Update(1600ET): Brazilian President Jair Bolsonaro finally spoke publicly for the first time since losing Sunday’s election by a narrow margin. Many expected, or were hoping, for a concession speech – but that didn’t happen. But it appears the short press event itself was all about the optics of accepting the loss.

He vowed to “follow the Constitution” and called for “order” in the country- and yet didn’t explicitly concede nor did he congratulate declared winner Lula da Silva on victory for the Brazilian presidency, which he’s expected to take over on January 1st. At the same time Bolsonaro didn’t contest the result either. 

As one Brazilian national outlet said of the very short speech, “Jair Bolsonaro has not said whether he will accept the election result. He didn’t mention Lula and he didn’t even congratulate the new elected president. It was a subtle pronouncement.”

At the lectern now: @jairbolsonaro. pic.twitter.com/IA8y5mQprn

— Steve Herman (@W7VOA) November 1, 2022

However, according to breaking news wires…

Brazil’s Chief Of Staff: To Begin Process Of Transition With President Lula

Meanwhile raging protests in some parts of the country continue, though they’ve reportedly waned in intensity and reach since the night prior…

ALERT: Truckers and other protesters on Tuesday blocked highways for second day in support of President Jair Bolsonaro, who has yet to accept his election loss to leftist Luiz Inacio Lula da Silva https://t.co/8AIjqSZ6Mv pic.twitter.com/AdSkVtY7Ui

— Insider Paper (@TheInsiderPaper) November 1, 2022

* * *

Incumbent Jair Bolsonaro has still not acknowledged his loss with any public statements over a day after Luiz Inacio Lula da Silva was declared winner of Brazil’s 2022 presidential election held Sunday.

Local media says President Bolsonaro, who is now expected to leave office by January 1st, has not so much as issued any official comments to government ministers. Lula da Silva said in front of a crowd of supporters while celebrating the historic win Sunday night, “Anywhere else in the world, the president who lost would have called me by now and conceded.”

Lula said he remains “part happy, part worried” about the transfer of power, given that “He still hasn’t called, I don’t know if he will and I don’t know if he will concede.”

As we detailed earlier, already many world leaders including those previously considered key global allies of Bolsonaro have called to offer their congratulations to Lula, including Russia’s Vladimir Putin and China’s Xi Jinping, among many others, as well as US President Joe Biden. 

CNN notes that the formal process of certifying the vote is underway: “It is Brazil’s Supreme Electoral Court that officially validates election results and communicates them to the Senate, Chamber of Deputies and State Assemblies.”

A number of major highways in Brazil blocked by truck drivers and other Bolsonaro supporters refusing to accept Lula’s victory in the elections

Many we spoke to are openly calling for a military takeover of the country… no sign of anything like that but it’s a tense situation pic.twitter.com/noFWc8MENX

— Secunder Kermani (@SecKermani) October 31, 2022

However that validation process is not completed yet: “A press officer for the Electoral Court told CNN that the vote’s results are already considered validated, since the court’s declaration of the outcome on Sunday. A court session at a later point will formally confirm the win, but no date has been set for it yet, he said,” according to the CNN report. 

Protests by Bolsonaro supporters against the election results – which saw Lula receive 50.9% to Bolsonaro’s 49.10% of the vote – have popped up reportedly in more than 100 locations. 

Bolsonaro supporters are claiming the election was “stolen”…

HAPPENING NOW: Things are developing quickly in Brazil, and not in a good way after the election that was STOLEN from Bolsonaro.

The police are starting to join with the Bolsonarista truck drivers who are protesting the fraudulent results of the Brazilian election. pic.twitter.com/FFWV7EOuDu

— VISH BURRA 🔫 (@VishBurra) November 1, 2022

BBC reports Tuesday morning, “Lorry drivers in Brazil loyal to President Jair Bolsonaro have blocked roads across the country, after his poll defeat to leftist rival Lula.” The report describes, “Blockages were reported in all but two states, causing considerable disruption and affecting food supply chains.” And more:

By Monday night, the federal highway police reported 342 such incidents, with the biggest protests going on in the country’s south. Some of the blockages were later cleared by police.

…Supreme Court judge Alexandre de Moraes on Monday ordered the police to disperse the roadblocks immediately. He warned that all those still blocking the roads on Tuesday would be each fined 100,000 Brazilian reals (£16,700: $19,300) per hour.

Bolsonaro has recently expressed concern over the potential for the country’s voting machines to be manipulated or tampered with, something that his political opponents have dismissed as “Trump-style” election denial rhetoric. 

WATCH: #BNNBrazil Reports.

Rural producers and truck drivers block highways after the defeat of President Jair Bolsonaro. Some demonstrations take place in the interior of Mato Grosso and Santa Catarina. #Brazil #Politics pic.twitter.com/rTPrMiESIZ

— Gurbaksh Singh Chahal (@gchahal) October 31, 2022

Into Tuesday morning, nothing has been posted to Bolsonaro’s official social media accounts since the night before Sunday’s vote.

His last last tweet came shortly before midnight on the eve of the election. He quoted from the Bible, the book of Ephesians, which says “Put on the whole armor of God, that you may be able to stand against the wiles of the devil…”. Some are taking this as a sign he could be readying to not go down without a political fight contesting the election results.

The New York Times is meanwhile reporting that Presient Bolsonaro is expected to give a speech on Tuesday, but it’s unclear when or precisely what he will say.

If you were hoping for your Tesla Cybertruck in 2023, it might be time to (again) realign your expectations.

A new report from Reuters indicates mass production of the Cybertruck will begin at the end of 2023, which means those who put down $100 to reserve the vehicle will have to wait for another year, according to two people with direct knowledge of the plans. 

“We’re in the final lap for Cybertruck,” Elon Musk told investors on a conference call last month. The company said, “early production” of the vehicle will start in the middle of 2023. A full ramp-up in production would occur later in the year. 

People have already waited several years for the sharp-angled electric truck, which could be years before all 1.3 million reservations are filled. 

Recall, last year, we reported that Tesla was delaying the Cybertruck to “late 2022”. We noted at the time:

Before we even opine on the details, we’re going to take the “over” regarding this timeline and guess the truck doesn’t happen until 2023, perhaps even later.

 In January, Tesla removed its 2022 production date for the Cybertruck. Musk cited supply chain woes and shortages in sourcing components as one of the main reasons for the delay. 

Musk revealed the Cybertruck at an infamous 2019 Tesla event where a demonstration of the vehicle’s unbreakable windows miserably failed. 

Meanwhile, competitors like Ford’s F-150 Lightning, Rivian’s R1T Explore, and GMC’s Hummer EV continue to gain market share and significant attention.

Authored by Paul Joseph Watson via Summit News,

Climate activist Greta Thunberg has gone fully mask off and is now calling for the overthrow of “the whole capitalist system.”

Thunberg made the extremist comments during an appearance on Sunday night at London’s Royal Festival Hall to promote her new ‘Climate Book’.

Nicholas Harris from UnHerd was there to watch Thunberg outline her demented manifesto.

Previously, she’d sold herself as a five-foot human alarm bell, a climate Cassandra. Her role was to warn, not to instruct: her most viral moments involved her scolding political leaders, not trying to supplant them. She strenuously avoided programmatic detail, saying such things were “nothing to do with me”. But now, on stage and in this book, she has found her political feet, specifically the Left-wing ideology of anti-capitalism and de-growth.

Interspersed among the usual directives about the need to pressure political leaders, her message was more radical and more militant than it has been in the past. There is no “back to normal”, she told us. “Normal” was the “system” which gave us the climate crisis, a system of “colonialism, imperialism, oppression, genocide”, of “racist, oppressive extractionism”. Climate justice is part of all justice; you can’t have one without the others. We can’t trust the elites produced by this system to confront its flaws – that’s why she, much like Rishi Sunak, won’t be bothering with the COP meeting this year. COP itself is little more than a “scam” which facilitates “greenwashing, lying and cheating”. Only overthrow of “the whole capitalist system” will suffice.

So now we are finally seeing the contours of Thunbergism. Run your eye down the contributors to The Climate Book and you can see who she’s been reading: Jason Hickel, Kate Raworth, Naomi Klein. For these people the climate crisis isn’t man-made. It’s made by capitalism, as are the other forms of social injustice which plague society. There’s no GDP growth – especially of the capitalist sort – without increasing carbon emissions. The only solution to this state of emergency is for rich countries to immediately abandon economic expansion as a social goal.

As we have previously documented, the climate change agenda is merely radical leftism dressed up in a more palatable format.

The co-founder of Extinction Rebellion, the offshoot of which, Just Stop Oil, is currently engaged in blocking roads across London, admitted in his own words that his movement “isn’t about the climate.”

In 2019, Stuart Basden revealed the true goals of the far-left environmentalist action group in a lengthy article posted on Medium.

Basden asserted that whatever climate problems exist can’t be fixed and that the movement should instead be focused on tearing down the entire system of western capitalism (China, the world’s biggest polluter, isn’t mentioned once).

He claimed that “European civilisation” is to blame for spreading “cruelty” and “violence” throughout the globe for the last 600 years and bringing “torture, genocide, carnage and suffering to the ends of the earth.”

Basden then cited numerous “delusions” which are to blame for this situation, including “white supremacy,” “patriarchy” and “class hierarchy” (a strange one given that most Extinction Rebellion protesters are upper middle class snobs who do little but inconvenience and harm the working class).

“The delusions of hetero-sexism/heteronormativity propagate the idea that heterosexuality is ‘normal’ and that other expressions of sexuality are deviant,” writes Basden.

So there you have it, it isn’t about the climate, it’s about bringing down the west and replacing everything it stands for with a nightmare far-left form of identity politics-mad totalitarianism.

*  *  *

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On Tuesday Finland’s Prime Minister Sanna Marin appealed directly to holdout countries Hungary and Turkey to approve the Finnish and Swedish NATO applications, a process which has for months been at standstill especially over Turkish accusations that both countries have supported Kurdish outlaw “terrorist” groups.

Marin pointed out that the commitments of the trilateral deal which Turkey’s leadership previously agreed to in the early summer are not fulfilled yet. “All eyes are now on Hungary and Turkey. We are waiting for these countries to ratify our applications. I think it would be important that this would happen preferably sooner than later,” Marin told a joint news conference with other Scandinavian leaders.

So far, 28 NATO member countries have ratified their applications, with the only two which haven’t done so among the 30-member bloc being Turkey and Hungary. 

The June trilateral summit agreed to implement Turkey’s requirements designed to ensure that Sweden and Finland would take steps to distance their countries from individuals and groups Turkey deems terrorists. This has included a demand to extradite wanted individuals back to Turkey.

Spokesman for Turkey’s ruling Justice and Development Party (AK Party) Ömer Çelik suggested on Monday that Finland and Sweden have yet to implement what was agreed upon earlier in Madrid at the trilateral summit. 

Om Monday Çelik said: “We do not find statements sufficient until they are implemented and materialized. Because we have heard a lot of words, striking statements, very elegant and very aesthetic words from our European friends, but still we witnessed actions of terrorist organizations on the streets of those countries as well as terrorist propaganda on their televisions.”

Finland had long maintained historic neutrality regarding NATO membership, but declared within months after Russia’s invasion of Ukraine that this marked a “turning point” for the world, saying that relations between Helsinki and Moscow could never go back to the way they were before.

Submitted by QTR’s Fringe Finance

Just days ago Zero Hedge reported that rent-controlled vacancies in New York City have soared. And it should also be no surprise that just yesterday they wrote about a mansion outside of Philadelphia that cost $35 million to build, but recently sold for just $9.26 million. 

That’s because indications are that Philadelphia, like many other home markets in the northeast, is seeing ownership rates collapse. My friend, and Philly-based realtor Kira Mason wrote this past week about how the city’s affordability issue “just got a lot worse” relative to where it stands against other Northeastern cities. These are her thoughts. 

Philadelphia has long been praised for its affordability when compared with other cities in the Northeast. Due in large part to relatively low-cost housing and some very compelling grants and regional loan programs, it has a higher percentage of individuals living in homes that they own than do DC, New York City, Baltimore, Pittsburgh, and Boston. But despite higher levels of homeownership, a key element of wealth-building, over 23% of Philadelphians live below the poverty line (double the US average).

Homeownership is an important piece of keeping that number from getting even higher, and I fear and suspect that the shift taking place in the housing market today will further stratify a Philadelphia that is already starkly divided along class lines.

Even before interest rates made their historic jump above 7% this fall, homeownership numbers in our city had started to decline. In 2019, they were down almost 9% from their highest recorded level of 58.2% in 2006. Many will attribute this shift to developers outbidding first time buyers in Philadelphia’s most affordable neighborhoods. I saw this firsthand in 2020 and 2021; those of my buyers who had the biggest hurdles to overcome on their paths to home ownership were repeatedly losing bidding wars to investors, even when putting forth offers that were significantly above asking price with favorable non-monetary terms.

While wages remained stagnant between 2013 and 2021, Philadelphia’s median residential sales price rose a staggering 80%. If wages had grown at the same rate as did the median sales price, the annual income of the average Philadelphian would have been almost $112,000 in July of 2021: an insultingly far cry from reality.

While rates were at historic lows in 2020 and 2021, many lower income Philadelphians were able to become homeowners despite rising prices. Now that rates have spiked above 7%, plummeting affordability to its lowest level in 37 years, these buyers are the first to be ejected from the market. Fortunately there are programs available to help keep rates as low as possible for buyers from a range of financial circumstances, but even the most competitive interest rates these days can be a tough pill to swallow.

For buyers with lower incomes, Pennsylvania Housing Finance Agency (PHFA) loans or Fanny Mae’s HomeReady loans are often a good fit. For buyers dealing with lower credit, FHA plans are generally offered. All of the above help keep rates and terms as favorable as possible by today’s standards.

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Higher income buyers have the option of buying a lower priced home in order to keep their monthly payments within bounds. Lower income buyers are limited by the bottom bracket of available home prices, and are therefore liable to be priced out of the market completely. A buyer in spring of 2021 with a 2.8% rate with a 10% down payment on a $300k house would have had a monthly principal and interest of $1,609. Today, at 7%, their monthly payment would be $2,296- a 42% increase. Today’s affordability strain makes the members of this population who are able to remain in the market at all especially likely candidates for higher risk loan offerings like Adjustable Rate Mortgages (ARMs) and temporary rate buydowns (TBDs).

ARMs, which had their reputation as a risky loan product cemented with the housing crisis of ‘08, are seeing renewed demand. Buyers are rightfully suspect of these loans with the crisis in recent memory, but ARM applications are still on the rise. They now comprise about 12% of total mortgage applications, up from 3% at the start of the year. Though this is fairly low in absolute terms, the recent spike has brought ARM applications to their highest level since 2008: nothing to sniff at.

While ARMs are growing in popularity, the real engine behind the plodding forth of the entry level housing market, to whatever degree it is still doing so, are temporary rate buydowns. These are the ARMs of 2022, and though they are without a doubt a safer proposition, they are not without their risks. I haven’t seen a deep dive into all of their implications, so let’s get into it.

First, a definition: a temporary rate buydown (TBD) is a device in which a seller or builder pays the buyer’s lender to offer them a lower rate for a given number of years. The buyer him or herself is not permitted to contribute. Once the sale is consummated, monthly payments and their associated interest rates begin on a graduated schedule, rising annually until reverting to what they would have been had the buydown never been enacted. Like an adjustable rate mortgage, this gives the buyer the opportunity to pay a lower principal and interest for a period of time. Unlike an ARM, every month’s rate (and associated payment) is known in advance.

While the predictability of a temporary rate buydown makes it a safer bet than an ARM, the truth is that many buyers who opt for either of these programs are doing so with the intention of refinancing in the future. In either case, if home values drop significantly enough, they would be prevented from following through with any refinancing plans, leaving them to contend with either an unpredictable future rate (ARMs) or a higher-than-desired monthly payment (TBDs). Let’s say a home is purchased today for $325k at 5% down and the buyer makes use of a 2-1 temporary buydown. If they later want to refinance, homes in that range would need to appraise for at least $320k in order for the refinance package to work.

While concerning, it’s important to keep in mind that the presence or absence of a TBD cannot factor into a buyer’s loan eligibility. These loans are still underwritten at the base rate. If a buyer is prequalified for a loan of a given amount, their lender has determined that they are capable of paying off the loan with or without a temporary rate reduction. This offers some real stability, but I can’t help but see the danger of buyers wedging themselves into homes at the very tops of their budgets because they are enamored with those year one and two rates. I’ve often thought of maximum prequalification amounts as akin to credit card limits: just because someone says you can, doesn’t necessarily mean that you should. I always advise my buyers to purchase below their means if they can afford to do so.

Temporary buydowns are not a long term financial plan. They are a temporary solution that should be used with full understanding and caution. – Laura Corley, CrossCountry Mortgage

We’re on the brink of a recession, and if history repeats itself, the same population opting for TBDs and ARMs could also be the first to face layoffs. Many of these buyers expect to either make more money in the future or refinance their home if it appreciates normally. What if neither of these scenarios come to pass? We could find ourselves with today’s buyers underwater in the not-too-distant future.

Temporary buydowns have become a popular option because they appear to help everybody in what has proven to be an exceedingly (and increasingly) difficult market. They offer sellers higher net proceeds when compared with a price reduction that would result in an equal monthly payment for the buyer, they help buyers to manage soaring monthly housing costs, and they help real estate agents and mortgage lenders to continue transacting at a business-sustaining pace. Their full implications are yet to be seen. For now, we should be keeping as close of an eye on seller assist data as we do on home prices, especially as the homes that went under contract this and last month settle in November and December.

Almost everyone is feeling the pain of today’s viciously unhealthy housing market. Buyers who finance at all price points are getting sucker punched by high rates, cash buyers are still transacting on Philly homes that are 35% more expensive than they were three years ago, and anyone compelled to sell is often getting less than their neighbors did and waiting longer to get it. But many first timers and less financially solvent buyers are being forced to quit before they’ve even begun. I think we’re likely to see Philadelphia’s historically impressive homeownership rate take a serious hit in the years ahead, with potentially far-reaching consequences for the health of the city as a whole. Those who remain on the market should be advised to proceed with caution; all of us could benefit from revising our boomtime “consumption without consequence” mindset to better suit our impending reality.

—

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About Kira Mason

Kira is a realtor with Berkshire Hathaway Fox & Roach and The Kevin McGillicuddy Team, winner of the 2021 Chairman’s Circle award and ranked within the top 1% of the national Berkshire Hathaway HomeServices network. She independently won Homesnap’s “Fastest Growing Agent” award in 2021 and specializes in the purchase and sale of residential real estate in Philadelphia. 

Kira runs the Substack Gritty City Real Estate, which you can read & follow free here and she is @kmasonrealtor on Twitter. She can be reached via e-mail at the address: contact@kiramasonrealtor.com.

Social media stocks jumped following an interview from Brendan Carr, one of five commissioners at the Federal Communications Commission (FCC), who told Axios that the Council on Foreign Investment in the US (CFIUS) should take action against the hugely popular (Chinese-owned) short-video app TikTok. 

US lawmakers demanding TikTok banned from US phones is nothing new (see: here & here), but as Axios explained in Carr’s interview:

“It’s the strongest language Carr has used to date to urge action on TikTok. With more than 200 million downloads in the US alone, the popular app is becoming a form of critical information infrastructure — making the app’s ownership by a Chinese parent company a target of growing national security concern.”

Even though FCC has no authority to regulate TikTok directly, they can certainly call on Congress to act. 

Axios said TikTok is in talks with CFIUS about whether it can be divested from ByteDance, a Chinese company, to an American company to remain operational in the US. 

Though, Carr wasn’t too optimistic about the future of TikTok in the US. He indicated:

“I don’t believe there is a path forward for anything other than a ban.” 

He warned there is increasing concern about the high amount of user data flowing back to China and the risk Beijing could influence US politics. He added:

There simply isn’t “a world in which you could come up with sufficient protection on the data that you could have sufficient confidence that it’s not finding its way back into the hands of the [Chinese Communist Party].” 

News of Carr’s interview sent beaten down social media companies, such as Meta Platforms, up more than 3% on the session. 

 Snapchat jumped more than 5%. 

A TikTok spokesperson responded to the interview by telling Axios:

“Commissioner Carr has no role in the confidential discussions with the US government related to TikTok and appears to be expressing views independent of his role as an FCC commissioner.” 

“We are confident that we are on a path to reaching an agreement with the US Government that will satisfy all reasonable national security concerns.”

Just days ago, one of the Democratic Party’s leading figures, Sen. Mark Warner (D-Va.), head of the US Senate intelligence committee, admitted that President Trump was right regarding the security risks surrounding the video app. 

Across the political spectrum, Republican lawmakers are in line with Democrats about TikTok: 

“No surprise there, TikTok is just another invasive tool for communist China to infiltrate Americans‘ personal and proprietary information,” Rep. Ken Buck (R-Colo.) told The Epoch Times. “This app presents a very real threat to our national security, and the United States should take strong action to stop the CCP’s espionage campaign.”

*Developing

A prominent figure in cryptocurrencies who claimed his ex-girlfriend was a spy and thought he might be “suicided by the CIA” was found dead one day after tweeting about an alleged “sex trafficking entrapment blackmail ring out of Puerto Rico and caribbean islands.”

Nikolai Arcadie Muchgian, the 29-year-old founder of MakerDAO, Balancer Labs, and the decentralized Dai stablecoin, was found dead last Friday in San Juan, Puerto Rico. According to local officials he was ‘swept away by sea currents’ behind Ashford Hospital in Condado and drowned.

On October 29th, Tether.to co-founder Craig Sellers tweeted of Mushegian’s death, noting that it came five days after the MakerDAO community approved custodian partnership with Coinbase.

Nikolai Muchgian, 29-yr old #stablecoin innovator, #BitShares contributor, $DAI architect/@MakerDAO co-founder has died in San Juan #PuertoRico, five days after #MakerDAO community approves custodian partnership with @Coinbase

Rest In Peace, Nikolai 😞🙏🏼https://t.co/WFlyGnfP2S

— Craig Sellars 🌈🗽 (@OmniCraig) October 29, 2022

And while Trustnodes.com notes that Condado “is considered a dangerous beach with strong undercurrents,” Mushegian’s death comes days after he tweeted that “CIA and Mossad and pedo elite are running some kind of sex trafficking entrapment blackmail ring out of Puerto Rico and caribbean islands,” adding that “They are going to frame me with a laptop planted by my ex gf who was a spy. They will torture me to death.”

This isn’t the first time Mushegian had tweeted about potential #WetWorks.

On September 4th, he laid out three “possible futures for me”: 1) suicided by CIA  2) CIA brain damage slave asset  3) worst nightmare of people who fucked with me up until now

3 possible futures for me 1) suicided by CIA 2) CIA brain damage slave asset 3) worst nightmare of people who fucked with me up until now, I am sure these are the only options

— ☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️☀️ (@delete_shitcoin) September 5, 2022

In August, he tweeted “Let it be known that if I am somehow set up and framed or shot, it wasn’t through sophisticated actions, but from sheer perserverence by people with infinite time and money to waste.”

Wow. pic.twitter.com/vx9F9uwyEG

— Dylan LeClair 🟠 (@DylanLeClair_) November 1, 2022

On September 24, he tweeted: “Imagine how evil someone has to be to transform me from antistate cryptoanarchist of 12 years to someone who prays to god to guide the top of food chain national security feds and their ancient karmic laws of banking handlers to come demolish this illuminati roleplay circlejerk.”

Who was Nikolai Mushegian? As Being Crypto notes:

Mushegian also had his own website, where he talked about various projects and what inspired him. These projects include the DAI fork RAI, Balancer, and DAI, among many other initiatives.

In a world where everybody in the crypto space seems to have an opinion, Mushegian was notably quiet. He predominantly let his development do the talking, offering his thoughts on various aspects of the market occasionally.

Mushegian was also a charitable figure, donating over $1 million to his alma mater Carnegie Mellon in 2020. He wished to support a research program for decentralized technologies, including dApps and protocols.

As TrustNodes further notes, “this is the second death by drowning of a cryptonian in 15 months with the far better known old time bitcoiner Mircea Popescu drowning in Costa Rica in June last year.”

Of course, we’re sure ‘fact checkers’ will be all over the ‘notoriously dangerous tides’ at Condado and ‘baseless conspiracy theories.’

What say you?

With oil prices set to soar after the midterms as the SPR drain ends and markets no longer have desperate democrats to help fulfill their immediate energy needs, moments ago the WSJ unveiled another potential oil price powder keg, so to speak, when it reported that according to Saudi and U.S. officials, Saudi Arabia has shared intelligence with the U.S. warning of an imminent attack from Iran on targets in the kingdom, putting the American military and others in the Middle East on an elevated alert level.

The report goes on to note that Iran is poised to carry out attacks on both the kingdom and Erbil, Iraq, in an effort to distract attention from domestic protests that have roiled the country since September.

In response to the warning, Saudi Arabia – which until recently was on the Biden admin “naughty list” after the crown prince snubbed Biden’s demands for no OPEC+ output cut – the U.S. and several other neighboring states have raised the level of alert for their military forces, the officials said. They didn’t provide more details on the Saudi intelligence.

Separately, the White House National Security Council said it was concerned about the warnings and ready to respond if Iran carried out an attack.

“We are concerned about the threat picture, and we remain in constant contact through military and intelligence channels with the Saudis,” said a National Security Council spokesperson. “We will not hesitate to act in the defense of our interests and partners in the region.”

It wasn’t exactly clear how attacking Saudi Arabia and launching a war with a far better armed opponent would “distract attention” from Iran’s internal troubles, but what is very clear is that if Saudi Arabia wanted to send the oil price soaring, it wouldn’t use another OPEC+ cut but would simply take production offline indefinitely; and if it can arrange Iran to help out… well, why not.

Iran has allegedly attacked northern Iraq with dozens of ballistic missiles and armed drones in recent weeks, one of which was shot down by a U.S. warplane as it headed toward the city of Erbil, where American troops are based. Tehran has publicly blamed Iranian Kurdish separatist groups based there for fomenting the unrest at home.

Iranian authorities have also publicly accused Saudi Arabia, along with the U.S. and Israel, of instigating the demonstrations.

While there is no indication at this point that this report is anything more than just Intel agency jawboning and propaganda, if it does in fact escalate into another Persian Gulf powderkeg, watch how high the price of oil will shoot to.

By Simon White, Bloomberg Markets Live reporter and analyst

Stocks will be stuck in a bear market for several more months even with a peak in Fed hawkishness.

Peak global inflation is likely here, allowing global central banks, including the Fed, to begin a gradual tempering of their hawkishness. The Fed will announce Wednesday the outcome of its rate-setting meeting, with a 75 bps hike expected. (To be clear, even while global inflation may have peaked, there are likely still several countries that will see another inflation peak later in this cycle.)

This might be taken as an all-clear for stocks and a swift end to the bear market, but current formidable headwinds and history suggest otherwise.

First, a distinction needs to be made between peak Fed hawkishness and the Fed pivot. A peak in hawkishness does not mean an immediate flip-flop to dovishness. Instead, it means the peak Fed Funds rate should stop rising – which we have seen – and be maintained. As the market starts to price this in, the front of the very steep Fed Funds curve should flatten, and the back of the curve – where the pivot is – should disinvert, taking the pivot out.

The negative correlation between the front and the back of the Fed Funds curve – pivoting around the peak in the Fed Funds rate – is very unusual. The last time was during the aggressive Fed hiking cycle in 1994, and then in again in the late 1990s.

The pricing out of the Fed pivot has implications for volatility as the relative price of crash insurance has a strong relationship with expected Fed cuts. No pivot likely means more expensive out-of-the-money S&P puts, and hence a higher VIX.

The end of the 1994 rate-hike cycle set the stage for a multi-year equity rally into the tech bubble. However, that is not the typical case. In median terms, the S&P moves sideways for about six months after the last Fed hike before putting in a pronounced rally.

Given we likely have three (perhaps more) rate moves to go before the Fed pauses – along with an increasingly likely earnings recession – any sustainable rally in equities and an end to the bear market is a way off.

Less than a month after the most recent JOLTS report (for the month of August, recall JOLTS is 2-months delayed) showed a near record plunge in job openings – in line with Fed hopes for a slowing economy and the reality of the slowing labor market – moments ago the BLS, perhaps carried away by next week’s midterms and the relentless taps on the shoulder from various Biden appartchiks, reported that in September – some two months before the midterms – job openings shockingly soared by 437K from a (upward revised) 10.280MM in August (10.053MM pre-revision) to 10.717MM. This was the second highest monthly increase of 2022 and the highest since  the 511K added in March!

And with expectations of a notable drop back under 10MM, this was the third biggest beat of expectations on record!

According to the BLS, the largest increases in job openings were in accommodation and food services (+215,000); health care and social assistance (+115,000); and transportation, warehousing, and utilities (+111,000). The number of job openings decreased in wholesale trade (-104,000) and in finance and insurance (-83,000

Coming a time when the number of unemployed workers allegedly continue to shrink, the surge in job openings meant that we are back to 5 million more job openings (10.717MM) than unemployed people (5.753MM), just shy of the all time high 5.9 million hit in March of 2022.

This means that there were almost 2 job openings for every unemployed worker, or – alternatively – the number of workers competing for every job opening slumped again, and was down to just shy of record lows, at 0.54.

Curiously, while job openings soared, hiring tumbled and in September the BLS reported that total hires dipped to 6.082 million which was the lowest since Feb 2021. The trend here is clear: down and to the right. According to the BLS, hires decreased in durable goods manufacturing (-57,000) and in state and local government education (-40,000).

Needless to say, while last month’s huge JOLTS miss sparked a frenzied rally, today’s shocking beat is not helping risk sentiment because if anything, the Fed will have to once again come out as hawkish, as the Fed’s WSJ mouthpiece was quick to remind us.

The number of job openings in September rose by 437,000 to 10.7 million (and the August figure was revised up by 200,000).

The Fed would like to see the ratio of vacancies to unemployed workers decline, and it ticked up in September to 1.86 from 1.68.https://t.co/RwwwVqBmFp

— Nick Timiraos (@NickTimiraos) November 1, 2022