Authored by Victor Davis Hanson via AmGreatness.com,

A recent epidemic of airline near misses deserves both attention and reflection.

In mid-December, a San Francisco-bound United Airlines Boeing 777-200 airliner, just a little over a minute after taking off from Maui, Hawaii, suddenly dived. It lost more than half its altitude and came within 800 feet of crashing into the Pacific Ocean before pulling up.

About a month later, an American Airlines jet crossed the runway at New York City’s John F. Kennedy International Airport just as a Delta Air Lines plane was accelerating for takeoff. The two aircraft nearly collided.

Then in February, a FedEx cargo jet at the Austin, Texas airport just missed crashing into a Southwest Airlines airliner by a mere 100 feet.

The same month an American Airlines Airbus A321 was being towed out of the gate at Los Angeles International airport, and smashed into a bus carrying passengers between terminals, injuring five.

These near and actual accidents come amid a general landscape of aviation chaos.

After Christmas, Southwest Airlines simply canceled 71 percent of its flights. It blamed staff shortages due to storms. The airline seemed incapable of ensuring enough of their pilots, attendants, crews, and airport staff could get to work.

The Federal Aviation Administration in January canceled all flight departures from the United States for two hours due a computer safety system collapse. Thousands of additional flights were canceled, many for over 24 hours.

Something has gone terribly wrong.

Either the Department of Transportation and its Secretary Pete Buttigieg, or the head of the FAA, or the quality of either ground crews, pilots, or air traffic controllers — or all combined — are putting American travelers at mortal risk.

If not corrected, these near-death airline experiences and the near collapse of the U.S. commercial aviation system presage catastrophes to come.

Similar problems are plaguing the U.S. military.

On July 21, 2021 the Chairman of the Joint Chiefs of Staff Mark Milley assured the country that “The Afghan security forces have the capacity and capabilities needed to fight and defend their country.”

Those forces utterly collapsed in a matter of hours less than a month later.

On the eve of the war in Ukraine, the Pentagon wrongly warned Congress that Kyiv could fall within 72 hours of a general Russian invasion.

This month, the Defense Department officials apparently allowed a series of surveillance balloons to enter U.S. airspace. President Joe Biden claims he was advised by the military not to shoot down a Chinese survival balloon craft as it crossed with impunity much of the United States.

In the aftermath, Pentagon spokespeople gave incomplete, mutually contradictory, and absurd explanations for these serial violations of U.S. airspace, most likely perpetrated by the Chinese communist government.

The Pentagon likewise disputes details of recruitment shortfalls. But the military brass concedes that many branches of the military are still between a third to a quarter short of their recruitment goals — despite the military steadily lowering standards for enlistment. It denies that the new woke military culture has alienated future recruits, although polls suggest otherwise.

The same shortfall is true of U.S. weapon arsenals. Between cuts in the defense budget, poor procurement planning, incompetent administration, and massive arms shipments to Ukraine, the military suffers dangerously low inventories of anti-tank and anti-aircraft missiles, artillery shells, rockets, missiles, and mines.

America’s security, safety, prosperity, and postmodern lifestyles are not our birthright.

They are the dividends of centuries of prior hard work, unfettered freedom of speech, disinterested research, and a meritocracy.

Tamper with any of that and the system begins to fall apart.

The United States will then resemble the miasma we see in most of the world abroad where ideology suppresses free inquiry, political correctness warps research, and tribalism trumps meritocracy.

Many of the major airlines have established racial and gender quotes for government pilot training programs. United Airlines has set quotas to ensure half of its trainees will be minorities or women. Since 2013, the FAA has been lowering standards for air traffic control qualifications to achieve de facto race and gender quotas.

In testimony before Congress our top military brass has bragged not of their reduction in standards for enlistment, but of their “diversity” hiring, as they purportedly ferret out “white supremacy” and “white rage.”

In sum, our government is playing with our lives as it prefers diversity, equity, and inclusion over ensuring the best qualified employees are hired on the basis of racially and gender-blind competitive tests and experience.

Keep it up, and there are going to be a lot more Afghanistan-style surrenders, Chinese surveillance craft in our skies, and airline nightmares.

Authored by ‘Stephanie Sats’ via BitcoinMagazine.com,

Incorporating many of the values inherent in Bitcoin, the Nostr protocol could grow into a social media platform that better serves its users…

Despite the rapid rise of Bitcoin-focused conversation happening there, Nostr is not a social medium. Nostr is a social-serving, open protocol intended for liberated speech and communication.

The main point of distinction here comes down to this tool’s indifference, at least compared to many popular social platforms. Though the tech is fundamentally different from Bitcoin (more on this later), there’s key overlap: Nostr doesn’t care who you are, whether you follow a set agenda or how often you’ll feed an algorithm with attention.

Nostr acts more like aspiring, decentralized tech that may incentivize truth — with the help of Bitcoin.

THE CURRENT STATE OF SOCIAL MEDIA

Censorship is used to govern and mediate many social media platforms and services. The guardrails in place may feel arbitrary to consumers, prescribing a set of rules that differ from a user’s core values. Incentives are driven by the dollar — by companies run by fiat currency (which is issued by a government, and therefore inextricably tied to it).

There’s increasing weariness of algorithms aligned with monetary incentives and the entities running them that own our information. It’s easy for users to lose trust in advertisers and influencers alike, as their motives fuel the platform but remain unclear. I believe this comes down to the role of the user; we’re not always part of the collective that’s building it. And when we do contribute, we may not be profiting fairly — if at all.

On traditional social platforms, users who aren’t bothered by censorship may still feel overwhelmed by bots and spam. Others may flock to social platforms for gaming and community support, only to dodge and sift through scam messages. Algorithms are so in sync with our behavior and thought patterns that it’s becoming increasingly difficult to separate the product from the consumer.

We saw these sentiments unfold over the past year with Elon Musk’s takeover of Twitter and how divisive that was. We’ve seen it in kickback after Meta’s rebrand. Social media can be scary or divisive at best — but despite all of this, we still use it. So, for connection, growth and building… where should we go?

Of course, there are quality, encrypted communication platforms which offer more shielded, secure interactions… but I wouldn’t define these as “social networks” either. They often function as vehicles for private, secure communication instead of shared spaces.

SO, IS NOSTR THE ‘DECENTRALIZED TWITTER’?

First, let’s unpack this a bit and explain what Nostr is and is not, because to think it solves all of the problems of traditional social media may be somewhat naïve.

Nostr is for developers. It’s an open-source project for builders that serves as a broadcast platform and content hub aggregate. From the architecture alone, we can start to differentiate it from Twitter or any other existing platform.

This protocol is newly, actively developed — so while it tugs at the root of topics like free speech and privacy, the tech itself is in its nascent stages. Nostr aims to decentralize private communications and data while allowing us to interact in new ways. For all of those reasons, we should learn about it — perhaps in the same way some of us should have learned about Meta products before dishing our credentials.

WHAT MAKES NOSTR UNIQUE TO BUILDERS?

With Nostr, data is stored on relays. Anyone can run their own relay, which acts like a personal server or channel. Users can be in charge of their own relays and run them with very little cost upfront — but more on monetization later.

Users can kick people off of their relays, but there are various relays that individuals can join. If a relay owner doesn’t want to host a person’s messages, that user can simply move to another one. This is a key differentiator from censorship on Twitter or Meta, where posts and accounts can be removed or frozen for not conforming to the platform’s centrally-operated rulebook.

Any user can build their own client, which is the program or application that hosts messages and information. Clients can be used to access the internet and broadcast posts (or facilitate communication) with the help of public and private keys.

Nostr uses cryptographic signatures to keep communications secure; public and private key pairs are used to encrypt and send data. Similar to Bitcoin, the Nostr code functions as a protocol. Yet it’s important to point out that Nostr is not a type of blockchain technology. There’s overlap — these innovations use some similar tools to accomplish different things.

Nostr was made so builders can connect with the people they want to and broadcast information, but it’s not the same as a globally-connected, blockchain-based network like Bitcoin — where all nodes have to agree, or come to a consensus. That can work great for something that functions as a currency, but consensus doesn’t have as much of a use in Nostr’s social aspects. They simply use cryptography in different ways.

WHAT NOSTR DOES DIFFERENTLY

Nostr technology is modeled after a lot of social platforms in terms of what they’re used for: broadcasting information or sentiment to others (in community forums or one-off messages), direct communication and self-expression.

Because it is decentralized, Nostr is more censorship resistant because it’s not controlled by one entity, group or company. Nostr can be used for sharing all types of content — ideas, direct messages, blogs, newsletters or even some games.

You can think of the Nostr protocol as a “language” for computers to communicate with one another.

Instead of a post (“event”) going live via one central server, it’s sent to a specific indicated server(s), and other servers can pull the information from there. Nostr uses queries to store data, and that data is in a JSON format — similar to the social media we know today. But instead of a central server structure like Instagram or Twitter, Nostr is open source and allows for users to choose how and where data is used.

With Nostr, you can use your key to connect to or run a public relay to broadcast information, or to focus on smaller, more private communications. There are options, and the main point here is that a lot of these options are in the builders’ hands.

Using Nostr doesn’t take up lots of storage for data, either — there’s content, tags and key storage. Nostr is accessible because excessive storage isn’t needed, depending on your goal.

Although this might all sound kind of complex because there are new terms and a lot to learn about the protocol, the technology itself is simple — and simpler technologies tend to be easier to scale. Nostr could grow fast, and there are lots of use cases.

HOW NOSTR SCALES AND ADAPTS TO OUR SOCIAL LANDSCAPE

Because this tech adopts a simpler structure, the “look and feel” differs from social media that tends to automate experience. Engaging Twitter or Instagram involves a transaction of personal information for a smooth, unified (yet prescribed) app interface and user experience (UX) journey.

My personal experience using Nostr, as a newbie, helped further confirm just how different this tech is from any social media I’ve used. There are tradeoffs: I felt more self reliant in using my keys to initiate set up, and less concern about data management or corporate greed. On the flipside, the UX as a whole felt unfussy but graceless: a refreshingly no-frills approach to social exchanges.

I don’t view this as a positive or negative, per se, but I think some users will have a learning curve (or at the very least, an adjustment from highly-managed and moderated platforms). There’s no Nostr website or customer service to guide them along; it’s grassroots in its reach. This could certainly be a plus for the Bitcoin community, which thrives on mutual education and reciprocity. The lack of bells and whistles eliminates trust, and suggests developments on the individual and community levels.

The Nostr community is fledgling, which provides ample opportunity for growth and renewed personal social strategy. There’s also lots of exploring that a creator needs to initiate, since there’s a wide range of relays and clients available. Fewer guideposts can lead to confusion for some, but the tradeoffs are freedom of choice and self-directed learning.

As for privacy, users don’t have to give a set of personal identifiers in order to set up an account. This is, of course, a major differentiator for platforms that store, sell, track and centralize your data for corporate profit or control.

THE BITCOIN INCENTIVE

People are hopeful that Nostr will allow for free speech, resistant-censorship communication and rich community building, which goes hand in hand with the Bitcoin ethos.

Not only this, but there could be a monetary component built in parallel to Nostr that’s radically different from how other social networks behave in popular culture today — especially when it comes to centralized algorithms and ad incentives.

Since clients can filter material by choice, they may create all sorts of different algorithms to do this. There is potential for monetization of one’s hosted relay by charging fees via the Lightning Network, an especially exciting prospect for many Bitcoiners. Over time, we may see things like Fedimints incorporated in Nostr monetization practices as well.

This self-driven monetization structure can have major implications on bots, spam and bad actors in general, both on the user level and protocol level. In the way that Bitcoin’s protocol discourages bad actors by nature of its very code, Nostr developers are actively working to bake security and honest action into its technology.

For example, some builders are looking into implementing costs assigned to relays, as a paid model that incentivizes honesty and reliability via proof-of-work models. In this potential design, for someone to send messages, they would have to post collateral in order to do so. This way, if there’s a bad actor, the reward could potentially be retracted as a consequence.

Combined, this would allow for a type of social network that focuses more on building instead of censorship or centralized incentive structures.

Bitcoiner values (such as sovereignty, privacy and decentralization) and Nostr’s potential monetization structure work hand in hand, and this is why so many Bitcoin hopefuls are actively setting up their own nodes and planning ways to incorporate Nostr into their careers or lifestyles. Nostr speaks to the decentralized communication need that Bitcoin could likely never support on its own, even with Layer 2 scaling — since blockchain technology functions best as a proof-of-work cryptocurrency. Reciprocally, Bitcoin solves the monetary pitfalls that most social media inherits.

WHO’S IN CHARGE?

Media is material that anyone can share, and it should be up to individuals and communities to regulate materials.

For Bitcoiners, this boils down to a recurring conversation around decentralization. Individuals may find themselves abandoning certain familiarities (like regulations or convenience), in order to flourish on the decentralized end of the spectrum. When it comes to social media and communication, it’s up to the individual where to draw that line. Some feel safer relying on a nucleus of control calling the shots, whereas Bitcoiners crave full autonomy despite the fact that they now hold more of the responsibility.

Nostr is a new innovation, and there’s a lot to learn. There are aspects you might want to consider about this tech while doing your research and making your own decisions. Since Nostr is not surveilled by any one authority or watchdog, users may need to do more due diligence as they grow comfortable in accepting that responsibility. The Nostr protocol provides a stark, simple contrast to the high levels of censorship and guardrails that we’re used to seeing — which is what makes it an entirely separate entity from “social media” as we know it.

Four months ago, we were one of the very few outlets discussing Zero Days to Expiration (or 0DTE) options.

Fast forward to today when virtually everyone is eager to talk (in most cases, erroneously and with little understanding) about this phenomenon which has taken Wall Street by storm, and which – as we discussed last night – has become the scapegoat for every long and wrong analyst and strategist, who blames the frenzied purchases of same-day options for being… well, wrong in predicting doom and gloom for stocks.

8 years every most hated rally was “explained” with HFTs; 4 years ago it was gamma. Now it’s 0DTE

— zerohedge (@zerohedge) February 5, 2023

The best example of this emerged late yesterday when JPMorgan’s in house stock cheerleader-turned-permabear Marko Kolanovic not only blamed 0DTE (among other factors) for incorrectly calling an end to the rally since November, but went so far as to warn that 0DTE itself could catalyze a market crash and spark some $30 billion in selling (which, more importantly, whould finally make Marko right after being wrong for all of 2022 when he said every week to buy the dip, and 2023, when he flipped and has been saying to sell the rally).

Marko is not alone in blaming 0DTE for pushing the market higher. Speaking to Bloomberg TV, a bearish Academy Securities strategist Peter Tchir slammed 0DTE and said that “people are really literally gambling”, adding “it’s almost like watching a horse race.”

“Volumes have exploded,” said Tchir. “It’s why we’re seeing moves that just are amplified — so maybe something that would be a half-percent move based on the news becomes a 1.5% to 2% move and it’s going in both directions.”

Echoing verbatim what we said a week ago (when we joked that Wall Street strategists are now blaming 0DTE for being wrong, just as they blamed gamma squeeze for being wrong several years ago), Tchir said that “It reminds me a lot of what we were seeing about a year and a half, two years ago where you had those gamma squeezes,” Tchir said. During the meme frenzy in early 2021, day traders used short-dated options to bet that as the value of the shares got closer to an option’s strike price, dealers would have to buy more and more of the underlying stock.

Bottom line: there is a lot of noisy innuendo and even more scapegoating out there, yet little actual signal. Which is why we went straight to the derivatives experts, our partners at SpotGamma for the best explanation of what’s going on. They did not disappojnt.

Here is an excerpt from their primer:

The amount of attention being foisted back onto the 0DTE narrative is quite remarkable. It’s drawing in comments from macro pundits, and cries of “Volmeggedon 2.0″ (these are risks which we outlined back in October, in this Founders Note, and this video).

As we wrote in that October note, “Volmeggedon” is essentially just a “liquidity cascade” (as well covered by Newfound Research). We are working at a comprehensive SPX 0DTE study, but we wanted to share our key early views:

• 0DTE driven “Volmegeddon” moves have certainly already happened in single stocks. See “Meme Mania ’21” or the wild market movement just a few weeks ago.
• We do not agree with the idea that most 0DTE is being net heavily sold. There seems to be a desire to package 0DTE flow as “all retail” or “all sellers” but we believe it is a mix of strategies and entities (funds, retail, dealers).
• The risk from 0DTE (in our view) comes from a heavy imbalance (ex: too many non-hedgers short downside). We think a lot of 0DTE is one dynamic-hedger trading with another dynamic hedger, and/or underling replacement (i.e. buy calls instead of long stock). The place that would most likely drive a heavy imbalance is a large entity coming in with a big, well timed long 0DTE call or put position that elicits sudden, impactful hedging flow. “Accidental imbalance” is certainly a risk, but we think less likely.
• This “large actor” imbalance may have already happened at least once, see October 13th, 2022 when someone purchased ~$25mm of 0DTE calls which sparked at 5% market rally. Full discussion here.
• Finally, SPX 0DTE seems to currently be used to aggressively drive markets higher off of lows, as opposed to push markets to the downside. We hypothesize that traders which are long puts into weakness may be using 0DTE calls to gamma hedge.

Lastly, 0DTE is leading some to cry “the VIX is dead!”. The first-order line of thinking here is that because of the effects of heavy 0DTE volume, the VIX isn’t a relevant calculation. It is true that the VIX does only measure the value of SPX options 25-33 days to expiration. The point here isn’t whether or not the VIX is useful (we think it is), but it seems to be that the “VIX is dead” is a way of declaring that “0DTE is all that matters”. This, we think, is incorrect. The VIX likely isn’t doing much because of low hedging demand, and a decline in realized volatility.

If and when large institutions decide they need to start hedging, they will likely do so using options that expire farther out in time. These large flows are, again, something we have not seen for several months, during a time of increasing 0DTE flows.

Enter: “50 cent”. This name was bestowed upon a large trader that used to specialize (quite successfully) in buying VIX calls with a price of 50 cents. After a long hiatus, they’re back as you can see below with several large clips of May 50 strike VIX calls.

We’d also highlight the very large VIX call buying from last week, too.

The point here is that as portfolios add equity exposure, the need for meaningful hedges should increase, in turn. This adds volatility-potential during market downturns, possibly in a way which wasn’t seen in the back half of ’22. During times of fear and volatility driven by “real money” hedging, we suspect those 0DTE flows will suddenly subside.

President Joe Biden on Thursday will give remarks over a high-altitude Chinese balloon that his administration watched take off from China, traverse the United States – including over sensitive nuclear facilities, before it was shot down off the coast of South Carolina.

Biden will also discuss three other unidentified objects shot down by US fighter jets over North America, two sources tell Reuters.

Watch Live:

Thursday’s comments mark the most substantial made by the US president since the Chinese spy balloon was shot down on February 4 – which Biden said was “not a major breach.”

Including the first balloon, the US Air Force shot down four objects over the span of eight days, prompting the head of NORAD (North American Aerospace Defense Command) said that the Pentagon can’t rule out that a spate of unidentified objects shot out of the sky over the past week might be extraterrestrial in nature. 

“I’ll let the intel community and the counterintelligence community figure that out. I haven’t ruled out anything,” said US Air Force General Glen VanHerck, who oversees NORAD, during a Sunday press briefing at the Pentagon. “At this point we continue to assess every threat or potential threat, unknown, that approaches North America with an attempt to identify it.”

VanHerck said that, unlike the Chinese spy balloon, all three UFOs gunned down over the weekend were of a similar size and speed.

He added that the since the Chinese balloon was found in late January, the US adjusted its radar so it could track slower objects. He explained that this radar adjustment, plus the heightened state of alert following the Chinese balloon, explains the frequency of UFO sightings. –Daily Mail

“With some adjustments, we’ve been able to get a better categorization of radar tracks now,” said VanHerck. “‘and that’s why I think you’re seeing these, plus there’s a heightened alert to look for this information.”

The Air Force general added that after the Chinese balloon incident, the US had to adjust its radar to be able to track slower objects – which explains the spate of new UFO sightings and takedowns. This prompted concerns that the US Air Force may have missed untold numbers of UFOs in the past.

“The last 72 hours revealed to the public what was happening for years, unidentified aircraft routinely operating over restricted US airspace,” tweeted Sen. Marco Rubio (R-FL). “This is why I pushed to take this seriously and created a permanent UAP task force two years ago.”

Of note, a June report to Congress in 2021 noted 144 sightings by US military aviators dating back to 2004 – one of which was attributed to a large, deflating balloon. The rest were beyond the government’s ability to explain without more analysis. Meanwhile, 366 additional sightings were noted in a January report from the Office of the Director of National Intelligence – though most of them were things like drones, birds, balloons or other airborne clutter.

While it won’t tell us anything we don’t know – since it is two months delayed and we already get monthly updates from the Fed via the G.19 statement – this morning the NY Fed published its quarterly Household Debt and Credit report, which showed that total household debt in the fourth quarter of 2022 rose by 2.4% or $394 billion, the largest nominal quarterly increase in twenty years, to a record $16.90 trillion. Balances now stand $2.75 trillion higher than at the end of 2019, before the pandemic recession.

And the same chart broken down by age:

Every type of consumer credit increased in Q4, and here is a detailed breakdown:

• Mortgage balances rose by $254 billion in the fourth quarter of 2022 and stood at $11.92 trillion at the end of December, marking a nearly $1 trillion increase in mortgage balances in 2022.
• Home equity lines of credit rose by $14 billion to $340 billion.
• Student loan balances now stand at $1.60 trillion, up by $21 billion from the previous quarter. In total, non-housing balances grew by $126 billion.
• Auto loan balances increased by $28 billion in the fourth quarter, consistent with the upward trajectory seen since 2011.
• Credit card balances increased $61 billion in the fourth quarter to $986 billion, surpassing the pre-pandemic high of $927 billion.

“Credit card balances grew robustly in the 4th quarter, while mortgage and auto loan balances grew at a more moderate pace, reflecting activity consistent with pre-pandemic levels,” said NY Fed economic research advisor Wilbert van der Klaauw.

On the other end, mortgage originations, which include refinances, fell to $498 billion in the fourth quarter as a result of soaring rates.

Yet despite record high auto loan rates, the volume of newly originated auto loans was $186 billion, representing a slight increase from the previous quarter. This is something for the Fed to look into as it clearly shows that there is a breakdown in the (tighter) credit channel which is only impacting housing and not purchases of other debt-funded goods.

Aggregate limits on credit card accounts increased by $88 billion in the fourth quarter and now stand at $4.4 trillion, just to make sure the debt serfs can always access money they don’t have, and have to repay at a record high APR.

Separately, and also as a result of the surge in interest rates, the share of current debt becoming delinquent increased again in the fourth quarter for nearly all debt types, following two years of historically low delinquency transitions.

Mortgage loans considered in “serious delinquency” of 90 days or more rose to a rate of 0.57%, still low but nearly double where they were from the year prior. Auto loan debt delinquencies rose 0.6 percentage point to 2.2%, while credit card debt jumped 0.8 percentage point to 4%. The delinquency transition rate for credit cards and auto loans increased by 0.6 and 0.4 percentage points, respectively.

“Although historically low unemployment has kept consumer’s financial footing generally strong, stubbornly high prices and climbing interest rates may be testing some borrowers’ ability to repay their debts”, warned van der Klaauw.

The New York Fed also issued an accompanying Liberty Street Economics blog post examining credit card and auto loan delinquency, with a focus on borrowers by age. While delinquency transition rates appear relatively small, a closer look at the uptick reveals some signs of stress amongst younger borrowers who are beginning to miss some credit card and auto loan payments. 

Indeed as shown in the chart below, where the NY Fed changes the focus from balances to borrowers, by measuring the percentage of borrowers that transition into late delinquency during the quarter, credit catd delinquencies are becoming a major issue for young people. [the numerator is the number of borrowers who became 90+ days past due, and the denominator is the number of borrowers who were less than 90 days past due in the previous quarter]. Specifically, credit card borrowers are missing their payments and transitioning to 90+ day delinquency at a rate higher than they had before the pandemic. (These rates are higher than the balance-weighted ones shown in the Quarterly Report because low-balance borrowers are generally more likely to become delinquent.)

The chart disaggregates these rates by age, and we see that this is particularly true for younger borrowers who have surpassed their pre-pandemic rates, while for older borrowers, the rates are rising but have not yet reached their pre-pandemic levels.

The next chart shows the same calculation, but for auto loans. We see that there’s a similar trend, although auto loan performance at the person level remains slightly healthier than it had just before the pandemic for most age groups, but younger borrowers are struggling relatively more.

The Quarterly Report includes a summary of key takeaways and their supporting data points. Overarching trends from the report’s summary include: 

Housing Debt 

• There was $498 billion in newly originated mortgage debt in Q4 2022. After two years of historically high volumes of mortgage originations, the Q4 volume more closely resembles pre-pandemic volumes.   
• Although the foreclosure moratoria have been lifted nationally, new foreclosures have stayed very low since the CARES Act moratorium was put into place. About 34,000 individuals had new foreclosure notations on their credit reports. 

Student Loans  

• Outstanding student loan debt stood at $1.60 trillion in Q4 2022.
• Less than 1% of aggregate student debt was 90+ days delinquent or in default in Q4 2022. The sharp drop in the student debt delinquency reflects the beginning of the Fresh Start program, which marked over $34 billion defaulted loans as current, amid the continued repayment pause on student loans.  

And here is why the US consumer is “so strong” – when you don’t have to worry about repaying your student debt, well… you spend that money on other useless stuff.

Finally, who benefits from no longer paying student loans? Everyone

Here is the full NY Fed presentation (pdf link).

HHDC_2022Q4 by Zerohedge

Enhanced benefits for the Supplemental Nutrition Assistance Program (SNAP) are set to expire at the end of February. The reduction in food stamps will impact more than 30 million Americans in 32 states — many of these folks will face a “hunger cliff.” 

Bloomberg reported that once the enhanced benefits expire, families will receive at least $95 less per month. Some families could have a reduction of up to $250 per month. 

Households with children will, on average, lose about $223 per month, according to the Center on Budget and Policy Priorities, a nonpartisan research and policy institute. 

“Right now, people are really up against it.”

“There’s not a lot of cushions to absorb this,” said Ellen Vollinger, SNAP director at the Food Research & Action Center, an anti-hunger advocacy group.

Bloomberg mapped out the 32 states where enhanced benefits are ending. 

Recall that SNAP costs soared to a record $119.5 billion in 2022, according to data released by the USDA. 

Food stamp costs have erupted from $60.3 billion in 2019, one year before the pandemic, to a record-setting $119.5 billion in 2022.

In 2019, the average monthly per-person benefit was $129.83 in 2019, according to the USDA. That increased by 78% to $230.88 in 2022.

Even more intriguing is that the number of participants increased from 35.7 million in 2019 to 41.2 million in 2022…

And the increasing number of SNAP participants comes at a time when the Biden administration declared the best jobs market ever. 

What’s on the chopping block is part of the Biden administration’s welfare state. And many of these people who will see a reduction in benefits starting next month will have to partially fend for themselves in the worst inflation storms in a generation. Meanwhile, many of these folks have limited to no personal savings, maxed-out credit cards, and no safety nets. 

Vollinger has previously described the expiration of enhanced SNAP benefits as a “hunger cliff” and described the number of states set to cut food stamps as “stunning.” 

Food insecurity is set to rise even more. 

Perhaps the free ride is over for some SNAP recipients who might have to re-enter the labor market and find a job to cover expenses since the welfare state won’t be as generous as it once was. More people searching for work might raise the labor force participation rate and, in return, increase the unemployment rate — something the Federal Reserve desperately needs to cool off the red-hot jobs market. 

By Rachel Premack of Freightwaves,

One union of rail workers has questioned declining maintenance standards following the Feb. 3 Norfolk Southern derailment in East Palestine, Ohio, which forced the evacuation of the 5,000-person town earlier this month. 

A device that can play a role in preventing derailments is the wayside hot-box detector. It uses infrared sensors to detect bearings, axles or other components of a rail car that are overheating, then uses radio signals to flag rail crews of any overheated components. 

The rail car that initiated the derailment had an overheated wheel bearing, according to a Tuesday report from the National Transportation Safety Board. The NTSB is still investigating the cause of the derailment and will publish a preliminary report in two weeks. 

Wayside hot-box detectors — also called “hot boxes” — are typically placed every 25 miles along a railroad, according to a Federal Railroad Administration (FRA) report. Their use has contributed to a 59% decrease in train accidents caused by axle- and bearing-related factors since 1990, according to a 2017 Association of American Railroads study.

Declining head counts have led to these mechanisms receiving less preventative maintenance, according to an official from the Brotherhood of Railroad Signalmen union. 

The FRA has no regulations requiring the use or maintenance of hot boxes. 

A hot box in East Palestine notified the crew moments before the train derailed, according to the NTSB’s report. 

It’s unclear if any hot box prior to East Palestine notified crews. A surveillance video shared on Facebook from an industrial facility in Salem, Ohio, about 20 miles from East Palestine, suggests the train’s axle was already on fire. 

Norfolk Southern did not respond to a request for comment, and the FRA declined to comment on the record.

From 5 ‘electronic leaders’ to zero in derailment region

Specialized signalmen called “electronic leaders” specialize in maintaining devices like hot boxes.

As recently as three years ago, Norfolk Southern employed five electronic leaders in the area of its rail network that includes East Palestine. Today, it employs zero, according to Christopher Hand, director of research at the Brotherhood of Railroad Signalmen.

The area in question is Eastern Region North – Division B, shown in red on the map. It runs east to west from Mansfield, Ohio, to Harrisburg, Pennsylvania, and north to south from Morgantown, West Virginia, to Astabula, Ohio. It also includes rail track in Pittsburgh, as well as Youngstown, Ohio.

Hand said electronic leaders know hot-box detectors “inside out.” But the position, which typically requires years of experience and higher pay, has become less common at railroads across the country. Electronic leaders also taught newer signalmen how to operate devices like the hot boxes.

After that position was eliminated in Norfolk Southern’s Division B, Hand said its responsibilities were likely transferred to a signal maintainer. Their main role is to keep up with government-mandated tests of equipment — and hot boxes aren’t under federal regulations.  

“Once they eliminated that position, it fell to the signal maintainers who had no knowledge, no training or very, very little training on these hot-box detectors,” Hand said in an interview with FreightWaves.

Across the rail industry, Hand said most signalmen are exclusively spending time on these government-mandated tests, rather than doing preventive maintenance, like cleaning and greasing. 

“There used to be something called ‘maintenance’ and it was routinely maintaining your apparatus — not just strictly going there when you have a regulated test,” Hand said.

It’s the responsibility of the railroad to maintain the track and locomotives by which railcars move. However, these derailed cars were possibly owned by a leasing company or the actual shipper of the chemicals inside the railcar.

Lobbying efforts to scale back maintenance saved railroads hundreds of millions

Federal regulators have rolled back other rail safety rules. 

For years, the federal government required railroads to conduct a type of brake test on rail cars that had not been operated for four or more hours. As of 2020, rail operators may wait up to 24 hours to conduct this test.

The Association of American Railroads, an industry association that includes Norfolk Southern, lobbied for this change starting in 2017, according to the Federal Register. The FRA estimated that changing this rule would save the rail industry nearly $600 million over a 10-year period.

The Association of American Railroads was also key in rolling back Obama-era legislation that would have required railroad companies to update their braking systems from a 19th-century design to an electronic one, as the Huffington Post reported on Wednesday.

On the same day as 99-year-old Charlie Munger reiterated his hatred for crypto, mumbling that he’s not proud of his country for allowing this “crap”, the price of bitcoin (and other major coins) is soaring.

“Well, I call it crypto shit. It’s worthless, it’s no good, it’s crazy, it’ll do nothing but harm, it’s antisocial to allow it,” Munger said during a live-streamed interview for the Daily Journal.

The last 36 hours have seen Bitcoin surge from below $22,000 to above $25,000…

Source: Bloomberg

Hitting its highest intraday level since June 2022…

Source: Bloomberg

It’s not just Bitcoin of course as Ethereum is ripping higher too, almost at $1750 (its highest since Sept 2022)…

Source: Bloomberg

CoinTelegraph reports that on-chain data indicates the current price momentum can be traced back to a mysterious fund that started pouring money into the crypto market on Feb. 10.

According to data from Lookonchain, nearly $1.6 billion in institutional funds have flowed into the crypto market over the past six days. Most of the $1.6 billion flowed from stablecoins, especially Circle-issued USD Coin. The owner of the funds first withdrew their USDC from Circle and then sent it to various exchanges.

USDC withdrawal from Circle. Source: Lookonchain

There were three notable wallets whose funds were traced from Circle to various exchanges.

First, a wallet address starting with “0x308F” withdrew 155 million USDC from Circle and transferred to exchanges since Feb. 10. The second wallet address starting with “0xad6e” withdrew 397 million USDC from Circle and sent it to various exchanges, and a third wallet starting with “0x3356” withdrew 953.6 million USDC from Circle and transferred to exchanges around the same time.

Wallets moving funds from Circle to exchanges. Source: Lookonchain

Additionally, Galaxy Digital Holdings CEO Mike Novogratz believes there’s a chance Bitcoin could return to $30,000 or above before the end of March.

According to a Feb. 15 Bloomberg report, Novogratz spoke at a Bank of America conference the same day and said he would’ve been the “happiest guy” if 2022 ended with BTC at $30,000, but added:

“When I look at the price action, when I look at the excitement of the customers calling, the FOMO building up, it wouldn’t surprise me if we were at $30,000 by the end of the quarter.”

The prediction is much lower than others Novogratz has made in the past. The Galaxy CEO once believed that Bitcoin could reach $500,000 by the end of 2027 if the United States Federal Reserve kept hiking interest rates.

In a bit of an about-face for Washington based on past officials’ more aggressive posture, US Secretary of State Antony Blinken now says the administration is not actively encouraging Ukraine to seize Crimea. 

Politico reports of his words that “A Ukrainian attempt to retake Crimea would be a red line for Vladimir Putin that could lead to a wider Russian response, Secretary of State Antony Blinken said in a Zoom call with a group of experts Wednesday.”

Specifically the top US diplomat said America is not “actively encouraging” Ukraine to liberate Crimea from Russia, the Wednesday report said.

Instead, any potential future Crimea offensive will be “Kyiv’s decision alone” – this despite a recent past history of rhetoric out of both Republican and Democratic administrations which have continually asserted over the years that “Crimea is Ukraine.”

The response was prompted by a reporter’s question on whether or not the US would assist Ukraine in retaking all territory previously seized by pro-Kremlin forces. Politico details more of Blinken’s response as follows:  

Blinken, according to two of the people, gave the impression that the U.S. doesn’t consider a push to retake Crimea to be a wise move at this time. He didn’t say those words explicitly, they underscored.

Two other people didn’t take Blinken’s comments that way. The secretary remarked that it is solely the Ukrainians’ decision as to what they try to take by force, not America’s. That signaled to them that Blinken was more open to a potential Ukrainian play for Crimea.

All of this comes as Western media and officials reluctantly acknowledged that Russian forces have the upper hand in Donetsk and are poised to take the strategic city of Bakhmut, having it surrounded.

Meanwhile, NATO secretary general Jens Stoltenberg this week issued a rare admission concerning the history of the Russia-Ukraine conflict. 

Stoltenberg admitted that the war in Donbass has been going on since 2014 – which appears to validate a key aspect of Russia’s framing of the conflict narrative and why Putin ordered the invasion:

🇺🇸🇪🇺🇺🇦🇷🇺”NATO has been training the Ukrainian military since 2014, NATO partners have been supplying the Ukrainian armed forces with the necessary weapons and training since 2014″ — Jens Stoltenbergs admits again

“Unprovoked invasion”… pic.twitter.com/Qa8shKSWXx

— AZ 🛰🌏🌍🌎 (@AZgeopolitics) February 14, 2023