The Daily Parker

The former CEO of FTX Trading goes on trial today for making $8 billion disappear in just under three years. Molly White has a precis:

About eleven months ago, the then second-largest cryptocurrency exchange in the world imploded over the course of only a few days as trust in the company crumbled and it failed to meet a surge of customer withdrawals. It rapidly became apparent that customer money was missing. A lot of it.

Since then, it’s come out that FTX allowed its sister trading firm, Alameda Research, to dip into FTX’s customer funds with effectively no limit to backstop their own trading losses. Much of FTX’s balance sheet was also revealed to be denominated in flimsy crypto tokens worth far less in reality than on paper, and a substantial portion of them had been created out of thin air by FTX itself. And the FTX group of companies had spent money they didn’t have, splashing out for extravagant celebrity endorsements and advertisements, buying real estate, and donating massive sums to curry favor among seated politicians and bankroll the industry boosters running for office.

Altogether, somewhere around $8 billion was gone.

Besides Sam Bankman-Fried, four other high-level executives at the FTX group of companies have been charged, and all four have reached plea deals. Three of them agreed to cooperate with the investigation as a part of their plea, and will almost certainly appear as witnesses at the trial. They were not just Bankman-Fried’s employees and co-workers, but also his friends, roommates, confidants, and, in one case, a former romantic partner.

There’s no question that billions of dollars of customer funds went missing from FTX. Instead, prosecutors are tasked with convincing a jury that they’re missing thanks to intentional fraud by Sam Bankman-Fried. The “intentional” part is the sticky bit, with prosecutors needing to convince all twelve jurors beyond a reasonable doubt that Bankman-Fried intended to defraud people. If even one juror holds out, Bankman-Fried could dodge a guilty verdict thanks to a hung jury — and trying to appeal to just one sympathetic juror may be his only hope in what looks like a pretty overwhelming case against him.

Since his resignation from FTX, Bankman-Fried has tried to portray himself as a colossally stupid man, who was simply too dumb to commit fraud. Unfortunately, stupidity doesn't actually exonerate criminal behavior. He only needs to have intended the actions, not the harm. And from the outside, it looks like he wasn't so much stupid as greedy, immature, narcissistic, and venal.

Get out the popcorn.

I haven't had the most productive morning ever, but I should get back into coding after I take Cassie on her lunchtime walk. Meanwhile:

• California governor Gavin Newsom (D) has announced he would appoint Emily's List president Laphonza Butler to serve out the remainder of the late US Senator Dianne Feinstein's term.
• The XPOTUS has shown up to his fraud trial in New York today, in what Michael Tomasky hopes will utterly ruin the man.
• In the Post, Michael Lewis examines the last year of Sam Bankman-Fried's life in the Crypto game.
• US Representative and clownish dingleberry Matt Gaetz (R-FL) threatened to call a vote on House Speaker Kevin McCarthy's (R-CA) tenure, but since just about everyone in his party can't stand him, the threat is going nowhere. But as Aaron Blake points out, my party won't save McCarthy either.

Finally, just look at this wonderful creature who got a bath yesterday. She actually climbed into the tub on her own, and seems to have figured out that getting a vigorous whole-body massage with warm water, followed by an equally-vigorous toweling off, actually feels pretty good.

It's only Wednesday? Sheesh...

• The Writers Guild of America got nearly everything they wanted from the Alliance of Motion Picture and Television Producers (i.e., the Astroturf organization set up by the big studios and streamers to negotiate with the Guilds), especially for young writers and for hit shows, but consumers should expect more bundling and higher monthly fees for shows in the future.
• Josh Marshall suspects that the two competing storylines about the XPOTUS (that he's about to return to power, but he's also losing every legal battle he fights) are actually just one: his "current posture of bravado and menace – while real enough as a threat – is simply his latest con, concealing a weaker and more terrified reality."
• Jamie Bouie marvels that Justice Clarence Thomas (R$) wins the trifecta: "We have had partisan justices; we have had ideological justices; we have had justices who favored, for venal reasons, one interest over another. But it is difficult to think of another justice, in the history of the Supreme Court, who has been as partisan and as ideological and as venal as Thomas...."
• Melissa Gira Grant profiles US District Court Judge Matthew Kacsmaryk (R-NDTX), a Christian nationalist who rose through the Federalist Society pipeline to a lifetime appointment where he will push his Victorian-era views on the people of Texas for the next 30 years or so.
• North Korea vomited up US Army Private 2nd Class Travis King, having used him for the little he was worth after the soon-to-be-dishonorably-discharged soldier illegally entered the kingdom in July.
• Kelli María Korducki worries that "in the age of AI, computer science is no longer the safe major," not realizing, perhaps, that the most effective programmers are and have always been liberal arts majors.

Finally, yet another fact that will make everyone I know feel old: today is Google's 25th birthday. And yes, the Daily Parker has been around longer trillion-dollar search company. We just haven't had our IPO yet.

Other than getting a little rained on this morning, I've had a pretty good day. But that didn't leave a lot of time to catch up on any of these before I started a deployment just now:

• Heather Cox Richardson examines US history through the lens of a never-ending conflict between "two Americas, one based in religious zeal, mythology, and inequality; and one grounded in rule of the people and the pursuit of equality."
• Josh Marshall ponders the difficulty of covering the XPOTUS's increasingly ghastly behavior in the "both-sides" journalism world we inhabit.
• James Fallows zooms out to look at the framing decisions that journalists and their publishers make that inhibit our understanding of the world. Like, for example, looking at the soon-to-be 4th time Republicans in Congress have shut down the Federal government and blaming all of Washington.
• Fallows also called attention to Amna Nawaz's recent interview with authoritarian Turkish president Recep Erdogan in which she kept her cool and her focus and he...didn't.
• Speaking of the impending Republican torching of the US Government (again), Krugman looks at the two clown shows in the party, but wonders why "everyone says that with the rise of MAGA, the G.O.P. has been taken over by populists. So why is the Republican Party’s economic ideology so elitist and antipopulist?"
• The Supreme Court has once again told the Alabama legislature that it can't draw legislative maps that disenfranchise most of its black citizens. Which, given the state's history, just seems so unlike them.
• The Federal Trade Commission and 17 US States have sued Amazon for a host of antitrust violations. “A single company, Amazon, has seized control over much of the online retail economy,” said the lawsuit.
• Monica Hesse dredges all the sympathy and understanding she can muster for XPOTUS attorney Cassidy Hutchinson's memoir. NB: Hutchinson is 27, which means I am way overdue for starting my own memoir.
• Chicago Sun-Times columnist David Roeder complains that the CTA's planned Red Line extension to 130th Street doesn't take advantage of the existing commuter rail lines that already serve the far south side, but forgets (even as he acknowledges) that Metra and the CTA have entirely different missions and serve different communities. Of course we need new regional transport policies; but that doesn't mean the 130th St extension is bad.
• Software producer Signal, who make the Signal private messaging app, have said they will leave the UK if the Government passes a "safety" bill that gives GCHQ a back door into the app.
• Molly White shakes her head as the mainstream press comes to terms with something she's been saying for years now: NFTs have always been worthless. Oh, and crypto scored two $200-million thefts this week alone, which could be a new record, though this year has already seen $7.1 trillion of crypto thefts, hacks, scams, and other disasters.
• After almost 20 years and a the removal of much of an abandoned hospital in my neighboorhood, the city will finally build the park it promised in 2017.

Finally, I rarely read classical music reviews as scathing as Lawrence Johnson's evisceration of the Lyric Opera's Flying Dutchman opening night last Friday. Yikes.

US Senator Bob Menendez (D-NJ) has gotten himself indicted again for stupefying corruption:

The three-count federal indictment depicts a brazen plan hatched during furtive dinners, in text messages and on encrypted calls — much of it aimed at increasing U.S. assistance to Egypt and aiding businessmen in New Jersey.

Mr. Menendez’s wife, Nadine Menendez, is accused of acting as a go-between, passing messages to an American-Egyptian businessman, Wael Hana, who maintained close connections with Egyptian military and intelligence officials, the indictment said. In one text, to an Egyptian general, Mr. Hana referred to the senator, who held sway over military sales, financing and other aid, as “our man.”

Friday’s charges describe an intermingling of the bare-knuckle, back-room dealings of Mr. Menendez’s home state of New Jersey and delicate matters of security in the Middle East. They represent the latest episode in a decades-long political career that took Mr. Menendez, the son of Cuban immigrants, from the Union City, N.J., school board to the halls of the Senate, a career marked by accusations of corruption and an earlier federal indictment that ended in a hung jury.

Dan Friedman marvels at the indictment:

Prosecutors say the New Jersey Democrat and his wife took hundreds of thousands of dollars via gold bars, mortgage payments, a Mercedes-Benz convertible, and cash that investigators found hidden in envelopes inside jackets bearing the senator’s name.

But what’s particularly striking about this indictment—besides the sheer brazenness of the alleged bribery—is that this is the second time Menendez has faced corruption charges in less than a decade. In 2015, he was charged with using his office to do favors for a Florida eye doctor, Salomon Melgen, who lavished Menendez with luxury items and free travel. Menendez, who claimed he and Melgen were simply friends who exchanged gifts, avoided conviction after a hung jury caused a mistrial in 2017. Melgen was convicted of Medicare fraud in 2017, but President Donald Trump commuted his 17 year prison sentence.

In 2018, the Senate Ethics Committee admonished Menendez, noting that despite the mistrial, Menendez had admitted to taking official actions to help Melgen while accepting gifts from him that the senator failed to disclose “as required by Senate Rules and federal law.” The committee said that Menendez’s actions “reflected discredit upon the Senate.”

The new charges suggest that the unusually sharp condemnation from his colleagues did not cause Menendez to cease ethically questionable, if not illegal, conduct. And Senate Democrats did nothing to stop him. Menendez’s 2018 reelection to a third Senate term, and an agreement by Senate Democratic Leader Chuck Schumer and other Democrats to allow Menendez to return to a top spot on the Senate Foreign Relations Committee—he became chairman when his party took control of the chamber in 2021—gave Menendez the power that the Justice Department now alleges he used corruptly.

I lived in New Jersey years ago—in fact, just after I started The Daily Parker—so I get that the state has a rep to uphold. But wow, the man needs to resign right now. New Jersey Governor Phil Murphy is also a Democrat, so should Menendez unexpectedly do the right thing, Murphy would appoint a new senator immediately. (As long as Murphy doesn't start marveling at "this thing [that's] fucking golden," we should be all right.)

Another Tuesday, another collection of head-shaking news stories one might expect in the waning days of an empire:

• Canadian prime minister Justin Trudeau (Lib-Papineau, QC) formally accused the government of India of assassinating a Canadian citizen on Canadian soil.
• Paul Krugman traces the road from Mitt Romney to MAGA.
• Jonathan Last accuses "Meet the Press" of acting like 2016 never happened.
• Police in Birmingham, Ala., Tased a band director for not ending the band's song a minute early as ordered. Guess what skin colors the cop and the band director had.
• Who's surprised, even a little bit, that the XPOTUS used classified documents as scrap paper?
• Tiffany Owens Reed wants to ban the car monopoly, not the cars themselves.

Closer to home, the old candy-making laboratory on the 13th floor of the historic Marshal Field building has come back to life, 24 years after the the last Frango mint was produced there. (Note to readers who speak Portuguese: no one checked a Portuguese dictionary before naming the candy.)

Special prosecutor Jack Smith has requested US District Court Judge Tanya S Chutkan issue an order telling the XPOTUS to stop threatening people online:

In a 19-page motion, prosecutors said that some of the people Mr. Trump has gone after on social media — including the special counsel, Jack Smith, who has filed two indictments against him — have experienced subsequent threats from others. Mr. Trump’s statements, they said, could also affect witnesses and the potential jury pool for the trial, which is scheduled to take place in Washington starting in March.

“Like his previous public disinformation campaign regarding the 2020 presidential election,” [prosecutors] wrote, “the defendant’s recent extrajudicial statements are intended to undermine public confidence in an institution — the judicial system — and to undermine confidence in and intimidate individuals — the court, the jury pool, witnesses and prosecutors.”

Meanwhile, attorney Jenna Ellis, who had greatness thrust upon her but now regrets it, called her former boss a "malignant narcissist" who poisons everything he touches. Of course, he doesn't seem to know who he's running against next year, saying in a speech yesterday that he thought Obama was going to take us into World War II if we're not careful... And 46% of the country will still vote for him.

Unrelated to the 2024 election, I found this website very interesting...

IDTWHQ almost made it to 22°C this afternoon, with a low dewpoint, sunny skies, and a lake breeze. In other words, perfect. Of course, the sun sets just after 7pm tonight, fully an hour earlier than it did five weeks ago...but that's autumn for you.

Not everything in the world went perfectly today, of course:

• House Speaker and noted invertebrate Kevin McCarthy (R-CA) continues to survive as third in line to the Presidency even though his unhinged back bench keeps forcing him to do stupid things, like start an impeachment inquiry on literally zero evidence.
• Alex Shephard actually sees this as a good thing for Democrats, as the "clown show" comes just as the House needs to pass a spending bill or the government will, once again, shut down.
• Meanwhile, satirist Andy Borowitz jokes that House Republicans "demand Biden tell them why they are impeaching him."
• Back in Chicago, it turns out only 9.6% of the city's waste got recycled in 2022, compared with 20% in New York and 80% in San Francisco.
• On Monday, Illinois becomes the first state in the union to eliminate cash bail.

Finally, our moderate drought continues in Illinois, but so far most agriculture seems unaffected. A dry autumn usually means a colorful one, so maybe we'll stay just under normal rainfall long enough to repeat last autumn's amazing display?

Inner Drive Technology WHQ cooled down to 14°C overnight and has started to climb up into the low-20s this morning, with a low dewpoint and mostly-clear skies. Perfect sleeping weather, and almost-perfect walking weather! In a few minutes I'm going to take Cassie out for a good, long walk, but first I want to queue up some stuff to read when it's pissing with rain tomorrow:

• A Wall Street Journal poll (which the XPOTUS funded in part) appears to have bad news for the Biden re-election campaign, not least because 52% of voters surveyed believe the laziest person to hold that office since Harding and the dumbest since...well, Harding..."has a strong record of accomplishments."
• The Wisconsin Republican Party has given up any pretense of respect for the voters by threatening to impeach the newly-elected Democratic state supreme court justice Janet Protasiewicz before she has even heard a single case. Says Jamie Bouille, "In the absence of national regulation — and against the backdrop of a federal Supreme Court that is, at best, apathetic on issues of voting rights — states are as liable to become laboratories of autocracy as they are to serve as laboratories of democracy."
• Molly White may not shed any tears for Sam Bankman-Fried's difficulties getting comfortable in prison, but our prison system really does create dangerous conditions for people who don't have armies of lawyers fighting for them.
• Elizabeth Spiers has had enough of men who double down on reprehensible behavior, and the other men who let them.
• The Chicago Tribune looks at Underground Railroad sites around the city.
• Charlie Warzel laments that "streaming has reached its sad, predictable fate." Vulture reached that conclusion back in June, when it reported on studio executives having reached that conclusion in March. And then the strike happened...
• The Economist's Bartleby column provides a how-to guide on "networking for introverts."
• James Fallows reviews former Naval Intelligence officer Michael McLaughlin's book on the cyber-war that you and I are already fighting.
• The UK set a new record this afternoon with its 7th consecutive day of 30°C temperatures, an unprecedented (at least since the 1880s) occurrence. "Before that, according to Met Office data, the UK has only had three consecutive days of 30°C weather in September on four previous occasions: 1898, 1906, 1911 and 2016," the Guardian reports. "Saturday was named the hottest day of 2023 in the UK with 32.7C recorded at Heathrow." (This is not normal.)

Finally, my indoor Netatmo base station has picked up a funny mid-September thing: cicadas. The annual dog-day cicadas have only a few more days to get the next generation planted in the ground, so the remaining singletons have come out this morning instead of waiting for dusk. As you can see, the ones in the tree right outside the window closest to the Netatmo have been going at it since dawn:

The predominant species in my yard right now are neotibicen pruinosus, or "scissor-grinder" cicadas. But we also have our share of other species in Northern Illinois. And, of course, next May: Brood XIII comes out. That'll be fun (especially for Cassie)!

Via Molly White, thieves made off with data from LastPass containing the encrypted passwords from 25 million users. They still have to crack the vaults to get at the data, which takes a long time, but Brian Krebs worries they have already succeeded in cracking a few of them:

In November 2022, the password manager service LastPass disclosed a breach in which hackers stole password vaults containing both encrypted and plaintext data for more than 25 million users. Since then, a steady trickle of six-figure cryptocurrency heists targeting security-conscious people throughout the tech industry has led some security experts to conclude that crooks likely have succeeded at cracking open some of the stolen LastPass vaults.

Armed with your secret seed phrase, anyone can instantly access all of the cryptocurrency holdings tied to that cryptographic key, and move the funds to anywhere they like.

Which is why the best practice for many cybersecurity enthusiasts has long been to store their seed phrases either in some type of encrypted container — such as a password manager — or else inside an offline, special-purpose hardware encryption device, such as a Trezor or Ledger wallet.

[Security researcher Nick] Bax said the only obvious commonality between the victims who agreed to be interviewed was that they had stored the seed phrases for their cryptocurrency wallets in LastPass.

If you use LastPass, MetaMask's lead project manager Taylor Monahan urges you to update your credentials now:

According to MetaMask’s Monahan, users who stored any important passwords with LastPass — particularly those related to cryptocurrency accounts — should change those credentials immediately, and migrate any crypto holdings to new offline hardware wallets.

“Really the ONLY thing you need to read is this,” Monahan pleaded to her 70,000 followers on Twitter/X: “PLEASE DON’T KEEP ALL YOUR ASSETS IN A SINGLE KEY OR SECRET PHRASE FOR YEARS. THE END. Split up your assets. Get a hw [hardware] wallet. Migrate. Now.”

If you also had passwords tied to banking or retirement accounts, or even just important email accounts — now would be a good time to change those credentials as well.

Another idea: don't hold your assets in crypto, which, unlike real banking, has no protection against theft and few ways to recover stolen funds.