Authored by Matt Bivens, M.D. via Racket News,

Editor’s note: the following is the first essay in a series, written by former Moscow Times co-worker and current E.R. doctor Matt Bivens. The remaining features will be published serially on his Substack site, The 100 Days. None of the articles in the series will be paywalled. In a normal presidential election year, the opiate addiction crisis would be a front-and-center domestic issue, but for a variety of mostly illegitimate reasons, it flies somewhat under the radar. Matt’s series chronicles the surprising and little-understood reasons contributing to this man-made, rapidly worsening disaster.

Yes, we in the medical profession got millions of Americans addicted to heroin and fentanyl. But that was all just a big misunderstanding. Why get into it?

And sure, nearly one in ten adults has had a family member die from a drug overdose. Ordinary people are furious about it, too. Their under-appreciated rage drove skepticism of official COVID-19 narratives, and that same rage might sway the outcome of the Presidential election — heck, might even land us in a war with Mexico! (Wouldn’t that be the ultimate “Wag the Dog”-level distraction from those sociopaths upstairs in our House of Medicine!)

So, yes, agreed. All good points. 

We medical people who see the patients and do all of the work — we, the house staff — we’re downstairs people. We can’t do anything about what goes on above. Agreed, it’s shameful how easily the upstairs sociopaths conned us, and it’s annoying to see them now so fabulously rich. But doctors being intentionally manipulated into destroying the lives of millions — that could have happened to anyone. Why stay angry about it? Ancient history! It’s not like it’s still happening, right? (Right?)

Surely you don’t want to burn down the entire house? We work here. And the pay is not bad. Let’s just focus on the patients before us, and try to stay positive. Right?

Heroin™ — brought to you by Bayer!

As a medical student, I was once told by my attending physician that people treated with morphine for pain don’t get addicted.

Surprised, I asked, “But what about all the Civil War veterans?”

When the U.S. Civil War ended in 1865, both sides demobilized a weary horde of chronically ill and wounded. Some soldiers had contracted tuberculosis, or a lingering pneumonia (in the days before antibiotics). Others had suffered field amputations with handheld saws. But whether the question was chronic coughing or terrible pain, the answer was morphine. The newly invented hypodermic needle allowed for fast-acting injections. Veterans everywhere got hooked, to the point where addiction was called “the Soldier’s Disease.” Soon morphine moved beyond the battlefield and was in use for everything from menstrual cramps to teething.

Things got so bad that when heroin (diacetylmorphine) arrived, it was welcomed as an improvement. Chemists had discovered it decades earlier, but in 1898 the pharmaceutical company Bayer started selling it as Heroisch, German for “heroic.” 

Heroin was a trade name. It was Heroin™ — brought to you by Bayer! 

Doctors desperate for something safer than morphine often convinced themselves this new drug wasn’t addictive.

“Heroin… possesses many advantages over morphine,” wrote a physician in 1900, in the precursor to the New England Journal of Medicine. “It is not a hypnotic… [and there is no] danger of acquiring the habit.” The philanthropic St. James Society even mounted a campaign to mail free heroin samples to morphine addicts (!), to help them break the habit.

Other doctors saw the public swilling down heroin and berated their fellow physicians for not sounding the alarm.

“The patient comes to look on heroin as a harmless sedative for his cough,” wrote one such physician in 1912, in the Journal of the American Medical Association, because too many doctors think it’s safe: 

“A patient who came under my observation told a physician, who was called to treat him for an attack of laryngitis, not to give him anything that contained opium, because he had formerly been a slave to this drug. The physician replied: ‘I will give you some heroin; there is no danger of habit from that’.”

Ordinary Americans weren’t buying it, and by 1906 we had established the federal Food & Drug Administration, because moms want to know if it’s got heroin. Cure-alls like the morphine-and-alcohol-based Mrs. Winslow’s Soothing Syrup definitely did quiet fussy babies, but it’s believed thousands never woke up again. 

President Teddy Roosevelt appointed an “Opium Commissioner,” who looked around and saw track marks on the arms of everyone from aging Army of the Potomac vets to high society ladies, and declared, “Americans have become the greatest drug fiends in the world.” It was our first Opioid Crisis. It had been driven by genuine ignorance and a lack of good alternatives — but tellingly, also by the inappropriate use of heavily marketed and physician-endorsed treatments. In response, the nation went on a scorched-earth campaign against all addictive substances, starting with new anti-narcotics agencies staffed by G-men in trench coats, and culminating in the U.S. Constitutional amendment to ban alcohol. Again: We rewrote the Constitution to outlaw alcohol. That we once went so far suggests how bad things had gotten.

This all seems like a glaringly obvious cautionary tale for the House of Medicine. Yet somehow, not 70 years after the nation had walked away from the Prohibition experiment, medical schools — medical schools! — were abruptly teaching that opioids weren’t necessarily addictive.

When my attending said a patient wouldn’t get addicted if a doctor gave morphine for pain, he was simply channeling what all the best people were saying. For example, in 2000, the Joint Commission — an independent non-profit that sets accreditation standards for hospitals — published a book for physician education that claimed: 

There is no evidence that addiction is a significant issue when persons are given opioids for pain control.

No evidence. And if the medical students ask about morphine-enslaved Civil War veterans? The Joint Commission’s book dismisses such concerns as “inaccurate and exaggerated.” 

It was the same over at the Federation of State Medical Boards — a trade organization for the bodies in each state that license, investigate and discipline doctors. A set of FSMB guidelines from this era sternly stated that opioids are “essential” for treating various kinds of pain, and only mentioned addiction to warn that “inadequate understandings” of that could lead to “inadequate pain control.”

I was literally told by my attending — who was just echoing those who accredit the hospitals and license the doctors — to “do more reading.” That’s a common directive to a medical student: Stop with the skeptical questions and go study.

From 20,000 deaths a year, to 50,000, to now 80,000

At the turn of the century, about 20,000 people each year would take an opioid — as a pill, or as a snorted or injected powder — and then stop breathing and die. Those of us working on ambulances or in emergency departments could not save them.

But for every death, there are about 20 non-fatal overdoses. So, with bag mask ventilation and opioid reversal agents, we have dragged millions of people back to life. How many suffered anoxic brain injuries, and today are mentally a half-step slower? Unknown.

Overdoses at this scale were a new development, and they were occurring hand-in-hand with the aggressive new marketing and prescribing of opioids. This is the era chronicled so well by popular miniseries — “Dopesick” on Hulu, “Painkiller” on Netflix. In the midst of it, the Sackler family-owned Purdue Pharma pled guilty to a deception campaign meticulously designed to bring about recklessly liberal opioid prescribing. As punishment, the company had to shell out $600 million, and three top executives got multi-million-dollar fines and 400 hours of community service.

That should have been peak “Opioid Crisis.” But it was only 2007. Heck, George W. Bush was still president. The Sacklers were never contrite. They’d been raking in about $1 billion a year for more than a decade. The $600 million fine sounded impressive — but the Sacklers shrugged, cut the government in to the tune of less than 5% of the cash rolling in, and got right back to slinging opioids. And in the 17 years since, everything has gotten terribly worse.

Did it feel like a catastrophe back in 2007, when 20,000 people a year would die, and people were enraged at Purdue?

Or a decade later, in 2017, when President Donald Trump declared it a national emergency, and 50,000 people a year would die?

That’s nothing. For the past three years, we’ve reliably seen 80,000 people each year take an opioid, stop breathing and die. 

Opioid overdoses accelerated amidst the despair of COVID-19 lockdowns. These days, it’s completely routine for a private car to brake with screeching tires at our emergency department entrance, with the driver screaming about someone in the back seat who is floppy, gray, not breathing. The overhead announcement of “trigger to triage!” used to get nurses and techs running excitedly to the front door. Now, they respond at a walk — a briskly respectful walk, but it’s clear no one’s particularly excited. The novelty wore off long ago. 

The Olympics of Sociopathy

Back when Purdue Pharma had to pay $600 million, that was big news. Today, judgments are handed down left and right for billions, without much comment or public excitement, against everyone involved in making, distributing or selling opioids: $17.3 billion from CVS, Walmart and Walgreens, $5 billion from Johnson & Johnson, $21 billion from opioid distribution companies McKesson, Cardinal Health and AmerisourceBergen, $4.25 billion from Teva Pharmaceuticals, $2 billion from Allergan.

Meanwhile, an agreement to let the Sackler family skate while Purdue surrenders $6 billion and goes bankrupt is before the U.S. Supreme Court. (For context, Purdue has earned far more than $30 billion from opioids by now. Forbes estimates the Sacklers as individuals are worth more than $10 billion; attorneys general argue the family has hidden billions more abroad. The Sacklers have for years sold more opioids via Rhodes Pharmaceuticals, a Rhode Island-based company they quietly control, than via Purdue).

Pondering these massive new settlements, I remember thinking, “Walmart? Johnson & Johnson? Surely some innocents have been caught up in an indiscriminate dragnet?”

Wrong. Don’t look into this if you don’t want to know. Like competitive bicyclists, many had lined up to slipstream behind Purdue Pharma and its deranged, anti-social marketing of OxyContin®. Perhaps none of those other corporations would have dared try to convince physicians and nurse practitioners to hand out opioids like candy. But the Sacklers dared and met with success — instant success, shocking success, in perhaps the most shameful episode in the history of medicine. 

The other companies might have been surprised, but they all fell eagerly in line behind. Each of them drafted in the turbulent wake of Purdue opioid marketing — some just coasting and enjoying the free money, others so excited they would at times sprint out ahead to briefly take the lead in this Olympics of Sociopathy.

For example, it may have been the Sacklers who first decided to target returning veterans (who have good health insurance) as an opioid growth market — veterans, by the way, are three times more likely to overdose and die than other Americans.

But it took a Johnson & Johnson-backed organization, the “Imagine the Possibilities Pain Coalition”, to spitball in 2011 about targeting elementary school students. After all, third graders have pain, too! A PowerPoint presentation from this group noted we could start marketing opioids to kids “via respected channels, e.g., coaches.”

Johnson & Johnson also quietly funded the 2013 launch of “Growing Pains”, “a new social networking site for young people with pain”. This effort to market opioids to teenagers aged 13 and up was shut down only as of 2021.

From Oxy to Heroin to Fentanyl to … Buprenorphine?

Today nearly every 10th adult has lost a family member to an opioid. All major candidates for president have tapped into the anger — which, however, they have chosen to direct at Chinese and Mexican cartels. 

Florida Governor Ron DeSantis vowed if elected president to send U.S. special forces into Mexico (!) to take out fentanyl labs. Trump as president reportedly talked about shooting missiles into Mexico to destroy said labs. President Joe Biden has pledged to “stop [fentanyl] pills and powder at the border.”

So, the newly agreed-upon villains are foreigners. 

Did something change? 

Yes and no. It turns out the Opioid Crisis — that catchall term for this 25-year-long blizzard of addiction, overdose and death — has gone through different stages, much like how COVID-19 would cycle through variants, from Delta to Omicron. But while COVID quickly mellowed, the Opioid Crisis has just gotten nastier. 

The CDC identifies three waves: First came the prescription wave of the late 1990s and early 2000s, which launched the entire enterprise. Next came the heroin wave, which per the CDC roughly started in 2010, when the prescription-addicted turned to the streets. From about 2013 to today, we have been awash in synthetic opioids like fentanyl (heroin requires farming poppies, but fentanyl is cheaply made in labs).

But wait long enough, and Big Pharma always wins. Amoral, soulless corporations — often the same ones paying out massive settlements — have maneuvered skillfully to reassert control over the addiction market they’ve created. The goal now is to create a fourth and final wave of the Opioid Crisis: the buprenorphine wave. We will start as many people as possible on this ingenious opioid.

Buprenorphine, the main ingredient in brand names such as Suboxone® and Subutex®, is a so-called partial opioid agonist: It latches tightly onto opioid receptors but stimulates them only slightly — just enough for a person with physical addiction to not experience withdrawal. A person on appropriately dosed buprenorphine is not sedated or high, they just “feel normal.” (What’s more, even if they were to inject fentanyl, the opioid receptors are already locked down by the buprenorphine, which blocks other opioids from getting through.)

I can’t argue against expanded use of buprenorphine. The data clearly shows that it prevents death and disability. People really do get control of their lives again. Of course, it is also addictive. So, the plan we confidently propose is to treat opioid addiction with this admittedly ingenious and excellent medication, for a monthly price tag, depending on the formulation, ranging from $196 to $1,136… forever. 

What’s not to like? 

Big Pharma, Finally Unmasked

Medicine has wrought amazing breakthroughs, and we have professed high moral standards. But some of us aren’t above indulging in the same “Braindead Megaphone”-style pronouncements plaguing the rest of society: sternly shouting down even the meekest questions about pediatric gender reassignment therapies or vaccine mandates, for example. When it comes to the Opioid Crisis — this massive, deadly pandemic of addiction we’ve unleashed — we stroll past whistling and look guiltily away, then whirl back around, whip out the Braindead Megaphone, and loudly announce that we expect to be paid handsomely to provide additional addictive opioids to treat this same pandemic. We declare this with wide-eyed innocence, and get indignant if anyone questions this plan — even as internal corporate communications now available show Big Pharma corporations rubbing their hands gleefully at the thought of all of that buprenorphine cash.

That’s right: internal corporate communications — millions of pages — are now available. They can be searched online at the Opioid Industry Documents Archive, hosted by University of California San Francisco (UCSF).

I thought I knew a lot about the Opioid Crisis. After all, I’d been a reluctant front-line participant in it for 20 years, as a paramedic, a medical student and a physician.

Then the lawsuits arrived, and the Archive opened.

Next: A conspiracy to taint the medical literature

Matt Bivens, M.D.: Full-time ER doctor. Board-certified in emergency and addiction medicine. EMS medical director for 911 services. Former Russia-based foreign correspondent, newspaper editor and Chechnya war correspondent. Reluctant student of nuclear weapons.

This graphic, via Visual Capitalist’s Marcus Lu, ranks the top 10 countries by their rate of cryptocurrency ownership, which is the percentage of the population that owns crypto.

These figures come from crypto payment gateway, Triple-A, and are as of 2023.

Data and Highlights

The table below lists the rates of crypto ownership in the top 10 countries, as well as the number of people this amounts to.

Note that if we were to rank countries based on their actual number of crypto owners, India would rank first at 93 million people, China would rank second at 59 million people, and the U.S. would rank third at 52 million people.

The UAE Takes the Top Spot

The United Arab Emirates (UAE) boasts the highest rates of crypto ownership globally. The country’s government is considered to be very crypto friendly, as described in Henley & Partners’ Crypto Wealth Report 2023:

In the UAE, the Financial Services Regulatory Authority (FSRA-ADGM) was the first to provide rules and regulations regarding cryptocurrency purchasing and selling.

The Emirates are generally very open to new technologies and have proposed zero taxes for crypto owners and businesses.

Vietnam leads Southeast Asia

According to the Crypto Council for Innovation, cryptocurrency holdings in Vietnam are also untaxed, making them an attractive asset.

Another reason for Vietnam’s high rates of ownership could be its large unbanked population (people without access to financial services).

Cryptocurrencies may provide an alternative means of accessing these services without relying on traditional banks.

If you enjoyed this post, be sure to check out The World’s Largest Corporate Holders of Bitcoin, which ranks the top 12 publicly traded companies by their Bitcoin holdings.

Authored by Susan Crabtree via RealClearPolitics,

A group of leading China critics in Congress is urging the State Department to step up its efforts to curb Beijing’s gruesome $1 billion forced organ harvesting trade, which targets ethnic and religious minorities, including Uyghurs, Tibetans, Muslims, Christians, and Falun Gong practitioners. 

Six members of the Congressional-Executive Commission on China, or CECC, sent a letter last week to Secretary of State Antony Blinken asking him to utilize existing agency reward programs to provide monetary incentives for information that will “deter and disrupt the market for illegally procured organs” in China. Rep. Chris Smith, who chairs the CECC, and Sen. Marco Rubio, the commission’s ranking member, joined Democrat Rep. Jennifer Wexton of Virginia and GOP Reps. Michelle Steel of California, Zach Nunn of Iowa, and Ryan Zinke of Montana in signing the letter. 

The State Department manages two programs that offer awards of up to $25 million for information leading to the arrest and/or conviction of members of significant transnational criminal organizations. One focuses on violators of U.S. narcotics law, and another targets other crimes that threaten U.S. national interests, including human trafficking, wildlife trafficking, cybercrime, money laundering, and trafficking in arms and other illicit goods. 

“We strongly support the Department of State’s efforts to issue rewards for wildlife and narcotics trafficking in the [People’s Republic of China],” the lawmakers wrote. “However, given the global demand for organ transplants and the evidence of the illegal trafficking of organs in the PRC, there is a pressing need to uncover first-hand information from those who witnessed or engaged in the practice.” 

The State Department didn’t respond to a request for comment. 

Communist China has long harvested prisoners’ organs, even though the government in Beijing initially asserted that all their organ extractions were from voluntary donors. But as far back as 2005, the top transplant doctor in China, then serving as the nation’s vice minister of health, admitted that roughly 95% of all organ transplants came from prisoners.

In recent years, leading researchers have documented a reprehensible aspect of these life-ending extractions: Prisoners of conscience – religious minorities and political dissidents are the main victims. There’s now extensive evidence that Chinese surgeons first honed their murderous organ harvesting practices on practitioners of Falun Gong, a meditation and exercise movement. In recent years, the regime expanded its pool of victims to China’s imprisoned Uyghur population as part of its systematic oppression of the Muslim minority group. 

China has vehemently denied these claims, but in 2019, the China Tribunal, a non-governmental, independent commission in the U.K., concluded otherwise. The Tribunal investigated accusations of organ harvesting in China and found that some of the more than 1.5 million detainees in Chinese prison camps are being killed for their organs to serve a booming transplant trade worth an estimated $1 billion a year. The Tribunal also found that the Chinese organ trafficking industry is harvesting organs from executed prisoners and political prisoners at an industrial scale, actions that constitute crimes against humanity.

In response to the Tribunal’s findings, more than a dozen United Nations human rights experts said they were extremely alarmed by reports that organ harvesting was targeting “specific ethnic, linguistic or religious minorities, including Uyghurs, Tibetans, Muslims, and Christians” detained in China. The experts, who operate under United Nations mandates but do not speak on the international organization’s behalf, called on China to respond to the allegations of illegal organ harvesting promptly and to allow international human rights monitors into hospitals and other areas to monitor the country’s organ extraction practices. China has ignored those requests.

In 2022, the American Journal of Transplantation, the leading medical transplant publication in the world, published a peer-reviewed article that uncovered compelling evidence that Chinese surgeons are systematically removing organs from prisoners while they are still alive, providing on-demand supplies for China’s organ export industry. 

The practice violates the internationally accepted “dead-donor” rule that holds that organ procurement “must not commence until the donor is both dead and formally pronounced so.” 

“Forced organ harvesting is an atrocity, and the disruption and deterrence of this practice should be a priority of the State Department,” the group of lawmakers wrote. 

“Getting the PRC to account and fully address evidence of forced organ harvesting will be critical in ending this horrific practice and promoting, long term, the establishment of a truly voluntary organ donation system,” they continued. “With effective enforcement mechanisms, we can work towards ensuring organs are procured safely and ethically.”

Susan Crabtree is RealClearPolitics’ national political correspondent.

Yesterday we discussed the latest consumer credit data, which revealed that the amount of credit card debt across the US has hit a new record high of $1.337 trillion (even though it appears to have finally hit a brick wall, barely rising in April by the smallest amount since the covid crash), even as the savings rate has tumbled to an all time low.

To be sure, credit card debt is just a small portion (~6%) of the total household debt stack: as the next chart from the latest NY Fed consumer credit report shows, the bulk, or 70%, of US household debt is in the form of mortgages, followed by student loans, auto loans, credit card debt, home equity credit and various other forms. Altogether, the total is a massive $17.5 trillion in total household debt.

But staggering as the mountain of household debt may be, at least we know how huge the problem is; after all the data is public. What is far more dangerous – because we have no clue about its size – is what Bloomberg calls “Phantom Debt“, and we have repeatedly called Buy Now, Pay Later debt. How much of that kind of debt is out there is largely a guess.

Let’s back up: the topic of Buy Now, Pay Later, or installment debt, is hardly new: we have covered it extensively in the past year, as this selection of articles reveals:

• “Buy Now, Pay Later” Mania Sends Americans Deeper Into ‘Black Hole’ Of Debt: April 2023
• Consumers Use ‘Buy-Now, Pay-Later’ Option To Fund Record Black Friday Purchases: Nov, 2023
• BIS Reveals ‘Buy Now, Pay Later’ Use Is Soaring Among Working Poor Youngsters: Dec 2023
• Self-Checkout Kiosks At 4,500 Walmarts Now Offer ‘Buy Now, Pay Later’ Loans For Basic Items: Dec 2023
• Many Are Addicted To “Buy Now, Pay Later” Plans, It’s A Big Trap: Feb 2024

But while it is easy to ensnare young, incomeless Americans into the net of installment debt where they will rot as the next generation of debt slaves for the rest of their lives, there is an even more sinister side to this extremely popular form of debt which allows consumers to split purchases into smaller installments: as Bloomberg reports in a lengthy expose on installment debt, the major companies that provide these so called “pay in four” products, such as Affirm Holdings, Klarna Bank and Block’s Afterpay, don’t report those loans to credit agencies. That’s why Buy Now/Pay Later credit has earned a far more ominous nickname:

It’s hard enough for central bankers and Wall Street traders to make sense of the post-pandemic economy with the data available to them. At Wells Fargo & Co., senior economist Tim Quinlan is particularly spooked by the “phantom debt” that he can’t see.

Which is not to say that we have no idea how much “phantom debt” is out there: according to the report, it is projected to reach almost $700 billion globally by 2028, and yet, time and again, the companies that issue it have resisted calls for greater disclosure, even as the market has grown each year since at least 2020. That, as Bloomberg accurately warns, is masking a complete picture of the financial health of American households, which is crucial for everyone from global central banks to US regional lenders and multinational businesses.

In fact, the recent explosion in installment debt may explain why the US consumer remains so resilient even when most conventional economic metrics suggest consumers should be struggling: “Consumer spending in the world’s largest economy has been so resilient in the face of stubbornly high inflation that economists and traders have had to repeatedly rip up their forecasts for slowing growth and interest-rate cuts.”

Still, cracks are starting to form. First it was Americans falling behind on auto loans. Then credit-card delinquency rates reached the highest since at least 2012, with the share of debts 30, 60 and 90 days late all on the upswing.

And now, there are also signs that consumers are struggling to afford their BNPL debt, too. A recent survey conducted for Bloomberg News by Harris Poll found that 43% of those who owe money to BNPL services said they were behind on payments, while 28% said they were delinquent on other debt because of spending on the platforms.

For Quinlan, a major concern is that economic experts are being “lulled into complacency about where consumers are.”

“People need to be more awake to the risk of BNPL,” he said in an interview.

Well, those who care, are awake – we have written dozens of articles on the danger it poses; the problem is that those who are enabled by this latest mountain of debt – such as the Biden administration which can claim a victory for Bidenomics because the economy is so “strong”, phantom debt be damned – are actively motivated to ignore it.

So why is this latest debt bubble called a “phantom”?

Well, BNPL is a black box largely because of a longstanding blame game among BNPL providers and the three major credit bureaus: TransUnion, Experian and Equifax. The BNPL companies don’t provide data on their installment loans that are split into four payments, which were used by online shoppers to spend an estimated $19.2 billion in the first quarter, according to Adobe Analytics, up 12.3% compared with the same period last year.

The BNPL giants say credit agencies can’t handle their information — and that releasing it could harm customers’ credit scores, which are key to securing mortgages and other loans. The big three bureaus say they’re ready, while two of the major credit scoring firms, VantageScore Solutions and Fair Isaac Corp. (FICO), say they’re equipped to test how the products will affect their figures. Meanwhile, regulation is looming over the industry, but this stalemate has left the status quo mostly in place.

In other words, not only do we not know just how big the BNPL problem is, it is actively masked by credit agencies which can’t accurately calculate the FICO score of tens of millions of Americans, and as a result their credit capacity is artificially boosted with far more debt than they can handle… and that’s why the US consumer has been so “strong” in recent years, defying all conventional credit metrics.

The good news is that despite the tacit pushback of the administration, there has been some signs of progress. Apple earlier this year became the first major BNPL provider to furnish transaction and payment data to Experian. As of now, it provides a snapshot of consumers’ overall debt load from Apple Pay Later transactions, but the information won’t be used for consumer credit scores. In separate statements to Bloomberg, Klarna, Affirm and Block said they want assurance that consumers’ credit scores and their data would be protected before reporting customer information. Representatives for TransUnion, Experian and Equifax said they’ve updated their structures and the data would be secure.

Still, the lack of transparency has researchers at the Federal Reserve Bank of New York, which publishes a comprehensive quarterly report on the $17.5 trillion in US household debt, convinced they’re missing some of what’s happening in the economy.

“They’ve reached a certain scale that they could impact economists’ assumptions about their economic outlooks,” said Simon Khalaf, Chief Executive Officer of Marqeta Inc., a firm that helps BNPL providers process their payments.

Meanwhile, the pernicious effects of BNPL credit are piling up: the Harris Poll survey conducted last month, provides some crucial clues about how Americans use BNPL. For one, splitting payments into smaller chunks encourages more spending, obviously.

More than half of respondents who use BNPL said it allowed them to purchase more than they could afford, while nearly a quarter agreed with the statement that their BNPL spending was “out of control.” Harris also found that 23% of users said they couldn’t afford the majority of what they bought without splitting payments, while more than a third turned to the services after maxing out credit cards.

The findings also show that the spending, which for more than a third of users has exceeded $1,000, isn’t entirely on big-ticket items. Almost half of those using BNPL say they’ve started, or have considered, using it to pay bills or buy essential items, including groceries.

Translation: Americans are no longer even charging everyday purchases they traditionally used cash and savings to pay for; now they are using installment plans to pay for bread!

It’s not just the lower classes that are abusing BNPL credit: while whatever small pockets of consumer distress have emerged so far in the US, have been chalked up to a bifurcated economy where working class Americans struggle to make ends meet, the survey found that middle-class households are relying on BNPL, too. The shocking punchline: about 42% of those with household income of more than $100,000 report being behind or delinquent on BNPL payments!

“BNPL essentially lets people dig a deeper and deeper hole of credit, which will be harder and harder to climb out of,” said Ed deHaan, a professor of accounting at Stanford Graduate School of Business, adding that it happens “more easily when there’s no transparency.”

Of course, installment debt is nothing new: the option to pay in installments using short-term loans has been around for a ong time, but it exploded in popularity during the pandemic, especially with younger, digitally savvy consumers who gravitated to the services as an alternative to credit cards. The pioneering BNPL companies, including Afterpay, Klarna and Affirm, launched with trendy retailers, partnered with social media influencers and became a common option on apps and online checkouts.

BNPL offers quick credit approvals and lets consumers pay in installments. The first is usually due right away, and the others are often collected once every two weeks for the popular “pay in four” loans. There’s typically no interest or fees, as long as payments are made on time. Like credit card companies, BNPL firms make money on fees from merchants — and some have steep penalties for missed payments.

While normally larger banks would avoid this kind of “new and much more dangerous subprime”, this time is different: the rapid adoption of the products has enticed major financial institutions to offer the option to split payments, even as regulators warn them of the risks. That includes PayPal, U.S. Bancorp and Citizens Financial. Even big banks like Citigroup and JPMorgan have similar capabilities on their credit cards.

The industry has branded itself a financial equalizer. They argue that “soft-credit checks” — when a lender runs a consumer’s credit history without affecting their score — expand credit access to those underserved by traditional lenders, while zero-interest provides a better deal than many cards.

Affirm said its customers have an average outstanding balance of $641, while Afterpay and Klarna put the figure at $250 and $150, respectively. Unfortunately, there is no way to check these numbers. And while the average credit card balance was $6,501 in the third quarter of 2023, according to Experian data, the BNPL balances mean that most Americans can’t even afford a weekly outing to their grocery store without putting it on an installment plan, a truly terrifying scenario.

Critics naturally argue that BNPL is particularly attractive to the financially vulnerable. The Consumer Financial Protection Bureau has flagged risks to consumers, including surprise late fees and “hidden interest” — or when BNPL purchases are made with credit cards charging high interest rates. The CFPB has also expressed concern about “loan stacking,” when individuals take out several BNPL loans at once with different providers, which is most of them.

Some BNPL services, including Afterpay and Klarna, require borrowers to agree to “mandatory autopayment,” meaning the companies can automatically charge the credit card or bank account on file when a payment is due. Those who link the latter are potentially vulnerable to overdraft fees.

Meanwhile, as rates remains sky high, even Wall Street’s perpetually cheerful analysts are wondering where is all the consumption coming from?

Robust consumer spending and low unemployment rates have many economists convinced the US consumer remains strong, making Wall Street bullish on the economy. But lately, stubbornly persistent inflation has dialed back expectations for imminent interest-rate relief.

That’s set to ramp up pressure on households that are already stretched thin by higher prices for everything from gas and food to rent and apparel. As of the end of December, almost 3.5% of credit-card balances were at least 30 days past due, according to the Philadelphia Fed, the most since the data began in 2012. Nominal card balances also set a new high.

For those who are falling behind, BNPL offers what appears to be a no-brainer decision: space out payments… at least until this last credit buffer fills up and bankruptcy is the only possible outcome.

That was the thinking of Hayden Waschak, a 23-year-old in Pittsburgh. Even though he said it felt “dystopian” to use  BNPL to pay for food, he began using Klarna in February to spread out payments on a grocery delivery app. It helped his finances — at first. After he lost his job as a documents processing specialist at University of Pittsburgh Medical Center in March, he relied more heavily on the service. And without any income, he became delinquent on payments and started racking up late charges. He eventually paid off the nearly $200 balance, but he said his credit score dropped.

“Unexpected life events caused me to lose income,” Waschak said. “I ended up paying more than if I had paid for it all at once.”

Meanwhile, the fact that BNPL balances do not count against your credit rating, means users get little upside when it comes to their credit — paying on time won’t help them build up their score. On the other hand, the downside is still there for falling behind: not only can they get charged late fees, but delinquent BNPL loans can be turned over to debt collectors.

The latter is what Fabrizio Lopez said happened to him. He used Affirm to split up a $500 online payment for used-car parts in 2019. The Long Island-based mechanic, who doesn’t have a traditional credit card, said that while he received the items a week later, he never got a bill. That is, until debt collection letters started pouring in from across the US.

Lopez said he primarily relied on cash before that purchase, so the unpaid loan stands out on his credit profile. Now 30, he worries that a the BNPL purchase has created “invisible barriers” to the financial system.

“They hook you with the idea of no interest rates,” he said. “I thought that I would be able to build my credit if I paid it back — I was so wrong.”

He is not the only one who is “so wrong”: just as wrong are all those Panglossian economists at the Fed and Wall Street who believe that the US economy is growing at what the Atlanta Fed today laughably “calculated” was a 4.2% GDP, even as the DOE found that the most accurate indicator of overall economic strength, diesel demand, was the lowest since covid, an glaring paradox… yet glaring to all except those who refuse to see just how rotten the core of the US economy has become, and will be “absolutely shocked” when the next credit crisis destroys tens of millions of Americans drowning in what is now best known as “phantom debt.”

Authored by Vivek Sun via BitcoinMagazine.com,

Argentina’s energy sector is increasingly turning to Bitcoin, this time with a state-owned facility using stranded natural gas from oil fields that would otherwise be wasted.

JUST IN: 🇦🇷 Argentina state-owned company’s subsidiary will mine $BTC with Stranded Gas: Forbes

Eventually, every country will be mining #Bitcoin pic.twitter.com/bu6sCXEUJ1

— Bitcoin Magazine (@BitcoinMagazine) May 8, 2024

State-owned energy firm YPF’s subsidiary, YPF Luz, recently partnered with Genesis Digital Assets (GDA) to launch a gas flare-powered mining facility. It will harness 1,200 machines to monetize gas currently being flared into the atmosphere.

This comes as Argentina embraces Bitcoin with the election of Bitcoin-friendly President Javier Milei in late 2023.

By repurposing stranded gas that is currently burned as waste, GDA estimates its mining operation could reduce up to 63% of the carbon emissions, which shows how Bitcoin mining can transform energy byproducts into productive use.

GDA founder Abdumalik Mirakhmedov said:

“This will be yet another opportunity to show the world that Bitcoin mining can have a positive effect on the environment and can be fully integrated into local communities.”

For YPF Luz, monetizing stranded gas offsets costs and drives sustainability. 

For GDA, this means competitive energy pricing and reduced carbon output. For Argentina, it signals leadership in leveraging Bitcoin mining to enhance energy infrastructure.

The news mirrors how other countries are utilizing Bitcoin mining to “clean up” energy grids. Bhutan mines Bitcoin with renewable hydropower to consume its seasonal excess, while El Salvador uses geothermal energy to power mining with no carbon footprint.

Mirakhmedov cited Argentina’s energy resources and friendly regulations as ideal conditions for the facility.

As Bitcoin mining expands worldwide, projects like GDA and YPF’s showcase a template for reducing stranded gas flaring through productive Bitcoin mining.

One theme we’ve spotted this earnings season has been an increasing number of companies warning about low-income consumers. 

From McDonald’s to Starbucks to Tyson Foods, executives on earnings calls have warned about mounting headwinds hitting the working poor. 

Last Tuesday, Starbucks CEO Laxman Narasimhan told investors on a call, “Our performance this quarter was disappointing and did not meet our expectations,” adding that significant headwinds originate from a “cautious consumer.” 

A similar message was shared by McDonald’s last week when execs reported lower-than-expected quarterly sales growth. 

On Monday, Melanie Boulden, who oversees Tyson’s Prepared Foods business, warned, “The consumer is under pressure, especially the lower-income households.” 

Then, on Wednesday, credit card data from the Federal Reserve showed households finally hit a brick wall. Credit card debt growth in March plunged to the smallest monthly increase since the Covid crash. 

This morning, Bank of America’s trading desk also spotted some weakness in consumer-sensitive stocks, this time in the travel industry. 

“Theme Alert? Consumer Travel Spending easing?” BofA’s analysts asked. 

They pointed out a list of disappointing earnings across the travel industry: 

• $EXPE miss/guide

• $TRIP miss

• $CMCSA parks commentary

• $DIS parks’ moderation’ or normalization

• $UBER slight bookings miss

Tripadvisor experienced its worst intraday decline ever, with its stock plunging by as much as 38%. This was due to the online travel firm’s announcement that it had called off a deal to sell the company.

Did the lack of ‘deal premium’ suddenly expose investors to the the reality that Gen-Z and millennials can no longer afford their stimmy-funded “experiences” as the economy slows.

Taking a deeper dive into markets, the Dow Jones US Travel & Leisure Index peaked in late March and fell 7.5%. The index is up against heavy resistance. 

Interestingly, the Transportation Security Administration’s airport checkpoint data still shows robust travel demand. 

Bank of America’s trading desk may be onto something here, a trend that other companies are also starting to notice: low-income consumers are cracking in the era of failed Bidenomics. 

Authored by Tom Mitchelhill via CoinTelegraoph.com,

The United States House of Representatives has voted to pass a bill that overturns controversial Securities and Exchange Commission guidance preventing banks from owning crypto. 

On May 8, the House voted to pass a bipartisan bill dubbed H.J. Res 109 which overturns the SEC’s Special Accounting Bulletin (SAB 121) that requires banks to hold their customers’ crypto assets on their balance sheets – which is not the case for traditional assets such as securities. 

Republican Congressman Mike Flood – the lawmaker who introduced the resolution – said SAB 121 was unfair for banks looking to custody crypto, as custodial assets are “always considered off-balance sheet.”

“Gary Gensler, in his jihad against digital assets, used what is supposed to be mundane staff accounting guidance to essentially freeze out large publicly traded banks from taking custody of digital assets,” said Rep. Flood (R-Neb.) in a Wednesday interview with CoinDesk.

And the SEC didn’t consult with the banking regulators about it, Flood pointed out, arguing that Gensler “doesn’t have any business in the banking world.”

Notably, 21 Democrats voted in favor of the bill – which combined with the unanimous 207 votes from Republicans – saw the bill pass 228 votes to 182. 

Source: Caitlin Long/X

“By overturning SAB 121, the bipartisan resolution ensures consumers are protected by removing roadblocks that prevent highly regulated financial institutions and firms from acting as custodians of digital assets,” wrote the House Financial Services Committee (HSFC) in a May 8 statement. 

“Staff Accounting Bulletin 121 is one of the most glaring examples of the regulatory overreach that has defined Gary Gensler’s tenure at the SEC,” said HSFC Chairman Patrick McHenry.

Introduced by the SEC in March 2022, SAB 121 outlines the regulator’s accounting guidelines for institutions looking to custody crypto assets. Notably, SAB 121 virtually prevents banks from custodying crypto assets on behalf of clients.

U.S. lawmakers including SEC Commissioner Hester Peirce have argued SAB 121 jeopardizes the willingness of regulated banks to act as crypto custodians and treats crypto holdings differently than other assets.

Despite the bill being passed through the House of Representatives, President Joe Biden stated he will veto the new bill.

“SAB 121 was issued in response to demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers,” Biden said in a Wednesday statement, saying he “strongly opposes” disrupting the SEC’s work on this.

In a May 8 statement, the White House said it “strongly opposes” members of the House of Representatives looking to overturn SAB 121, claiming it would disrupt the SEC’s efforts “to protect investors in crypto-asset markets and to safeguard the broader financial system.”

“Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.”

Source: White House

No lesser mortal than key House Democrat Rep. Maxine Waters thought Flood’s resolution went too far.

“This bill takes a sledgehammer to fix an issue that may merely need a scalpel, and it does so because my colleagues on the other side of the aisle are not only interested in doing the bidding of special interest groups, they are also interested in attacking and undermining the SEC in every possible way,” said Rep. Maxine Waters (D-Calif.), the ranking Democrat on McHenry’s committee.

As CoinDesk reports, when an agency rule is reversed under the Congressional Review Act, it’s not only erased, but anything similar is forever blocked from future implementation.

Waters argued that SAB 121 – apart from the controversial custody component – also provided guidance on crypto disclosures that are necessary and would be threatened if Congress overturns the policy, and Biden echoed the concern about policies that would be blocked.

By Joseph Lord of Epoch Times

The House of Representatives on May 8 overwhelmingly voted to block a measure to strip House Speaker Mike Johnson (R-La.) of the gavel advanced by Rep. Marjorie Taylor Greene (R-Ga.).

Rep. Marjorie Taylor Greene (R-Ga.) forced a vote on a motion to vacate after meeting with the speaker twice this week to discuss her grievances and demands.

House Majority Whip Steve Scalise (R-La.) then offered a measure to table Ms. Greene’s motion to vacate. Democrats joined Republicans to approve its shelving in a 359 to 43 vote. 11 Republicans voted to move forward with the ouster attempt.

BREAKING — THE HOUSE has resoundingly tabled a motion to oust @SpeakerJohnson

359-43

R
196Y
11N

D
163Y
32N

— Jake Sherman (@JakeSherman) May 8, 2024

House Democrat leaders had earlier pledged to help protect Mr. Johnson in the event of Ms. Greene’s ouster vote, citing his help in passing $95 billion foreign aid for Ukraine, Israel, and the Indo-Pacific.

Speaking on the House floor during what was intended to be the final vote of the week, Ms. Greene unleashed a litany of complaints against Mr. Johnson.

She received a loud “boo” from members present when she brought the resolution to the floor.

The Georgia lawmaker was accompanied by Rep. Thomas Massie (R-Ky.), one of two Republicans who openly expressed support for the measure.

Mr. Johnson has previously denounced Ms. Greene’s attempt to oust him, calling it a “dangerous gambit.”

“I think it’s wrong for the Republican Party. I think it’s wrong for the institution,” he said last week.

Ms. Greene, on the House floor, cited a series of alleged conservative failures by Mr. Johnson, alleging that he had “aided and abetted the Biden administration in destroying our country.”

The other wild thing about this statement is that Trump floats that he may support ousting @SpeakerJohnson but not now!

“We’re not in a position on voting on a motion to vacate. At some point, we may very well be, but this is not the time.” https://t.co/wxbG79xBsL

— Jake Sherman (@JakeSherman) May 8, 2024

These included his move to allow a vote on a motion to expel Rep. George Santos (R-N.Y.) from the lower chamber, marking the first time in U.S. history that a member has been expelled before a conviction for a crime.

Ms. Greene also cited his move to pass a 1,000-page, $1.2 trillion government funding package after giving lawmakers less than 48 hours to consider it, as required by internal rules.

The Georgia Republican also noted that Mr. Johnson’s move to pass billions in foreign aid for Ukraine came without any demands on border security, effectively yielding any leverage Republicans had over the issue.

Additionally, she noted Mr. Johnson’s crucial vote to kill a warrant requirement for the reauthorization of a controversial surveillance power.

More in the full developing report at Epoch Times

A combination of factors, including remote work, an exodus of progressive cities, higher interest rates for longer, and diminished credit availability, continues to pressure the office tower market nationwide. The latest example of challenges facing the $20 trillion commercial real estate market comes from New York City.

Bloomberg reports that the $400 million loan backing 1440 Broadway, a 25-story tower at the corner of Broadway and 40th Street in Midtown Manhattan, has fallen into delinquent status.

The loan was bundled into commercial mortgage-backed security called JPMCC 2021-1440. 

“One of the loans responsible for this meaningful month-over-month increase was the $399 million 1440 Broadway loan securitized in JPMCC 2021-1440,” JPMorgan analysts led by Chong Sin, Terrell Bobb and John Sim wrote in a note to clients. 

The analysts said the deal sponsors “failed to pay the loan’s balloon payment last month, and now the loan is considered non-performing matured.”

According to JPM data, the serious delinquency rate for office loans hit 7% in April, the highest level since the first half of 2017. 

1440 Broadway has been plagued with a drop in office space demand. One of its largest tenants, WeWork, downsized after declaring bankruptcy in late 2023. Another top tenant, Macy’s, has struggled with sliding foot traffic because of fewer office workers in the city. On top of this, the high-interest rate environment has pushed up the cost of financing. 

Here’s additional color of the property from JPM: 

“… The property’s two largest tenants at securitization, WeWork and Macy’s, have presented significant challenges to the continued performance of this loan. At securitization, these two tenants accounted for 70% of the property’s rental income. However, Macy’s vacated the property at the end of its lease term in January 2024. WeWork declared bankruptcy earlier this year but has worked with the property’s sponsors to amend the terms of its lease. WeWork negotiated a 40% decrease in rent as it is now expected to pay just $44 psf for its space in the building as opposed to the $73.26 it was originally paying. WeWork will gradually pay more for its space as the amended lease terms do include steps up in rent. Additionally, WeWork was able to shorten the length of its lease. WeWork’s lease was originally intended to end in 2035 but is now expected to end in 2028. We estimate that the property’s occupancy rate is now at 58% and a 52% decline in gross rental income from the prior year.”

Looking at citywide office occupancy trends, card-swipe data from Katle Systems shows below 50%, an ominous sign office workers aren’t returning in droves. 

The CRE mess is far from over. In fact, it is a rolling disaster, with the real fireworks coming later this year if interest rates remain elevated. 

In a recent note, we cited Mortgage Bankers Association data showing that $929 billion—20% of the $4.7 trillion total—in commercial mortgages held by lenders and investors are due later this year. The figure is up 28% from 2023 and inflated by amendments and extensions from prior years. Nevertheless, borrowers must now bite the bullet and pay up or default.

Remember that surging CRE defaults risk triggering hundreds of small regional bank failures. We warned about this in a March note titled “$1 Trillion In 2024 CRE Maturities Could Lead To Hundreds Of Bank Failures.”

Authored by Andrew Moran via The Epoch Times,

The Federal Deposit Insurance (FDIC) failed to provide its employees a safe workplace free from “sexual harassment, discrimination, and other interpersonal misconduct,” a new report released on Tuesday concluded.

Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC), testifies before the House Financial Services Committee in Washington on Nov. 15, 2023. (Madalina Vasiliu/The Epoch Times)

The more than 200-page report, produced by law firm Cleary Gottlieb Steen & Hamilton, was ordered by the bank regulator. The independent review was overseen by the Special Committee of the FDIC Board of Directors after The Wall Street Journal published scathing reports identifying an objectionable work climate and misogynistic culture described as a “sexualized boys’ club environment.”

More than 500 individuals recounted their experiences of discrimination, sexual harassment, and “other interpersonal misconduct” they endured at the FDIC.

Heads of field and regional offices managed their offices like “fiefdoms” while commissioned bank examiners “controlled the destinies of junior examiners,” the report explained.

“Those who reported expressed fear, sadness, and anger at what they had to endure,” the report stated.

“Many had never reported their experiences to anyone before, while others who had reported internally were left disappointed by the FDIC’s response.”

In one example, a female examiner received a photo of a senior FDIC examiner’s private parts and was recommended by others to “stay away from him because he had a ’reputation.’”

One employee feared for her safety after a co-worker stalked her and repeatedly shared “unwelcome sexualized text messages that feature partially naked women engaging in sexual acts.”

Women in a field office explained that their supervisor regularly talked about their breasts, legs, and sex life.

Others noted that colleagues and supervisors would mock personnel with disabilities, calling one “Pirate McNasty,” and demoralize workers from underrepresented groups by telling them they were “token” employees hired to fill quotas.

“These incidents, and many others like them, did not occur in a vacuum,” the report stated. “They arose within a workplace culture that is ’misogynistic,‘ ’patriarchal,‘ ’insular,‘ and ’outdated‘—a ’good ol’ boys’ club where favoritism is common, wagons are circled around managers, and senior executives with well-known reputations for pursuing romantic relations with subordinates enjoy long careers without any apparent consequence.”

The investigation also uncovered prevalent retaliation against workers who complained about the misconduct, which helped foster a toxic work environment.

“Employees are not encouraged to provide feedback and suggestions up the line, in particular if it is bad news,” one witness said.

“In fact, employees, such as myself, have been retaliated against for providing suggestions for improvement after having been requested for such feedback.”

Others, according to the report, were unsure or did not know how to report complaints.

‘Very Sorry’

Mr. Gruenberg told agency staff that the report presented “a sobering look inside our workplace” and expressed that he was “very sorry” for overseeing a hostile environment.

“I want to also thank everyone who shared their experiences throughout this process. I know that doing so was difficult,” the FDIC chief said. “To anyone who experienced sexual harassment or other misconduct at the FDIC, I again want to express how very sorry I am. I also want to apologize for any shortcomings on my part.”

“As Chairman, I am ultimately responsible for everything that happens at our agency, including our workplace culture,” he added.

Implementing “meaningful and sustained change” will not be easy, Mr. Gruenberg said to employees.

The Federal Deposit Insurance Corporation (FDIC) seal is shown outside its headquarters in Washington on March 14, 2023. (Manuel Balce Ceneta/AP Photo)

The recommendations outlined in the report will be incorporated into the FDIC’s ongoing 13-page action plan. Additionally, the FDIC is still actively finding a transformation monitor and independent third-party expert to help adopt the Special Review Committee’s recommendations.

Special committee co-chair Jonathan McKernan called the report “an important first step” toward ushering in change at the FDIC.

“Today’s report establishes the urgent imperative of a cultural transformation at the FDIC led by those with the leadership capacity to effectuate that change,” Mr. McKernan said in a statement. “Fostering an environment that promotes a safe, respectful, and inclusive workplace is fundamental to achieving the agency’s mission.”

An apology is not enough for Patrick McHenry, Chairman of the House Financial Services Committee, who demanded Mr. Gruenberg’s resignation.

“It’s time for Chair Gruenberg to step aside. The independent report released today details his inexcusable behavior and makes clear new leadership is needed at the FDIC,” Mr. McHenry said in a statement.

He added that committee Republicans will ensure the FDIC head and other senior leaders are “held accountable” for their actions.

Rep. Patrick McHenry (R-N.C.) speaks to the press after meeting President Joe Biden to discuss the debt limit at the White House in Washington on May 22, 2023. (Madalina Vasiliu/The Epoch Times)

Cleary Gottlieb Steen & Hamilton was not asked, nor did it determine, if Mr. Gruenberg and other individuals at the federal agency should be removed or disciplined.

‘Toxic Atmosphere’ at FDIC

Late last year, The Wall Street Journal published two in-depth reports. The first was“Strip Clubs, Lewd Photos and a Boozy Hotel: The Toxic Atmosphere at Bank Regulator FDIC,” and the second was “FDIC Chair, Known for Temper, Ignored Bad Behavior in Workplace.”

The article listed claims by employees, past and present, that bullying, discrimination, and sexual misconduct were pervasive at the FDIC.

Many cases of inappropriate conduct listed in the article were met with little or no disciplinary action.

Following the newspaper’s published investigation, Mr. Gruenberg said he had been unaware of the allegations and rejected calls from Republicans to step down.

Later, the Wall Street Journal reported that the FDIC chief maintained “a reputation for bullying and for having an explosive temper.” At least one probe was initiated against Mr. Gruenberg after berating a female employee while serving as the vice chairman.

Mr. Gruenberg told lawmakers at a Senate Banking Committee hearing that he was “personally disturbed and deeply troubled” by the article’s findings, adding that the agency launched a “comprehensive review” of the situation.

Following the report, several Republican senators demanded his resignation over workplace misconduct allegations.

Sen. John Kennedy (R-La.) urged Mr. Gruenberg to step down so that “a new chair can restore the professional culture at the FDIC that the American people expect from its institutions.”

In a Dec. 7 letter, Sens. Tim Scott (R-S.C.), Thom Tillis (R-N.C.), Cynthia Lummis (R-Wyo.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) called the accusations “deeply disturbing and unacceptable at any workplace.”

“According to these reports, both you and your top deputies ‘have been involved in decisions over high-level examples of alleged sexism, harassment, and racial discrimination in which the agency didn’t take a hard line with individuals accused of misconduct,’ allowing the culture of harassment and discrimination to persist and flourish,” the letter added.

The bombshell Wall Street Journal reports came three years after the FDIC’s inspector general discovered multiple sexual harassment complaints and issued more than a dozen recommendations to change the workplace culture.

Mr. Gruenberg joined the FDIC Board of Directors in August 2005. In 2011, then-President Barack Obama nominated him to a full five-year term as chairman. In 2022, President Joe Biden nominated Mr. Gruenberg to another term.

Should Mr. Gruenberg step down or be removed from his position, FDIC Vice Chair Travis Hill would take over, and the board would be split between Republicans and Democrats.