Greetings, and welcome to the Friday LinkSwarm…on Friday! Finally, my sloth has paid off! Enjoy a sampler of news stories from the last two weeks.
Governor Ron DeSantis said in his victory speech that, not only did he win the Florida gubernatorial race, but he has also “rewritten the political map.” It is difficult to argue with that assessment. He beat Democrat Charlie Crist by 20 percentage points and flipped Democratic strongholds such as Miami-Dade County.
A particularly potent force in his campaign has been culture-war issues — battles DeSantis won by going on the offensive. “We fight the woke in the legislature,” he said in his speech. “We fight the woke in the schools. We fight the woke in the corporations. We will never, ever surrender to the woke mob. Florida is where woke goes to die.”
As with Trump, DeSantis’s political aggressiveness wins him admirers. The tactics that some conservatives consider morally or philosophically dubious appear only to intensify his popularity.
In March, the Republican Florida legislature passed the Parental Rights in Education Act, preventing teachers from instructing kindergarten through third-grade students in gender identity and sexuality. “I would say when you oppose a parent’s rights and education bill, which prevents six-, seven-, eight-year-olds from having sexuality, gender ideology injected in their curriculum, you are the one that’s waging the culture war,” DeSantis said in defense of the bill. DeSantis also signed the Stop W.O.K.E. (Wrongs to Our Kids and Employees) Act, preventing critical race theory from being promoted or advanced in schools and corporations.
When Walt Disney executives criticized the education law as a “Don’t Say Gay” bill, DeSantis retaliated by questioning whether the corporation’s 50-year-old “independent special district” status should go under “review” to ensure that it is “appropriately serving the public interest.” Charles C. W. Cooke warned about the dangers of this move. Yet, however short-sighted, it was undoubtedly effective culture-war politics. DeSantis’s enemies fell into the trap: Democrats revealed their hypocrisy by rushing to the defense of big business.
DeSantis has also won the PR fight on immigration. His morally dubious decision to fly asylum seekers to Martha’s Vineyard revealed Democrats’ hypocrisy. His hard line on immigration does not dampen support among Hispanics. According to a Telemundo/LX News poll, DeSantis had a 51 percent to 44 percent lead over Crist among Hispanic voters. A bilingual pollster who conducted the survey explained: “There are lots of Hispanic voters in this state who really like the governor’s style, this strongman who won’t back down.”
On transgenderism, DeSantis has been utterly fearless. He stated that, in children, most “dysphoria resolves itself by the time they become adults” and “it’s inappropriate to be doing basically what’s genital mutilation.” While other Republican states have tried to use legislation to stop gender experiments, DeSantis appointed a state medical board that banned doctors from prescribing puberty blockers, hormones, and gender-transition surgeries. This way, his enemies can’t claim that politicians are interfering in the medical profession. Rather, it’s medical professionals keeping politics out of health care.
FTX’s new CEO and liquidator, John Ray III, who also oversaw the unwinding and liquidation of Enron, admits that “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”
And just in case his shock at FTX’s fraud of epic proportions was not quite clear enough, he adds that “from compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
Snip.
Below we excerpt some of the most notable highlights from the affidavit, which we embed at the bottom of the post and which everyone should read to get a sense of just how massive Sam Bankman-Fried’s fraud was.
I have over 40 years of legal and restructuring experience. I have been the Chief Restructuring Officer or Chief Executive Officer in several of the largest corporate failures in history. I have supervised situations involving allegations of criminal activity and malfeasance (Enron). I have supervised situations involving novel financial structures (Enron and Residential Capital) and cross-border asset recovery and maximization (Nortel and Overseas Shipholding). Nearly every situation in which I have been involved has been characterized by defects of some sort in internal controls, regulatory compliance, human resources and systems integrity.
Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.
For purposes of managing the Debtors’ affairs, I have identified four groups of businesses, which I refer to as “Silos.” These Silos include:
(a) a group composed of Debtor West Realm Shires Inc. and its Debtor and non-Debtor subsidiaries (the “WRS Silo”), which includes the businesses known as “FTX US,” “LedgerX,” “FTX US Derivatives,” “FTX US Capital Markets,” and “Embed Clearing,” among other businesses;
(b) a group composed of Debtor Alameda Research LLC and its Debtor subsidiaries (the “Alameda Silo”);
(c) a group composed of Debtor Clifton Bay Investments LLC, Debtor Clifton Bay Investments Ltd., Debtor Island Bay Ventures Inc. and Debtor FTX Ventures Ltd. (the “Ventures Silo”);
(d) a group composed of Debtor FTX Trading Ltd. and its Debtor and non-Debtor subsidiaries (the “Dotcom Silo”), including the exchanges doing business as “FTX.com” and similar exchanges in non-U.S. jurisdictions. These Silos together are referred to by me as the “FTX Group.Each of the Silos was controlled by Mr. Bankman-Fried. Minority equity interests in the Silos were held by Zixiao “Gary” Wang and Nishad Singh, the co-founders of the business along with Mr. Bankman-Fried. The WRS Silo and Dotcom Silo also have third party equity investors, including investment funds, endowments, sovereign wealth funds and families. To my knowledge, no single investor other than the co-founders owns more than 2% of the equity of any Silo.
Much, much more at the link, including an eye-dropping, deeply incriminating Twitter thread by founder Sam Bankman-Fried about the step-by-step decisions they made that weren’t really illegal because they had such good intentions.
BlackRock’s energetic focus on ESG investing is affecting its bottom line. The index fund’s performance is deteriorating, and risks are accumulating. In the face of this situation, UBS Wealth Management recently downgraded ratings for BlackRock (NYSE: BLK) by now listing it as a “Neutral” recommendation rather than a “Buy.” The bank also cut the target stock price to $585 from $700.
The new recommendations were made based entirely on BlackRock’s reckless ESG positioning. UBS says that stubborn insistence on this course could also trigger increased regulatory inspections and investor withdrawals.
Thus, the company pressuring countless firms to adopt more “woke” positions has suddenly found a boomerang coming in its direction. Investors and analysts are now telling BlackRock that ESG shenanigans are bad business and want it stopped.
“This was a close call,” said one Republican leader in Washington. “We were worried that we would achieve massive victories tonight, but we thankfully snatched defeat from the jaws of victory to achieve a much more proper and sensible red trickle, like the proper gentlemen we are.”
