Authored by Jenna Hall via BitcoinMagazine.com,

As Bitcoin adoption grows, some cities are embracing the technology as hubs for businesses, events and lifestyles tailored to Bitcoiners…

Bitcoin has taken the world by storm since its creation in 2009. In fact, about 46 million Americans own bitcoin. And as its popularity continues to grow, so does the desire for those adopting it to utilize it in their everyday lives.

As a result, several cities in the United States have emerged as hotspots for Bitcoin enthusiasts, entrepreneurs and investors. Take a look at five cities leading the way in Bitcoin adoption and innovation, and what makes them such attractive destinations for Bitcoiners.

SEATTLE, WASHINGTON

Washington State has a long history with Bitcoin and blockchain technology. In 2018, Wenatchee, a small town three hours east of Seattle, became an epicenter of bitcoin mining in the United States. Since then, cities in Washington like Seattle have seen a dramatic increase in both people and businesses interested in utilizing digital currencies.

Seattleites can buy and sell their digital assets at any of the 202 bitcoin ATMs in the city. Speaking of buying and selling, the state of Washington doesn’t tax the purchase of bitcoin — a unique advantage for Bitcoin enthusiasts living in the state.

LOS ANGELES, CALIFORNIA

As a major center for technology and innovation, Los Angeles has a growing number of businesses and individuals experimenting with bitcoin and other digital currencies. Some individuals have even been able to successfully pay the rents for their apartments in Los Angeles using bitcoin.

The city has truly embraced the use of blockchain technology, with many boutiques, restaurants, toy stores, florists and other businesses accepting bitcoin as payment. In 2021, the iconic Staples Center was renamed Crypto.com arena, further cementing the relationship that bitcoin and other digital currencies have with the City of Los Angeles.

MIAMI, FLORIDA

Miami mayor Francis Suarez has made it clear that he’s an advocate of digital currencies and wants to make Miami the “capital of crypto.” In fact, in 2021, Mayor Suarez became the first American politician to officially take his city salary in bitcoin and, in a recent interview, he said he’s still getting paid this way.

Every year, the City of Miami hosts several events and conferences for blockchain enthusiasts to attend, including the upcoming 2023 Bitcoin Conference, the largest Bitcoin conference in the world. There is also ample opportunity to use bitcoin in everyday life there, with the city having around 886 bitcoin ATMs and numerous shops, businesses and restaurants accepting bitcoin.

NEW YORK CITY, NEW YORK

With its prominence in both the financial and technological worlds, New York City is a prime destination for Bitcoin users and blockchain companies alike. The city’s position as a hub for cryptocurrencies was solidified in 2015 when the New York State Department of Financial Services introduced a licensing framework for virtual currency businesses, though many Bitcoin proponents have seen this as antagonistic to innovation.

Still, people living in New York have access to over 179 bitcoin ATMs and Consensus, one of the world’s largest cryptocurrency events, was launched in the city in 2015. The city’s mayor, Eric Adams, has said he’d like to see New York turned into a “Bitcoin hub,” taking the mantle from Miami.

SAN FRANCISCO, CALIFORNIA

With San Francisco being one of the biggest tech capitals of the world, it probably doesn’t come as a surprise that it’s also one of the top cities to live in for Bitcoin users. The city is a home to many well-known cryptocurrency exchanges that make buying and selling bitcoin possible, including Binance.US and Coinbase.

The San Francisco and San Jose areas boast 474 bitcoin ATMs and have a wide variety of businesses, restaurants, retail stores, nightclubs, hotels and property managers that accept bitcoin. The city also hosts many blockchain conferences and events, including the annual San Francisco Blockchain Week, when blockchain companies and enthusiasts come together from all over the world to discuss the future of digital currencies.

The world of Bitcoin is constantly changing and evolving, and so are the cities embracing it. From New York to San Francisco and beyond, each of the country’s Bitcoin hotspots has something unique to offer. Whether you’re looking for a thriving startup scene or a supportive community of Bitcoin enthusiasts, these cities are sure to provide an exciting environment for anyone looking to deepen their involvement in the world of Bitcoin.

California has suffered from a devastating drought that caused widespread problems for many years. Climate alarmists (such as Greta Thunberg) screamed at the top of their lungs that the world would end… However, following a few short months of a conveyor belt of atmospheric rivers, extreme to severe drought conditions have dramatically eased.

The National Oceanic and Atmospheric Administration (NOAA) reports a new atmospheric river is approaching the Central Coast of California, which is likely to result in rain, wind, and thunderstorms towards the end of the week.

“We’re expecting the onset to begin early Thursday morning along the coast, but by late morning we are expecting it to become more widespread,” Roger Gass, a forecaster with the weather service, told news website SFGATE. 

“We’ll see rain increase in intensity and coverage through the day Thursday and raining continuing into the night and into Friday morning,” Gass said. 

Parts of the storm will begin to hit the Central Coast on Wednesday afternoon. The main part won’t arrive until Thursday afternoon and last through Friday. Several feet of snow is expected for areas above 6,000 feet in elevation. Below 5,000 feet, such as the Sierra Nevada foothills, rainfall totals are forecasted to range between 2 to 7 inches.

“Will there be a moderate to strong & warm Atmospheric River storm this weekend in CA? Yes. Will there be flooding from hvy rain & snowmelt? Also yes,” UCLA climate scientist Daniel Swain tweeted. 

The latest deluge comes as extreme and severe drought conditions in the state have eased since the parade of atmospheric river storms began battering the state in late December.

JPMorgan is suing former executive Jes Staley to hold him responsible for any damages which may stem from lawsuits accusing the bank of facilitating Jeffrey Epstein’s sex-trafficking operation.

As Bloomberg reports, the bank filed a third-party complaint on Wednesday afternoon against Staley in Manhattan federal court. According to the filing, Staley should be held liable if allegations about his relationship with Epstein are found to be true.

The filing comes weeks after the US Virgin Islands revealed bombshell emails between Staley and Epstein from 2010 referencing Disney princesses, presumably in the context of girls procured for sexual activities.

“That was fun,” Staley allegedly wrote to Epstein. “Say hi to Snow White.“

To which Epstein replied: “[W]hat character would you like next?”

“Beauty and the Beast.”

Epstein also emailed Staley photos of young women in seductive poses, the filing continues.

JPMorgan responded – claiming that the emails fail to show that minors were victimized, or that “force, fraud or coercion” were used against women. The bank has asked the judge to dismiss the case, in which the USVI and Epstein accusers say JPMorgan is liable for facilitating Epstein’s sex trafficking of minors, because they ignored obvious red flags while continuing to provide banking services to the prolific pedophile.

The close ties between Staley, once JPMorgan’s private banking chief, and Epstein have been at the core of two suits claiming the bank knew or should have known about Epstein’s crimes and kept him on as a client anyway. But Staley himself was not named as a defendant in either suit. -Bloomberg

As Bloomberg further notes, JPMorgan’s new filing could shift some of the liability to Staley himself.

Staley and Epstein exchanged upwards of 1,200 emails over a period of several years. In 2013, Staley left JPMorgan to become CEO of Barclays, which he left in 2021 following a probe by the UK Financial Conduct Authority into his relationship with Epstein.

Epstein, meanwhile, had around 55 accounts with JPMorgan between 1998 and 2013, which contained hundreds of millions of dollars. At least 20 individuals paid through JPMorgan accounts were “victims of trafficking and sexual assault in Little St James,” according to the USVI.

We can only assume this filing means that there’s something big coming, and JPMorgan knows it.

Authored by Dmytro “Henry” Aleksandrov via Headline USA,

Proposed legislation that would classify conservative free speech as domestic terrorism is being called “the most dangerous bill in legislative history.”

Washington State Attorney General Bob Ferguson is aggressively pushing legislation that would establish a 13-member panel to determine what constitutes disinformation and misinformation rising to the level of “domestic violence extremism,” according to The Center Square. The panel would also collect data on incidents of their pickings of domestic violent extremism and classify noncriminal activities or speech as such.

Free speech advocates blasted the bill for targeting conservatives and criminalizing anyone who expresses an opinion that runs counter to a regime-approved narrative.

“This commission is specifically designed to target conservatives and quash any government opposition, which is why the legislation purposefully ignores Antifa and Black Lives Matter extremists. Indeed, it expressly supports those tactics,” wrote Seattle KTTH talk-show host Jason Rantz, who called it “the most dangerous bill in legislative history.”

According to Rantz’s interpretation of comments that AG Ferguson made in a January interview with PBS, the idea behind the bill is to “take preemptive measures to stop actual domestic terrorist acts through community intervention,” such as compelling people identified as “extremists” to undergo counseling.

“Let’s engage in prevention, of getting folks — avoiding them being radicalized in the first place. If somebody is radicalized and wants removal, move away from that, how can we help them with counseling, for example, to get them away from that ideology?” Ferguson told PBS host Laura Barrón-López.

“So, looking at from a more holistic standpoint, we think, addresses prevention, addresses helping folks who’ve been radicalized and take a more holistic view of this to address what is a huge challenge, not just in Washington state, but all across the country.”

However, Rantz noted that the bill goes far beyond just that goal.

“They say this is about violence, but it’s not about violence. It’s actually about speech,” he told Fox News on Friday.

“We already have laws on the books that very clearly address violence. What they’re trying to do with this commission is create what they’re calling a ‘public health approach’ to some of these ideologies.”

Rantz also explained that the commission could see the opposition to critical race theory, mask mandates and radical gender ideology connected to “white supremacy.”

“They are singularly focused on the Right,” Rantz said. “What this commission will end up doing is… recommending legislation that could not only lead to imprisoning people for having certain kinds of political positions, but also forcing them into counseling.”

Most investors have lived (and died) by the adage that “there is no alternative” to equities for the last decade or more – as global central bank repression has forced every Tom, Dick, & Harriet into ever more risky assets in search of yield… or some return.

However, a funny thing happened when “don’t fight The Fed” began to mean doing something that the commission-rakers and asset-gatherers wanted it to mean – stock prices fell, bond yields rose, and inflation chewed up any real income gains the average-joe felt.

“This is the way” that markets have been for a year or so now to the point where something shocking has just happened.

While we all know you should never “cross the streams”, it appears we have reached the capital market equivalent of the ‘singularity’: rates, equities, and credit yields have all converged.

For the first time since 2001, 6-month US money closed above the earnings yield (1/PE) of the S&P 500.

Additionally, investment-grade (IG) credit yields are still above 6 month money as they have also been selling off, but the gap has narrowed substantially in recent months. This hasn’t inverted since 1980 but has got close in recent weeks.

Deutsche Bank’s Jim Reid explains why this matters:

Earnings yields were below 6m money for long periods in the 1980s and 1990s without it impacting equity returns too much until the peak inversion around the dotcom boom/bust.

One might argue that for most of the 1980s and 1990s, collapsing yields and real yields meant that both bonds and equities could rally in unison.

For credit though, this type of curve spread has been a good lead indicator of credit spreads. As this curve gets flatter, the higher the probability is of spreads widening over the next 18 months and visa-versa.

Intuitively, when yields on short-end money are competitive with longer duration risk assets, there should be more circumspect investment behaviour with animal spirits slowly draining away. The front-end should become more attractive to the detriment of riskier ventures out the curve. This is why we think an inverted curve is such a good predictor of the economy over subsequent quarters.

Translation: Brace – the singularity is upon us.

Authored by Heather Reams via RealClear Wire,

Deployment of new clean energy technologies, lower energy costs, and reduced global emissions all have one thing in common: American leadership. While President Biden and Democrats across the country promote top-down energy mandates and other policies that lead to higher energy prices,  conservatives understand that—by unleashing American resources, accelerating permitting for energy infrastructure and innovative clean technologies, and supporting a strong, diverse energy portfolio—we can strengthen the United States’ role as a global leader in emissions reduction and provide affordable, reliable energy for American families.  

Citadel CEO Ken Griffin has taken a different approach from Wall Street banks, who have banned using artificial intelligence chatbots in their offices. Instead, Griffin is currently in the process of obtaining a company-wide license to utilize OpenAI’s ChatGPT tool. 

“This branch of technology has real impact on our business,” Griffin told Bloomberg in an interview on Tuesday in sunny Palm Beach, Florida. “Everything from helping our developers write better code to translating software between languages to analyze various types of information that we analyze in the ordinary course of our business,” he added. 

Griffin, who heads the South Florida hedge fund Citadel and capital-markets firm Citadel Securities, touted the chatbot as the “fastest-growing consumer application in the history of the internet.” He emphasized: “I’m really excited to see how this changes the world.”

Griffin views ChatGPT as a way to streamline tasks for employees, enabling them to be more productive. “It will take an enormous amount of work that’s done today by people, and do it in a distinctly different, highly automated, efficient way,” he said.

Last year was a banner year for both of Griffin’s companies, with Citadel Securities raking in revenue of $7.5 billion and becoming the largest trading unit in the US. Similarly, Griffin’s flagship hedge fund recorded a 38% surge due to strong performances in equities and commodities. 

The billionaire founder is setting a precedent for the industry at a time when many Wall Street banks, such as Bank of America Corp., Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., and Wells Fargo & Co., have prohibited ChatGPT from the office. 

There wasn’t too much excitement in the latest Fed Beige Book report which was based on information collected on or before February 27, 2023: it found that overall economic activity increased slightly since the previous, Jan 18, 2023 report: Six Districts reported little or no change in economic activity since the last report, while six indicated economic activity expanded at a modest pace. Looking ahead, the mood remained listless with contacts “not expecting economic conditions to improve much in the months ahead.”

That said, if one reads between the lines, the impression on gets is of consumers who are once again maxing out their credit cards just to keep pace with inflation; meanwhile even thought the Beige Book did not dwell on housing weakness, it noted growing weakness in the office market.

• On balance, supply chain disruptions continued to ease. Consumer spending generally held steady, though a few Districts reported moderate to strong growth in retail sales during what is typically a slow period.
• Auto sales were little changed, though inventory levels continued to improve.
• Several Districts indicated that high inflation and higher interest rates continued to reduce consumers’ discretionary income and purchasing power, and some concern was expressed about rising credit card debt.
• Travel and tourism activity remained fairly strong in most Districts. Manufacturing activity stabilized following a period of contraction.
• While housing markets remained subdued, restrained by exceptionally low inventory, an unexpected uptick in activity beyond the seasonal norm was seen in some Districts along the eastern seaboard.
• Commercial real estate activity was steady, with some growth in the industrial market but ongoing weakness in the office market.
• Demand for nonfinancial services was steady overall but picked up in a few Districts. On balance, loan demand declined, credit standards tightened, and delinquency rates edged up.
• Energy activity was flat to down slightly, and agricultural conditions were mixed.

And, as noted above, “amid heightened uncertainty, contacts did not expect economic conditions to improve much in the months ahead.”

Turning to labor markets we find a far stronger underlying picture, although one wonders how much of this is still a kneejerk response to the chaos in the immediate aftermath of the covid lockdowns:

• Labor market conditions remained solid. Employment continued to increase at a modest to moderate pace in most
• Districts despite hiring freezes by some firms and scattered reports of layoffs.
• Labor availability improved slightly, though finding workers with desired skills or experience remained challenging.
• Several Districts indicated that a lack of available childcare continued to impede labor force participation.
• While labor markets generally remained tight, a few Districts noted that firms are becoming less flexible with employees and beginning to reduce remote work options.
• Wages generally increased at a moderate pace, though some Districts noted that wage pressures had eased somewhat.

And some good news for watchers of the wage-price spiral: “Wage increases are expected to moderate further in the coming year.“

• Or maybe not because when turning to prices, the Beige Book found that “Inflationary pressures remained widespread, though price increases moderated in many Districts.”
• Several Districts reported input costs rose further, particularly for energy and raw materials, though there was some relief reported for freight and shipping costs.
• Some Districts noted that firms were finding it more difficult to pass on cost increases to their consumers.
• Selling prices increased moderately in most Districts, with several Districts noting a deceleration.
• Home prices were generally flat or down slightly, while rents were reported to be steady or higher. Still, home prices and rents remained high, contributing to ongoing concerns about housing affordability.

As with labor, there was optimism when looking ahead, as respondents said they “expected price increases to continue to moderate over the year.”

Two charts to end with: first, peak inflation is now comfortably in the rearview mirror – with the fewest mentions in one year – and anyone betting that the Fed is freaking out about inflation may be surprised in two weeks…

… and while the risk of stagflation remains with mentions of “slow” high, this too saw a notable drop from recent record highs.

Source: Federal Reserve

Authored by Ryan McMaken via The Mises Institute,

On Friday, residential real estate brokerage firm Redfin released new data on home prices, showing that prices fell 0.6 percent in February, year over year. According to Redfin’s numbers, this was the first time that home prices actually fell since 2012. The year-over-year drop was pulled down by especially large declines in five markets: Austin (-11%), San Jose, California (-10.9%), Oakland (-10.4%), Sacramento (-7.7%), and Phoenix (-7.3%). According to Redfin, the typical monthly mortgage payment is now at a record high of $2,520. 

The Redfin numbers come a few days new numbers from the Case-Shiller home price index showing further slowing in home prices growth since late last year. The market’s expectation December’s the 20-city index had been -0.5 percent, month over month, and 5.8 percent, year over year. But the numbers came in worse (from the seller’s perspective) than was hoped. For December—the most recent monthly data available—the index ended up showing a month-over-month drop of -1.5 percent (seasonally adjusted), and a year-over-year gain of 4.6 percent (not seasonally adjusted). 

By most accounts, the rapidly-slowing market faces headwinds thanks to rising interest rates, including the standard 30-year fixed mortgage, which is now back up over 7 percent. This puts homeownership out of reach for many first-time buyers, and is also a big disincentive for current owners to “move-up” into higher priced houses since any new home would come with a much higher mortgage rate than was available a year ago. 

Not surprisingly, demand for new mortgages has plummeted. CNBC reported last week: 

Mortgage applications to purchase a home dropped 6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low.

So, sales have fallen and, at least according to Redfin, prices are falling too. This is what we should expect to see in any environment where the real estate market is not being incessantly fueled by easy money from the central bank. After all, easy money for real estate markets had been the main story since 2009. In recent months, however, the Fed has allowed interest rates to rise while pausing efforts to add more mortgage-backed securities (MBS) to the Fed’s portfolio. Without those key supports from policymakers, the real estate market simply lacks the market demand that is necessary to sustain rapid growth. Contrary to what countless mortgage brokers and real estate agents tell themselves and each other, there is precious little capitalism in real estate markets. It is a market that is thoroughly addicted to, and dependent on, continued stimulus and subsidization from the central bank. 

Without the central bank propping up MBS demand in the secondary market, primary-market mortgage lenders have fewer dollars to throw around. That means higher interest rates and fewer eligible buyers. Similarly, by setting a higher target rate for the federal funds rate that banks must pay to manage liquidity, markets face less monetary growth in general. That comes with a lessening overall demand that—in the short term, at least—drives up incomes for both current and potential homebuyers. 

Even worse, that continued nominal income growth that does exist is not keeping up with price inflation. The result has been 22 months in a row of negative real wage growth, and that will translate to falling demand. 

This close connection between easy money and demand for homes can be seen when we compare growth in the Case-Shiller index to growth in the money supply. This has been especially the case since 2009. As the graph shows, once money-supply growth begins to slow, a similar change occurs in home prices one year later. 

As money-supply growth rapidly slowed after January 2021, we then saw a similar trend in home prices 12 months later, with a rapid deceleration in the Case-Shiller index. Remarkably, in November of last year, money-supply growth turned negative for the first time since 1994. That points toward continued drops in home prices throughout this year. If Redfin’s February numbers are any indicator, we should expect price growth to turn negative in the Case-Shiller numbers this spring. 

Now just image how much more lackluster real estate markets would be without the Fed buying up all those trillions in MBS over the past decade. It’s now been more than a decade since we had any idea what real estate prices actually would be without enormous amounts of stimulus from the Fed. The money-printing-for-mortgages scheme entered its first phase throughout 2009 and 2010, and then was almost non-stop from 2013 to 2022, topping out around $1.7 trillion in 2018. The Fed had begun to pull back on its MBS assets in 2018 and 2019, but of course reversed course in 2020 and engaged in a frenzy of new MBS buying.  In that period the Fed purchased an additional $1.4 trillion in MBS. That finally ended (for now) in the fall of 2022. The Fed still holds over $2.6 trillion in MBS assets.

If we look at year-over-year changes in these MBS purchases along side Case-Shiller home prices, we again see a clear correlation: 

It’s clear that once markets think the Fed may again increase its MBS purchases, home prices again surge. This close relationship should not surprise us since the volume of MBS purchases is a sizable portion of the overall market. Since 2020, the Fed’s MBS stockpile has equaled at least 20 percent of all the household mortgage debt in the United States. In early 2022, Fed-held MBS assets peaked at 24 percent of all US mortgage debt, but they still made up over 20 percent of the market as of late 2022.

Lest we think that real estate markets seem to be weathering the storm fairly well, let’s keep in mind this is all happening during a period when the unemployment rate is very low. Yes, the federal government has greatly exaggerated the amount of job growth that has occurred in the economy over the past 18 months. However, it’s also fairly clear that real estate markets are not yet seeing large numbers of unemployed workers who can’t pay their mortgages. When that does occur, we can expect an acceleration in falling home prices.

For now, most mortgages are being paid, and even as real wages fall, most homeowners are cutting in places other than their mortgage payments. Once job losses do set in, all bets are off, and a wave of foreclosures will be likely. Many jobless workers won’t be able to sell quickly to avoid foreclosure either. With so few borrowers who can afford rising mortgage rates, there will be relatively few buyers. That’s when prices will really start to come down—when there is a mixture of motivated sellers and rising interest rates. 

For now, though, the investor class remains relatively optimistic. Marcus Millichap CEO Hessam Nadji was on Fox Business last week flogging the now well-worn narrative that we should expect a “small recession,” but Nadji did not even entertain the idea that there might be sizable layoffs. Instead, he suggested that there is now a mere temporary softening of demand, and that will reverse itself once the Fed reverses course and embraces easy money again. In other words, the Fed will time everything perfectly, and it will be a “soft landing.” 

This well captures the attitude of the “capitalists” heading the real estate industry right now. It’s all about the Fed. Without the Fed’s easy money, demand is down.

Once the Fed pivots back to forcing down interest rates and buying up more MBS, well then happy times are here again.

Gone is any discussion of worker productivity, savings, or other fundamentals that would drive demand in a real capitalist market. All that matters now is a return to easy money. The real estate industry will get increasingly desperate for it. In 2023, it’s become the very foundation of their “market.” 

Yesterday, the spread between 2- and 10-year yields rose above 1% (and in the past 24 hours yield curve has blown out another 10bps to 110bps) for the first time since 1981, when Paul Volcker was engineering hikes that broke the back of double-digit inflation at the cost of a lengthy recession and millions of unemployed workers.

A similar dynamic is unfolding now, according to Ken Griffin, the chief executive officer and founder of hedge fund giant Citadel. “We have the setup for a recession unfolding” as the Fed responds to inflation, Griffin told Bloomberg in an interview in Palm Beach.

“Every time they take the foot off the brake, or the market perceives they’re taking their foot off the brake, and the job’s not done, they make their work even harder,” Griffin said.

What does the the historical record say?

One question history can help answer, is how long this continued deep inversion could last. Here is what DB’s Jim Reid found when asking just this question:

1. If we look at the last 70 years of hiking cycles, we can see that the curve on average flattens from around the first hike to 12 months after. It then stabilizes for 6 months and then starts steepening.
2. Alternatively, if we look at what happens before a recession, on average the curve hits its most inverted around 3 months prior to a recession before seeing a substantial steepening over the next 12-18 months, especially in the first three months of the recession.

What do DB’s rates strategists’ think? They expect that by year-end 2023, the 2s10s will uninvert back to +45bps, so some 135bps steeper than current levels. While that sounds a huge move, Reid notes that “it’s not too far out of line with what you would expect if there was a recession in H2.” To be sure, investors are not currently in a rush to buy the front end though given current inflation risks, and are looking for evidence of labor market weakness or more clarity on fiscal tightening from debt ceiling negotiations before they do. However if and when it happens, the curve can steepen quite quickly if history is to be believed, Reid warns.

How about those historical cases when we saw an inversion as big as today’s? Here Reid calculates that on all the previous occasions that the 2s10s has been more than -100bps inverted since data is available from the early 1940s (there are just four of these – 1969, 1979, 1980 and 1981) a recession has either been underway, or has occurred within a maximum of 8 months.

And just to highlight how rare the current inversion truly is, Reid says that there have only been 7-month end closes lower than -100bps in 80 years of available data: “so we are in rarefied air.”