Rep. Alexandria Ocasio-Cortez (D-NY), who insisted last year that “deranged sexual frustrations” underpin a “Republican fixation on me,” and who said she ‘thought she was going to die’ during the January 6 Capitol riot – despite being in a building across the street from the actual Capitol that day, now says she is “absolutely” afraid for her life.

“I hesitate to walk my dog,” the 33-year-old New York congresswoman told CNN‘s Chris Wallace, adding that the attack on Paul Pelosi has only heightened her concern.

When asked if she thinks her life is in danger, she replied: “Absolutely, I felt that my life has been in danger since the moment that I won my primary election in 2018,” adding “And it became especially intensified when I was first brought into Congress in 2019.”

“It means when I wake up in the morning, I hesitate to walk my dog. It means when I come home, I have to ask my fiancé to come out to where my car is to walk me just from my car to my front door,” she continued, adding “It means that there’s just – a general disposition where you kind of feel like there’s almost a static electricity around you.”

“And you’re just always just looking around, your head is just on a swivel, going to a restaurant, walking down the street.”I actually believe that it very much shaped my political decisions because I started to feel … that it was possible that I may not see the end of the year,” adding “I said I don’t know if I have time so I need to be as robust and urgent as possible to say what I need to say.”

When asked if she still thinks the job is worth it, she replied: “

She didn’t seen too afraid in July when she pretended to be handcuffed during a Roe vs. Wade protest.

Her staff is lying unless she’s Superman and just broke the handcuffs at the end of the video. pic.twitter.com/BrToWoVsg9

— Matt Whitlock (@mattdizwhitlock) July 19, 2022

By Alex Kimani of OilPrice.com

Over the past five years, the United States’ largest independent oil and gas company, Exxon Mobil, has mostly focused its exploratory activities in South America.

Last month, the oil major announced that it had made two new discoveries at the Sailfin-1 and Yarrow-1 wells in the Stabroek block offshore Guyana, potentially adding more barrels to one of the most closely watched new oil discoveries. ExxonMobil has now made more than 30 discoveries on the block since 2015, and has ramped up offshore development and production at a pace that far exceeds the industry average.

In contrast, Exxon’s exploits in Africa have been few and far between, with its last discovery on the continent coming nearly two decades ago. But Exxon has now announced that it has, together with its partners, discovered hydrocarbons in Block 15 off Angola in the Bavuca South prospect. This was the block’s 18th discovery, but the first since 2003. According to Exxon, the Valaris DS-9 drillship drilled the Bavuca South-1 well 365 km northwest from the coast at Luanda in 1,100 m (3,608 ft) of water, encountering 30 m (98 ft) of good-quality, hydrocarbon-bearing sandstone. Exxon owns a 36% interest in the block, with BP Exploration Angola (24%), ENI Angola Exploration (18%), Equinor Angola Block 15 (12%) and Sonangol P&P (10%) being its partners.

Africa’s Oil & Gas Opportunities

The last big fossil fuel discovery on the continent dates back to 2010 after Texas-based Anadarko Corp. (now a subsidiary of Occidental Petroleum Corp.) and Italian energy giant Eni S.p.A. (NYSE: E) discovered approximately 180 trillion cubic feet of natural gas reserves, equivalent to ~29 billion barrels of oil, in Mozambique’s supergiant offshore basin of Rovuma, immediately catapulting the South African nation to a potential global LNG superpower. As you might expect, there was a stampede by oil and gas majors including ExxonMobil, TotalEnergies (NYSE: TTE), Shell (NYSE: SHEL), and China National Petroleum Corp. (NYSE: SNP)) coming in to stake their claims.  

Unfortunately, widespread terrorism and the growing menace of piracy have constantly held back progress with Mozambique fast joining the league of African nations grappling with a ‘resource curse.’ The security crisis in the northern region of Cabo Delgado had displaced hundreds of thousands of people, created a humanitarian crisis and even forced TotalEnergies to declare force majeure on its massive natural gas investment in the country.But the tides have now turned, and Mozambique has managed to get its act together just in time. The country is now poised to ship its first cargo of liquefied natural gas (LNG) overseas in November at a time when Europe is desperately trying to cut energy ties with Russia. Experts have estimated that Mozambique can earn in excess of $100B from its natural gas assets over the next 30 years.

BP has already inked a deal to buy all of the output from Eni’s $7 billion Coral-Sul project–capable of producing 3.4 million metric tons of LNG per year–for the next 20 years. Meanwhile, TotalEnergies has announced plans to resume its massive $20 billion project toward the end of the year, with the terminal expected to churn out 13.1 million tons of LNG annually. In addition, ExxonMobil says it will make a final decision for an even larger project in the near future. Meanwhile, the European Union has planned a five-fold increase in financial support to $15 million to fight militants near Mozambique’s gas projects. The EU has already pledged to provide the country’s army with an additional 45 million euros ($45 million) of financial support, and has so far given a SADC mission in the country 2.9 million euros of funding.

On its part, Mozambique has laid out plans to set up a sovereign wealth fund toward the end of 2022, with 50% of the fund’s revenues to be reinjected into the fund while the remaining 50% will go to the government’s budget during the first 20 years of LNG production. Mozambique has the potential to move up the ladder and become a middle-income nation over the next two decades if it plays its cards right.

Vijaya Ramachandran, director for energy and development at the Breakthrough Institute, says Germany and Europe should look to Africa, if they are serious about achieving energy security. Ramachandran notes that the continent is endowed with substantial natural gas reserves and new discoveries in the process of being tapped. Very little of Africa’s gas has been exploited, either for domestic consumption or export.

Algeria is already an established major gas producer with substantial untapped reserves and is connected to Spain with several undersea pipelines. Germany and the EU are already working to expand pipeline capacity connecting Spain with France, from where more Algerian gas could flow to Germany and elsewhere. Libyan gas fields are connected by pipeline to Italy. In both Algeria and Libya, Europe should urgently help tap new fields and increase gas production. New pipelines under discussion currently focus on the Eastern Mediterranean Pipeline Project, which would bring gas from Israel’s offshore gas fields to Europe.

But the biggest African sources lie south of the Sahara–including Nigeria, which has about a third of the continent’s reserves, and Tanzania. Senegal has recently discovered major offshore fields. 

Ramachandra says Europe should not ignore these opportunities. For instance, the proposed Trans-Saharan pipeline will bring gas from Nigeria to Algeria via Niger. If the project is completed, the new pipeline will connect to the existing Trans-Mediterranean, Maghreb-Europe, Medgaz, and Galsi pipelines that supply Europe from transmission hubs on Algeria’s Mediterranean coast. The Trans-Saharan pipeline would be more than 2,500 miles long and could supply as much as 30 billion cubic meters of Nigerian gas to Europe per year–equivalent to about two-thirds of Germany’s 2021 imports from Russia (For comparison purposes, the Yamal-Europe pipeline, one of the major routes for Russian gas to Europe, is 2,607-mile-long). On its part, Nigeria is enthusiastic about exporting some of its 200 trillion-cubic-foot reserves of gas, with Nigerian Vice President Yemi Osinbajo arguing in favor of natural gas’ critical role, both as a relatively clean transition fuel and as a driver of economic development and foreign exchange earner.

Unfortunately, the Trans-Saharan pipeline will likely take a decade or more to complete, and LNG shipments to Europe would bring quicker relief.

Unfortunately, Europe’s biggest gas importer, Germany, has not built a single LNG import terminal as part of its  policy to make the country dependent on Russian gas and in turn make Russia more dependent on Germany. But there’s hope: Berlin has already renounced its old ways and says it will now build LNG infrastructure. 

Luckily for Germany and other stranded EU nations, Ramachandran says LNG loading ports can be built reasonably quickly in Africa, with the Greater Tortue Ahmeyin field, an offshore gas deposit straddling the maritime border between Senegal and Mauritania, a prime example. When the field comes online next year, it will place the two west African nations among Africa’s top gas producers. Floating liquefaction plants above the offshore gas field produce, liquefy, store, and transfer the gas to LNG tankers that ship it directly to importing countries. While the initial production from this field will be small, it is slated to double in a few years, and the field sits within a larger basin of natural gas with substantially greater reserves.

Elsewhere in Africa, too, gas production will continue to expand as projects in Tanzania, Mozambique, and other countries come online in the next few years.

Developing a gas pipeline as big as the Trans-Saharan pipeline will likely present many challenges as it runs through regions plagued by conflict and insurgency. But these kinds of projects could alleviate Europe’s energy crisis while also helping Africa to develop and integrate economically.

A top sanitation company has been accused of employing at least 31 children to clean the killing floors of slaughterhouses during graveyard shifts – one as young as 13, according to the Department of Labor.

The company, Packers Sanitation Services, or PSSI (owned by Blackstone), is contracted to work at meatpacking facilities and slaughterhouses across the country. According to court documents filed Wednesday, the children were allegedly employed at three facilities in Nebraska and Minnesota, NBC News reports.

The company employs over 17,000 employees at more than 700 locations across the country, according to PSSI’s website.

The investigation found that minors cleaned the killing floors and various machines — including meat and bone cutting saws and a grinding machine — during the graveyard shifts, according to the complaint.

PSSI employed at least a dozen 17-year-olds across the three slaughterhouses, fourteen 16-year-olds, three 15-year-olds, one 14-year-old and one 13-year-old, the complaint said. -NBC News

According to the complaint, an Aug. 24 investigation was launched after law enforcement officials were tipped off that the company may be employing children. Search warrants were executed at two plants owned by food processor JBS USA in Grand Island, Nebraska and Worthington, Minnesota – and at a poultry processing plant in Minnesota.

If true, the practice would violate the Fair Labor Standards Act, which prohibits employers from “oppressive child labor,” as well as minors from working in any type of hazardous employment, reads the complaint, which asks the Federal District Court of Nebraska to issue a temporary restraining order as well as a nationwide preliminary injunction against the company to stop it from employing minors while the Labor Department investigates.

Initial evidence indicates the company may also employ more kids under similar conditions at 400 other sites across the country, in addition to the 31 minors employed at three sites that investigators already confirmed, according to the complaint.

The court partially granted the Department of Labor’s request in a Thursday filing. That order requires PSSI to “immediately cease and refrain from employing oppressive child labor” and comply with the Department of Labor’s investigation. -NBC News

According to PSSI, the company “has an absolute company-wide prohibition against the employment of anyone under the age of 18 and zero tolerance for any violation of that policy —period,” with a spokesperson adding that the company mandates the use of the federal E-Verify system when it comes to new hires, “as well as extensive training, document verification, biometrics, and multiple layers of audits.”

“While rogue individuals could of course seek to engage in fraud or identity theft, we are confident in our company’s strict compliance policies and will defend ourselves vigorously against these claims.”

Company executives were reportedly “surprised” by the filing, after PSSI says it “has been cooperating with their inquiry, producing extensive documents and responses.”

Interviews with the kids — which were conducted in Spanish, their first language, according to the complaint — revealed that several children began their shifts at the facilities at 11 p.m. and worked until 5, 6 or 7 a.m. Some worked up to six or seven days a week.

School records showed that one 14-year-old, who worked at the Grand Island facility from 11 p.m. to 5 a.m. five to six days a week, from December 2021 to this past April, fell asleep in class and missed school after suffering injuries from chemical burns. At least two other minors also suffered chemical burns, the complaint states. -NBC News

“While Wage and Hour is continuing to pour over records to identify such children, it is slow, painstaking work. Yet, the children working overnight on the kill floor of these slaughterhouses cannot wait,” states the complaint.

For much of the past year (and certainly at the time, more than a year ago, when the so-called experts, central bankers and macrotourists were still yapping about “transitory inflation” and other things they were wrong about and do not understand), we were warning that at some point the Fed will realize that it is simply impossible to contain supply-driven inflation through stubborn rate hikes which instead would lead to a dire alternative – millions in mass layoffs and newly unemployed workers – and will revise its 2% inflation target higher, a move which will send every risk asset, from high-beta trash and meme stonks, to blue-chip icons, to bitcoin and cryptos, limit up.

To remind readers of this coming phase shift, we most recently warned in June that “at some point Fed will concede it has no control over supply. That’s when we will start getting leaks of raising the inflation target“…

At some point Fed will concede it has no control over supply. That’s when we will start getting leaks of raising the inflation target

— zerohedge (@zerohedge) June 21, 2022

Well, it turns out that we were right, and not just about the coming mass layoffs…

Layoffs This Month (% of Workers):

1. Twitter: 50%

2. Cameo: 25%

3. Robinhood: 23%

4. Intel: 20%

5. Snapchat: 20%

6. Coinbase: 18%

7. Opendoor: 18%

8. Stripe: 14%

9. Lyft: 13%

10. Shopify: 10%

11. Meta: “Thousands”

12. Apple: Hiring Freeze

13. Amazon: Hiring Freeze

— The Kobeissi Letter (@KobeissiLetter) November 8, 2022

… but also about the inflation target leaks. But first, lets back up a bit.

A little over one year after nobody expected the Fed would be hiking rates like a drunken sailor until some time in late 2023 or 2024, it has now become fashionable to not only predict that the Fed will keep hiking rates at every FOMC meeting and at the fastest pace since the near-hyperinflation of the 1980s, but that the central bank will somehow manage to avoid a hard landing (i.e., the hiking cycle won’t end in a recession or depression), even though every single Fed tightening cycle since 1913 has ended in disaster.

An example of this was the statement by former Fed vice chair (and PIMCO’s “twice-revolving door”) Rich Clarida, who told CNBC that “failure is not an option for Jay Powell,” adding that “I think they’re going to 4% hell or high water. Until inflation comes down a lot, the Fed is really a single mandate central bank.”

“Failure is not an option for Jay Powell,” says Former Fed Vice Chair Richard Clarida. “I think they’re going to 4% hell or high water. Until #inflation comes down a lot, the Fed is really a single mandate central bank.” pic.twitter.com/4hfLCVWZDP

— Squawk Box (@SquawkCNBC) September 9, 2022

Of course, if one could hike rates in a vacuum that could work – after all, Clarida himself, who admits he got this year’s soaring inflation dead wrong when he was still a daytrading god and part oft he Fed in 2021, said that the Fed may as well have just one mandate, namely to tame inflation. But what so few seem to recall is that the Fed is “hiking to spark a recession“, or as CNBC’s Steve Liesman put it, there is no such thing as “immaculate rate hikes” meaning that rate hikes have dire tradeoffs in other sectors of the economy. In other words, if the Fed’s intention is to spark a recession, it will spark a recession… leading to millions of Americans losing their jobs, something which even Elizabeth Warren appears to have grasped.

SENATOR WARREN SAYS SHE IS VERY WORRIED THAT FED IS GOING TO TIP ECONOMY INTO RECESSION

Looks like someone didn’t read Chairman Doom’s speech https://t.co/wQALP1aA3Y

— zerohedge (@zerohedge) August 28, 2022

Yet due to the recency bias of Biden’s trillions in stimmies, and a world where workers – whether working form home or the office – have virtually all the leverage, few today can conceive of a world where inflation is zero or negative and is instead replaced with millions in unemployed workers, an outcome which one could (or rather should) say is even worse for the ruling democrats than roaring inflation. At least, with runaway prices, most people have a job and their wages are rising (at least nominally, if not in real terms).

However, the higher rates rise, the closer we get to that inevitable moment when the BLS – unable to kick the can any longer – admits what has been obvious to so many for months: the US is facing a labor crisis of epic proportions with millions and millions of mass layoffs. And for those to whom it is not yet obvious, we urge readers to re-read a WSJ op-ed published two months ago by none other than Jason Furman, who was Obama top Economic Adviser from 2013-2017 and currently economic policy professor at Harvard.

In “Inflation and the Scariest Economics Paper of 2022“, Furman summarized a paper written by Johns Hopkins macroeconomist Larry Ball with co-authors Daniel Leigh and Prachi Mishra of the International Monetary Fund released by the Brookings Papers on Economic Activity, whose conclusion is as follows: “To bring price increases down to 2%, we may need to tolerate unemployment of 6.5% for two years.“

In other words, just as we said, inflation – much of which is supply-driven, which the Fed can do nothing about – will force the Fed to crush the economy by keeping rates for much longer, the result of which will be many millions in unemployed workers, or as Furman puts it, the paper “shows why the Federal Reserve will likely need to maintain its war on inflation, even if unemployment continues to rise.”

What is more remarkable about Furman’s read of the economist paper is that in addition to its primary theme (the lack of labor slack, or labor tightness, is responsible for some 3.4% of underlying inflation in July 2022), the paper admits precisely what we have been saying all along – that the Fed can’t control supply-side variables:

The paper also argues, convincingly in my view, for a different measure of underlying inflation. Fluctuations in energy and food prices are generally due to factors outside the control of macroeconomic policy makers. Geopolitics and weather have elevated the inflation rate in recent years. Plunging gasoline prices are temporarily lowering the inflation rate now. That’s why economists since the 1970s have focused on “core” inflation, which excludes food and energy.

But food and energy aren’t the only things people buy that are subject to supply-side volatility. Prices of new and used cars, for example, have gyrated over the past two years for reasons that are mostly unrelated to the strength of the overall economy. Both regular and core inflation are based on taking averages of price increases and can be distorted by large changes in outlier categories. The median inflation rate calculated by the Federal Reserve Bank of Cleveland drops outliers to remove these distortions.

According to Furman, median inflation – which is a statistically better measure of the underlying inflation that policy makers can actually control – is well above the Fed’s preferred headline inflation print and still shows little signs of moderating and has run at a 6.3% annual rate in the last three months. But the “scariest” part of the new paper, Furman reveals, is when the authors use their model to forecast the unemployment rate that would be needed to bring inflation down to the Fed’s 2% target. He explains why this is so scary:

The authors present a range of scenarios, so I ran their model using my own assumptions…  Under these assumptions, which are more optimistic than the authors’ midpoint scenario, if the unemployment rate follows the Federal Open Market Committee’s median economic projection from June that the unemployment will rise to only 4.1%, then the inflation rate will still be about 4% at the end of 2025. To get the inflation rate to the Fed’s target of 2% by then would require an average unemployment rate of about 6.5% in 2023 and 2024.

Under these scenarios if the unemployment rate rises to 4.1% then inflation will stay above 3%. If it rises to 7.5% then inflation will slightly undershot the Fed’s target.

The unemployment rate needed to hit the Fed’s target in this scenario is 6.4%. pic.twitter.com/ysUDUU6yaG

— Jason Furman (@jasonfurman) September 8, 2022

Where is unemployment now: it’s 3.7% (6.059 million unemployed workers vs 164.753 million civilian labor force). This matters, because according to one of the most erudite economist Democrats, by the end of the Biden admin in 2024, the unemployment will have to soar to 6.5% for inflation to plunge to the Fed’s historical target of 2.0%

What does this mean in absolute numbers? Assuming a modest increase in the US labor force, a 6.5% unemployment rate in 2024 would translate into no less than 10.8 million unemployed workers, an 80% increase from the 6 million today!

Still think that politicians – and especially Democrats – will sit quietly and blindly ignore how high the Fed is hiking rates if it means that to normalize inflation back to 2% it means nearly doubling the number of unemployed Americans (and a crushing recession to boot). Spoiler alert: no, they won’t, and this may be one of the very rare occasions when Elizabeth Warren is actually right to worry about what the coming mass layoff wave means for Democrats… and the 2024 presidential election.

So what should the Fed do? Well, according to Furman, the Fed has four options:

1. First, place more emphasis on the ratio of job openings to unemployment and median inflation as it assesses the tightness of labor markets and the underlying rate of inflation.
2. Second, the new paper shows how much easier it will be to tackle inflation if expectations remain under control. The Fed should follow up on Chairman Jerome Powell’s tough talk at Jackson Hole with meaningful action such as a 75-basis-point increase at the next meeting.
3. Third, be prepared to accept the unemployment rate rising above 5% if inflation is still out of control.

While we doubt #3 is actionable, what is more remarkable is Furman’s final proposal: it’s the one that, like the Dude’s proverbial rug, ties the room together and sets the stage for what is coming:

Finally, stabilizing at a 3% inflation rate is probably healthier for the economy than stabilizing at 2%—so while fighting inflation should be the central bank’s only focus today, at some point the Fed should reassess the meaning of victory in that struggle.

And just in case his WSJ proves too complicated for some mainstream experts and economists, here it is in truncated, twitter format:

(iii) Seriously consider raising the inflation target to something like 3 percent

This one is tricky. On a blank slate a 3% target would be better than a 2% target. But shifting to that could deanchor expectations.

— Jason Furman (@jasonfurman) September 8, 2022

And there you have it: remember what we said on June 21: “At some point Fed will concede it has no control over supply. That’s when we will start getting leaks of raising the inflation target.” Well… there it is.

We first brought all this up more than two months ago, on Sept 10, and said “that while mainstream economists and the market may require quite a few months to grasp what is coming, it is the only way out of a crisis of commodities – as Zoltan Pozsar has repeatedly and correctly put it – and which central banks have no control over, and thus will have to move not only the goalposts but the entire football field to avoid a social revolt or something even scarier.”

* * *

Well, it’s now a “few months” later, and we are delighted to note that our June 21 prediction that “At some point Fed will concede it has no control over supply. That’s when we will start getting leaks of raising the inflation target” is becoming more and more accurate by the day.

Consider the November 4 note from TS Lombard chief strategist Steven Blitz discussing “October US Employment” (available to pro subscribers in the usual place), in which contrary to widespread consensus (especially after the weaker than expected CPI print), Blitz says that the Fed remains on pace for a 75bps rate hike.

But while we will let readers parse his logic for why the dovish view is due for another disappointment, we will highlight his concluding paragraph in which he makes precisely the point we h

In the end, a recession is pretty much baked in by what the Fed has done, signalled, and will do. The overall imbalance between the supply and demand for labor is too much of a driver of inflation, through wages and, in turn, services ex shelter, for the Fed to stop now and say they have done enough. Powell, in fact, was very clear there is much more to do. This does not negate the  fact that the coming downcycle will greatly impact those that AIT [average inflation targeting] was seeking to protect and are only just getting closer to even in terms of employment. None of this changes the Fed’s coming actions, what this coming hit to employment does mean is that the political cycle for the Fed is about to get a lot hotter – from all sides. This is one reason why I have long believed, as have many others, that the Fed ultimately bails and raises the inflation target to 3%. Powell does not have the same license to keep unemployment high and real growth low for an extended period as did Volcker (more so in retrospect than at the time). My guess is, Powell knows that.

Much more in the full must-read note available to pro subs.

But while the opinions of Furman and Blitz are notable, they are hardly (with all due respect) critical thought-leaders for US policy. Goldman Sachs, on the other hand, is. Which is why we were shocked when the vampire squid this weekend approached the topic aggressively, making it clear that an inflation target increase is no longer a matter of if but when.

While pro subscriber have access to the full note, we will excerpt some of the big highlights below, confirming that the debate about the coming inflation target raise is in its advanced stages:

The inflation target level debate

In the past few months, markets have been gyrating wildly, with views bifurcating along the paths of soft vs hard landing expectations for 2023. The moderation in the October core inflation print is an important landmark as it reduces the risk of the most adverse sticky and high inflation (6-10%) scenario which leaves the G10 central banks no other option but to crush demand.

How does 3.5-5% inflation allow for policy scenario optionality? Given that most would agree that a fast reduction in inflation to 2% is unlikely we can now have a debate whether raising the G10 inflation target to the 3-4% range is more optimal for reasons of maintaining employment levels or public debt sustainability than the 2% goal which would not be possible if inflation was sticky in the 6-10% range. (see “To keep unemployment low, central banks should plan to raise inflation target” by J Gagnon).

The premise of this debate (and we mean debate by market participants and not, or at least not yet, by central bankers) is that the shift in the global supply curve to the right (de-globalization / underinvestment / tariffs and sanctions) has probably moved the saddle point of the supply curve defining the inflation level at potential output from 2% to the 3.5-5% range. (see diagram on slide 3).

If this is the case, slowing the economy to potential will not satisfy the 2% inflation target. As the supply curve flattens at negative output gap levels, the output and social cost of bringing inflation to 2% increases disproportionately, creating the political context for the inflation target level revision debate.

Goldman next lays out the dilemma facing politicians and central banks in no uncertain terms: keep the inflation target unchanged and suffer economic and market devastation, or raise it and enjoy another (however brief) Golden Age. Take a wild guess which option politicians whose careers are measured in “next four year” increments will pick:

Our very stylized global macro financial framework sees scope for a significant divergence in the growth/inflation/fiscal outcomes in 2023 based on the level of the front end real rates (1y fwd rate futures – 5y BEI) which will be defined by the G10 central banks’ adherence to or departure from the 2% inflation target. If front end real rates are significantly lower from here (ie G10 CBs signal a pause in Q1-23, and break-evens go up meaningfully with the CBs remaining on hold) we see:

• real growth rebounding,
• G10 inflation moderating to 3.5-5.0 range allowing for ongoing fiscal consolidation and
• reduction in public debt/GDP levels,
• equities rallying,
• weaker dollar,
• credit spreads tightening and capital flows returning to EM assets

If front end real rates keep tightening from here (G10 CBs keep hiking until the 2% core inflation looks clearly within reach with the first indication being much higher Fed dots for 2023 in Dec) we see:

• real growth collapsing in H1-23,
• inflation reaching but also possibly undershooting the 2% target and the fiscal position deteriorating with public debt / GDP ratios going higher.
• The current challenging environment for risky assets will persist in this environment until policy turns for recession stabilization.

There’s more in the full must-read GS note (also available to pro subs), but that, in a nutshell, is the simple choice that is now being actively discussed behind closed doors at various G7/G20 and BIS/Tower of Basel meetings until the inevitable decision is made.

Professional subs can find much more on this arguably most important for the future of market topic here and here.

By Eric Peters, CIO of One River Asset Management

“Keep me posted when anything material pops up,” I told our team, scanning Twitter feeds for developments in the unfolding FTX drama, everything moving fast. “This is unlike anything I’ve seen in my 33yrs of doing this,” I said. “It has hints of many crises – Lehman, Enron, Madoff, MF Global – but moving at light speed with no lender of last resort. It’s like banking in the late-1800s.” We had no exposure to FTX or its token FTT, avoiding each for different reasons, intuitive/qualitative/quantitative risk management at work.

“This smells like the kind of thing that happens toward the bottom. Near the end. This is the kind of catalyst that ushers in the capitulation, the flush, that then leads to the next stage we’ve been building for: the first regulated market cycle in digital assets.”

* * *

“There was no way US policymakers were going to relax regulation to accommodate new technology,” said The Chairman, repeating advice he’s shared for a couple years, helping guide me through the innovation maze.

“If you want to introduce new technology into financial markets, you need to start with the premise that it performs the regulatory functions at least as well as the current technology,” he continued. FTX was imploding in the Bahamas, the crypto market’s third largest exchange collapsing in on itself, crypto markets in free fall.

“And only with that condition satisfied will you be able to capture the efficiencies these new technologies represent.” Creative destruction sounds great in a sentence, though less so when you live it, and this makes navigating change so interesting, worthy, profitable.

“With the FTX crisis following the Three Arrows collapse, Celsius, Luna and the others, this perspective will become a regulatory reality,” said The Chairman. “And the question for the industry and the regulators today is how do we transition from where we now are to a place where tokenization is consistent with the fundamental principles of sound financial regulation,” he said. “Those principles are:

1. liquidity transformation needs prudential regulation

2. customer assets need to be segregated and accessible, and

3. leverage of all forms needs to be limited and commensurate with liquidity in times of stress

“And it is fundamental that you can’t sell financial products to retail customers on a caveat emptor basis; transparency and a level informational playing field are necessary,” the Chairman added.

“The US has a choice now, and there is only one to make. Regulators must incrementally accommodate crypto products, making way for the products, actors, and services that comply with these fundamental principles while keeping out the others. Identifying what is in and what is out has been bogged down in semantics and in the search for regulatory gaps,” he said.

“The key financial regulators should collectively move forward with the identification of compliant and non-compliant products as well as paths to compliance for those that can get there. And wherever the US draws the line, people will be disappointed. That’s okay. That’s part of bringing discipline to activities that are out of step. What’s not okay is to do nothing and cede many of the opportunities that crypto represents to our competitors and adversaries, while subjecting our retail investors to the risk.”

The Miami Heat “terminated” all business relations with the bankrupted FTX crypto exchange, despite signing a two-decade $135 million deal last year to name the sports stadium “FTX Arena.” The team announced Friday they’re searching for a new stadium sponsorship partner, while the adult company “Bang Bros” tweeted out their offer to name the area “Bang Bros Center (The BBC)” still stands. 

“The reports about FTX and its affiliates are extremely disappointing,” Miami Heat tweeted out in a statement, adding, “Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX. We will be working together to find a new naming rights partner for the arena.”

Miami-Dade County and the Miami HEAT have released the following statement pic.twitter.com/ERZo1IsZ2o

— Miami HEAT (@MiamiHEAT) November 12, 2022

With the stadium naming rights in the air, Bang Bros tweeted its $10 million offer for the naming rights still stands. 

In a tweet, the adult film company posted two images of the stadium, one with “Bankrupt” across the top picture that also said “OOOPS!” And right below it, a photoshopped Bang Bros’ logo was placed on top of the stadium, with a caption that read, “BUT HEY! OUR OFFER STANDS! … WE PROMISE LESS PEOPLE WILL GET F@$%ED!”

In another tweet, the company said their “offer still stands to buy the naming rights” of the stadium.

Our offer for the naming rights still stands ! They should take our deal! https://t.co/pZEtTltEvn@BillyCorben @ONLYinDADE

— BANG BROS (@BangBrosDotCom1) November 11, 2022

Bang Bros, based out of Miami, tried to purchase the stadium’s naming rights in 2019. Here’s what they said in a tweet back then:

“We’ve officially Submitted our $10,000,000 bid for the naming rights to the Miami Heat Arena. We wish to thank American Airlines for their past support of the HEAT. We intend to change the name to the BangBros Center aka ‘The BBC.'”

Twitter users had a field day with Bang Bros’ tweets:

“Well BangBros arena it is smh this is where we are in the movie Idiocracy thx a lot @SBF_FTX a reality star for president, was the beginning of this alternate time, I think & it appears it can actually keep getting worse this is crypto 2022 god damn who would thunk it in 2013,” one Twitter user said. 

“After the fraud and disaster that was FTX, they should accept this,” another person said. 

“Should’ve gone with Bang Bros back in 2019. Everyone knew FTX was a house of cards. Bang Bros won’t be filing for bankruptcy any time soon,” someone else said. 

“This only has a chance of happening because its Florida,” a Twitter user said.  

Authored by Jonathan Turley,

Parental rights are becoming one of the defining issues for 2024. Building from Glenn Youngkin’s 2021 gubernatorial victory in Virginia, school boards races and educational initiatives have become some of the most fiercely contested areas on local and state ballots. Rep. Eric Swalwell (D., Cal.) weighed in this week into the area with a curious attack on parents demanding more say in the education of their children.

The California Democrat insisted that it is akin to “Putting patients in charge of their own surgeries? Clients in charge of their own trials?” These were curious analogies to draw since patients and clients are in charge of the key decisions in their surgeries and trials. What Rep. Swalwell is missing is called informed consent.

Swalwell is a lawyer with a degree from the University of Maryland Law School.

He took to Twitter to lash out against parents who dare challenge aspects of the education of their children. The tweet came in response to South Carolina GOP Sen. Tim Scott saying that Republicans intend to put “parents back in charge of their kids’ education.” Swalwell declared such a notion to be ridiculous:

“Please tell me what I’m missing here. What are we doing next? Putting patients in charge of their own surgeries? Clients in charge of their own trials? When did we stop trusting experts. … This is so stupid.”

As a threshold matter, it is important to note that parents have always had a say in the education of their children. School boards are invested with the authority to dictate changes in curriculum and teaching policies.

Indeed, in Meyer v. Nebraska (1925), the Court struck down a state law prohibiting instruction in German. In the decision, it stressed that parental roles in the education of their children was an essential part of the protections under the Constitution’s Due Process Clause: the right “to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men.”

Putting that historical and constitutional context aside, Rep. Swalwell is equally mistaken in his analogies to the medical and legal professions. In reality, patients and clients do control major decisions over their cases. Since he asked for assistance, let’s deal with each in turn.

Patients and Medical Consent

From the outset, the argument that patients do not make the key decisions on their own medical care is a bit incongruous given Swalwell’s support for abortion rights without any limits. (Swalwell was widely criticized for a campaign commercial showing a women being arrested at a restaurant by police with guns drawn under suspicion of having an abortion). While women clearly consult with doctors, the whole premise of “my body, my choice” is that these decisions are left to women, not the doctors or the state.

Parents are asking for consent in the basic goals, material, and methods used the education of their children.

American torts have long required consent in torts. Indeed, what Swalwell seemed to suggest would be battery for doctors to make the key decisions over surgical goals or purposes. Indeed, even when doctors secured consent to operate on one ear, it was still considered battery when they decided in the operation to address the other ear in the best interests of the patient. Mohr v. Williams, 104 N.W. 12 (Minn. 1905).

In Canterbury v. Spence, 464 F.2d 772, 784, the court observed:

“Nor can we ignore the fact that to bind the disclosure obligation to medical usage is to arrogate the decision on revelation to the physician alone. Respect for the patient’s right of self-determination on particular therapy demands a standard set by law for physicians rather than one which physicians may or may not impose upon themselves.”

Thus, doctors in the United States do have to secure the consent of patients in what they intend to do in surgeries or other medical procedures. (There are narrow exceptions such things as “substituted consent” or  emergencies that do not apply here).

Ironically, California has one of the strongest patient-based consent rules. As the California Supreme Court stated in Cobbs v. Grant, 8 Cal. 3d 229 (1972):

“Unlimited discretion in the physician is irreconcilable with the basic right of the patient to make the ultimate informed decision regarding the course of treatment to which he knowledgeably consents to be subjected.

A medical doctor, being the expert, appreciates the risks inherent in the procedure he is prescribing, the risks of a decision not to undergo the treatment, and the probability of a successful outcome of the treatment. But once this information has been disclosed, that aspect of the doctor’s expert function has been performed. The weighing of these risks against the individual subjective fears and hopes of the patient is not an expert skill. Such evaluation and decision is a nonmedical judgment reserved to the patient alone.”

While obviously a patient cannot direct an operation itself, the doctor is expected to explain and secure the consent of the patient in what a surgery will attempt and how it will be accomplished. That is precisely what parents are demanding in looking at the subjects and books being taught in school. Moreover, that is precisely the role of school boards, which has historically exercised concurrent authority over the schools with the teachers hired under the school board-approved budgets.

Clients and Legal Consent

Swalwell is also wrong on suggesting that clients are not in charge of their own trials. Not only must attorneys secure the consent of their clients on what will be argued in trial but they can be removed by their clients for failure to adequately represent their interests. It would be malpractice for a lawyer to tell a client, as suggested by Swalwell, that they do not control the major decisions in their own cases.

Ironically, the informed consent rule in the law has been traced to its rise in the medical profession. It was adopted by bars to give clients the right to direct their own legal affairs. MODEL RULES OF PROF’L CONDUCT r. 1.7 cmt. 18. “Informed consent” is a defined term in the Model Rules. See id. r. 1.0(e) (defining “informed consent” as the “agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct”).

Obviously, lawyers must follow their own ethical and professional judgment in trials and tactical choices are generally left up to the lawyers. However, the main arguments and objectives of the trial remain for the client to decide. As one court explained in Metrick v. Chatz, 639 N.E.2d 198, 653-54 (Ill. App. Ct. 1994):

“An attorney’s liability for failing to advise a client of the foreseeable risks attendant to a given course of legal action is not predicated upon the impropriety of the recommended course of action; rather, it is predicated upon the client’s exposure to a risk that the client did not knowingly and voluntarily assume. Consequently, to establish the element of proximate cause, it is necessary for the client to both plead and prove that had the undisclosed risk been known, he or she would not have accepted the risk and consented to the recommended course of action.”

Much like the claim of parents, clients demand the right to reject a plan for trial and the arguments or means to be used at trial. This right of consent is ongoing and can be exercised at any point in the litigation.

Informed Consent

Of course, the key to informed consent is that parents are giving the information needed to secure their consent. School districts have been resisting such disclosures and pushing back on parental opposition to major curriculum or policy decisions.

I have previously stated my opposition to micromanaging classrooms. However, in public education, citizens vote to elect board members to be accountable for educational priorities and policies. In private education, citizens vote with their tuition dollars as well as through school boards. Most of these controversies involve major educational policies ranging from transgender participation on teams to the lesson plans viewed by many as extreme or political. Those policies go to the issues of educational priorities that have historically been subject to school board authority.

In other words, “what is missing here” is that Rep. Swalwell’s interpretation could constitute both medical and legal malpractice. It may also constitute political malpractice as both parties now careen toward the 2024 elections.

Dave Chappelle has once again managed to trigger just about everyone during his opening monologue as host of Saturday Night Live this weekend – including SNL staff members who reportedly extremely unhappy about his appearance.

Commentary ranged from Kanye West, Jews, and why Donald Trump won the 2016 US election.

Kicking things off, Chappelle read a note which said: “I denounce antisemitism in all its forms, and I stand with my friends in the Jewish community,” adding “And that, Kanye, is how you buy yourself some time.”

He then noted how Kanye, who now goes by Ye, ‘lost $1.5 billion in one day’ after speaking against Jews.

“I learned that there are two words in the English language that you should never say together in sequence. And those words are ‘the’ and ‘Jews,'” said Chappelle, who later said that it’s a game of ‘perception’ – “If they’re black, it’s a gang. If they’re Italian, it’s a mob. If they’re Jewish, it’s a coincidence and you should neeeever speak about it.”

He then turned his attention to politics, which included saying that Herschel Walker is “observably stupid,” and then explaining why Trump won the 2016 US election.

“He’s very loved. And the reason he’s loved is because people in Ohio have never seen somebody like him,” said Chappelle, who then described how the billionaire captured hearts and minds by admitting “I know the system is rigged because I use it.”

Of course, Chappelle then suggested that Trump was colluding with Russia (as opposed to the Obama DOJ, FBI, and Hillary Clinton setting him up), and suggested that Melania Trump “looks like the type of chick that James Bond would smash but not trust.” So he either sold out on that one or is woefully under-informed.

Unsurprisingly, the left was outraged:

As for the actual show itself, a “House of the Dragon’ parody appears to have been the most popular:

A new YouGov survey has found that 42% of Republicans and Republican-leaning independents would prefer Florida Gov. Ron DeSantis over former President Trump as the party’s 2024 presidential nominee.

Just 35% polled said they would prefer Trump over DeSantis.

That said, those who consider themselves “strong Republicans” were more likely to support a third Trump run (45%) over the Florida governor, while 43% said they would prefer DeSantis.

The difference was far more pronounced among the ‘Republican-leaning’ respondents, of which 45% preferred DeSantis vs. 21% for Trump. 38% of those who described themselves as “not very strong Republicans” prefer DeSantis, vs. 31% who picked Trump.

The poll comes after Trump lashed out at DeSantis following the governor’s resounding midterm victory last week – cementing his position as a top GOP candidate to run against Trump in the 2024 GOP primaries.

Trump nicknamed DeSantis “Ron DeSanctimonious” during a rally last week, before going further and releasing a statement in which he took credit for DeSantis’ political success.

The former president then suggested that he could share damaging private information about DeSantis “that won’t be very flattering” if the Florida governor runs in 2024, and that DeSantis is actually a RINO.

“I think if he runs, he could hurt himself very badly,” said Trump, adding “I know more about him than anybody — other than, perhaps, his wife.”

Authored by Caitlin Johnstone via Medium.com,

War criminal George W Bush and Ukrainian President Volodymyr Zelensky will be appearing at an event next week at the George W. Bush Presidential Center, in partnership with US government-funded narrative management operations Freedom House and National Endowment for Democracy. The goal of the presentation will reportedly be to address the completely fictional and imaginary concern that congressional Republicans won’t continue supporting US proxy war efforts in Ukraine.

CNN reports:

Former US President George W. Bush will hold a public conversation with Ukrainian President Volodymyr Zelensky next week with the aim of underscoring the importance of the US continuing to support Ukraine’s war effort against Russia.

The event, which will take place in Dallas and be open to the public, comes amid questions about the willingness of the former president’s Republican Party to maintain support for Ukraine.

“Ukraine is the frontline in the struggle for freedom and democracy. It’s literally under attack as we speak, and it is vitally important that the United States provide the assistance, military and otherwise to help Ukraine defend itself,” David Kramer, the managing director for global policy at the George W. Bush Institute, told CNN. “President Bush believes in standing with Ukraine.”

The Struggle for Freedom event will take place on Wednesday, in partnership with the Freedom House and the National Endowment for Democracy, at the George W. Bush Presidential Center.

NEW: President George W. Bush, Ukraine President Volodymyr Zelenskyy, and Taiwan President Tsai Ing-wen will participate in the Bush Institute’s Nov. 16 event on advancing freedom.

More from @kylieatwood @CNN: https://t.co/cGvBylur7G

— George W. Bush Presidential Center (@TheBushCenter) November 10, 2022

To be clear, there is absolutely no reality-based reason to believe Republicans will meaningfully shy away from full-scale support for arming and assisting the Ukrainian military. The proxy war has only an impotent minority of opposition in the party and every bill to fund it has passed with overwhelming bipartisan support. Some “MAGA” Republicans have claimed that funding for the war would stop if the GOP won the midterm elections, but they were lying; there was never the slightest chance of that happening.

Bush, you may remember, drew headlines and laughter earlier this year with his Freudian confession in which he accused Vladimir Putin of launching “a wholly unjustified and brutal invasion of Iraq — I mean, of Ukraine.” The fact that the president who launched a full-scale ground invasion which destabilized the entire region and led to the deaths of over a million people is now narrative managing for the US empire’s current aggressively propagandized intervention says everything about the nature of this war.

Also appearing with Bush will be the leader who’s slated to become the face of the US empire’s next proxy war, Tsai Ing-wen of Taiwan. CNN writes:

Taiwan’s President Tsai Ing-wen will also take part in the event next week. She will deliver a recorded message, in which she is expected to underscore that the struggle for freedom is a global challenge.

And sure, why not. If you’re going to manufacture consent for proxy warfare against multiple powers as your empire flails around frantically scrambling to prevent the emergence of a multipolar world, you may as well save time and promote them all on the same ticket.

Former President George W. Bush: “The decision of one man to launch a wholly unjustified and brutal invasion of Iraq. I mean of Ukraine.” pic.twitter.com/UMwNMwMnmX

— Sahil Kapur (@sahilkapur) May 19, 2022

Many people who support the US proxy war in Ukraine now recognize that the Iraq war was a horrific disaster, but Ukraine isn’t the good war, it’s just the current war. Western propaganda means people always oppose the last war but not the war that’s currently being pushed by the propaganda of today. The US provoking and sustaining its Ukraine proxy war is no more ethical than its invading of Iraq; it just looks that way due to propaganda.

It is only by the copious amounts of propaganda our civilization is being hammered with that this is not immediately obvious to everyone. In the future (assuming we don’t annihilate ourselves first), the propaganda will have cleared from the air enough for people to look back with clarity on 2022 and realize that they were lied to, yet again.

It’s easy to oppose the last war. It’s hard to oppose current wars as the propaganda machine is shoving them down our throats. Everyone’s anti-war until the war propaganda starts.

*  *  *

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