Dave Smith and James Smith dissect Kanye West's Hitler comparisons and sexual assault allegations, contrasting them with Michael Jackson's legacy. They pivot to the FTX scandal, exposing Sam Bankman-Fried's fraudulent use of customer funds for Alameda Research debts, which they condemn as a Ponzi scheme disguised by his philanthropist persona. Finally, they critique Elizabeth Warren's hypocrisy regarding Elon Musk's free speech, highlighting the political double standard where censorship is opposed only when applied to tech moguls. Ultimately, the episode reveals how celebrity infamy and financial fraud exploit public trust while political figures selectively enforce free speech principles. [Automatically generated summary]
Transcriber: nvidia/parakeet-tdt-0.6b-v2, sat-12l-sm, and large-v3-turbo
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Enough of Alex Jones00:14:03
Fill her up.
You are listening to the Gash Digital Network.
We need to roll back to state.
We spy on all of our own citizens.
Our prisons are flooded with nonviolent drug offenders.
If you want to know who America's next enemy is, look at who we're funding right now.
Every single one of these problems are a result of government being way too big.
You're listening to part of the problem on the Gash Digital Network.
Here's your host, James Smith.
What's up?
What's up?
Welcome to a brand new episode of Part of the Problem.
I am the most consistent motherfucker you know, the libertarian Tupac Dave Smith.
He is the king of the caulks.
Robbie the fire, Bernstein, COVID, Jesus.
How are you, sir?
I'm doing great.
Excited to go to Arizona.
How about you?
Oh, yeah.
That's that's fun.
When do you leave?
Uh, tomorrow morning, 6 a.m., which sucks.
Yeah, but you know what?
Those are the flights that don't get canceled as often.
So get on those 6 a.m.
Is that the move?
The early ones don't get canceled.
I almost always fly first thing in the morning, and I haven't had any of those canceled.
So that's my story, and I'm sticking to it.
I don't know if it's actually true, but that's how I feel.
I think that's the move.
I think because I keep flying out the night before, but then you got to get a hotel room.
You don't sleep well anyways.
You get in late and you're like, all right, well, now I'm drinking.
I don't know.
So I think the early morning makes more sense.
I don't, unless I have a thing early in the day, I don't like to fly in the day before.
Like if I just have shows that night, if I got like a podcast at noon, I'm not going to fucking fly in that morning.
But other than that, I want to sleep in my bed too with the family.
Flight strategies, breaking news from the podcast podcast.
Well, I think I'll take an early flight out to Los Angeles on New Year's to me and my brother Louis Jay Gomez are co-headlining up at the comedy store.
So we're actually, I should say, we're doing like a big showcase show.
So there'll be a whole bunch of comics on that on that show.
A whole bunch of the LA guys will be out there.
So come hang out with us, spend your New Year's with us if you're in the Los Angeles area.
Anything else you want to plug?
Yeah, Phoenix, Tucson, Shell New Year's Eve party, Kansas City, Omaha, Nebraska, St. Louis.
So, you know, get some tickets.
Come hang out.
Hell yeah.
Okay.
Let's get into it for today.
Listen, we can't, we just can't move on from Kanye quite yet.
He's god damn it, dude.
Kanye West is back on another show this time.
Alex Jones.
He stepped into Alex Jones' show.
And let's just say he has not moderated his position since in the last few days.
He is still being Kanye.
Here is Kanye West dressed in a very reasonable outfit.
Here is him making a moderate out of Alex Jones.
Let's watch.
You're not a Nazi.
You don't deserve to be called that and demonized.
Well, I see good things about Hitler also.
The Jews I love.
I just love this.
I don't know if you saw the interview where he was there with Nori Noriega, who's like a big rapper when I was a kid, but he does a podcast now and he was interviewing him.
And it was just like the whole interview is them like trying to throw him lifelines.
Like it's just like them trying to be like, I mean, you know, it's the same thing Alex Jones is doing here.
He's like, yeah, you're, I mean, people are calling you a Nazi, but I don't think that's fair.
You're not a Nazi, right?
He's like, well, I do really like this Hitler guy.
That is, that does sound pretty Nazi-ish.
I don't know.
But Noriega, the whole time, they're like, they're like, well, but you don't hate like all Jews, right?
Like, you're just, you're not saying we all, we love Jews, right?
We love all people.
We don't like hate all of them.
You're just saying, like, these ones give you bad contracts in the record industry, but you don't hate all of them.
And Kanye's like, well, I want little Jewish children to wake up and ask their parents, why is everyone so mad at us and shit like that?
And they're just like, and they're like, all right.
Well, it's just so weird to see these people like trying to throw him lifelines, him being like, no, I'll stay out here in the water.
This is where I'm comfortable.
And then them just being awkward.
Anyway, let's just play it.
I see, I see good things about Hitler also.
The Jew, I love everyone.
And Jewish people are not going to tell me you can love, you know, playing this.
You can love what we're doing to you with the contracts.
And you can love what we're, you know, what we're pushing with the pornography.
But this guy that invented highways, invented the very microphone that I use as a musician, you can't say out loud that this person ever did anything good.
And I'm done with that.
I'm done with the classifications.
Every human being has something of value that they brought to the table, especially Hitler.
First off, I think a quick fact check will tell you that Hitler did not invent the microphone.
I was just saying, I'm not saying, I'm going to go along with the spirit of everyone did something good.
He did not invent the microphone.
I don't think he invented the highway either.
I didn't think he built a big one, but I don't think he invented any of those.
Everyone did something good, especially Hitler.
It's like, all right.
But you know, the more you hear from Kanye, and I, it literally blows me away.
It's like, even the people like trying to defend him on every level now.
I just maybe I'm missing something, but I like as I said to you before, Rob, I go, you must just really fucking hate Jews that you're trying to find some way to defend this guy who's just incoherently rambling.
But the problem, my problem with Kanye is not that he's, you know, an anti-Semite or even that he praises Hitler or even any of this shit.
You know what the problem with Kanye really is, Rob?
And it's this simple.
And it's almost like as a country we forgot.
He's a gay fish.
It's what it's always been.
It's the same thing.
South Park nailed it all those years ago.
He's he's just a gay fish.
He just wants to sit there and talk about what a genius he is and how he does everything and wear this goofy outfit and rant incoherently to anyone who's willing to listen because that's just like that's it.
And he's just getting all this attention on himself for doing these ridiculous stunts.
I mean, I got to say, I will admit, this one was pretty goddamn entertaining.
So it's kind of at least this one was fun to watch.
I mean, I didn't watch the whole thing.
I don't even know where you go to watch Alex Jones' whole thing.
Well, to be in trouble for being called an anti-Semite and then going, listen, let me clear this up.
I just don't think we're taking enough time to appreciate Hitler's true beauty.
That's why at least Alex Jones is letting him, you know, get after it, because these are the ideas that I'd like to hear and explored, especially Hitler, the most underlooked of all the talents and souls that have graced our planet Earth.
We don't take enough time.
We should have Hitler Appreciation Day because especially Hitler, we should look into and find more of the good in him.
It is, I really do.
I don't know.
I wonder what the fuck is going on in this dude's head.
But yeah, he's, it's not even like, and I do say, as I've said in previous shows, there is something I almost respect about having all the pressure in the world to just walk back what you're saying and not walking it back.
Like, I kind of inherently respect that.
The problem is what he refuses to walk back is nothing.
He just doesn't actually have anything to say.
And like, I've listened to enough of it now.
It's every time it's just like non-linear, incoherent rap.
I think we got a problem in our culture where sometimes you can be very talented at something and catch some luck in your life to become very successful at that thing.
That doesn't make you a genius.
It doesn't mean that you got all the answers to life problems.
It might not even make you very skilled at anything other than that one thing that you're particularly good at, which is pretty awesome to be great at one thing and have people really love it and want to spend money on it.
So it's like, just focus on that.
You're pretty lucky.
You know what I mean?
Don't buy the bullshit that like the fact that you feel you mastered this talent.
You're actually God gives the world.
It's not that you're musically talented.
It's that you can explore any industry and come up with the world's greatest ideas, which includes if we want to be better people, we have to spend more time in looking at the good of Hitler.
Well, there's that.
That's definitely one of the problems.
And then I think there's another problem that is almost like with the audience.
And I think that what happens, look, I think maybe our audience is guilty of this at times.
But it's almost like, you know, that meme that's like, it's like, I support the current thing.
And it's just like kind of talking about people who, whatever the current thing is, they're going to support it.
There's almost like a version of that, which is like, I oppose the current thing, whatever it is.
So if it's like, you know, if you're against fucking CNN, then whatever, whoever's against them, you're for.
And like, it's almost like people are just being like for this guy.
And there's also, I mean, I think we've, we've built up a culture of calling people racist, sexist, homophobe, you know, anti-Semites when it's completely unfair.
And so it's almost like a lot of people are just like, oh, if anyone gets called that, it's like, fuck you.
That's, you know what I mean?
I'm on that guy's side.
This just seems like, like, I don't even, I'm not even sitting here being like offended, like, oh my God, it's so horrible that you're saying nice things about Hitler.
It's, I'm just like, this is stupid.
What's there's nothing interesting here.
You're not making a point.
You don't, you don't know the first thing about anything.
I don't know what's even interesting about this conversation.
Anyway, yeah, I don't.
His fashion design is he watched that scene in pulp fiction and said, you know what?
Let's all wear that.
Man, that one was weird.
I don't know.
There was also, there's one other quote was like after this whole round, Alex Jones just seems uncomfortable and he goes off on a whole thing and he's like, look, they're saying all these things about me.
I don't like, I don't like Nazis.
I don't like Hitler.
And then they're going to commercial and Kanye just goes, I like Hitler.
He says it again.
Wow.
Hold on.
Let me find.
Did even Nick at some point stand up and go, you know, while I might be a gay Mexican who's pro-white nationalism, I'd like to reiterate, I'd like to explain the fact that I'm not actually pro-Hitler.
He might even be taking it beyond where Fuentes wants to go where Puens is like, all right, well, where was Milo on this one?
He didn't want to go.
I don't know.
It's a good question.
Maybe there's trouble in paradise.
Hold on, fuck.
Let me see if I can find that.
I had it up here before, but God damn it.
This really is worth.
And Torchnager said he loved Hitler.
They gave him an award.
I'm just saying, I don't like Nazis and I don't like what some of the mafias are doing either.
Just like as they're on their way out.
This is for no reason.
Jeez.
I mean, he's really like.
I know he's pod committed.
Well, yeah, there's something about he's just like, I'm not backing down.
I'm not backing down.
I'm doubling down on this.
I'm not, that's it.
And I guess he's got enough money and enough shit that he's just like, I don't care.
This is what I'm going out with.
Like, this is it.
But imagine, like, you know, it is kind of sad in a way because Kanye, if he was doing this about any cause that like was actually a worthy cause and go, but you're just going at like you're going out just to make sure it'd be like the thing that motivates me the most is I got to work up fucking hatred against Jews or make people take a look at this Adolf Hitler guy again.
Like, oh, all right.
Well, that's quite a hill to go out on.
I don't know.
And by the way, for me, being the guy who keeps saying, I don't believe that there's this rising tide of anti-Semitism, give me the analytics.
It'd be funny if like his album sales just spiked from being on Alex Jones.
And then I'd be like, you know what?
I take that back.
Well, it's hard.
It's hard to like, you know, with a lot of these things, it's very hard to actually measure.
Cause like, look, I mean, Alex Jones is getting like, I'm sure, a ton of eyeballs on him.
You know what I mean?
And I'm sure like the ratings for that Tim Pool episode were phenomenal.
I'm sure a ton of people are watching this right now, just sharing the clips all over.
But it's hard to like gauge how many people are watching this because like they like they like what he's saying and how many people are just watching it, you know, like the way we are or most people I know are like, it's just like, yeah, it's just the spectacle of this is incredible.
So anyway, I better hope he doesn't go back to music because he might actually imagine if he wrote like the world's greatest tunes about hating Jews and everyone's like, you know, feeling it.
Let me tell you something.
As a Kanye fan, and this is how I always feel with these things, he's still one, one banger away from me just being like, wow, this is a great song, not really caring about any of this shit.
I was fucking, I still listen to Michael Jackson and I don't even know.
I know there's some people who go, you got to take a deep dive.
He's really innocent.
He didn't do it.
Here's the truth.
I've never taken a deep dive because I don't care.
That music is still that music.
If he did it, well, he's dead.
Can't punish him now.
You got to separate the artist from the child rapist.
Sheath Underwear Sponsorship00:02:49
That's right.
Well, look, I'm just saying, if he's guilty, right?
He never got fucking prosecuted for it.
He never got punished.
That's horrible.
What's happened to those kids happened?
That's terrible.
But there's no sense in punishing me by taking away his music from me.
I never did nothing.
And you should honor the sacrifice of those kids' buttholes.
Like they went through it so that we could all still enjoy that art.
Yeah.
Maybe that's what it took to make Billy Gene.
And if so, then it's like, all right, yeah, that's what was all for not.
I'm not saying you should do that as a part of your creative process, but if it's been done and gold is out, should we throw out that gold?
It's like using the science that the Nazis figured out.
You know what I mean?
It's like they already tortured all those people and now we just have good info from it.
So might as well take a look, take a look at what they found.
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All right, let's get back into the show.
All right.
So it turns out what they found was how to program Kanye West.
And we're, and now we're praising the Nazis too.
Yeah.
No, I basically were coming around to realize that Kanye had a point here.
You know what?
Shit.
Kanye is right.
Everyone did something good, especially Hitler.
All right.
So from one spectacle to another, this one is a little bit more substative.
Jesus.
Fractional Reserve Banking00:15:10
There's a little more substance to this and actually speaks to this crazy thing.
So of course, we did an episode recently covering the whole insane, what is it called?
F FTX thing, which is just really an insane story.
This guy, Sam Bankman Fried, he was just at this like fucking huge event where Zelinsky spoke and Janet Yellen was there too.
I also sent a video to you, Brian, a Janet Yellen video.
That was the other thing I wanted to do.
We'll pull that up next.
But yeah, evidently this guy can still come in and speak to these big events, but he did sit down for a grilling from Good Morning America.
I thought this was pretty interesting.
So let's play a clip from that.
A lot of people look at you and see Bernie Madoff.
Yeah.
I mean, I don't think that's who I am at all, but I understand why they're saying that.
People lost money and people lost a lot of money.
And I mean, at the end of the day, look, there's a question of what happened and why and who did what, what caused the meltdown.
And I think that reads very differently, right?
When you look at the classic Bernie Madoff story, there was no real business there.
The whole thing, as I understand it, I think, was just one big Ponzi scheme, right?
FTX, that was a real business.
He was at the top of the cryptocurrency world.
30-year-old billionaire since let's pause it for a second there.
It's hard.
This is a hard argument for him to make, because especially when you're like printing your own coin and then taking investor money and lending it out or putting it up on margin, you know what I mean?
To your other company, it's pretty hard to say there was a real business there.
I mean, seems kind of just like the crypto version of what Bernie Madoff did, but whatever.
Anyway, also didn't notice the guy is so weird.
It's really bizarre to like see this dude.
You'll see coming up in this interview, just like the way he talks to himself after a question's been asked and the way he like constantly is looking around and stuff.
Like, you know, incredibly bizarre human being.
I'm not buying the little Nikki act.
Yeah.
No, I know what you mean.
All right, here, let's keep playing.
Super Bowl ads, Nailing Stadiums, Steph Curry, Giselle Bunch.
We did a lot of things to try to try and bolster our reputation to try and, you know, help our brand.
But in the early morning hours of November 11th, it all came to an end when FTX filed for bankruptcy and Bankman Fried stepped down as CEO amid reports of FTX customer funds being used to pay Alameda research creditors.
This confirmed by former Alameda CEO Carolyn Ellison during an early November video meeting with employees.
Alameda, the crypto trading firm also founded by Bankman Freed.
ABC News reached out to Carolyn Ellison for comment, but has not heard back.
One of the reasons FTX went bankrupt is because FTX deposits were used to pay Alameda's creditors.
Carolyn Ellison said you knew about that.
Is that true?
You know, best I can tell, Alameda did have a big position open on FTX.
That position, I think, was very overcollateralized a year ago.
There is a total market collapse and specifically a large correlated collapse in its assets over the last month and to some extent over the last year that I threatened that position quite a bit.
And I think that's, as best I understand, a lot of what happened there.
I am no cryptocurrency expert.
I'm no finance expert, but I don't think you answered my question.
Did you know that FTX deposits were used to pay off Alameda creditors?
I don't know of FTX deposits being used to pay off Alameda creditors.
Are you which creditors are you referring to?
Carolyn Ellison said that you all knew that these funds were used, were put into Alameda.
They were the funds owned by your depositors.
So I can't speak for who knew what.
A lot of the customers on FTX deposits right there.
Just this, I mean, I think while he's pausing and like talking to himself there, I'd imagine like I'm almost sitting here going like, dude, you should have a lawyer present with you.
You should really not be answering these questions with that.
If you could see he just doesn't want to answer because he asks him after the second time being like, which I thought was pretty funny, he goes, like, I'm not a crypto expert or a finance expert.
I'm pretty sure you did not answer the question that I just asked you, which is like, did you know that your depositors' funds were being used to pay off the fucking creditors from this other company?
Like, did you know about that or not?
And he goes, that finally he goes, I'm not going to speak to who knew what.
You're like, but we're asking about you.
We're asking what you knew.
Like, I understand you can't speak to what other people knew, but he's only asking what you knew.
Like, how did you know that this is how your company was being run?
Anyway, pretty just remarkable to see him trying to weasel out of that.
Any other thoughts, Rob, or you want to keep playing?
No, I mean, you pulled a fucking scam, dude.
It's fraudulent.
And I don't, the whole, the whole selling of the FTT coins and then basically buying them at a valuation and then getting real money as a loan against an asset that actually had no worth other than what you purchased it for.
I mean, I guess maybe you suckered rich people.
So just get on the news and go, hey, listen, these people are institutional investors.
They could have done their homework.
They're a bunch of dumb suckers because much like the housing market, they just thought it was going to go up forever.
These people just looked at the crypto market and said, hey, we want in.
It's going to go up forever.
And I suckered a bunch of people and I'm keeping their money.
I would kind of respect them.
Yeah.
And that this is a new playing field.
It's not SEC regulated and they're going to have a hard time proving that I actually broke the law in any capacity.
Yeah, that'd be really interesting if he just said that.
But anyway, let's keep playing.
You know, a lot of the customers on FTX did have borrowers either in dollars or Bitcoin or Euros.
As you know, the FTX terms of service, tell the people who signed up, none of the digital assets in your account are the property of or shall be or may be loaned to FTX Trading.
But you're saying that happened.
Mind you're saying is a few things happen.
The first thing is if you pause it right here.
Now, this is where to your saying his defense is going to be tough for them to prove it.
This is where he's in trouble.
Is that it very clearly says in his terms, like, this is the agreement that he was making.
Was that no?
It's like none of your money will be used in this way.
And then it was.
So anyway, let's keep playing.
Saying is a few things happen.
The first is there is a margin trading facility on FTX by which users can lend out funds by which other users borrow funds.
And so there are explicit cases where there is, you know, margin send where there is borrow lending.
If Alameda is borrowing the money that belongs to FTX depositors, that's a bright red line, isn't it?
There are lots of pause for second, actually.
Sure.
I just want to say objectively, one of the things that's very funny about this is that when everyone's so shocked about the borrowing of depositor money, that's fractional reserve banking.
So it's funny every time you see one of these clips and people are shocked, how could you engage in this fraud?
Let's understand that that is the fraud of the banking system, but the stupidity of allowing banks that are not by the Fed to essentially hold your funds and engage in fractional reserve banking.
At least when you do it with the Fed, there's horrific problems.
It costs us all money over time.
The thing will explode at some point, but you do have the security of the fact that it's backed by the Fed.
You start doing fractional reserve banking away from the Fed, and we can all know that's not going to work out.
Well, it's see, this is exactly what I was going to say.
And I'm so glad like you picked up on the same exact thing.
There's something, there's something really funny and entertaining about this to me that if any non-government entity is doing the same thing, everyone sees it so clear for what it is.
You're like, oh, but that's fraud.
You can't just fucking do that.
You know what I'm saying?
Like, you can't just like take people's assets and then lend that out to other people.
And they had no idea you were doing that.
This is like, obviously, obviously, this is going to crash.
This is going to be a disaster.
But it's literally what the Federal Reserve does.
Excuse me.
This is what the big banks do.
And it's all backed up by the Federal Reserve.
Is that for people who don't know it just very simply fractional reserve banking just refers to what your bank actually puts away?
Like when you open a checking account or a savings account, in most people's mind, they think of it as a, because the term is bank, that they have put their money in a bank.
And the bank is holding your money, but that's not true.
The bank holds a tiny fraction in reserves.
I think now, didn't they lower it to like nothing at this point?
I don't even think there are any fractional reserve standards anymore.
But basically, for the longest time, it was 10% of your money they would hold on to and the other 90% they loaned out.
Now it gets even crazier when you realize the ripple effect of this.
So just for example, right?
Let's say whatever it is, you know, I open a checking account with $1,000, right?
So they now take that account and they put $100 away and they lend $900 to Rob.
So now Rob gets a loan of $900.
But like most people, Rob doesn't, you know, like if you're talking about a big loan, Rob doesn't just hold that money in cash.
Rob puts it in the bank, right?
Because now he's got this money in his bank account.
So he puts $900 in a bank.
And now they put $90 of those dollars away and they lend out $810 to Brian.
Now Brian has $800.
He put $810.
He puts that in the bank.
And what do they do?
They put $81 away in reserves and then they loan out right.
And so it keeps going over and over and over again.
And you get up to this point where there's like $10,000 out there.
There's all of us who all think we have this money, but all that actually exists is the $1,000.
The original, that's just on the first thousand.
And all of these people out there think they have way more money.
And then basically the argument is that it sends these price signals into the market.
Like there's way more money than there is.
And if anyone ever wanted, and you used to have this all the time when you'd have runs on banks, and you know, this is in what's it called?
A Christmas story?
What's the movie where they actually break down when everyone comes in and wants it?
And he's explaining, no, your money isn't here.
But it's kind of like their justification for fractional reserve banking.
They're like, your money's with the banker and the banker's money's with the florist and the whole thing.
But it's an insane system.
But the point, anyway, that I was trying to make at the beginning that Rob was making too is that when you see anyone else doing this, you know it for what it is.
It's so easy.
You just look at it.
You go, oh, well, that's fraud.
You're a criminal.
Oh, is it Miracle on 34th Street?
I'm sorry.
My mistake.
But, you know, it's like, yeah, you're clearly a criminal.
Everyone can see that.
In the same way that, like, if anyone was counterfeiting, if you found out that someone has a counterfeiting machine when they're just printing up $100 bills, and we all know right away, you go, well, what is that person?
Well, he's a criminal.
You're a fucking criminal.
And why are you a criminal?
Why is a counterfeiter a criminal?
Because you're stealing from all the rest of us.
Isn't that just so obvious?
You're stealing everybody else's money.
You're stealing purchasing power from everybody else.
You're getting off free while we all have to work for our money.
And yet, when the Fed does it, it's monetary policy.
So that's just what they do.
And there's a second layer to it, which is the leveraging.
So, like in an FTX thing, so let's say you're selling your, you've got your FTT token, which has, let's just say, an evaluation of $100 a token because you purchased it from yourself.
And now you take a loan out against that.
And you take that money and you buy someone else's cryptocurrency.
Now, those people think, oh, look at how much my cryptocurrency is worth.
And then they go buy something else.
And then they create a derivative contract against that thing.
And all these things are going up because they think that there's money in the system.
And then when the one thing collapses, everything's got to come down because everyone's pulling their money out.
And you realize that this signal was just inflated from which that's what's going on in the crypto universe.
It's not that much different than what happened with subprime lending is that you got all this money in the system.
So you're buying these mortgages, then you're collateralizing them, you're putting them together, more liquidity, more leverage.
Ah, fucking circle, circle, circles.
But I don't remember at that time watching any single individuals from Lehman or Goldman Sachs or AIG having to answer these questions like Sam Blankenstein over here.
No, not like this.
Man, this guy's really making you agree with Kanye, isn't he?
Yeah, he came in right away to be like, you know what?
I'll make that actual reality, Kanye.
I got your back.
You know, I'm starting to see where he's coming from a bit more.
Maybe we shouldn't have done these segments in this order.
But right.
And also the other point to that too is that the more you securitize all of this debt, the more people get brought down when the whole thing goes belly up.
So just for your example, like in the subprime, with the subprime mortgages, now it's not just that, like, oh, okay, there's this guy who's going to lose his house and this bank who's going to like lose their, you know, whatever.
I don't even know how much the banks actually lose because they collect the house or whatever.
But if the house goes down in value, so the bank loses some money, the guy loses his house.
But now it's also like this was, this was securitized, chopped up into a million pieces and sold to people's fucking pension funds.
You know what I mean?
And so like their retirement is going down with this too.
So it just like really, it sucks all these people in to boost up this artificial bullshit idea that there's like real money, and then it brings everybody down.
It's like what the pedophiles are trying to do.
You rope as many people into it as possible so that when you get caught, now everyone's caught.
So you put out ads with little bears dressed up like they're, you know, about to be tied to a bed.
That's what they're trying to do.
Yep, there you go.
And the New York Times will defend all of them.
Well, yeah.
I mean, if you donate to Democrats, at least they will.
Leverage Scheme Risks00:13:01
Did you?
I know this is a total ADD moment, but do you see that storyline with that agency that put out the ads?
I've seen it.
Yes, yes.
I find those storylines so funny because it's like almost always things are overstated.
But when you see those ones, I'm like, well, I don't want to research that.
Yeah, I feel the same way.
You're like, I see people like sharing the images and I'm just like, I can't even look at this.
Yeah.
Like, I want to someone else, just let me know what happened.
Because even that somewhat normalizes it.
It's like, I don't even want to see it.
Yeah.
Yeah.
No, I know exactly what you mean.
Exactly what you mean.
There's some there's some real creepy people in this fucking world and some of them are positions.
Yeah.
Yep.
They sure will.
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All right, let's get back into the show.
Okay, let's keep playing.
Isn't it?
There are a lot of cases where that's actually explicitly part of the programs and that are.
Here it says that the digital assets may not be loaned to FTX Trading.
They can't be loaned out.
There existed a borrowed lending facility on FTX.
And I think that's probably covered.
I don't remember exactly where, but somewhere else in the terms of service.
But they'd have to approve of that.
They're saying they didn't approve of it here.
They're saying you approved of it.
If you rewind to the beginning of FTX, where some customers were, I think, in line with sort of existing relationships that they've had, at least in some cases, wiring money straight to Alameda Research in order to trade on FTX.
So you do know and you did know that FTX deposits were being funneled to Alameda.
So I was vaguely aware that that was how some wires were being sent in the first place.
Didn't that set off alarm bells in your head?
So there are a lot of people who are involved in that process.
And look, I really deeply wish that I had taken like a lot more responsibility for understanding what the details were of what was going on there.
I knew that legal was involved.
I knew that other groups at the company were involved, that there were agreements drafted up.
But you're ultimately responsible.
I mean, ultimately, absolutely.
Like, look, I should have been on top of this.
And I feel really, really bad and regretful that I wasn't.
And a lot of people got hurt.
And that's on me.
Just for those.
I like that that is just what it all comes down to.
He goes, how about I wrap this all up with a, look, I like totally feel bad about this.
I'm like totes apps.
Sorry.
We cool?
We cool now.
That's it.
Like, yeah, I mean, there's a lot of people who are upset because I defrauded them out of millions of dollars.
My bust.
That's where we're left.
All right.
Anything you want to add before we play the rest of this?
Well, it's full of shit, but it's kind of interesting that they would be so stupid to put right into the service agreement that the FTX can't borrow your funds.
I would think that you would, you wouldn't have it that cut and dry.
You would have looser language because his response to that is, yeah, but we allowed people to trade with margin, which is similar to any other brokerage account.
You would be allowed to have margin, but the assumption would be if I'm telling you that you're not allowed to borrow my shares, like if that was in the agreement that the, that, that I, I'm not going to loan my shares, the exchange to short somebody, then the assumption is that they're borrowed, like that they've got a relationship with a hedge fund or someone else, that they're lending me the money for the margin.
Yeah, right.
There's, there's also, there's a big difference between a brokerage account allowing you to trade on margin, then still assuming that they are not just trading your deposits on margin when you give it to them.
You know what I'm saying?
Like, and for people who don't know, trading on margin is basically where like you borrow money using your asset as collateral.
So you can, the upside is much higher, but then you could also owe money if it, if it goes down, right, Rob?
Like more or less that you're like, so if you had an account opened already, you put your money in, and then you want to trade on margin, you can make much more money because you're actually borrowing money to invest more in this.
But if you lose money, you come out not only like you lost your investment, but you could actually owe more money that you have to put in.
So in this case, he's taking people's investment, trading that on margin.
It's not just now the downside can really spiral out of control.
I think that's accurate.
I think that's more or less.
I think I got that more or less, right?
Okay, let's keep playing.
Here's what Mark Cuban has to say about that.
Yep.
He said, if I were him, I'd be afraid of going to jail for a long time.
At the end of the day, you know, it's not my call what happens.
And the world will judge me as it will.
Are you worried about going to jail?
There are a lot of things that are worrying me right now.
And, you know, as best as possible, I'm trying to focus on what I can do going forward to be helpful and, you know, let whatever, you know, regulatory and legal processes are happening play out as they will.
I do want to move on, but just finally.
Can you pause?
I also, this just infuriates me.
If you're this lost about your organization and you totally didn't understand the way it was operating, maybe don't try and help.
You can't have it both.
Like, firstly, the money's lost.
There's nothing that you can do to help.
So I don't need this whole act of, well, I'm going to work tirelessly to make sure that the money's referred.
What money?
The money's lost.
Well, you almost want to.
You're investigated in a leverage scheme.
It's gone.
It didn't exist.
It's like we go, hey, how much money you got?
How much money did you come out of this with?
Like, what's in your bank account right now?
What are you up?
That's what he's claiming.
Yeah, I know.
Like, you always want to go, like, oh, what's, I mean, I know you were always just making a dollar to give a dollar away, right?
You were this really great guy.
That's how you marketed yourself, remember?
That you were just getting rich so you could give all of your money away.
It's like, how'd that work out?
Where's I want to know?
Like, yeah, I know you say you don't got any money.
You've always kind of been saying that, but what says I heard you were driving a Toyota, but then we saw you were taking private jets to Malibu and shit.
What's going on here?
Where's your, I mean, yeah, just so you know what this feels like?
I can't place it because I never watched Law and Order, but I can see this scene in my head of the guy who loses his cool and he kills someone.
And then he's still holding the corpse and like the cops show up.
He goes, we got to help.
And we got, it's like, he's dead.
It's over.
It's finished.
Yes.
That's what this feels like.
Dude, the money's lost.
You're running a fraudulent Ponzi scheme.
It's over.
You're not going to be able to help anyone.
And if you're claiming that you were so lost in the way the organization ran, then, you know, then you were irresponsible for running it.
You reap the benefits.
So don't you still fucked up.
You're still not a nice person.
You're out there confidently pretending that you're running a business and that you should be on the cover of magazines and meeting with regulators.
You enjoyed all that clout.
You were out there selling that you had this under control and you didn't.
And if you were that lost, there's nothing you're going to be able to do to help people.
So quit, quit pretending.
Yep.
And it really, there's something also just truly revealing about not just that this guy didn't know.
You know what I mean?
Like how like, let's just say, take him at his word.
Take everyone at their word, giving everyone the benefit of the doubt, other than what this, you know, the dark side.
And then we spent the money.
Now we don't have the money, but I'll do what I can.
But just say, but let's just say, right, like that this isn't what it is.
At worst, what you have here is a crazy money laundering operation from like Ukraine to the Democratic Party, like some really crazy shit.
But let's just say at best.
So the best case scenario.
And this is like another little hint of why people have like trust has evaporated in every major institution in this country.
At best case scenario, if this is the least corrupt version that you could possibly interpret all of this to be.
So here you have this guy who does not understand the first thing about the operation that he's running.
Literally doesn't even realize that it's completely fraudulent and that he's ripping all of these people off.
And this guy is able to make it to the absolute top of this nexus of like political celebrity connectedness, sucker all of them into this thing, even like really supposedly wise institutional investors to invest in this thing that they do not understand at all clearly.
And then he loses all of their fucking money.
And just like this goes from being this guy who the establishment is praising as like, oh, this wonderful person who just wants to make money to give it all away.
Meanwhile, what he's actually doing is just robbing blind from a whole bunch of people in this best case scenario, Ponzi scheme that he's running.
Best case scenario, Ponzi scheme, worst case scenario, Ponzi scheme with a money laundering criminal element to it.
But that's the best case you could come up with is like, wow, these fucking are the entire establishment are fucking idiots who don't know what they're doing that they would just celebrate this guy and all of these people would get on board.
It's really like, it is pretty shocking, say the least.
This kid fucking went to MIT.
I couldn't dream of getting into MIT.
For all the intelligence you think I have here, there is no amount of effort I could have put in in high school and ended up in MIT.
I would not have gotten in there in any capacity.
This kid's not a dumbass.
The people working at that company, he had plenty of people with credentials.
I mean, I think that that was a CIA taking time bomb purposely to take out the crypto universe so that they could regulate it and blew up too quickly.
Yeah, look, I was giving you like the most generous possible interpretation, but if you're just looking at what's more likely here, it's not the most generous interpretation.
That's for sure.
All right, listen, we do, we got to wrap this one up.
All right.
Can we do the Elizabeth Warren clip?
It's so good.
We don't even know what's going on.
Okay, fine, fine.
Real quick, let's do.
We got a clip of Elizabeth Warren here.
This was pretty funny.
So yeah, we could just play this in its entirety.
Republicans say that Democrats are picking on Elon Musk.
Elon Musk is doing just fine.
But do you think that users have a right to freedom of speech, even if what they're saying is wrong or offensive?
I think that one human being should not decide how millions of people communicate with each other.
One human being should not be able to go into a dark room by himself and decide, oh, that person gets heard from, that person doesn't.
That's not how it should work.
Republicans say that.
Isn't it amazing how they will just totally turn it on its head and then use all of this like projection to go, yeah, that's that's kind of the point.
That's kind of what we're saying we object to.
That one person or one group of people can decide who's heard from and who's not.
Isn't the whole thing that he's promising that that won't happen anymore?
Just insane.
Just insane.
Now, really, we all know the truth is that what they object to is that he's not going to be deciding who can be heard from and who can't be, and that they're not going to be deciding on the people Elizabeth Warren wants to be heard from and the ones she doesn't want.
All right.
Anything you want to add on that, Rob?
I think we covered it.
I just think people need to be able to see that clip.