Authored by Matthew Vadum via The Epoch Times (emphasis ours),

A left-wing civil rights group is asking the Supreme Court to review the felon disfranchisement provision of the Mississippi Constitution that permanently prevents certain felons from voting, claiming the law is rooted in racial animus.

The appeal is not expected to affect the approaching Nov. 8 elections.

The petition (pdf) in the case, Harness v. Watson, is expected to be docketed by the Supreme Court in the coming days. The respondent, Michael Watson, is Mississippi’s Republican secretary of state.

The petitioners, Roy Harness and Kamal Karriem, are black Mississippi residents. Harness was convicted of forgery in 1986. Karriem, a former Columbus city council member, was convicted of embezzlement in 2005. Both have completed their sentences.

According to a summary provided by the Mississippi Center for Justice, which is representing the men, Section 241 of the Constitution permanently blocks anyone from voting who was convicted of certain crimes that the original framers of the document believed were committed mostly by black people.

The state constitution bars those convicted of murder, rape, bribery, theft, arson, obtaining money or goods under false pretenses, perjury, forgery, embezzlement, or bigamy, from voting.

“It was one of several voting provisions in the 1890 Constitution designed to take the vote away from Black citizens who had obtained it during the Reconstruction period after the abolition of slavery and the end of the Civil War,” the summary states. “The other discriminatory provisions, including the poll tax and the so-called understanding clause, were eliminated in the 1960s in response to federal court orders and the federal Voting Rights Act of 1965.”

Rob McDuff is the attorney for the plaintiffs and the director of the Impact Litigation Project at the Mississippi Center for Justice.

“At a time when our state and nation are struggling with the vestiges of a history of racism, it is important that the United States Supreme Court step in to address this remaining vestige of the malicious 1890 plan to prevent an entire race of people from voting in Mississippi,” McDuff said.

“Although the Supreme Court has become more conservative in recent years, we hope it will see that the continued implementation of this racist provision is an affront to the promise of the Equal Protection of the Law contained in the Fourteenth Amendment to the U.S. Constitution.”

A federal district court upheld the ban, concluding it was bound by the 1998 ruling of the U.S. Court of Appeals for the 5th Circuit in Cotton v. Fordice, which held that the “discriminatory taint associated with the original version” had been erased when burglary was removed from Section 241 in 1950 and rape and murder were added as disenfranchising crimes in 1968.

Because a majority of voters approved these racially neutral amendments to the provision in 1950 and 1968 and discriminatory animus was not a factor at those times, Section 241 was “redeem[ed] … from its unconstitutional provenance.”

The district court ruling was affirmed by a three-judge panel of the U.S. Court of Appeals for the 5th Circuit. In August all 17 judges on the 5th Circuit reviewed the ruling and voted 10–7 to uphold the ban.

The 10-member majority acknowledged (pdf) the state’s 1890 constitutional convention was “steeped in racism,” that the “state was motivated by a desire to discriminate against blacks,” and that Section 241 was a “device that the convention exploited to deny the franchise to blacks.”

But any discriminatory intent was “cured” by the later constitutional amendments, the majority stated.

The Epoch Times reached out to Watson for comment but his office did not immediately respond.

Throughout history, humans have relied on cooperation and social relationships to thrive. Of course, who we spend time with evolves throughout our lifetime.

Using insights from the American Time Use Survey and Our World in Data, Visual Capitalist’s Avery Koop and Nick Routley look at who Americans spend the most time with at various ages of their life.

Adolescence to Adulthood

In the average American’s teenage years, they spend most of their time alone and with their family. This makes sense, as the majority of people under 18 still live in a home with their nuclear family unit, meaning parents and siblings. Not surprisingly, adolescence is also when time spent with friends reaches its peak.

Jumping forward to a person’s early adulthood, 25-year-olds spend an average of 275 minutes per day alone, and 199 minutes with coworkers. This aligns with people in their twenties beginning to enter the workforce.

By age 35, people are still spending the most time with themselves, at 263 minutes per day. However, time spent combined with children and partners, the runner-ups, adds up to 450 minutes or around 7.5 hours a day.

Although people are spending more time with kids and partners as they grow older, this trend may shift, as women are having fewer children. More women today are obtaining an education and are entering the workforce, causing them to delay or entirely put off having children.

Middle to Old Age

Upon turning 45, the average person spends 309 minutes a day alone, and in second place, 199 minutes with children. Time with coworkers remains relatively steady throughout someone’s forties, which coincides with the middle of career for most people in the workforce.

By age 55, time spent alone still takes top spot, but time spent with a partner goes up to 184 minutes, and time with coworkers also moves up, pushing out time spent with children.

Typically, time spent with children during the mid-fifties tends to see a sharp decline as children enter adulthood and begin to move out or spend more time out of the house.

Today, more children are staying at home longer or even moving back home. 52% of adult children in the U.S. today are living with their parents.

As people get closer to old age, around 65-years-old, they spend increasingly less time with coworkers as they begin to retire, and much more time alone or with a spouse. Then, from age 65-75, people consistently spend the most time alone, then with a partner and family.

Alone and Lonely?

One of the most significant trends on the chart is increased time spent alone.

By the time someone reaches 80, their daily minutes alone goes up to 477. This can be a problematic reality. As the population continues to age in many countries around the world, more elderly people are left without resources or social connection.

Additionally, while one quarter of elderly Americans live alone, the trend of solo living is going up across nearly every age group, and this trend applies to a number of mature economies around the world.

A natural conclusion would be that increasing alone time has negative impacts on people, however, being alone does not necessarily equate to loneliness. Our World in Data found that there was no direct correlation between living alone and reported feelings of loneliness.

One final consideration is the role technology plays in our social interactions. Thanks to smartphones and social platforms, time alone doesn’t necessarily equal isolation.

It is not just the amount of time spent with others, but the quality and expectations, that reduce loneliness.

Authored by John Mac Ghlionn via The Epoch Times,

The importance of a strong power grid cannot be emphasized enough. Often, when a grid fails, the results are terrifying. Of all the major power grids in the world, the United States’ is one of the more vulnerable to attack.

State-sponsored hackers from the likes of Iran, Russia, and, unsurprisingly, China pose a real threat to the United States’ electrical transmission lines. However, there’s another (far less obvious) threat to the grid: electric vehicles (EVs).

Yes, you read that right.

The Biden administration is desperate to consign the internal combustion engine to the dustbin of history. In this radical shift to embrace a new, zero-emission world, Americans are being told to embrace EVs. Such an embrace, however, requires a stellar power grid, the very thing the United States lacks.

Just to be clear, the U.S. power grid (or electric grid) involves a huge network of transmission lines, power plants, and distribution centers. The United States has three major grids: the Eastern Grid, the Western Grid, and the ERCOT Grid, otherwise known as the Texas Grid. Of the three, the Eastern Grid is the largest.

Although the three grids can operate independently, they’re also connected. A failed grid means no power for tens of millions of citizens and prolonged periods of darkness. Imagine a power grid failure in the likes of Los Angeles or New York. The two cities are already riddled with crime; grid failures would make things many times worse.

Attacks Since 2016

In 2018, the Department of Homeland Security announced that Russian hackers had hijacked the control rooms of various electric utilities. This allowed the hackers to disrupt power flows and cause blackouts.

Rather alarmingly, the DHS conceded that the attacks had been occurring since 2016, the same year the Russians started attacking Ukraine’s grid. Although the Russians have strenuously denied the attack, such denials appear to conflict with reality.

As tensions between Russia and the United States escalate, and tensions between China, another hacker-friendly country, intensify, expect more disruptions to the grid.

A photo illustration shows a background of electric power infrastructure with an Apple iPhone showing an Emergency Alert notification from CalOES urging the public to conserve energy to protect health and safety as the electricity grid is strained during a heat wave in Los Angeles, Calif., on Sept. 6, 2022. (Patrick T. Fallon/AFP via Getty Images)

However, as mentioned, Americans must concern themselves with more “benign” threats. A recent paper, published in Applied Energy, discussed the threat of electric cars to the grid. Currently, there are 2.5 million electric vehicles in the United States; four in five owners opt to charge their cars overnight. This decision, according to the researchers, is putting a considerable strain on power grids.

By 2025, the United States will have more than 20 million EVs on its roads. By 2030, according to Bloomberg, more than half of car sales will be electric. The strain is increasing, and power grids are ill-equipped to shoulder the load.

If Bloomberg’s projection proves to be correct, then, as the researchers note, it will take 5.4 gigawatts of energy storage to charge EVs. To put 5.4 gigawatts into perspective, one nuclear power plant produces 1 gigawatt of energy. The United States currently has 55 power plants. To facilitate the new EV revolution, the United States requires many more. Considering California, the largest state in the country, has moved to ban the sale of gas-powered cars, and other states are considering introducing similar measures, the United States needs to get a move on. Time is very much of the essence.

What would happen if, say, the power grid was to fail in EV-crazed California? To answer that question, we need only rewind a few months. This past summer, plagued by scorching hot temperatures, the Golden State’s power grid came incredibly close to collapsing.

It survived, but only just.

The grid will be tested again. With California’s desire to push the sales of EVs, the next test could prove to be an unmitigated disaster. Energy is a finite resource, a fact that seems to be lost on so many EV enthusiasts.

A charging port is seen on a Mercedes Benz EQC 400 4Matic electric vehicle at the Canadian International AutoShow in Toronto on Feb. 13, 2019. (Mark Blinch/Reuters)

In truth, the nation’s power grid is already on its last legs. It has been for years. In a sobering piece for Smithsonian Magazine, Dr. Massoud Amin, a professor of Electrical and Computer Engineering (ECE) at the University of Minnesota, explained the many ways in which the country’s power grid, “the most complex” one ever assembled, could fail. The grid, he wrote, “underpins our economy, our quality of life, our society.” Without it, society will be brought to a screeching halt. Crime will rise. Lives will be lost. Chaos will reign supreme.

By 2025, according to the American Society for Civil Engineers, the inability of the United States to maintain its many power lines will cost the country dearly—$130 billion, to be exact. EVs, so often hailed as the best thing since sliced bread, come with a whole host of sizable problems.

Across the United States, as the author Ben Guess recently noted, there are currently 21 EVs per public charging port. By 2030, to keep up with EV purchasing trends, the United States must install almost 500 charging ports every day for the next 8 years.

Does this sound realistic to you?

Even if the United States does somehow manage to install enough ports, the grid simply isn’t strong enough to support the battery-related demands. This is a point that needs to be emphasized, repeatedly and unapologetically. Yes, state-sponsored hackers are a threat, but state-sponsored EV initiatives aren’t exactly harmless. In the blind embrace of all things green, we must not lose sight of the bigger picture, the objective realities that stare us straight in the face

By the end of this decade, if everything goes to plan, Miami will have a new supertall tower, measuring more than 1,000 feet tall, able to withstand hurricane-force winds. 

WSJ said developers broke ground on the new 100-story Waldorf Astoria residential tower in October. It will feature 360 luxury condo residences and 205 hotel guest rooms in the tallest residential building south of Manhattan. 

PMG, which is developing the Waldorf tower, said the structure had overcome many designing and planning challenges, such as how to engineer a foundation in porous limestone, survive hurricane-force winds, and obtain permission from Miami International Airport to build a supertall building in the middle of a highly traveled flight path. 

One of the engineering marvels PMG worked into the tower’s design is a pendulum at the top that counteracts swaying in high winds. There are also plans to use specialized technology called deep soil mixing to create a sturdy foundation. 

“Where other buildings might have taken four months of foundation, it’s going to take us a year to get all that structure underground just to support this building,” PMG chief executive Kevin Maloney said. 

Maloney said the building is so massive that 150-200 knot hurricane-strength winds wouldn’t comprise the building structure – mainly because each floor is a massive 20,000 square feet, compared with PMG’s Manhattan’s West 57th street’s 5,000 square feet. 

“The building code in Miami is the strictest in the country, and that’s true about 1,000-foot towers or eight-story towers.

“There’s not a city I feel safer in than Miami in terms of hurricane code,” Ryan Shear, Managing Partner of PMG, said. 

Maloney said 87% of the condo space in the supertall tower has already been sold, with units starting at $2 million.

High demand for the future tower could be due to the massive influx of people and new money flooding into Miami. There are financial moguls, such as billionaire Ken Griffin moving the global headquarters of his Citadel and Citadel Securities to the city from Chicago. 

The financial winds are shifting, and in no time, the streets of Brickell will be filled with portfolio managers and programmers. 

Miami is the next Wall Street. We doubt Waldorf tower will be the only one by the decade’s end. 

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The founders of the election integrity group True the Vote were jailed on Oct. 31 by a federal judge for contempt of court.

U.S. marshals detained Catherine Engelbrecht and Gregg Phillips after a hearing in federal court in Dallas, according to a court docket entry.

Court filings show U.S. District Judge Kenneth Hoyt, the Reagan appointee overseeing a lawsuit against True the Vote, Engelbrecht, and Phillips, ordered the defendants jailed after they refused to share information, including all people who have had or still have possession of any information from Konnech computers.

Konnech is an election management software firm whose CEO was arrested in October for allegedly stealing poll worker data and hosting it on servers in China.

Konnech sued True the Vote prior to the arrest, alleging that the election integrity group and its founders gained unauthorized access to its computers and gained information from them.

In the lawsuit and a motion for a temporary restraining order (TRO), Konnech said that the defendants made “completely baseless claims” that Konnech’s CEO and employees were Chinese operatives and that the FBI was investigating Konnech.

“The truth is that Konnech is a U.S. company founded and operated by a U.S. citizen who has no affiliation with the Chinese Communist Party whatsoever,” Konnech said, adding that all of its U.S. customer data “is secured and stored exclusively on protected computers located within the United States.”

That was part of the $2.9 million contract Konnech reached with Los Angeles County, but Los Angeles District Attorney George Gascón, a Democrat who charged Konnech CEO Eugene Yu, said investigators found that information “was stored on servers in the People’s Republic of China.”

True the Vote said Konnech’s claims that they hacked into Konnech servers were false and that they accessed a server in China using a “pre-loaded password that did not even require typing in a password to enter the server.”

Hoyt in September ordered the defendants to stop accessing the computers and to return all property and data obtained from the computers. He also ordered them to identify each person and group involved in accessing the computers and to disclose to Konnech how the computers were accessed.

Defendants told the court in a sealed letter that they wouldn’t identify the source of the data, “arguing that to do so would hinder an FBI investigation concerning the matter, or jeopardizing ‘national security,’” Hoyt said in a recent order.

Defendants said they turned over the person’s identity to the FBI and that they shouldn’t have to make that name available to Konnech. Text messages submitted to the court were sent between Engelbrecht and FBI agents, according to an affidavit from the former.

Phillips said in an affidavit that defendants would “comply fully” with Hoyt’s order and that the name of the person who accessed information from a computer was revealed in court during a recent hearing. According to Votebeat, that person is Mike Hasson. A summons was issued to Hasson on Oct. 31.

Phillips also said that Hasson and FBI agents were the only people who had access to the information.

The defendants will be detained “until they fully comply” with Hoyt’s order to disclose information, according to a summary of the hearing.

Read more here…

As Goldman trader John Flood describes in his end-of-day market recap note (available to pro subs) the day on Goldman’s trading desk, “it was a 4 on 1 – 10 scale in terms of overall activity levels w/ most investors relatively frozen in terms of playing offense ahead of FOMC tomorrow.”

So with everyone frozen until 2pm tomorrow – and many could be very surprised if the Treasury announces some actionable news on Treasury buybacks during tomorrow’s 8:30am Refunding announcement which could spark a far bigger risk rally than Powell sounding modestly on the dovish side – here is a preview of what to expect: as we noted yesterday, a fourth successive 75bps rate hike has long been pretty much nailed down but the subsequent path of hikes is now up for grabs and will be the focus from this week’s meeting.

As DB’s Jim Reid wrote on Monday , “it feels inconceivable to us, given how spectacularly forward guidance has broken down across the global markets over the last 12 months, that Powell will try to guide too aggressively for December, especially with two payrolls (one this week) and two CPIs to come before they meet again.” In light of this, DB’s economists currently believe that 75bps is still likely in December, but that January could mark a downshift whilst still seeing upside risks to their terminal rate expectation of 5% given the recent inflation data and evidence that r-star has risen. Even WSJ Fed mouthpiece, Nick Timiraos, tweeted at the weekend “Consumers have a big cushion of savings. Corporations have lowered their debt-service costs. For the Fed, a more resilient private sector means that when it comes to rate rises, the peak or “terminal” policy rate may be higher than expected.”

To be fair in his WSJ article that went viral 10 days ago he did mention that 2023 Fed forecasts could be upgraded. However the market mostly focused on the near-term downshift possibilities (that changed today because while tomorrow’s 75bps hike is a lock, the odds of a 75bps hike in Dec jumped today and the odds of a 50bps hike in Feb also jumped notably).

Over the weekend, Goldman came out with a slightly different scenario then DB: the bank’s economics team – which also expects a 75bps hike this week – had updated its terminal rate estimate to 4.75-5% in March, and sees hikes set for: 75bps in Nov, 50bps in Dec, 25bps in Feb, 25bps in March (with March here being the new add).

As Goldman’s Jan Hatzius wrote, there are three possible reasons why the FOMC could end up hiking past the February meeting, as the bank now expects:

1. First, inflation is likely to remain uncomfortably high for a while, which could make continuing to hike in small increments the path of least resistance.
2. Second, more rate hikes might be needed to keep the economy on a below-potential growth path now that the fiscal tightening has mostly run its course and real income is growing again.
3. Third, the FOMC might need to do more if a future pivot causes a premature easing of financial conditions.

      (More details in the full note available to pro subscribers).

It is unclear which of these three possible routes might eventually lead the FOMC to tighten by more than it currently plans, but Goldman thinks “it is more likely than not that one of them will.” Goldman also updated its scenario analysis of possible Fed paths to reflect the bank’s revised baseline forecast: the average view (the green line on the right side of Exhibit 3) is now slightly higher than before and is roughly in line with market pricing for 2023 (the orange line on the right side of Exhibit 3), which has moved up more meaningfully since our last update a month ago.

What is notable in the Goldman forecast is the bank’s recent insistence that inflation will remain “uncomfortably high for a while” which could make hiking for longer than currently planned the path of least resistance.

We would discount this, for two reasons: i) it comes from the same bank which one year ago we mocked for “convincing” its clients every week that inflation would be transitory and ii) the coming recession will spark massive job losses which will far outweigh the adverse impact of higher inflation, as the growing complaints from the Bernies, Warrens and other democrats make clear.

Shifting away from Goldman, Morgan Stanley is more dovish, writing in its FOMC preview that it expects the Fed to increase the policy rate by an additional 50bp in December and 25bp in January, for a peak rate of 4.625%: “The Fed then holds rates there for an extended period until beginning to normalize policy with a 25bp decrease December 2023.” Some more from the MS preview:

With little doubt around the policy decision at hand, the focus of this meeting will be squarely on the signals the FOMC is sending around a possible step-down in the pace of rate hikes in December. Currently, the market is placing a 50% probably of a 75bp hike in December – giving the Fed full optionality to make a game time decision. There are multiple ways of signaling the possibility of a step down, largely related to acknowledging concerns around the extent of tightening already implemented. Most immediately, the paragraph on current conditions could include an observation that financial conditions have tightened, and the discussion of future policy moves could be softened from referencing “ongoing increases” in the future.

The FOMC statement may also add a reference to global financial conditions, reflecting concerns about the effects that interest rate hikes have had on the global financial system. “Watching closely” in this regard, similar to language used by Vice Chair Brainard in her speech on October 10, would send a very strong message that the committee will look to step down – should the data allow.

Decreasing the pace of tightening could appeal to both hawks and doves – slower rate hikes would better enable reaching a higher peak rate (hawks), and would also allow more time to respond to the incoming data (doves). Nevertheless, the Committee will not want to signal that a step down in the pace of rate hikes signals an earlier end to tightening or a lower peak rate, limiting the dovishness that markets may try to associate with the preference for a step down to a 50bp hike.

(More in the full note available to pro subscribers).

Next, Newsquawk summarizes the consensus view, noting that the Fed is expected to hike its target Fed Funds range by another 75bps to 3.75-4% (money markets have 75bps priced at a 98% probability) with a firm focus on the guidance and Powell’s presser as the FOMC looks to step down its pace of tightening approaching its expected terminal rate, roughly in the 4.5-5% area some time in May/June.

Ahead of the blackout, Fed insider Timiraos at the WSJ noted the FOMC is barreling towards a fourth straight 75bps hike in November, adding that the meeting could serve as a critical staging ground for future plans, including whether and how to step down to 50bps in December; Fed’s Daly also gave remarks calling on the need to step down the pace of tightening. Timiraos wrote, “Some officials are more eager to calibrate their rate setting to reduce the risk of overtightening. But they won’t want to dramatically loosen financial conditions if and when they hike by 50bps (instead of 75).

One possible solution would be for Fed officials to approve a half-point increase in December, while using their new economic projections [in Dec.] to show they might lift rates somewhat higher in 2023 than they projected last month.” Those concerns around loosening financial conditions will already be top of mind for the Fed given the spike higher in long-end inflation breakevens that have been accompanied by a pick-up in stock appetite, fall in Treasury yields, and a weakening Dollar seen in wake of the WSJ article, not to mention the dovish developments at the ECB and BoC which have only added to central bank ‘pivot’ pricing. As such, Powell will likely push back on the ‘pivot’ narrative at the November FOMC, and perhaps front-run the December SEPs in hinting towards a higher terminal rate than the 4.6% median dot in the September SEPs and stressing a “higher for longer” stance as a means to counter the dovish signalling of a reduction in the pace of hiking in the backdrop of little progress made on the inflation front.

Shifting away from these qualitative forecasts we next look at what JPM had to say, which is again on the quantitative side, and in keeping with previous scenario analyses (see “JPM’s Fed Day Scenario Analysis“, “JPMorgan’s Payrolls Scenario Analysis“, and “How To Trade The CPI: Scenario Analysis From JPMorgan“), JPMorgan trader Andrew Tyler writes that as he thinks about Fed scenarios, “consider that of the prior 6 meetings this year, markets have rallied into Fed Day on 3 occasions and sold off into the day on 3 occasions. Post-Fed Day, there is a similar hit rate with markets closing higher as of that Friday three times; and, by the next Wednesday markets have been up 3x and lower 3x. 2 weeks after the Fed, markets have been up 4 of 6 times; when they are up, the SPX is up and average of +4.1% vs. +1.3% across all 6 observations.” And since the hike for this meeting is known (75bps), and all that matters what hints Powell shares on the rate hike path, Tyler’s recommendation is to “keep an eye on terminal rate expectations; Friday we closed with terminal rate expectations of 4.90%” This number has since spiked back over 5% following today’s much hotter than expected JOLTS print.

Which is not to say that Powell can’t surprise: he can, and as the last two FOMCs showed, he certainly will if he wants to (that said, the question whether the Fed chief wants to crash markets one week before the midterms is also rather pertinent). Below are Tyler’s six scenarios for Wednesday’s FOMC:

• 50BPS HIKE; DOVISH PRESS CONFERENCE – of the scenarios, this is the least likely and the most bullish. It is difficult to conceive of a scenario where this outcome occurs given inflation levels and a tight labor market. Should this outcome occur, the immediate reaction could produce a double-digit 1-day return for Equities. The last time the SPX had such a strong 1-day return was in Oct 2008 when the SPX was +10.8% on Oct 28 and +11.6% on Oct 13. Given the low liquidity environment, this time the SPX is looking at +10% to +12%. Once again, this scenario would lead to the biggest stock market gain in 14 years.
• 50BPS HIKE; HAWKISH PRESS CONFERENCE – a slightly more likely scenario; this outcome could stem from a Fed that is increasingly concerns about financial stability as it balances growth and inflation. However, it seems far more likely that the Fed gets Fed Funds to 4% before they begin to balance their considerations. This outcome is still very bullish and the SPX would rally +4% to- +5%.
• 75BP HIKE; DOVISH PRESS CONFERENCE – this is second most probabilistic outcome in JPM’s view. While a stepdown from 75bps to 50bps is reflected in the DOTS, this is still a Fed that appears nervous about loosening financial conditions, of which Equity levels are an input, so a dovish press conference seems less likely than a hawkish one. If you saw the Fed give explicit guidance for the December meeting, then that is likely viewed as a dovish outcome. SPX jumps +2.5% to +3%.
• 75BP HIKE; HAWKISH PRESS CONFERENCE – this is the most likely outcome with Powell retaining optionality for December and 2023 meetings while emphasizing the current risks to inflation moving higher. Even with a hawkish press conference, we may see language suggesting that a stepdown from 75bps is coming, which softens the blow. This outcome feels like the one that is most expected by bond markets, so we may not see a significant move in yields which keeps Equities from melting down. SPX down 1% to up 0.5%.
• 100BPS HIKE; DOVISH PRESS CONFERENCE – given recent publications from WSJ, this outcome feels as unlikely as seeing a 50bps hike. Should this outcome occur, it may mean that the Fed both wants a higher terminal rate and that it wants to complete the tightening cycle this year. The Fed could do 100bps here and December, taking Fed Funds to the 5.00% – 5.25% level. Speaking with clients who invest in EM, this is lower range of where they think the Fed should take rates. Separately, the market may digest this move as the Fed having prior knowledge of where next week’s CPI prints; the previous CPI prints triggered a -4.3% day. In this scenario, the SPX falls 4% – 5%.
• 100BPS HIKE; HAWKISH PRESS CONFERENCE – this is the best outcome for bears or for Equity investors waiting for this latest rally to dissipate. This outcome likely ends this latest rally irrespective of what CPI does next week. Here this would seem to be a Fed reassessing its own inflation forecasts, which some investors feel is too optimistic. Here you likely see a significant selloff across all risk assets as bonds reset higher. This type of shock, especially when considering the WSJ articles, could see Equities retest YTD lows. SPX falls 6% to 8%.

To summarize visually, stocks could move… a lot.

While the above forecast may be just a tad ridiculous and extreme, another market-linked observation comes from Bespoke which notes that the ”S&P 500 once again finds itself lower between FOMC meetings, for 8th time in past 10 periods; current decline has been more modest than some historic drops (like 13% decline prior to June meeting).”

Since tomorrow’s statement will not contain any surprises – as noted above 75bps is a lock –  we will skip a projected redline as most attention will be on Powell’s press conference comments, and instead remind readers of why the market has turned much more dovish in recent weeks: as Morgan Stanley economists note, they expect the Fed to prep for a step down in the pace of hikes at the upcoming FOMC meeting as hinted by recent Fedspeak quotes below which show that the Fed appears ready to ratchet down the hawkishness, especially as the Fed continues to believe in the idea that monetary policy works with “long and variable lags” (see quotes below).

• Daly, October 21: A benchmark rate in range of 4.5%-5.0% is a ‘very reasonable estimate’ of how high rate needs to go…the time is now to start talking about stepping down, from the 75bp pace of hikes.
• Harker, October 19: I expect we will be well above 4 percent by the end of the year. Sometime next year, we are going to stop hiking rates. At that point, I think we should hold at a restrictive rate for a while to let monetary policy do its work…If we have to, we can tighten further, based on the data.
• Kashkari, October 19: My best guess right now is yes, do I think inflation is going to level out over the next few months, the services, the core inflation, and then that would position us some time next year to potentially pause.
• Bullard, October 20: The goal is to move to some meaningfully restrictive level that will push inflation down. But it doesn’t mean that you go up forever

One final reason why it’s time for the Fed to turn dovish is growing liquidity concerns: as we have discussed extensively over the past few weeks, Treasury market liquidity has been challenged in recent months, there could be a question linked to the Fed’s role in supporting Treasury liquidity, especially with the backdrop of recent BoE intervention in Gilts. While changing QT or balance sheet policy in general has a very high bar, the Fed could be asked about regulations like the SLR, and the possibility of exempting Treasuries from SLR calculations. While few expect any announcements or new headlines from Chair Powell, it will be important to see what kind of guardrails, if any, the Fed wants to put around Treasury liquidity issues. An unexpectedly large hawkish surprise would lead to further fractures in Treasury market liquidity.

Much more details in the full FOMC previews available to pro subscribers, from DB (link), JPM (link), Goldman (link) and MS (link) and Newsquawk (link)

Authored by Archie Chaudhury via BictoinMagazine.com,

14 years later, Bitcoin has shown its strengths… and that it still has a long way to go to achieve its original goals…

When Satoshi Nakamoto first published the Bitcoin white paper in October of 2008, the world was reeling from a financial crisis caused by the irresponsibility and negligence of the institutions that controlled our financial system. Hedge funds, central banks and other powerful agents had been all too happy to place over-leveraged bets on the economy, and to profit from the economic losses incurred by the working class when these bets collapsed.

Governments, in a desperate attempt to keep these institutions alive, spent hundreds of billions of dollars in bailouts and other monetary injections instead of ensuring the well-being of the average citizen. Bitcoin was Satoshi Nakamoto’s answer to state-backed money; it was a vision for a decentralized digital currency that could provide the efficiency of online banking, the relative pseudonymity of physical cash, and the scarcity of gold.

Unlike previous attempts at creating digital cash, Bitcoin was not backed by or controlled by a singular entity or party, but rather by an anonymous developer (developers?), a set of faceless forum visitors and a small online community that believed in using cryptographic software for privacy and independence from authoritarian powers. Nakamoto’s ultimate goal was to create an asset that was autonomous, decentralized and was not susceptible to the greed or will of any one individual. October 31, the day Satoshi Nakamoto formally announced their white paper to the Cypherpunks Mailing List, has come to be known as “Bitcoin White Paper Day” and is celebrated as an informal declaration of independence from corrupt state-backed money, heard across the world. The purpose of this article is to reflect on how far we have come since then, and how much work remains to be done in order to accomplish Nakamoto’s goals.

The Bitcoin that we use today is vastly different from the Bitcoin that Satoshi Nakamoto and his fellow contributors created in the late 2000s and early 2010s. Beyond the numerous technical upgrades and hard forks, the network itself has grown significantly, with more and more people taking the proverbial “orange pill” and deciding to use bitcoin in some capacity.

There is another way in which Bitcoin has changed: the core network, and asset (BTC), is thought of more as a store of value rather than a platform for micropayments. Indeed, there was a significant cultural schism within the Bitcoin community that led to this change: the famous, and aptly titled, “Blocksize Wars” approximately five years ago led to this change, with forks such as Bitcoin Cash and later Bitcoin SV being created by community members who believed in scalability over all else, and the core Bitcoin chain being upheld by members who sought to preserve decentralization and to look at alternative methods such as Layer 2 payment channels to support scalability. The Lightning Network, which is the most popular payment channel, has slowly gained popularity, recently reaching a capacity of 5000 bitcoin.

Despite these changes, the core technological tenets espoused by Nakamoto in 2008 (Nakamoto Consensus with proof-of-work mining and a static maximum supply of 21 million) remain constant. This is not solely because of a technological or economic reason; in fact, it has been argued that changing Bitcoin’s underlying consensus mechanism or supply cap could lead to increased performance and adoption respectively. Rather, Bitcoin’s consistency in these areas can be attributed to the philosophy of its underlying community, who believe strongly in scarcity, security and decentralization over all else.

Meanwhile, bitcoin is being used by people around the world to stave off unruly economic conditions. Bitcoin’s natural scarcity makes it attractive for citizens where corruption has led to unrestricted inflation. This adoption has even led some governments, such as El Salvador, to declare bitcoin a national currency, a move that would have been unfathomable to Nakamoto and Bitcoin’s original contributors.

Perhaps the most interesting thing to take from Bitcoin’s progress over the past couple of years is that it has happened without a central leader: unlike alternative assets that are more akin to decentralized software platforms, bitcoin functions purely as money, with key “policy” decisions being made by a community. There is no Bitcoin organization or representative solely responsible for promoting adoption, nor is there a central “chief scientist” that has a significant impact on key protocol-level decisions. While there are certainly major influences within the community, the protocol as a whole does not have an organizational structure to lead either adoption or development. In fact, Bitcoin’s lack of hierarchy should be a goal for other distributed ledger projects who, while perhaps decentralized to a certain degree, are still largely influenced by a singular entity or individual.

While Bitcoin has certainly grown from its humble beginnings as a white paper and a couple hundred lines of scrappy code, it still has a long way to go if it is to achieve the ambitious goals discussed by Nakamoto and other early adopters in their email chains and forum posts. From a technical standpoint, the Bitcoin community needs to continue building technology that not only enables further scalability and security, but perhaps more importantly, also helps make the network more decentralized. One of the most staunch mottos that Bitcoin community members have adopted is the term “Don’t trust, verify.” This is, of course, in reference to running a full Bitcoin node and not relying on data from external third parties, such as node providers. Network optimization, rollups, and other scalability research has been proposed by various individuals in the Bitcoin community as a way for the network to simultaneously scale while decreasing the cost it takes to run a full node. A recent report, published by John Light through research funded by the Human Rights Foundation, Starkware and CMS Holdings, provides more detail about rollups-related scalability research.

Despite its roots in technology, Bitcoin has evolved over the years to become something more: it is now a community, a network, if you will, of like minded-individuals who all have some varying degrees of belief in a singular idea. Bitcoin is no longer a software, privy to only developers, coders or those with a highly technical background, and this marked shift should also signal additional non-technical priorities for the Bitcoin community to address over the next decade.

More effort needs to be spent on educating the general public and making them aware of not only Bitcoin’s technology, but also the failures of the legacy financial systems that they use today. More effort needs to be spent not only on touting bitcoin’s economics and technology, but also drawing on distinctions between bitcoin and other cryptocurrency platforms. Finally, more effort needs to be made among the cryptocurrency community as a whole to come together when the fundamental principles that Satoshi Nakamoto and his fellow cypherpunks believed in are threatened by authoritarian governments, regardless of the platform that is being attacked.

While discussions around varying blockchain networks have always been tribalistic to a degree, the recent trend has been to promote the success of your platform over all else, and even chide or insult platforms who face potential regulatory scrutiny. While believing that bitcoin is the most sound digital asset in terms of economics/construction, and getting into arguments about said belief is okay, and should even be encouraged, celebrating when an alternative platform is threatened with regulatory action or censorship goes against what Bitcoin is fundamentally all about.

The cypherpunks, Satoshi Nakamoto and a majority of Bitcoin’s community all believe in the idea that one day, there can be a digital peer-to-peer currency completely independent of any government, intermediary or biased party. While we certainly have various disagreements about the pros and cons of our respective technology, belong to different “maximalist” groups, and in general have varying beliefs, we all ultimately belong to a space that was motivated by the idea of a censorship-resistant and non-partisan digital asset/network. We would do well to remember that fundamental principle as we continue to work on Bitcoin over the next 14 years.

Tweet from Erik Vorhees on the sanctioning of Tornado Cash and potential BTC regulation by ESG proponents.

Each year, thousands of acres of land are scorched by wildfires across the United States. But, as Visual Capitalist’s Carmen Ang details below, while most of these fires are triggered by natural causes such as lightning, some are unfortunately caused by human activity.

This graphic by Gilbert Fontana uses data from the National Interagency Fire Center (NIFC) to show the number of acres burned across the U.S. between 2001 and 2021.

Historically, we can see that lightning-caused fires have led to more damage in the U.S., and this is especially true in the West region which includes states like California, Oregon, and Washington.

That said, it’s worth noting that in three out of the six years from 2016–2021, human-caused wildfires led to more damage.

Authored by Dave DeCamp via AntiWar.com,

On Monday, President Biden’s special envoy for Iran, Robert Malley, said the US isn’t going to “waste its time” on talks with Tehran to revive the nuclear deal and would use a military option as a “last resort” against Iran.

Negotiations between the US and Iran on the nuclear deal, known as the JCPOA, have been stalled since early September. The Biden administration hasn’t officially said it’s done with the talks, but Malley’s comments are the surest sign that diplomacy between Washington and Tehran is dead.

Malley echoed other administration officials and said that the JCPOA is “not our focus right now” and that the US is going to focus on other issues, including supporting protesters inside Iran.

“It is not on our agenda. We are not going to focus on something which is inert when other things are happening… and we are not going to waste our time on it… if Iran has taken the position it has taken,” Malley said at a Carnegie Endowment event, according to Axios.

There’s no sign that Iran is working to develop a nuclear weapon, but Malley still threatened the US would use military action as a “last resort” to prevent Tehran from doing so.

“We will use other tools, and in last resort, a military option if necessary, to stop Iran from acquiring a nuclear weapon,” he said.

The US has accused Iran of making “extraneous demands” during the JCPOA negotiations. But the Biden administration had taken a hardline approach in the talks by refusing to lift all Trump-era sanctions.

The stance forced Iran to negotiate what sanctions would be lifted in exchange for it bringing its nuclear program back into the strict limits set by the JCPOA.