…unreal.

The House Ethics Committee is investigating Rep. Alexandria Ocasio-Cortez (D-NY), according to a Wednesday press release.

“Pursuant to House Rule XI, clause 3(b)(8)(A), and Committee Rules 17A(b)(1)(A), 17A(c)(1), and 17A(j), the Acting Chairwoman and Acting Ranking Member of the Committee on Ethics have jointly decided to extend the matter regarding Representative Alexandria Ocasio-Cortez, which was transmitted to the Committee by the Office of Congressional Ethics on June 23, 2022,” reads the statement.

It is unclear what she is being investigated for, though the Daily Caller notes that shortly after she took office, conservative groups filed complaints alleging AOC had misused congressional resources – and that she has come under fire for her involvement with the Justice Democrats Super PAC.

BREAKING: The House Ethics Committee has opened an investigation into Rep. Alexandria Ocasio-Cortez pic.twitter.com/fccV52bPZz

— Katelyn Caralle (@Katelyn_Caralle) December 7, 2022

Authored by Ethel Fenig via AmericanThinker.com,

Today’s Japan has an aging population which is slowly declining, but 81 years ago, it was a powerful imperialist island nation. So powerful, so imperialistic, that on December 7, 1941 Japan launched an attack against the greatest nation on earth, and bombed Hawaii’s Pearl Harbor.

As morning colors were readied and sailors and civilians ate breakfast, the Japanese planes struck. In fifteen minutes, the main battle line of the Pacific fleet was neutralized. The active battleships USS California, USS Oklahoma, USS West Virginia, USS Nevada, and USS Arizona were sunk, as well as the old USS Utah, which was then being used as a target and antiaircraft training vessel. The battleships USS Maryland, USS Tennessee, and USS Pennsylvania were damaged.

Initially, the American response to the attack was sporadic, but within five minutes American vessels began to fire back in earnest against the attackers. Relayed to the fleet was this message, “Air raid Pearl Harbor, this is no drill!”

The assault of the first wave ended about 8:45 a.m. There was a momentary lull before the second wave of Japanese planes arrived at 8:50 a.m. No torpedo planes came with the second group of dive and high-altitude bombers.

As the second wave withdrew, Mitsuo Fuchida, the military pilot who led the first wave, circled Pearl Harbor and assessed the damage. Satisfied, he took a last look and signaled to his pilots to return to the Japanese carrier. The main objective of the attack —  demobilizing the Pacific Fleet — had been accomplished. More than 2,400 Americans were killed and 1,104 wounded. Twenty-one ships of the Pacific Fleet were sunk or damaged, and 75 percent of the planes at the local airfields were damaged or destroyed. The next day the U.S. declared war on Japan; just days after that, Germany too became an official enemy, marking the American entry into what turned out to be World War ll.

Bob Batterson, a 101-year-old Pearl Harbor survivor, relayed the horror of the 90-minute surprise attack – as reported yesterday at a local news outlet:

At first Batterson and his roommates thought the warning siren and loud noise was a drill, but he soon realized instead, it was a massacre.

‘It’s just a feeling of helplessness,’ remembered Batterson.

Still, he remembers the unbelievable sights of carnage and tragic sounds of fellow sailors trapped inside the belly of battleships.

‘They lived in that hell for three days,’ said Batterson.

Now, 81 years later, Batterson has some sound advice for his fellow Americans, and considers Pearl Harbor a teachable moment to never let our collective guard down, “To remind us that we’ve got to remain alert. We have got to get involved[.]”

In Batterson’s eyes, that future depends on whether we learn from all the lives lost on that “date which will live in infamy” or be vulnerable to yet another dark day for America. Additionally:

‘This is a good way to make sure that we remember those guys – we don’t forget,’ said Batterson.

‘They died for us, and we’ve got to protect this country as best we can.’

They died so others may live! Nearly four years later, in the wake of the atomic bombing of Hiroshima and Nagasaki, the Japanese finally surrendered. But the cost of American lives was immeasurable. So, as you go about your day, remember, and say some words of gratitude to those who secured our freedom.

We are walking 50 miles from Kaneohe to Pearl Harbor to honor the 81st anniversary of the attack on #PearlHarbor, and our brothers and sisters who have paid the ultimate price. We honor all who serve & sacrifice to defend the safety, security and freedom of the American people. pic.twitter.com/Tq35dvsBMv

— Tulsi Gabbard 🌺 (@TulsiGabbard) December 7, 2022

The last few days been very interesting.

Coming into this week, SpotGamma expected that markets would grind ahead into next weeks key data points, starting with 12/13 CPI.

This view was driven by the fact that short dated volatility sellers should come into a positive gamma environment, taking advantage of the blackout in data-driven volatility triggers.

However, it seems like some flows were unlocked on Monday morning, and the options market was not anticipating or signaling the risks or size.

You can see this in the chart below wherein we plotted ES futures against the 2 year yield & crude oil futures. You can see there are synchronized moves in these assets around data from last week, but then there is this move that occurs early on Monday morning – before the 10AM ISM print.

Based on SpotGamma‘s metrics for identifying options hedging flows and positioning, the driver(s) of these recent selling flows in stocks are non-obvious, but appear large and smell like coordinated stock liquidations.

We’d note here that while we have no first hand knowledge, there are whispers around of tax loss selling, and funds unwinding energy positions.

Aside from Jay Powell’s apparently ‘dovish’ address which sent stocks exploding higher on a short-squeeze, the last two weeks have seen almost constant selling pressure during the day-session for stocks, and relative calm during the overnight session.

To us, something along these lines makes sense.

One of our first institutional roles was on a program trading desk.

This role was to implement large “programs” which are trading giant baskets of stocks.

For example – some pension fund will come in and need to sell $100mm of the S&P500 basket.

You don’t sell futures here, you actually spread out the $100mm over all stocks in the S&P500.

With big orders you cannot simply hit “market sell” because you move the market too sharply.

So, you the order into an algorithm like a VWAP.

The algo starts selling at 9:30 AM, and stops at the close.

And, for really large orders, you may spread it out over a few days.

This smells an awful lot like cash stock sales, and also syncs with the idea that the options market wasn’t privy to the catalyst.

In fact in the last month or so, the S&P has lost around 40 points during the open-to-close day-session (and that includes the 123 point surge after Jay Powell spoke ‘dovishly’) while the close-to-open night session has gained 70 points…

Nevertheless, there is hope for short-term bulls, as the upside here is that we believe that the options flows have been fairly positive over the last few days.

HIRO is not reflecting large put buyers – but some call buying. We did see some longer dated put positions added (and the VIX up a bit), the options flows generally don’t speak of major fear/protection.

In other words – we don’t see the options market as currently inducing volatility.

We think that if there was an options induced negative feedback look we’d get more “bounce” or mean reversion after larger drawdowns.

Instead, futures just drop and stick as shown above.

The S&P is stuck for now at its 100-day moving-average…

However, below 3900 Put Wall support, we think that volatility changes materially.

Update 2 (2:30pmET): This should answer our question whose side the local military/policy is.

• *PERU POLICE DETAIN PRESIDENT PEDRO CASTILLO: COMERCIO

* * *

Update (1:50pmET):

• *PERU CONGRESS APPROVES IMPEACHING PRESIDENT PEDRO CASTILLO
• PERU’S VICE PRESIDENT REJECTS ON TWITTER CASTILLO’S DECISION TO “PERPETRATE THE BREAKDOWN OF THE CONSTITUTIONAL ORDER WITH THE CLOSURE OF CONGRESS”

* * *

It turns out the US is not the only banana republic out there: moments ago, Peru President Pedro Castillo announced the dissolution of congress and called for legislative elections to draft a new constitution hours before an impeachment debate, greatly escalating a political crisis and putting the Latin American nation’s democracy under threat.

“We took the decision of establishing a government of exception toward reestablishing the rule of law and democracy,” Castillo said in a televised speech Wednesday, adding that the incoming congress will draft a new constitution within nine months. “From today and until the new congress is established, we will govern through decrees.”

Castillo’s move was met with nationwide protests and outrage by the Peruvian constitutional court which called the dissolution of Congress a coup, and said that Castillo is no longer president. Meanwhile, the Congress – which apparently did not get the memo that it has been dissolved – started the Castillo impeachment session early, and will most likely vote to remove the president.

Additionally, the Peruvian vice president Boluarte rejected Castillo’s “coup” while the country’s Attorney General said he would file a criminal complaint against Castillo.

Meanwhile Castillo also announced a curfew and the “reorganization” of Peru’s justice system including the top courts at the same time he pledged to respect private property and business freedom. The president also said all illegal arms in possession of Peruvians must be handed back to the police within 72 hours.

Castillo’s unexpected move comes as congress was preparing to discuss a third impeachment attempt against him after failing to remove him from power twice. The president has had a rocky relationship with lawmakers since the start of his administration in July 2021 yet the measure risks creating a backlash as it’s legality will be questioned. A sign of that came quickly after Castillo’s speech, when Finance Minister Kurt Burneo, Foreign Minister Cesar Landa, and Justice Minister Felix Chero presented their resignations.

The move brought back memories of the decision by former leader Alberto Fujimori in 1992 to dissolve congress. At that time, he was supported by his ministers and the military.

And just like then, what will matter at the end of the day is who controls the army.

Sure enough, as Rodolfo Rojas, a partner at Lima-based Sequoia political advisory group said, “the army’s attitude toward this will be decisive over the next hours. If they back Castillo, he could stay in power temporarily, but if not, he’s going to fall.”

What determines whom the army will back? Why money of course: the one who hands over more of it, will be left in charge after this.

Peru’s sol tumbled as much 1.7% against the dollar after the announcement, the biggest intraday decline since July last year. Dollar-denominated bonds were among the worst in emerging markets, with the nation’s century bond sliding 1.3 cents to 60 cents on the dollar after the news. Peru’s benchmark stock index dropping 2.4% to the lowest in over a month.

For those wondering, the US is not on the side of Castillo, despite his eagerness to confiscate all domestic weapons. Brian Nichols, the US Assistant Secretary of State for Western Hemisphere Affairs, said that the US “categorically” rejects any acts by Castillo to prevent Congress from carrying out its mandate.

“We strongly urge President Castillo to reverse his attempt to close Congress and allow Peru’s democratic institutions to function as outlined in Peru’s constitution,” Nichols, the top diplomat focused on Latin America, said in a statement. “This dissolution is completely illegal,” Andrea Moncada, a political analyst, said.

Former President Ollanta Humala said Castillo’s announcement was akin to that of a dictator and that he should be detained. He called on the Armed Forces to stand on the right side of the constitution.

“What should happen is that Castillo should be detained since he’s gone outside the law,” Humala told RPP Noticias. “This decision should have been supported by the cabinet of ministers, those who haven’t resigned yet are in the same situation as Castillo.”

Via SchiffGold.com,

Beyond allegations of mismanagement and outright fraud, the collapse of the FTX cryptocurrency exchange reveals a more fundamental problem — the power of speculative manias fueled by central-bank easy money.

Peter Schiff recently appeared on NTD Capital Report to talk about the collapse of FTX, saying ultimately it was the Federal Reserve’s fault. And it is a warning sign for the broader economy.

When FTX filed for bankruptcy, it sent shockwaves through the crypto world. As Mises Institute senior editor Ryan McMaken put it, “FTX’s collapse has exposed just how little due diligence is actually taking place among investors who are apparently willing to put large amounts of cash in whatever place looks like the hottest new thing and promises—without convincing evidence—big-time returns.”

Peter said he wished he had taken a deeper look into Sam Bankman-Fried earlier because he thinks he would have been able to ferret out the fraud pretty quickly. Peter pointed out that he called out Alex Mashinsky (CEO of the crypto lending and staking platform Celcius) for running a Ponzi scheme in a debate. Celcius filed for bankruptcy back in July. SchiffGold analyst Tony called Celcius the “canary in the coal mine” and said FTX was the coal mine — and it just collapsed.

Peter pointed out that Celcius was paying yield on cryptocurrency, as was FTX.

How could you do that? Cryptos don’t generate yield. The only way to generate yield is to take tremendous risk, which is exactly what [Mashinsky] did, except the people who were depositing their crypto didn’t appreciate the risk that was being taken. Of course, they were taking a lot of risks themselves just owning crypto because all of these currencies are basically worthless. They’re not even really currencies. They’re collectible tokens. But pretty soon, nobody is going to want a bitcoin collection, or any of these collections, and the prices are going to implode.”

Some people have expressed sympathy for Bankman-Fried, saying his naivete got him in trouble, and that he wasn’t intentionally trying to defraud people. Peter said he doesn’t know whether Bankman-Fried’s actions were criminal or just the result of gross incompetence and negligence.

But you would think some of these hedge fund managers who invested with him would have done a little bit of due diligence. But this just shows you the way investors will act when they’re drunk on cheap money. So, I would blame the Federal Reserve for a lot of people acting as foolishly as they did. Because maybe he was a kid, but there were a lot of grownups who were giving him money.”

McMaken wrote that the FTX collapse was a canary in the coal mine for the broader economy and that it could foreshadow the fate of other segments in the economy that have been pumped up by the easy money policies of the Federal Reserve over the last decade-plus.

Peter also talked about the overall state of the US economy during his interview, calling it “an absolute disaster.”

Thanks to Fed policy over the last decade or so, we have a gigantic bubble. We never had a real recovery. We just had a financial bubble. And we dug ourselves into a much deeper hole than the one the Fed put us in back in 2008 following the financial crisis that they also created with the same type of monetary policy that is creating the crisis that we are heading for, which is going to be far worse than what we experienced in 2008. Not only is inflation going to get much worse than it already is, but we’re going to have a worse financial crisis than the one we had in 2008. This is going to be the worst recession that the US has ever experienced. It may even be worse than the Great Depression. It will certainly feel worse for most people because in the Depression, people at least got the relief of falling prices. This time, consumers are going to feel the sting of dramatically higher prices.”

So why did we have solid GDP growth in the third quarter? Peter said it was just a function of the big improvement in the trade deficit. While the trade deficit was still huge, it wasn’t as big as it was in the previous quarters.

That was thanks to two factors. One – the strong dollar, which is now reversing. The dollar just had its worse month in 12 years. … So, that’s going to push the trade deficit up. In fact, the trade deficit in November swelled by 10%. It was a huge jump. But the other factor that helped bring down the trade deficit was all the oil that Biden released from the Strategic Petroleum Reserve. Oil companies were able to buy that oil and then export it, and so, that artificially boosted our exports, which improved GDP. But pretty soon, we’re going to run out of the oil in this strategic reserve. There won’t be a reserve left, so we won’t be able to rely on that crutch.”

Peter pointed out that the economic data that came out last week was horrific.

I think we’re going to have a big negative number for Q4 GDP. So, we’re going to end the year on a low note. And I think we’re going to have another negative quarter in Q1 of 2023.”

The host asked Peter what he thought about the big jump in retail sales. Doesn’t that bode well for the economy?

Peter said they’re not really up.

Prices are up. So, if you factor in inflation, retail sales are down.”

Authored by Caden Pearson via The Epoch Times,

A federal judge in Washington dismissed a lawsuit against Saudi Crown Prince Mohammed bin Salman on Tuesday for the 2018 murder of Washington Post columnist Jamal Khashoggi, citing President Joe Biden’s grant of immunity.

U.S. District Judge John Bates decided to defer to the Biden administration’s mid-November decision to grant immunity to the Saudi crown prince, despite his hesitation.

According to Bates, any other option would “unduly interfere” with the executive branch’s power to make foreign policy.

“Despite the Court’s uneasiness, then, with both the circumstances of bin Salman’s appointment and the credible allegations of his involvement in Khashoggi’s murder, the United States has informed the Court that he is immune, and bin Salman is therefore ‘entitled to head of state immunity … while he remains in office,’” Bates wrote in his 25-page ruling (pdf).

Bates was referring to the fact that Saudi King Salman bin Abdulaziz Al Saud only officially designated the crown prince as prime minister in September, four years after Khashoggi’s murder and after the lawsuit against the crown prince was filed.

A picture of slain Saudi journalist Jamal Kashoggi is displayed during a ceremony near the Saudi Arabia consulate in Istanbul on Oct. 2, 2019. (Lefteris Pitarakis/AP)

Plaintiff Considering ‘All Options’

Khashoggi’s widow Hatice Cengiz and Democracy for the Arab World Now (DAWN), an advocacy organization founded by Khashoggi, filed the legal action against the Saudi crown prince and other defendants in 2020.

“While we are disappointed in the decision, we will consider all options to continue our legal challenges to MBS’s criminal behavior,” DAWN Executive Director Sarah Leah Whitson said in a statement referring to the crown prince by his initials.

DAWN noted that the Saudi king’s royal decree appointed bin Salman prime minister six days before the Oct. 3 deadline for the Biden administration to intervene in the lawsuit, characterizing it as “a last ditch effort to escape the jurisdiction of the court.”

The organization also disputed the court’s ruling to dismiss DAWN’s case against two other defendants, Saud al-Qahtani and Ahmed al-Assiri, on jurisdictional grounds.

U.S. intelligence officials believe Khashoggi was tortured, killed, and dismembered at the Saudi consulate in Instanbul on Oct. 2, 2018, at the order of the crown prince, who has been the kingdom’s de facto ruler for several years.

Khashoggi had attended the consulate to obtain the papers required to wed Cengiz, a Turkish national. She waited outside the consulate for more than 12 hours “in a desperate and tormented state” for her fiance to return, the judge noted.

Although the prince has denied ordering Khashoggi’s murder, he later admitted that it happened “under my watch.”

Hatice Cengiz, fiancee of the murdered Saudi journalist Jamal Khashoggi, talks to Reuters outside Justice Palace, the Caglayan Courthouse, after attending a trial on the killing of Khashoggi at the Saudi Arabian Consulate, in Istanbul, on April 7, 2022. (Murad Sezer/Reuters)

Unduly Interfering

Bates noted in his ruling that the judicial branch believes it appropriate to defer to the executive branch’s foreign immunity determinations “when the conduct of foreign affairs is involved.”

“As the branch of government primarily responsible for international affairs and diplomacy, the Executive Branch may be hindered or embarrassed should the judiciary second-guess its foreign immunity decisions,” Bates wrote.

According to Bates, it is well-established in the “chess game that is diplomacy” that “judicial interference” is not advisable in such a situation where the executive branch may grant immunity “as a bargaining counter in complex diplomatic negotiations” and where denials could “preclude a significant diplomatic advance.”

“These considerations are no less present when the circumstances of a head of state’s appointment are suspect: the Executive Branch remains responsible for foreign affairs, including with Saudi Arabia, and a contrary decision on bin Salman’s immunity by this Court would unduly interfere with those responsibilities all the same,” Bates wrote.

“If the immunity determination was in front of the Court without input from the Executive Branch, the Court certainly would consider plaintiffs’ arguments about whether, as a substantive matter, bin Salman was entitled to head-of-state immunity,” the judge added.

“But because the United States has determined that bin Salman is so entitled, ‘the doctrine of the separation of powers under our Constitution requires us to assume that all pertinent considerations have been taken into account by the [Executive Branch] in reaching [its] conclusion.’”

Bates, therefore, dismissed the claims against bin Salman based on head-of-state immunity.