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Wednesday, February 8, 2023

How to Combat Gender Theory in Public Schools

 As radical gender theory has made its way into public schools across the United States, children as young as five have been exposed to ideas that encourage them to question their gender identities, sometimes with life-changing and irreversible results. Despite Americans’ broadly shared skepticism about gender-identity curricula and practices in schools, many ideologically motivated teachers and administrators have not relented in their mission to advance radical gender theory, even in otherwise-conservative areas.

Among many other examples I’ve uncovered, in Illinois’ Evanston-Skokie School District, kindergarteners read books affirming transgender conversions; in Springfield, Missouri, teacher and administrator training recommends recognizing and affirming a panoply of student gender identities. Over 4,000 schools nationwide feature “gender and sexuality” (GSA) clubs, the national organization which calls for the abolition of the American judicial system and the “cisgender heterosexual patriarchy.”

Too often, teachers and administrators keep parents in the dark or pressure them into “affirming” their child’s claimed gender identity. Indeed, school policies often advise—or require—teachers not to share gender-related information with parents. Michigan’s Department of Education encourages teachers to facilitate students’ sexual transitions without parental consent. In Fairfax, Virginia, and Montgomery County, Maryland, teachers are expressly barred from “outing” supposedly transgender children to their parents. The GSA Network instructs adult club “advisors” to keep a child’s involvement in a GSA club confidential.

Even where parents learn that their children have adopted a new gender identity, they’re often cowed into supporting gender “affirmation” when school officials present them with the Hobson’s choice of “a live son or a dead daughter.” Worse still, parents who agree to transition their children socially unwittingly invite a form of iatrogenesis— that is, “affirming” their child’s newly adopted name, pronouns, and dress in public likely increases the chances of the child’s persisting in that identity, which in turn raises the probability of unnecessary medicalization.

These practices are not only deeply misleading; they fly in the face of a century of American law. The Fourteenth Amendment’s Due Process Clause protects parents’ fundamental right to direct the upbringing, education, and care of their children. States should stand with parents and the Constitution against these intrusions on the family.

To that end, I have crafted a policy document designed to guide state legislatures wishing to curb the excesses of radical gender theory in public schools. With the American parents’ rights tradition as its lodestar, my proposal seeks to accomplish three main goals.

First, it includes measures to strengthen parents’ rights. These include prohibitions on school employees’ withholding information from parents about their child’s gender identity and health information, engaging in private conversations with students about matters related to sex and gender, or pressuring parents to proceed with “gender affirming” therapies or interventions. School officials would be required to inform parents about any change to their child’s health and wellness, and would no longer be allowed, without written parental approval, to affirm a student’s gender transition or to address students by names and pronouns other than those indicated on the enrollment forms provided by their parents.

Second, it regulates classroom instruction on sex- and gender-related concepts. As a blanket matter across public schools, it prohibits instruction on human sexuality and gender identity in elementary school, except when required by law as part of the state sex-education curriculum. Parents of children in elementary and middle school would have to provide written consent prior to sex education or instruction on gender-related concepts, and parents of high schoolers would have the ability to opt out of any instruction on such matters. And in response to the disingenuous attacks on Florida’s Parental Rights in Education Act, my proposal expressly allows teachers to discuss the presence of same-sex households and human reproduction within a biological context.

Third, building on earlier efforts at the Manhattan Institute to provide transparency in school training and curricula, it requires schools to post on their websites information about sex- and gender-related materials and activities used to instruct students and train teachers and staff. Curriculum transparency is broadly popular, facilitates democratic accountability, and gives parents the information they need to opt in or opt out of classes. My proposal would further require posting information about all school-sponsored clubs, regardless of type, and alert parents of their planned activities.

To be sure, these proposals alone cannot solve the problem of educational institutions captured by gender ideologues and their allies in the teachers’ unions. While the law plays a critical role in protecting children and parents, it is not a panacea. Conservatives, moderates, and pragmatists concerned about radical ideologies in their public education institutions must also push back by actively engaging in their children’s education, running for school board seats, and even urging their legislators to reinvent public institutions in conformity with the ideals of the American Founding.

Meantime, state law can play an important role in ensuring that parents fulfill their role as recognized under the Constitution. My proposal would go a long way toward achieving that goal.

The Mystery of America's Secrets Gone AWOL

 If America’s greatest secrets are so crucial to national security, why do classified documents keep showing up where they shouldn’t? 

Since last August, when federal agents raided former President Trump’s Palm Beach home seeking classified documents he had removed from the White House, national secrets have also been discovered at various properties connected to President Biden, including his Delaware home, and at former vice president Mike Pence’s Indiana home. 

Although each of these cases were slightly different, they had at least one thing in common: The repository of White House secrets, the National Archives, did not appear to have a firm list of which documents were missing. While Trump claims he had the authority as president to declassify and retain any material from his time in office, Biden and Pence, who had no such authority (either as vice president or while they served in Congress), have said they had inadvertently taken the material with them when they left the veep’s office in 2017 and 2021 respectively. This raises another question: If even underfunded public libraries will flag the failure to return a borrowed book and send out reminder notices, why isn’t a similar process in place to safeguard America’s top secrets? Why weren’t Biden and Pence directed years ago to search their papers for the missing secrets? 

“The system is not nearly as robust as it should be,” said Bradley P. Moss, an attorney who specializes in national security matters. “Most of the classified documents that are used on a regular basis [in the White House] are not tracked, logged and documented nearly as stringently” as they should be. “Is there documentation identifying the originals of the classified documents? Yes, almost certainly. Is that documentation constantly updated to reflect where every copy of every document is currently located and how it was transmitted at every step? Not really. It’s just too much.” 

Former Republican congressman Devin Nunes, who is now CEO of the Trump Media and Technology Group, said that handling of classified documents is a scandal. “It’s not like since 9/11 there’s been a lack of money or federal laws specifically for all this,” Nunes said. “The process isn’t broken; people just aren’t following the law. None of this makes any sense unless someone did something illegal.”  

National security experts said that given the systems in place to limit access to classified documents it is not surprising that almost all of the recently discovered documents can be traced back to the White House. Here’s how it works. 

Only elected officials with the proper clearance can view classified documents, and only in what the government calls a “Sensitive Compartmented Information Facility” (SCIF). (Famous spies or thieves, such as Edward Snowden or Reality Winner, got their hands on classified material at the agencies that produced it. )

For members of Congress the SCIF is a specific area in the Capitol basement that is governed by tight rules. Before entering the SCIF, people must surrender their phones and other personal devices. “You walk into the SCIF with nothing, you walk out of the SCIF with nothing,” said Javed Ali, an associate professor of public policy at the University of Michigan who served stints with the Defense Intelligence Agency and the FBI before joining Trump’s National Security Council. “Whatever 3 or 4 letter agency you’re in, you’re supposed to leave that stuff in the office, because you don’t want any unauthorized or unintentional leaks.” 

Nunes said those exiting the congressional SCIF must pass through more than one door and a guard, making it difficult for someone to depart with classified paperwork. No one could recall a case where documents went missing from the Capitol SCIF.  

Because of this, Nunes and Ali said, probably the most remarkable recent revelation was that Biden possessed documents from his years in the Senate, 1973-2009. “When you see batches of classified documents,” Ali said, “it’s clear these weren’t one-off mistakes.” 

None of the documents in Biden’s possession have been identified and the White House has refused to comment. 

Things are different in the White House. The Oval Office, for example, where the president regularly discusses classified matters with his team, is considered a SCIF, and there are other secure locations in the building.  

At the White House, copies of documents marked “classified” or the even more secret “compartmentalized” or “codeword” can circulate among officials there with proper clearance. This was underscored by the recent resurfaced White House photo from 2013 showing then-Vice President Biden clutching a classified document folder stamped “CODEWORD” in a public White House setting. Those documents are not, however, supposed to leave one of the White House SCIFs, and they are supposed to be collected at the end of any meeting at which they were reviewed, according to several people familiar with such operations.  Eventually, those documents are sent to the National Archives, where they are stored and made available to government officials and others with proper clearance. 

The problem is magnified by just how many copies there may be of sensitive paperwork. 

“What’s getting lost in all this is it’s very rare that there is only one copy of some of these things,” said a former government official who dealt with the storage of classified docs. “And the system in place is only as good as the people who follow it.” Whether that collection is rigidly observed at the White House, however, seems unclear. 

Lanny Davis, who served in the Clinton administration, said it isn’t only Hollywood that stamps “TOP SECRET” and the like atop documents. The color, the font, the folder a document comes in ‒ all of these send clear signals to participants that papers are classified. 

“There is no doubt; when you see red lettering atop a document, it isn’t a close call,” Davis said. 

The experience of more than a half-dozen people familiar with the process and rules surrounding classified documents thus suggests the White House can be a leaky ship, a finding buttressed by the fact Biden, Trump, and Pence all spent years in the executive branch. In the most famous modern case of pilferage, President Bill Clinton’s former national security adviser, Sandy Berger, was convicted in 2005 of stealing and destroying documents from the National Archives. In 2015-16, an investigation of Hillary Clinton’s nonsecure private server found 113 emails containing classified information, three of which had classified markings, sent while she served as secretary of state. 

When a president leaves office, his administration is required to send all presidential and vice-presidential documents ‒ including classified ones ‒ to the National Archives. It’s not unusual for former presidents to bicker over which records should be turned over to government depositories. In addition, active presidents have the authority to classify or declassify documents, an argument made by some of Trump’s team over the papers found in the raid of Mar-a-Lago, his Palm Beach home. 

The National Archives refused two requests from RCI to discuss their protocols or to offer comment on the mushrooming scandals.  

Although much of the discussion surrounding the recent discovery of classified documents has been colored by partisan politics, experts say the crucial issue is not the specific motivation of Trump, Biden, and Pence but systemic failures inside the White House and at the National Archives to catalog and collect the nation’s secrets. 

So far, the mistakes that led to the current scandals have yet to be identified by either the parties that possessed classified documents or the agencies who produced them. Biden has offered no explanation for how classified papers, some reportedly going back to his days as a senator, have been found in offices in Philadelphia and Washington D.C., as well as the garage and at least one other location in his Wilmington, Delaware, home.

And neither the extent nor nature of the documents has been revealed. Pence has said he takes “full responsibility” for roughly a dozen pages of classified briefings reportedly from foreign trips turning up in his Carmel, Ind., home, but it remains unclear how they got there. 

While there have long been complaints about the overclassification of  government documents – an estimated 50 million documents each year – there is a general belief that they must be protected. When classified documents were discovered at Trump’s home, President Joe Biden said he couldn't understand "how anyone could be that irresponsible. … I thought, what data was in there that may compromise sources and methods," regarding national intelligence. 

The partisan furor has been heightened by the Justice Department’s unprecedented step of raiding a former president’s house, while concealing information about Biden’s classified documents for months and now slow-walking searches of the various places they could be. The latter includes the University of Delaware, which has fought Freedom of Information Act requests to review the mountains of documents Biden dedicated to it after his terms as senator. 

White House officials have rebuffed all queries into how Biden has handled sensitive material or if any changes have been made to their procedures in light of the embarrassing revelations. Administration officials have dismissed the controversy as simple human error. 

“It was probably mishandled carelessly,” Davis said. Davis also believes some of what press accounts have labeled “classified information” is likely sensitive but not necessarily classified formally, meaning what has transpired are examples of bad judgment more than criminal. 

Yet the mystery of how documents the government considers sensitive enough to raid houses and appoint independent counsels wound up in multiple, insecure locations lies at the heart of what is going on now, according to Nunes. 

“We know how documents got to Mar-a-Lago, and it’s a little odd that they seem to know something was missing,” he said. “We don’t know how the documents got to all of Biden’s places but something doesn’t add up, unless someone took it.” 

https://www.realclearinvestigations.com/articles/2023/02/08/the_mystery_of_americas_traveling_secrets_880464.html

FDA OKs 510(k), CLIA waiver for BioMerieux multiplex respiratory panel

 The U.S. Food and Drug Administration (FDA) said on Tuesday that it has cleared BioMérieux’s BioFire Spotfire Respiratory Panel, the first COVID-19 test to receive a Clinical Laboratory Improvement Amendments (CLIA) waiver.

The in vitro diagnostic (IVD) test is used for the simultaneous detection and identification of multiple respiratory viral and bacterial infections in individuals suspected of having COVID-19 or other respiratory tract infections.

The agency reviewed the BioFire test through a dual 510(k) and CLIA waiver pathway, which was designed to speed bringing accurate IVD tests to CLIA-waived settings.

Waived tests include those cleared by the FDA for home use and tests approved for waiver under specific CLIA criteria.

According to BioMérieux’s website, the respiratory panel uses a nasopharyngeal swab in viral transport media to detect numerous viruses including adenovirus, SARS-CoV-2, human metapneumovirus, human rhinovirus/enterovirus, influenza A virus, influenza A virus A/H1-2009, respiratory syncytial virus, and others. It also detects bacteria – specifically, Bordetella parapertussisBordetella pertussisChlamydia pneumoniae, and Mycoplasma pneumoniae.


https://www.labpulse.com/business-insights/policy-and-regulation/fda-clearance/article/15306534/fda-grants-510k-clearance-clia-waiver-for-biofire-multiplex-respiratory-panel

What Is America’s Strategic Interest In Ukraine?

 As the Ukraine war enters its twelfth month, the military situation remains a stalemate, but a stalemate that gives the political advantage to Russia. If Russia can hold most of the territory in the oblasts of Luhansk, Donetsk, Zaporizhzhia, and Kherson that it annexed on Sept. 30, 2022, it will claim success for its “special military operation.” A dismembered Ukraine will be left with a trillion-dollar reconstruction bill on a GDP of barely $100 billion, a resident population of perhaps 25 million with ten million of its citizens living abroad as refugees, and a dim future.

In furtherance of what strategic interests has the United States acted in Ukraine? Is Ukraine’s NATO membership an American raison d’état? Did American strategists really believe that sanctions would shut down Russia’s economy? Did they imagine that the trading patterns of the Asian continent would shift to flow around the sanctions? Did they consider the materiel requirements of a long war that is exhausting American stockpiles? Did they consider what tripwires might elicit the use of nuclear weapons? Or did they sleepwalk into the conflict, as the European powers did in 1914?

Why did Russia invade? Would Russia have invaded Ukraine if the West and the Zelensky government had put Minsk II into effect, with autonomous Russophone regions within a sovereign and neutral Ukraine? Contrafactual history is inherently unprovable, but there are good reasons to believe that this is true. Protecting the rights of Russians separated from the motherland by the breakup of the Soviet Union is a Russian raison d’état. After more than 14,000 casualties in fighting between Ukrainian nationalists and pro-Russian separatists in Donbas before the February 24th invasion, it is hard to argue that Russia’s concerns were groundless.

In 2008, Russia intervened in Georgia to uphold the principle that anyone who holds a Russian passport—Ossetian, Akhbaz, Belorussian, or Ukrainian—is a Russian. Russia’s survival depends neither on its birth rate, nor on immigration, nor even on prospective annexation, but on the survival of the principle by which Russia was built in the first place. That is why Putin could not abandon the pockets of Russian passport holders in the Caucasus.

A generation of American diplomats, including Henry Kissinger and former Ambassador to Russia William Burns, warned that expanding NATO to Ukraine was a tripwire for Russia. German documents published by Der Spiegel in February 2022 confirm that Western powers gave Russia written assurance in 1990 against NATO expansion. Russia’s prostration after its 1998 debt default, though, allowed NATO to ignore these assurances. Under Clinton, NATO’s mission morphed into a nebulous human rights and social welfare agenda. NATO added Poland, Hungary, and the Czech Republic in 1999, and another seven former Soviet-zone countries in 2004. Meanwhile the Bundeswehr shrank to five ill-equipped divisions from the twelve combat-ready, heavily armed divisions of 1990. NATO degraded its military function as it padded its membership.

Ukraine is another matter. Russia regards its inclusion in NATO as an existential threat. Putin stated on the eve of the invasion on February 23:

Positioning areas for interceptor missiles are being established in Romania and Poland as part of the US project to create a global missile defense system. It is common knowledge that the launchers deployed there can be used for Tomahawk cruise missiles—offensive strike systems.

In addition, the United States is developing its all-purpose Standard Missile-6, which can provide air and missile defense, as well as strike ground and surface targets. In other words, the allegedly defensive US missile defense system is developing and expanding its new offensive capabilities.

The information we have gives us good reason to believe that Ukraine’s accession to NATO and the subsequent deployment of NATO facilities has already been decided and is only a matter of time. We clearly understand that given this scenario, the level of military threats to Russia will increase dramatically, several times over. And I would like to emphasize at this point that the risk of a sudden strike at our country will multiply.

In October 2021, Russia tested its first submarine-launched hypervelocity missile and deployed the first S-500 air defense system around Moscow. If American strategists were not angling for advantage in a prospective nuclear exchange, as Putin believed, why then abandon Minsk II and the principle of Ukrainian neutrality? Regime change in Russia has been on the agenda of some senior Biden Administration officials for a decade. As Undersecretary of State Victoria Nuland, head of the State Department Eastern European desk, told a Congressional committee on May 6, 2014: “Since 1992, we have provided $20 billion to Russia to support the pursuit of transition to the peaceful, prosperous, democratic state its people deserve.”

What Moscow saw was not the America of 1983, which pursued peace through strength, but rather provocation from weakness. It miscalculated on an invasion with just 120,000 troops. If regime change was not Washington’s agenda before February 24, it became so explicitly afterward. On March 26, President Biden declared that Putin “cannot remain in power,” defining America’s goal as regime change. This was a grave miscalculation. The Russian elite has rallied behind the regime, aware that its privilege and position will disappear if the regime falls, and the Russian people stoically follow their orders. December opinion polls show near-record 81% support for the regime.

Contrary to earlier American claims that economic sanctions would reduce Russia’s economic output by half, Russia’s GDP shrank by only 4 percent in 2022. Russia’s exports to China rose to $190 billion in 2022 from $86 billion in 2021, and exports to India reportedly doubled to $27 billion in 2022 from $13 billion in 2021, although the true total probably is higher. Russian fertilizer revenues rose by 70% in 2022 vs. 2021 despite a 10% drop in volume. Chinese and Indian goods have replaced many Western items, with only minor inconvenience to Russian consumers. Turkey, Armenia, Georgia, and other countries on Russia’s periphery have boosted exports to Russia, effectively circumventing U.S. sanctions. At about RUB 69 to the U.S. dollar, Russia’s currency trades higher than it did a year ago. New trading relationships, especially in energy, have emerged in Eurasia that consolidate Chinese influence.

It is unclear whether the West has an advantage over Russia in the prospective provision of materiel. By Estonian estimates, Russia can produce 9,000 artillery shells a day, compared to a present U.S. total of 15,000 a month. U.S. capacity to provide precision munitions to Ukraine is constrained, according to a January 9, 2023, CSIS assessment. Russia meanwhile has added substantial amounts of mobilized manpower, improved ground-air coordination, deployed additional SU-35 and SU-57 warplanes, and sent a significant number of its most advanced T90 tanks to the front.

The West probably does not have the military capacity to drive Russia out of Ukraine. To be sure, some U.S. analysts see military aid to Ukraine as a cheap option. The Hudson Institute’s Rebecca Heinrichs tweeted on January 12, 2023, that the U.S. risks “running out of certain weapons systems. But those weapons are also destroying weapons of a top-tier adversary cooperating with our number one adversary. Not a waste.” That is, the U.S. may sacrifice Ukraine in an unwinnable war of attrition in the hope of degrading Russian capabilities. U.S. military analysts touted one Wunderwaffe after another as the key to victory: Javelin anti-tank missiles, Switchblade drones, HIMARS, and so forth. Even if the U.S. provided Abrams tanks and F-16s to Ukraine, though, these systems would require many months of training before deployment. Russia meanwhile has successfully mobilized forces roughly double the size of its initial invasion force and improved its performance on the ground.

Having stumbled into a war for which it was poorly prepared, and having then failed to crush the Russian economy through sanctions, the United States faces a dilemma. A cease-fire in place, even an armistice like the North-South Korea divide, would allow Russia to claim success in its annexation of Ukrainian territory. Continuing the war, though, eventually will reduce Ukraine to dysfunctionality, as Russian forces continue to inflict casualties on the Ukraine Army, and Russian ordnance degrades Ukraine’s infrastructure. The U.S. could deploy weapons to strike targets deep inside Russia, or even deploy American combat forces, but at the risk of nuclear war with Russia, something the Biden Administration appears to recognize.

Barring a decisive offensive by either the Ukrainian or Russian side during the coming months, the war of attrition will continue. Western weapons will not give Ukraine a decisive advantage. With roughly five times Ukraine’s much-reduced population, Russia is the likely victor in a war of attrition.

The most likely outcome is a humiliating armistice. Paradoxically, that may redound to the long-term benefit of the United States. North Vietnam did the United States a favor by humiliating us before the Soviet Union did. It destroyed the limited-war illusion that possessed American military planners from the late 1950s onward. Our humiliating withdrawal from Vietnam in 1975 made possible a radical re-thinking of American military strategy, beginning under Defense Secretary Harold Brown in 1977 and continuing through the Reagan Administration. The United States undertook a revolution in defense technology that produced modern avionics and precision weapons, reversing the advantage that Russia enjoyed in conventional weapons in the early 1970s. The Russian military concluded after the 1982 Beqaa Valley air war and the initiation of the Strategic Defense Initiative that it could not keep pace technologically with America.

Utopian illusions about exporting democracy motivated America’s great blunders of the past generation, from Afghanistan and Iraq to Libya and Syria, and ultimately Ukraine. Perhaps we require another national humiliation on the scale of Vietnam to bring us back to the drive for technological superiority that ultimately won the Cold War.

David P. Goldman is Deputy Editor of Asia Times, where he has written the "Spengler" column since 2001. Previously he was an award-winning market strategist and research director at Credit Suisse and Bank of America. From 2013 to 2016 he was a partner at Reorient Group (now Yunfeng Financial), a Hong Kong investment bank. His books include How Civilizations Die (2011) and You Will Be Assimilated: China's Plan to Sino-Form the World (2020). He contributes to The Wall Street JournalNewsweekClaremont Review of Books, and Tablet, among other publications. He has consulted for the Defense Department's Office of Net Assessment and for the National Security Council. He serves on the advisory board of SIGNAL, an Israeli think tank specializing in Sino-Israel relations.

https://www.hoover.org/research/what-americas-strategic-interest-ukraine

Trump: Real SOTU Is Biden Is Leading Us To WWIII And He's Most Corrupt President In History

 TRUMP: Here's the real State of the Union. Over the past two years under Biden millions and millions of illegal aliens from 160 different countries have stormed across our Southern border. Drug cartels are now raking in billions of dollars from smuggling poison to kill our people and to kill our children. Savage killers, rapists, and violent criminals are being released from jail to continue their crime wave and under Biden, the murder rate has reached the highest in the history of our country.


Biden and the radical Democrats have wasted trillions of dollars and caused the worst inflation in half a century. Real wages are down 20 months in a row. Gas prices have soared and are now going up much higher than even before. And the typical American family is paying $2,200 in increased energy and food costs each year.

Joe Biden's weaponized Justice Department -- and I'm a victim of it -- is persecuting his political opponents. His administration is waging war on free speech. They're trying to indoctrinate and mutilate our children. He's leading us to the brink of World War III and on top of all of that, he's the most corrupt president in American history and it's not even close. But the good news is we are going to reverse every single crisis, calamity, and disaster that Joe Biden has created. I am running for president to end the destruction of our country and to complete the unfinished business of Making America Great Again. We will make our country better than ever before and we will always put America first. Thank you.

FTX bankruptcy fees near $20 million for 51 days of work

 FTX’s top bankruptcy, legal, and financial advisors have billed the company more than $19.6 million in fees for work done in 2022, according to Tuesday bankruptcy court filings. More than $10 million of that was for work done in Nov. 2022, as Sam Bankman-Fried’s crypto empire entered bankruptcy protection in Delaware.

The firms will initially only be paid a little over $15.5 million, or 80% of the value of their work, under a court-ordered interim compensation plan.

The law firms that billed FTX are Sullivan & Cromwell, Landis Rath & Cobb, and Quinn Emanuel Urquhart & Sullivan. Professional advisor Alvarez & Marsal and financial advisor AlixPartners also billed the company.

Some of the work that the firms billed for involved meetings with other companies that also were billing FTX for their time, or involved corresponding with former and current executives, including Caroline Ellison, the former CEO of Bankman-Fried’s hedge fund, Alameda Research.

Landis Rath & Cobb and Sullivan & Cromwell, FTX’s primary legal firms, billed the company a combined $10.7 million for over 8,400 hours of work. Landis Rath & Cobb billed $1.16 million for work done between Nov. 11 and Nov. 30.

Sullivan & Cromwell, a target for both lawmakers and Bankman-Fried over their pre-petition work with FTX, sought over $9.5 million in compensation for over 6,500 billable hours, in the period between Nov. 12 and Nov. 30. Over a third of those billable hours, totaling over $4.8 million, were for the work of partners, who typically charge the highest hourly rate.

Sullivan & Cromwell assigned over two dozen partners to FTX’s case, according to the filings. Jim Bromley, a partner at Sullivan & Cromwell and a lead attorney on the case, billed over 178 hours for the weeks between Nov. 12 and Nov. 30.

The legal filings offer a glimpse into the ferocious work done by advisors to untangle FTX’s complex web of accounts and slipshod accounting standards. Sullivan & Cromwell lawyers spent over 1,900 hours in November alone on work related to analyzing and recovering FTX’s global asset base, according to the filings.

Alvarez & Marsal, an advisory firm, billed $1.9 million for over 2,300 hours of work on “business operations,” meeting with lawyers, FTX executives, analyzing FTX’s holdings using blockchain explorers, and reviewing “cybersecurity scenarios.” Those operations included multiple hours in November corresponding with and calling Ellison, 5.3 hours in a single day imaging iPad files and other electronic devices, and a first-day hearing conference call that lasted 2.5 hours.

Quinn Emanuel, which billed over $1.5 million for work done between November and December, assigned over a dozen lawyers to the case, nine of whom were partners. One of those partners, Sascha Rand, billed over $13,000 for a single day’s work in November, corresponding and reviewing first-day issues. Another Quinn lawyer filed for over $17,000 on a “non-working travel” day trip beginning Nov. 21, returning on Nov. 22.

AlixPartners, a financial consulting firm, billed $1.1 million for work done over the course of a little more than a month, from Nov. 28 to Dec. 31.

FTX’s advisors aren’t entitled to their full fees yet. Under an interim compensation order, professional advisors are paid 80% of their filed fees, provided that no objection is filed. Full compensation for legal and advisor fees will not occur until a final fee application is filed, whenever FTX’s bankruptcy saga concludes.

That doesn’t mean that advisors won’t get their due, however. A 2019 Federal Reserve study said professional and consulting fees in Lehman Brothers’ bankruptcy were over $2.56 billion.

Lawyers for Sullivan & Cromwell did $40,000 worth of work just to appear in FTX’s first bankruptcy hearing on Nov. 22, based on court filings of hours billed and hourly rates.

https://www.cnbc.com/2023/02/08/ftx-bankruptcy-fees-near-20-million-for-51-days-of-work.html

"The Irony Is If Higher Rates Mean Higher Wage Growth, And Higher Inflation"

 By Michael Every of Rabobank

Inde-structure-able

Our Fed watcher Philip Marey has responded to Fed Chair Powell’s chat yesterday with a 50bps upward shift in his Fed Funds call for 2023. Rather than pausing at 5.00% after a 25bps hike next month, Philip now sees the Fed raising rates to 5.50% via an additional two hikes over the year – and he is flagging upside risks that Fed Funds may need to go as high as 6%. (See ‘Long Road Ahead’.) I know markets have the memory of goldfish, and everybody was always right, but 12 months ago that view would have been seen as science fiction.

This forecast revision, clearly sign-posted by Philip in advance, was not driven by Powell’s comments on goods disinflation (though notice the 2.5% m-o-m January surge in US used car prices on one industry measure). Rather it was because the Fed Chair stated the current US labor market dynamic “feels more structural than cyclical,” and his biggest worry is inflation in core services ex-housing as well as possible new exogenous shocks.

“Structural”. There’s a difficult word for markets to deal with. They can cope with the idea that there has been a nasty cyclical shock, because of ‘exogenous events nobody foresaw’, so rates had to go higher; but the idea there might be a permanent change in the economy so rates have to STAY HIGHER, is something nobody is contemplating. Including the Fed. How else do they project inflation coming back down to 2% by 2024, and only a moderate increase in unemployment at the same time? Do structural changes on the endogenous and exogenous fronts simultaneously resolve themselves in 18 months? How?

[ZH: here's how, as we explained last year "3.9 Trillion Reasons Why The Fed Will Raise Its Inflation Target"]

Relatedly, oligopoly specialist @matthewstoller tweets: “If the Fed doesn't continue to tighten financial conditions I worry inflation could re-accelerate. Auto industry giants have gotten used to high mark-ups and are not increasing production to meet demand.” He isn’t alone in that view.

In May 2022, the Boston Fed concluded: “The US economy is at least 50% more concentrated today than it was in 2005… Our findings suggest that the increase in industry concentration over the past two decades could be amplifying the inflationary pressure from current supply-chain disruptions and a tight labour market.” In April 2022, the Economic Policy Institute argued ‘Corporate profits have contributed disproportionately to inflation. How should policymakers respond?’, lobbying for an excess profits tax not rate hikes, by showing contributions to growth in unit prices in the US corporate sector for 1979-2019 being corporate profits (11.4%), non-labour input costs (26.8%), and labour costs (61.8%) vs.  Q4/2020–Q4/2021’s corporate profits (53.9%), non-labour input costs (38.3%), and labour costs (7.9%). In other words, a supply shock and ‘costs-plus’ price increases in a concentrated corporate sector led US prices higher (after loose fiscal policy). Now we might have a structurally tight labour market on top!

That’s as President Biden will reportedly say in his State of the Union address that he is building a “blue-collar America” where “no one is left behind”. (Apart from the white-collar workers who are easily replaced with ChatGPT?) Wage pressures much! On the other hand, Biden’s appointment of Lina Khan at the FCC is seeing a slow, grinding reversal of the Borkian revolution that led to such high levels of corporate concentration – but that will take far longer to take effect, if at all, than a third consecutive ‘blue-collar’ White House.

Indeed, imagine if powerful firms pay out higher interest costs, and higher wages, yet can raise prices to cover them? I think that used to be called a wage-price spiral.

Plus we have endogenous issues encapsulated in China refusing to take a phone call from the Pentagon to discuss balloons, Saudi Arabia to issue non-US dollar debt despite its currency being pegged to it, and Belarus’s president boasting, “The world will soon see new powerful monetary unions with a new reserve currency.” (Again, I don’t see these attempts working, or offering global peace or stability, but that doesn’t mean they won’t try, and that they don’t limit Western central banks’ room for policy manoeuvre.)

But don’t worry: inflation goes back to 2% anyway. Everywhere. Because reasons.

Of course, this is not just a US issue.

For example, yesterday’s other central bank action, where the RBA 25bps rate hike to 3.35% as expected, saw an accompanying statement that further rate increases will be needed in the coming months. In other words, local housing-obsessed analysts saying rates would not go close to 4% were wrong – and they may be even more wrong than that.

Albeit anecdotally, what we are seeing unfold in parts of Australia is that as mortgage rates reset higher, those carrying investment rental properties are not selling off their holdings. Instead, they are raising rents to ensure they feel no pain; and given there is a housing shortage, and less homes will be built as rates rise, renters either have to pay, or go live in the streets.

That might mean a deflationary collapse in demand as more money flows from the bottom, rent-paying strata of society up into the hands of the propertied class – which is the neo-feudal political-economy asset-based policies logically converge towards. (And why Henry George’s ideas about a land value tax are logical, as Martin Wolf argued in the Financial Times recently.) Or it might mean Aussie renters insist that they won’t live like serfs, and need much higher wages - which given the very tight labor market, they can get.

The irony would then be higher rates mean higher wage growth, and then higher inflation.

Of course this is not a forecast. Yet it underlines that if you don’t understand the structure of the political-economy then you can’t accurately forecast ‘just’ the economy. That’s the same argument we made in the geopolitical modelling exercise we just did for the UK and Eurozone regarding balance of payments and balance of power crises.

Quite literally, structure your arguments better if you want to be able to differentiate between economic science fiction and what is now economic science fact, i.e., Fed Funds heading for 5.5%, with a risk of a 6% peak.      

https://www.zerohedge.com/markets/irony-if-higher-rates-mean-higher-wage-growth-and-higher-inflation