By Tony Pasquariello, Goldman head of hedge fund sales

For only the third time since 1926, both US stocks and bonds lost money in 2022 (the other two occurrences were 1931 and 1969).

The intra-year path was extraordinary — be it the high print on inflation (I wonder when we’ll see a 9.1% headline on CPI again), the Fed’s response (425 bps of hikes across just seven meetings) or the geopolitical backdrop (one variable that very much carries through to 2023).

Then consider this fundamental oddity: US real GDP growth should only amount to +0.7% this year (Q4/Q4) … yet, there’s been over 4.5mm new jobs created (payrolls survey) [ZH: with even the Philly Fed confirming our speculation that the BLS is fabricating job numbers it’s no longer much of an oddity].

In that context, I’ll borrow a line from Barton Biggs, which I think captures the raw material of what served folks well in 2022:

Although those quantitatively inclined would disagree, to me, investing is much more an art than a science … experience, diligence, a knowledge of history, an open mind, and an obsessive nature are all important ingredients for the successful [investor] … as are intuition, imagination, flexibility and maybe just a touch of the seeing eye.

What of 2023?

For the macro crowd, my instinct is these tensions won’t go quietly into the night and the opportunity set will remain decently target rich (e.g. China and Japan could be very actionable theaters).

At the same time, I concede that the broad setup across asset prices today is far less asymmetric than it was at the start of this year.

Therefore, I suspect we’re shifting from a macro environment that favored aggressive trading (see chart below) and brute force (i.e. US 2-year notes surged from 70 bps to 470 bps, that’s about as good as it gets for trend following strategies) to one that is more nuanced, featuring less volatility and more dispersion across markets (which should play to the strengths of RV and equity long/short).

With thanks to Ben Snider in Goldman Research, what follows from here is a check-down of the score board … I also included the recap on last year at the very bottom of this note, if only for a compare-and-contrast that speaks (quite loudly) for itself.

* * *

The tale of the tape in 2022:

1. The S&P 500 fell by 19%. Including dividends, the total return was -18%. This ranks in the 5th percentile of all annual returns since 1962.

2. Realized volatility was 24%. This ranks in the 92nd historical percentile.

3. Putting those together, the ratio of S&P return-to-vol was -0.7, ranking in the 12th historical percentile.

4. The largest S&P peak-to-trough drawdown during the year was 25%, almost 2x the median historical annual drawdown.

5. The market traded higher on just 43% of days in 2022, the second worst year since WWII (after 1974). This is interesting: the median gain on those days was 115 bps, the highest in postwar history.

6. 31% of S&P stocks posted positive returns, including 66 names up 20% or more and 18 names up 50% or more. On the other side, 188 stocks closed down more than 20% and 26 names were down 50% or more.

7. NDX returned -32%, lagging S&P by 14 percentage points and registering the worst year of underperformance since 2002.

8. US Treasury 10-year notes returned -16%, the worst return on record.

9. Only two of the GICS level one sectors generated positive returns: energy +65%, utilities +2%.

10. The worst sectors: communication services -40%, consumer discretionary -37%, information technology -28%.

11. The best global markets (in local FX): Venezuela +254%, Turkey +207%, Argentina +142%.

12. The worst: Russia -37%, South Korea -24%, China A-shares -20%.

13. Finally, I’ll conclude with a chart, from Ryan Hammond in GIR: as mentioned before, you have probably seen work suggesting that one should not try to time the markets, as missing the best days is a serious drag on returns. While that rang true again (see the gray line), for the world’s best traders, note how dodging the worst days this year generated an immense amount of alpha (see the light blue line):

More in the full Pasquariello note available to pro subs.

2023 now effectively marks the end of the whole “Interim President Juan Guaidó” fiction of the previous years, after Venezuela’s opposition on Friday voted to remove him from this role.

Starting in 2019, Guaidó declared himself as interim president of Venezuela while seeking to invalidate President Nicolas Maduro’s controversial 2018 re-election. He had received the full backing of the United States, followed by other countries who can be counted on to mimic Washington policy.

For the latter part of the Trump administration it was official US policy to recognize Guaidó with the “interim president” title, even with Maduro’s diplomatic officials at the embassy in Washington being considered persona non grata. 

During the Trump years there were even widespread reports of a US-sponsored coup attempt against Maduro, as Guaidó waited in the wings to take over, but which failed and with subsequent efforts to stoke anti-Maduro unrest gaining no traction and ultimately waning. 

This was despite Guaidó and his opposition officials not having any real level of power inside Caracas or the country, despite a period of what might be called super star status outside the country and some decree of international or Western recognition.

But since November of 2022, the opposition has been in deepening talks with the Maduro government, coinciding with Maduro officials seeking rapprochement with Washington.

Those unprecedented talks led to the White House unveiling a monumental shift in its Venezuela policy,  namely the easing of oil sanctions which allowed Chevron to pump Venezuelan crude and export it to the United States.

The US-led attempt to simply pretend that Juan Guaidó was the actual President of Venezuela – even though not a single person had ever voted for him for that position – was one of the more laughable and pathetic failures of the bipartisan US National Security State. https://t.co/sldO1Pfpwi

— Glenn Greenwald (@ggreenwald) January 1, 2023

Chevron was forced to halt all drilling there just under three years ago due to Trump administration sanctions, also amid the aforementioned US policy that recognized only the opposition leader Guaidó.  “Chevron received a six-month license that authorizes the company to produce petroleum or petroleum products in Venezuela,” a White House statement indicated.

Chevron as the last major US oil company to operate in Venezuela had before the oil embargo invested in Venezuela’s oil fields and machinery over the last century to the tune of an estimated $2.6 billion. But it’s expected to take much more than just six months, possibly even years, for Chevron to get its necessary oil field infrastructure, machinery, and logistics chain up and running again to get back to its earlier Venezuela production levels.

Authored by John Cody via Remix News,

German youth in migrant-heavy neighborhoods once again turned Berlin and other German cities into war zones on New Year’s Day, but this year, news reports indicate that attacks were especially brutal and targeted rescue services, including ambulance workers.

In Berlin, police and firefighters responded to 3,943 incidents, with 15 firefighters and 18 police officers injured. According to Bild newspaper, there were “particularly bad attacks in the hotspot neighborhoods of Kreuzberg and Neukölln with a high proportion of migrants.”

“There were dozens of attacks,” says Interior Senator Iris Spranger, of the Social Democrats (SPD).

In Kreuzberg, for example, after young men set fire to barricades, firefighters who arrived to extinguish the fire were attacked by 200 hooded men. In Neukölln, which is one of the most multicultural neighborhoods in Germany, 50 perpetrators fired rockets at emergency force services.

In one disturbing scene, a group of men were filmed attacking an ambulance, hurling objects inside the vehicle’s open rear doors.

Berlin-Neukölln New Year’s Eve. If you import Kalkutta you don’t help Kalkutta, you will become Kalkutta. @NancyFaeser you are responsible pic.twitter.com/roLNVwdyaO

— Hans Gutermann (@HausPirna) January 2, 2023

Other videos show youths hurling rockets at ambulances as they attempt to drive down Berlin streets.

(1/4) Wenn man Bilder aus Städten wie Berlin oder auch Frankfurt sieht, weiß man: Es ist immer eine bestimmte Klientel, die hier zu Silvester völlig ausrastet. Es geht also nicht pauschal um Böller. Es geht darum, wer wie damit umgeht. pic.twitter.com/mdnT7qWRpw

— Anabel Schunke (@ainyrockstar) January 1, 2023

Zu #Silvester und dem #Jahreswechsel geht #Berlin im #Feuerwerk #Chaos unter.#Fachkräfte aus der #Partyszene und #Chaoten aus der #Sonnenallee, #Kreuzberg und #Neukoelln überfallen #Polizei und #Feuerwehr.

Berlin: das institutionialisierte #Staatsversagen, dank #Giffey. pic.twitter.com/4pHZcVYNKf

— Dr. David Lütke (@DrLuetke) January 2, 2023

Berlin Neukölln war dieses Jahr Silvester richtig schlimm pic.twitter.com/Obzc3tRyur

— 🌙فاطمة (@fatumaa_ab) January 1, 2023

Many of the incidents were caught on film, with the clips featuring burning vehicles, fires in tall apartment blocks, and one police officer being struck by a rocket directly on his helmet, which then burst into flames. One officer and one firefighter suffered from severe injuries and remain hospitalized.

“Our vehicles were fired at with birdshot ammunition,” says Thomas Kirstein of the Berlin Fire Department. Police report that an “illegal bullet bomb” was thrown at a fully occupied police car. In another video, a man shoots out a police car window.

freue mich auf das #boellerverbot in berlin. dann gehören solche bilder nächstes silvester der vergangenheit an.

Ihr team freiheit

🗽✊🏼

pic.twitter.com/bcEGoRqyP0

— Ulf Poschardt (@ulfposh) January 2, 2023

In the ensuing chaos, 103 people (98 men and five women) were arrested. The Berlin police wrote on Twitter, “The violence that our colleagues had to experience on New Year’s Eve is unbearable. It is a task for society as a whole to clearly counteract this. We thank you all for your commitment and wish the injured a speedy recovery.”

Die Gewalt, die unsere Kolleginnen & Kollegen in der Silvesternacht erleben mussten, ist unerträglich. Es ist eine gesamtgesellschaftliche Aufgabe dem deutlich entgegen zu wirken. Wir danken Ihnen allen für Ihren Einsatz & wünschen den Verletzten schnellste Genesung.
^VPr ^PPr’in

— Polizei Berlin (@polizeiberlin) January 1, 2023

Another video showed migrant youth mocking a firefighter as he attempted to give an interview to news outlets.

Berlin halt. pic.twitter.com/04NiRZGICB

— Anabel Schunke (@ainyrockstar) January 1, 2023

The next morning, burned-out buses and automobiles could be seen across Berlin.

Hat #Berlin noch irgendwas von einer normalen deutschen Großstadt?
Wahldebakel, Antifa Krawalle und jetzt noch so ein Silvester. Vielleicht wählt ihr euch mal ne vernünftige Regierung ins Amt wie wir anderen. pic.twitter.com/Xneaf4OIgy

— Henrijs_DE🔅 (@HenrijsDE) January 1, 2023

Georg Pazdersk, former AfD parliamentary group leader in the Berlin House of Representatives, wrote: “When are we finally going to admit that we have a huge problem with young male migrants from archaic societies who don’t want to integrate. Silencing the problem means continuing to promote it.”

Wann gestehen wir uns endlich ein, dass wir ein riesiges Problem mit jungen männlichen Migranten aus archaischen Gesellschaften haben, die sich nicht integrieren wollen. Das Problem totzuschweigen heißt es weiter zu fördern.https://t.co/Z6NODxl9Cmpic.twitter.com/7BqWOkxXKx

— Georg Pazderski (@Georg_Pazderski) January 1, 2023

Other cities, such as Duisburg, were hit with violence as well, including attacks on rescue services.

#duisburg #silvester pic.twitter.com/kDiY1JmDSQ

— Anabel Schunke (@ainyrockstar) January 1, 2023

“One can only shake one’s head. The political leadership in Berlin takes no responsibility for this disaster. It has sympathy for people who break rules,” Neukölln’s former mayor, Social-Demcrat (SPD) Heinz Buschkowsky, told Bild.

In der Silvesternacht regieren in unseren Innenstädten #DIEGESETZLOSEN. Junge Männer, die machen, was sie wollen, vor niemandem Respekt haben, sich über Gesetz & Ordnung hinwegsetzen – unsere Doku morgen 18 Uhr bei #AchtungReichelt – Hier Kanal abonnieren: https://t.co/bhjqXCo8wP pic.twitter.com/BVdkbinASW

— Julius Böhm (@julius__boehm) January 1, 2023

“The lunatics are becoming are appearing more and more. Every festive event is a welcome occasion to attack the authorities…That’s the enemy, and they must be fought.”

“Even experienced emergency personnel are shocked by the extent of the brutality. This must finally come to an end. The state must no longer stand by while chaotic people repeatedly attack police officers and firefighters. These are not trivial offenses, they are crimes,” CDU Berlin chapter leader Kai Wegner told Bild.

Previous years also featured extreme violence, especially in Neukölln.

In a statement released by the AfD, the party wrote, “Anarchy reigned in Berlin on New Year’s Eve. It was a first foretaste of future everyday life in German cities because although the authorities and the press are adamantly silent when it comes to the specific naming of the perpetrators, the countless videos of that night speak volumes: They are young, violent men with a southern appearance who hardly speak German. And not only can they immigrate unhindered, they also get paid for a nice life by the traffic-light government with tax money.

The conclusion that is now being drawn from the riots is as typical as it is naïve: a ban on firecrackers and cameras on the rescue vehicles should fix it. As if the corresponding clientele would be impressed by these measures. There is only one effective remedy against such scenes: finally protect the borders and deport criminal migrants immediately,.”

Weitere Eindrücke der #Partyszene, die ich euch nicht vorenthalten möchte! Da wäre ich doch gern dabei gewesen – in dieser “sicheren und lebenswerten” #Silvester2022-Nacht!
Meine Kinder hätten das #Feuerwerk wahrlich genossen🙃🤡@polizeiberlin: Material für euch! Tut was damit😉 pic.twitter.com/jhned7Yjiu

— XzumTreme (@XzumTreme) January 2, 2023

In 2016, approximately 2,500 German women were raped and sexually assaulted by North African and Middle Eastern men in Cologne and other cities in an event that fueled the rise of the Alternative for Germany party and anti-immigration sentiment in Germany.

An earthquake rattled parts of Northern California on Sunday for the second time in two weeks. The 5.4-magnitude quake was centered about 30 miles south of Eureka. On Dec. 20, a 6.4-magnitude earthquake also struck near Eureka.

Now one quake prediction research firm warned that the next big one could be imminent. 

On Monday morning, Quake Predictions published a warning that read for the next two days — there is a “dangerous situation” of the likelihood of a 7.0-magnitude “in the San Francisco Bay to NW of Los Angeles area.” 

48 hour warning – (Dangerous situation) – WARNING: 7.0 earthquake is likely in the San Francisco Bay to NW of Los Angeles area 01/02 to 01/03- (huge quake signal just hit California) https://t.co/VMyuA1uw32 pic.twitter.com/goGyalmLFc

— EarthquakePrediction (@Quakeprediction) January 2, 2023

The warning comes after two sizeable quakes hit Northern California in less than two weeks. 

Sunday morning’s earthquake was described as “more violent this time,” Rio Dell Mayor Debra Garnes told CNN in an interview. 

“It was shorter but more violent. My refrigerator moved two feet. Things came out of the refrigerator. There’s a crack in my wall from the violence of it,” Garnes said. 

California has an average of five earthquakes per year with magnitudes between 5 and 6, according to LATimes. And the latest shakings might suggest a long overdue big quake could be nearing. 

Authored by Toby Young viaThe Daily Sceptic,

Samuel Greg, a Distinguished Fellow in Political Economy at the American Institute for Economic Research and author, most recently, of The Next American Economy: Nation, State, and Markets in an Uncertain World, has written a good piece for the Spectator about the WEF on the eve of Davos 2023.

He argues that if you care about liberty, democracy and national self-determination, it’s perfectly rational to be concerned about the influence of Klaus Schwab and his followers. Not because they are the puppeteers controlling politicians across the West, but because their ideas permeate the upper echelons of the global elite. In particular, Schwab’s belief in the top-down, technocratic form of government exemplified by the EU.

It wields no formal political power and can’t make anyone do anything. Nonetheless, since its founding in 1971, the WEF has become an organisation which embodies supreme confidence in the imperative of a particular type of person running the world from the top-down. In his famous 2004 essay entitled ‘Dead Souls’, the political scientist Samuel P. Huntington called this prototype ‘Davos Man’.

A clever moniker that neither Schwab nor the WEF have ever succeeded in shaking off, Davos Man was Huntington’s short-hand description of “academics, international civil servants and executives in global companies, as well as successful high-technology entrepreneurs” who thought alike and tended to view national loyalties and boundaries “as residues from the past”. Davos Man also looked with undisguised disdain, Huntington suggested, upon those who weren’t getting with the programme – whatever the content of the programme happened to be.

Therein lies the deepest problem with the WEF. It’s one thing for people to come together in international settings to discuss problems, share insights, and network. Business leaders, politicians, and NGO-types do this all the time.

It’s another thing for an outfit such as the WEF to decide that the time has come to rearrange the world from the top-down and remake the planet in a corporatist image. The ideal for which Schwab is aiming, judging from his speeches and writings, is something akin to a globalised EU, with its supranational and ingrained bureaucratic ways being transposed to an international level, and the levers of power vested in the hands of reliable Davos men and women.

In short, it’s easy to caricature the WEF and Schwab as something akin to Ian Fleming’s fictious Spectre and its criminal-mastermind Ernst Stavro Blofeld. Yet the agenda now being pursued at settings such as Davos is sufficiently alarming that anyone who believes in preserving things like liberty, sovereignty, and the decentralisation of power should be concerned.

Worth reading in full…

Robert Malone has a saltier take on the WEF’s current agenda on his Substack, particularly no. 4 on the WEF’s list of priorities: “Preparing for the next pandemic requires ending health disparities.”

That’s uncomfortably reminiscent of the toxic new ideology I discussed yesterday, which combines extreme risk aversion – to pandemics, climate change, hate speech, etc. – with ‘equity’, meaning a commitment to protecting ‘vulnerable’ groups, e.g. ethnic minorities and the LGBTQ+ community.

So the argument for, say, keeping mask mandates in place forever would run something like this: airborne viral diseases have a disproportionately negative effect on marginalised people because they have less access to healthcare, therefore governments have a moral duty to impose masks mandates.

Authored by Natasha Wright,

Even if Merkel had not been accomplice to this grande feat of political mirage and deception, she should be praised for her honesty.

Otherwise, merely as a set of mitigating circumstances for ‘the Merkel on the political court of justice of history’ we could just acknowledge her honest admission that she was a participant in that grand Minsk Agreements delusion, which led the world into a conflict of huge proportions, the result and the aftermath of which the world cannot even see the outlines of at this point, and in its less favourable variant it can mean its complete destruction (the world’s destruction that is). The issue is certainly much more deep-rooted than that. Merkel has recently, seemingly totally unprovoked, divulged the well-hidden truth that the Minsk Agreements with Russia about Ukraine, signed seven years ago with the presidents of the two countries, Vladimir Putin and Petro Poroshenko, Merkel and the then President of France, Francois Hollande reached within the framework of the Normandy Format were just a deceptive political ploy.

Sadly, some of the signatories (i.e. Germany, France and Ukraine) seem to have never even considered fulfilling all the signed contractual clauses and its pertaining elements. That agreement, Merkel admitted, was signed merely to consolidate and reinforce Ukrainian military might and buy more time so that they could use it for their ‘final reckoning’ with Russia. The Minsk Agreement, says the already retired Merkel during her ‘sitting on her political laurels’ pension days, Merkel disclosed to the general public and her political counterparts, that it was a mere concerted effort to give Ukraine time, which many have subliminally known already. Ukraine used that time to consolidate its military position, as is so blatantly obvious at this moment in time. The Ukraine from 2014 and 2015 is certainly not the Ukraine of the year 2022. The Battle for Debaltseve at the beginning of 2015 has patently proven that Putin’s army could have rolled over them in a nanosecond back then and crushed them to pieces militarily.

I sincerely doubt that the NATO member states could have done more back then than what they are doing now. Clearly, it was bound to turn into a frozen conflict and not solved at all. Ukraine has just been given a precious time it badly needed. As if Poroshenko wanted to reinforce what Merkel was about to disclose a few months later, NATO Secretary General, Stoltenberg, has boastfully gloated that NATO allies have given much needed support for Ukraine for years on end, particularly since 2014 so that its armed forces were much bigger and more powerful in February 2022 than in 2014. Moreover, Stoltenberg. ‘A wannabe-Adolf’ admitted at the NATO Summit in Madrid this summer after a series of belated admissions, they have been preparing for this for quite a long time now. This plausible though an oblique admission that the Minsk Agreements did not serve the purpose of a peaceable solution to the conflict but so as to simply arm and train Ukraine en route its military preparation for the war yet to come against Russia. The ‘kudos filled with irony’ for this should go straight to Petro Poroshenko that exactly what happened. Admittedly though ironically, that was a very talented document, which is how Poroshenko described it i.e. written with great political panache because they needed the Minsk Agreements to gain four more years as their head start, to form, consolidate and train Ukrainian armed forces, and together with NATO build the best military combat readiness army in Eastern Europe in line with the high-profile NATO standards. That was what Poroshenko trotted out inadvertently in front of the Russian pranksters Vovan and Lexus, who made him believe that he was in fact talking to Michael McFaul, the former U.S. Ambassador in Russia. Poroshenko, out of sheer negligence and ignorance, was way more straightforward, up until Angela Merkel with her official though unanticipated admission and confirmation of all Russian suspicions on this matter, outplayed them in all her honesty. She even appears to have told the truth. Which possibly makes matters much worse for her. That’s it, Sergey Lavrov gave a succinct response. Vladimir Putin rose above it all though with overwhelming subtle derision. How one is supposed to feel if he and Russia had been viewed as the main culprits for the ongoing war of massive proportions but it turned out that he was right all along. Vladimir Putin gave a straightforward response. ‘This is disappointing, Truth be told, I did not expect to hear any such thing from the former German Chancellor because I have always thought that the German leaders were honest with us. Apparently, they resorted to ‘grand deception’ tactics. The situation is not just horrible but abhorrent as well, said Alexander Lukashenko, the disappointed host of the then Minsk Agreements.

Poroshenko, Hollande, whom Merkel led along holding his ‘politically rickety’ hand as if he were her political lapdog in front of Putin’s eyes, carried out a secret operation and deceived everybody. In doing so, they got a long period of a pseudo ‘truce’ so as to prepare Ukraine. After Merkel’s admission, nobody has the right to blame Russia for what happened. What is even worse, the Minsk Agreements and its great pretenders in all their feats of delusional pretence, is not an exception to the rule but it occurs as a rule for the Collective West.

‘The hidden agenda behind the Minsk Agreement additionally demolishes the credibility of the Collective West to tatters’ – the Chinese Global Times concludes. Merkel’s admission goes to prove that some countries in the Collective West, particularly the USA, fail to perform their contractual obligations. They breach contracts, they break their own words with utmost dismissive frivolity. They deem any agreement as useful only if they see their chance to promote their own selfish interests. Otherwise, Washington DC and their vassals are always on the ready ‘to fail to perform’.

One has to wonder why the Collective West keeps doing this? What is the rest of the decent world to do and how are we to move on from this after this admission by Merkel? Are we supposed to sign any future agreements and business deals with the Collective West? Does that mean that there will not be peace in the world as long as one great power is driven to a complete defeat? What got into Merkel to give away those precious details? We are yet to find out in Merkel’s memoirs.

There is no need to pardon Merkel for anything she has done but her admission is hugely important particularly for Moscow for the reasons of any future peace negotiations. All these great deceptions carried out under false pretences appear to come with a long tradition back in history. In the history of diplomacy it is not odd that political personages of huge importance break their promises. The history of international relations has witnessed such instances of statesmen and political figures giving their words and then breaking them. Even the formal pledges and written agreements. Especially in the 20th century. Hitler comes to mind. James Baker’s pledge ‘Not one inch eastward‘ given to Michael Gorbachev as well still resonates in our historical memory and certainly in the political archives.

Republicans’ slim House majority in the upcoming congressional session means that aspiring speaker Kevin McCarthy needs nearly every GOP rep’s votes. That’s giving discontented conservatives powerful leverage — and on Sunday, that leverage was evidenced by McCarthy granting a major concession to the holdouts.

However, it’s still far from clear that McCarthy will be elected on the first ballot —if at all. 

I’m not voting for Kevin McCarthy for Speaker because he’s just a shill of The Establishment.

The reason most of my Republican colleagues are supporting him is because they benefit from the redistribution of lobbyist & special interest money from McCarthy to their campaigns. pic.twitter.com/bdJmjwy6W7

— Rep. Matt Gaetz (@RepMattGaetz) December 27, 2022

In a conference call, McCarthy said he would agree to lower the threshold by which rank-and-file members can force a vote to depose a sitting speaker. Specifically, he said he would support a rule change that would allow any five members of the House majority to compel a vote to “vacate the chair.” That concession, however, is partial — some reps want any single member to have the power to force a no-confidence vote. 

Normally a largely ceremonial undertaking, this session’s speaker vote could turn into an entertaining spectacle that paralyzes the House. Since 1923, every speaker has won on the first vote. An 1855 battle for House leadership, however, spanned two months and 133 votes.  

To be elected speaker on Tuesday, McCarthy needs 218 votes. Since no Democrat is going to vote for a Republican, that means McCarthy will have to persuade nearly every one of the new session’s 222 GOP members to vote for him. Thanks to his party’s profound underperformance in the midterms, McCarthy is working with the slimmest majority for an aspiring first-time speaker since John Nance Garner in 1931.  

An easier path to firing a speaker is just one of many rule changes that have been demanded by conservative Republicans who are fed up with a top-down approach to legislation that sees mammoth omnibus bills presented by leadership for a straight up-or-down vote, with no ability to offer amendments from the floor. 

In a letter to GOP representatives, McCarthy voiced sympathy with their grievances:  

“The simple fact is that Congress is broken and needs to change,” McCarthy wrote in a letter to his members, citing party leaders’ increasingly centralized power that has “relegated members of both parties to the sidelines, with mammoth bills being drafted behind closed doors and rushed to the floor at the last minute for an up-or-down, take it or leave it vote.” — Politico

However, McCarthy’s concession and olive branch landed with something of a thud.  Nine GOP reps who’ve yet to commit to McCarthy issued a statement saying that, while it represented “progress,” “Mr McCarthy’s statement comes almost impossibly late to address continued deficiencies ahead of the opening of the 118th Congress on January 3rd…there continue to be missing specific commitments with respect to virtually every component of our entreaties.” 

I don’t see any scenario where I’d support Kevin McCarthy as House Speaker.

McCarthy has a track record of cutting backdoor deals with Democrats. pic.twitter.com/UzUz67yd7K

— Rep Andy Biggs (@RepAndyBiggsAZ) December 29, 2022

Among the unacknowledged demands: Conservatives want a commitment that House leadership will not work to defeat them in party primaries.  

Meanwhile, the Freedom Caucus has asked for rule changes that include: 

• Broader membership in the group that doles out committee assignments

• Allowing committee members to choose their own chairs

• Allowing amendments from the floor

• Being given five days to review legislation before voting on it

The new session starts Tuesday, and the speaker election is the first order of business — even before the swearing-in of new members.  Representatives vote in alphabetical order, by saying a name. Watch for resisters to the McCarthy campaign to say the name of a fellow representative, or any name at all. (For instance, Thomas Massie could vote for Ron Paul on the first ballot.)  

McCarthy can trim the necessary votes below 218 by persuading malcontents to skip the vote or simply reply “present.” That’s because, by precedent, winning the speakership requires a majority among those who vote for a specific name. 

A failure to win on the first ballot would compel McCarthy to offer more concessions to the hold-outs. It could also lead to the emergence of a new speakership candidate. An impasse could also be broken by a House vote to allow an election by a plurality. 

Thanks to the fact that several of the rebellious GOP members come early in the alphabet — including Andy Biggs (AZ), Dan Bishop (NC), Andrew Clyde (GA), Eli Crane (AZ) — we may know quickly if McCarthy’s first-ballot hopes are likely to be dashed. 

Authored by Guglielmo Cecero and Raphael Schön via BitcoinMagazine.com,

Bitcoin is under attack. It is increasingly seen as a “dirty currency.” Elon Musk’s Tesla, Wikipedia, Greenpeace and other organizations have stopped accepting BTC for their products or as a means to donate money.

Musk, who is not only one of the richest but also one of the most controversial people on this planet, has said: “Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment.” Ouch.

And it’s not just Musk. Politicians have also taken aim at Bitcoin.

Before the European Commission’s Markets in Crypto-Asset Regulation (MiCA) regulation was passed, it caused quite a stir within the Bitcoin community, especially due to the left-wing factions of the EU Parliament that were opposed to proof of work (PoW) and the power consumption of the Bitcoin network. In the trilogue, a version of MiCA was finally passed that did not ban PoW or mining.

As became known in April 2022, some members of the European Parliament (MEPs) tried to push through a ban on bitcoin mining and one on BTC trading in the course of the draft law. Luckily, they failed.

However, the foundations for further steps have been laid. For example, the issuers of cryptocurrencies, which we know are mostly simply tech startups, will be obliged to deliver some kind of report on the energy consumption and the associated carbon footprint of the respective asset. Brokers and exchanges, in turn, must inform their customers about these exact figures when they purchase crypto assets.

The increasing aversion to Bitcoin also gained traction through an anti-Bitcoin Greenpeace USA campaign launched in March, which was financed by Ripple co-founder Chris Larsen, among others. Interestingly, Greenpeace accepted bitcoin donations between 2014 and 2021 until they were put on hold due to environmental concerns.

FACT: #Bitcoin mining is driving millions of tons of new global warming pollution in the US

MYTH: Burning “waste” methane can green bitcoin

REALITY: Burning waste gas does nothing to reduce fossil fuel consumption and is even keeping old gas wells open https://t.co/o4Er21GVoo

— Greenpeace USA (@greenpeaceusa) October 17, 2022

NEARLY HALF OF THE EU PARLIAMENT DOESN’T LIKE BITCOIN

As mentioned, a mining or trading ban for Bitcoin didn’t make it into the MiCA legislation. However, it is very unlikely that members of the EU parliament who tried to implement this in MiCA will give up — we can assume the contrary.

In March 2022, the economic and monetary affairs (ECON) committee in the EU parliament voted against a ban on PoW. Thirty-two members voted against it, 24 in favor. The topic seems to become more and more ideologically driven, as the Social Democrats, the Greens, and the left mostly wanted a PoW ban, whereas the Conservatives, the Liberals and right-wing factions tended to vote against it.

15/ Here is a detailed overview of how all the MEPs voted for the final vote (not only single amendments, but entire draft) pic.twitter.com/Z0i5DRI1bw

— Patrick Hansen (@paddi_hansen) March 14, 2022

The final MiCA draft created by conservative MEP Stefan Berger included a compromise: Instead of a ban on PoW, they agreed on including a rating system for cryptocurrency to assess their environmental impacts (more on that later).

In an email conversation with Politico, the Spanish Green EU parliament member Ernest Urtasun explained:

“Creating an EU labeling system for crypto will not solve the problem as long as crypto-mining can continue outside the Union, also driven by EU demand… The Commission should rather focus on developing minimum sustainability standards with a clear timeline to comply.”

And he added:

“Ethereum’s recent upgrade just showed that phasing out from environmentally harmful protocols is actually feasible, without causing any disruption to the network.”

THE ECB DOESN’T LIKE BITCOIN — AT ALL

While we see different opinions on Bitcoin in the European Parliament, the signals we’re getting from the European Central Bank (ECB) are very clear. The ECB is issuing warnings about cryptocurrencies on a regular basis, naming their “exorbitant carbon footprint” as “grounds for concern”.

Just recently, on November 30, 2022, the ECB published a blog post titled “Bitcoin’s Last Stand.” In it, ECB’s Market Infrastructure And Payments Director General Ulrich Bindseil and advisor Jürgen Schaff argue that, “Bitcoin’s conceptual design and technological shortcomings make it questionable as a means of payment.”

According to Bindseil and Schaff, Bitcoin transactions are “cumbersome, slow and expensive,” which they say explains why the world’s largest cryptocurrency — created to overcome the existing monetary and financial system — “has never been used to any significant extent for legal real-world transactions.” Bindseil and Schaff added that since Bitcoin is neither an effective payment system nor a form of investment, “it should be treated as neither in regulatory terms and thus should not be legitimized.”

While it may seem paradoxical to very vocally attack something that is on the “road to irrelevance,” it is not the first time that the ECB has attacked Bitcoin.

10 years ago today, the ECB wrote in its first report on #bitcoin: “In an extreme case, virtual currencies could have a substitution effect on central bank money if they become widely accepted.” pic.twitter.com/aPACJlds3G

— Tuur Demeester (@TuurDemeester) October 21, 2022

In July 2022, the ECB singled out Bitcoin in a research article and compared proof of work to fossil fuel cars while considering proof of stake as more akin to electric vehicles. Let’s ignore for a minute that this doesn’t make sense and look at what it wrote in detail:

“Public authorities should not stifle innovation, as it is a driver of economic growth. Although the benefit for society of bitcoin itself is doubtful, blockchain technology in principle may provide yet unknown benefits and technological applications. Hence, authorities could choose not to intervene with a view to supporting digital innovation. At the same time, it is difficult to see how authorities could opt to ban petrol cars over a transition period but turn a blind eye to bitcoin-type assets built on PoW technology, with country-sized energy consumption footprints and yearly carbon emissions that currently negate most euro area countries’ past and target GHG saving. This holds especially given that an alternative, less energy-intensive blockchain technology exists.”

In general, the ECB believes it’s highly unlikely that the European Union will not take action in terms of carbon emissions on PoW-based assets like bitcoin. The authors of the paper argue that in their view it’s likely that the EU will take similar steps on phasing out PoW as they are doing with fossil fuel cars. Especially since, according to them, an “alternative, less energy-intensive” technology like PoS exists.

“To continue with the car analogy, public authorities have the choice of incentivising the crypto version of the electric vehicle (PoS and its various blockchain consensus mechanisms) or to restrict or ban the crypto version of the fossil fuel car (PoW blockchain consensus mechanisms). So, while a hands-off approach by public authorities is possible, it is highly unlikely, and policy action by authorities (e.g. disclosure requirements, carbon tax on crypto transactions or holdings, or outright bans on mining) is probable. The price impact on the crypto-assets targeted by policy action is likely to be commensurate with the severity of the policy action and whether it is a global or regional measure.”

The vast majority of citizens are used to thinking of money as something other than what it really is, and the ECB is also to blame for this. Money is perceived as something that has value by itself, instead of something whose value comes from the interaction between the people who use it.

The euro is subject to both constant changes (regular inflation) and traumatic events (devaluations, forced exchange rates, etc.), but these are ignored or otherwise underestimated. People believe they own it, although they can only exchange it for other things.

For how many and for what things will 100 euros be exchanged in one year, five years or ten years? This is, in no way, up to us.

Its exchange function is constantly changing due to factors we cannot control. The interaction between those who use it is the main factor and, in turn, this interaction depends on economic and monetary policy rules that few people know about.

Bitcoin escapes these rules (and this is the reason why the ECB wants to ban it), it is just code that the ECB and the regulators are trying to make useless. Bitcoin also and above all expresses its value through features that are totally independent of a government’s power and, therefore, the ECBs.

WHAT WILL HAPPEN NEXT?

In 2025, we will see a rating system for cryptocurrencies according to their environmental impact within the European Union — think energy labels for fridges or TVs. You can already expect that bitcoin will get the worst classification. This step will essentially be positive for Ethereum and bad for Bitcoin.

Source

It’s quite unlikely that such a label will scare off investors from buying bitcoin, especially since the Bitcoin community is saying that the Bitcoin network is not an obstacle but a solution for more green energy.

Therefore, the Bitcoin mining industry has the incentive to become greener: The fossil fuel analogy in the ECB paper makes no sense. The energy mix of a PoW network like Bitcoin can come entirely from renewable, green sources. Bitcoin can serve as a way to immediately monetize energy, as is already happening with flared gas that would be flared anyway. However, it’s questionable how fast and effective this effort will be to policymakers, especially since fossil energy companies like Exxon are now mining Bitcoin using flared gas.

The authors of the ECB paper are already implying that a higher bitcoin price equals more energy consumption, as more miners will participate. Destroying demand for bitcoin would hence be an effective solution to bring down the hash rate. At least in theory.

CONCLUSION

The academic and political consensus seems to point toward something like trying to retire the “old” PoW, and moving towards the “new” PoS standard. Particularly since Ethereum’s recent merge, many bystanders believe this could be a viable path for the Bitcoin network. We doubt that and plan to elaborate on that in a future post. As we’ve seen in different scenarios, banning Bitcoin is hard, if not impossible. The Nigerian government tried, failed and eventually gave up, for instance.

It will be quite a while until 2025, and with an energy crisis, increased focus on carbon emission as well as global uncertainty overall, the only thing we can do at this point is to expect the unexpected.

Even if the worst-case scenario happens, and we see a Bitcoin ban of some sort happen in the EU, we doubt that this will hold forever. Bitcoin does not ask for permission. Bitcoin is something that ontologically struggles to stay inside a fence. It is not an idea derived from anarchist positions, it is an argument derived from the inherent characteristics of the technology introduced by Satoshi Nakamoto. The regulators work in an authorizing logic and so it is clear that they struggle to intercept the Bitcoin phenomenon, which functions regardless of someone else’s permission.

Meloni’s government will soon force NGO ships flying flags from countries like France, Germany and Norway to accept the migrants they pick up in the Mediterranean Sea

Italian Premier Giorgia Meloni smile as she attends her year-end press conference in Rome, Thursday, Dec. 29, 2022. (AP Photo/Alessandra Tarantino)

As Olivier Bault reports at Remix News, the threshold of 100,000 illegal migrants who arrived by sea in Italy this year was crossed on Dec. 21, and the number is not only a symbolic milestone but also serving as a call to action for Italy’s conservative government.

The figure of 100,000 can be compared with the 64,055 on the same date a year ago and the 33,867 arrivals by sea in 2020. This year’s number is the highest since 2017, the year when the left-wing government of Matteo Renzi finally decided to clamp down on the NGOs’ business of transferring illegal immigrants to Europe through passive and sometimes active cooperation with people smugglers, introducing stricter rules on how NGO ships were allowed to operate in the Mediterranean Sea.

Meloni’s government prepares to take action

Starting next year, however, Giorgia Meloni’s government will introduce stricter rules for NGO boats operating in the Mediterranean Sea to prevent them from coordinating their activities with people smugglers and from searching for would-be immigrants near the Libyan shore.

Italy’s council of ministers was to approve on Dec. 28 a draft security decree that will include a new Code of Conduct for those NGOs and accelerate the processing of asylum requests.

One of the big changes the new right-wing government in Rome plans to introduce is that migrants taken on board an NGO boat in an alleged search-and-rescue operation will be required to declare if they intend to file an asylum request once in Europe. If this is the case, the country under whose flag a given ship is sailing will be required to take in the asylum seekers and process their requests.

The new policy change may give governments in Germany, France and other nations second thoughts about funding migrant boats operating on the Mediterranean if they are the ones forced to take these migrants in.

A second major change is that after a search-and-rescue operation, an NGO ship will have to immediately ask for a safe port to disembark the rescued migrants and will have to sail towards their designated port, without waiting for days for further opportunities to “rescue” migrants.

This is meant to put an end to the practice of systematic searching for would-be illegal immigrants, sometimes in coordination with people smugglers, instead of conducting genuine search-and-rescue operations.

The NGOs that will violate the new rules will face administrative sanctions and can eventually have their ships seized by the Italian authorities in case of repeated violations.

The second part of the new “security decree,” which will have to be later approved by Italy’s parliament to become law and remain in effect, will provide for fast processing of asylum requests and more efficient repatriation procedures for those whose requests are rejected.

Vast majority are economic migrants

In 2016, 181,436 illegal immigrants entered Italy. Thanks to the new rules introduced by Interior Minister Marco Minniti in the summer of 2017 and a memorandum of cooperation that was then signed with the Libyan government in Tripoli, the number dropped that year to 119,310.

The lowest number —and the lowest death toll as well — was reached in 2019 after over a year with Matteo Salvini as Italy’s interior minister, with “only” 19,471 migrants arrivals by sea. However, that number included a significant rise observed from September to December, when Salvini’s League was replaced by the center-left Democratic Party as the 5-Star Movement’s coalition partner under Prime Minister Giuseppe Conte.

Similarly to what was observed during the previous years, most of the migrants who have crossed the Mediterranean Sea on small fishing boats or bigger ships run by European NGOs this year did not escape war. Out of the 100,000 who had arrived from Jan. 1 to Dec. 21, some 86,000 were from countries at peace. Out of these, over 20,000 were from Egypt, and almost 18,000 were from Tunisia. Bangladesh came third with over 14,000 of its citizens among those who reached Italy through the Mediterranean Sea this year.

None of those countries are at war or known for persecuting their citizens, so it is clear most of those migrants have spent thousands of euros and risked their lives in the hope of a better standard of living in Europe.

It is also worth noting that out of those more than 100,000 new immigrants, over 30,000 have come from Tunisia using small boats and 73,173 sailed from the Libyan coast between Jan. 1 and Dec. 20, of whom 22,216 were turned back by Libyan coast guards. An additional 17,583 sailed from Turkey or Lebanon according to data from Italy’s interior ministry compiled by Il Giornale.

This year, there have been 15 ships active transporting migrants on the Mediterranean belonging to 12 different NGOs, of which only one is Italian. The biggest ships are run by the Franco-Swiss organization Doctors without Borders (MSF) and the “European” organization SOS Méditerranée whose headquarters are in France and which is financed in large part by French local authorities. Both the former’s Geo Barents ship (3,844 migrants disembarked in Italy this year, as of Dec. 20) and the latter’s Ocean Viking (2,387) fly the Norwegian flag. Germany’s Sea Watch came only third this year with its two ships having disembarked 1,825 migrants in Italy, but it will have a newer, bigger ship, the Sea Watch 5, to take even more migrants on board from next year on.

Can Meloni succeed?

The Meloni government’s efforts to control immigration by sea will depend much on bilateral agreements they manage to secure with the countries of origin of those migrants. In addition, it remains to be seen whether Meloni’s government will have the courage to keep migrants under surveillance in closed facilities until their asylum requests are processed and until they are sent back to their home country for those whose requests are rejected.

All of these actions would necessarily set Italy on a collision course with the pro-immigration European elites in Brussels, Paris, and Berlin.

Update (1331ET): 

19-year-old Trevor Bickford, from Wells, Maine, is the kid who injured three NYPD officers with a machete in an unprovoked attack in Times Square. He was on the FBI’ watchlist’ after being radicalized. 

UK’s Daily Mail wrote, “the FBI in Boston do have an open case on him,” and “he is on a ‘guardian list’ because of his radicalization.”

Sources told NYPost that Bickford traveled via Amtrak train to NYC with “camping gear, a diary and a last will and testament” before he pulled off the machete attack. 

“Published reports reveal that Bickford appeared to be a typical American teenager before he allegedly became radicalized in the years after sources said his father died of an overdose in 2018,” NYPost continued. 

Daily Mail published pictures of Bickford via his mother’s Facebook. 

Here’s a picture of the young man after the NYPD shot him. He was rushed to Bellevue Hospital in Manhattan, along with the two cops he injured — all three are expected to survive. 

NY Post: Man who attacked police with machete near Times Square last night is Trevor Bickford, 19, from Wells, Maine. “Cops are investigating whether he is a recently radicalized Islamic extremist, based on online postings.”https://t.co/xOaVJS7vGhhttps://t.co/17g5gBRBD6 pic.twitter.com/qXvUqftx2R

— Steve Lookner (@lookner) January 1, 2023

News Center Maine’s Jack Molmud reported the FBI arrived at the suspect’s family home this afternoon. 

NEW: NBC New York is reporting the man accused of attacking three police officers in NYC is 19 year old Trevor Bickford

Bickford is from Wells, Maine. I am outside the address confirmed to be his family’s from neighbors. FBI agents are outside the home right now @newscentermaine pic.twitter.com/xX0JnUowfy

— Jack Molmud (@jmolmud) January 1, 2023

It seems like the case every time… 

Suspect Behind NYPD New Year’s Eve Attack Was on FBI Radar – Trevor Bickford a Recent Convert to Islam pic.twitter.com/bZj5c9MYPV

— FCKTOFF (@fcktoff) January 1, 2023

*  *  * 

Chaos erupted in Times Square on New Year’s Eve when a machete-wielding man injured three New York Police Department (NYPD) officers. 

New York Police Commissioner Keechant Sewell told reporters early Sunday that a 19-year-old man attempted to strike the first officer in the head with a machete, unprovoked. Sewell said the man hit two other officers on the head with the machete. 

Sewell said one officer received a laceration to the head while the other received a skull fracture and a large laceration. Another officer discharged his firearm, striking the suspect in the shoulder. 

Watch as Police Commissioner Sewell & Mayor Adams provide an update on a police involved incident in Manhattan. https://t.co/ha11b02Fvq

— NYPD NEWS (@NYPDnews) January 1, 2023

The incident occurred around 9:30 p.m. ET at West 52nd Street and 8th Avenue. One police source told NYPost that an investigation had been opened to see whether the suspect is a radical Islamic extremist. 

“We are working with our federal partners for this investigation, and it is ongoing,” Commissioner Sewell said. 

NYPD Crime Stoppers released a picture of the machete. 

Mike Driscoll, assistant director in charge of the New York FBI Field Office, who is also investigating, told local news NBC New York that the knife attack appears to be the work of a “sole individual at this time, there’s nothing to suggest otherwise.” The FBI’s Joint Terrorism Task Force is also investigating.

Nearby onlookers were startled by the attack and gunfire — many revelers fled amid the chaos. 

They are shooting and stabbing in #TimesSquare! Two police stabbed. Condition unknown! #NYCACC pic.twitter.com/D119rFg5Qs

— @BeeNewsDailyB (@BeenewsdailyB) January 1, 2023

BREAKING NEWS: Two NYPD officers stabbed, One Officer was stabbed in the head during New Year’s Eve celebrations at Times Square. #Manhattan #nypd #stabbing #fdny #TimesSquare #NewYear #balldrop #HappyNewYear #NewYorkCity #nyc #newyork #BreakingNews #Police pic.twitter.com/EMzINArTLp

— NY Actions (@NY_ACTIONS) January 1, 2023

“No backpacks or umbrellas in Times Square. They forgot to mention machetes,” a police source told The Post.