Controversy and Change: Elon Musk’s $1 Million Lottery and the End of Free Money

Is Elon Musk's $1 million lottery a daring political maneuver or a step too far into legal gray areas? Join us as we tackle the controversy head-on, dissecting the accusations laid by Philadelphia District Attorney Larry Krasner against Musk's super PAC. With claims of non-random winner selection and potential violation of Pennsylvania's lottery regulations and federal election laws, this sweepstakes raises critical questions about the ethics of influencing voter registration in swing states. As we peel back the layers of this case, we explore its ramifications on the political landscape and the delicate balance of power among major players.

Switching to the financial realm, we confront the seismic shift heralded by Morgan Stanley CEO Ted Pick with the end of the "free money" era. With a 500 basis point interest rate hike since 2022, the economic terrain is fraught with challenges for companies and investors alike. We'll unpack the "infinite money glitch" scandal at JP Morgan Chase, where an ATM loophole led to fraudulent withdrawals, triggering legal battles and potential criminal charges. Explore with us the implications of high interest rates, persistent inflation, and global uncertainties as we provide insights to help you steer through these turbulent financial times.

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Chapters

• 0:00 Elon Musk $1 Million Lottery Controversy
• 8:50 Navigating the New Financial Landscape

Transcript

Speaker 1: 0:00

What if I told you that a $1 million street stakes can land you in court, and that it involves Elon Musk, the Constitution secret lottery? Buckle up, because today's episode dives deep into a story that's not just headline worthy. It's got major implications for business, politics and the law, and you don't want to miss these numbers. That and more in this week's Weekly Business Brief. It's Wednesday, october 30th 2024, and it's time to get down to business and dive deep into the top news in this week's Weekly Business Brief. Here's what's going on, guys.

Speaker 1: 0:38

Earlier this month, elon Musk's super PAC, known for performing MAGA ideals, kicked off a $1 million per day sweepstakes for swing state voters who signed a petition supporting constitutional amendments. Sounds like a win-win right? Well, not so fast. Philadelphia District Attorney Larry Krasner had a different take. He's accusing his initiative of being an illegal lottery scheme. Now here's where it gets interesting. Krasner isn't targeting election laws, no, instead coming after the PAC for violating Pennsylvania's strict lottery regulations. Npa lotteries have to be regulated by the state. And here's a twist. Krasner is also claiming consumers' protection laws were broken because the winners allegedly weren't chosen randomly. Some of the price recipients were spotted attending Trump rallies in the Keystone State. A hearing is coming up this Friday to potentially shut down the sweepstakes entirely. But wait, there's more. Last week, the Justice Department warned that this sweepstake could be in violation of federal election law. It's illegal to pay people to register to vote, and this sweepstakes might cross that line, since you had to be a registered voter to win. Now let's talk dollars and influence. Musk has already poured $75 million into his super PAC backing Trump's campaign and even shared the stage at rallies. His vision, trump's campaign and even shared the stage at rallies. His vision slashed the federal budget by two not one, but $2 trillion and maybe even serve as Trump's secretary of cost cutting. So what does this all mean for you, the listeners? The story isn't just about the lottery. It's about how money, politics and law collide and how one initiative could reshape electoral influence.

Speaker 1: 2:53

Thoughts here, the Dems okay, the Dems play dirty. The Republicans are now playing dirty, like. This to me seems like an obvious, like there's just a lot of nonsense on both sides. Guys, there's a lot of nonsense on both sides. This is what politics looks like. Um, it's just, you know, one side takes, takes, does, does something extreme. The other side does something extreme. What and it's just insanity what. This is crazy. The stuff we're seeing right now. You know you have the richest men in the world now backing donald trump and doing this. Now you have a a da in pennsylvania or or whatever. This guy, this attorney general, whatever he is in pa now, now a Democrat going after him. It is a freaking clown show with this stuff. It's just politics is a dirty business man. That's all I have to say.

Speaker 1: 3:52

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Speaker 1: 4:31

So here's the scoop, guys. Jpmorgan Chase, the biggest bank in assets the biggest bank by assets, excuse me is suing customers who exploited a glitch in ATMs to withdraw money from their checks before their checks could bounce. So this so-called infinite money glitch went viral on TikTok in late August and left the bank dealing with potentially thousands of fraudulent withdrawals. Let's hit you with some numbers here. One lawsuit out of Houston $290,939.47. Yep, that's how much one man owns after depositing a counterfeit. $335,000 check guys. This is insanity. Globally, paper checks still account for a whopping $26.6 billion in fraud losses last year alone, according to Nasdaq's Global Financial Crime Report.

Speaker 1: 5:35

Now here's where it gets even more interesting. These weren't isolated incidents. Videos were popping up all over social media of people celebrating their easy cash grabs. How dumb is that? Like, you know what you're doing and you're putting it on social media. Not very smart, which left JP Morgan scrambling to close the loophole.

Speaker 1: 6:00

But this isn't just about money. It's about trust. The bank's lawsuits are clear signal they won't tolerate fraud. They're prioritizing the biggest cases. We're talking about customers owing anywhere from $80,000 to $141,000. Yikes and there's a twist 141,000. Yikes and there's a twist. Jp Morgan has also referred many of these cases to law enforcement, so criminal charges could be in the cards. The glitch is a reminder of how fast vulnerabilities can spread, especially when amplified by social media. The ripple effect hits everyone customers, the bank, the financial system as a whole. And now JP Morgan is working with law enforcement to ensure those involved are held accountable Bottom line. While this infinite money glitch might have felt like a payday for a few people, the consequences could be long lasting. Lastly, the era of free money is officially over and if you're investing, running a business or even just thinking about your next move financially, you need to hear this.

Speaker 1: 7:12

But before that, I want to share some thoughts here on this infinite banking scheme thing, or whatever they're calling. It is this, guys, I'm not sure how criminals are wired right, like, hey, man, the bank, right, you try to steal from the bank. Guys, the bank never loses, right, the bank never loses. I will tell you that the way I see this is you have, you're putting, if you know you're putting in a fraudulent check and you're going to, you're going to take money out from the bank. Do you not consider what will happen next? That when that check bounces and your account goes into negative, that the bank is not going to come after you? Do you not think that they're going to come after you? Press charges I mean, we're talking big numbers 140,000, 80,000, 300,000, 290,000 in Texas. That's insanity, guys, insanity.

Speaker 1: 8:05

So just, guys, hey, I want to just challenge you guys out there to think like, if I do this, then what happens? Right, when I do this cause and effect. If I make this move, this move will create this effect and that effect may create another effect, and so on and so on and so forth. So be careful, guys, just be careful, just think things through. When you see things on social media, you see things online, you see things that are too good to be true. They probably aren't, and I'm willing to bet that the majority of people that did this thing were young people, vulnerable people that just didn't know any better, right, and didn't think, hey, I'm just going to go do this and it's going to be a good time.

Speaker 1: 8:50

Anyways, into the next thing here. The era of free money is officially over. That era is gone, as Morgan Stanley CEO, ted Pick, revealed during a powerhouse panel of global finance leaders in Rydyad. Now let's get to the numbers. Since 2022, after the Fed flashed rates to near zero during COVID we've seen a 500 basis point hike in just 18 months. Yes, we have Gone are the days when startups with barely a business plan could go public. Instead, we're in with what Pick calls a normalized cadence, but it's tougher for public companies now.

Speaker 1: 9:33

So what's the outlook for rates? Despite some predictions for two rate cuts by the end of 2024, no major bank CEO thinks that's likely. Really, inflation is still front and center. In fact, when asked if they expected those cuts, not a single executive raised their hand. Again, not a single executive raised their hand. That's interesting.

Speaker 1: 9:59

This is an interesting, very interesting article. Means navigating uncharted waters for business and investors alike high interest rates, ongoing inflation, geopolitical challenge for decades. But, as tough as it sounds, understanding these shifts can be your edge in this new financial landscape. So how are you preparing for this new era? Thoughts here. Not a single executive raised their hands when asked. Interesting my thoughts here is I think we are going to see those two rate cuts. I think we are going to see a rate cut in November. I think we're going to see a rate cut in December. Again, those rate cuts are going to be between 25 to 50 basis points. I'm leaning more towards to maybe a 25 and a 50, right 25, 50 or 50, 25, one or the other. And reason being is we're going into election. Well, election is next week. Basically, election is next week, but this administration has got to make themselves look good, and then the incoming administration has clearly made it well. Whoever the incoming president is going to be, if it's Donald Trump, let me just say that If it's Donald Trump, I'm presupposing that statement, presupposed that Donald Trump was going to win, but if it's Donald Trump, it looks like he's going to win. By the way, guys, if it is Donald Trump according to the polls not me the polls if it is Donald Trump that gets in, he's already made it clear that he wants the rates to come down. Right, he wants the rates to come down. That's an important thing for him, important thing for business. I'm with him on that. So I do believe my point is either way doesn't matter Whoever wins. I do believe my point is either way doesn't matter Whoever wins, I do believe rate cuts need to happen. I think rate cuts are going to happen. I'm not sure what the banking executives I'm not as smart as those guys, nor do I know the information. Those guys have a regular entrepreneur, regular guy out here doing, you know, operating businesses and and and just playing in the real estate world. I think a two rate cuts are going to happen. Um, we are just just for just for context, guys. We, the real estate market, the real estate market in and of itself, has is sales are the lowest they've been in 30 years. The last time sales were this low, sales volume was this low, was in 1994. Let that sink in for a minute, and this has been your weekly business brief. Stay safe, peace out.