With cryptos making headlines every day – and not in a positive way with the post-SBF fallout snowball gathering pace downhill – none other than billionaire hedge fund manager Bill Ackman offered a surprising rejoinder to the bears in a brief Twitter thread explaining why he is u-turning from skeptic to investor in the crypto ecosyste.

The last couple of days have seen Ethereum monkeyhammered lower relative to Bitcoin as the FTX Hacker dumps his horde of stolen tokens…

“The FTX issues are really an urgent reminder of the need for regulatory clarity and a real regulatory framework for crypto,” Christian Catalini, founder of the MIT Cryptoeconomics Lab, said on Bloomberg TV.

He added that hype and speculation over the minting and trading of tokens “has generated a massive distraction from building actual products and services that reach consumers, solve actual problems.”

And that reflects the attitude shift that the Pershing Square founder has had as he says “crypto is here to stay” comparing crypto’s potential social impact to the telephone and the internet…

The telephone, the internet, and crypto share one thing in common.

Each technology improves on the next in terms of its ability to facilitate fraud.

As such, I was initially a crypto skeptic, but after studying some of the more interesting crypto projects, I have come to believe that crypto can enable the formation of useful businesses and technologies that heretofore could not be created. The ability to issue a token to incentivize participants in a venture is a powerful lever in accessing a global workforce to advance a project.

The problem with crypto is that unethical promoters can create tokens simply to facilitate pump and dump schemes. It may in fact be that the vast majority of crypto coins are used for fraudulent purposes rather than for building legitimate businesses.

Despite crypto’s ability to facilitate fraud, with the benefit of sensible regulation and oversight, crypto technology’s potential for beneficent societal impact may eventually compare with the impact of the telephone and internet on the economy and society. 

Initially, I assumed that there is no intrinsic value to any of the tokens and therefore they simply represent a modern-day version of tulip mania without the aesthetic benefits.

But after examining a number of interesting crypto projects, I began to understand how a token could build intrinsic value over time.

Two examples may help to explicate my view: @helium created a global Wi-Fi network used by @limebike and others to track devices globally as well as for other uses which benefit by access to global Wi-Fi networks. 

Helium’s global network of 974k hotspots was crowd created by individuals who purchased and deployed Helium hotspots to mine HNT, its native token. Customers who wish to use the network must purchase HNT and burn it, ie, remove the ‘consumed’ HNT from its total supply of tokens. 

As a result, over time, a two-sided market for HNT develops in which miners buy hotspots and deploy them around the globe to earn tokens. Users, in turn, purchase HNT tokens in order to use the network. The more demand for the network, the more demand for HNT. 

Given HNT’s ultimately finite supply, the balance between supply and demand yields a market price which increases or decreases over time along with the success of the Helium Wi-Fi network. As such, HNT becomes a valued commodity whose price is determined by supply and demand. 

DIMO collects valuable auto data from data ports in cars. It does so by allowing car owners to mint tokens by capturing data from their own car. The data are valuable for the car owner as well as for auto manufacturers, suppliers, insurers, municipalities, etc. One can envision a two-sided market for DIMO tokens developing over time where data-users buy and burn tokens that are minted by car owners with DIMO data collection devices. (Disclosure: I am a small investor in DIMO and am uninvolved in Helium.) 

To understand the benefit of crypto-based business models, imagine how difficult it would be to create Helium’s million-node network of global hot spots where each node is placed in a location to optimize the coverage of the network. Helium miners earn more tokens for siting their nodes where they are most needed as miners earn more tokens the more their node’s signal is demanded by users. Consider the capital investment and time required for Verizon or ATT to create the same network. Consider the regulatory hurdles and international coordination that would have to be overcome compared with the Helium model. While @Tesla can build DIMO’s dataset for its own cars, how can any other automobile company create a similar dataset for their own vehicles that were manufactured before connectivity and data collection became feasible. Furthermore, how can any company create a dataset of all cars on the road today? While all cars made since 1996 have OBD (onboard data) ports, other than DIMO’s token-incentivized model, I can’t envision how a company in a non-crypto world can create real-time access to this data.

Disclosure: I am a small direct investor in crypto projects.

The other two are @ORIGYNTech and Goldfinch Finance. I am also an investor in seven crypto VC funds and a small investor in companies that help with tax compliance and/or reduce fraud in crypto i.e., @TaxBit and @trmlabs.

In total these investments represent less than 2% of my assets. I invest more as a hobbyist trying to learn than as a careful investor as I minimize the time I spend on non-Pershing Square investments so please don’t rely on my due diligence or take any of the above as an investment recommendation.

All of the above said, I think crypto is here to stay and with proper oversight and regulation, it has the potential to greatly benefit society and grow the global economy.

All legitimate participants in the crypto ecosystem should therefore be highly incentivized to expose and eliminate fraudulent actors as they greatly increase the risk of regulatory intervention that will set back the positive potential impact of crypto for generations.

As always I welcome your feedback. 

With Pershing Square ‘buying the dip’ as it were, perhaps this is the point where retail exuberance will morph into institutional investment?

“We’ve got to get past this early stage of amateurs in crypto,” Bobby Lee, founder of crypto storage solution provider Ballet Global Inc., said on Bloomberg Television.

By Michael Every of Rabobank

The World COP

Today’s Daily is truly Global. For those who only want to hear about US inflation, especially all those beating down commodities and the US dollar on the view that things are transitory again, I offer ‘History Lessons: How “Transitory” Is Inflation?’ based on the 1970-2022 inflation experiences of 14 OECD economies. Its key conclusions are:

• “The US Federal Reserve Bank’s expectations for the speed of reverting to 2% inflation levels remains dangerously optimistic.”;

• An inflation jump to 4% is often temporary, but when it crosses 8%, it proceeds to higher levels over 70% of the time;

• If inflation is cresting, levels of up to 6% revert by half in about a year;

• If inflation is accelerating, 6% inflation reverts to 3% in a median of about seven years;

• Reverting to 3% inflation is easy from 4%, hard from 6%, and very hard from 8% or more; and above 8%, reverting to 3% usually takes 6 to 20 years, with a median of over 10 years; and

• Nobody is even mentioning 2%.

Those interested in the global outlook feeding this sticky inflation, please look around you.

COP27 just concluded in Sham el-Chic. Few seem happy with the outcome, and the EU27 nearly walked out. The final communique, in the words of Bloomberg’s energy voice Javier Blas, “is full of diplomatic language gymnastics… the reference to “low-emission” energy to mean gas and nuclear (and probably carbon-captured oil)…. no advance from COP26 on coal… coal remains a phase down, not a phase-out (and, in reality, coal demand is going up, on track for a record high both in 2022-23, surpassing the 2013 peak)… doesn’t move the needle on fossil fuels either, simply copy-and-pasting COP26 language on the need to phase-out “inefficient fossil fuel subsidies” (but, in reality, subsidies are up!!). Early attempts to call for a phase down of fossil fuel *consumption* were killed… While everyone is talking about “loss and damage” (but where’s the money?), to me COP27 key is the lack of progress on what really matters: fossil fuel consumption and emissions. And there, an alliance of big fossil fuel producers and consumers has delayed-or-muted action.”

Is that at least deflationary near term if it means more fossil fuels for several years? Perhaps – just look at oil prices today.

Then again, Daniela Gabor argues the Wall Street consensus won at COP27, noting “central banks’ journey from restrainers of carbon finance to derisking ‘influencers’” as they will use Blended Finance Initiatives for “marginally bankable transition projects to attract private capital.” So, central banks will back loss-making transition projects, guaranteeing the tax-payer wears all losses while all profits flow to Wall Street. Yet such neoliberal profiteering dressed up as altruism is perhaps not a million miles away from my argument of inevitable rate hikes and MMT: we would still get higher rates alongside de facto public subsidies for infrastructure – just hiding the role of the public sector as the loss maker while lauding the ‘bravery’ of the private sector getting guaranteed profits. It depends on what we do with the inevitable losses – will they be monetised?

Is that deflationary? Over the medium term on the supply side, yes: but there is a big J-curve as investment ramps up, while investment and monetisation depress the exchange rate and raise inflation until new supply, and so healthier trade balances, kick in; and this neoliberal version offers more financialisation and high-end consumption to boot.

Not far from Sham el-Chic, and full of fossil fuels and high-end consumption, Qatar kicked off the 2022 World Cup – with no booze for fans staying in $200 a night tents, and ‘polite’ requests for no loud noise, music, or public displays of affection of any kind (but some more than others): the Daily Mail is doing its usual pot-stirring in calling it a ‘Qatarstrophe’. The dazzling opening ceremony involved Morgan Freeman and the reception Trump got in Saudi minus the Palantir, and talked about mutual respect and being “one tribe”. The football was less dazzling, with the hosts losing 2-0 to Ecuador and the Guardian noting: “This was the global game in its final form, a private power-show for the benefit of a very small group of very rich people… They were 2-0 down by half-time… whereas people and presidents and slogans can lie, elite sport rarely does.”

Notably, the World Cup is not a distraction from our problems, but in many ways emblematic of them: how do we make things work globally when we can’t agree on what that even means?

On a level fans can understand, how did we end up with the World Cup being held in Qatar in November? Why do FIFA run ‘The people’s game’? Can we get rid of them? Forgetting about their legitimacy, their corruption is a matter of public record (and prosecution).

More politically, the BBC refused to carry the opening ceremony, instead covering the trail leading to Qatar’s selection as host, alleged human rights abuses there, and recorded deaths among the migrant workers who built the new football stadia nobody will use when the competition is over. (Qatar’s official mascot is ironically a friendly ghost.) Beforehand, FIFA General Secretary Infantino launched a bizarre rant claiming, “Today I feel Qatari. Today I feel Arab. Today I feel African. Today I feel gay. Today I feel disabled. Today I feel a migrant worker,” adding he had been bullied for being a redhead long before he was a slaphead, and that any Western accusations against Qatar are hypocrisy because of the West’s actions over the last 1,000 years.

Branko Milanovic made a typically poignant observation back in 2015 when noting the expansion of the World Cup to new venues represents a shifting of global power from an old European and Latin American aristocracy to a more inclusive kleptocracy. There is more money; more people are involved – if ‘people’ means a larger elite; but the football gets worse for the working class base in the former aristocracies. Nobody wanted to see the 32-team tournament this time round but Infantino and teams not good enough to qualify for 24 slots. But wait until the 2026 World Cup in Canada, the US, and Mexico –two of which have no interest in the sport. There, instead of nobody being able to travel anywhere as in tiny Qatar, nobody will be able to do so because of the huge distances involved – and 48 countries’ fans will be involved. By 2034, perhaps every country qualifies automatically, and we all form a global league that plays non-stop?

This is the issue with globalisation: there are winners and losers, and new power structures emerge – with obvious limits involved to those who are not being paid not to see them.

Some argue alongside Qatar 2022 –and Saudi Arabia’s MBS and its Emir shaking hands when the former was recently considering building a moat around the latter– COP27 showed geopolitical gains for smaller economies demanding payments from the West for damages from climate change; the G20’s ‘middle powers’ took the lead in making the US and China back off slightly; the International Institute for Strategic Studies confab just saw smaller economies argue together they can constrain larger ones; and even France’s Macron told the Indo-Pacific not to allow the larger beasts of the jungle to set the rules. In short, perhaps middle powers present a middle path to us all via a ‘new non-alignment plan’.

However, what if the old football aristocracies with all the money and talent say enough is enough? What happens if UEFA, flirting with its own deeply unpopular stupid European Super League, says it won’t release players to even bigger, sillier World Cups? (Or national leagues to UEFA?) When push comes to shove, true footballing power lies with the old elite not the new. What could other footballing countries do? Refuse to let their talent play in Europe and develop their own leagues over decades? If it were that easy, why don’t they just do it now?

Brexit was an attempt to just that, botched by tautisms, contortions, and deliberate distortions. The British government is now pushing back against suggestions it is now interested in a ‘Swiss’ route back to Europe again. After all, the government is about to embrace EU style fiscal rules and taxation just as Europe realizes how stupid they are. Yet opinion polls make abundantly clear the Conservatives won’t be in power for long, and perhaps ever again(?) Looking forward, one can say that with a structural energy crisis, high taxes and crumbling public services, a rump nationalist demographic, geopolitical delusions of grandeur, and an economy driven by mainly one sector with a cloudy global future, the UK would fit back into other EU economies snugly.

Donald Trump, now back on Twitter and running for President again despite the mainstream press and billionaires trying to ignore him, also claimed to want to do the same for the US. Trump is less relevant now because we are all Trump to varying degrees. Yet imagine what a Trump unencumbered by wanting to please either the Republican establishment or billionaires might want to do in power. Time for some serious ignoring from mainstream thinkers!

Indeed, for now we are all pretending to be “one tribe” cheering a game where 22 men kick a ball for 90 minutes, even if Gary Lineker’s “…and the Germans win” seems less likely on and off the pitch. Everyone is friends with everyone else again, despite PM Trudeau’s on-camera dressing down in Bali; middle powers are pretending they can swing outcomes in their favor; France and Germany are pretending they have strategic autonomy, as is the Netherlands in saying it won’t follow the US lead on tech controls vs. China when its semiconductor firm ASML is reliant on US inputs; Australia’s PM is pretending he can block Taiwan joining the CPPTP then suddenly remembering he can’t.

But let’s see how long it is until things we are sorted into World Cup groups, or things kick off. China just told Russia it is happy to work together with “like-minded countries”, and Thailand that they are “one family”. The US is sending F-22s to Japan and other bombers to Australia, and is extending and deepening its mutual defense treaty with the Philippines; the White House is also to help Thailand and the Philippines develop nuclear power. (If middle powers play against both sides smartly, they prosper; if they play against both sides badly, they get sent off.) The Wall Street Journal carries a detailed report showing EU-US trade and FDI is surging, dwarfing that of both into China in some respects – and European firms are looking at the US as an industrial base.

Is this deflationary? The sharp economic downturn we have coming ahead certainly is. The grim outlook for net exporters facing up to no more net exports certainly is. Yet a surge in new infrastructure and industrial investment, even if private-sector led and loss-stop bank-rolled by central banks, and into new up-to-downstream supply chains into new defence spending, is going to be very inflationary almost immediately afterwards. It is, as they say, a game of two halves.

As is my Bloomberg morning screen today, where headline one says ‘Locked Down: Covid Curbs Return to City Rumoured to Be Reopening’; and the one underneath says ‘China stocks to Jump on Reopening, Property: Hao Hong’. And you thought footballers who were not very bright but made too much money – at least they can kick a ball.

As DB’s Jim Reid (a fervent Liverpool supporter) writes in his weekly preview, the start of the World Cup coincides with the holiday-shortened Thanksgiving week so it will be the usual compressed few days of activity. The FOMC minutes (Wednesday) and the ECB’s account of their last meeting (Thursday) will be the key macro events. Focus will be on their thinking about the terminal rate (both) and QT plans (ECB), with both now more likely to hike 50bps than 75bps in December. We will also see global flash PMIs on Wednesday.

Other data will include an array of business activity indicators, including durable goods orders in the US. Indeed, Wednesday is a US data dump ahead of Thanksgiving and we will also see the final UoM consumer confidence data which includes the inflation expectations revision which is important. Claims also comes a day early.

The Fed speakers last week helped prompt a big flattening of the US curve as they generally hinted towards a terminal rate of above 5%. As such before we see the FOMC minutes, tomorrow sees three Fed speakers who might add to the debate. They are all hawks (Mester, George and Bullard) though and have all spoken since the FOMC so the market should know their biases. Over the weekend, the Atlanta Fed President Raphael Bostic (non-voter) opined that he believes that the Fed can slow the pace of rate hikes and feels that the Fed’s target policy rate need not rise more than 1 percentage point to tackle inflation and help ensure a soft landing. Boston Fed Collins also spoke but kept all options open.

Lastly, with only around 20 S&P 500 firms left to report earnings this season, this week’s results line-up will be tech-heavy and feature a number of large Chinese firms. These include Baidu (Tuesday), Xiaomi (Wednesday) and Meituan (Friday). In the US, we will hear from Zoom today and Analog Devices, Autodesk and HP tomorrow.

Courtesy of DB, here is a day by day summary of key events

Monday November 21

• Data: US October Chicago Fed national activity index, Germany October PPI

• Central banks: ECB’s Holzmann, Simkus, Nagel, Centeno and Vasle speak

• Earnings: Zoom

Tuesday November 22

• Data: US November Richmond Fed manufacturing index, UK October public finances, Italy September current account balance, ECB September current account, Eurozone November consumer confidence, Canada September retail sales

• Central banks: Fed’s Mester, George and Bullard speak, ECB’s Holzmann and Rehn speak

• Earnings: Baidu, Analog Devices, Autodesk, Dollar Tree, HP

• Other: OECD’s Economic Outlook is released

Wednesday November 23

• Data: US November PMIs, October durable and capital goods orders, new home sales, initial jobless claims, Germany, France, UK and Eurozone PMIs

• Central banks: FOMC meeting minutes, ECB’s Guindos speaks

• Earnings: Deere, Prosus, Xiaomi

Thursday November 24

• Data: Japan November PMIs, Tokyo CPI, October nationwide and Tokyo department store sales, PPI services, Germany November Ifo survey, France November business and manufacturing confidence

• Central banks: ECB’s account of October meeting, ECB’s Schnabel and Nagel speak

• Other: US markets are closed

Friday November 25

• Data: Germany December GfK consumer confidence, Q3 private consumption, government spending, capital investment, France November consumer confidence, Italy November consumer and manufacturing confidence, economic sentiment

• Central banks: ECB’s Muller and Guindos speak

• Earnings: Meituan

* * *

Finally, here is a focus on just the US, with Goldman noting that the key economic data release this week is the durable goods report on Wednesday. The minutes from the November FOMC meeting will be released on Wednesday and there are several speaking engagements from Fed officials, including presidents Daly, Mester, George, and Bullard.

Monday, November 21

• 01:00 PM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will speak at a livestreamed event hosted by the Orange County Business Council. Text and Q&A with audience and media are expected. On November 16, Daly said, “Somewhere between 4.75% and 5.25% [fed funds rate] seems a reasonable place to think about as we go into the next meeting. And so that does put it in the line of sight that we would get to a point where we would raise and hold…Pausing is off the table right now, it’s not even part of the discussion…Right now the discussion is, rightly, in slowing the pace.”

Tuesday, November 22

• 10:00 AM Richmond Fed manufacturing index, November (consensus -8, last -10)

• 11:00 AM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will deliver opening remarks at a discussion on wages and inflation at an event hosted by the Cleveland Fed. Q&A is not expected. On November 10, Mester said, “I currently view the larger risks as coming from tightening too little…This morning’s October CPI report also suggests some easing in overall and core inflation…Monetary policy will need to become more restrictive and remain restrictive for a while in order to put inflation on a sustainable downward path to 2%…It is likely that there will continue to be higher-than-normal levels of financial-market volatility, which can be difficult to navigate. With growth likely to be well below trend, it could easily turn negative for a time.”

• 02:15 PM Kansas City Fed President George (FOMC voter) speaks: Kansas City Fed President Esther George will participate in a virtual policy panel hosted by the Central Bank of Chile. On November 16, George said, “I’m looking at a labor market that is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there…Seeing that we’re not going to get help in the supply side, we have a lot of work to do…When I think about inflation today, we’ve kind of turned the tide of supply-chain, production-side shortages. Now, we’re really looking at labor as the driver here…For me, the more important question for this committee, looking out over next year, is being careful not to stop too soon. This was the lesson of the 1970s and ’80s, is thinking, ‘Oh, we’ve got it now, we can stop,’ and then you find that inflation really reemerges in some way.”

• 02:45 PM St. Louis Fed President Bullard (FOMC voter) speaks: St. Louis Fed President James Bullard will discuss the implications of heterogeneity in macroeconomics for monetary policy at an event hosted by the Central Bank of Chile. Media Q&A is not expected. Bullard’s presentation on November 17 said, “Even under these generous assumptions, the policy rate is not yet in a zone that may be considered sufficiently restrictive. To attain a sufficiently restrictive level, the policy rate will need to be increased further…Caution is warranted…as both markets and the FOMC’s SEP forecasts have been predicting declining inflation just around the corner for the past 18 months.”

Wednesday, November 23

• 08:30 AM Durable goods orders, October preliminary (GS +1.5%, consensus +0.4%, last +0.4%); Durable goods orders ex-transportation, October preliminary (GS flat, consensus flat, last -0.5%); Core capital goods orders, October preliminary (GS flat, consensus +0.1%, last -0.4%); Core capital goods shipments, October preliminary (GS +0.4%, consensus +0.2%, last -0.5%): We estimate that durable goods orders rose 1.5% in the preliminary October report, reflecting strength in commercial aircraft orders. We forecast moderate growth in shipments of core capital goods (+0.4%) but unchanged core capital goods orders, reflecting weaker foreign demand and some softening in domestic industrial data.

• 08:30 AM Initial jobless claims, week ended November 19 (GS 215k, consensus 225k, last 222k); Continuing jobless claims, week ended November 12 (consensus 1,520k, last 1,507k): We estimate initial jobless claims decreased to 215k in the week ended November 19.

• 09:45 AM S&P Global US manufacturing PMI, November preliminary (consensus 50.0, last 50.4): S&P Global US services PMI, November preliminary (consensus 48.0, last 47.8)

• 10:00 AM University of Michigan consumer sentiment, November final (GS 55.5, consensus 55.0, last 54.7); University of Michigan 5–10-year inflation expectations, November final (GS 3.0%, consensus 3.0%, last 3.0%): We expect the University of Michigan consumer sentiment index increased by 0.8pt to 55.5 in the final November reading.

• 10:00 AM New home sales, October (GS -7.0%, consensus -5.5%, last -10.9%); We estimate that new home sales declined 7.0% in October, following a 10.9% decrease in September.

• 02:00 PM FOMC meeting minutes, November 1-2 meeting: The FOMC increased the federal funds rate target range by 75bp to 3.75%-4.0% at its November meeting. Chair Powell hinted that the FOMC will likely raise the funds rate to a higher peak than it previously projected and said that slowing the pace is not contingent on seeing softer inflation data, but rather is likely to be appropriate because the level of the funds rate is now much higher, the cumulative tightening to date is substantial, and the magnitude and timing of its impact on the economy are uncertain. Our baseline forecast calls for the Fed to deliver a 50bp rate hike in December, and a 25bp hike in February, March, and May for a peak rate of 5-5.25%.

Thursday, November 24

• No major data releases scheduled.

Friday, November 25

• No major data releases scheduled.

Source: DB, Goldman

The first question that comes to mind (as oil already tests multi-month lows) is – why would they do this?

The Wall Street Journal reports that Saudi Arabia and other OPEC oil producers are discussing an output increase, the group’s delegates said…

An increase of up to 500,000 barrels a day is now under discussion for OPEC+’s Dec. 4 meeting, delegates said.

The move would come a day before the European Union has said it would impose an embargo on Russian oil and the Group of Seven wealthy nations’ plans to launch a price cap on Russian crude sales, potentially taking petroleum supplies off the market.

Any output increase would mark a partial reversal of a controversial decision last month to cut production by 2 million barrels a day at the most recent meeting.

The reaction was swift and obvious as WTI tumbled $2 back to a %77 handle…

We are sure it just a coincidence that this report hits days after the Biden administration grants immunity to MbS over the brutal assassination of reporter Jamal Khashoggi.

Even WSJ admits it is an unusual time for OPEC+ to consider a production increase, with global oil prices falling more than 10% since the first week of November.

…quid pro quo, indeed.

A powerful earthquake struck Indonesia’s main island on Monday, killing dozens of people and wounding hundreds, reported Reuters. 

Videos on social media show building structures toppled and debris strung out across streets and damaged infrastructure in Indonesia’s West Java province. 

The U.S. Geological Survey said the magnitude 5.6 quake was centered in the Cianjur region in West Java province at a depth of 10 kilometers (6.2 miles).

Weather Updates PK / Karachi Doppler pic.twitter.com/GouZ6Vuyn1

— Weather Updates PK (@WeatherWupk) November 21, 2022

#GempaCianjur #GempaCianjur 5.6 magnitude Earthquake left 46 dead and over 700 injured. Heartbreaking and Devestating visuals from *אזהרת צפייה*..🔞#Indonesia #Earthquake #إندونيسيا #جاوا #Java #Cianjur #WestJava #gempabumi #GempaCianjur #Gempa #Pray pic.twitter.com/M8xO4QPWVv

— Voice Bengali 🇧🇩❤️🇵🇸 (@VoiceBengali71) November 21, 2022

इंडोनेशिया के जावा द्वीप में 5.6 तीव्रता का भूकंप, कम से कम 44 लोगों के मरने और 300 से अधिक के घायल होने का समाचार#Indonesia #Earthquake #WestJava #ViralVideo pic.twitter.com/GwTHAYr37K

— सुधांशु कुमार 🇮🇳🚩 (@sudhanshu_nasa) November 21, 2022

תנועת הכבישים נחסמה בעקבות קריסת עצים..
מרעידת אדמה באינדונזיה.#Indonesia #Earthquake #إندونيسيا #جاوا #Java #Cianjur #WestJava #gempabumi #GempaCianjur #Gempa pic.twitter.com/eH8v1m4Vyx

— 🌏News (@kisis007) November 21, 2022

Earthquake of 5.6 magnitude rocks Indonesia’s Java island; 20 dead, over 300 injured#Earthquake #Cianjur #JawaBarat #WestJava #Java #Indonesia #Indonesia #earthquake pic.twitter.com/Bx5wvfooNM

— Sumit Kumar (@Sumit_Sankrit) November 21, 2022

According to US Geological Survey data, the quake struck at a shallow depth of six miles, measuring at 5.6 magnitude, with an epicenter in Cianjur.

NYT quoted Cianjur police, who said 61 people had been killed, warning the number could rise as many people were trapped under buildings reduced to rubble or in landslides. 

The country’s National Disaster Mitigation Agency said preliminary reports show the earthquake destroyed 343 buildings, including homes, businesses, government offices, schools, temples, and churches. 

“Local news outlets reported some interregional roads have been cut off due to damages and landslides caused by the earthquake, hindering search and rescue efforts in some areas,” Bloomberg said. 

Indonesia’s disaster mitigation agency warned about aftershocks. Tremors were felt as far as the capital Jakarta, about 63 miles away from the epicenter, where people working in tall buildings were evacuated. 

Indonesia’s 18,000 islands are located along the “Ring of Fire,” a very active seismic zone in the Pacific Ocean. 

In 2004, a powerful earthquake off Sumatra, an island in northern Indonesia, triggered a tsunami that killed 230,000 people. In 2009, a 7.1-magnitude quake hit Cianjur, killing 57 people. 

Authored by Bill Pan via The Epoch Times,

House Minority Leader Kevin McCarthy (R-Calif.) said on Saturday that when he becomes speaker of the House next year he will remove Rep. Ilhan Omar (D-Minn.) from the House Foreign Affairs Committee because of her remarks that many deemed anti-Semitic.

“We watch anti-Semitism grow, not just on our campuses, but we watched it grow in the halls of Congress,” McCarthy said at the Republican Jewish Coalition’s annual leadership meeting in Las Vegas on Saturday.

“I promised you last year that as speaker, she [Omar] will no longer be on Foreign Affairs, and I’m keeping that promise,” he told a cheering audience.

Omar, a Muslim immigrant of Somali descent, has been condemned for her remarks on the U.S.–Israel relationship several times in recent years, including by the leadership of her own party.

In 2019, the first-term congresswoman wrote on Twitter that the U.S. support of Israel is “all about the Benjamins.” This prompted House Speaker Nancy Pelosi (D-Calif.) and other Democrats to issue a joint statement, saying that the comment invoked a long-standing anti-Semitic trope and was “deeply offensive.”

President Donald Trump also weighed in at that time to call for Omar’s expulsion.

“Anti-Semitism has no place in the United States Congress,” Trump told reporters during a Cabinet meeting at the White House.

“And I think she should either resign from Congress or she should certainly resign from the House Foreign Affairs Committee.”

McCarthy’s Plan To Expel Democrats From Panels

This isn’t the first time McCarthy has said he wants to expel Omar from her committee assignment. In an interview with Breitbart in January, he said he was planning to oust Reps. Omar, Adam Schiff (D-Calif.), and Eric Swalwell (D-Calif.) from their respective committees if Republicans secure a majority in the House after the midterms.

“Ilhan Omar should not be serving on Foreign Affairs,” McCarthy said at that time. “You had Ilhan Omar, who earlier referred to my support for Israel in an earlier Congress was ‘all about the Benjamins’ and never apologized.”

McCarthy argued that the two Californian Democrats shouldn’t stay on the House Intelligence Committee, either. He pointed to Swalwell’s affair with an alleged Chinese Communist Party spy, and the role Schiff played in promoting the false assertion that the Trump campaign had colluded with Russia during the 2016 election.

“You look at Adam Schiff—he should not be serving on Intel when he has openly, knowingly now used a fake dossier, lied to the American public in the process and doesn’t have any ill will [and] says he wants to continue to do it,” he said.

Authored by Daniel Lacalle,

While many market participants are concerned about rate increases, they appear to be ignoring the largest risk: the potential for a massive liquidity drain in 2023.

Even though December is almost here, central banks’ balance sheets have hardly, if at all, decreased. Rather than real sales, a weaker currency and the price of the accumulated bonds account for the majority of the fall in the balance sheets of the major central banks.

In the context of governments deficits that are hardly declining and, in some cases, increasing, investors must take into account the danger of a significant reduction in the balance sheets of central banks. Both the quantitative tightening of central banks and the refinancing of government deficits, albeit at higher costs, will drain liquidity from the markets. This inevitably causes the global liquidity spectrum to contract far more than the headline amount.

Liquidity drains have a dividing effect in the same way that liquidity injections have an obvious multiplier effect in the transmission mechanism of monetary policy. A central bank’s balance sheet increased by one unit of currency in assets multiplies at least five times in the transmission mechanism. Do the calculations now on the way out, but keep in mind that government expenditure will be financed.

Our tendency is to take liquidity for granted. Due to the FOMO (fear of missing out) mentality, investors have increased their risk and added illiquid assets over the years of monetary expansion. In periods of monetary excess, multiple expansion and rising valuations are the norm.

Since we could always count on rising liquidity, when asset prices corrected over the past two decades, the best course of action was to “buy the dip” and double down. This was because central banks would keep growing their balance sheets and adding liquidity, saving us from almost any bad investment decision, and inflation would stay low.

Twenty years of a dangerous bet: monetary expansion without inflation. How do we handle a situation where central banks must cut at least $5 trillion off their balance sheets? Do not believe I am exaggerating; the $20 trillion bubble generated since 2008 cannot be solved with $5 trillion. A tightening of $5 trillion in US dollars is mild, even dovish. To return to pre-2020 levels, the Fed would need to decrease its balance sheet by that much on its own.

Keep in mind that the central banks of developed economies need to tighten monetary policy by $5 trillion, which is added to over $2.50 trillion in public deficit financing in the same countries.

The effects of contraction are difficult to forecast because traders for at least two generations have only experienced expansionary policies, but they are undoubtedly unpleasant. Liquidity is dwindling already in the riskiest sectors of the economy, from high yield to crypto assets. By 2023, when the tightening truly begins, it will probably have reached the supposedly safer assets.

In a recent interview, Bundesbank President Joachim Nagel said that the ECB will begin to reduce its balance sheet in 2023 and added that “a recession may be insufficient to get inflation back on target.” This suggests that the “anti-fragmentation tool” currently in use to mask risk in periphery bonds may begin to lose its placebo impact on sovereign assets. Additionally, the cost of equity and weighted average cost of capital increases as soon as sovereign bond spreads begin to rise.

Capital can only be made or destroyed; it never remains constant. And if central banks are to effectively fight inflation, capital destruction is unavoidable.

The prevalent bullish claim is that because central banks have learned from 2008, they will not dare to allow the market to crash. Although a correct analysis, it is not enough to justify market multiples. The fact that governments continue to finance themselves, which they will, is ultimately what counts to central banks. The crowding out effect of government spending over private sector credit access has never been a major concern for a central bank. Keep in mind that I am only estimating a $5 trillion unwind, which is quite generous given the excess produced between 2008 and 2021 and the magnitude of the balance sheet increase in 2020–21.

Central banks are also aware of the worst-case scenario, which is elevated inflation and a recession that could have a prolonged impact on citizens, with rising discontent and generalized impoverishment. They know they cannot keep inflation high just to satisfy market expectations of rising valuations. The same central banks that assert that the wealth effect multiplies positively are aware of the disastrous consequences of ignoring inflation. Back to the 1970s.

The “energy excuse” in inflation estimates will likely evaporate, and that will be the key test for central banks. The “supply chain excuse” has disappeared, the “temporary excuse” has gotten stale, and the “energy excuse” has lost some of its credibility since June. The unattractive reality of rising core and super-core inflation has been exposed by the recent commodity slump.

Central banks cannot accept sustained inflation because it means they would have failed in their mandate. Few can accurately foresee how quantitative tightening will affect asset prices and credit availability, even though it is necessary. What we know is that quantitative tightening, with a minimal decrease in central bank balance sheets, is expected to compress multiples and valuations of risky assets more than it has thus far. Given that capital destruction appears to be only getting started, the dividing effect is probably more than anticipated. And the real economy is always impacted by capital destruction.

Authored by Monica Showater via AmericanThinker.com,

If anyone wants to see just how far that Martha’s Vineyard “stunt” initiated by Florida’s governor, Ron DeSantis has gone, take a look at what’s going on in France and Italy:

According to the U.K. Express:

A diplomatic row between France and Italy erupted last week when Rome forced Macron’s hand to accept a humanitarian rescue ship, the Ocean Viking with 234 migrants aboard, after Italy had refused it a port for weeks.

The presidents of Italy and France sought to tamp down tensions over migration Monday by asserting the need for “full cooperation” on a host of issues and the importance of strong bilateral relations after days of diplomatic barbs over the fate of migrants crossing the Mediterranean. In response to Italy’s demand France accepted migrants from the Ocean Viking rescue ship, President Emmanuel Macron retaliated by suspending its participation in an EU solidarity pact to accept 3,000 relocated migrants this year from Italy and sent officers to reinforce its southern border crossings and prevent migrants from entering.

The nicey-nice talk is just that — nicey-nice talk, and Italy’s president is largely a ceremonial one. What happened was a full-fledged row.

It began as a migrant issue. What is going on in Europe is that assorted European NGOs sail ships to pick up illegal migrants from distant places like Bangladesh, Pakistan, Eritrea, and sub-Saharan Africa, at sea, ensconced on human-smuggling racket ships departing from Libya and serving as a kind of cartel taxi service, bringing the illegal migrants into Italian ports, which are the closest to the Libyan coast. Italy takes in tens of thousand of these illegal migrants, which is proving profitable indeed for the human smugglers, but costly to Italy, which must pay for their welfare and upkeep, as well as tolerate the crime, the litter, the sexism, and the stone-age sanitation practices, sometimes even tent cities.

The European Union has nominally vowed to share the migrant “wealth” by distributing the unvetted illegal migrants throughout the Eurozone, but many countries don’t keep up their end of the bargain, leaving Italy holding the migrant bag.

Italy put its foot down and dispatched one of the NGO migrant taxi-service ships full of illegal migrants to the French port of Toulon. Italy’s newly elective conservative prime minister, Giorgia Meloni, kept her campaign promises to Italians by effectively taking a page from the gubernatorial decisions of Florida’s Gov. Ron DeSantis, who dispatched a plane full of illegals recruited from their landing pad in Texas over to the tony sanctuary-island Martha’s Vineyard in Massachusetts. Like Martha’s Vineyard’s wealthy hypocrites, according to the press accounts, France backed out of its E.U. deal to take in migrants, in order to make sure no more such migrant ships come to its ports from Italy. Italy was apparently supposed to just keep them, although as of now, it’s unclear as to why the Italian navy can’t force the ships back to the Libyan coast where they came from.

The raging statement from Italy’s prime minister, Giorgia Meloni — you’ve got to listen to it in Italian with the sound on — pretty well demonstrated that this was someone who full well knew the damage and hypocrisy of France, whose policies effectively enticed migrants to dump their homelands and come up to Europe for the welfare. Meloni’s edgy working-class Roman accent speaking in the sharpest of furious tones, pretty well conveys the Italian sentiment and is something to hear.

This is fantastic. Macron thought he could throw a “cordon sanitaire”around Meloni’s Italy, and she is really taking it to him. https://t.co/mmpWeaWagL

— Mike Gonzalez (@Gundisalvus) November 19, 2022

ITALY – Well their new PM Giorgia Meloni certainly doesn’t hold back does she?

Here’s her take on Macron, after he called the Italians disgusting.pic.twitter.com/qtJZS1r5xk

— Bernie’s Tweets (@BernieSpofforth) September 28, 2022

She’s informed, she’s furious, and she’s laying it out to everyone, basically out-Martha Vineyard-ing even Ron DeSantis as she forced that ship to France. 

For the smug Eurochickens out there, starting with Emmanuel Macron of France, she’s gotten word out now that Italy’s not one to mess with these days, they’ve had it with being Europe’s punching bag on migrants. Expect the Europeans to adjust their expectations accordingly.

The Arizona attorney general’s office has launched an investigation into irregularities in Maricopa County’s handling of the midterm elections.

AG Mark Brnovich’s election integrity unit has demanded a full report of well-publicized irregularities, and what he claims is evidence of “statutory violations.”

The letter, sent late Saturday by Assistant AG Jennifer Wright to the county’s top civil division attorney, Thomas Liddy, is a major escalation over widespread problems with voting tabulators and printers, which delayed the declaration of a winner in razor-thin races in the attorney general’s race and the gubernatorial race.

Gubernatorial candidate Kari Lake has questioned the media’s premature declaration that her opponent, Democrat Katie Hobbs – who wasn’t exactly popular, won.

The letter demands a full report on how voting machine and printer issues were handled, along with a copy of each polling location’s Official Ballot Report, as well as explanations for any discrepancies.

Wright also demanded that the evidence be turned over before the final vote certification which is due Nov. 28.

“These complaints go beyond pure speculation, but include first-hand witness accounts that raise concerns regarding Maricopa’s lawful compliance with Arizona election law,” reads the letter. “Furthermore, statements made by both Chairman Gates and Recorder Richer, along with information Maricopa County released through official modes of communication appear to confirm potential statutory violations of title 16.”

Among the potential legal violations are poll workers giving improper instructions to voters whose ballot tabulations were delayed by the issues.

“Maricopa County appears to have failed to adhere to the statutory guidelines in segregating, counting, tabulating, tallying, and transporting the ‘Door 3’ ballots,” wrote Wright. “In fact, Maricopa County has admitted that in some voting locations, ‘Door 3’ non-tabulated ballots were commingled with tabulated ballots at the voting location.

“Further, we have received a sworn complaint from an election observer indicating that more than 1700 “Door 3” non-tabulated ballots from one voting location were placed in black duffle bags that were intended to be used for tabulated ballots.”

The head of Germany’s Federal Office for Civil Protection and Disaster Relief (BBK), Ralph Tiesler, has warned citizens to prepare for short-term power outages, particularly in January and February, and to stock up on rations in advance.

“We have to assume that there will be blackouts this winter. By that, I mean a regional and temporary interruption in the power supply. The cause will not only be energy shortages, but also the targeted, temporary shutdown of the networks by the operators, with the aim of protecting the networks and not endangering the overall supply,” Tiesler told the news outlet Welt am Sonntag, adding that local authorities in several German municipalities are preparing for the possibility of blackouts, and have developed ‘precise plans’ that include procuring emergency generators to support the system.

That said, some municipalities are not prepared – and despite German gas storage facilities being near capacity, experts don’t think the stockpile will be enough to last the country through the winter due to a lack of new supply from Russia.

“We expect short-term blackouts rather than long-lasting, large-scale blackouts. But good preparation is important for that, too,” Tiesler added.

What to do? Stock up…

“Primarily water, several crates, and canned food. That would be enough for ten days. That’s what my agency recommends… Our message is: prepare in the first place. Be prepared for possible crises, don’t assume that everything will be readily available all the time,” Tiesler stated, adding that residents should also purchase battery-powered radios and candles.

Germany’s energy woes stem from a drop in gas supplies from Russia, after an ill-advised scheme to shut off their nuclear power plants. The flow of gas was cut off much earlier than expected over Ukraine-related sanctions, as well as explosions in September which rendered the Nord Stream 1 pipeline inoperable.