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9-12 More Months: How Long US Consumers Have Before The Bottom Falls Out

During the Covid-19 pandemic, consumers socked away an unprecedented amount of cash thanks to government stimulus and a locked down economy. There was such a surplus that people were able to also pay down debt, buy new appliances, and take vacations once draconian lockdowns were lifted. And of course, businesses raised prices and hired more workers to meet the flood of demand.Now that we’re ‘enjoying’ inflation while wages have struggled to keep up, the question becomes – how long can consumers maintain this level of spending with their “excess” savings, which was estimated at $1.2 – $1.8 trillion heading into Q3 of this year?Around nine to twelve months, according to the Wall Street Journal.What’s more, consumers have already been loading up credit cards to supplement their incomes.A brief history of recent savings trends via the Journal;In 2019, before the pandemic hit, households saved 8.8% of their disposable income. That saving rate jumped to 16.8% in 2020, the highest annual saving rate on record, as government stimulus and unemployment benefits left many consumers flush with cash but with few opportunities to spend during lockdowns.In 2021 the saving rate moderated to 11.8%, and it has fallen further during 2022. The rate has been below 4% for seven straight months and in September it stood at 3.1%, near its lowest level since the 2008 financial crisis.In short; consumers are spending more and saving less of their monthly income thanks to inflation.What’s more, there are signs that consumers aren’t using their savings to pay down credit card debt like they used to – with the Federal Reserve Bank of NY reporting that credit card balances increased 15% YoY in the third quarter – the largest increase in more than two decades. Delinquencies, meanwhile, rose across all income groups.According to JPMorgan, at this rate the excess savings could be ‘entirely spent by the second half of next year.’Goldman economists estimate that households have depleted around 25% of their excess savings, and will have spent around 60% of it by the end of 2023.”The growth boost from strong balance sheets is probably mostly behind us but … elevated wealth levels will provide a backstop to spending for households that are hit with a negative economic shock,” they wrote last week.Analysts say a feature of this holiday spending season will be the divide between high-income households that still have savings and low-income households that have spent most of their rainy-day funds and are being squeezed by food, gasoline, and shelter inflation.Economists at the Federal Reserve last month said households in the top half of the income distribution held the lion’s share of excess savings in mid-2022 at $1.35 trillion, and the lower half of the income distribution held about $350 billion. -WSJAccording to Joseph Brusuelas, chief economist at RSM US LLP, “It’s going to be an upscale holiday season, with strong spending in luxury names, experiential travel, upper-end resorts—and a more modest holiday season in bottom [income] quintiles.” […]

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CEO Of Ukrainian Crypto Firm Denies FTX–Ukraine Money-Laundering Allegations

Authored by Andrew Moran via The Epoch Times,Everstake, a Ukraine-based cryptocurrency firm, has been caught in the crosshairs of a controversial relationship involving Kyiv, Democrats, and the beleaguered FTX exchange that has captured the attention of Washington officials.As part of efforts to generate more funds for the war effort, the Ukrainian government launched “Aid for Ukraine,” a website that accepted cryptocurrency donations that would be converted into fiat money and then deposited at the National Bank of Ukraine. The contributions would be used to purchase a wide range of essential items, from medical supplies to military clothing.The Ministry of Digital Transformation partnered with FTX, Ukraine’s Kuna exchange, and Everstake to help facilitate crypto-denominated donations, which have totaled between $60 million and $100 million.Because of former FTX CEO Sam Bankman-Fried’s immense donations to Democrat lawmakers and the timing between the creation of the fund and President Joe Biden’s billions in financial and military assistance to Kyiv, there has been speculation of wrongdoing. Critics allege that Ukraine invested in FTX to funnel money to the Democratic Party.According to Everstake CEO Sergey Vasylchuk, it is a ridiculous assertion to think that the Ukrainian government would invest in private companies at a time of war and utilize critical resources for political payoffs, noting that Kyiv is “investing in the needs of families” with the aid it receives.“Technically, the Ministry of Digital Transformation mostly supported the information point of view,” he told The Epoch Times, adding that it was chaotic in the early days of the war, requiring the use of backups to receive funds.“It was messed up at the time,” the head of the staking service platform noted. “I never felt this was like a wonderful cheat. For me, when they say Ukraine invests in companies, I just ignore it.”Vasylchuk confirmed that he was never in contact with Bankman-Fried during the process, explaining that FTX maintained only a small role in the fundraising effort.“We have six people who were part of the compliance legal team” who helped get the Aid for Ukraine project off the ground, Vasylchuk averred.Sergey Vasylchuk, CEO of Everstake, a Ukraine-based cryptocurrency firm. (Courtesy of Everstake)Crypto has turned into a vital tool in the military conflict in Eastern Europe.In recent months, pro-Russia organizations have been accepting donations through cryptocurrency exchanges, raising millions of dollars in digital currencies that are then used to support Moscow’s military campaign.In the aftermath of the FTX collapse, there have been widespread concerns this would trigger a contagion effect. Cryptocurrency prices have plummeted, crypto-related firms have tumbled, and many parties that have been exposed to Bankman-Fried’s empire have experienced financial pressures.But Vasylchuk says that Everstake is weathering the storm because it maintains diversified assets and, depending on a treasure trove of web reports, the company uses various wallets to ensure the safety and security of its holdings.‘UNITED24’Ukraine officials have also addressed the recent allegations, including Deputy Minister of Digital Transformation Oleksandr Bornyakov, who described the latest rumors as “nonsense.”“A fundraising crypto foundation @_AidForUkraine used @FTX_Official to convert crypto donations into fiat in March. Ukraine’s gov never invested any funds into FTX. The whole narrative that Ukraine allegedly invested in FTX, who donated money to Democrats is nonsense, frankly,” he wrote in a tweet last week.Aid for Ukraine was recently taken down and replaced with “UNITED24.”“UNITED24 was launched by the president of Ukraine, Volodymyr Zelensky, as the main venue for collecting charitable donations in support of Ukraine. Funds will be transferred to the official accounts of the National Bank of Ukraine and allocated by assigned ministries to cover the most pressing needs,” the new website states.The website also informed visitors that “we are looking for companies or enterprises that can help Ukraine with specific needs.”Ukrainian President Volodymyr Zelensky during a meeting with the U.S. secretary of state in Kyiv on Sept. 8, 2022. (Genya Savilov/POOL/AFP via Getty Images)Washington Probing FTX-Ukraine ConnectionsA growing number of U.S. officials are not convinced by these explanations.In a letter to Secretary of State Antony Blinken, several House Republicans, led by Rep. Troy Nehls (R-Texas), wrote that it had recently come to their “attention that billions of taxpayer dollars sent to Ukraine to assist with their war efforts were potentially invested in a crypto exchange that then made massive donations to Democrats” during the 2022 midterm election campaign.“While this partnership was touted as a way to assist Ukraine in cashing out crypto donations for ammunition and humanitarian aid, we have serious concerns that the Ukrainian government may have invested portions of the nearly $66 billion of U.S. economic assistance into FTX to keep Democrats in power—and keep the money coming in,” the lawmakers explained in a letter (pdf) exclusively obtained by FOX Business.“We sincerely hope the primary driver behind the billions in congressional assistance to Ukraine was not Democrats attempting to keep themselves in power, and that none of the missing funds were used as a passthrough to avoid campaign finance laws or end up in Democrat pockets.”A State Department spokesperson told the business news network that there is “no reason to believe that these reports are anything but pure falsehoods and misinformation.”The House Financial Services Committee, led by Reps. Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.), announced a bipartisan hearing into the FTX debacle and what it could mean for the digital asset economy. The committee plans to hear from Bankman-Fried and individuals involved in Alameda Research, Binance, and FTX. […]

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Iran Launches More Large-Scale Missile Attacks On Northern Iraq

Iran has launched another round of attacks on Kurdish groups in northern Iraq in connection with ongoing anti-government protests inside the Islamic Republic. This as Iran’s own neighboring Kurdistan region has continued to be a hotbed of the now two-month long “anti-hijab” protests sparked by the death in police custody of a 22-year old Iranian Kurdish woman from Saqqez. Iran’s elite Islamic Revolutionary Guard Corps (IRGC) announced early Monday that it struck three areas of the northern Iraqi Kurdish region with drones and missiles the day prior, causing “heavy damage” on the camps. Tehran has said that “terrorist groups”.Kurdish militia group in Iraq, AP file imageIranian statement media said that 26 members Komala and the Democratic Party of Iranian Kurdistan were killed as a result. Iran had first carried out a similar cross-border attack in September, which was said to have killed an American citizen who was a dual national. There were more reported Iranian strikes last week.The IRGC claims that the groups being targeted are behind weapons smuggling operations, as well as sabotage actions inside Iran, which aim to destabilize the country. Like with the last major cross-border attack, the US Central Command condemned the fresh Iranian military aggression, saying the strikes violate Iraq’s sovereignty and “jeopardize the hard-fought security and stability of Iraq and the Middle East.”⚡️Consequences of Iranian strike in Northeastern Iraq pic.twitter.com/CLYTNoK3K5
— War Monitor (@WarMonitors) November 20, 2022Tehran has meanwhile been demanding that Baghdad take concrete action to disarm the outlawed Kurdish militia groups while holding open the possibility of more cross-border strikes.A Monday Iranian foreign ministry statement said its military had no choice to act to “protect its borders and security of its citizens based on its legal rights.” […]

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The Lords Of War: The Perils Facing Trump, Garland, & Smith In Washington’s Legal Arms Race

Authored by Jonathan Turley,Below is my column in The Hill on the appointment of a special counsel to investigate former President Donald Trump. All of the three main players – Trump, Attorney General Merrick Garland, and Special Counsel Jack Smith – will face immediate challenges in the legal arm’s race unfolding in Washington.Here is the column:There seemed to be enough torpedoes in the water in Washington this week that you could walk across the Potomac without getting your feet wet. On Capitol Hill, the new House Republican majority announced a series of subpoena-ready investigations of President Biden and administration officials. At the Justice Department, Attorney General Merrick Garland appointed a special counsel to investigate former President Trump for possible crimes ranging from the 2020 election to the Jan. 6, 2021, Capitol riot to the Mar-a-Lago documents controversy.It was all reminiscent of the movie “The Lord of War,” in which a fictional arms dealer warns that “the problem with gunrunners going to war is that there is no shortage of ammunition.” The same appears true of rival government officials having no shortage of subpoenas.In this atmosphere of politically and mutually assured destruction, there are some immediate threats for the three main combatants:Attorney General GarlandWhen he announced the appointment of Jack Smith to investigate Trump, Garland explained that “based on recent developments, including the former president’s announcement that he is a candidate for president in the next election, and the sitting president’s stated intention to be a candidate as well, I have concluded that it is in the public interest to appoint a special counsel.”In making that case for a Trump special counsel, however, Garland may have made a case against himself for refusing to appoint a Biden special counsel in the Hunter Biden scandal. Garland’s department is investigating potential wrongdoing that could involve the other referenced candidate, President Biden, in the Hunter Biden matter. That investigation should be looking at numerous alleged references to the president using code names such as “the Big Guy” in the context of receiving percentages on foreign deals and other perks. Yet Garland has refused to appoint a special counsel in an investigation that not only could prove highly embarrassing to the president but, in the view of some of us, could implicate him as well.Congressional Democrats repeatedly voted to block an investigation of this alleged multimillion-dollar influence peddling by the Biden family. House Republicans are now poised to look into these foreign deals — and how the Justice Department may have stymied or slowed any investigation before the 2020 election.While the special counsel appointment helps insulate Garland from claims about the use of his department for political purposes on any Trump charges, he may soon face new challenges, including possible contempt referrals if Biden officials or Democrats refuse to supply information or testimony to Republican House investigators. Garland has sharply departed from prior cases in which the Justice Department largely refused to prosecute such contempt referrals; he has been very active in pursuing Trump officials who failed to cooperate with Congress. He now may be asked to show the same willingness to pursue those who obstruct or defy House Republican investigations.Former President TrumpThe greatest threat clearly faces Trump himself. His announced intention to run for the presidency in 2024 may have expedited the appointment of a special counsel. With the expectation of a possible indictment, Trump may have wanted to frame the optics as a vendetta against a declared Biden opponent before his administration took any major step toward prosecution. Instead, it likely sealed the need for a special counsel.Trump already has declared the move to be political and says he will not “partake in” an investigation.A special counsel could make fast work of controversies such as Mar-a-Lago, which have been investigated for months and already have secured grand jury testimony. For Trump, having a special counsel in control, rather than an attorney general, may prove even more precarious. Some of the potential charges for unlawful transfer or possession of classified material historically have resulted in relatively minor charges. If this investigation produces the basis for an obstruction charge or misdemeanors, Garland might have been inclined to use his discretion to forgo prosecution and avoid political disruption or questions of bias. In contrast, after the expense and effort to create his office, a special counsel may feel less inclined to overlook a chargeable offense. The majority of people charged by former special counsel Robert Mueller faced relatively minor charges and served short terms in jail.Trump also will face practical barriers. Prosecutors usually start with the low-hanging fruit in an organization, to coerce people to cooperate by threatening criminal charges. On issues such as obstruction, Trump did not allegedly act alone; there were staff and lawyers who made what the FBI claims were knowingly false or misleading representations. Those individuals must now be viewed by Trump’s counsel as having potential conflicts of interest, including his former counsel. The only way to avoid conflicts or vulnerabilities is to assemble a largely new staff that was not involved in either the Jan. 6 or Mar-a-Lago episodes.That is the difference between “partaking” in a personal excursion and a criminal investigation: The latter does not depend on your participation.Special Counsel SmithSmith faces the unenviable task of investigating a presidential candidate less than two years before the election. Given the advanced stage of prior investigations, he could bring charges before Sept. 5, 2024 (or roughly 60 days before the election under Justice Department guidelines for election year filings). It is unlikely, however, that a charge against Trump could be tried in that time.However, Smith’s first test will be to avoid the initial mistakes of a predecessor, Mueller.Like Smith, Mueller was considered a natural choice as special counsel, given his extensive experience as a career prosecutor. However, Mueller’s investigation was undermined by his selection of a team — starting with his top aide, Andrew Weissmann, a controversial prosecutor who was accused of political bias. The investigation was further undermined by FBI personnel, including Special Agent Peter Strzok, who was later removed from the team and fired by the Justice Department; Strzok has since filed a wrongful termination lawsuit.Smith can avoid tripping a similar explosive wire by selecting a team that is defined by its prior professional expertise, not its prior political views or associations.He also needs to be wary of creative avenues to indict Trump. Smith was part of the prosecution team that convicted former Virginia Governor Bob McDonnell (R) on federal corruption charges in 2014. The Supreme Court unanimously overturned that conviction as having stretched the law beyond its breaking point. If Smith is going to be the first prosecutor to indict a former president, he needs to do so with unimpeachable evidence of an unchallengeable crime.Only one thing is certain in any of this: It will not end well.With both sides loading up staff and subpoenas, the start of the 2024 campaign season has all of the makings of an utter bloodletting. There will be ample support for both sides to fulfill their respective narratives — and no shortage of legal weapons — in this political war of attrition. […]

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VP Harris To Visit Disputed South China Sea Area After She Briefly Met With Xi

Authored by Dave DeCamp via AntiWar.com,Vice President Kamala Harris will visit a Philippine island on the South China Sea that is near waters at the center of a maritime dispute between China and several Southeast Asian countries that all have overlapping claims.Harris will be the highest-level US official to visit the Philippine province of Palawan, which lies just outside of the nine-dash-line that Beijing claims in the South China Sea. The visit is clearly meant as a message to China, and Harris is scheduled to visit one of the Philippine coast guard’s biggest patrol ships, where she will deliver a speech.Vice President Kamala Harris meets US Navy sailors at Yokosuka Naval Base in Japan, via ReutersChina and the Philippines occasionally have maritime stand-offs near disputed reefs in the South China Sea, and the US often reminds Beijing that it’s a treaty ally of Manila. The US has explicitly warned Beijing that an attack on Philippine vessels in the region would invoke the 1951 Mutual Defense Treaty between Washington and Manila, meaning the US is threatening to go to war with China over the maritime dispute.Harris arrived in Manila on Sunday and is set to visit Palawan on Tuesday. On Monday, Harris will meet with President Ferdinand Marcos Jr. for talks that, according to a Biden administration official, will be focused on reinforcing the US-Philippine alliance.The US Vice President met briefly with China’s President Xi Jinping on Saturday, with the AP describing that she “spoke briefly with Chinese leader Xi Jinping on Saturday in another step toward keeping lines of communication open between the two biggest economies.” Further, “Harris and Xi exchanged remarks Saturday while heading into a closed-door meeting at the Asia-Pacific Economic Cooperation forum’s summit in Bangkok.”Today in Bangkok, I greeted President Xi before the APEC Leaders Retreat. I noted a key message that President Biden emphasized in his November 14 meeting with President Xi: we must maintain open lines of communication to responsibly manage the competition between our countries. pic.twitter.com/C5gpFxdg1Q
— Vice President Kamala Harris (@VP) November 19, 2022Harris will also look for a boost in economic ties with Manila. The White House released a fact sheet on Sunday night that outlined initiatives the vice president will focus on, including the Enhanced Defense Cooperation Agreement (EDCA), a military pact between the US and the Philippines that was signed in 2014.The EDCA was meant to enhance the Mutual Defense Treaty and the 1999 Visiting Forces Agreement, which outlines rules for US troops stationed in the country. Under the EDCA, the US can rotate troops into the Philippines for prolonged deployments and build military facilities for US and Philippine forces to use.The US is looking to expand military facilities using the EDCA. The White House said that new building locations have been “identified to enable the United States and the Philippines to continue to work together towards achieving the agreed objectives under EDCA.” […]

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Is The American Pendulum Swinging Back To Reason? Maybe, But It Will Be A Long Fight

Authored by Brandon Smith via Alt-Market.us,It should be considered an embarrassment for the states and districts involved, but the 2022 midterm elections are still being counted as I write this. In some cases, ballot drop boxes, mail-in ballots and “malfunctioning” voting machines have created a suspicious fog of uncertainty, and the uncertainty always seems to work in the favor of the political left.Needless to say, some kind of change needs to happen – The majority of Americans are aware that ongoing trends of national deconstruction cannot be allowed to continue. Even the people that refrain from voting are watching the elections, just to see if the momentum of the country has shifted even a little. And, many people who tend to refrain are on the independent/libertarian side of things.Times change and circumstances evolve, even if some people are too bitter or jaded to see it. The old guard Neocons trained in the Chicago school by Leo Strauss along with the acolytes of Irving Kristol are losing favor among conservative voters and many are dying out. The era of Bush family politics is going extinct; they were never conservative anyway.What is left behind is a kind of philosophical stew – A mixture of libertarians, independents, Republicans and patriots that don’t necessarily affiliate with every aspect of the GOP but they will vote for a candidate with a strong stance against the woke propaganda and globalism of the political left. That’s what they are looking for.For example, Ron DeSantis and his epic win in Florida shows us that the GOP is now being forced to address real conservative issues and concerns, whether they like it or not. Because if they want to win big like DeSantis they will have to start promoting the same policies and arguments as DeSantis. Republican candidates that don’t will not succeed, at least nowhere near the same level.Many people assume that Trump was the impetus for this new wave of conservatives which has abandoned the Neocon coup. But in reality, the wave started at least a decade ago and we are only now beginning to see the results. Trump rode the wave, he didn’t create it.Despite the claims of the mainstream media, there was indeed a red wave this year, but at the state level and in terms more subtle.I consider keeping my own state red a matter of urgency. Montana conservatives recently witnessed what happens when we get lazy about voting leftists out of power. Our governor at the beginning of the covid event was Steve Bullock, a Democrat posing as a “middle of the road” pro-gun, pro-freedom guy. But when the federal government’s calls for mandates hit, Bullock followed right along with all other blue state politicians in trying to enforce unconstitutional restrictions and was incredibly malicious towards groups questioning such policies.In 2020, we booted him out of office and most Democrats along with him. We learned our lesson – Keep the state red because in the event of crisis these people will exploit the situation to steal power and assert dominance.I’ve had a lot of folks tell me over the years that voting is irrelevant and that conservative leaders at the state and county level would fold and submit to the whims of the feds when the time came for our liberties to be stripped away. These people were wrong.The time did come; the pandemic was the perfect opportunity for establishment authoritarians to take all that was left of our freedoms forever. They certainly tried with all the tools available to them, including the controlled corporate media, big tech social media platforms, federal bureaucracy, etc. We passed within a short breath of full-spectrum tyranny.The covid cult failed and they failed because red states across the country refused to comply, from the voters to the politicians. Conservative state leaders did not “fold” as many predicted, which means there is a chance to fight back on a level beyond defending our front porches with guns in hand.At the very least, the actions of red states have bought us more time, and that is a precious commodity in an era of quickly escalating crisis. The situation is not quite as dire as I believed many years ago, and not as definitive as many liberty activists believe now. The end is not nigh. Our efforts are having an effect.Am I putting blind faith in the elections? No. But there is valuable information to be derived from the elections and some of it tells a story of a country battling back from the brink of progressive insanity. Here are just a few factors to consider after the midterms:Conservatives Were Out In ForceWhile the media constantly mentions a higher turnout for young voters this season, the real news is that conservatives had at least 3.5 million more voters overall than Democrats. Since the leftists are so fond of majority rule, it is interesting to point out the separation in active voters.It is also odd that Democrats continue to declare “victory” in 2022 given they lost control of the House of Representatives. How can they declare a win when they came out the other side of the election with less than they had before?Florida SweepRon DeSantis crushed leftists in Florida based on a very vocal anti-woke, anti-establishment platform. He proved that this is what Americans want. Not middle of the road, not riding the fence or trying to be diplomatic, but remaining steadfast and uncompromising in the face of irrational zealotry and underhanded agendas.Some people in the liberty movement have their complaints about DeSantis, but what I’m looking at is results and he has done more to stop the woke agenda in his state than any other state in the country. He also stood firm against covid authoritarianism. Results are what matter most.The “Blue Invasion” Threat Was A LieAll the wailing and screaming I heard over the past two years about leftists relocating into red states during covid and changing the demographics was complete nonsense. I’ve been saying since the pandemic began – Leftists don’t move away from their hive and they aren’t taking over red states, at least not in the past few years. The latest midterms prove that the fear of “blue invasion” was pure paranoia. If anything, in Montana we saw far more conservatives escaping blue states to live somewhere they felt was safe.After this election I don’t want to hear another half-baked theory about the Dems turning Texas or Florida or other strong red states to the dark side.The Abortion “Blue Wave” Never HappenedRemember after the Supreme Court decision overturning Roe v. Wade the number of media outlets proclaiming that conservatives would be destroyed during the elections? Apparently, average Americans are not as concerned with the “right” to kill babies as they had assumed. States that have moved to ban abortion are not facing a blue wave and these laws will most likely remain in place.This fact upends a long running narrative in the mainstream than any attempt to stop abortion is doomed to failure and that any political candidate that supports banning abortion would be soundly defeated. The narrative was merely a scare tactic to create a false consensus.Ballot Harvesting And Mail-In Options Always Favor DemocratsOne could debate the reasons why, but the Democrat tactic of relying on non-traditional voting methods always works in their favor. There is also the issue of potential voter fraud when it comes to mail-in ballots and ballot harvesting, as we are currently seeing investigated by the Attorney General of Arizona. The only way to be sure that such sabotage does not occur is to do what Florida did and require most voters to appear at polls in person.In battleground states where this is not an option, it would seem that conservatives are going to have to learn the ballot harvesting game that Democrats play and use the tactic against them.Americans Place The Economy Above All Other ConcernsRegardless of how the elections pan out, public polling before the midterms consistently revealed that the majority of Americans are worried about inflation and economic decline above all else, and the social issues that leftists typically run on are at the bottom of the list.This means that the longer the economic crisis goes on the more Dems in power will be questioned about their solutions. It is perhaps ironic that leftists are so keen to hold onto government control when they are only going to continue to take the bulk of the blame for the continuing economic fallout.They have no plan, and they don’t intend to do anything about it except spend more money they don’t have, which is what caused the crisis in the first place. At least conservative candidates are acknowledging the threat; leftists still refuse to admit the threat exists.I believe the economic danger will continue to grow, and there is little that can be done about it with Democrats still clinging to the Senate and with Biden in the White House. Which means the work will fall to individual states to protect themselves from the shock. I suspect that in the end red states will survive while blue states implode.Is our cultural pendulum swinging back to reason? Yes, I see signs of it everywhere, but the fight ahead is going to be long and arduous. It’s not just the globalists that we have to contend with, it’s the woke activists and useful idiots within our population that need to be diminished. It took decades for us to get to the terrible spot we are in as a society and it will most likely take decades to get us out of it. That said, there is hope. Over time this fight can be won and there a many millions of us at the ready.*  *  *If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE. […]

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Stocks & Crypto Dump, Dollar Jumps Despite Dovish Daly

OPEC rumors and denials, an apparently dovish Mary Daly (but we note Powell has added a speech that was unplanned for 11/30), and soaring COVID cases (and lockdowns) in China all summed up for a bearish day for stocks.Oil prices puked on WSJ rumors that OPEC+ was considering production hikes (which is just dumb) and sure enough they denied it soon enough and WTI prices rebounded dramatically into the green from a $75 handle all the way back up to an $80 handle…SF Fed’s Mary Daly suggested that financial conditions were pricing in a Fed funds rate of around 6% and that The Fed should slow its roll (lags etc). Eyeballing the chart below comparing financial conditions (blue) to the market’s expectations of the terminal Fed Funds rate suggests otherwise, Mary…Source: BloombergAnd that’s perhaps why stocks never caught much of a bid off those comments.Finally, China’s COVID cases soared, lockdowns spread, and the yuan tumbled…Source: BloombergWhich helped push the dollar higher…Source: BloombergWhich is negative for stocks as the weak dollar has been a prime (bullish) mover for US equities in recent weeks. Nasdaq was the worst performer today, Dow the least worst but all the majors ended the day red…The massive post-CPI squeeze surge in stocks is almost entirely unwound in “most shorted” stocks…Source: BloombergUS Treasuries ended the day with minimal changes (short-end underperforming the long-end), but swung around intraday quite significantly…Source: Bloomberg5Y yields yo-yo’d with oil today, dropping back below 4.00% before bounding back above…Source: BloombergBefore stocks were even moving there was pain in crypto land as the FTX Hacker started dumping ETH. Ether fell from $1220 to $1100 before finding some support…Source: BloombergBitcoin also suffered, breaking back below $16,000…Source: BloombergGold faded back below $1750…Finally, the market’s rate-trajectory continued to shift notably more hawkish with terminal Fed rate expectations back near cycle highs above 5.08% and H2 2023 rate-cut expectations falling significantly…Source: BloombergSo all that pause/pivot/slow-down hope is dashed… despite Daly’s comments today. […]

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Watch: NASA’s Orion Spacecraft Buzzes Moon Ahead Of Week-Long Orbit

NASA’s Artemis 1 uncrewed Orion capsule buzzed the Moon on Monday morning. The space agency said Orion passed 81 miles above the lunar surface, traveling at more than 5,100 mph while at a distance of more than 230,000 miles from Earth. Orion autonomously fired its engines at 0744 ET for two-and-a-half minutes in the first of two maneuvers required to enter the distant retrograde orbit around the Moon. The spacecraft will perform a distant retrograde orbit insertion burn on Friday, allowing it to stay in orbit for about a week to test spacecraft systems. The close approach was captured on Orion’s cameras and relayed on NASA TV. As #Orion makes its closest lunar approach today, 53 years ago the Apollo 12 astronauts were in lunar orbit preparing to head back home! The Yankee Clipper command module performed a trans-Earth injection, leaving lunar orbit #OTD at 3:49 pm ET.More https://t.co/tWfNZql230 pic.twitter.com/HJmuceGhub
— NASA History Office (@NASAhistory) November 21, 2022Here’s the video of the spacecraft performing its first lunar flyby. LIVE NOW: The @NASA_Orion spacecraft is performing its first powered lunar flyby.Orion will make its closest approach to the lunar surface during the #Artemis I mission – approximately 80 miles – at 7:57am ET (12:57 UTC). https://t.co/rO5HBPx0Ec
— NASA (@NASA) November 21, 2022The capsule’s cameras also sent back a picture of tiny Earth. “Our pale blue dot and its 8 billion human inhabitants now coming into view,” said Mission Control commentator Sandra Jones.Fly-by complete!@NASA_Orion completed its closest fly-by of the Moon this morning, 81 miles above the lunar surface, traveling 5,102 mph. Before the fly-by, we conducted an outbound powered fly-by burn, increasing speed at a rate of more than 580 mph: https://t.co/gqViM3BJLg pic.twitter.com/9IUkQUj4pf
— Jim Free (@JimFree) November 21, 2022″This is one of those days that you’ve been thinking about and talking about for a long, long time,” flight director Zeb Scoville said.The Artemis I mission launched last Wednesday morning. This is all part of the space agency’s goal for a crewed mission around the Moon in 2024, with an eventual return of humans back to the lunar surface in 2025. But for all this to happen, Orion needs to splash down off the coast of San Diego on Dec. 11 to complete the 25-day mission.  […]

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How Fed Easy Money Fueled The FTX Crypto Collapse

Authored by Ryan McMaken via The Mises Institute,The collapse of the crypto exchange FTX may prove to be a canary in the coal mine of the easy-money fueled crypto bubbles. FTX’s collapse has exposed just how little due diligence is actually taking place among investors who are apparently willing to put large amounts of cash in whatever place looks like the hottest new thing and promises—without convincing evidence—big-time returns. Indeed, FTX seems to be a textbook example of how many investors are easily hoodwinked by media narratives about the latest investment genius who has magically discovered some new way of delivering unprecedented returns. The “genius” in this case is Sam Bankman-Fried, a 30-year old MIT grad who ran FTX into the ground and had placed control of his clients’ money in the hands in the small number of friends with virtually no real experience, knowledge, or scruples about how to responsibly manage funds. Financial record-keeping and reporting at the company was haphazard at best. The calculations will be murky for a while, but it now, it looks like FTX has “lost” at least one to two billion dollars of client funds, not to mention billions of dollars in investments in the company that evaporated. Much of it was probably just stolen. But it’s difficult to guess at this point because FTX didn’t bother to put together an accounting department. FTX new CEO reports the state of the company’s financial management is worse than Enron. Yet, hundreds of thousands—possibly more than a million—clients were willing to pour money into the exchange. Some put most of their entire net worth. Institutional investors put in much more. Sequoia Capital, for example, famously put $210 million into FTX. “Due diligence” involved a “last-minute Zoom call” with Bankman-Fried during which he played video games. That money is now all “missing.” Why were so many willing to so carelessly hand over much of their life savings to an operation run by a man-child in short pants who was essentially accountable to no one? The answer lies in the fact that when we mix speculative manias with decades of central-bank-fueled easy money, we end up with a world in which FOMO and a desperate search for yield leads to disaster. The FTX implosion is exactly what we should expect to see as our decade-old bubble economy comes to grips with rising interest rates, a slow-down in easy money, and a looming recession. Slowing Monetary Inflation Creates a Problem for Leveraged Crypto As I showed earlier this week, the tech sector overall is facing losses and a need for cost-cutting as the price of borrowing—i.e., interest rates—goes up.Up until this year, this inevitable economic decline was repeatedly delayed because many problems and inefficiencies in a business can be papered over when it’s always possible to just borrow more and pay off old debts with new cheaper debt. The gambit works when interest rates are continually falling, as has been the case over the past 40 years. That is, it was easy to do so until recently. Now that firms can no longer always count on more cheap money coming down the road, losses and out-of-control expenses become a problem. When borrowing costs go up, inefficient and fraudulent companies have a harder time covering up losses and a lack of revenue. This becomes especially problematic for highly leveraged companies that have enormous debt-service costs, engage in financial shenanigans, and take on high risk investments like derivatives. In recent months, we’ve begun to see crypto exchanges get into trouble for similar reasons. FTX is just the most spectacular recent example, but FTX could have kept its problems hidden for longer had the easy money kept flowing as usual. Here’s what happened: As a crypto exchange, FTX functioned in some ways like a quasi-bank. Clients put money into the exchange as a way to facilitate client investments and use of their crypto to both invest and consume. Much of this also revolved around FTX’s crypto token known as FTT. Clients were “depositors” of a sort. Like a bank, however, FTX also tried to make money by making investments of its own through a sister company, a crypto-trading firm called Alameda Research. FTX was effectively acting as a fractional-reserve bank, using client “deposits” to make speculative investments through Alameda. But then the easy-money economy this year tightened up slightly as the Federal Reserve raised rates and backed off Quantitative Easing. One effect of this was falling prices for a variety of crypto currencies, FTT among them. Investors—both small-time crypto buyers and large institutional investors—began to sell their crypto or forego new purchases in order to get liquidity for use elsewhere. As a result, ordinary clients at FTX began to withdraw their holdings. Meanwhile, large crypto exchange Binance began to sell its own considerable holdings of FTT. Suddenly, FTX had to give large numbers of departing clients their money back. But FTX had already committed much of its money elsewhere: like many investors, Alameda and FTX were making riskier bets in an effort to stay ahead of inflation in a Fed-created world of ultra-low yields. FTX then found that it didn’t have enough liquidity to meet its obligations to clients. Moreover, as the Fed scaled back on QE and the economy slowed, asset prices began to stagnate. This meant FTX’s collateral was losing value and it could not be easily sold to cover client withdrawals. On November 11, it all collapsed. This wouldn’t have happened—at least not right now—had the easy money still been flowing. Clients would not have lost interest in FTT tokens to the same extent, and FTX could likely have taken out some new loans to cover whatever rising costs it was facing. The can would have been kicked down the road yet again. But as it was, there simply wasn’t enough liquidity anymore for the scam to continue. Thus, we find that leveraged crypto faces many of the same problems that other highly leveraged high-risk ventures face. Once the easy money dries up, financial obligations remain, but new loans to pave over the problems are difficult to come by. This problem was noted months ago by Bitcoin consultant Caitlin Long of Custodia Bank who opposed leveraged crypto as a form of circulation credit—i.e., unbacked “savings.”From Yield Famine to CollapseBankman-Fried was able to keep up the ruse for years in spite of manifestly dishonest business practices, absurd accounting, and good old-fashioned grifting. But the fact is that countless investors are so susceptible to cons like those promoted by SBF because investors want to believe them. Thanks to “yield starvation” brought on by years of financial repression, investors are desperate to find a hero who can promise big returns, even if the risks appear to be high. As economist Brendan Brown has noted, there will always be speculative narratives and manias. But when a search for yield becomes especially acute, things are made far worse. The financial sector then becomes enamored of financial celebrities like SBF. Fortune magazine then features SBF on its cover. Countless news programs featured SBF as a wunderkind expert on the new economy.  This was further enhanced by the fact that much of the client money SBF mismanaged—i.e., stole—was used for enormous public relations campaigns designed to burnish SBF’s image and clout. He gave immense amounts of money to the Democratic party and used funds to win over countless elites in the media. Even as SBF’s fraud was exposed, The New York Times and The Washington Post were still running articles about how SBF and his associates are merely misunderstood do-gooders. SBF himself admitted his image was all part of a con. The PR worked, and speculators hopped up on easy money continued to put money into FTX with little to no true due diligence. Many investors forget that when the easy money is flowing, financial mediocrities, and even outright frauds, can be made to look like legitimate geniuses. Unfortunately, it often requires only the smallest amount of monetary tightening to expose the grift, and then the party is over. […]

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Goldman Sees More Oil Weakness Until China Reopens, Then Even More Upside

Now that today’s flagrant oil market manipulation attempt via a WSJ “leak” early this illiquid morning has crashed and burned with oil trading at session highs after a rollercoaster session that saw oil tumble by $5 and then rebound by even more…… after the Saudis denied the report attributed to the “group’s delegates” just two hours later as we expected…Has Saudi Arabia denied everything yet
— zerohedge (@zerohedge) November 21, 2022… we can focus on the bigger picture, which is mostly dependent on China’s reopening schedule and the G7 Russian oil price cap – especially with Russia saying it won’t sell oil to price-cap nations, a scenario which JPM said could lead to $300+ barrel of oil – and to a lesser extent, the calendar. Here, while the medium-term price trajectory remains somewhat murky, one thing is certain: with even less investment in supply (and with interest rates at levels that make mockery of capex hurdle rates) now than in recent years, over the long-run, prices are going much higher.That in a nutshell is the summary from the latest Goldman Oil price research note, in which the bank’s chief commodity strategist Jeffrey Currie cut his 2022 Q4 price target by $10 to $100/bbl, while doubling down on his extremely bullish long-term oil price outlook. Below we excerpt the highlights from his note:Over the last ten years, Brent prices have averaged a c.10% drawdown in November, in what has practically become a Thanksgiving tradition. While it’s tempting to blame a lack of liquidity for another capitulation, we believe the market is right to be anxious about forward fundamentals, due to significant Covid cases in China and a lack of clarity on the implementation of the G7’s price cap.While confidence remains high in a 2Q23 China reopening and the structural bullish underinvestment thesis, the path between now and next spring remains highly uncertain. China’s Covid cases are at Apr-22 highs, yet, the new policy reaction function is unknown. However, the logic of exponential virus spread, means further lockdowns will likely be required, if full reopening is not feasible. Therefore, we cautiously lower our expectations for China demand by 1.2 mb/d in 4Q22, equivalent to the effective cut recently implemented by OPEC+, the group’s first successful preemptive curtailment.Meanwhile, Russia oil export flows are being maintained at elevated levels as inventories are drained ahead of the imminent implementation of the EU crude embargo. Consequently, we expect a lagged impact of the embargo on production, raising our expectations by c.0.3 mb/d over 4Q22.According to Goldman, the net impact of the above is a ~1.5 mb/d loosening of 4Q22 balances, lowering the bank’s 4Q22 Brent forecasts by $10/bbl, to $100/bbl. But according to Currie’s calculations, markets have already priced a 2 mb/d softening over the next 3 months, as these fundamental developments occurred during a seasonally low liquidity period, with discretionary positioning at post-pandemic highs, activating CTA sell triggers, exacerbating the move lower.To be sure, WTI has notably underperformed, with prompt spreads plunging into contango, as the grade suffered from a unique combination of factors:(1) a disruption to a USGC pipeline;(2) soaring dirty tanker rates; and(3) quality concerns causing WTI to discount sequentially by c.$5/bbl+ from similar grades.Goldman concludes that until broader macro stability – directly linked to the inevitable Chinese reopening from its artificial “covid zero” policy, which are nothing more than a scapegoat for Xi’s foundering economy – is able to generate an increase in passive flows, the burden of proof remains on fundamentals. To that end, Currie’s advice is to monitor both Russia’s export flows, as well as China’s pandemic response in the coming weeks (if ignoring WSJ hit pieces). More importantly, for longer-term investors, “the current sell-off provides an opportunity to add length on yet another speed bump that will come to pass.” Here’s why:While the market has rightfully reassessed year-end fundamentals more bearishly, spot balances have pivoted into deep draws since late October of c.-1.5 mb/d versus a 2017-19 average build of +0.5 mb/d (Exhibit 19). This has been driven by both landed crude (ex China), as well as oil on water (ex-Russia origin). However, with Russia supply and China demand both tracking bearishly on our high frequency modeling, these draws are indicative of robust spot demand (ex-China). This is corroborated in our global hard current activity indicators, reflecting realized demand, versus soft activity indicators which tend to be more forward-looking (Exhibit 23).Global oil stocks remain at very depleted levels, just 100 mb above the YTD lows. Moreover, OPEC+ has just started its preemptive 2mb/d quota cut (worth 1.2 mb/d in actual production in our view), into a market that was already in a seasonally-adjusted deficit (Exhibit 21). This is all despite Russia maintaining production just below pre-war levels.The underlying trends in the balances therefore seem intact, in our view, with energy equity price action a testament to this. China’s lockdowns, like all previous waves, will come to pass, and the country should reopen fully domestically next year. We still believe Russian production will decline sequentially c.0.6 mb/d from here, with risks of a deeper, more abrupt disruption, still present. Thus, while we downgrade our 4Q22 Brent forecasts by $10/bbl (to $100/bbl), we maintain our forecast for $110/bbl Brent next year, with risks still skewed higher should inventories fully deplete once again. This could occur in 1H23 if OPEC+ maintains its current quotas and global activity and employment remain at high levels.Therefore, for longer-term investors, the current sell-off provides an opportunity to add length on yet another speed bump that will come to pass. From a tactical perspective, uncertainties abound, while discretionary positioning is still long and CTAs flows will be selling, leaving risks skewed lower in the near-term.More in the full report available to pro subs. […]