“The worst is behind us,” is probably the most ominous phrase you can utter.
Well, other than “I’ll be right back.”
Still, it’s something we need to consider. The Dow picked up 3.7% yesterday – the biggest day in over two years.
Inflation was lower than predicted. It’s still high by historic standards, but these days, investors will take what they can get.
It’s also another tailwind for President Joe Biden, who looks politically strong after the Democrats’ better-than-expected performance in the midterm elections.
However, the Fed knows the horror movie tropes and was working hard to downplay the good feelings.
“It’s far from a victory,” said San Francisco Federal Reserve President Mary Daly.
I’m as surprised as you are to be giving praise to someone from the Federal Reserve, but it’s hard to disagree with this.
“One month of data does not a victory make, and I think it’s really important to be thoughtful that this is just one piece of positive information, but we’re looking at a whole set of information.”
Other Fed officials also took a stoic view – clearly trying to keep the markets from overreacting.
One could say yesterday was a bit of an overreaction.
Yet after months of doomerism from all in sundry, it is worth taking the optimistic point of view.
Inflation figures are down, the political system is relatively stable after the midterms, and Russia has withdrawn from the one regional capital it has under its control. Both sides may be setting the stage for negotiations.
Do I think the worst is behind us? Not necessarily. The federal deficit remains a time bomb that will go off at some point, and it’s hard to see Russia giving back any of the territory it still controls. There are also some voices who think we are still in a bear market.
All that said, the prophecies of collapse have not come to fruition… well, except for one.
I refer, of course, to what’s happening in cryptocurrency. We’ve written about it before, in fact, for years…
And now the worst case scenario may be developing.
If you hold crypto of any sort, make sure you read Mr. X’s comments today.
Happy Veterans’ Day. Thank you to those who served.
The markets remain open today so let’s finish strong.
WORD ON THE STREET
Lowered Expectations, Chaos At Twitter, Trump Tantrum
- Fed Gets Good News, Tries To Calm Everyone Down – The Federal Reserve got sweet vindication when the CPI showed that the pace of inflation has slowed. The Federal Reserve presidents of San Francisco, Cleveland, and Kansas City all suggested that while the report was good news, inflation was still unacceptably high. The market has nonetheless priced in just a 0.5% interest rate hike for December. That could pose a danger if the Fed still thinks higher rates are required and traders are caught off guard.
Trump Unloads On DeSantis – The 2024 campaign has begun. Former president Donald Trump clearly sees a rival in Florida Governor Ron DeSantis, or, as ’45 calls him, “Ron DeSanctimonious.” He dismissed him as an “average” governor whom he saved when he was “politically dead.” After winning office in a close race in 2018, DeSantis cruised to re-election this week, leading to speculation that he could be the GOP’s post-Trump standard bearer.
Ukraine Moves In – In one of the most serious defeats for Russia thus far, Ukraine has recaptured Kherson, driving Russian forces out of the last regional capital it controlled. That said, Ukraine didn’t destroy Russia’s forces – they simply retreated without much of a fight. Russian forces continue their offensive against Bakhmut, suggesting that the east will now be Moscow’s primary focus.
Twitter Chaos – Look, just don’t go in there right now, you’ll be better off. Many senior staff members at Twitter have been fired or let go as Elon Musk tries to implement a new regime. This includes banning remote work. Musk’s attempt to find a new source of financing the site by having users pay $8 a month to be verified is backfiring. “Verified” accounts using the names of corporations or famous people are posting offensive and definitely not PR-friendly tweets everywhere. Example: a fake Chiquita account said it had overthrown the government of Brazil, before an “apology” saying that they hadn’t overthrown a government since 1954. All right, that’s a pretty good one.
HOT SPOTS: What’s Going on in Geopolitics
- China Limits Quarantine Time – Investors desperate for signs that China will lighten up on its zero-COVID policy got one when Beijing said it would limit the quarantine for international travelers to five days. That still sounds terrible, but it used to be seven days. China is also cutting back on contact tracing. The country may finally be slowly abandoning the economically ruinous experiment.
Hurricane Nicole Makes Landfall In Florida – Hurricane Nicole hit Florida and killed at least five people. Governor DeSantis has declared a state of emergency in 34 counties and urged people to “listen to announcements from local emergency management officials.”
Hungary Blocks EU Aid For Ukraine – Hungary said it would not support a plan by the European Union for Ukraine to receive up to $18.06 billion. The German government was infuriated, with Foreign Minister Annalena Baerbock warning Hungary not to “play poker” with aid to Ukraine.
CUTTING EDGE: What‘s Happening In Tech
- Russian Hackers Hit Australia – The Australian Federal Police accused hackers in Russia of being responsible for a ransomware attack on Medibank, one of Australia’s largest private health insurers. The attack saw highly private and personal data stolen and made available on the dark web. About 9.7 million people have reportedly had their private data stolen.
Amazon Adds A New Robot To Its Arsenal – Facing a wave of unionization attempts, Amazon is adding a new robot model. The “Sparrow” picks up individual items, not just boxes. Amazon says that the company will save employees from “repetitive tasks,” and create new jobs in “technical maintenance,” getting in front of the charge that it is just trying to replace workers with automation.
FTX Scrambles To Stay In Business – FTX head Sam Bankman-Fried said “I f***ed up” as his cryptocurrency exchange sought new funding in order to ease concerns about liquidity. The entire cryptocurrency sector may take a hit if FTX can’t put together a deal with someone. Crypto lending program BlockFi has already said it is “pausing client withdrawals,” leading to more speculation and panic.
FOR YOUR CONSIDERATION
“The best way investors can protect themselves is to get a Crypto Wallet that they control. Do not allow your assets to be stored or controlled by another company.”
“Do not settle for something less than a custodial wallet. Pick the crypto storage device that is most appropriate for your situation and make sure you have total ownership. Store all relevant information safely and do not allow others access.”
There is a crisis underway in cryptocurrency and investors need to know how to protect themselves. Failure to pay attention now could cost you everything if you have your assets under someone else’s control.
Mr. X explains the situation, the long game in crypto, and the one tool all crypto investors need.
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