The Pandemic Was a Disaster for Housing Affordability. 2023 Might Be a Little Better.


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After a COVID-induced roller coaster ride, the dust is starting to settle America’s housing market. In general, the pandemic has been a disaster for housing affordability, although there is some hope that relief will come in the new year.

As of November, nationwide rents have grown 4.7 percent year-to-date according to data culled by Apartment List. In a blog post, the company notes that rents have been falling in the last few months and that year-over-year rent growth will likely come in below 4 percent.

That’s closer to the typical amount of rent growth we were seeing in the years right before the pandemic. It’s well below the 17.6 percent increase in rents that the country saw last year.

Nevertheless, the average rent on an apartment is $1,356 today, or about 20 percent higher than it was in February 2020, according to Apartment List data.

So, while rent growth might be moderating, the country as a whole is still a more expensive place to live. And the nationwide increase in rents masks some of the real housing cost strains that COVID created in once-affordable parts of the country.

The lockdowns, social distancing, and the remote work revolution of 2020 saw people abandon traditionally expensive downtowns of major metros in favor of life in the traditionally more affordable exurbs of smaller cities and sunbelt metros.

The net effect of expensive areas getting a little cheaper and cheaper areas getting much more expensive is a nationwide price convergence. Apartment List notes that pre-pandemic rents in San Francisco used to be 2.5 times that of Phoenix. Now they’re only 1.6 times as high.

It’s an even more dramatic story with home prices, which are up some 40 percent nationwide from pre-pandemic levels, according to the Case-Shiller Home Price Index. Here too, the biggest price increases have been in traditionally more affordable areas in the South and Southwest.

The National Association of Realtors notes that of the 10 housing markets with the most year-over-year home price growth, seven were in Florida. The other three were in Tennessee, North Carolina, and South Carolina.

When combined with higher interest rates, housing affordability as measured by a mortgage payment-to-income ratio is at its worst point since the 1980s, reported The Washington Post earlier this year.

Overall, that’s a pretty bleak picture. But there is some good news.

There are nearly 1 million apartments under construction today. That’s more housing in the pipeline than at any point in the past 40 years. The additional supply will hopefully work to keep rents flat in the coming year.

The picture for single-family housing isn’t so rosy. Numbers released by the Census Bureau last week show that permits for new homes and new homes starting construction both continue to fall.

But the completion of new homes has stayed steady, and real estate experts are predicting home prices to stay basically flat next year.

That means next year, housing might not get more expensive. That will be a welcome break from punishing pandemic-era rent and home price increases.

The post The Pandemic Was a Disaster for Housing Affordability. 2023 Might Be a Little Better. appeared first on Reason.com.

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Jim Quinn: It’s Not A Lie If You Believe It

Jim Quinn: It’s Not A Lie If You Believe It

Authored by Jim Quinn via The Burning Platform blog,

“The past was erased, the erasure was forgotten, the lie became the truth.” – George Orwell, 1984

“Great is truth, but still greater, from a practical point of view, is silence about truth.” ― Aldous Huxley, Brave New World

I wish I could go through a day without having to reference Orwell and Huxley when observing how the ruling class is able to manipulate, subjugate, and propagandize the willfully ignorant masses through lies, deceptions, disinformation, and fear. But here we are, living through a dystopian nightmare blending the worst aspects of Orwell’s 1984 and Huxley’s Brave New World.

It’s as if O’Brien and Mustapha Mond are running the show, using behavioral conditioning, restricting freedom of speech, adhering to a strict caste system, surveilling everything we say or do, using our fears to control us, utilizing propaganda to produce false narratives, and ultimately threatening to stomp a boot on our faces forever if we do not obey and conform. Virtually everything we are told by politicians, government bureaucrats, military brass, “esteemed” journalists, medical “experts”, bankers, and corporate executives is lies. They do not believe their lies, but they know it benefits themselves financially to lie, and as long as they work together, they know the ignorant masses will believe them.

George tells Jerry “It’s not a lie if you believe it” as he is going to take a lie detector test. I wonder how Fauci, Biden, Hillary, Obama, Comey, Wray, Pelosi, and the slew of other Deep State coup conspirators would fare on a lie detector test about Russiagate, Covidgate, J6 Insurrectiongate, and Vaccinegate. Based on the titanic volume of lies they have spewed over the last several years, I’m sure the machine would overheat and explode if hooked up to any of this traitorous vile scum.

The humorous phrase uttered by George Costanza on a sitcom twenty-seven years ago captures a significant kernel of truth about the mindset of the vast majority of non-critical thinking drones roaming the aisles of Wal-Marts and waiting in the drive-thru at McDonalds across our dystopian states of America. The lies run so deep you need hip-boots to wade through them on a daily basis. The reason our leaders lie is because we let them lie. The majority prefer comforting lies to unpleasant truths, because accepting unpleasant truths would require them to act and they prefer being distracted by trivialities like sports, reality TV, social media likes and otherwise being addicted to their technological gadgets.

“The process of mass-media deception has to be conscious, or it would not be carried out with sufficient precision, but it also has to be unconscious, or it would bring with it a feeling of falsity and hence of guilt…. To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies all this is indispensably necessary.” – George Orwell

Orwell’s explanation of mass-media deception is a brilliant assessment of how the ruling class changes the narrative to suit their needs, and without blinking an eye are able to deny what they have said and done. Orwell saw this manipulation of the truth before TV, the internet, social media, or professionally created government propaganda existed. In his day only newspapers, radio, and speeches existed to push deception upon the public.

The proliferation of technologically enhanced mass-media deception has accomplished everything the ruling class/oligarchs/Big Brother surveillance state could hope for. Lies and deception are nothing more than a means to their ends of control, wealth, and power. Right and wrong; good and evil; justice and injustice; truth and falsity; humanity and inhumanity; are meaningless concepts to the corrupt, greedy, power hungry, immoral, deviant, evil overlords who wield their wealth to maintain and expand their control over the ignorant masses, unwilling and unable to resist because their indoctrination runs deep, and the unceasing propaganda keeps them confused and angry at phantom enemies.

The perfect example of Orwell’s mass media deception in practice has been this entire Covid hoax, which has been built on a foundation of lies from the very beginning. At the outset Fauci scoffed at the concept of masks providing any protection from a microscopic virus while being interviewed on 60 Minutes. He wasn’t lying. Numerous scientific studies documented by the CDC proved beyond a doubt, masks are absolutely useless in preventing the spread of viruses. But a few weeks later the covid controllers realized the usefulness of masks as the perfect fear inducing symbol of a fake pandemic and the first step in demanding compliance and obedience by the masses.

Suddenly Fauci and his Big Pharma bought medical “expert” lackeys discarded the inconvenient facts that masks do not work, and piously preached that everyone must mask or mass death would occur. Any dissenting voice speaking the truth about masks was the enemy and needed to be silenced, scorned, ridiculed, and destroyed. The deception was aided and abetted by Twitter, Facebook, Google and the feckless MSM doing the bidding of the ruling elite, while being paid off by Big Pharma.

This was only the beginning of a worldwide conspiracy of lies. The videos from China of bodies in the streets were fake. Evidently to provoke fear among the global community. The purported origin of the virus being bats in a wet market in Wuhan was a lie concocted by Fauci, Daszik, and their Chinese co-conspirators to cover-up their illegal weaponization of viruses in the Wuhan Bio-weapon lab. This cover-up was maintained by the dying legacy media, Twitter, Facebook, and Google through the censorship and banning of anyone (ZeroHedge) who dared question the government approved narrative.

The demand for national lockdowns was built on the lies of Neil Ferguson, a 3rd rate academic, and his fear mongering Imperial College model of deaths if the world didn’t shut down. His ludicrous outcomes, based on false assumptions, were the basis for the disastrous decisions made by corrupt politicians across the world. The results in Sweden, which did not lockdown, have proven his model to be worthless, and responsible for the destruction of the lives of millions across the globe.

They lied about social distancing, based on a 3rd grade girl’s school paper. They used a PCR test improperly to falsely produce “positive” cases in order to terrify the masses into a mass formation psychosis. A case was not a sickness. They drastically overestimated the fatality rate and attributed the deaths of extremely old sick people to covid when they died from their existing malady. Only 6% of covid deaths can be attributed to strictly covid. The overall survival rate if you contracted covid is 99.7%, with anyone under 70 years old 99.9%. Virtually no one under 21 years old died from covid. It was less lethal than the annual flu to young people.

The overlords and their bevy of apparatchik whores in the government, media, and academia needed to ramp up the fear through rising cases, hospitalizations, and deaths in order to get rich off this plandemic, while planting the seeds of their Great Reset scheme to turn the world into a compliant surveillance state. The coup de grace of lies was to be the miraculous “Operation Warpspeed vaccine” which would rid the world of this perilous pestilence. Supposedly brilliant virologists developed amnesia over the concept of herd immunity, which has been known for centuries.

This War on Covid has gone as well as the War on Poverty and the War on Drugs, meaning it has been a complete and utter failure in defeating its supposed foe, but has been hugely successful in enriching politicians, corporations, and the multitude of toadies in the media, academia, and the bureaucracy who perpetuate the lies and disinformation they are paid handsomely to disgorge. The lies engulfing the supposed vaccine run deep and wide.

The entire vaccine scheme is built on an altar of lies, mistruths, misinformation, deception, and censorship. mRNA gene therapies have existed for decades and had consistently failed in application as every animal tested using these concoctions died. Pfizer faked their trial data, lied about adverse reactions, lied about long-term safety, lied about effects on pregnant women, and tried to keep these results hidden for seventy-five years. The tripe about these “vaccines” being safe effective has been and continues to be the Big Lie.

The emergency use authorization for these experimental jabs could only be given if there were no existing medications which were an effective treatment for the illness. There were dozens of scientific studies and world-renowned physicians acknowledging the effectiveness of both hydroxychloroquine and ivermectin in treating covid and alleviating its symptoms safely and effectively – and cheaply. That was the real problem. The hundreds of billions in profits to be made by Big Pharma, and then divvied up to politicians, legacy media companies, the FBI, and social media censorship arms of the ruling class, would be impossible if the truth about hydroxychloroquine and ivermectin was allowed to be acknowledged.

Therefore, Fauci and his sycophants claimed they were dangerous, horse de-wormer medicine, and ineffective. Twitter, Facebook, and Google censored and banned doctors who posted anything positive about either treatment. Meanwhile, Fauci sentenced tens of thousands to death by pushing Remdesivir, a treatment he financially benefitted from, and recommending ventilators for those with covid. Fauci sentenced tens of thousands to death by not allowing these treatments to be used. He deserves the same fate for his treacherous actions but is treated like a saint by the left-wing media and the Biden minions.

The biggest Orwellian mass-media deception of them all was what the “experts” unequivocally declared about their glorious vaccines. Just as every vaccine in history was supposed to keep you from contracting the illness you were vaccinated against, Fauci, Biden, Walensky, Gates, the Pfizer CEO, and a myriad of other paid “experts” told the global population they would not contract or spread covid once they were vaxxed. They are on video and in print declaring this to be true.

But when it was proven to be not true, they just denied they had ever said so. As long as the masses could be convinced the lie had become the truth, then the lie was the truth, according to the Party and its journalistic narrative guardians. Controlling the narrative through suppressing and censoring the truth is how they continue to maintain control. The release of the Twitter files by Musk confirms every “conspiracy theory” put into the public domain by the naysayers, critical thinkers, and a few honest journalists. They have lied about everything.

“And if all others accepted the lie which the Party imposed—if all records told the same tale—then the lie passed into history and became truth. ‘Who controls the past’ ran the Party slogan, ‘controls the future: who controls the present controls the past.” – Orwell

When confronted by the reality these experimental, toxic, gene altering, spike protein generating brews do not prevent anyone from contracting the virus, being hospitalized by the virus, or dying from the virus, the powers that be just changed the definition of a vaccine and attempted to alter the narrative and pretend they had never said what they said. How Orwellian of our Big Brother overlords. The past is alterable in a totalitarian regime.

“The past was alterable. The past never had been altered. Oceania was at war with Eastasia. Oceania had always been at war with Eastasia.” ― George Orwell, 1984

Even the current definition of vaccination is a lie. Not only does it not protect you from the virus, but the Antibody-Dependent Enhancement (ADE), warned about by highly regarded doctors like Robert Malone, Peter McCullough, and Pierre Kory over a year ago, is now happening to the vaxxed and boosted victims. Biden’s lie about this being a pandemic of the unvaccinated has transformed to the truth we are experiencing a pandemic of the vaccinated. The vaccinated are now 4x as likely to contract covid as an unvaxxed person who has recovered from covid. Natural immunity, which has protected humanity for centuries, is real and far superior to these Big Pharma jabs.

The cognitive dissonance of the vaxxed runs deep. They are too embarrassed and ashamed to admit they were duped and lied to. How many more young people need to “die suddenly” before they turn on Fauci, Biden, Big Pharma CEOs, media talking heads, politicians, and the sickcare industrial complex, and hold them accountable? Is the mass formation psychosis too ingrained in their psyche to ever revolt?

The lies about the covid vaccines being safe and effective, promulgated through a multi-billion-dollar advertising campaign running non-stop for the last two years, paying famous athletes, Hollywood stars, social media influencers, and unethical doctors, are proving to be the most diabolical and fatal falsehoods ever perpetrated on global humanity. The “effective” nonsense was put to bed last year when covid spread faster after more than half the country was berated and threatened into getting the jab, then a 2nd jab, then a 3rd jab, and then a booster, because the previous three failed.

And still half the country refuses to accept the truth because they don’t want to question the narrative or abandon their fellow vaccine cultists. The “safe” garbage narrative is collapsing on a daily basis as factual data about sudden deaths, real scientific studies proving the extreme dangers of these vaxxes, fertility data, excess mortality data, a constant stream of reports about young people contracting myocarditis, having heart attacks, and developing blood clots, has swamped Fauci and his ship of lying fools – with the ultimate result of breaking the mass formation psychosis of the masses.

Essentially, these vaccines are creating a slow-motion mass casualty event, and everyone involved in their premature use in human beings should stand trial for murder, but they won’t. That is because the totalitarian Deep State has grown too powerful, too arrogant, and too filled with contempt for those they rule over. They feel invincible, as they blatantly steal elections, keep peaceful protestors in dungeons, assassinate those who might implicate them in child trafficking conspiracies, use the mechanisms of the surveillance state to crush all opposition, and collude with mass media networks and the Silicon Valley mafia media to suppress the truth and censor those who dare question the Deep State sanctioned narrative. The Twitter files confirm the deceit and treason at the highest levels of government, media, and military. Hannah Arendt describes how totalitarian regimes depend on fabrications to maintain their power.

“Before mass leaders seize the power to fit reality to their lies, their propaganda is marked by its extreme contempt for facts as such, for in their opinion fact depends entirely on the power of man who can fabricate it.” ― Hannah Arendt, The Origins of Totalitarianism

At this point in history virtually everything uttered by the president, any politician, government bureaucrat, media personality, corporate executive, medical “expert”, and faux journalist is a fabrication, exaggeration, disinformation or outright lie. The list of lies is never ending, and has been going on since Adam and Eve, but the quantity and audaciousness of the lies in recent times has accelerated to a point where the totalitarians no longer fear revelations about their lies. They are comfortable knowing the masses will believe absurdities as long as they confirm their ideologies, biases, and beliefs.

The masses do not mind being lied to because they are entranced by narratives created to keep them under control and focused on whichever enemy they are propagandized to hate, whether it be Trump, lockdown and mask dissenters, anti-vaxxers, phantom white supremacists, J6 “insurrectionists”, the Russians, or “election deniers”. Provenly bold faced liars like Biden and Fauci are admired and celebrated for their dedication to the narrative, despite its falseness. It happened in Nazi Germany, Stalinist Soviet Union, Mao’s Communist China, and today as we plunge towards a new world order totalitarianism of unknown outcomes and atrocities.

“Mass propaganda discovered that its audience was ready at all times to believe the worst, no matter how absurd, and did not particularly object to being deceived because it held every statement to be a lie anyhow. The totalitarian mass leaders based their propaganda on the correct psychological assumption that, under such conditions, one could make people believe the most fantastic statements one day, and trust that if the next day they were given irrefutable proof of their falsehood, they would take refuge in cynicism; instead of deserting the leaders who had lied to them, they would protest that they had known all along that the statement was a lie and would admire the leaders for their superior tactical cleverness.” ― Hannah Arendt, The Origins of Totalitarianism

I think a list of big lies is sufficient to prove we are ruled by totalitarian ideologues who don’t care their lies are destroying our country, culture, and societal norms. During my lifetime: they lied about JFK’s assassination; they lied about the Gulf of Tonkin to get us into the Vietnam War; they lied about 9/11; they lied about WMD in Iraq; they lied about the 2008 financial collapse; they lied about the 2014 CIA coup in the Ukraine creating the havoc we have today; they lied about global warming and had to switch to climate change when the original lie was revealed; they lied about Russiagate and their coup against Trump, they lied about the “peaceful” BLM protests; they lied about the cause of George Floyd’s death (fentanyl overdose); they lie about child trafficking and grooming; they lie about butchering children in the name of gender identity; they lied about Hunter Biden’s computer and the Biden family crime syndicate; they lied about rigging the 2020 election; they lied about Epstein’s “suicide”; they lied about the FBI and Pelosi staging the January 6 “insurrection”; they lied about colluding with Twitter, Facebook, and Google to influence elections and create a fake pandemic; they are lying about our border being safe and secure; they are lying that Biden isn’t a dementia ridden puppet controlled by Obama, Soros, and Gates; they are lying that Sam Bankman-Fried and his FTX money laundering operation wasn’t an arm of the Democrat party, using ill-gotten funds and funneling it to Democrat candidates; and they are lying about their intentions to destroy our society through suicidal economic, social, and legal policies in order to usher in a totalitarian Great Reset New World Order run by wealthy elites and their detestable acolytes. Our dystopian nightmare is on-par with Orwell’s.

“The atom bombs are piling up in the factories, the police are prowling through the cities, the lies are streaming from the loudspeakers, but the earth is still going round the sun.” – George Orwell

Totalitarian regimes have tremendous success using fake data and fake charts to give the appearance of truth to a populace too willfully ignorant to investigate whether the data and charts are a truthful and accurate reflection of reality. It is so much easier to believe supposed experts than it is to think critically and question the narrative, especially when they are telling you what you want to hear. Even though the average person knows their financial situation has steadily deteriorated over the last two decades, along with the financial situation of the country, they still believe the fake data vomited on a daily basis by the government and Wall Street banking cabal.

They are lying about the inflation rate being 7%. It is more than double the government reported figure, based upon the calculation from 1980 when Volker needed to raise the Fed Funds Rate to 18%.

They are lying about the 3.7% unemployment rate. The total working age population is 265 million, up from 212 million in 2000. There are 158 million employed today, versus 137 million in 2000. The unemployment rate in 2000 of 4% is virtually the same as the rate reported today. How could that be if the working age population went up by 53 million, but employment only went up by 21 million? Quite a conundrum. It’s easy if you lie. According to the government 100 million working age Americans choose not to work, therefore they aren’t unemployed. That number was 70 million in 2000. Fully 40% of our working age citizens are not working today, but the government tells you our unemployment rate is 3.7%. This might be the biggest lie ever told.

The government has reported positive real GDP growth for most of the past two decades, with short-term dips in 2008/2009 and due to covid in 2020. Those figures are lies. Using a truthful inflation figure shows GDP has barely stayed flat for the last 20 years. The great American economy hasn’t grown in 20 years. We are a dying lying empire of debt. Our national debt grew from $5.7 trillion in 2000 to $31.5 trillion today. The debt to GDP ratio has gone from 55% in 2000 to 122% today. Throughout history, when this ratio exceeds 90%, economic disaster follows.

The biggest lie has been perpetrated by the Wall Street controlled Federal Reserve, whose mandates are a stable currency and low unemployment. With a straight face these jokers declare they have succeeded, while the USD has lost 97% of its purchasing power since the deceitful inception of the Federal Reserve in 1913, and the real unemployment rate is north of 20%. Losing the last 3% of purchasing power guarantees to be the most painful.

After documenting the outrageous multitude of lies being told by those controlling the levers of society, I’m torn regarding whether I trust enough people can be awakened from their self-induced stupor of belief in authority to mount a counter-offensive of truth. I guess I wouldn’t be writing articles about these subjects unless I thought there was a kernel of hope I could plant with my reasoning. But I find myself drawn more towards the conclusion reached by Alexandre Koyré over fifty years ago about mobs and the ease with which totalitarian authority figures can manipulate them:

“The mob believes everything it is told, provided only that it be repeated over and over. Provided too that its passions, hatreds, fears are catered to. Nor need one try to stay within the limits of plausibility: on the contrary, the grosser, the bigger, the cruder the lie, the more readily is it believed and followed. Nor is there any need to avoid contradictions: the mob never notices; needless to pretend to correlate what is said to some with what is said to others: each person or group believes only what he is told, not what anyone else is told; needless to strive for coherence: the mob has no memory; needless to pretend to any truth: the mob is radically incapable of perceiving it: the mob can never comprehend that its own interests are what is at stake.” ― Alexandre Koyré, Réflexions sur le mensonge

When the mob has been essentially hypnotized by totalitarian authority figures, unbound from the law through illegally invoking “emergency” powers to ensure the safety of the masses, it takes massive bloodshed and enormous upheaval before the mob will come to their senses and realize their dreadful misplacement of trust in tyrants. Personally, I hope I am wrong about what lies ahead, but I don’t see a pathway towards a peaceful, reasoned resolution of what plagues our country and the world.

Fools, knaves, and low IQ ideologues control the narrative, the political power, the media messaging, the banks, and the minds of the mob. We can attempt to distance ourselves from the onslaught, but there really is no way to escape the impact of a Fourth Turning, whether it be global conflict, civil chaos, financial Armageddon, or the wrath of the mob for being right about the vaccines, politicians, or the financial markets. I am not surprised or upset about the lies told to me by those running the show. Neitzsche and Carlin, two brilliant thinkers, pretty much sum up my feelings.

“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.” ― Friedrich Nietzsche

“My first rule:  I don’t believe anything the government tells me.  Nothing.  Zero.” – George Carlin

Very few people who need to awaken from their propaganda induced stupor of believing absurdities will read this article. Those who are already awake and can see what is happening clearly have few or no options to impact the course we are traveling. Too few see the iceberg dead ahead as the U.S. Titanic accelerates towards its rendezvous with destiny. We can shout and wave our hands, but there is nothing we can do to alter the course of an empire run by idiot ideologues, hellbent on the destruction of our ship of state. As Bradbury presciently noted in his masterpiece of societal self-immolation, I can’t make people listen to a message they don’t want to hear.

“But you can’t make people listen. They have to come round in their own time, wondering what happened and why the world blew up around them. It can’t last.” ― Ray Bradbury, Fahrenheit 451

At this point I’m torn between the darkness of Orwell’s vision and the stoic attitude put forth by Tolkien. We are living in a time of universal deceit and telling the truth feels like a revolutionary act when the mob is under the spell of mass formation psychosis. It is an interesting dichotomy that this article will only be read by a small audience of people who already agree with most of my arguments. If it ever reached a wider audience, I would be attacked by the mob, censored, threatened, and doxed in an attempt to destroy my life. So be it.

I will do what I can do with my limited resources, protect my loved ones, strengthen relationships with like-minded hobbits, disconnect from this warped and deviant society as much as possible, distance myself from the government, prepare for an uncertain future, and try my best to navigate the perils ahead. We only have a limited time on this earth to make a difference. We each must decide what we do with the time given us. God help us.

“I wish it need not have happened in my time,” said Frodo. “So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.” ― J.R.R. Tolkien, The Fellowship of the Ring

“The world is indeed full of peril, and in it there are many dark places; but still there is much that is fair, and though in all lands love is now mingled with grief, it grows perhaps the greater.” ― J.R.R. Tolkien, The Fellowship of the Ring

*  *  *
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Tyler Durden
Fri, 12/30/2022 – 16:25

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‘Worst Year Ever’ For Stocks & Bonds – Global Inflation Fight Bursts ‘Everything Bubble’

‘Worst Year Ever’ For Stocks & Bonds – Global Inflation Fight Bursts ‘Everything Bubble’

Before we get to the big picture on the month, quarter, and year, this week has ended with no ‘Santa Claus’ rally this year for US stocks…

Until the last few minutes, the S&P 500 pinning around 3835 just as we said as JPM’s Collar trumped 0-DTE chaos, then everything melted up into the close…

As SpotGamma remarked earlier, as January is a put-heavy OPEX, any downside start to January could energize those puts, and serve to press markets lower.

This could lead to higher IV, and a reflexive selling loop to the downside. We’d then look for a rally after OPEX, as those puts expire.

Conversely, should January start off with strength, those puts could help to fuel a rally as their values collapse leading to an early, material stock rally.

OPEX could then trigger a reversal of that market strength. We currently assign edge to this scenario.

Trade the first week of January should help shed light on the timing of the rally (i.e. pre-OPEX or post-OPEX) as the machines show the way…

The dollar slipped lower, gold higher, and bitcoin lower on the week as Treasury yields surged into year-end…

Source: Bloomberg

On the year, global stocks suffered a 20% decline in 2022, the 2nd worst year since 1974, as central banks fought inflation in the face of supply chain shortages and an energy crisis due to the COVID-19 pandemic and Russia’s invasion of Ukraine…

Source: Bloomberg

Worse still, as The FT reports, a traditional portfolio consisting of 60% US stocks and 40% US bonds will have seen its worst performance since 1932, when the U.S. was in the midst of the Great Depression.

As US bond returns are suffering their worst stretch in over a century…

US equity and bond markets lost a combined $17.4 trillion in 2022 at their October lows…

Source: Bloomberg

And while The Dow ‘only’ fell 9% in 2022, Nasdaq plunged over 33%

Source: Bloomberg

Over $7 trillion in stock market cap has been erased from the Nasdaq 100. While the Nasdaq 100”s drop was bigger in 2008 (down 41.9%), it was only down about $1 trillion in 2008 though, because the denominators have gotten so much bigger…

Source: Bloomberg

European stocks were also slammed lower (worst year since 2018) with UK worst and Spain the prettiest horse in the glue factory…

Source: Bloomberg

With the ‘longest duration’ stocks having been hammered the hardest

Source: Bloomberg

Energy stocks turned in a dramatic performance and were the only US equity sector with gains in 2022 (as Consumer Discretionary and Tech underperforming)…

Source: Bloomberg

“This has been a year to be in the bunker,” says John Bilton, head of global multi-asset strategy at JPMorgan Asset Management.

Gold ended the year unchanged as the dollar surged; and while bonds and stocks were monkeyhammered lower, crypto was really clubbed like a baby seal…

Source: Bloomberg

The volume of negative-yielding debt has collapsed in 2022 (from a peak over $18 trillion in Dec 2020, there remains a modest $113 billion left, mainly in short-dated JGBs)…

Source: Bloomberg

As The Fed unleashed its most aggressive tightening cycle in decades

Source: LPL

Some investors welcome this new discipline.

“This has been a train crash waiting to come,” says Alexandra Morris, chief investment officer at Norway’s Skagen Funds.

“Now, money has a cost. You can’t just throw money at unprofitable businesses, very risky businesses. We need to have a much more sensible allocation of capital.”

As the year ends, 113 counterparties parked a record $2.554 trillion at the Fed’s overnight reverse repurchase agreement facility, in which counterparties like money-market funds can place cash with the central bank. That was $245 billion more than the day before, the biggest one-day increase ever.

Source: Bloomberg

Demand for the facility has tended to surge at the end of each quarter as dealers curtail their activity in the market for repurchase agreements in order to shore up their balance sheets for regulatory purposes.

US Treasury yields exploded higher this year, led by the short-end, as the market realized The Fed wasn’t kidding about its anti-inflation stance. 2Y Yields rose a stunning 370bps in 2022 while 30Y yields rose over 200bps…

Source: Bloomberg

Which meant a massive flattening in the yield curve…

Source: Bloomberg

…driving the entire curve deep into inversion…

Source: Bloomberg

For some context, 2Y Yields started the year at 0.72% and ended at 4.43% (with Fed Funds now trading above it)…

Source: Bloomberg

The last six months have seen dramatic swings in the market’s expectations for The Fed’s monetary policy trajectory with the terminal rate surging up to around 5.00% as the expectations for a H2 2023 rate-cutting cycle (which implies a recession) surging dovishly in Q4…

Source: Bloomberg

The dollar has gained more than 8 percent over the year, but it lost more than 8 percent this quarter on expectations the Fed may not raise rates as high as previously feared…

Source: Bloomberg

Cryptos took annus horribilis to ’11’ this year with the big ones – BTC and ETH – down 64% and 67% respectively as chaos reigned across the ecosystem…

Source: Bloomberg

On the commodity side of the board, it was a very volatile year with copper down notably (growth/demand scares) and energy up (supply scares), though the latter is dramatically below its mid-year panic highs…

Source: Bloomberg

WTI had a volatile year as Putin invasion reactions battled China COVID restrictions

Source: Bloomberg

Despite the dollar’s gains, gold ended unchanged on the year, rallying back above $1800 after triple-testing $1600 support…

Source: Bloomberg

Silver outperformed gold on the year, with Q4 seeing the gold/silver ratio top out (at 2019/2020 resistance) and fall back into the red for the year…

Source: Bloomberg

Finally, if you’re hoping for a rebound in 2023, there’s really only one factor you can pray for…

Source: Bloomberg

When (or if) The Fed ends its QT program? Or this?

See you in 2023!

Tyler Durden
Fri, 12/30/2022 – 16:01

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US Mulls Testing Airline Wastewater As China Covid Surge Expands

US Mulls Testing Airline Wastewater As China Covid Surge Expands

The US Centers for Disease Control and Prevention is considering a plan to sample wastewater taken from international aircraft to track emerging Covid-19 variants, Reuters reports.

According to an infectious disease expert, such a policy would provide the best chance of tracking the virus and slowing its entry into the United States, vs. blanket travel restrictions announced this week by the US and other countries, which once again are requiring mandatory negative Covid tests for travelers from China.

“They seem to be essential from a political standpoint. I think each government feels like they will be accused of not doing enough to protect their citizens if they don’t do these,” said Dr. Michael Osterholm, an infectious disease expert at the University of Minnesota, referring to the travel restrictions.

Nearly half of a plane-load of 212 passengers who arrived in Italy’s Milan Airport from China on Monday tested positive for Covid, according to a Wednesday statement by a regional health chief.

This week the United States added its voluntary genomic sequencing program to the Seattle and Los Angeles airports, bringing to the total number of airports that can analyze positive tests to seven.

That may not be enough, according to experts.

A better solution would be testing wastewater from airlines, which would offer a clearer picture of how the virus is mutating, given China’s lack of data transparency, said Dr Eric Topol, a genomics expert and director of the Scripps Research Translational Institute in La Jolla, California.

Getting wastewater off planes from China “would be a very good tactic,” Topol said, adding that it’s important that the United States upgrade its surveillance tactics “because of China being so unwilling to share its genomic data.” –CNBC

China has hit back at critics, calling criticism of its Covid statistics ‘groundless’ – and saying that the risk of new variants is low, as they would likely be more infectious but less severe.

According to CDC spokeswoman Kristen Nordlund, sampling airline wastewater is one of several options the agency is considering.

“Previous Covid-19 wastewater surveillance has shown to be a valuable tool and airplane wastewater surveillance could potentially be an option,” she wrote.

In July, French researchers reported that airplane wastewater tests revealed that negative Covid tests don’t protect against new variants – finding the Omicron strain in wastewater from two commercial airplanes which flew from Ethopia to France in Dec. 2021 despite all passengers having tested negative. 

California researchers reported in July that sampling of community wastewater in San Diego detected the presence of the alpha, delta, epsilon and omicron variants up to 14 days before they started showing up on nasal swabs.

Osterholm and others said mandatory testing before travel to the United States is unlikely to keep new variants out of the country. -CNBC

“Border closures or border testing really makes very little difference. Maybe it slows it down by a few days,” said Osterholm, adding that the virus is likely to spread worldwide anyway, so closing borders would simply delay the inevitable.

Tyler Durden
Fri, 12/30/2022 – 15:40

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Short Circuit: A Roundup of Recent Federal Court Decisions

Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.

If officers point a surveillance camera at a home for eight months without a warrant, is that an unconstitutional search? Earlier this year, the First Circuit ruled that not only is it not unconstitutional, but also that it’s not even a search. Phooey! In an amicus brief, IJ is urging the Supreme Court to take up the case and adopt a more common sense approach to its Fourth Amendment jurisprudence: looking for evidence is a search.

  • Marine Corps refuses to allow Sikh recruits to maintain their religiously required hair and dress during basic training, even though every other service branch fully accommodates Sikh servicemembers—and even the Marines will after basic training. A RFRA violation? Colonel Jeppe (paraphrasing): Deep down in places you don’t talk about at parties, you want me [violating religious liberty during basic training]—you need me [violating religious liberty during basic training]. D.C. Circuit: “[I]t is difficult to imagine [the Sikh plaintiffs] losing”; give them a preliminary injunction.
  • Second Circuit: It’s possible that $17 mil was an unconstitutionally excessive fine in this case involving banking fraud in the cannabis industry, but the district court likely overcorrected by dropping it to $100k. Such reductions should cure the excessiveness, but no more.
  • North Carolina inmate with vision impairment complains that his cell is not ADA compliant, prompting prison nurse to threaten him with involuntary sedation if he won’t shut his trap. His trap remains un-shut and Nurse Ratched makes good her threats. He files a grievance, but it is dismissed as untimely, so he goes to federal court. Fourth Circuit: And there’s a decent argument the prison’s administrative process was so byzantine that the inmate had no remedies to exhaust. The trial court can clear that up on remand.
  • Allegation: From a distance of 10 feet, man records TSA agents patting down his husband (who had infant formula that couldn’t be opened for testing) at Richmond, Va. airport. When ordered to stop recording and delete the footage, he complies, and the family is allowed on its way. A First Amendment violation? Feds: Think of the terrorists. Fourth Circuit: Think of the split-second decisions TSA agents will be afraid to make if they don’t have total immunity for violating the Constitution. Reversed and dismissed.
  • North Carolina farmworker labor union relies on two types of agreements when negotiating with farm owners: settlement agreements, which resolve disputes under the condition that the owner affiliate with a union, and dues-checkoff agreements, which require the owner to withhold union dues from member paychecks and transfer the money directly to the union. That is, until North Carolina bans the use of such agreements in 2017. Fourth Circuit: Though the ban may have a greater impact on Latinos and non-citizens, there’s no evidence of discriminatory intent, and it is constitutional.
  • Friendly advice from the Seventh Circuit: If you have medical issues that a police officer might mistake for inebriation, it may be a good idea to wear a medical bracelet while driving.
  • After East Chicago, Ind. firefighters’ union lobbies against the mayor, the city imposes a work schedule that is unlike any other in the country and that wreaks havoc on firefighters’ sleep and personal lives. District court: Which was plainly retaliation, as an official admitted on surreptitiously recorded tape. Plus, there’s no evidence of any benefits to the city’s finances from the change. Seventh Circuit: Preliminary injunction affirmed. Easterbrook, J., concurring: Political payback is part of democracy, and judges don’t have any business weighing costs and benefits of democratically enacted policies—even petty and mean-spirited ones. Alas, the city didn’t make that argument.
  • “Knowingly” is a word that can attach to a plenitude of phrases. But does it attach to “who has not attained the age of 18 years” in a federal statute that makes certain statutory . . . acts criminal? The majority and dissent of this Eighth Circuit panel have a lot of statutory points to say about it.
  • On their own time and away from school, Albany, Calif. students post racist memes about other students to a private group chat. Posts are then shared beyond the private group, leading to substantial disruption at school. Can the school expel the students? Ninth Circuit: Last year’s “angry cheerleader” case means that off-campus online speech is usually protected, but this stuff was “reasonably foreseeable” to get out and disrupt school life. Concurrence: I’m into banning some forms of “hate speech.”
  • Allegation: Vancouver, Wash. middle school teacher wears a MAGA hat to teachers-only cultural sensitivity and racial bias training. One teacher cries. Another feels threatened. The professor leading the training feels traumatized. The principal cusses out the offending teacher and tells him not to wear the hat again, which makes him feel harassed, intimidated, and bullied. Ninth Circuit: We feel like if the principal was going to have a Bernie Sanders sticker on her car, she shouldn’t be silencing other political speech. Grant of qualified immunity reversed.
  • San Bernardino, Calif. officers purportedly conducting inventory search of car they are having towed don’t actually inventory the many pieces of property they find—just the one illegal thing. Ninth Circuit: Minor noncompliance with dept. policy. No need to suppress the evidence: Forrest, J., dissenting: A Fourth Amendment violation.
  • Joseph “Tiger King” Maldonado-Passage was sentenced to 22 years in prison for hiring two hitmen to take out his foe, an animal-rights activist. (Neither was successful; one went to the beach instead, and one was an undercover FBI agent.) (Tiger King: Murder, Mayhem and Madness is on Netflix, if you wish to revisit or learn about the sordid story for the first time.) Tenth Circuit (2021): Convictions stand but resentence the man. District court: Okay, 21 years. Tenth Circuit (2022): Which is fine.
  • Nevada Supreme Court: Qualified immunity, a federal doctrine, does not shield state and local officials from state constitutional claims. Nor is there any need for the state legislature to give people a permission slip to seek damages for violations of the search-and-seizure provisions of the Nevada Constitution: “We simply recognize the long-standing legal principle that a right does not, as a practical matter, exist without a remedy for its enforcement.” (IJ argued this case as friend of the court. We also produced a stirring podcast on the topic of state remedies as a friend of the people.)
  • Ohio Supreme Court: When the gov’t wants to seize private land for public use via eminent domain, it can only take as much as it needs and it must show its needs with actual evidence. (IJ urged this course of action as amicus.)

Friends, until this week, Wisconsin was one of the very few states that banned the sale of most homemade, shelf-stable foods—like chocolates, candies, dried goods, and roasted coffee beans. The ban was very pleasing to the commercial bakeries that lobbied for it, but a poor deal for everyone else. So poor that the ban flunked the state’s rational basis test, a court ruled this week, noting that “every single [state] employee who testified in this case stated that [the ban] is unjustifiable as a matter of food safety.” [Bold in the original.] Click here to learn more.

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Yet Another Senator Bungles the First Amendment To Justify Censorship


Senator Ben Cardin

While misconceptions about free speech run rampant, it’s always surprising when the person spouting falsehoods about what the First Amendment protects is someone with real political power. Earlier this week, Sen. Ben Cardin (D–Md.) made such an error, asserting during a Senate hearing that the First Amendment doesn’t protect those who espouse “hate” or “violence.” Not only is this claim brazenly wrong, but the fact that Cardin was using this misconception to justify online censorship makes it particularly frustrating.

On Wednesday, Cardin posted a clip to Twitter from a closing statement he made during a December 13 Senate hearing on antisemitism. In the clip, Cardin states that “if you espouse hate, if you espouse violence, you’re not protected under the First Amendment. So I think we can be more aggressive in the way that we handle that type of use of the internet. We know that Europe has done things, and I think we have to learn from each other.” The tweet accompanying the clip reads “Our first amendment is one of the defining jewels of this country. It is NOT a free pass to spew violent rhetoric.”

The clip was also posted by The Hill, whose tweet eventually gained over 600 quote tweets and 1.7 million views. The backlash to the senator’s comments was swift, with hundreds of replies jumping to correct Cardin.

“Hate speech is absolutely protected by the First Amendment—explicitly so, according to the Supreme Court,” Reason‘s Robby Soave tweeted about the incident. “Embarrassing when people don’t know this, moreso when it’s a U.S. senator.”

On Thursday, Cardin appeared to backtrack, tweeting an extended clip of his original comments with the caption, “Hate speech is protected under the #FirstAmendment, unless it incites violence. #context.” In the clip itself, Cardin is shown prefacing his original statement by adding that he believes the government should begin regulating internet speech, saying “I do think there’s a role for government, consistent with our First Amendment, for us establishing parameters.”

While Cardin is correct to note that “hate speech” is legally protected unless it falls under another category of unprotected speech, like incitement of violence, the additional context does not make his assertions any more legally correct. Speech that “espouses hate” is almost universally protected by the First Amendment, and speech that “espouses violence” also has a surprisingly high chance of being protected. In fact, the legal bar for incitement of violence is so high that even the most aggressive online speech would probably have a slim chance of actually being declared an incitement of violence. As the Foundation for Individual Rights and Expression (FIRE) notes, “Mere advocacy of lawbreaking or violence remains protected speech as long as it is not intended to and likely to provoke immediate unlawful action.” Other categories of unprotected speech that might “espouse violence,” like harassment or true threats, have similarly high bars.

Further, Cardin’s comments consist of more than just a simple misunderstanding of constitutional law. They reveal a troublingly common view on tech censorship—one that is increasingly present on both the left and right. For Cardin, and many others, the presence of online speech he finds distasteful—in this case, speech which is “hateful” or apparently “violent”—is worthy of government regulation and intervention. While this push toward technocratic intervention in Big Tech is increasingly popular on the left, support for government censorship is also endemic on the right. Republican lawmakers are increasingly calling for government censorship of library books and critical race theory—not to mention attacks on social media companies’ First Amendment right to kick disfavored users and content off their sites.

Unfortunately, as Cardin’s comments show, the First Amendment seems to be going out of style on all sides of the political spectrum.

The post Yet Another Senator Bungles the First Amendment To Justify Censorship appeared first on Reason.com.

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Criminal Procedure Casebooks and Generational Change

I spent the last three months revising the 4th Amendment materials of the Kamisar LaFave & Israel Criminal Procedure casebook for the 16th edition of the book, which will be available for the Fall 2023 semester.   I thought I might say something about the experience, as I think it raises interesting questions about generational change in law school courses and materials — and perhaps about the state of the criminal procedure field today.

First, some context. The Kamisar LaFave & Israel casebook basically invented the field of constitutional criminal procedure as a subject, starting with its first edition in 1965. I’ve been on the casebook for well over a decade, but until now I had responsibilities for only a small part.  This time around, I am taking over most of the 4th Amendment materials as part of a broader generational shift in the book.  This is a little bit oversimplified, but the basic idea of that generational shift is that Eve Brensike Primus has taken over the interrogation law and right to counsel materials from Yale Kamisar, who passed away earlier this year;  I have taken over the Fourth Amendment materials from Wayne LaFave, who has retired; and Nancy King has taken over the adjudicatory criminal procedure materials from Jerry Israel, who has also retired.

Revising a classic casebook is a daunting prospect.  Each of us “second generation” authors is well aware we are following the footsteps of true giants in the Criminal Procedure field.  But it also seems to me the nature of things that, as one generation of editors moves on to the next, each new generation will recast the materials to fit the new set of authors — and a new generation of readers. Along those lines, I ended up quite considerably rewriting the Fourth Amendment materials of the book.  Much of the basic structure is similar, and many of the main cases are the same (albeit re-edited). And while some of the changes are author preferences — do you spend a lot of time on the facts of cases?  How long do you spend on dissents? etc. — some of them strike me as more generational shifts in how to think of law school casebooks, and the field of criminal procedure, more broadly, that might be of interest to a broader readership.

Below are some of the significant changes in focus I tried to introduce to the Fourth Amendment materials. My understanding is that my colleagues have made similar changes to their materials, too. But as I am writing this in my own capacity, I’ll focus on the approach I took in the search and seizure area:

Clear statements of black-letter law.  In an earlier generation of casebooks, it was common to present the cases as cases and to leave the assembly of the doctrine more to the students.  That is now outdated. Students today can get the black-letter rules anywhere, from wikipedia to Youtube to commercial outlines to outline banks online.  Given that the rules are not some sort of carefully-guarded secret anymore,  it seems odd to not integrate the black letter law rules into the casebook itself. I think it’s easy, and helpful, to state the rules up front and to then focus the materials on the hard part of how they apply and whether they are persuasively justified.  In redoing the materials, I tried to be clear about what the rules are, at least to the extent the rules are clear, and to say what rules are unclear and why.

Increased attention to history.  In an earlier generation of criminal procedure casebooks, the law was largely about the Warren Court’s major rulings.  That is still partly true: The canonical cases are often 1960s-vintage (in Fourth Amendment law, think Mapp, Katz, Terry, etc.).  But the Warren Court ended over a half-century ago, and today the 1960s are more a key part of the story than the entirety of the story. In particular, today’s Supreme Court and lower courts interpreting the Fourth Amendment often care a lot about the common law and the origins of the Fourth Amendment.  It seems to me that a casebook today needs to cover that: You can’t understand where we are without knowing the pre-Warren Court history.  So my reworked materials start with a section on the history and the development of the Fourth Amendment, starting with Entick v. Carrington (1765).

Increased attention to race and racial justice.  In recent years, especially after the killing of George Floyd, questions of race and racial discrimination in law enforcement have become central issues addressed in law school courses in criminal procedure.  In rewriting the materials, I aimed to make those questions more prominent.  That took different forms throughout the materials, among them: (a) adding commentaries about the role of race in criminal procedure; (b) adding more coverage of topics that were less prominent before, such as the law of excessive force, (c) reporting on empirical studies about racial disparities in search and seizure, and (d) directly addressing areas in which race and doctrine intersected, such as whether the seizure test should incorporate the race of suspects.

Increased attention to social science and empirical studies.  In the last decade or two, there have been a lot of very useful social science and empirical studies that give insights into how the law of criminal procedure works.  Some of the studies are on the scale of the criminal justice system: How many arrests occur each year?  How many warrants are out for persons’ arrest, and for what?   Other studies are on how often different doctrinal paths are taken: How often do people consent?  How often does an automobile search lead to discovery of evidence?   Other students are on racial disparities: How often are people of different races subject to Terry stops? How often are people of different races frisked?  Others are on psychology of police-citizen interactions: Why do people consent to search?  When do people feel free to leave?  What influences judicial findings of probable cause?  Students who read Supreme Court cases will want to know how some context of how they work, and I think it’s really useful in various places to summarize the empirical studies so students can contextualize the rules.

Increased awareness of state practices. In an earlier generation, it was assumed that the U.S. Supreme Court had federalized the field of criminal procedure.  The Warren Court had made the law uniform, so there was one body of law to learn.  Today, though, state practices have become more important again, in part because the U.S. Supreme Court has limited the reach of some federal doctrines.  A student who goes on to practice criminal law might practice in federal court, or in a state that sticks with the federal standard. But they might practice in a state that has a lot of state limitations that exceed the federal threshold.  You can’t go through all the state practices, of course, and the federal standard is still the floor and governs in many places. But it can be useful to point out some areas where state practices differ, and more generally for students to be aware that state practices in a particular state might have state-specific doctrines that go beyond the federal floor.

Those are the main kinds of changes.  Of course, adding these materials meant that other materials had to be taken away.  We’re trying to keep the book the same length, and maybe shorten it if we can.  Among the items that I tried to shave down a bit (or even cut out) to make room for new materials included: (a) Trimming or eliminating materials that were “hot topics” in an earlier era, but are less prominent today, such as legal issues involving the War on Terror, (b) Trimming dissents from older cases, some of which were included at great length in earlier editions because those Justices were still on the Court and might have future majorities (as time passes, that becomes less significant; dissents are needed to frame debates, but they can often be shorter because those Justices are no longer on the Court);  and (c) Trimming cases that were recent at the time of earlier editions and may have seemed like important new directions at the time, but that over time have come to seem significantly narrower because they did not actually lead to new paths.

The new 16th Edition of the casebook will be available for the Fall 2023 semester.  I hope professors find the changes helpful, and that students enjoy the experience of reading it.

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2022 Was the Year of Hubris


an illustration of Icarus

When Russian tanks rolled across the border into Ukraine on February 23, much of the world seemed to believe the conflict would be over quickly—that the brave Ukrainians would be crushed by the Russian war machine, one of the world’s largest and most expensive militaries.

Whether Russian President Vladimir Putin shared that opinion is unclear, but there’s no doubt that the invasion was a display of his own overconfidence: in his military, in the expected acquiescence of Ukraine, and in the world’s willingness to let a dictator redraw the boundaries of a well-established, independent European country. It hasn’t gone as planned. Instead of a quick victory, the war has turned into a churning, bloody stalemate. The U.S. estimates that Putin has lost 100,000 of his own troops while conquering relatively little new territory (to say nothing of the massive humanitarian disaster the war has unleashed).

Hubris—the arrogant pride that goeth before the fall—has been a fundamental part of the human experience since long before the ancient Greeks wove it into stories as the metaphorical Achilles heel that toppled heroes and villains alike. It’s always been with us, but hubris had a real moment in 2022. Politicians insisted that government action was necessary to rein in social media platforms, but the market has largely done that on its own. This year also saw the spectacular collapse of Sam Bankman-Fried’s crypto-trading-platform-turned-Ponzi-scheme, and with it the exposure of the hollowness of Bankman-Fried’s “effective altruism” ideology. An anticipated “red wave” failed to materialize for Republicans in the midterm elections, the promise of “transitory” inflation was punctured on almost a monthly basis, and China was forced to ease up on its “zero COVID” strategy after lockdowns triggered protests and demands for freedom unlike anything seen there in decades.

On a moral scale, everything on that list pales in comparison to Russia’s invasion of Ukraine, of course. And there’s a big difference between overconfidently risking your own property and destroying what belongs to someone else.

Even so, the tendency of those in power to topple themselves (or at least lose a lot of money and support) by overreaching should provide a lesson to policy makers and the rest of us as we head into 2023 about the volatility and unpredictability of the modern world. It’s not just those in power who are susceptible to hubris; it’s anyone who thinks he knows what’s going to happen next.

Indeed, what happened to Facebook and Twitter in 2022 should put to bed the hubristic declarations of people like Sen. Elizabeth Warren (D–Mass.), who has argued for government action to break up Big Tech. The market is beating her to it.

Facebook’s revenue and user base are spiraling downward, and the site’s parent company, Meta, announced in November that it was laying off 11,000 workers. Zuckerberg had a rough year, but Musk might have had it even worse. He lost $25 billion on January 27 after Tesla announced that it would delay delivering some vehicles due to supply chain issues. That was the fourth-steepest one-day drop in a person’s wealth in the history of Bloomberg’s personal wealth index. And that was well before Musk decided to go on his ego-driven Twitter misadventure, which has blown another $39 billion hole in his net worth, according to Bloomberg’s numbers. Users unhappy with Musk’s leadership have fled to other platforms, accelerating an existing trend of greater competition and fragmentation in social media.

Call it creative destruction. Call it voting with your virtual feet—like the ones that might someday be attached to those weird avatars in the metaverse. Either way, it should inject some much-needed humility into the debate over the future of Big Tech.

Meanwhile, Putin wasn’t the only foreign leader left exposed by overconfidence this year. China’s handling of the COVID-19 pandemic had been a point of national pride, and had been offered as evidence that authoritarian countries were better equipped to handle modern crises than democracies. Then, a new wave of the virus exposed the problems with China’s zero COVID strategy—and protests against the resulting lockdowns forced the government to ease some of its strictest rules, including allowing people with mild cases to quarantine at home rather than in mass quarantine facilities. “Even in a historically authoritarian country, you can only keep your boot on someone’s neck for so long,” Reason‘s Emma Camp observed earlier this month.

American leaders who fret about the threat of a rising China—and who use that threat to counterproductively make America more like China—should take notice. China’s zero COVID strategy has also sunk its economy and lowered expectations for the near future. “Until recently, many economists assumed China’s gross domestic product measured in U.S. dollars would surpass that of the U.S. by the end of the decade,” The Wall Street Journal reported in October. Now, more are wondering “if it ever will.”

Politically, it seems like the year of hubris has once again demonstrated why democracy is the least-bad form of government. Democratic countries still make big mistakes of course, but it’s more difficult to launch a massively destructive war or lock your own citizens inside their homes for extended periods of time when you have to occasionally gain the consent of the governed to stay in power.

China’s economic issues are tied up in its authoritarian ones. Simply put, democracies seem better positioned to handle a world where everything is in constant flux because elections serve as a sort of market mechanism.

“Authoritarian systems have a tendency toward groupthink and ideological rigidity, frequently proving unwilling or unable to properly assess information and change course when existing policies prove disastrous,” Vox senior correspondent Zach Beauchamp wrote earlier this month. During 2022, he wrote, “authoritarian governments that were supposed to outcompete democracy floundered, while some of the biggest democracies staved off major internal challenges.”

All governments are susceptible to hubris by their very nature. But democracy, like a free market, injects humility and uncertainty into the system. Those are benefits, not flaws. That’s something I can say with utter confidence.

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22 Changes In 2022: Crypto Year In Review

22 Changes In 2022: Crypto Year In Review

Via Thanefield Capital,

We’ve done our best to put together 22 points that we think tell the story of this year in crypto.

Everything shown is as of December 26th or December 27th.

Without further ado, Thanefield Capital’s 22 Changes in 2022.

1. Total crypto and stablecoins market cap

2021: +$162mn per hour

2022: -$164m per hour

Almost exactly, 2022 undid every dollar crypto and stablecoins added in 2021. Year over year market cap destruction first flashed in Q1 and was tagging $2tn by November. We’d love to see a more standardized measurement of total crypto value (addressing problems like FDV and liquidity) gain popularity, but this is the headline number.

2. Bitcoin and Ethereum futures open interest

Futures open interest for the two biggest cryptos went up only in coin terms, doubled, and then blew up with the FTX crash. Both charts will still close the year out significantly higher than at the start. Both charts are of course lower when measured in dollars.

3. Ethereum gas

The cost/demand to transact on Ethereum dropped around 80%.

4. Session performance

For the second year in a row, crypto tended to go down during Asia market hours. It was the worst time of day for Ethereum but the best for Bitcoin. All three sessions had negative absolute performance.

5. Crypto lending

OTC leverage imploded after 3AC went down – with market leader Genesis originating $8.4bn in loans this Q3 vs. $50bn in the last quarter of 2021. The more recent Q4 numbers are likely to be even lower.

6. Binance dominance

Binance pushed their total futures market share to almost 70%.

7. Altcoin drawdowns

This year sent a whopping 2/3rds of the names in our Binance spot universe (~80 coins) down more than 90% from their all time high.

8. Ethereum volume share

Starting this year at just half the size, it is now a toss up whether Ethereum futures will trade more volume than Bitcoin on any given day. This came and went with the merge trade but surged again in Q4 and appears to be sticking around.

9. SBF

The face of crypto was charged with conspiracy to defraud the United States.

10. Implied volatility

The average implied volatility for 1 month Bitcoin and Ethereum options averaged just under 100 in 2021, and looks set to close this year under 75. The adjustment lower has accelerated in recent weeks.

11. Futures margin

2022 solidified the crypto futures transfer to cash margin from coin margin – taking the ratio from 200% to 700%.

12. Solunavax

Solana, Luna, and Avax wiped out roughly $236bn in FDV. This number was on par with 2019’s total crypto market cap.

13. Perps volume

Total perpetual futures volume opened the year averaging around $90bn a day and will end the year crashing under $40bn a day.

14. Put love

Downside is the new upside – crypto options stopped trading with a negative skew this year. Chart is cropped at zero for visual purposes.

15. Heroes

Half of the top 10 crypto funds going into this year are now either bankrupt, missing in action, or both.

16. Carry

What was left of the once >40% annualized basis trade in Bitcoin and Ethereum was squashed to zero and then some, and has stayed there.

17. Ethereum supply

The merge gave crypto’s second largest asset a wildly different emissions schedule, moving Ethereum further into direct competition with Bitcoin.

18. Stablecoins

For the first time in their history, stablecoins saw a decrease in circulation this year. It’s a slow turning chart and it’s only going one way right now.

19. Weekends

Crypto markets were further integrated into a M-F lifestyle, with Bitcoin averaging almost 70% more volume on weekdays than weekends now, up from a roughly 30% difference at the start of the year. The kicker is that this took the form of less volume on weekends, not more volume on weekdays.

20. The bigger picture

Macro left us on our own this year with one of the worst performances for a US 60/40 portfolio in history.

21. Fundraising

Here’s the chart that sticks out like a sore thumb. This year’s total crypto fundraising topping the 2021 total goes to show just how extreme activity here remained well into H1. Post-FTX, everything is different but the data will take some time to come in.

22. GBTC

GBTC made the transition from a troubled product to a failed, parasitic product as the NAV discount blew out to more than half. The discount widening played a large part in the downfall of 3AC.

See you next year!

Tyler Durden
Fri, 12/30/2022 – 15:20

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Pledging Deepened Military Ties With Putin, Xi To Visit Russia In Spring Against Backdrop Of War

Pledging Deepened Military Ties With Putin, Xi To Visit Russia In Spring Against Backdrop Of War

Russian President Vladimir Putin in a Friday virtual meeting with his Chinese counterpart Xi Jinping hailed Russia-China ties as at their “best in history” and the strategic partnership between the two countries a “stabilizing factor” amid broader geopolitical tensions with the West. Putin vowed to his “dear friend” Xi to strengthen military cooperation with China, while Xi reciprocated by saying Beijing stands ready to expand ties.

“In the context of soaring geopolitical tensions, the importance of the Russian-Chinese strategic partnership as a stabilizing force is growing,” Putin emphasized, saying relations will continue to expand “dynamically” from this point on.

The Chinese leader in response said: “Under our joint leadership, the Chinese-Russian comprehensive partnership and strategic interaction in the new era demonstrates… resistance to stress [or difficulties],” according to a Russian state media readout.

Kremlin Pool Photo via AP

Xi additionally sought to reassure Putin that China “in the face of a simple and far from unambiguous international situation” stands ready to “increase strategic cooperation with Russia, provide each other with development opportunities, and be global partners.”

Xi’s remarks about the ongoing Ukraine crisis and conflict, which Putin himself this month for the first time referred to as a “war” (a definite upgrade in terminology from the previous “special military operation” reference), were interesting considering that they carefully avoided condemning the invasion of Ukraine

Xi also told Putin that the road to peace talks in Ukraine would not be smooth and that China would continue to uphold its “objective and fair stance” on the issue, according to state broadcaster CCTV.

With these words, Xi once again shirked continued pressure from Western countries to issue a full condemnation of the war.

Another big development to come from the Friday virtual summit is that the Kremlin unveiled an invitation for President Xi to travel to Russia in the spring of 2023. Putin expressed hope that this would present a united front and public solidarity in closer relations in the face of the pressure campaign from the West.

Putin said: “We are expecting you, dear Mr Chairman, dear friend, we are expecting you next spring on a state visit to Moscow,” adding that the state visit would “demonstrate to the world the closeness of Russian-Chinese relations.”

Given that part of the meeting was televised, and the formal invitation made public as part of this, it’s very likely Xi will indeed proceed with the spring visit, which is likely to have already been long in the planning process.

Putin further summarized what kind of message this would send to Russia and China’s rivals and enemies, stressing to Xi that “Amid unprecedented pressure and provocations from the West we are standing up for our own fundamental views.”

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As we detailed this week of Zoltan Pozsar’s year-end big picture global sitrep, a major (recurring) theme of which includes the following observation: “in a moment when the world is going from unipolar to multipolar, the actions of heads of state are far more important than the actions of central banks”… 

According to Pozsar the special relationship between Russia and China “has a financial agenda to it, and what President Xi and President Putin say about the future of money – that is, the future they envision – matters for the future of the U.S. dollar and liquidity in the U.S. Treasury market.” But even more important is what they do, i.e., it is their actions that are forging something new, or as Zoltan puts it: 

Bretton Woods III is slowly taking shape, and in light of developments to date, my motto for Bretton Woods III – “our commodity, your problem” – remains apt.

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Tyler Durden
Fri, 12/30/2022 – 15:00

via ZeroHedge News https://ift.tt/1RflxTo Tyler Durden