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Commentary on The Capital Markets- Category [Corruption]
2017-12-11 09:10 by Karl Denninger
in Corruption , 431 references
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The hits keep coming.....

The FBI has, in my opinion at least, had a relatively poor and spotty reputation for a very long time.  This hasn't stopped me from being willing to provide assistance on a voluntary basis in certain circumstances (of course if you get subpoenaed your cooperation isn't voluntary!)

There are plenty of reasons for people with a brain to be skeptical at best when it comes to the integrity of the FBI, and the issues are hardly new.  J. Edgar Hoover was an infamous political hack who abused his power and destroyed myriad people using that power as director of the FBI, serving until 1972.  As such to intimate or worse, state that the FBI is historically and currently an apolitical agency is a flat-out lie and anyone asserting same deserves to be hung by their genitals in a hungry pen full of feral pigs.  I remind you that the FBI's Headquarters building remains named for him to this day -- despite it being an established fact that he trashed the Constitution and Bill of Rights when it came to political opponents for some 40ish years neither the FBI or any other part of the Feral Government has struck his name from that building or the visage of the FBI itself.

It should not really surprise that we are discovering there's more politically-aligned malfeasance within the FBI today.  

It is not just Strzok, who was quietly demoted over the summer by Mueller.  It's also Mueller himself who sought to cover up the reason for the demotion, which recently made its way into the public eye: The agent in question not only was having an affair with another FBI employee (while married, I remind you -- not only a violation of the ethical standards expected of agents it is also a direct disqualifier for a security clearance as it makes you subject to blackmail) they also shared text messages during the election season that were highly critical of Trump and praised Hillary.  We still don't know exactly what those text messages said, incidentally, because Mueller and Wray, the acting director of the FBI, have refused to comply with a Congressional subpoena for them and other records and Congress has thus far lacked the balls to cite them for contempt.

Now we find out that it's much worse -- Strzok was the person who changed the Comey memo on Clinton's violation of the law with regard to her email server from "grossly negligent" to "extremely careless."  This is a critical distinction because gross negligence is the legal standard for prosecution, and it was clearly met.

That, in other words, rather-clearly constitutes obstruction of justice within the FBI by both Comey and Strzok and is exactly the sort of horse**** that Hoover was known for.

It gets worse.  Much worse.

Strzok was apparently the person who interviewed Flynn.  And if that's not enough there's another agent currently still involved in Mueller's office who praised Sally Yates after she was fired to refusing to defend Trump's travel ban.

I remind you that the FBI is an Executive Branch department and thus Yates' actions constituted gross insubordination, which was why she was fired.

This isn't "politics" folks, it's rank lawlessness, it's obstruction of justice (exactly what they're trying to nail Trump with) and it's at the highest levels of the FBI.  These are not "rogue agents", they're now proved partisan leadership that has proved and documented that political considerations trumped the Rule of Law within the FBI.

Do not, however, excuse Trump.  He has refused to act on any of this despite knowing of it.  Specifically he has thus far refused to fire both Mueller and Wray for misconduct, which is entirely within his right to do and in fact his duty; if he does anything else, including "letting this go" he is a full co-conspirator as he now has actual knowledge of their actions.

Further, since Hillary has not received either a pardon or any sort of immunity guarantee she can still be prosecuted until the Statute of Limitations runs which means that any delay by Trump is an intentional act to escape having to actually enforce the law.

That is an impeachable offense folks and, at least equally-so, a clarion call for all in America to disrespect and refuse to voluntarily do anything to help the FBI, ever, for any reason and irrespective of other considerations until every single person associated with this crap is not just fired but indicted and tried.

Got middle finger?

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2017-12-06 11:59 by Karl Denninger
in Corruption , 2769 references
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If you're too short in attention span to listen to my interview from Monday I guess I can lay it out in text for you.

Not that anyone will read more than the first two sentences that's in the first category.....

Any scheme that shares the following single essential element is a ponzi scheme whether recognized formally in the law at any given moment or not.

That is, the first people who perform some action get a given reward.  The scheme is designed, intentionally, so that the amount of effort for that same unit of reward rises, usually exponentially.  In addition it is usually the case (but not required) that the original effort's starting point is extremely small relative to the reward.

Let me remind you of the mathematical facts surrounding two exponential curves where one exponent is larger than the other.  I will use an extreme example; a "spend" in effort that starts at $1 and goes up at 5% for each iteration and a fixed reward of $100.

If you're one of the first to participate this sounds great!  You spend $1 worth of effort and get $100 in reward.  This scheme is an illegal Ponzi scheme because by the time the 100th iteration takes place each further iteration must produce an inevitable -- and ever-larger from that point forward -- loss.

Note that it does not matter what the compound growth rate of the "spend" portion is nor how far apart the "spend" and "reward" are at the beginning, so long as the "spend" growth exceeds the growth in "reward" value.

The only difference is how long it takes before you get screwed, not whether you get screwed.

Every scheme that has this characteristic is a Ponzi scheme because it is inevitable that the two lines will cross and that later people who participate will inevitably lose money to the founders (and early adopters.)

It is a mathematical certainty that this outcome will occur.

If you have read Leverage (look to the right) you know that I made quite a big deal out of this mathematical relationship early on in the book, because it features in what our politicians have done since roughly 1980 when it comes to revenue, spending and the trajectory of deficits.  The reason governments undertake this, and people design schemes like this, lies in this graph; a very similar graph appears in the book:

 

This represents a "spend" of $1.00, a "reward" of $10.00, and a growth in "spend" of 5% while "reward" growth (e.g. GDP and thus taxable funds, etc) is 2%.

Notice the "belly" in the early periods.  That is, while cost and reward both go up it looks like you're getting a free lunch.  That is, the "gap" (reward less spend) starts at $9.00 and starts to expand immediately; the second period it's $9.15, then $9.30, etc.  In the 9th period it costs $10.00 which exceeds the original reward entirely, so the idiots in the public (that's you, by the way) believe all the talking heads on TeeVee that tell you "the tax cuts paid for themselves", "the economy will grow its way out of this" and similar.

Every single one of these people is peddling an intentional fraud that has been designed to screw you and deserves to be fed to feral pigs.

In fact the fraud and your willingness to buy it goes on for a long time; the maximum spread is not reached until the 50th iteration, when it has become $15.47!  You believe these people are damned geniuses {Reagan, Trump, Greedscam, Yellen, Cramer, etc}.

Unfortunately on the 52'd period, just after you proclaim that these people have achieved the state of Godhood the reward ratio starts to fall.  You still feel good; after all, $15 is MUCH more than the original $9, right?

Alas, by the 73rd period the spread is now under $9 and falling rapidly; in just nine more periods it goes negative and is continuing to accelerate.  About this time you realize that while the "spread" is still close to the original level your cost has gone from $1 to $32; in other words your expenses have expanded by thirty-two times!

By the 100th period the reward is a full $49.64 cents less than the cost and will continue to accelerate until it bankrupts you and everyone else.

Every scheme that has these features is a fraud.

There are no exceptions because the laws of mathematics do not contain exceptions.  An exponentially-increasing difficulty with a fixed reward, or one that increases at a lower rate of growth than the difficulty, where there is no fixed terminus, is by definition a mathematically-proved fraud and everyone involved in creating or promoting such has committed a crime in each and every case.

That we no longer have a Rule of Law allows these people to walk free instead of being imprisoned but that their actions were mathematically-provable frauds is not open to question.

In the case where there is a fixed terminus (e.g. some maximum number of "coins") there is a further consideration.  If the costs rise beyond the reward by design (that is, the exponent makes "reaching the terminal point" impossible) then the above applies unaltered.  If, however, this is not the case (usually by accident, incidentally) but some cost is born by those continuing to participate that is essential to the scheme then you also have a fraud because there is no way to pay for that essential element beyond the terminal point.  As such the viability of the scheme will, as a matter of mathematical fact, collapse when that essential component disappears.

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2017-12-06 07:00 by Karl Denninger
in Corruption , 618 references
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How do you know when a nation is about to collapse?

It becomes so lawless that hiding the abuses is no longer necessary.  They're undertaken in full daylight, boldly, by those in charge.  And, usually, they start to involve victimizing kids -- not so much because it's easier (it's plenty easy to victimize adults when nobody goes to prison and you've turned every man into a eunuch on top of it) but because you start to run out of adults to vicimize so all that's left is kids.

The poster child for this is of course Zuckerberg and Facebook, which the founding President of has admitted uses psychological trickery to addict people to the site, and now has chosen to abuse children.  You'd think that when a business starts peddling the equivalent of drugs to kids that the cops would show up, haul everyone involved off in chains and destroy the company involved but you'd be wrong -- Facebook's stock closed at $172 yesterday, for a market cap of $502 billion.  Every single penny of that should be forfeit right here, right now.

Oh, speaking of abusing children, if you're a sorta little guy you might get arrested for prostituting kids.  Maybe. It seems that being a State Senator is not far enough up the power ladder to evade going to jail.  I hope that guy has a nice supply of Vasoline, as I have been told prison inmates just loooove those who like to screw kids.  Now about Zucker****er; yeah, I know, it's not sex -- just totally buttraping the future of said kids by diddling their minds so it doesn't count.... right?

It's just Facebook you say, or some State Senator? Uh, no.  How about Google and Youtube?  Oh by the way, as Youtube "allegedly" tries to "clean this up" I can tell you with certainty that they are de-monetizing videos that absolutely are family-friendly.  How do I know?  They flagged one of my daughter's -- which featured...... wait for it...... a hike up a hill with her pussy...... CAT.  There was utterly nothing objectionable in any way, shape or form in that video, but since she was out of town and I noted the lack of ads I filed the protest for her.  They turned it back on.  Instead of looking before killing it in the first place, of course, they just used a computer to do it, you see, because 30 seconds of actual looking would have disclosed..... a cat and a hike.  It also would have meant Google would have made a bit less money to actually employ people, and, well, we can't have that.  Jobs?  Forget about it.

Then there's Chicago and Goldman's latest fraud, and what a doozey that one is.  The City, which incidentally is basically bankrupt and has insane pension liabilities, created a "new" corporation, assigned it alleged "preference" for sales tax revenues, and then had it issue bonds in order to game the ratings.  The result?  A "AAA" rated bond issue for a bankrupt municipality.  May I remind you that if you tried this you'd be tossed in prison for 30 years for fraud and the entire set of transactions would be unwound because you cannot structure your finances to avoid paying creditors after the event that gives rise to the liability has happened.  For example, you cannot get into a car accident where you're at fault and then put your assets in a trust to avoid losing them in the ensuing lawsuit.

Yet that's exactly what Chicago did with Goldman's help to both set it up and run the bond offering.  This is blatant and outrageous fraud upon every single previous creditor, and if you or I tried it not only would the transaction be unwound we'd be indicted on top of it.  Well?  Where are the handcuffs on Rahm and why isn't Goldman shut down right here and now as a criminal enterprise with Mr. God's Work being led off in cuffs?

Then you have the grand-daddy of all, which is quite-clearly outlined here -- not that if you've read my column you need another example.  It deals with the medical scam.  Just a few miles south having your appendix removed is 1/10th of the cost of having it done here.  The difference?  Blatant and lawless behavior that violates 100+ year old anti-trust law.  This law is not just civil in nature either; it is a felony to even attempt to monopolize trade or commerce.

May I remind you that this body of law (15 USC Chapter 1, Sections 1 and 2) do not require that prices go up, although in the case of medical care of all sorts they sure as hell have -- by a factor of 10 or more.  The reason the law was written to not require pricing to increase is that it is extremely common for monopolists to cross-subsidize -- that is, screw someone else so you think you're getting a "deal".  It's illegal irrespective of price rises (or not) for the precise reason that the people who wrote the law at the time were well-aware that it is trivial for large, powerful corporations to cost-shift and thus hide what they're doing, making it appear that you're getting a reasonable deal when in fact they're jacking people up the cornhole left, right and center.

Amazon anyone?

Steve Forbes recently wrote on this but he has no sack either for he has refused to use the "F" word -- consistently and over decades. See, people don't want to use the "F" word (no, not ****, felony) because if the American public was to actually start reading said law, and realized that the first two sections consisted of all of a couple of paragraphs and nowhere is there a requirement that prices go up (never mind that they sure as hell have in the medical field) they might pick up pitchforks and torches and demand that people start going to prison right now "or else."

I mean it's not like hospital administrators (who provide zero care to patients) have risen in count by over 3,000% while doctors have risen by something like 100% from 1970 to today, or medical costs have gone up 800% while wages have risen 16%.  Oh wait.....

People have told me that I'm being completely unrealistic when I point out that fixing this would cause medical costs to drop by 80% or more, making "insurance" completely unnecessary for 95% of all things medical and the cost of insurance for the remaining 5% about as expensive on an annual basis as one nice night out on the town.  In other words with the exception of the truly destitute nobody would need any help at all from government or anywhere else.

Don't tell me that this outcome is impossible either; if you're older than 45 or so your parents did exactly that when you were a child.  Were you stoned when you were six or are you intentionally refusing to face facts?  I remember the doctor's office -- exactly where the building was, the waiting room (divided into two sections; one for well kids there for routine things, the other for sick kids -- an attempt to avoid getting the well kids sick!), the front desk (where you paid, natch) and the little exam rooms.  I also remember my very-much middle class mother writing a check for the modest cost incurred.  There were no insurance cards and no angst about a visit to the doctor, if you really needed one.  You called, you showed up, you had whatever you needed attended to taken care of, you wrote a check and left.

That's because it didn't bankrupt you.

Never mind that the Surgical Center of Oklahoma has an infection rate of 1/20th that of a traditional hospital!  That's right -- they harm and kill through negligence or just honest mistake 1/20th as many people.  Why?  Because they can't bill you for it as they gave you a fixed price up front, so they have every incentive to not do stupid things.  The hospital down the street, on the other hand, bills you for the infection or screw-up they caused.  Oh, if it kills you?  Your estate gets billed.  A couple hundred thousand people die every year in this country as a result of this crap, probably including someone you know and maybe someone you loved and yet you still sit on your ass.

Examples like the above show that I'm right -- and further, were we to demand this get fixed right now by taking out our pitchforks and torches we'd instantly and permanently fix the federal deficit along with state and local pension liabilities and leave cities, towns and counties with budget surpluses that would allow them to massively cut taxes of all sorts -- including property taxes.  Never mind the couple hundred thousand people who wouldn't be dead every year.

But no!  We can't have that, because nobody has a sack left in this country.  There's simply no demand for an actual answer to the problem anywhere, nor will anyone get off their ass and go find that long-lost pitchfork and torch.

Well, let me know when you change your mind America, because as it stands right now it's not just your money that's being stolen -- it's also your kids that are being abused on a rampant and outrageous basis by those very same big-bizness and political folk while you sit back and cluck about this or that political party.

Yeah.

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You pretty much have to decide here folks.

I'm down to a very short list of people I will associate with.  I've already eliminated anyone who supports what Hillary Clinton did with classified information or thinks it's "no big deal" and shouldn't have led to her being indicted -- and still doesn't.

It's even worse if you think Trump shouldn't be indicted now but think Hillary should be, or vice-versa, particularly after this little escapade from President Trump himself on Twitter, in which it appears he incriminated himself, literally giving the finger to the rule of law in public.  Having figured out this morning (apparently) that he really stuck it to the pooch's cornhole with that tweet the backpedaling has become so furious that you can actually feel the air being sucked out of the room as Trump tries to bury what certainly appears to me to be a public admission of not only an impeachable offense but a criminal felony by the President himself.

Maybe the truth is that I have no "Tribe" as there's no rule of law left and everyone in this nation is willing to excuse outrageous criminal conduct by one person or another so long as they're a member of their favored political group.  If that's the case then I think it's time for me to go find a nice secluded piece of dirt somewhere, put up a fence with "The hell with the dog, beware the owner!" and "Live fire rifle practice takes place on this property at all hours of the day and night; DO NOT ENTER" signs all over the place, buy a few chickens and goats and live out whatever time I have left with me, myself and I, saying "**** you" to everything and everyone.

There's a young woman who's dead in California exactly because nobody gives a **** about the rule of law, may I remind you.

There have in fact been plenty of Americans killed for this exact reason over the last couple of decades. This is not just the story of one young woman killed by an illegal invader who five times illegally entered the United States and who was set free on purpose just before he killed her by a city government that willingly and knowingly ignored that fact.  In fact re-entry in this fashion to the United States is not a "mere" process crime or a little misdemeanor; it is a felony.

It's also those who died in Benghazi while Hillary looked on and laughed after being embroiled (along with others) in what was almost-certainly a very-illegal and outrageous arms scheme in that part of the world which she really wanted to keep quiet.  It's Brian Terry, a border agent killed by a Mexican invader who was using a firearm that our own Attorney General allowed to be knowingly illegally sold into Mexican drug rings from a shop here in the United States.

If we open it up to those who were financially ruined or had their health destroyed by willful misconduct and lies then the list expands to an utterly huge number of Americans -- maybe even a majority.

It's all those who got scammed by Wells Fargo, a serial offender in the mortgage scam, in car loans and in opening fake accounts -- yet nobody went to prison and the bank is still operating, despite being busted again recently for screwing FX customers.  That, I count, is four serial offenses; exactly how many times do you have to rob people of far more than would qualify for "grand theft" treatment by anyone else, and why does not "three strikes" apply to them?  There are people sitting in prison for life for stealing a few hundred dollars worth of merchandise as their third strike, as that's a third felony.

"Doctors" and other "medical professionals" knew their "dietary guidelines" were **** and didn't care.  They knowingly told you to eat trash -- in many cases by being bribed and in others by simply refusing to actually square what they were allegedly being told with basic biological fact that any farmer who has fattened up a cow or pig has known for hundreds of years and which the Bible strongly suggests has been known for over 2,000 years when speaking of "killing the fatted calf."  Instead of working against such corporate and their own personal interests, both of which lay in making as much money as possible those so-called "physicians" lied and took your money while you got fat, sick, diabetic, had your toes and feet cut off one at a time, were forced onto dialysis and died, all while they earned a new Porsche every ****ing year and sent their kids off to tony private schools to learn how to screw you some more with the money you were forced to give them after their advice got you sick!  They started this horse**** in kindergarten and it continues today in the schools.  It wasn't just carbs and fats they lied about either.  It was also rage monster attacks linked to psychiatric drugs they handed out like candy -- including to kids through what amounted to (and still does) forced drugging, despite knowing full well (because it showed up in their clinical trials) that in a small but real percentage of people, especially those under the age of 25, it made them literal homicidal maniacs.  A huge number of mass-shootings are in fact linked to exactly this as I've reported on repeatedly over the last decade.  There has been exactly zero accountability for any of it; not one drug company or physician group has ever been prosecuted, jailed or hung for that despite the dead bodies stacked like cordwood on an annual basis; so-called "medical errors" alone are the third leading cause of death in the US.  Hell, we could go back to the tobacco issue if you'd like too.  Oh, sure, why not?  Gee, want me to dig up the infamous Congressional hearing where they ask if tobacco is addictive?  That was easy -- this is as recently as 1994 folks.

How many tobacco executives went to prison for lying to Congress, which I remind you is a felony, and was trivially proved not much later when internal corporate documents came to light that demonstrated exactly that?  That count is zero, may I remind you.

For more than 10 years I've been reporting on this crap, writing more than 11,000 articles skewering officials in the Bush, Obama and now Trump administrations. The Market Ticker began publication in 2007 with, if you remember, an article on WaMu's paying dividends with money that didn't exist, an act that the FDIC, OTS, OCC and Fed (never mind the SEC) should and could have body-slammed their executives with safety-and-soundness charges, and likely criminally charged people as well.  They didn't and a year and change later the bank collapsed.  Then there was IndyMac in which an OTS supervisor knew about backdating deposits and actively worked with the bank to conceal it -- they collapsed too.  Nobody went to jail in either instance  That latter abuse was especially outrageous because the very same "examiner" was later identified, he did the same thing just before the S&L collapse and not only wasn't prosecuted he wasn't fired either, or he wouldn't have been there to do it with IndyMac.

Then there's Ben Bernanke who testified before Congress that he added liquidity during the original phases of the crash in 2008.  The NY Fed's own public desk reports proved that The Fed in fact pulled over $120 billion from the banking system right into the maw of the collapse over a 4-day period, exacerbating it, and given the timing might have in fact caused it -- the exact opposite of what he testified to having done.  I reported on this and faxed all 535 members of Congress with said proof and yet in the ensuing months of his testimony not one Representative or Senator asked him to square his statements before Congress with the facts published by his own NY Fed's desk, nor did any member of the media go after him on that very-apparent and outrageously false statement either.

Well?

Now people want to talk about "Making America Great Again" and how "Trump" is "doing that", wearing cute red hats and crowing about the record stock market.  Really?  We have more anti-trust violations than ever, not one thing he promised to do to decapitate the (felonious) medical monster has been done (despite there being not one but two Supreme Court decisions making clear he could direct his AG to do so and they're not only winners in court he could jail executives in hospitals, insurance and pharama firms; restoring competition in that industry would drop costs 80% in an afternoon instantly and permanently fixing virtually all federal state and local budget problems without raising a single tax on anyone anywhere), there's not been one instance of the Rule of Law actually being applied against anyone in the corporate or political sphere (despite all the promises to "lock her up") and now we have a brazen, in your face middle finger erected to the rule of law in the form of a tweet.

No wonder the stock market is at record highs when robbing people becomes sport for anyone on the Forbes 400 list -- but too bad you're not a CEO and thus can't rob the American people blind yourself. That "privilege" is reserved for people like Beelzebezos, Zuckerpig, Hastings and Mr. "Gods Work" himself in NYC, never mind the so-called "health" industry mavens.

Instead you're drowning in student debt you were conned into taking on for a worthless degree within a system that has seen costs ramp relative to wages by something like 10x, football players get huge monuments erected to them in college stadiums while they don't even need to show up to class in order to get a "degree", you've got an 8 year auto loan on a car that will be obsolete in 5, household debt has never been higher and median income has barely moved in over 10 years and that's before all the theft you're exposed to on a daily basis.

If you're not in the 1% you've been rat****ed for the last couple of decades while those in the 1% and above have robbed the other 99 -- and not only gotten away with it half the country cheers them on while they are being actively bent over the table depending on who is in office this week, month or year!

Hell, 95% of the US population thinks "Net Neutrality" is a "good thing."  May I remind you that back when this was in the media Netflix got caught intentionally destroying their own customer experience and lied about ISPs being responsible for it to get that passed by the FCC.  Who went to prison for that?  Nobody; Hastings instead has seen the stock price increase by 500%, stoked by stealing the firm's transport costs from non-customers!  If you're a Netflix customer you are robbing your neighbor who is not.  If it's perfectly legal for him to shoot you if you stick him up in his driveway for $30 why isn't it when you do it while he's sitting in his living room on an every-month basis?  There's a clean argument the company wouldn't even exist if the firm had to cover its own transport and thus your bill wouldn't be $10/month -- it would be $30 or $40.

If you were my friend, robbed a bank, I found out about it then the FBI came and interviewed me and I tried to talk them out of going after you claiming that "he's a really good guy", then a few weeks later managed to fire the FBI guy doing the investigating my ass would rot in a federal person for 20 years -- and justly so.  Hell, if I merely lied to said FBI guy I'd do hard federal time. 

Yeah, I know, Trump claims Comey made that conversation up out of whole cloth.  Surrrre he did, with a memo taken to his files at the time it allegedly happened.  How would Comey have gotten any possible idea to write such a memo unless the conversation took place?  Let me remind you that it was taken to file on a secure FBI system and thus exactly when it was written can be and has been proved. If you believe Trump on this you're either dumber than a box of rocks or are intentionally lying and thus have no valid space within a conversation between intelligent people.

Rule of law?  What's that?  That's what it's called if Dennis Hastert gets arrested for paying off some guy who he abused when the "guy" was a kid due to trying to structure transactions illegally in order to avoid them being the subject of formal IRS reporting -- but where was the Rule of Law when he was committing the abuse?  Oh, that was missing.  Just like it was for Clinton and now just like it is for Trump.  You see it's not politically expedient for the people to insist that The Rule of Law apply to everyone, all the time.  No, that would be terrible because then their favored pet political scam that is making a few wealthy while working you all up into a partisan froth and robbing you blind with fake "tax cuts" and "Obamacare" get-the-doc-and-hospital-dude rich scams while shoving you and your grandfather into a six-foot deep hole after you're asset-stripped to the point that the pitiful raisins you claim to have for balls are exposed would be disrupted.

Meh.

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2017-12-01 20:19 by Karl Denninger
in Corruption , 153 references
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I just noted Amazon doing this as they popped up a "notification" on my phone, and I've seen many others (including Mobile Nations, a widely-read "phone" website which includes Crackberry) doing it as well. (Yes, I had forgotten the app was still on there.  It's not any more!)

Amazon is running a "giveaway" promotion where you have a chance to win.  These are legally sweepstakes (not "contests" -- games of skill, or "lotteries" -- games of chance in which you pay to play) and must comply with both State and Federal laws.

Some states -- such as Florida -- have bonding requirements in some instances.  A whole bunch of people ignore that, but you ought not to because if a Florida resident can "play" you're in violation if you don't comply with it no matter where you physically are.  Florida is not the only state with such requirements either.

But leave the state-specific stuff aside; let's look at the general rules that apply everywhere, which I know a fair bit about because we did these from time to time at MCSNet.

First, the game must be of chance.  That is, it must truly be unbiased and random in terms of choosing winners.  You don't have to be able to prove lottery-style random number generators are used (picking tickets out of a hat by someone unrelated who turns their head is sufficient) but you cannot bias the outcome to favor some entries over others.  If the game involves skill then it's an entirely different thing (a "contest") and different laws apply.

Second, something of value has to be able to be won.  Since nobody would play if there was no "prize" this is usually not very difficult to figure out....

And third, the player may not be required to provide consideration in exchange for his or her entry.

This last one is where the minefield is with regard to these current sweepstakes.

You may notice that the ones you get in the mail (like the old Publisher's Clearing House or the NRA's fairly-frequent "Win 21 Guns!" ones) all say "no purchase required to win."  So does Amazon's.  That's because if you have to buy something to enter then it's a lottery and those are generally illegal (there are exceptions -- like raffles at various non-profit functions -- but none apply to the general business entity putting them out there for the public.)

But "consideration" under the law is not merely the payment of money -- it's anything of value.

It used to be that some states had ruled that forcing someone to put a postage stamp on an entry was consideration!  This was why you'd see things like "Void in Blah" on the "Sweepstakes" you'd get in the mail from Publisher's Clearing House years ago -- it was illegal for you to have to spend anything, including a stamp on an envelope, to enter.  Some jurisdictions have ruled that since Internet Access is not free if you have to sign into an Internet site that is consideration.  This used to be more-common back when I was running MCSNet; I have no idea if any jurisdiction would consider that a problem today, but it gives you some sort of idea of the scope of the issue:  In short the scope of what is "consideration" not only varies from state to state it is a hell of a lot broader than you think it is.

For example, the following is probably illegal:

"Click here to enter; no purchase required.  One entry per person.  Gain additional entries (5) by liking us on Facebook (button here), gain 2 entries by tweeting the contest (button here), etc."

The latter gives someone better odds in exchange for something of value to the site owner -- additional traffic and exposure.  Similarly, a sweepstakes that gave you a second entry for bringing someone to the store in the mall with you would likely be illegal as well because additional customer traffic is of value to the store or mall.

Well, here's the Amazon app's display:

 by tickerguy

This is questionable at best just like the "five extra entries for liking us on Facebook" since all of those "features" have value to Amazon in that they either (1) provide more data to them on your shopping habits or (2) are likely to directly lead to a purchase.

The original "click to enter" solicitation is probably (provided there's an "other than by loading our app" means of entry) legal, since it does not require that you provide consideration.  The giving of additional chances to win in exchange for doing something that is of value to the vendor is almost-always not legal, as that turns the sweepstakes into a lottery.

I have seen a crazy proliferation of these sorts of "sweepstakes" over the last number of months, but with the holiday season being full-bore they're coming fast and hard now and nearly all of them that I've seen of late contain features like the above that I would not have dreamed of attempting back in the 1990s because if I had I would have expected to be sued out of existence by the State Attorney General, the FTC or both.

That our nation no longer has a Rule of Law, no longer has a functional Attorney General and no longer has a functional Federal Trade Commission, the latter two of whom should be after this like stink on **** never mind all the State Attorneys General, is why this crap goes on and you continue to be exploited in this fashion today.

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