Behind Closed Doors? Sam Bankman-Fried Arrested In Bahamas Prior To House Hearing On FTX Collapse (Will He Testify Via Zoom?)

First, Sam Bankman-Fried agreed to testify in the House Financial Services Committee meeting on December 13, 2021. Then Bankman-Fried said he would testify remotely. Then ,,, he was arrested by the Bahama’s police. How convenient!

Does this mean that SBF will testify from behind closed doors?

According to Reuters, FTX’s Bankman-Fried says he will testify remotely at congressional hearing.

WASHINGTON, Dec 12 (Reuters) – Sam Bankman-Fried, the founder and former CEO of now-bankrupt crypto exchange FTX, on Monday said he would testify remotely at Tuesday’s U.S. House Financial Services Committee hearing to examine the collapse of the company.

FTX filed for U.S. bankruptcy protection last month and Bankman-Fried resigned as chief executive, triggering a wave of public demands for greater regulation of the cryptocurrency industry.

That might be kind of difficult, since Sam Bankman-Fried has been arrested in the Bahamas.

Perhaps, The SEC Gary Genslar will testify as to why he met with SBF and gave him the green light for his trading? And why did Genslar erase Hillary Clinton from his schedule after meeting with her? And why was Genslar meeting with Hillary in the first place since she is now just an American cititzen??

Will SBF be extricated by tomorrow morning hearing time?

Blackrock’s Dire Forecast For 2023 And FAANG’s Loss Of >$3 Trillion In 2023 (M2 Money Velocity Near Lowest In History, US Yield Curve STILL Inverted)

Blackrock has a grim presentation on investing in 2023. Particularly with regards to The Federal Reserve and their ability to stave-off a recession (comin’ at you!).

Central bankers won’t ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. They are deliberately causing recessions by overtightening policy to try to rein in inflation. That makes recession foretold. We see central banks eventually backing off from rate hikes as the economic damage becomes reality. We expect inflation to cool but stay persistently higher than central bank targets of 2%.

For some investors, this year’s rout in high-flying technology stocks is more than a bear market: It’s the end of an era for a handful of giant companies such as Facebook parent Meta Platforms Inc. and Amazon.com Inc.

Those companies — known along with Apple Inc., Netflix Inc. and Google parent Alphabet Inc. as the FAANGs — led the move to a digital world and helped power a 13-year bull run. And FAANG drawdown have reached over $3 trillion.

FAANGs (Meta, Amazon, Apple, Alphabet, Netflix) are getting clobbered in 2022.

Typically, when The Fed prints too much money, such as 10% or higher (red line), inflation follows. Particularly when The Fed prints at 25% YoY in Q4 2020, it was followed by the highest inflation rate in 40 years. But if M2 Money continues to slow, inflation will likely slow, but not to The Fed’s target of 2%.

Despite what Minneapolis Fed’s Neal Kashkari said about The Fed having infinite printing resourses, The Fed is going to fight inflation THAT THEY HELPED CAUSE. Biden’s energy policies (did you see that Elon Musk has a car that uses plentiful hydrogen?), and excessive Federal spending by Biden/Pelosi/Schumer, are culprits in creating the supply chain problems facing America. BUT after the 25% surge in M2 Money in 2020 and 2021, we saw M2 Money VELOCITY crash and burn to its lowest level in history. Which means the “bang for the buck” for printing more money is negligible.

Of course, big tech firms got caught influencing the 2020 Presidential election (see Musk’s release of Twitter files) and engaged in restriction of the 1st Amendment (Freedom of Speech). How much will that impact FAANG stocks going foward?

And yes, the US Treasury yield curve is inverted pointing to a recession in 2023.

And yes, apparently Biden was complicit in the Twitter fiasco.

Shotgun Joe! Shooting down freedom of speech.

Green Man! Mortgage Rate Remains Steady Ahead Of Dec 14th Fed Meeting (Part Of The Bigger Slowdown Picture, Not Government Policy) 50 BPS Increase Expected

The good news for Americans? The global slowdown is helping to lower US Treasury yields which, in turn, helps to help to lower US mortgages rates. Kind of a perverse “good news” story when you think about it.

The bigger picture is the slowdown caused by 1) a global economic slowdown and 2) the tightening of Fed monetary policy to fight inflation.

Look at the Case-Shiller national home price growth YoY (blue line) against M2 Money growth YoY (green line). Just move the green line to the right and it covers home price growth. Both are slowing down with anticipated Fed rate hikes (red line) now at 50 basis points for the December 14th FOMC meeting. And note that The Fed’s balance sheet (orange line) has barely budged.

Here is a video of Fed Chair Jerome Powell filming American households reaction to Fed tightening thanks to Biden/DC inflation.

Jerome Powell on the left, American middle class on right.

The Tighten Up! US Treasury Yield Curve DOWN -206% In 2021, M2 Money DOWN -90%, S&P 500 DOWN -17.5%, Bitcoin DOWN -64.2% (Biden And NY Fed’s Project Cedar To Replace US Dollar)

Unlike Archie Bell and the Drells, this tighten-up is about The Federal Reserve tightening-up its monetary policy.

On December 31, 2021, the US Treasury yield curve (10Y-2Y) stood at +77.4 basis points, generally a good omen.

Then markets woke up. And not in a woke way.

As The Fed tightens to tamp down on inflation in 2022, we are seeing a pattern. The US Treasury 10Y=2Y yield curve has sunk to -82 basis points, a -206% decline.

In addition to the inversion of the US Treasury yield curve we have witnessed M2 Money growth declining -90%, the S&P 50) index down -17.5%, Bitcoin down -64.2% and gold down only -2.3%.

But we now have to worry about Project Cedar, a seemingly innocent project to replace the US Dollar. A new digital currency would allow Washington DC to monitor your purchases and behavior. And perhaps create a Social Credit Score like in China measuring how well you conform to Biden’s notion of a utopian, green society.

And the US yield curve has been inverted for 109 straight days.

US Treasury Yield Curve Inverts To -82 Basis Points, Worst Since 1981 As Fed Tightens Policy (112 Straight Days Of Inversion)

Whoop there it is!

The US Treasury 10y-2y yield curve descended further into inversion at -82 basis point, the worst since 1981.

This is not a good sign, since the 10Y-2Y curve typically inverts just prior to a recession.

The current US Treasury curve is currently humped at 1 year, then declining rapidly. The swaps curve is peaking at 9 months, then declining rapidly.

The Fed Funds Futures market is pointing to a peak Fed Funds rate of 5% at the May 3rd FOMC meeting.

Yes, a recession is headed our way.

104 Days Later! US 10Y-2Y Yield Curve Remains Inverted For 104 Staight Days, Mortgage Rate Falls As Fed Tightens (Ethereum Rises > 4%)

Yes, The US Treasury 10Y-2Y yield curve remains inverted, for the 104th straight day. And Bankrate’s 30-year mortgage rate has dropped -57 basis points since November 3, 2022.

This comes after a gruesome Pending Home Sales and mortgage applications reports today.

At least Ethereum is up over 4% today!

World Yield Curve Inverts For First Time Since At Least 2000 (US Yield Curve Has Been Inverted For 107 Straight Days) Drums Along The Potomac??

Do I hear Drums Along The Potomac or East River??

The hawkish drumbeat from central bankers is raising fears of a downturn, with global bonds joining US peers in signaling a recession, as a gauge measuring the worldwide yield curve inverted for the first time in at least two decades.

The US Treasury 10Y-2Y yield curve, on the other hand, has been inverted for 107 straight months.

And in Europe, 10-year sovereign yields are dropping like a paralyzed falcon.

The world and US yield curves are pointing to trouble. And drums along the Potomac (DC) and East River (NYC).

As The Fed Tightens To Fight Inflation, The US Banking System Growth Grinds To A Halt, Bank Deposits Decline -0.6% YoY (SBF’s Lemonade Stand Isn’t Helping)

The US has an inflation problem. Both headline and core inflation YoY remain high compared to the previous 40 years. And The Federal Reserve is resolute in trying to curb inflation to 2%.

But as The Fed counterattacks inflation by raising their target rate, we are seeing a problem forming at the nation’s commercial banks. The growth in deposits YoY is now -0.6%. Commercial bank holdings of Treasuries and Agency MBS are declining as well. Agency MBS holdings are down -4.6% YoY and Treasuries and Agency holdings are down 0.0%.

How about M2 Money growth and M2 velocity? M2 Money growth has fallen to 1.3% YoY while M2 velocity has not been the same since the Covid sugar splash by The Fed and Federal government.

While inflation is creating havor for commercial bank deposit growth, it is interesting to follow the adventures of a spoiled child from MIT and his multi-billion dollar lemonade stand with all the controls of a child.

Once again, how did regulators get this SOOOOO wrong? And why didn’t investment advisors look at the balance sheet of FTX and Alameda Research. Yes, the media loves to report on FTX orgies, but the FTX fiasco points to something far more sinister. Were Sam Bankman-Fried and his paramore Caroline Ellison fronting this operation on behalf of some other parties?

Here is the FTX bankruptcy declaration in the State of Delaware. It appears like a massive case of fraud to me. And perhaps worse. Here is a nice summary from Zerohedge.com.

I recall one of Woody Allen’s best lines. When asked what an investment manager does, the response was “they manage your money until nothing is left.” Sounds like SBF has a great future on Wall Street! And Caroline Ellison should have known better than to post things like “Here are what I think about some things: controlling most major world governments.”

Rent Crisis! 41% in U.S. Couldn’t Pay Rent November (Bank MBS Holdings Collapse With Fed Tightening)

Interesting story on Alignable.

Due to high inflation, reduced consumer spending, higher rents and other economic pressures, U.S.-based small business owners’ rent problems just escalated to new heights nationally this month, based on Alignable’s November Rent Poll of 6,326 small business owners taken from 11/19/22 to 11/22/22.

Unfortunately, 41% of U.S.-based small business owners report that they could not pay their rent in full and on time in November, a new record for 2022. Making matters worse, this occurred during a quarter when more money should be coming in and rent delinquency rates should be decreasing. But so far this quarter, the opposite has been true.

Last month, rent delinquency rates increased seven percentage points from 30% in September to 37% in October. And now, in November, that rate is another four percentage points higher, reaching a new high across a variety of industries.

All told in Q4 so far, the rent delinquency rate continues to increase at a significant pace, up 11 percentage points from where it was just two months ago.

Well, this is not good.

And on the mortgage front, not all is quiet.

Commercial bank holding of Agency mortgage-backed securities (MBS) has collapsed with Fed tightening and mortgage rate increases.

Ain’t that a lot of bad news for real estate and the mortgage market.

US Mortgage Rate Declines To 6.77% As European Yields Increase (Fed Starts Digital Dollar Experiment … In Terror!)

Despite The Federal Reserve removing some of the monetary punch bowl, Bankrate’s 30-year mortgage rate declined to 6.77% yesterday.

Catch a rising yield and put it your pocket. European sovereign yield are up over 10 basis points today.

On this side of the pond, The Federal Reserve has begun their experiment with big banks using digital currency. This is a step towards going to a cashless economy.

Why is this terrifying? Blockchain technology is a fantastic innovation for processing payments given its ledger capabiliities. But that means that The Federal Reserve might be able to look at your complete history of expenditures. Or worse, perhaps even shut down your ability to make payments, This may lead to a China-style “social credit score” where the Fed and the Federal government punish people for driving “too much” increasing your carbon footprint or eating non-Federal government approved foods and lowering your social credit score.

Will there be safeguards? Allegedly, but remember the FBI hid Hunter Biden’s laptop prior to the Presidential election of late 2020. And HOW did our nation’s regulators completely drop the ball on Sam Bankman-Fried (or Spam Bankfraud)?

Thus, it is an Experiment in Personal Liberty Terror.