Month: October 2024

Authored by John O’Sullivan via CoinTelegraph.com,

The debate over the identity of Bitcoin creator Satoshi Nakamoto is back in the spotlight with the upcoming release of an HBO documentary.

As part of the renewed interest, 10x Research has published a report revisiting two leading theories: one pointing to cryptographer Nick Szabo and the other suggesting involvement by the United States National Security Agency (NSA).

Both theories are part of a larger debate that has attracted renewed interest with the upcoming HBO documentary investigating the origins of the world’s first cryptocurrency.

Source: 10x Research

Szabo: The man behind smart contracts

Szabo is a prominent figure in crypto history due to his development of “smart contracts” in the 1990s and his proposal of “Bit Gold,” a precursor to Bitcoin.

10x Research highlights Szabo’s influence, noting his decentralized concept of Bit Gold closely aligns with the core architecture of Bitcoin. 

Bit Gold introduced cryptographic puzzles, timestamps and public verification methods. These elements were later seen in BTC, which the world is steadily likening to gold.

Despite Szabo denying any involvement with Bitcoin, 10x Research points out similarities in writing style and philosophy between Szabo’s blog posts and Nakamoto’s 2008 white paper on Bitcoin.

Szabo overtook cryptographer Len Sassaman as the frontrunner on Polymarket to be identified as Satoshi Nakamoto in HBO’s upcoming documentary that claims to reveal Bitcon’s creator.

Polymarket bettors have put 27.9% odds on Szabo, inventor of the failed crypto network Bit Gold, as the one HBO’s Money Electric: The Bitcoin Mystery will identify as Bitcoin’s pseudonymous creator, followed by Sassaman at 14% and Blockstream CEO Adam Back at 4.3%

Sassaman initially led with as high as 68% odds shortly after the betting platform opened the market on Oct. 4.

Those odds dropped when the documentary’s producer, Cullen Hoback, told CNN on Oct. 7 that he confronted the person he thinks is the real Satoshi Nakamoto, which would rule out Sassaman because he died in 2011.

NSA: Nakamoto’s Secret Alias?

The report also delves into the possibility that the NSA played a role in the creation of Bitcoin, citing the agency’s expertise in cryptography and related research.

The NSA’s 1996 research paper “How to Make a Mint: The Cryptography of Anonymous Electronic Cash” outlined the basic framework for what eventually became BTC.

How to Make a Mint: The Cryptography of Anonymous Electronic Cash. Source: Archive.org

On March 5, 2001, cryptographer Glenn Lilly filed the “Device for and method of one-way cryptographic hashing” patent while working for the NSA.

The patent assignee is listed as “The United States of America as represented by the National Security Agency,” which means the patent is held by the US government — specifically, by the NSA.

Device for and Method of one-way cryptographic hashing. Source: United States Patent and Trademark Office

According to the 10x Research report, the patented technology was “the widely used secure hashing algorithm (SHA-256),” an algorithm used “in the hash function and mining algorithm for the Bitcoin protocol.”

It should be noted that the NSA has made the patent royalty-free, as confirmed by Datatracker.

Confirmation that the US Patent 6,829,355 is available royalty-free. Source: Datatracker

HBO big reveal or Szabo-tage?

Despite extensive research, no definite proof links the NSA or Szabo (or any other entity) directly to the creation of BTC, and the 10x Research report still leaves readers with questions.

Cointelegraph spoke with Markus Thielen, founder of 10x Research, who explained that “the real Satoshi might need to make a public statement, particularly if they decide to sell the Bitcoin they hold.”

“Many will likely assume HBO’s findings are true, even though the person behind Satoshi may avoid confirming this for as long as possible,” he added.

Thielen said the firm believes the HBO documentary will “likely fall short” of proving Nakamoto’s identity, leaving it up to the “true Satoshi” to step into the light and provide conclusive evidence.

One Satoshi pretender, Craig Wright, was recently found not to be the mastermind behind BTC and was instead found guilty of perjury by a United Kingdom High Court judge on July 16.

A number of days have passed with no Israeli retaliation against Iran for its Oct. 1st major attack which saw nearly 200 ballistic missiles pummel the Tel Aviv area, including hits on important Israeli air bases. A lot of back-and-forth and contradictory reports later, and with the US side reportedly trying to ‘talk Netanyahu down’, Israel is saying that strikes on Iran’s energy facilities are still definitely on the table:

US OFFICIALS TO NBC – ISRAEL IS CONSIDERING STRIKING ENERGY FACILITIES IN IRAN

The news wire sent crude prices spiking, as has been the pattern over the last week of threats and counterthreats flying between Tehran and Tel Aviv…

The New York Times reported Monday based on Israeli officials that a significant counter attack is still coming, and it is expected to target Iranian military sites. The fresh report also lists as likely targets Iranian intelligence sites and officials’ offices or headquarters. President Biden has warned against striking Iran’s nuclear sites, and even days ago backed off the idea of hitting energy and oil facilities. Thus a ‘debate’ has still been raging internally as both sides are said to be coordinating the response.

“At least initially, Israel seems unlikely to go after the country’s nuclear crown jewels,” NY Times writes. “After considerable debate, those targets seem to have been reserved for later, if the Iranians escalate with counterstrikes of their own.”

But hawks and hardliners in the Israeli government, who may or may not have PM Netanyahu’s ear, are saying the ‘opportunity’ must be seized: 

“Israel has now its greatest opportunity in 50 years, to change the face of the Middle East,” Naftali Bennett, a hard-line nationalist and former prime minister who once described himself as to the right of Prime Minister Benjamin Netanyahu, recently wrote on social media. “We must act *now* to destroy Iran’s nuclear program, its central energy facilities, and to fatally cripple this terrorist regime.”

He added: “We have the justification. We have the tools. Now that Hezbollah and Hamas are paralyzed, Iran stands exposed.”

But this sounds a lot like the rhetoric leading up to the 2003 US invasion of Iraq, but instead of setting in motion the “birth pangs of a new Middle East” — the Iraq war resulted in an estimated million deaths and casualties, destabilization going on two plus decades, the rise of ISIS, and the ascendancy of a pro-Tehran government in Baghdad.

Interestingly, Washington is now trying to ‘manage’ Israel’s impending Iran strike, with Biden urging a “proportionate” response, or one that avoids major regional war.

Strangely, the US administration is apparently offering Israel “compensation” for its military to hit only US-approved targets. According to a Sunday Jerusalem Post report, “An American official said, ‘If you don’t hit targets A, B, C, we will provide you with diplomatic protection and an arms package’.”

“Israeli officials responded saying, ‘We consider the United States and listen to them. But we will do anything and everything we can to protect the citizens and the security of the State of Israel’,” the report continued.

Notable answer not included in the 60 minutes broadcast last night (was in Overtime)

Asked which foreign country she considers to be the US’s “greatest adversary,” Harris says:

“I think there’s an obvious one in mind which is Iran. Iran has American blood on their hands.” pic.twitter.com/yLefXJM1Cr

— Alex Thompson (@AlexThomp) October 8, 2024

Concerning the desire of some Israeli officials to strike Iran’s nuclear sites hard, there remains a significant practical problem: US ‘bunker-buster bombs’ are needed to do damage to underground facilities. Much of Iran’s missile silos are also protected underground. Washington would have to sign off in this case.

Currently, US CENTCOM Chief General Michael Kurilla is in Israel leading the coordinated discussion from the US side. To be expected in the post-9/11 world of ‘forever wars’ in the Middle East, Congress seems completely absent from the conversation as US taxpayer dollars are literally being used to essentially bribe Israel.

Meanwhile, former President Donald Trump while on the campaign trail recently argued that Israel should “hit the nuclear first and worry about the rest later.” This is sure to frustrate and anger the sizeable part of his base which has been sick and tired of the unauthorized ‘forever wars’ – especially ones waged on behalf of foreign powers which have little or nothing to do with defense of the US homeland.

By Bas van Geffen, Senior Macro Strategist at Rabobank

China’s equity indices either did very well, or very poorly, depending on your reference. The country returned to work after a weeklong national holiday with a gain of 4.4% for the Shenzhen CSI 300 index. That’s less than half of the opening gains though – the CSI 300 opened the day with a 10.8% increase on the screens. Some investors may have used the first opportunity they had in a week’s time to sell some of their holdings and lock in a profit.

That also explains some of the sharp divergence between the green digits on China’s mainland exchange and the 7.8% drop in the Hang Seng index today. The Hong Kong exchange remained open last week, and the HSI had gradually continued to rise until today’s open. The drop in the HSI index arguably better reflects the latest sentiment. The government had scheduled another press conference for today, leading to expectations of further stimulus measures. However, the press briefing concluded with no additional measures being announced.

With a fairly thin data calendar this week, there is little distraction for German industry to hide behind. Industrial output wasn’t as bad as expected: production was down ‘only’ 2.7% y/y. That’s an improvement from the previous month (-5.3%) and it beat market expectations. However, this probably does not mark an improving trend for the manufacturing sector. Production in the automobile industry, which was the main reason for the output jump, fluctuates considerably from month to month.

Moreover, yesterday’s data also flag a sharp decline in new orders. Order books shrank 3.9% y/y, despite an increase in demand from non-Eurozone countries. Particularly demand in Germany itself is abysmal, indicating that German companies are still very reluctant to invest in capacity or more efficient production.

Given the importance of export orders for German growth, and particularly the export of cars to China, it is not surprising that Germany was amongst the countries that voted against Brussels’ plans to impose punitive tariffs on Chinese electric vehicles. Reuters headlined that this highlights “Berlin’s waning influence” in Europe.

Indeed, one way to interpret the split decision to impose additional tariffs is that China is successfully exploiting the different national interests to drive a wedge between the European politicians. But one would hope that there has been some backroom coordination in Europe, in order to limit the fallout of the EV tariffs. What if European politicians secretly agreed to vote in such a way that a) the tariffs would be passed; and b) those countries with a big reliance on exports to China can vote against, so that any retaliation will focus on less-vulnerable sectors?

Whether it was discord or coordination, the vote will probably focus Beijing’s attention on the agriculture sector, not cars. Germany and Slovakia –who both have a substantial car industry– voted against. Meanwhile, France, the Netherlands, Ireland and Denmark are amongst those countries that voted in favor of the tariffs. To retaliate against these countries specifically, China will have to focus on agricultural exports such as pork, dairy and (French) wines. Speaking of which, China has just announced provisional tariffs on French brandy.

The founder of Lululemon had his house defaced after putting up a political sign taking a shot at David Eby, premier of the province he lives in, British Columbia. 

Eby is in the midst of a tight race with what Bloomberg is calling a “resurgent Conservative Party”, with the news outlet detailing how Chip Wilson’s $60 million becahfront mansion became covered in graffiti after posting the political sign. 

The sign read: “Eby will tell you the Conservatives are ‘Far Right’ but neglects saying that the NDP is ‘Communist.’”

The Bloomberg article reports that on the same day the graffiti went up, saying “selfish billionaire lives here”, it was washed off and another political sign was put in its place.  The second sign read: “Voters seem to forget when Eby ‘gives’ us money, it is the Voters’ money he has already taken.”

“I don’t disagree with him when he calls David Eby a communist,” responded BC Conservative Leader John Rustad. 

Eby, the local legislator for Wilson’s neighborhood, stated last week that the government raised taxes on Wilson and the wealthiest 2% of British Columbians to fund health care and social services, according to Bloomberg. 

He remarked: “I know when you are so rich that the Red Hot Chili Peppers play your birthday party, it’s possible to lose perspective.”

Wilson’s representative didn’t comment, but Wilson has previously cited Ayn Rand’s *Atlas Shrugged* as the second-most influential book in his life. His property is valued at C$81.8 million ($60.1 million), making it the most expensive home in BC, according to provincial tax data, Bloomberg writes. 

Authored by Robert Burrows via BondVigilantes.com,

In recent years, the transmission mechanism of monetary policy—the intricate process through which central bank actions impact the economy—has undergone significant changes, notably as global debt levels have surged. With governments around the world carrying heavier debt burdens, the impact of rising interest rates on the economy has shifted in ways that policymakers must grapple with. This complex situation underscores the need for a deeper understanding of the economic dynamics. One of the most pressing issues is the effect of increasing interest payments on government debt, reshaping how central banks think about and implement monetary policy.

The traditional transmission mechanism

Historically, central banks have used interest rates as their primary tool to influence economic activity. When inflation is high, or the economy is overheating, central banks raise interest rates to cool demand by making borrowing more expensive. Conversely, when the economy is sluggish, they lower rates to stimulate spending and investment by making credit cheaper.

This process works through several channels:

1. Interest rates: higher rates increase the borrowing costs for businesses and consumers, reducing spending and investment, and vice versa.

2. Wealth effect: changes in interest rates affect asset prices, which influence household wealth and, in turn, consumer spending.

3. Exchange rates: higher interest rates can attract foreign capital, strengthen the domestic currency, and impact trade balances.

However, with unprecedented levels of government debt, the traditional transmission of monetary policy is becoming increasingly complicated.

The role of high debt in changing the transmission mechanism

Now government debt is at historically high levels, the impact of interest rate changes reverberates more strongly through fiscal channels. Rising interest rates affect private borrowers and significantly increase the cost of servicing government debt. This creates a feedback loop between monetary and fiscal policy, which may ultimately constrain the central bank’s ability to use its tools as freely as it did in the past.

Rising interest payments and the fiscal-monetary policy nexus

As interest rates rise, governments must allocate more of their budgets to debt servicing costs. This presents a significant dilemma: higher interest payments can crowd out other forms of government spending, such as infrastructure investments, social programs, or healthcare. In countries with very high debt-to-GDP ratios, such as the United States, Japan, and several European nations, the cost of debt servicing has become a substantial part of the national budget.

The figure below illustrates the substantial size of the US net interest expense. It’s on track to be the second largest outlay, second only to Social Security. Perhaps this is why Japan, with its 250% debt to GDP, has been so slow to raise interest rates.

Source: US Department of the Treasury, Monthly Statement, April 2024.

This increase in government spending on interest payments due to rising rates means two things:

1. Constrained fiscal policy: governments may have less room to manoeuvre when it comes to fiscal stimulus, as a larger proportion of their revenue goes towards interest payments. This could limit the effectiveness of countercyclical fiscal measures in future recessions.

2. Political pressure on central banks: central banks may face political pressure to keep interest rates low to help reduce the government’s borrowing costs. This creates a risk of ‘fiscal dominance’, where the need to manage government debt trumps the central bank’s focus on controlling inflation.

The impact on economic growth

The rising cost of government debt can also significantly dampen economic growth. As governments are forced to spend more on debt servicing, they may cut back on productive investments that drive long-term economic growth. The gravity of the situation is a cause for concern. Additionally, higher interest rates can squeeze private-sector borrowing, especially for small businesses and consumers, leading to lower levels of economic activity overall.

How high debt affects central bank decisions

A central bank’s traditional objective is to manage inflation and stabilise the economy. However, with high debt levels, central bankers must now also consider the fiscal implications of their actions. Raising interest rates aggressively to combat inflation could potentially destabilise public finances, especially if governments are already struggling with large deficits and high debt loads.

For example, a country with high debt that faces rising interest rates may see its credit rating downgraded, leading to higher borrowing costs and a vicious cycle of debt accumulation. Central banks may be forced to adopt a more cautious approach to tightening monetary policy, even when inflation rises, to avoid exacerbating fiscal pressures. This caution could lead to a situation of ‘fiscal dominance’, where the central bank’s ability to control inflation is compromised by political pressure to keep interest rates low for the government’s benefit, highlighting the potential risks to inflation control when central bank independence is threatened.

Changing policy transmission

Another significant shift in the transmission mechanism is that high debt levels have led to greater uncertainty about how quickly or effectively monetary policy actions translate into economic outcomes and through which channel—monetary or fiscal.

Consider a scenario where a central bank hesitates to raise rates due to concerns over government debt. In this case, inflation could persist at high levels, diminishing purchasing power and undermining the efficacy of future policy interventions. This erosion of the central bank’s control over inflation due to ‘fiscal dominance’ could result in less effective future policy interventions, highlighting the enduring impact of high debt levels on the economy.

The US economy, along with others, is approaching a critical juncture, with the upcoming election potentially serving as a catalyst. Despite being in the fourth year of economic expansion and with unemployment at or near all-time lows, current deficit levels mirror those seen during recessionary periods.

The chart below shows the unemployment rate vs. the deficit (inverted):

Source: Bloomberg, M&G, August 2024

When the next economic downturn arrives, the government may find itself in a precarious situation. Will it be able to respond with a Keynesian splurge given the current levels of debt and deficits? If the new administration fails to curb spending, the market may force austerity measures on the government. Fearing this outcome, the government will likely have to tighten fiscal spending, potentially leading to an economic slowdown.  

This dynamic has made life increasingly difficult for investors, and they should remain cautious. With interest rates starting to move lower on the back of rate cuts and valuations looking stretched with still relatively flat curves, fixed income is at risk of yields moving materially steeper as investors lose confidence or central banks respond to an economic slowdown.

From a long term perspective, the curve remains exceptionally flat:

Source: M&G, Bloomberg as at September 2024

Worryingly, politicians seem more concerned about people eating dogs and cats over the pending fiscal crisis. Perhaps investors will continue turning to alternative assets such as gold, which is known to protect against inflation, currency devaluation and geopolitical risk, which seems to be rising by the day. Alternatively, we may see a greater focus on economies with strong fiscal positions and low outstanding debt.

The CIA hasn’t seen any evidence that Iran is building a nuclear weapon, agency director William Burns told a security conference on Monday.

“No, we do not see evidence today that the supreme leader [Ayatollah Ali Khamenei] has reversed the decision that he took at the end of 2003 to suspend the weaponization program,” said Burns in remarks at The Cipher Brief‘s 2024 Threat Conference in Sea Island, Georgia, as reported by NBC News. 

Burns perspective comes as the State of Israel says it’s planning a “serious and significant” response to Iran’s barrage of some 200 ballistic missiles fired at Israel last week. The Iranian strike followed Israel’s assassination of Hassan Nasrallah, the secretary-general of the Lebanese political and militant organization Hezbollah, which is allied with Iran.

As the world awaits Israel’s next step up the escalation ladder, there has been speculation that Iranian nuclear reactors and related facilities may be among the IDF’s targets. President Biden told reporters he wouldn’t support Israel striking nuclear targets, while former President Trump said Israel should “hit the nuclear first and worry about the rest later.” 

Burns did caution that, thanks to Trump’s decision to withdraw the United States from the 2015 nuclear agreement between Iran and several major powers, Iran “is in a much closer position to produce a bomb’s worth of … enriched material for a single weapon.”

Under that Joint Comprehensive Plan of Action (JCPOA), Iran had taken on an unprecedented degree of external supervision of its nuclear program, dismantled centrifuges, filled its heavy water reactor with concrete, and shipped uranium out of the country, all in exchange for the easing of economic sanctions. When Trump killed the deal and reimposed sanctions, Iran began ignoring restrictions imposed by the treaty.  

Burns told the audience that, under the JCPOA’s restrictions, it would have taken Iran more than a year to accumulate the requisite amount of enriched uranium to build a bomb. “Now it’s probably more like a week or a little more to produce one bomb’s worth of weapons-grade material,” he said, “so the risks have increased.”

Of course, it’s one thing to obtain enriched uranium, and another altogether to build a functioning, deliverable nuclear warhead. By some estimates, that could require up to a year, NBC notes. In any event, Burns emphasized that, under close, ongoing scrutiny of Iran, the CIA hasn’t seen any indication of an Iranian intent to build a nuclear bomb:  

“We don’t see evidence today that such a decision has been made. We watch it very carefully. I think we are reasonably confident that — working with our friends and allies — we will be able to see it relatively early on. But … the great danger in a way is that time frame has been compressed in ways which create new challenges for us.”

In 2005, Khamenei issued a fatwa declaring that, according to an Iranian government summary of his remarks, “the production, stockpiling and use of nuclear weapons are forbidden under Islam and… the Islamic Republic of Iran shall never acquire these weapons.” The religious edict against nuclear weapons followed Iran’s earlier refusal to reciprocate when Saddam Hussein’s Iraq used mustard gas and other chemical weapons against Iranian soldiers and civilians during the Iran-Iraq War. The US government knowingly abetted Iraq’s employment of chemical weapons. 

This week’s anticipation of a potential Israeli targeting of Iranian nuclear facilities comes amid social media speculation over a 4.5 magnitude seismic event in Iran’s desert on Saturday, with various non-seismologist posters suggesting that, rather than an earthquake, the vibrations may have been caused by a nuclear weapon test. 

The Comprehensive Nuclear-Test-Ban Treaty Organization rejects those theories, according to Russia’s Permanent Representative to International Organizations in Vienna Mikhail Ulyanov. He took to Telegram, writing: 

“In connection with the seismic events in Iran on October 5 there were speculations that they were probably caused by nuclear tests. CTBTO analyzed signals from its 25 stations and came to the conclusion that recorded waveforms were consistent with previous earthquakes in Iran.”  

Along with his interventionist allies in the United States, Israeli Prime Minister Benjamin Netanyahu has been claiming Iran is on the brink of building a nuclear weapon since 1992. In 2003, he infamously told the US Congress: 

“There is no question whatsoever that Saddam is seeking and is working and is advancing towards the development of nuclear weapons—no question whatsoever…Every indication we have is that (Saddam) is…pursuing with abandon, pursuing with every ounce of effort, the establishment of weapons of mass destruction, including nuclear weapons.”

Remember how that turned out for thousands of American service members and hundreds of thousands of innocent Iraqis? 

Authored by The Empowerment Alliance via RealClearPennsylvania,

The Commonwealth of Pennsylvania is ground zero for selecting the next president of the United States. We know that energy affordability is a key issue to voters in making this decision.

Data compiled by The Empowerment Alliance (TEA) shows that Pennsylvania has 3.2 million American Energy Patriots, or about 38% of its 8.8 million registered voters.

We define those voters as people who prioritize energy affordability in their voting decisions. They will support candidates who champion cost-effective energy policies.

Statistics also reveal that the Biden-Harris administration has a negative 31.8% approval rating among this voting bloc.

The state’s importance

• Pennsylvania has 19 electoral votes, the most among the seven battleground states.
• The state has tended to back the winner in U.S. elections. Only three times between 1933 and 1988 was a candidate for president able to win without carrying the state.
• In 2020, Joe Biden won the state by about 1.16 percentage points (80,555 votes) over Donald Trump.
• Trump claimed a narrow victory in 2016 over Hillary Clinton.

TEA has reviewed both Kamala Harris’s and Donald Trump’s energy policies and records that Keystone State voters should consider before voting.

• Since President Biden and Vice President Harris took office, the cost of electricity in Pennsylvania has increased over 33 percent, the cost of natural gas has risen 28 percent, and the cost of gasoline jumped more than 30 percent.
• Despite campaign promises that it would not ban fracking, the Biden-Harris administration let a fracking ban take hold in the Delaware River Basin that covers parts of Pennsylvania, New York, New Jersey, and Delaware.
• A nationwide fracking ban could cost Pennsylvania 600,000 jobs and $260 billion in lost Gross Domestic Product (GDP).

Specifics lacking

Harris has adopted a plan that aides describe as “strategic ambiguity” on energy policy to avoid alienating environmental activists and moderate voters. In fact, it took until early September for her campaign to list any key issues on its official website.

The state’s natural gas producers have pressed Harris on her specific policies, which have been inconsistent or—in some cases—nonexistent.

“We need more details,” said Dave Callahan, president of the Marcellus Shale Coalition, whose members gathered in northeast Pennsylvania last week for an annual conference.

Reuters talked to a dozen natural gas and drilling executives who attended the conference; all said that they are still guessing about Harris’s energy policy.

Various policy changes

• Harris says that she no longer supports a ban on oil and gas fracking on federal lands, which she did support during her 2020 presidential run.

Since ascending to the top of the Democratic ticket, Harris has backed away from banning fracking, saying she now believes the clean energy economy can grow without having to ban the practice.

• She also backed the progressive wish list of climate goals—including ending U.S. reliance on fossil fuels within 10 years—as a co-sponsor of the Green New Deal legislation in the Senate.
• As vice president, Harris cast the tiebreaking vote on Biden’s climate investment package, which contained about $1 trillion in tax credits, grants, and loans for clean energy.

But as a 2024 presidential candidate, she now says that she no longer backs the Green New Deal.

• As a senator, Harris was a co-sponsor of legislation that called for increasing zero-emissions vehicles, i.e., electric vehicles, and ultimately phasing out all others by 2040.

The campaign said recently that she no longer supports that measure.

By contrast, voters have a much clearer picture of where Trump stands on energy issues.

• His “Drill Baby, Drill” mantra isn’t just campaign bluster to appease oil and gas producers.
• He remains committed to domestic energy production and pipeline expansion, as he was during his first term in office.
• Trump has pledged to broadly dismantle federal regulations, boost domestic hydrocarbon production, and lure “energy-hungry industries” to the United States, if he’s elected again.

Natural gas matters here

Pennsylvania is second only to Texas in estimated total proved natural gas reserves.

• The state’s reserves more than quadrupled from 2011 to 2021 because of increased natural gas development in the Marcellus Shale region.
• In 2021, the oil and natural gas industry contributed $75 billion to the Pennsylvania economy.
• That same year, workers with jobs related to the oil and natural gas industry earned an average of $95,047 annually.
• In 2022, about 3,138,296 residential and business customers used natural gas in Pennsylvania.

Summary

Pennsylvania has a robust and diverse economy. It must protect the jobs and livelihoods of its residents by electing leaders at the local, state, and federal level who will fight for domestic energy with an eye toward consumer well-being.

The economy boasts strong sectors in agriculture, food processing, industrial machinery, and health care, among others. That vibrant economy is fueled by reliable, locally produced energy.

The development of the Marcellus Shale is an American success story, beginning around 2005. It has enabled the extraction of clean, job-creating, American natural gas from the Marcellus and Utica shales.

That success needs to continue so that Pennsylvania families, farms, businesses, and industries can continue to flourish.

A Harris presidency will weaken domestic energy producers and make America even more reliant on foreign oil. If the record of her home state of California is any guide, we can expect that as president she will advocate for more green-at-any-cost schemes, such as expensive and inefficient electric vehicle charging stations.

That is something that Pennsylvania’s energy sector, the state’s entrepreneurs, and families can ill afford.

 The Empowerment Alliance was formed in 2019 to offer common-sense energy solutions that promote production and consumption of Affordable, Clean, Reliable natural gas. We believe that our nation’s energy independence is essential for America’s independence.

China’s National Development and Reform Commission stopped short of announcing new stimulus plans on Tuesday, sending shockwaves through Asian equity markets. In metal markets, iron ore prices plunged, proving Goldman analysts right in their recent note to institutional clients to “fade iron ore rallies.”

“NDRC underwhelms relative to elevated stimulus expectations (little incremental and no hints at new local government special bond issuance). PBOC-owned newspaper running story that authorities are guiding against bank lending that goes directly to the stock market (probably a good thing),” Goldman’s Rich Privorotsky told clients this AM.

Privorotsky said, “Iron ore -4%, copper -2 and hsi futures -7-8%. Off shore property stocks remain probably the single most volatile pocket of the equity market down nearly 20%.” 

Iron ore futures jumped nearly 29% from the lows of around $90 a ton beginning in late September on optimism that Beijing would boost the economy and oversupply conditions in China’s steel industry would dissipate. However, when NDRC did not deliver additional stimulus today, iron ore went into meltdown mode, plunging 5% to the $105 level. Iron ore is a key ingredient for steelmaking, which has suffered amid a multi-year property crisis in the world’s second-largest economy. 

In a separate note, Hang Jiang, head of trading at Yonggang Resources Co. in Shanghai, was quoted by Bloomberg as saying, “There had been talk that the NDRC may announce trillions of yuan in stimulus, but it came out with nothing at all,” adding, “The stimulus from China so far is not going to yield a significant turnaround for base metals.” 

Jiang pointed out, “We need to see stimulus feed into a real pickup in consumption before we can see big price rallies.”

Perhaps that’s why Goldman’s Thomas Evans told clients two weeks ago that “any rally in iron ore prices should be faded.” 

“In the long term, steel overcapacity and growing supply in iron ore are the two biggest headwinds to ferrous supply chain, which can’t be fixed any time soon. The indicator to watch is whether, when and how much iron ore production would be cut from junior miners for market to rebalance,” Evans said. 

In broader metal markets, aluminum, zinc, nickel, lead and tin were lower more than 2%. Bloomberg noted, “For the steelmaking staple, the seaborne market looks to be oversupplied. Unless and until China’s mills start making more steel, and the nation’s property crisis gets a proper fix, that’s going to remain the case.”

Fading the iron ore rallies is in play. 

Authored by Lance Roberts via RealInvestmentAdvice.com,

When most people hear the word “risk,” they think about wild market swings, scary headlines, and losing money overnight, but Howard Marks, Co-Chairman and Co-Founder of Oaktree Capital Management, takes a different approach. In his new video series How to Think About Risk, Marks digs deep into what risk is and how investors should handle it. Spoiler alert: It’s not just about volatility.

The CFA Institute recently summarized the video stream, but I wanted to elaborate on some of Howard Mark’s views.

Let’s break down some key lessons from Marks that can help you rethink your investing approach to risk.

Risk Isn’t Just Volatility

One of the biggest takeaways from Marks’ series is the idea that risk and volatility aren’t the same thing. For years, many investors (and academics) have been taught that volatility—the ups and downs of stock prices—equals risk. However, Marks argues that this is a big misunderstanding.

Volatility is one part of the picture, but risk is the probability of losing money. Just because prices bounce around doesn’t mean you’re at risk of a big loss. Investors should focus on managing their downside, not just trying to avoid every little price swing.

The Magic of Asymmetry: More Upside, Less Downside

One of Marks’s most important lessons is the concept of asymmetric investing. Essentially, this means structuring your investments so that your potential gains are much larger than your potential losses. Sounds simple, right? But in practice, it’s challenging.

The goal isn’t to avoid risk altogether — that’s impossible. Instead, it’s about taking on calculated risks where the reward far outweighs what you put on the line. That’s the kind of smart risk-taking that leads to long-term success.

You Can’t Quantify Risk — And That’s Okay

Here’s the hard truth: you can’t measure risk in advance. Markets are unpredictable, and while we can guess what might happen, the future is uncertain. Even after the fact, you might not know how risky an investment is.

For example, just because an investment worked out doesn’t mean it wasn’t risky — maybe you just got lucky. Marks encourages investors to use their judgment and to recognize that past data won’t always predict future outcomes. Trust your instincts and look at the bigger picture.

The Risks We Don’t Talk About

When we think about risk, most of us focus on the risk of losing money. However, Howard Marks reminds us there are other risks we should be aware of, like missing out on gains by playing it too safe or being forced to sell investments during a market crash. Both can be just as damaging to our portfolios in the long run.

Sometimes, not taking enough risk can leave you behind, missing out on opportunities that could have helped you grow your wealth. Marks emphasizes the importance of balancing risk and reward to ensure you’re not just protecting against losses but also positioning yourself for future gains.

The Future Is Unpredictable

Howard Marks draws on some big thinkers like Peter Bernstein to explain that the root of all risk is our inability to predict the future. Sure, we can anticipate what might happen, but there will always be surprises we can’t see coming. And those unexpected events — like financial crises or major market shifts — can have the biggest impact on your investments.

So, what can you do? Be prepared for anything. Marks stresses the importance of acknowledging what you don’t know and managing your portfolio accordingly.

Risk Can Be Deceptive

Here’s a fascinating insight from Marks: Risk isn’t always what it seems. When the market feels the safest, that’s often when it’s often the riskiest. Think about it — when everything is going smoothly, people tend to take more risks, which can lead to market bubbles and crashes.

On the flip side, it might be a better time to invest when things look risky. It’s counterintuitive, but risk can often be highest when it feels lowest. The lesson here? Don’t get too comfortable when the market seems calm — that’s when mistakes are most likely to happen.

Price Matters More Than Quality

Here’s a myth that Howard Marks shatters: High-quality assets aren’t always safe, and low-quality assets aren’t always risky. The key is the price you pay. You can buy the best company in the world, but if you overpay, it’s still a risky investment. On the other hand, a lower-quality asset can be a great investment if you get it at the right price.

The takeaway? Focus on value. It’s not about finding the best companies — it’s about finding good companies at the right price.

More Risk Doesn’t Always Equal More Return

We’ve all heard the saying, “High risk, high reward.” But Marks says that’s not always true. Just because an investment is riskier doesn’t mean it will deliver better returns. Taking on too much risk can lead to significant losses.

Investors need to be careful about chasing returns without fully understanding the risks. The goal should be to weigh the possible outcomes and ensure the potential reward is worth your risk.

You Can’t Avoid Risk — But You Can Manage It

At the end of the day, Marks clarifies that risk is an unavoidable part of investing. You can’t completely avoid it, but you can manage it. That means constantly evaluating the risks in your portfolio, staying prepared for unexpected events, and focusing on asymmetric opportunities where the upside outweighs the downside.

Final Thoughts And Rules

Robert Rubin, former Secretary of the Treasury, changed the way I thought about risk when he wrote:

“As I think back over the years, I have been guided by four principles for decision making.  First, the only certainty is that there is no certainty.  Second, every decision, as a consequence, is a matter of weighing probabilities.  Third, despite uncertainty we must decide and we must act.  And lastly, we need to judge decisions not only on the results, but on how they were made.

Most people are in denial about uncertainty.  They assume they’re lucky, and that the unpredictable can be reliably forecast.  This keeps business brisk for palm readers, psychics, and stockbrokers, but it’s a terrible way to deal with uncertainty.  If there are no absolutes, then all decisions become matters of judging the probability of different outcomes, and the costs and benefits of each.  Then, on that basis, you can make a good decision.”

It should be obvious that an honest assessment of uncertainty leads to better decisions, but the benefits of Rubin’s approach go beyond that.  Although it may seem contradictory, embracing uncertainty reduces risk while denial increases it. Another benefit of “acknowledged uncertainty” is it keeps you honest. A healthy respect for uncertainty and a focus on probabilities drives you never to be satisfied with your conclusions. It keeps you moving forward to seek more information, question conventional thinking, continually refine your judgments, and understand that certainty and likelihood can make all the difference.

Here are the 15-Risk Management Rules we follow every day. Hopefully, this will give you a start on developing your own.

The reality is that we can’t control outcomes; the most we can do is influence the probability of certain outcomes. This is why the day-to-day management of risks and investing based on probabilities rather than possibilities are important not only to capital preservation but also to investment success over time.

The key takeaway? Don’t fear risk — understand, manage, and use it to your advantage.

Israel’s northern port city of Haifa has for the second consecutive day been targeted by a record number of Hezbollah missiles.

The last few hours have witnessed waves of rocket barrages – with the last being twenty sent – bringing the total number of projectiles fired to over 100 on the northern metropolis in only half a day period.

The Israel Defense Forces (IDF) said that while many were intercepted, other rocket impacts were confirmed, with damage caused to several homes, and a 70-year old woman wounded by shrapnel.

A barrage of an initial 85 missiles were launched, followed by the remainder 20. Sunday into Monday also saw dozens fired, with a restaurant, infrastructure, and homes getting hit.

Of Tuesday’s new attacks regional media is detailing that missiles targeted the area of “Haifa Bay, Israel’s main northern metropolis, was the largest the city had been exposed to since hostilities between the Lebanese group and Israel began.”

“Israel’s Channel 12 news outlet said at least five rockets fell on the city, and the mayor of Haifa reported that a building in the Haifa Bay area was hit,” Al Jazeera has noted.

The IDF has since then said an air force drone struck rocket launchers used by Hezbollah to mount some of the Haifa attacks. South Lebanon has continued to be an area of intense fighting, and Beirut has still been getting pounded with airstrikes.

#BREAKING | Hezbollah: “We have bombed the city of #Haifa with a large barrage of rockets in support of our steadfast #Palestinian people in the #Gaza Strip and in support of their brave resistance, and in defense of #Lebanon and its people.”#Israel #Hezbollah #Palestine pic.twitter.com/xC1qafvcpw

— Ammar Khan (@AmmarKh12669255) October 8, 2024

Meanwhile, Defense Minister Yoav Gallant has issued an update on strikes last week believed to have taken out Hashem Safieddine, who was the believed successor to slain Secretary-General Hassan Nasrallah. Gallant says Israel assesses that Safieddine has been killed.

“Hezbollah is an organization without a leader, Nasrallah was eliminated, his replacement was probably also eliminated. This has a dramatic effect on everything that happens. There is no one to make decisions, no one to act,” Gallant told the IDF Northern Command during a visit.

Israel’s air defenses active over the country’s largest northern metropolis:

The excessive breathing is real.

Haifa right now. https://t.co/F81hlz596r pic.twitter.com/urvTN3VSTu

— Arya – آریا (@AryJeay) October 8, 2024

“The actions we are taking are being observed all over the Middle East. When the smoke in Lebanon clears, they will realize in Iran that they have lost their most valuable asset, which is Hezbollah,” the defense chief added, also describing that Hezbollah’s capabilities and arsenal has taken a heavy blow.

Also on Tuesday, dpa has reported based on a new television interview that “Hezbollah’s deputy leader has expressed openness to a deal with Israel.” However, Israel has said it plans to persist in its Lebanon operations for at least weeks to come.