Bad, Bad Men - Trump, Musk, MBS, and All the Rest
Trump
Earlier this month, Donald Trump was ordered to pay $83 million dollars in a defamation case. With that out of the way, we awaited the result of his New York civil fraud trial. The judge handed down his ruling last week and it was a doozy:
A New York judge on Friday handed Donald J. Trump a crushing defeat in his civil fraud case, finding the former president liable for conspiring to manipulate his net worth and ordering him to pay a penalty of nearly $355 million plus interest that could wipe out his entire stockpile of cash.
With pretrial interest tacked on, the total penalty for Trump and his companies is around $450 million. This is a large amount of money, but it's worth noting what else the judge did - for three years, a court-appointed monitor will oversee all financial and corporate transactions at the Trump Org, with the power to block movement of funds. Trump and his sons are barred from serving as officers of NY corporations for a few years, and they can't take any loans from NY banks.
Whether the monitor or the judge's ruling will have any real impact on Trump's behavior remains to be seen - he's shown little regard for laws in the past. However, if Trump truly is on the hook for half a billion dollars and can no longer use his companies as piggy banks, what other options does he have?
One is, of course, his political campaign, which he tapped for more than $50 million dollars' worth of legal fees last year. However, the PACs running dry - he's got a mere $23.5 million available to defend his multiple criminal trials, at least two of which will happen this year.
If it wasn't demented enough that a presidential candidate plans on spending nine figures of donor funds on his legal bills during an election, Trump is planning a takeover of the RNC so he can tap their coffers as well. Will crippling his party financially harm GOP election chances? One can dream.
There may be hope for ol' Donnie, in the form of his 'media' company, Trump Media and Technology Group. You may recall TMTG because we've talked about it here a bit, and I confess I'd written it off due to the company's many regulatory issues.
Well! The SEC approved the merger last week, and if the deal goes forward Trump's stake in the company will be worth nearly $4 billion dollars at today's prices.
You may be wondering how a company that only made $3.4 million dollars while losing $49 million dollars in 9 months last year could be valued at $9 billion dollars and that is an excellent question. The simple answer: DWAC is a meme stock, like Gamestop, except the underlying business is far less tangible.
From a financial standpoint, the company is a flop. Truth Social, the platform Trump uses to 'truth' to his six million followers, isn't large enough to even call a 'platform'. It's has had a total of less than 9 million signups, and maybe half a million use the site regularly. Despite TMTG's snazzy slide decks, its media offerings have proven even less popular than the man whose name it bears.
A problem with a SPAC offering is that money DWAC could have raised from a hot IPO won't come - the company will owe the SEC $18 million in penalties to go public and is so tight on cash it will have to take on more debt just to keep the lights on.
Why is DWAC worth anything at all? TMTG is clearly a sham company, set up primarily to enrich Trump and his allies - Trump is going to install a bunch of his cronies on the new board. The real value in the stock - ticker DJT - is cashing in on the rubes who will buy at the top, wherever that is. Sophisticated (or cynical) investors will be betting on suckers paying $50 for DJT for the next six months, right until the lockup period ends and Trump will definitely absolutely one hundred percent unload most or all of his shares and the company will become as worthless on paper as it is in reality.
That the SEC is allowing this to happen speaks to the limits of our regulatory framework - there is only so much it can do to stop people from buying into an obvious scam, if said scam has filed the proper paperwork and not broken any (more) laws. Trump has found another way to extract wealth from his cultists - assuming they can keep his fake media company's stock price inflated for six precious months.
Musk
Elsewhere, an actual billionaire is still trying to run his social media website that has actual people on it. Or does it?
According to CHEQ, a whopping 75.85 percent of traffic from X to its advertising clients' websites during the weekend of the Super Bowl was fake.
"I've never seen anything even remotely close to 50 percent, not to mention 76 percent," CHEQ founder and CEO Guy Tytunovich told Mashable regarding X's fake traffic data. "I'm amazed…I've never, ever, ever, ever seen anything even remotely close."
CHEQ is a company that provides fraud detection for advertisers. Bots and click fraud are a problem everywhere, and big social platforms are not immune. However, Twitter's competitors seem to be much better at dealing with it:
Out of more than 40 million visits from TikTok, only 2.56 percent were determined to be fake. Facebook sent 8.1 million visits and 2.01 percent of the monitored visits were classified as inauthentic. And over on Instagram, only 0.73 percent of the 68,700 visits from the platform were fake.
Okay, so, there are two possible explanations here. One is that Elon - either directly or indirectly, via 'suggestions to an employee' or whatever - is juicing his traffic numbers so he can gloat and/or attempt to lure advertisers back.
If the world's richest tech moron is engaging with botnet and ad fraud purveyors to pump his numbers things have become dire. I'm not sure I buy this explanation because it seems like an awful lot of work for Musk, but who knows what he's capable of with enough ketamine.
The other, more likely explanation is ad fraudsters have figured out ways to profit by slamming the site with fake traffic, because Elon has fired nearly his entire safety team and there's no one left to fight off the bots. Perhaps it's a confluence of the two - Musk was informed people were barraging his site with fake clicks, but let it happen so he could claim record traffic during the Super Bowl.
Maybe it's connected in some way to reports from earlier this month that X has been flooded with ads for porn sites and fake luxury goods paid for with stolen credit cards. Which, again, is not a sign of a healthy business, or one that is taking even basic measures to protect its users from unwanted scams and obscene material.
MBS
There are ill-advised vanity purchases, and then there's whatever the fuck Saudi Arabia has been doing for the last few years. Since Mohammed Bin Salman effectively took over the country and, uh, rooted out corruption among its elites, he's has been on a spending spree. Tapping vast oil wealth, MBS set up investment funds and embarked on a series of ambitious development projects.
You have to spend to make, the saying goes, and perhaps that is true in some cases - Norway's sovereign wealth fund invested aggressively over the last thirty years and its value swelled to over $1.6 trillion. The key difference is that Norway's fund supports the lifestyles of all Norwegians, acting like a pension fund, paying dividends.
The Saudi version is what happens when you give a thirty-something princeling access to hundreds of billions' of dollars and surround him with advisors whose primary investing strategy is 'will it impress my rich friends?'
They started an airline. And a golf league. They're spending hundreds of millions' of dollars to lure players to their soccer league. And their esports league. They're building a giant cube building, a yacht resort, and a 110-mile long mirrored city to house nine million people.
Last summer, I asked:
Perhaps it’s worth asking whether the murderous nepo baby in charge of twelve-figure investment funds has a clue what he’s doing?
As more financial data becomes available, it's increasingly clear MBS is putting his country's finances at risk for his numerous, expensive hobby projects:
The country’s sovereign-wealth fund, which is tasked with these initiatives, last month said its cash levels as of September had fallen by roughly three-quarters to about $15 billion, the lowest since December 2020, when the fund began reporting the data.
They've already blown through hundreds of billions, and they haven't even begun to really dig into Noem, which will be a historically expensive boondoggle.
And listen, if I were a Gulf state sitting on a dwindling (though still quite large) reserve of oil and trying to be future-looking as the world seeks to cut carbon emissions, I might be tempted to make some bold bets with my massive coffers. Trying to become a global hub for trade, or finance, or microchips, these are reasonable ideas. Doing all those things plus a dozen other giant luxury real estate and sports investment projects, and assuming you won't ever run out of money is a little less reasonable.
Despite running a wildly profitable oil company in Saudi ARAMCO, the country has taken on a lot of debt in recent years:
Outside of the U.S., Saudi Arabia has more outstanding dollar-denominated bonds—roughly $100 billion—than any entity in the world except for the World Bank.
And it plans to sell more shares in its oil company. That is not to say the debt is unsustainable - even after the borrowing spree it will still have half the debt-to-GDP ratio of Germany.
But! Germany has what you'd call a normal economy - it makes things, and exports and imports other things, and (crucially) isn't dependent on the value of one commodity to pay its bills. It is economically diversified in a way Saudi Arabia is not.
In fact, if the cost of oil were to drop significantly, things might get dicey very quickly:
The IMF estimated oil prices would need to be above $86 a barrel in 2023 and $80 a barrel this year to balance the government’s budget. Prices have hovered around $81 over the past year. Despite the huge spending, Saudi Arabia experienced a rare economic contraction in 2023.
Over the last sixty years, the price of oil has been below $80 a lot more often than it's been above it:
Unlike Norway, which mostly puts its money into investments and securities, an airline or soccer team or multi-decade real estate project are not things MBS can simply sell if his revenues start to turn. Instead, he's made an all-in bet that oil will continue to be expensive, so his country can load itself up with debt to have superfluous sports leagues, build complicated supply chains and manufacturing industries from scratch - in a desert! - and build real estate projects for the hyper rich and their yachts to live in.
Not itemized in any of MBS's financial plans is the economic fate of his people. We've previously noted that the country is as unequal as poor African nations, and that seems unlikely to change when its ruler is focused on catering purely to people of his economic class. Building literal towers of gold while your people live in poverty - surely there aren't any religious texts warning against such behavior.
All the Rest
We've talked about three world historical scumbags, but what about the others? The honorable mentions? The also rans? Let's do a quick recap.
Andrew Cuomo, who's spent millions' in taxpayer funds to sue anyone who spoke out against him, now wants to abolish a state ethics panel that considered whether to force the former governor to forfeit millions from a book deal in 2020.
Ken Paxton is attempting to revoke a Catholic non-profit's tax exempt status because it sued to delay the release of records about its immigrant clients along the border.
Chris Rufo has close ties to alt-right publications that publish propaganda on behalf of dictators and authoritarians around the world. He's part of a network of global agitators pushing racism, fascism, and conspiracy theories via 'anonymous' blogs popular among the right.
A Texas billionaire named Tim Dunn has been showering money on groups fighting against clean energy, public education, and anyone he views as non-Christian. He has become a powerful force in Texas politics and captured significant portions of its legislature as part of his self-described 'holy war'.
Former Trump White House advisor Stephen Miller's dark money legal group continues to fill federal and local dockets, filing numerous culture war lawsuits on behalf of whoever it can find to sign their name to them. Its goal is largely to undermine Biden's agenda via judges Miller helped install, who have been eager to help.
Short Cons
The New Inquiry - "What is Street Epistemology? He’ll demonstrate. It’s one of two things he does, the other being jiu-jitsu. “I don’t have a life,” he says. “I talk to strangers and I wrestle strangers.” But before we can do Street Epistemology, Peter needs to think of some questions."
CNN - "The president of the far-right cable network One America News solicited additional information from an anonymous tipster who provided “stolen” passwords of Smartmatic employees after the 2020 election, according to emails recently disclosed in court and new allegations from the voting technology company."
NPR - "Records obtained by The Texas Newsroom under the Texas Public Information Act show that as of Jan. 24, the state has spent over $148 million to bus migrants to predominantly Democratic cities. The price tag grows every day."
404 Media - "Facebook is awash with scams that direct visitors to fake live streams of funeral services, preying on relatives and friends of the deceased when they might be at their most vulnerable, 404 Media has found."
WSJ - "Fischer, a 41-year-old mental-health professional and suburban homeowner with two boys, was by then in debt by six figures from online gambling losses. For nearly a year, she lost again and again, complaining to at least one gambling company that she had a problem but couldn’t stop."
ProPublica - "...researchers across the country were flummoxed this week when the Centers for Medicare and Medicaid Services announced a proposal that will increase fees and diminish access to claims data that has informed thousands of health care studies and influenced major public health reforms."
Lawyers Guns Money Blog - "It turns out that the publisher is retracting three papers on which Judge Matthew Kacsmaryk based his opinion that the FDA had not properly approved the drug mifepristone, used in abortions."
Know someone thinking of spending his country's vast wealth on a bunch of luxury real estate developments and video game tournaments? Send them HERE!