Give it a rating, give it a review or if you want to dive deeper into the conversation. Come join us on the breakers Discord. You can find a link in the show notes or get a bit dot LY slash breakdown pod. Also a disclosure as always, in addition to them being a sponsor of the show, I also work with FTX. All right, folks happy Monday and boy boy, the fear of last week is definitely creeping into this week's beginning as well. Last night, there were absolute fireworks in the foreign exchange and currency markets specifically around the British pound. Alex Krueger put it in historical context. Last night's GBP flash crash he writes was almost as large as the infamous Soros driven black Wednesday of 1992. September 16th, 1992, down 4.8%. September 26th, 2002, down 4.3%. The pound hit an all time low against the dollar around $1.039 to the pound. A big theme, in fact, this week that we'll be discussing is the dollar wrecking ball and what it means that the dollar is so strong versus absolutely everything right now. Another theme that continues to grow in the public consciousness is the golden handcuffs, real estate discussion that we talked about last week. This was summed up in a viral tweet from John F Carter who wrote housing supply question. Is anyone who locked in a sub 3% mortgage going to sell their home so they can get a new house with a 6% mortgage? Overall it just feels to me like there's something of a crescendo happening in financial markets where the roiling is getting louder and something is happening. Cantering Clark writes, there were little stress fractures forming for the last few months, but in the last two weeks, it looks like actual cracks have opened up. How long before an all correlations go to one event in markets? In any case, here's some of what we have to look forward to on the macro side this week as summed up by TED Talks macro. Monday, European central banks, Christine Lagarde speaks, Tuesday, fed chair Jerome Powell speaks on the future of digital assets, Wednesday, Powell speaks on monetary policy, Thursday, U.S. final GDP for Q two, Friday, U.S. PCE data. Also, there's an FOMC member speaking every day this week. So that is the preview on the macro side. And I think it's poised to be just as explosive, if not more so than last week. However, where I want to start today's show is with a surprise action in the crypto space from late last Friday. On Friday, California governor Gavin Newsom vetoed that state's crypto Bill, which would have established a licensing and regulatory scheme that was seen as equivalent to New York's bit license. For those of you who don't have the immense pleasure of being in the crypto industry from New York State. The bit license has grown to be seen as an unworkably tight licensing scheme. In its 7 years of operations, only 18 companies and 6 limited purpose trusts have been granted a bit license. Most firms have found the cost of compliance too high and instead chosen not to operate in New York State. The California bill passed their assembly in August and would have required California licensed entities to only interact with stablecoins issued by banks or otherwise state license organizations, it would have forced stablecoin issuers to remain fully backed by reserves, and it would have set up licensing and examination processes for crypto companies. In his note explaining the veto Newsom wrote, on May 4th, 2022, I issued executive order N 9 22 to position California as the first state to establish a transparent regulatory environment that both fosters responsible innovation and protects consumers who use digital asset financial services and products, all within the context of a rapidly evolving federal regulatory picture. Over the last several months, my administration has conducted extensive research and outreach to gather input on approaches that balance the benefits and risks to consumers. Harmonize with federal rules, and incorporate California values such as equity inclusivity and environmental protection. Newsom went on to explain that it would be quote premature to create a licensing regime without considering the feedback from that executive order. He also noted that future federal legislation or regulations may supersede any Californian regulatory structure. Quote, a more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases and is tailored with the proper tools to address trends and mitigate consumer harm. The governor also noted that the bill would have required a multi-million dollar expenditure which had not been budgeted for. Tim grace in the assembly member who sponsored the bill expressed his disappointment in a statement. He wrote, the cryptocurrency market is under regulated at best and deliberately rigged against everyday consumers at worst. A financial market can not be considered healthy if there are no guardrails in place to protect consumers from scams and bad actors. As chair of the banking and finance committee, I will continue to work to protect California's consumers and responsible industry. The legislature overwhelmingly supported regulating digital financial assets, and I can only hope that the administration will be willing to work with us to achieve this goal in the future. Now what's notable about this veto is that the bill was extremely popular in the assembly. It received 71 yes votes zero no votes and 9 abstentions. So it's a big political deal that Newsom said no. Important context, though, the veto is one of 8 bills vetoed by Newsom on Friday. And part of the reason is a state budget crunch. After recording record budget surpluses in the previous two years, California tax revenues for 2022 are currently coming in at 4 billion below forecasts. The governor's note for this slew of recent vetoes claimed that the bills which crossed his desk this month represented $30 billion in unfunded and unbudgeted spending. Quote, with our state facing lower than expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending, particularly spending that is ongoing. End quote the budget situation in California isn't in any sort of Dire Straits, the state currently has 37 billion in reserve accounts. However, any drop in tax revenue does force tough choices. Does the government want to have access to more fiscal support and social support or does it want to burden itself with expensive regulatory departments? Now this brings us to three very different interpretations of this news. The first interpretation was that this was a victory for common sense. Taking Newsom at his face when he set a more flexible approach is needed. Jake stravinsky writes, governor Gavin Newsom deserves serious respect for making the right call by vetoing AB two two 6 9. The bit license copycat bill that passed the California legislature by a wide margin, 71 to zero in the assembly. That takes guts and he did it for the right reasons. Mike dudas of 6th man ventures writes, kudos to California governor Newsom. New York's bit license has been an unmitigated disaster, encouraging regulatory capture, harming innovation, and pushing legit businesses out of state. All while failing to protect New York consumers. A second interpretation of this really honed in on the fact of California's budget shortfall. Effectively, some people argued that this bill would have created an office with a big budget attached that would have basically been sitting around not approving things. In Newsom's note, he wrote, standing up a new regulatory program as a costly undertaking, and this bill would require a loan from the general fund in the tens of millions of dollars for the first several years. Such a significant commitment of general fund resources should be considered an accounted for in the annual budget process. Basically, Newsom is saying that there is a real question of whether these sort of regulations are a good use of funds, especially during a downturn. In California, there's also the issue of capital flight. The state has seen a fairly significant exodus of high-tech entrepreneurs and investors, especially as remote work as normalized post COVID. These are folks who don't want to deal with California taxes anymore. And so creating another reason for an entire category of industry to leave doesn't necessarily