Wednesday, November 09, 2022

Michael Moore: Blue wall stopped ‘ugly red wave’
Alejandra O'Connell-Domenech - THE HILL
Documentary filmmaker and activist Michael Moore thanked voters for creating a “Blue Wall” to stop Republicans from gaining control of the House and Senate during Tuesday’s midterm elections.


Michael Moore: Blue wall stopped ‘ugly red wave’© Provided by The Hill

“We were lied to for months by the pundits and pollsters and the media. Voters had not ‘moved on’ from the Supreme Court’s decision to debase and humiliate women by taking federal control over their reproductive organs. Crime was not at the forefront of the voters ‘simple’ minds. Neither was the price of milk,” Moore wrote on his Substack “Mike’s Midterm Tsunami of Truth.”

“It was their Democracy that they came to fight for yesterday. And because of that drive, we live to fight, and hope, for another day,” he continued. “Once again, massive thanks to all of you for helping all of us build a Blue Wall that stopped an ugly red wave.”

While votes are still being counted, Tuesday proved to be a better night than expected for Democrats, as the “red wave” many polls and pundits predicted would engulf the nation failed to do so.


Related video: Go blue? Michael Moore's key to beat MAGA Republicans
Duration 5:19


The GOP started the night off strong when projections from Florida showed Sen. Marco Rubio (R) and Gov. Ron DeSantis (R) winning their races.

But Democrats defied the odds by holding their own throughout the night and secured victories in key races, including the Senate race in Pennsylvania, where Democrat John Fetterman defeated Republican Mehmet Oz.

Earlier this year, Moore predicted that voters emboldened by the overturning of Roe v. Wade would ensure Democrats kept control of Congress in a blue “tsunami” during the midterm elections.

“On November 8th, 2022, an unprecedented tsunami of voters will descend upon the polls en masse — and nonviolently, legally, and without mercy remove every last stinking traitor to our Democracy,” Moore wrote on his Substack in October.

Previously, Moore accurately predicted that former President Trump would win the 2016 presidential election when many polls wrongly suggested Democratic nominee Hillary Clinton would become the nation’s first female president.

US midterm vote: How Democrats thwarted an anticipated ‘red wave’

Abortion rights and Republican tilt to the far right helped Democrats hold on in key races across the US, analysts say.

Michigan Governor Gretchen Whitmer was one of several Democratic incumbents in swing states who fended off Trump-backed challengers with relative ease [Rebecca Cook/Reuters]
AL JAZEERA 
9 Nov 2022

Washington, DC – The stars appeared aligned for Republicans. With economic uncertainty, a seemingly unpopular president from the opposite party in the White House, and historic trends on their side, they were hoping to deliver a knockout punch to their Democratic rivals in the United States midterm elections.

But as Americans woke up on Wednesday morning, it seemed like the much-anticipated “red wave” changed course and never made landfall.

KEEP READINGl
Photos: How the US voted in the 2022 midterm elections

Key takeaways – so far – from the US midterm elections

A Democratic push to protect abortion rights and Republicans’ move to the far right with the nomination of several Donald Trump-backed conspiracy theorists and election deniers helped change Democrats’ fortune, analysts say.

David Cohen, a political science professor at The University of Akron in Ohio, said the Supreme Court’s ruling in June that ended the constitutional right to abortion in the US was an “energising moment” for Democrats.

“It was one of the most important motivating issues to get Democrats out to the polls,” Cohen told Al Jazeera. “I think also the worry from many Americans about the threats to democracy – that issue was not looked at enough by prognosticators.”

President Joe Biden had stressed that “democracy is literally on the ballot” as he warned ahead of election day on Tuesday that candidates who question the integrity of elections posed a danger to the US system.

While results are still coming in and the Republican Party may well gain control of the House of Representatives, the Senate, or both, it became clear in the early hours of Wednesday morning that Democrats had outperformed expectations.

“Certainly by historic standards, this is really an incredible night for the Democrats. There has not been a majority party in the White House and in the Congress that has done so well in the midterms,” Lara Brown, a political science professor at George Washington University, told Al Jazeera in a television interview.

“Even if the Democrats lose the House, and they appear to be on track to do that, [Republican] Speaker Kevin McCarthy’s majority would be very narrow – and that would be a win for the Democrats.”


Defying historic trends

In US midterms, the party in control of the White House usually suffers major losses in Congress.

Former President Trump lost dozens of seats in the House in 2018. Barack Obama lost large majorities in both chambers of Congress in 2010, prompting him to describe the vote as a “shellacking”. George W Bush and Bill Clinton also lost control of the House and the Senate in midterms.

“In a normal midterm election, you see a seating chair switch of 31 seats – and that’s been more pronounced in presidents’ first midterm elections when voters who had turned out for the president in a prior general election tend to sit out the midterms,” said Robinson Woodward-Burns, assistant professor of political science at Howard University.

But this year, losses for Biden’s Democratic Party will be modest at best – and Democrats could end up with gains when all the votes are counted.

The party flipped a Senate seat in Pennsylvania in one of the most closely watched races in the country, and Democratic Governors Gretchen Whitmer and Tony Evers won re-election in the swing states of Michigan and Wisconsin, respectively.

Democrats also avoided major upsets in their coastal strongholds.

Senate races in Colorado and New Hampshire that were expected to be competitive ended up being easy wins for Democratic incumbents. And in the House, many Democratic candidates in swing districts survived, and the party was actually able to flip a couple of Republican-held districts
.
Democrat John Fetterman defeated Republican Mehmet Oz in a Pennsylvania Senate race considered one of the most important contests in the midterms
[Gene J Puskar/AP Photo]

Abortion was focal to many Democratic campaigns, with liberal candidates promising to protect the right to the procedure and painting their Republican opponents as “extremists” who want the government to dictate to women what to do with their bodies.

A conservative majority on the US Supreme Court – including three Trump appointees – had revoked the constitutional right to the procedure in June, fuelling outrage from women’s rights groups. Biden promised to pass a federal law to codify abortion rights as part of his pitch to voters.

On Tuesday, the states of California, Michigan and Vermont passed ballot proposals to enshrine abortion protections into their laws. And voters in deeply conservative Kentucky rejected a measure that would have amended the state’s constitution to say there was no right to the procedure.

While the defeat of the referendum will have no immediate effect on the law in Kentucky, which has an abortion ban in place, it showed that even some conservatives who vote Republican do not back government restrictions on reproductive rights.

Election deniers

Republicans also did not do themselves any favours by nominating far-right candidates for key races, including in swing states, according to analysts. Trump-backed candidates who question the legitimacy of the 2020 presidential elections faltered across the map.

In Pennsylvania, a state that Biden won by a little more than 1 percent two years ago, far-right Republican candidate for governor, Doug Mastriano, lost by more than 13 percentage points to Democrat Josh Shapiro.

In Michigan, election denier Kristina Karamo was trailing incumbent Secretary of State Jocelyn Benson by a similar margin with 87 percent of the votes counted by Wednesday afternoon.

Voters sent a message on Tuesday that “Americans are really not enthusiastic about extremists of either party”, said Brown.

For his part, Cohen said “candidate quality” undermined Republicans’ chances of winning across the map, citing several races where GOP hopefuls did not do as well as expected.



“Some of the alarming rhetoric we heard on the Republican side, I think really nailed home the message that American democracy is not a sure thing, and that there were many candidates on the ballot that would actively undermine the American political system,” Cohen said.

Beyond warning of what they call Republican extremism, Democrats also tried to tout their own record. For all his perceived unpopularity, Biden has been talking up his economic policies, including a bipartisan infrastructure bill he signed into law last year and the more recent Inflation Reduction Act that freed up billions in funding to combat climate change.


Moreover, the president’s decision to forgive up to $20,000 in student debt may have helped mobilise young voters who appear to have played a major role in the Democrats’ better-than-expected performance.

“The youth vote is overwhelmingly Democratic,” Cohen told Al Jazeera. “And I think they helped put Democrats over the top in a number of races.”

SOURCE: AL JAZEERA


Red Ripple: Democrats surprise themselves with their own strength

Nov 9, 2022, 12:03am MST

David Weigel
David is a Political Reporter for Semafor, joining us from the Washington Post. 

Democrats woke up on Tuesday bracing for a 2010-level wipeout, losing seats they’d held for generations. They entered Wednesday morning surprised by how well their 2020 coalition was holding together.

In New Hampshire, Sen. Maggie Hassan won a race that Republicans hoped was breaking their way. In Cincinnati, Democrats unseated Rep. Steve Chabot, a member of the 1994 “Republican Revolution” who’d helped impeach Bill Clinton. And in Washington, D.C. a stage that had been set for Kevin McCarthy to celebrate a new Republican majority stood empty, well after midnight.

“So far, this isn’t a wave,” said Pennsylvania Rep. Brendan Boyle, as early results in his state showed Republicans struggling to flip the four districts they’d targeted. “It’s a ripple.”

Republicans were still on track to flip the House, aided by a friendly gerrymander in Florida and a court-drawn New York map that created half a dozen winnable seats.

Late in the night, after polls had closed in every state, they’d flipped a number of seats President Joe Biden won by single digits. In Virginia Beach, they ousted Rep. Elaine Luria, a member of the Jan. 6 commission. In northern New Jersey, where Rep. Tom Malinowski looked vulnerable all cycle, he fell to Tom Kean, Jr. in a rematch of their 2020 race.

But Republicans shot the moon this cycle, talking confidently about a “red wave,” then a “red tsunami.” Former President Donald Trump hoped for a “humiliating rebuke” of the man who defeated him. Sen. Ted Cruz stumped across the Rio Grande Valley, telling audiences that they could sweep all three House seats in a region Democrats had won for more than a century.

They wound up with just one of those seats, as one of the Republicans who lost asked why the wave never materialized.

The Democrats’ surprising strength showed up early in the night. So did the problems with weak nominees that Republicans had worried about all year. In New Hampshire, where Donald Trump had endorsed former White House staffer Karoline Leavitt over a candidate favored by House GOP leaders, the first towns to report their votes found her losing where moderate Republicans usually won. Leavitt, who’d claimed that the 2020 election was rigged against Trump, quickly fell to Rep. Chris Pappas.

“Great night to be a moderate in a moment when politics looks insane,” said Matt Bennett, the co-founder of the centrist Democratic think tank Third Way – which had published a Monday memo warning that voters saw both parties as equally extreme.

Flush with cash in both their campaign committee and their affiliated super PAC, Republicans had expanded their target list all year, into places that Biden won by as much as 20 points. But they struggled to win much softer targets, with both Trump-backed MAGA candidates and more moderate Republicans. In Rhode Island, the GOP had recruited Allan Fung, who mocked Democratic ads that called him an extremist. He lost by 3 points to state Treasurer Seth Magaziner. In northwest Ohio, MAGA activist J.R. Majewski lost by double digits in a seat Trump had carried by 3 points. Democrats who worried that a GOP gerrymander would reduce them to just two House seats walked away with five of them.

With a few exceptions, like New York City’s suburbs and majority-Latino parts of Florida, Democrats held on by winning the suburban voters who flipped their way after 2016. Across the Midwest, Republicans got less than they needed in suburban counties where they’d blamed Democrats for increased crime. It was a potent message in Long Island. But it didn’t connect outside of Milwaukee, where statewide GOP nominees ran behind the 2020 Trump vote, or outside of Pittsburgh, where Democrats were on track to hold two seats where Republicans tied their nominees to the “defund the police” movement.

undefined headshotDAVID 'S VIEW

I can’t overstate how confident Republicans were when the polls closed today. There was talk of a 54-seat Senate majority, the biggest House majority in a century, new supermajorities in state legislatures. Lots of people who watched these races closely, including me, were looking for upsets in places Democrats never have to worry about. That didn’t happen. Democrats clearly turned out their base and kept some swing voters in line by highlighting the most right-wing, pro-Trump leanings of candidates who had wanted the race to be a clear Biden referendum.

Donald Trump makes election night about himself as Republicans underperform
Dave Levinthal

Former President Donald Trump speaks during the America First Agenda Summit, at the Marriott Marquis hotel July 26, 2022 in Washington, DC. 
Drew Angerer/Getty Images

Donald Trump blasted out a "poll" Tuesday night asking supporters whether he should run for president.

Answer "yes," and you're taken to a donation form.

Money contributed goes to Trump's own political action committees.

As a "red wave" failed to materialize Tuesday night and many Republicans underperformed, former President Donald Trump turned his attention away from struggling 2022 Republican congressional and gubernatorial candidates and toward his favorite politician of all: himself.

"TRUMP RAPID RESPONSE," an email to supporters reads. "DO YOU WANT PRESIDENT TRUMP TO RUN IN 2024?"

Click a green "YES" button and you're taken to a page featuring Trump boarding Marine One.

A donation form inveigles prospective contributors to give at least $45 and as much as $2,500.

A Trump fundraising message from November 8, 2022. Trump political committees

A Trump fundraising message from November 8, 2022. Trump fundraising committees

Trump has openly flirted with running for president again ever since leaving the White House in January 2021.

He's promised to make a "big announcement" on November 15.

All the while, Trump has aggressively fundraised for his post-presidential political committees, most notably Save America and Make America Great Again PAC.

Save America alone had almost $70 million cash on hand as of October 19, according to Federal Election Commission records.

‘Hats Off to the Democrats’: Lindsey Graham Begrudgingly Acknowledges Red Wave Didn’t Happen, Offers Biden Some Unsolicited Advice

Sen. Lindsey Graham (R-SC) acknowledged a red wave did not materialize on election night as Republicans had hope in a downbeat interview with NBC News as results were coming in.

“Let’s talk about New Hampshire, because here’s here’s one where Republicans were feeling kind of good recently. But you do have General Bolduc, who it was controversial election denier from that wing of the party. Well, how are you reading these tea leaves?” Savannah Guthrie asked Graham.

“If you run that far behind your governor, kind of that you probably made a mistake. So. You know, General Bolduc served his country well, but, you know, Sununu won big, Bolduc, you know, wouldn’t talk about what we should have done, I guess, but definitely not a Republican wave, that’s for darn sure. I was in charge of Guam, so I want to take credit for that,” Graham joked.

“Congratulations,” Guthrie replied.

“Guam, which I thought was big in 1993, last time we were gone. Guam, I think you know, I think we’re going to be at 51, 52 when it’s all said and done, the Senate,” Graham predicted.

“Well, let’s talk about the Donald Trump effect. There been a couple of conversations around this table as it’s become apparent there’s not going to be a wave here. And the question of whether his appearances along the way have actually hurt Republicans. Do you give that any credence?” Lester Holt asked Graham.

“You know, not really. I think it was a referendum on Biden. You know, if we take back the House and we get the Senate majority, that’s a very good night. A wave would have been like New Hampshire and Colorado,” Graham replied.

Sen. Ted Cruz (R-TX) stuck a similar tone on the election while discussing the results on his podcast, saying, “It hasn’t been as big of a wave as I’d hoped it would be. We’ve had some close races go the other way so far.”

“So, you know, you got to hats off to the Democrats. They performed well in a lot of these swing districts. You know, a couple of days from now, we’ll know better,” Graham continued, adding:

But at the end of the day, guys, if we take the House in the Senate, we’re going to have to sit down as a country and figure out what to do with it.

Some unsolicited advice to President Biden. If we do take the House and we do take the Senate. Let’s all go to the border and see if we can find a way to fix it. I’ve got to a bill with Elizabeth Warren, believe it or not, to regulate social media and maybe we could do something in the energy and the energy space. So if it’s a divided government, maybe something good can come of it.

Republican pollster says Trump ‘couldn’t have had a worse night’

Patrick Ruffini said the former president is like a "wounded animal"

Republican pollster and strategist Patrick Ruffini has said he couldn’t have imagined a worse night for former President Donald Trump, who he described as a wounded animal.

Control of US congress hangs in the balance as the Democrats showed surprising strength in the American midterm elections, defeating Republicans in several races and defying expectations that high inflation and President Joe Biden’s low approval ratings would drag the party down.

In the most heartening news for the Democrats, John Fetterman flipped the Republican-controlled senate seat for Pennsylvania that is key to the party’s hopes of maintaining control of the chamber.

In the race for the house of representatives, Democrats kept seats in districts from Virginia to Kansas and Rhode Island, while many districts in states like New York and California had not been called.

Democrats were also successful in governors’ races, winning in Wisconsin, Michigan and Pennsylvania – battlegrounds critical to Mr Biden’s 2020 win over former president Donald Trump.

But Republican Governor Ron De Santis had an excellent night in Florida, where he increased his share of the vote and his coattails pulled other Republicans up the ballot to victory in their own races.

Asked what happened to the predicted Republican red wave, Ruffini told the BBC that the Supreme Court’s decision to overturn Roe v Wade – the court’s 1973 ruling that abortion was a constitutional right and therefore legal across the US – drove up Democratic turnout.

Trump, as always, seems to be taking it well:

Sewage pipe in Egypt bursts after COP27 attendees complain about lack of basic necessities

Participants of this year's U.N. climate conference in Egypt said food and drinking water were unavailable

First there was no water. Then there was too much of the wrong kind.


Attendees of this year's U.N. climate conference in Egypt found themselves stepping over streams of foul-smelling fluid Wednesday after a pipe or tank holding liquid waste appeared to have burst near one of the venue's main thoroughfares.

The incident was the latest of several infrastructure and planning problems that have emerged this week during the conference, which runs through Nov. 18. Participants have complained that basic necessities such as drinking water and food are not available or require lengthy queuing under the simmering Sinai sun. Floors sometimes buckle and toilet paper in the various venues has frequently run out.

The problems raise broader issues about planning for an event meant to help solve climate change and promote green living.

Giant AC units blow cold air into vast tent-like buildings with little insulation and doors wide open. Empty rooms are brightly lit into the night. Solar panels, wind turbines or electric vehicles are hard to find.

Workers clean a sewage leak at the COP27 U.N. Climate Summit on Nov. 9, 2022, in Sharm el-Sheikh, Egypt. (AP Photo/Nariman El-Mofty)

The event's Egyptian hosts didn't immediately respond to a request for comment.

Questions around sustainability have dogged U.N. climate meetings for years. For example, during the meeting in Katowice, Poland, in 2018, hot air had to be pumped into the prefabricated buildings to keep participants warm in sub-zero temperatures. Last year in Glasgow, Scotland, the plastic wrapping of sandwiches and drinks being stored in open refrigerated units raised eyebrows.

Responding to criticism, many recent hosts have highlighted their efforts to keep the talks green, with vegan food, recycling containers and various "carbon offsets" for unavoidable emissions caused by the conference.

This year's meeting in Sharm el-Sheikh, a resort by the Red Sea, drew 33,449 participants at the last count, many of whom arrived by plane.
Canadian dollar slides as crypto selloff spooks investors

By Fergal Smith -

A Canadian dollar coin, commonly known as the "Loonie"

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from a seven-week high, as volatility in the cryptocurrency market weighed on investor sentiment.

The loonie weakened 0.7% to 1.3520 per greenback, or 73.96 U.S. cents, after trading in a range of 1.3412 to 1.3541. On Tuesday, the currency touched its strongest level since Sept. 21 at 1.3385.

"The plunge that we have seen in the crypto space over the last two days caught up with risk sentiment today, resulting in weak stock and commodity prices," said George Davis, chief technical strategist at RBC Capital Markets.

"The risk-off move has boosted the USD across the board."

Related video: Canada Launches Consultation on Crypto, Stablecoins and CBD
Duration 3:41   View on Watch


Investors fretted about the financial health of major cryptocurrency exchange FTX, with some questioning whether a rescue deal from bigger rival Binance would materialize.

The U.S. dollar climbed against a basket of major currencies and U.S. stock indexes fell as the outcomes of tightly contested U.S. midterm elections remained unclear.

Investors were shifting focus to U.S. inflation data on Thursday for clues on the path of future interest rate hikes by the Federal Reserve.

The Bank of Canada is also expected to tighten further. Its governor, Tiff Macklem, is due on Thursday to give a speech on the evolution of the Canadian labour market.

The price of oil, one of Canada's major exports, settled 3.5% lower at $85.83 a barrel on Wednesday, after industry data showed that U.S. crude stockpiles rose more than expected and on concerns that a rebound in COVID-19 cases in top importer China would hurt fuel demand.

Canadian government bond yields eased across a flatter curve, with the 10-year down 5.8 basis points at 3.421%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)
CRYPTO MONOPOLY CAPITALI$M 
How Binance's plan to buy FTX unfolded in a matter of days

By Hannah Lang - Yesterday 


Illustration shows Binance and FTX logos© Thomson Reuters

(Reuters) - Crypto exchange Binance signed a nonbinding agreement on Tuesday to acquire rival crypto exchange FTX, in a dramatic move that capped off a series of back-and-forth salvos between the CEOs of both companies.

Here are the key developments in the longstanding relationship between Binance and FTX:

* December 2019: Binance invested an undisclosed amount in FTX, which was then a derivatives exchange, CoinDesk reported. Binance also purchased long positions in FTT, FTX's native crypto token.

* July 2021: Binance announced that it was selling its stake in FTX, Fortune reported. As part of that exit, Binance received the equivalent of $2.1 billion in Binance's stablecoin and FTT, according to Binance CEO Changpeng Zhao.

* Nov. 2: Crypto news website CoinDesk reported on a leaked balance sheet from Alameda Research, FTX CEO Sam Bankman-Fried's crypto trading firm, which maintains close ties with FTX.

* According to CoinDesk's report, $3.66 billion of Alameda's $14.6 billion in assets are held in “unlocked” FTT. Reuters was unable to independently verify the accuracy of the report or the origin of the leaked balance sheet. Still, investors quickly noticed that Alameda’s finances appeared to be heavily dependent on FTT, and FTT’s value was in turn heavily dependent on purchases from FTX, the token’s largest buyer.

* Nov. 6, 9:32 a.m. ET: Alameda CEO Caroline Ellison said in a tweet that the "balance sheet info which has been circulating recently" showed only a subset of Alameda's corporate entities. The firm has more than $10 billion in assets that are not reflected in the CoinDesk report, she said.

* Nov. 6, 10:47 a.m. ET: Concern escalated on Sunday when Zhao tweeted that Binance would liquidate its holdings of FTT “due to recent revelations that have come to light,” although he did not specify which revelations he was referring to or how much of the token Binance held.

* Nov 7: In a series of tweets on Monday, Bankman-Fried asserted that “a competitor is trying to go after us with false rumors.”

“FTX is fine. Assets are fine,” he said.

He tagged Zhao in a later tweet, saying "I'd love it, @cz_binance, if we could work together for the ecosystem."

* Nov. 8: In the 72 hours leading up to Tuesday morning, FTX had seen around $6 billion of withdrawals, according to a message to staff sent by Bankman-Fried that was seen by Reuters. Also on Tuesday morning, Bankman-Fried wrote that withdrawals are effectively paused.

Shortly after 11 a.m. ET, Bankman-Fried tweeted that FTX had "come to an agreement on a strategic transaction with Binance for FTX.com," and that while teams were working on clearing the backlog of withdrawal requests, all assets would be covered 1:1.

Zhao tweeted that there is "a significant liquidity crunch" at FTX and, in order to protect users, Binance signed a nonbinding letter of intent to acquire FTX.com, which does not include FTX's U.S. entity.

(Reporting by Hannah Lang in Washington; Editing by Matthew Lewis)

Before deal with rival, FTX scoured Wall Street, Silicon Valley billionaires for $1 billion lifeline

Nov 8, 2022, 

Liz Hoffman, Bradley Saacks, and Louise Matsakis

Liz is Semafor’s Business & Finance Editor, joining us from The Wall Street Journal. Bradley is a Business & Finance reporter for Semafor, joining us from Business Insider. Louise is a Technology Reporter for Semafor, joining us from NBC News.

Sign up for Semafor Business to get scoops in your inbox twice a week.

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Title iconTHE SCOOP

In the hours before it secured rescue financing from its rival Binance, the crypto exchange FTX sought a bailout of more than $1 billion from Silicon Valley and Wall Street billionaires, people familiar with the matter told Semafor.

Deposits have poured out of FTX since Sunday, when Binance said it would dump hundreds of millions of dollars of FTT, a token FTX created that gives holders a discount on its trading fees. That forced the exchange to sell the assets backing that token to meet redemptions, which it was unable to meet Tuesday morning in a classic bank-like run, the people said.

FTX founder Sam Bankman-Fried — a billionaire himself on paper, at least until recently — tweeted Tuesday that the company had reached an agreement to sell FTX.com, its crypto exchange for non-U.S. residents, to Binance, the same crypto firm that sparked the panic in the first place.

Terms weren’t disclosed. Two of the people briefed on Bankman-Fried’s efforts said the firm was seeking more than $1 billion in financing before the Binance deal was sealed, with one adding that by midday Tuesday the hole appeared far deeper — closer to $5 billion to $6 billion.

It appears to be a classic liquidity crunch, when a bank or brokerage can’t sell securities quickly enough to satisfy redemptions or meet regulatory requirements. A similar dynamic forced Robinhood, the online brokerage, to seek emergency funding from existing investors, and was the root of the 2008 financial crisis.

Bankman-Fried (who is an investor in Semafor) said the deal does not involve FTX.US or Binance.US, which are separate entities. He didn’t return requests for comment and a spokesman for FTX declined to comment beyond Bankman-Fried’s tweets.

Binance CEO Changpeng Zhao tweeted that his firm would now start examining FTX's books, adding that he can pull out of the deal "at any time."

The deal has had ripple effects through the entire industry. Bitcoin and Ethereum have fallen by 9% and 12% as of Tuesday afternoon, respectively, and FTT’s market cap is less than half it was at the start of the week.

The Binance lifeline hasn’t slowed the token’s losses; FTT was down more than 50% in the hours since the deal’s announcement.

undefined headshotLIZ'S VIEW

Bankman-Fried has some explaining to do.

First, here’s how stablecoins like the ones FTX holds work. They are called that because their value is supposed to be pegged to a fiat currency, like the U.S. dollar. The simplest way for their backers to guarantee that is to keep the money that investors give them in cash.

But that doesn’t generate much profit, so most invest that money in other assets — ideally safe things like Treasury bonds and money-market funds — that give a small return without adding a ton of risk. When customers want to exchange their stablecoins for, say, dollars, the platform has to sell those assets for cash, easy enough in the case of Treasury bonds.

Sometimes, as in the case of Tether, they invest in riskier assets like commercial paper, which give them a higher return. Selling those assets in a pinch is harder, and leads to a huge financial hole. Tether said in October it has cut all of its commercial paper holdings.

For the most part, crypto companies, which are lightly regulated, don’t have to tell investors where they’re investing their money, in the same way that a bank doesn’t have to tell you exactly what it’s doing with your deposits (though at a high level, bank balance sheets are publicly disclosed.)

Fast-forward to yesterday. “We don't invest client assets (even in treasuries),” Bankman-Fried tweeted. That suggests that those assets are sitting in cash and that when investors showed up and wanted money for their tokens, it should have been freely available. FTX’s scramble for cash suggests it wasn’t.

Title iconTHE VIEW FROM THE BAHAMAS

Last year, amid growing scrutiny of the crypto industry around the world, Bankman-Fried announced that FTX was relocating its headquarters from Hong Kong to the Bahamas. The Caribbean nation has emerged as a hub for crypto, and in 2020, became one of the first countries to launch a central bank digital ­currency, dubbed the sand dollar.

FTX has promoted itself as a positive force in the Bahamas, announcing late last year that it had donated over $10 million to organizations throughout the country. In April, FTX broke ground on a $60 million complex that is expected to house its headquarters in the Bahamas, which is supposed to include two hotel towers, offices and an athletics center, according to The Nassau Guardian, a local newspaper.

FTX is also planning to host its second annual Crypto Bahamas conference at the Baha Mar resort in Nassau next April. It’s not yet clear how the event or FTX’s other investments in the Bahamas will be impacted by its deal with Binance.

Title iconCORRECTION

Online brokerage Robinhood raised money from existing investors during a cash crunch in 2021. A previous version of the story misstated where it got its funding.

FTT is a native token of FTX, not a stablecoin. A previous version of the story misidentified FTT.

Russia’s Return to Grain Deal Is a Sign of Turkey’s Growing Influence

Having declined to join Western sanctions against Russia, Turkey has become the only remaining window to Europe for Russian companies and individuals.

After Moscow withdrew from the Ukrainian grain deal, it took Turkish President Recep Tayyip Erdogan just two days to get Russia to return to the agreement and abandon the idea of blocking the export of Ukrainian grain. The speed of this reversal shows just how much Ankara’s influence on Moscow has grown in the last eight months, drastically shifting the relationship balance in Turkey’s favor.

Moscow originally agreed to unblock Ukraine’s ports to allow the export of grain back in the summer, when Russia appeared to have the advantage in the war. The Kremlin was urged to sign the agreement by Turkey, key importers of Russian and Ukrainian grain in the Middle East, and the UN.

It was also in Russia’s interests to agree to the deal. The simultaneous loosening of sanctions to allow exports of Russia’s own grain and fertilizer wasn’t officially billed as part of the deal, but was agreed with the United States and the EU.

The grain deal also provided the Kremlin with one more precious lever of influence over the West. Russian President Vladimir Putin first started hinting that Russia might withdraw from the agreement back in September—shortly after the Ukrainian army launched its successful counteroffensive.

The Kremlin’s official reason for criticizing the deal was that Ukrainian grain was supposedly largely being sent to Europe, rather than the poorer countries where it was needed more, though the destination for the Ukrainian grain was not part of the terms of the agreement.

In reality, Putin was irritated that despite the lack of formal sanctions, European companies did not resume business as usual with their Russian counterparts. Banks continued to delay transactions, or simply refused to work with Russian entities; several cargos of fertilizer remained blockaded in Baltic ports; and foreign buyers looked for alternatives to Russian suppliers.

Russia found an excuse to use the grain deal as a lever over the West on October 29, following an attack on the Crimean port of Sevastopol. The Russian military said that Ukraine had launched a drone attack from a civilian vessel sailing through the corridor designated for grain cargo, and that ships escorting the grain cargoes had been damaged in the attack. Moscow called it a terrorist attack, and suspended its participation in the deal.

In exchange for returning to the deal, Putin demanded written security guarantees for both military and civilian ships within the grain corridor. There were also non-public demands, such as other banks restoring relations with the state-owned Rosselkhozbank (Russian Agricultural Bank). The bank had previously played no significant role in the international trade of grain and fertilizers, but the Kremlin has apparently decided to turn it into a one-stop shop for payments for agricultural exports, thereby protecting it from sanctions in the same way it protected Gazprombank by channeling payments for gas exports through it.

In the couple of days following Russia’s withdrawal from the deal, Erdogan announced that grain could be exported without Russia’s involvement, and spoke to Putin by phone, after which Moscow suddenly did a U-turn and returned to the deal.

Furthermore, the Russian president promised that “in any case,” Russia would not prevent the export of Ukrainian grain to Turkey. In other words, even if Russia again withdraws from the deal, it will still be possible to ship Ukrainian grain out of Black Sea ports. There was much talk in diplomatic circles that Ankara had “leaned heavily” on Moscow, reflecting the Kremlin’s new weakness.

At the beginning of this year, Turkey needed its partnership with Russia more than Russia did. Russians made up the bulk of tourists vacationing in Turkish resorts (about 4 million in the first nine months of this year), and Turkish diplomats were begging Moscow to lift sanctions on Turkish agricultural produce. It was Russia that laid the TurkStream gas pipeline to Turkey along the Black Sea bed; Russia’s state atomic agency Rosatom is building a nuclear power plant (Akkuyu) for Turkey; and Moscow is Ankara’s key partner in the Caucasus, Syria, and Libya.

Back then, Russia could afford to be choosy: in 2021, Turkey was not even among Russia’s top ten biggest foreign trade partners (it was in eleventh place). All of that changed with Russia’s invasion of Ukraine. The trade turnover between Russia and Turkey doubled in the first nine months of this year from the year before to reach $47 billion, and at the end of the third quarter of this year, Turkey may well have become one of Russia’s top three trading partners, behind China and Belarus only—and gaining on Germany.

Tech goods saw particularly stratospheric growth: Russia now depends on Turkey for equipment maintenance and other manufacturing processes, since tech imports to Russia from the rest of the world—including China—have fallen significantly. Turkey appears to have become a trans-shipment hub for deliveries of tech goods from Europe. Italy, for example, has significantly increased its supply of goods to Turkey, while Turkish exports to Russia have increased by similar amounts. Having declined to join Western sanctions against Russia, Turkey has become the only remaining window to Europe for Russian companies and individuals.

Meanwhile, Turkstream is now the only route for transporting Russian gas to Europe that is fully controlled by Moscow, following the damage caused to both Nord Stream pipelines by recent explosions. Now Moscow and Ankara have started discussing the creation of a gas hub in Turkey.

Russian propaganda presents the growth in cooperation with Turkey as proof that Russia is not isolated on the international stage. But it also has its flip side. The Kremlin can no longer ignore Erdogan’s own foreign policy ambitions and interests. Russian companies will have to provide their Turkish partners with significant discounts to make sure they don’t close the last window onto the European market.

There will also be a price to pay at home. Turkey has never been very popular among Russian ultra-patriots, and now they are outraged by their country’s return to the grain deal, which they see as a sign of weakness.

The Western sanctions that came in response to Russia’s invasion of Ukraine and the breakdown in relations with the West have seen Russia’s cooperation with several non-Western states broaden dramatically. Compared with the previous five years, Russia’s average monthly trade volumes this year have quadrupled with India, doubled with Turkey, and increased by more than 60 percent with China. Now the possible loss of those partners would not just deprive Moscow of a considerable portion of its hard currency revenues, it would also accelerate the rate at which the Russian economy lags behind in terms of technology, due to the deficit of imported equipment and components.

The Kremlin still has various tools for putting pressure on the West in its arsenal, including nuclear blackmail, but Russian demand for various goods and tech imports is growing by the day. As a result, Moscow will increasingly have to pay heed to its few remaining partners, taking into account their interests when setting policies, including with regard to Ukraine, and paying a political price at home, as well as a financial cost. The message from those partners to Putin is loud and clear: now “is not a time for war,” and the conflict with Kyiv has already dragged on for too long.