Authored by Dave DeCamp via AntiWar.com,

Some US and Western officials believe this winter will provide an opportunity for diplomacy between Russia and Ukraine as they don’t think either side can fully achieve their goals in the war, NBC News reported on Wednesday, citing anonymous sources.

“In the winter everything slows down,” one Western official said. “The potential for talks, we would like to see that happening.” The report said Western military officials don’t believe that Ukraine can drive Russia out of all the territory it has captured.

Also on Wednesday, Russia announced that it was pulling out of the southern Ukrainian city of Kherson. US and Western officials told NBC that if Ukraine retakes Kherson, it could put the government of Volodymyr Zelensky in a “better position to negotiate.”

The Italian newspaper La Repubblica reported this week that the US and NATO might think peace talks are possible if Ukraine retakes Kherson. The paper said the Western powers are considering diplomacy due to the threat of tactical nuclear weapons being used and the fact that if Russia is defeated in Ukraine, it may become closer to China.

The officials also told NBC that Russia losing Kherson could make Vladimir Putin’s government less likely to talk, but Moscow reaffirmed on Wednesday that it’s open to negotiations. “We are ready to negotiate, of course, taking into account the realities that are emerging at the moment,” said Russian Foreign Ministry spokeswoman Maria Zakharova.

Throughout the war, the US has maintained that it won’t push Ukraine to the negotiating table. The US and its allies also discouraged peace talks with Russia when a deal was within reach after in-person negotiations between Ukraine and Russia were held in Istanbul at the end of March.

Former British Prime Minister Boris Johnson traveled to Kyiv after the Istanbul talks and urged Ukraine not to negotiate with Russia, and the negotiations ultimately failed. But now, there does appear to be a shift in the Western approach, with the US at least exploring the idea of diplomacy.

A Ukrainian official told NBC that when National Security Advisor Jake Sullivan visited Kyiv last week, he broached the idea of when the conflict will end with Zelensky and whether it could include a diplomatic solution. The report said Sullivan didn’t want to pressure Ukraine to negotiate but said Kyiv should change its stance on negotiations to maintain support from its Western backers.

NATO have identified a short-term negotiation window: reach the banks of the Dnipro, capture Kherson & then push for a ceasefire from a position of strength – La Repubblica.https://t.co/ErdFZI0dxG pic.twitter.com/zv6Ro52Rw1

— Faytuks News Δ (@Faytuks) November 7, 2022

President Biden on Wednesday reiterated the administration’s public stance that it’s up to Ukraine when to negotiate with Russia. “Nothing about Ukraine without Ukraine,” he told reporters. Zelensky recently signed a decree ruling out peace talks with Russia as long as Putin is president but appeared to drop that demand this week after the suggestion from Sullivan. Zelensky said he was open to talks with Russia, but he maintained conditions that are non-starters for negotiations, including a full Russian withdrawal and Moscow paying for war damages.

While diplomacy is being discussed, the US and NATO are also making preparations to support Ukraine in its war for years to come, and Russia has been reinforcing its positions after mobilizing 300,000 fresh troops, signaling an offensive may be coming. According to NBC, Congress is planning to pass a fresh aid package for Ukraine worth somewhere between $40 billion and $60 billion.

Blood testing fraudstress Elizabeth Holmes was denied a request for a new trial on Monday by a federal judge in California, new documents reveal.

The 37-year-old Holmes was found guilty in January of defrauding investors in blood testing startup Theranos. She was convicted on four of 11 counts – including investor fraud and conspiracy, but acquitted on three counts of defrauding patients who paid for tests from Theranos, Reuters reports.

In July, former Theranos President Ramesh “Sunny” Balwani was also convicted of defrauding investors and patients about Theranos that was once valued at $9 billion.

Holmes’ lawyers filed for a new trial in September citing “newly discovered” evidence from the government’s statements made at the closing arguments of Balwani’s trial, as well as alleged government misconduct. Reuters

Holmes founded Theranos in 2003 at the age of 19 – and was known as a Steve Jobs-esque figure, prancing around in turtle neck sweaters and making grandiose promises about the future of her company.

Board members included James Mattis, the retired four-star Marine Corps general and former Trump defense secretary.

In his Monday ruling, US District Judge Edward Davila said that Holmes’ lawyers failed to produce enough new material evidence to prove alleged misconduct by the government, adding that statements made at Balwani’s trial were not applicable to an acquittal for Holmes.

Holmes is scheduled to be sentenced on November 18. She faces up to 80 years in prison, but will likely receive a much lower sentence.

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Television host Jimmy Kimmel has revealed that he has lost at least half of his fanbase after cracking jokes against former president Donald Trump.

“I have lost half of my fans—maybe more than that,” Kimmel said in an interview with Stitcher’s “Naked Lunch” podcast.

“Ten years ago, among Republicans, I was the most popular talk show host, at least according to the research that they did.” The “Jimmy Kimmel Live!” show has been airing on ABC since 2003.

When Trump was first running for office, executives at ABC had “hinted” that Kimmel would be better off backing away from anti-Trump jokes.

However, the comedian insisted that he is not going to stop joking about Trump despite agreeing that more neutral comedy would help the ratings of his show.

Kimmel told executives that they can hire someone else to host the show if they want but according to Kimmel, they backed off when they knew he was “serious.”

Claiming that he was “proud” to speak against Trump, Kimmel went on to joke about still airing shows when the former president “goes to jail.”

The comedian also defended current president Joe Biden, saying that he is a “decent human being” no matter what anyone thinks about him. Biden is “certainly not evil” and those who believe so have got “some real problems,” Kimmel said.

Kimmel’s show has struggled to get viewers in recent times, with ratings significantly dropping during the past few years. In 2016, Jimmy Kimmel Live garnered 2.2 million viewers on average, a number that has declined by over a third to 1.5 million in 2022.

Talk Show Audience Drop, Bias Against Trump

Kimmel isn’t the only talk show host who has seen audience numbers fall in the past years. Other liberal hosts have also seen a decline in viewership.

NBC’s “Late Night with Seth Meyers,” which attracted around 1.5 million viewers in 2016 now only has a viewership of 786,000, according to Fox. CBS’ “The Late Late Show” has lost 36 percent of viewers during this period. Jimmy Fallon, the host of “Tonight Show” has seen viewership decline by almost 60 percent.

In 2018, Fallon apologized for ruffling Trump’s hair during a cordial interview weeks before the 2016 presidential race. Anti-trump critics claimed that the action had humanized Trump and helped him in the elections.

Sketch comedy program “Saturday Night Live,” which has been very biased in how it treats Trump as against Biden, has also suffered a drop in audience numbers.

According to an analysis by Fox News, the show only satirized Biden three times during his first year in office. In contrast, Trump was satirized at least 11 times in his first year. In 2017, the show used to average 7.4 million viewers, which has now fallen to 4.7 million.

Alameda Research – Sam Bankman-Fried’s (SBF) FTX-affiliated crypto hedge fund – “owed” FTX $10 billion after the exchange “lent” billions of dollars of sacrosanct customer assets to fund risky bets, just as we suspected… only even more!

If @SBF_FTX took $6 billion in client funds from FTX and secretly syphoned them to fund his “teenage investing wizards” at Alameda, he should go to prison for a long time.

— zerohedge (@zerohedge) November 9, 2022

That, as The Wall Street Journal reports, citing a person familiar with the matter, is what set the stage for the carnage and chaos across the crypto space that has happened in the past few days as the reality of FTX’s alleged commingling of funds and massive shortfall became public thanks to Binance’s CZ’s due diligence and CoinDesk’s reporting.

FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Bankman-Fried described as a “poor judgment call.”

All in all, FTX had $16 billion in customer assets, according to the person, so FTX lent more than half of its customer funds to its sister company Alameda.

SBF tweeted at the beginning of the week as information started to leak and the ‘bank run’ accelerated that FTX had the funds to cover all client holdings…

…  but that tweet has since been deleted as it would be Exhibit A in the prosecution’s case to throw the 30-year-old in prison.

The problem was that Alameda had a giant, growing hole in its balance sheet. As @MiniGrogu explains:

On Nov 2nd, CoinDesk published an article on Alameda Research leaked Q2 balance sheet.

Against $8b in liabilities, Alameda accounted for $14.6b of assets.

The primary asset was “$5.82 billion” of “unlocked” and “collateral” FTT (market cap at the time was approx $3.1b).

To be clear, Alameda marked the value of their FTT bag at 193% of known market cap at a time where only 200-300 addresses actively traded the token.

How much of this “5.82 billion” do you think they could have realized before all FTT bids fled the order book?

The rest of the assets were equally abysmal: $1b+ of SOL (~10% of market cap), $2b+ of other illiquid altcoins (SRM, MAPS, OXY, and FIDA), and $2b of “investment in equity securities”

Put another way, @MiniGrogu concludes:

“Alameda was running the Celsius playbook”

And we know how that ended.

More recently Alameda had become one of the biggest players in “yield farming,” or investing in tokens that pay interest-rate-like rewards. Yield farming can be risky because the tokens often have an initial run-up in price as investors pile in, seeking the rewards, then a crash as they get out.  

“It’s essentially like picking up pennies before a steamroller,” said independent blockchain analyst Andrew Van Aken.

“You use dollars, or stablecoins, to get these very speculative coins.”

Well the fingers got caught under the roller-coaster as prices across the crypto-space spiralled lower and the vicious circle put recovery out of reach, prompting the ever-increasing need for FTX client funds to fill the void.

So, given what The Wall Street Journal is reporting – that SBF either directly invested client funds or used them as collateral to plug gaping holes in Alameda’s mid-priced balance sheet – that must be illegal right?

Well… maybe, maybe not.

As @MiniGrogu explains in a detailed tweet thread, the answer is “well, it’s not clear.”

In traditional markets under US jurisdiction it’s clearly illegal, brokers must keep client funds segregated from other company assets and regulators can punish violations.

In their User Agreement, FTX does state that the Customer Account is a self-directed account, meaning ALL orders/directions involving the account are executed at the request of the user.

HOWEVER, the same is not true for ‘margin accounts’…

Absent from the TOS or User Agreement, but present in the whitepaper, is a statement that collateral for margin accounts is held in a “Centralized Collateral Pool”

As @MiniGrogu concludes, “This is likely the hole.”

This means that while all signs point to clear fraud, it is not immediately clear that SBF did something illegal here – unethical yes… but illegal not-so-clear given the TOS.

Nevertheless, while we are sure this will lead to demands from lawmakers to “do something” – and by ‘something’ they mean regulate the shit out of the crypto business…

Maxine Waters – Chair of the House Financial Services Committee – wasted no time in demanding ‘more’ regulation…

“The recent fall ofFTX.com – a major international cryptocurrency trading platform – is just the latest example in a string of incidents involving the collapse of cryptocurrency companies and the impacts these failures have on consumers and investors. Although FTX’s U.S.-facing company is reportedly operational, FTX’s FTT tokens are now worthless, and even worse, FTX.com customers are completely unable to access their funds.

Now more than ever, it is clear that there are major consequences when cryptocurrency entities operate without robust federal oversight and protections for customers.

For four years, under my leadership as Chairwoman, the Committee on Financial Sendees has led the way in examining and investigating the cryptocurrency marketplace. This includes the Committee’s formation of Congress’ first-ever Task Forces on Financial Technology and Artificial Intelligence, along with the working group on digital assets. In addition, for several months, I’ve been working around the clock with Ranking Member Patrick McHenry to craft bipartisan legislation that establishes a federal framework for stablecoins in order to begin building the safeguards needed to protect customers’ assets and insulate our financial markets from contagion.

This week’s news further highlights the urgent need for legislation.”

Oh really Maxine?

(reminder, after George Soros, Bankman-Fried was the largest donor to Democrats in the Midterms).

…we would remind readers that there is nothing special about crypto in this situation…

Jon Corzine used plain old dollars to embezzle client funds at MF Global. It’s not just crypto – clearly the entire fiat system is broken as well.

— zerohedge (@zerohedge) November 10, 2022

MF Global customers were ultimately made whole after a years-long bankruptcy process. With FTX, operating in the less regulated world of crypto, it is unclear whether customers will ever get their money back.

But, fraudsters gonna fraud, whether it is with fiat or with crypto.

In fact, this is a total failure of trust and once again goes to weakness of centralized systems… which ironically, only crypto can fix.

Earlier this morning, in a lengthy mea culpa, SBF said in a tweet that Alameda Research was winding down trading.

Authored by Bryan Jung via The Epoch Times,

California voters on election day rejected a millionaire tax to boost electric vehicles (EVs) and and state wildfire response programs.

Proposition 30 would have added a tax to promote the use of EVs by creating a Clean Cars and Clean Air Fund, which would be separate from the state’s general fund.

Residents with an annual income of above $2 million would be forced to pay an extra 1.75 percent tax on their earnings to support the programs, starting on January 2023, according to the state (pdf). The tax would have been imposed on fewer than 43,000 of California’s 39 million residents.

California’s marginal tax rate would have risen from 13.3 to 15.05 percent, giving the state the highest income tax level in the country.

The proposal had a lifespan of 20 years, or would end if California brought greenhouse emission down to 80 percent below 1990 levels for three consecutive years, according to the state analyst’s office.

Electric vehicle purchases and the building of electric charging stations throughout the state would have been subsidized by the proceeds from the tax.

The other half of the proposal would better prepare California’s response to wildfires, with an added emphasis on firefighter hiring and training.

The amendment, if it had passed, was estimated to have brought in $3–5 billion annually.

Gov. Newsom Opposed His Own Party on the Proposition

Ironically, California’s Democrat governor, Gavin Newsom, normally a supporter of eco-friendly vehicles, was a strong opponent of the proposal, putting him in opposition to his own party.

Newsom accused the amendment of being a Trojan Horse to enrich the ride-sharing company Lyft, which had funded support for the proposition with millions of dollars.

“Proposition 30 is being advertised as a climate initiative,” said the governor in a TV commercial against the state amendment. 

“But in reality, it was devised by a single corporation to funnel state income taxes to benefit their company. Put simply, Prop 30 is a Trojan horse that puts corporate welfare above the fiscal welfare of our entire state.”

A coalition of environmental and health groups and the Democrat Party of California were the other major backers of the plan.

Newsom, in a strange twist, sided with the California Republican Party, along with the California Teacher’s Association, the California Chamber of Commerce, and the California Hawaii State Conference NAACP.

The Democrat Governor and the California GOP Join Forces to Prevent the Tax

The governor had been touting his own separate plan to ban the sale of all combustion engine vehicles in the state by 2035 by compelling residents to buy the highly expensive EVs in the name of reducing carbon emissions.

Besides the proposal, California had already set aside $6.5 billion in subsidies for EVs and public charging stations, with additional plans to spend another $10 billion over the next five years.

However, the backers of Proposition 30 claimed it would actually help speed the transition to EVs by making it easier for low-income residents to buy the low-emission cars by partially subsidizing their purchase.

Opponents like Newsom said that Lyft was funding Proposition 30 for its own benefit, since state regulators at the California Air Resources Board have already required that 90 percent of all ride-shares use EVs by 2030.

Newsom accused Lyft of making a stealth play to have the state subsidize the purchase of EVs for its own employees, as the proposition did not clearly specify who would cover the costs of the transition to the new technology.

Opponents said that ride-share companies like Uber and Lyft should shoulder the burden instead of having the state subsidize its drivers to buy the vehicles, which they had requested, reported CalMatters.

The governor also said that the proposal would siphon money into the special EV fund and away the state’s general fund, which is used for funding programs ranging from education to public healthcare.

Lyft refuted the governor’s accusation, saying that it supported the measure out of genuine concern over climate change and claimed that the funds would not benefit it specifically.

“Proposition 30 funds this through a tax on individuals who earn more than $2 million a year. I’m fortunate enough to be impacted by this tax and happy to pay it to help turn back the clock on this existential threat,” wrote Lyft CEO Logan Green in a company blog post.

The other major lobbying group opposing the tax were California’s teacher unions, who demanded that the money raised be better spent on public schools.

Newsom’s critics cynically accused him of not supporting the proposal due to pressure from his wealthy donors.

Hurricane Nicole made landfall on Florida’s east coast early Thursday as a Category 1 storm with maximum sustained winds of 75 mph, according to the National Hurricane Center. 

Nicole made landfall on North Hutchinson Island, just south of Vero Beach, around 0300 ET, and has since been downgraded to a tropical storm. 

The storm is now churning inland over central Florida near Orlando, bringing high winds and torrential rains as it moves west-northwest. 

A storm surge warning across North Palm Beach to Jupiter Inlet was canceled; watches were also canceled south of North Palm Beach to Hallandale Beach. 

“Nicole remains a large tropical storm. Tropical-storm-force winds extend outward up to 450 miles from the center, especially to the north,” NHC said. 

There are nearly 230,000 customers across Florida without power early Thursday. 

At least 1,200 flights have been canceled within, into, or out of the US Thursday, according to data from the flight tracking website FlightAware.

No other hurricane on record has made landfall so late in the season along Florida’s east coast, Phil Klotzbach, a tropics researcher at Colorado State University, tweeted. 

#Hurricane watches have been posted for parts of the east coast of Florida due to Subtropical Storm #Nicole. If Nicole were to make landfall as a hurricane, it would be the latest calendar year hurricane to make landfall along the east coast of Florida on record. pic.twitter.com/qQoqujsFxg

— Philip Klotzbach (@philklotzbach) November 7, 2022

Dr. Michael Mann, director of the Earth System Science Center at Penn State University, told USA Today that La Nina conditions are expected to continue through the end of the year and could produce increased storm activity into late fall. 

Remember, the World Meteorological Organization Secretary-General Petteri Taalas recently said, “It is exceptional to have three consecutive years with a la Nina event.” 

And according to the UN Office for the Coordination of Humanitarian Affairs:

“El Nino and La Nina are naturally occurring climate patterns and humans have no direct ability to influence their onset, intensity or duration.” 

But-but-but Greta? What about man-made climate change?

It’s not just today’s cooler than expected CPI print that is sending stocks soaring, the S&P up 4.2% at last check, its biggest increase since April 2020: amid today’s barrage of Fed speakers.

• 09:00: Fed’s Harker Discusses The Economic Outlook
• 09:35: Fed’s Logan Speaks at Energy and the Economy Conference
• 11:00: Fed’s Daly Speaks with European Economics & Financial Center
• 12:30: Fed’s Mester Discusses the Economic Outlook
• 13:30: Fed’s George Speaks at Energy and the Economy Conference

… the first two have already come out with decidedly more dovish jawboning, echoing last week’s Fed statement (if not Powell’s far more hawkish presser).

The first was Philly Fed president Patrick Harker who said Thursday that the U.S. central bank is approaching a point where it may be able to moderate the pace of its rate rise campaign aimed at lowering too high levels of inflation.

“In the upcoming months, in light of the cumulative tightening we have achieved, I expect we will slow the pace of our rate hikes as we approach a sufficiently restrictive stance,” Harker said in a speech text. But he added that moving from what had been 75 basis point increases to something like a half percentage point rise would still be significant action.

Harker added, “at some point next year, I expect we will hold at a restrictive rate for a while to let monetary policy do its work” as more expensive borrowing costs impact the economy. The central banker said what happens after that will be driven by the data and added “if we have to, we can always tighten further, based on the data.” Or, alternatively, the Fed will have just another 100bps more of rate hikes because as shown earlier, the terminal rate had slumped below 5% and now anticipates about 1% more in rate hikes before the Fed ends its tightening campaign.

Harker, who doesn’t hold a vote on the FOMC this year but will in 2023, laid out what it will take for him to call for a shift in monetary policy. “What we really need to see is a sustained decline in a number of inflation indicators before we let up on tightening monetary policy,” he said, adding “we need to make sure inflation expectations don’t become unanchored.”

To be sure, the Philly Fed president offered the token dose of hawkishness, but nothing the market hasn’t heard a thousand times already: in his remarks, Harker said there are signs the economy is slowing but he added “the job market continues to run extremely hot” and inflation “remains far, far too high.” Well, check back next month on the employment number – with midterms over, the BLS can finally tell the truth.

Harker said in his speech that he believes the U.S. GDP will be flat for this year, rise by 1.5% next year and 2% in 2024. Unemployment should rise from its current 3.7% level to 4.5% next year before falling to 4% in 2024. He said there’s evidence the Fed can lower inflation “without doing unnecessary damage to the labor market.”

As for inflation, he said inflation as measured by the core personal consumption expenditures price index, which stood at 5.1% in September, should ease to 4.8% this year, 3.5% next year and 2.5% in 2024. The Fed’s target is 2%.

But far more important that non-voter Harker’s speech is what the former head of the PPT and current Dallas Fed president, Lorie Logan said after today’s CPI: speaking at a conference hosted by her bank in Houston on Thursday, she said that the Federal Reserve looked closer to moderating aggressive interest-rate increases after welcome news on inflation. More importantly, she emphasized that the Fed should start looking at financial conditions, a clear sign that the Fed is starting to pay attention not just to inflation and employment but how it’s actions are breaking the market. 

“While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy,” Logan said adding that “this morning’s CPI data were a welcome relief, but there is still a long way to go,” she said. Not only is inflation far above the Fed’s 2% target, “but with aggregate demand continuing to outstrip supply, inflation has repeatedly come in higher than forecasters expected.”

“I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving,” Logan added even as she warned markets not to confuse a slower pace of monetary policy tightening with easier policy.

Last but not least, Powell’s own mouthpiece, WSJ’s Nick Timiraos said that “the October inflation report is likely to keep the Fed on track to approve a 50-basis-point interest-rate increase next month. Officials had already signaled they wanted to slow the pace of rises and were somewhat insensitive to near-term inflation data.”

Fed officials have signaled they would prefer to see evidence that inflation is moderating before they pause rate rises.

The hot August and September CPI prints restarted the clock on gathering a string of sequential moderations in inflation.

— Nick Timiraos (@NickTimiraos) November 10, 2022

And in a subsequent tweet, Timiraos confirmed that the Fed’s attention is now turning to financial conditions:

Dallas Fed President Lorie Logan: The Fed must get inflation down but “we should also try, if we can, to avoid incurring costs that are higher than necessary.”

Financial conditions can eventually tighten in ways that aren’t linear. https://t.co/QHhA1k8FGs pic.twitter.com/o7nh3PkeXa

— Nick Timiraos (@NickTimiraos) November 10, 2022

News of the better-than-expected CPI report sent bond yields plummeting and saw investors harden bets that the Fed would scale back the size of its next rate increase in December to 50 basis points, with rates peaking around 4.8% next year. And sure enough, odds of the December rate hike have collapsed to 0% after the CPI, while odds of a 50bps hike are now 100%.

What happens after December, will depend on next month’s jobs report. And if recent mass layoffs are any indication, not to mention that the midterms are now history, we are looking at a deeply payrolls negative number next month.

In his first words since the (alleged) ponzi fraud of FTX was exposed yesterday, Sam Bankman-Fried, CEO and founder of FTX, has issued a lengthy tweet-thread to try to explain himself.

He begins: “I’m sorry. That’s the biggest thing… I fucked up, and should have done better.”

1) I’m sorry. That’s the biggest thing.

I fucked up, and should have done better.

— SBF (@SBF_FTX) November 10, 2022

And then goes on…

I also should have been communicating more very recently.

Transparently–my hands were tied during the duration of the possible Binance deal; I wasn’t particularly allowed to say much publicly. But of course it’s on me that we ended up there in the first place.

So here’s an update on where things are.

[THIS IS ALL ABOUT FTX INTERNATIONAL, THE NON-US EXCHANGE. FTX US USERS ARE FINE!]

[TREAT ALL OF THESE NUMBERS AS ROUGH. THERE ARE APPROXIMATIONS HERE.]

FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!).

But that’s different from liquidity for delivery–as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little.

The full story here is one I’m still fleshing out every detail of, but as a very high level, I fucked up twice.

The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower.

My sense before:

• Leverage: 0x

• USD liquidity ready to deliver: 24x average daily withdrawals

Actual:

• Leverage: 1.7x

• Liquidity: 0.8x Sunday’s withdrawals

Because, of course, when it rains, it pours. We saw roughly $5b of withdrawals on Sunday–the largest by a huge margin.

And so I was off twice.

Which tells me a lot of things, both specifically and generally, that I was shit at.

And a third time, in not communicating enough. I should have said more. I’m sorry–I was slammed with things to do and didn’t give updates to you all.

And so we are where we are. Which sucks, and that’s on me.

I’m sorry.

Anyway: right now, my #1 priority–by far–is doing right by users.

And I’m going to do everything I can to do that. To take responsibility, and do what I can.

So, right now, we’re spending the week doing everything we can to raise liquidity.

I can’t make any promises about that. But I’m going to try. And give anything I have to if that will make it work.

There are a number of players who we are in talks with, LOIs, term sheets, etc.

We’ll see how that ends up.

Every penny of that–and of the existing collateral–will go straight to users, unless or until we’ve done right by them.

After that, investors–old and new–and employees who have fought for what’s right for their career, and who weren’t responsible for any of the fuck ups.

Because at the end of the day, I was CEO, which means that *I* was responsible for making sure that things went well. *I*, ultimately, should have been on top of everything.

I clearly failed in that. I’m sorry.

So, what does this mean going forward?

I’m not sure–that depends on what happens over the next week.

But here are some things I know.

First, one way or another, Alameda Research is winding down trading.

They aren’t doing any of the weird things that I see on Twitter–and nothing large at all. And one way or another, soon they won’t be trading on FTX anymore.

Second, in any scenario in which FTX continues operating, its first priority will be radical transparency–transparency it probably always should have been giving.

Giving as close to on-chain transparency as it can: so that people know *exactly* what is happening on it.

All of the stakeholders would have a hard look at FTX governance. I will not be around if I’m not wanted.

All of the stakeholders–investors, regulators, users–would have a large part to play in how it would be run.

Solely trust.

But all of that isn’t what matters right now–what matters right now is trying to do right by customers. That’s it.

A few other assorted comments:

This was about FTX International. FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow.

It’s 100% liquid. Every user could fully withdraw (modulo gas fees etc).

Updates on its future coming.

At some point I might have more to say about a particular sparring partner, so to speak.

But you know, glass houses. So for now, all I’ll say is:

well played; you won.

NOT ADVICE, OF ANY KIND, IN ANY WAY

I WAS NOT VERY CAREFUL WITH MY WORDS HERE, AND DO NOT MEAN ANY OF THEM IN A TECHNICAL OR LEGAL SENSE; I MAY WELL HAVE NOT DESCRIBED THINGS RIGHT though I’m trying to be transparent. I’M NOT A GOOD DEV AND PROBABLY MISDESCRIBED SOMETHING.

And, finally:

I sincerely apologize.

We’ll keep sharing updates as we have them. 

We are sure the likes of Tom Brady and Sequoia will forgive and forget this outright fraud… and we are also sure that all the Democrats who received funds from this man will return those fraudulently obtained funds to bear their ‘fair share’ for all Americans caught up in this scheme.

Meanwhile, the price of FTX Token is rising…

As rumors circulate that Tron founder Justin Sun may be the White Knight here…

Further to my announcement to stand behind all Tron token (#TRX, #BTT, #JST, #SUN, #HT) holders on #FTX, we are putting together a solution together with #FTX to initiate a pathway forward. @FTX_Official

— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) November 10, 2022

We wouldn’t hold our breaths.

Via SchiffGold.com,

With prices rising and real wages falling, many Americans are struggling to make ends meet. They are increasingly turning to credit cards and other debt to fill the gap. But that creates other problems. Debt has to be repaid and a growing number of Americans are struggling to keep up with payments.

Auto loan delinquencies have risen to the highest level in over 10 years, according to TransUnion.

TransUnion tracks more than 81 million auto loans in the United States. According to the consumer credit reporting agency, 1.65% of auto loans were at least 60 days delinquent in the third quarter. That is the highest rate for 60-day-plus delinquencies in more than a decade.

TransUnion senior vice-president Satyan Merchant told CNBC inflation was making it difficult for people to keep up with their car payments.

Consumers still want to stay current as best that they can. It’s just this inflationary environment is making it challenging. It leaves fewer dollars in their pocket to make the auto loan payment, because they’ve got to pay more for eggs and milk and other things.”

Unsurprisingly, subprime borrowers are having the most difficult time keeping up with their payments.

With loan-accommodation programs implemented during the pandemic, some borrowers managed to avoid delinquency. As those programs have ended, delinquencies have spiked. Merchant told CNBC that these programs pushed some delinquencies into the future.

According to TransUnion, 200,000 borrowers who took advantage of the pandemic-era auto loan accommodation programs are now listed as 60 days delinquent.

Like mortgage rates, auto loan rates have increased significantly since the Fed started pushing up rates to battle inflation. The average interest rate on new-vehicle loans rose to 5.2% in Q3. Interest rates on used vehicle loans average 9.7%. Combined with the rising cost of both new and used vehicles, along with rising fuel prices, the cost of owning a car continues to rise dramatically.

Merchant told CNBC that a rise in unemployment would create a bigger jump in auto loan delinquencies.

If we get into a position where employment starts to be a challenge in the United States and unemployment increases, that is when the industry will really start to be concerned about a consumer’s ability to pay their auto loans.”

The Federal Reserve blew up an auto bubble with years of artificially low interest rates after the 2008 financial crisis. The air was coming out of that bubble as the Fed tightened interest rates in 2018. The Fed pivot in 2019 and then the return to zero percent interest rates during the pandemic gave pumped air back into the deflating bubble, but with the Fed now tightening monetary policy once again, the air appears to be seeping out.

This is another example of how the combination of inflation, rising interest rates, and a deteriorating economy is negatively impacting average Americans. We see the same dynamics popping up in other sectors, including housing. This flashes warning signals that things in the economy could deteriorate very quickly in the near future as this deterioration compounds and snowballs.

For now, American consumers are managing to limp along using credit and savings accumulated during the pandemic. But savings are quickly being depleted and debt has limits.

The cooler than expected CPI print sparked the somewhat expected chaos in markets as Fed rate trajectory expectations puked dovishly. Fed terminal rate has plunged back below 5.00% and subsequent rate-cut expectations are soaring…

December has now priced out any chance of a 75bps hike (50bps locked in)…

This fits the narrative…

The October inflation report is likely to keep the Fed on track to approve a 50-basis-point interest-rate increase next month

Officials had already signaled they wanted to slow the pace of rises and were somewhat insensitive to near-term inflation datahttps://t.co/jVTJvMkjg3

— Nick Timiraos (@NickTimiraos) November 10, 2022

Stocks immediately exploded higher. Nasdaq is up over 4%…

Bond yields puked (10Y back below 4.00%)…

And the dollar plunged…

Which helped send Gold futures surging up to $1740 – its highest in 2 months…

Some are arguing this is the start of The Fed ‘pivot’…

⚠️ This is the start of the Fed pivot. The breadth of US CPI is down sharply and moving back to a level that isn’t showing ‘scary’ inflation. This is what matters for the Fed. One data point doesn’t make a trend… but chart below shows we’re moving in the right direction $USD pic.twitter.com/cRlc0vki7t

— Viraj Patel (@VPatelFX) November 10, 2022

However, we are reminded of Powell’s press conference reversal and wonder how long before The Fed jawbones this financial condition easing impulse away?