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Thinking Crypto News & Interviews
A highlight from Ron Hammond Interview - Crypto Regulation News! SEC Gary Gensler Hearing, FTX Trial, Crypto Bills, Coinbase, Stablecoin Regulation
"Last time he spoke in front of the House Finance Service Committee, he kept saying multiple times, we have not lost a court case on crypto at all. We have brought several actions. And again, remind you, they call settlements wins. And so in their case, they were. They had won every single court case. But now that talking point is really faded because, as you mentioned, the Ripple's case, the Grayscale case, there's also ones like the Coinbase suit going on right now. This content is brought to you by Link2, which makes private equity investment easy. Link2 is a great platform that allows you to get equity in companies before they go public, before they do an IPO. Within their portfolio includes crypto companies, AI companies, and fintech companies. Some of the crypto companies you may recognize include Circle, Ripple, Chainalysis, Ledger, Dapper Labs, and many more. If you'd like to learn more about Link2, please visit the link in the description. Welcome back to the Thinking Crypto podcast, your home for cryptocurrency news and interviews. With me today is Ron Hammond, who's director of government relations at the Blockchain Association. Ron, great to have you back on. Thanks for having me. Always a pleasure. Ron, it's going to be a busy week. It's already a busy week here in DC. Tomorrow is, of course, the hearing with chairman of the SEC, Gary Gensler. Tell us about that and what can we expect. Definitely. For those who may not know, Gary Gensler, the chair of the SEC, is going to be testifying in front of the House Financial Services Committee for the second time this year. That's a really big deal because, to remind you, last year, they barely saw him at all in that committee when the Democrats had control. But if the Republicans can control, they want to exercise oversight of the SEC as much as possible. And again, it's pretty typical, though, for the opposite party to try to put the screws on to the party that has the White House. But in this case, a lot has happened, both in crypto, but also just generally, that it's going to get a lot of flack for Gary Gensler, whether it be on private funds, ESG. And again, crypto will definitely come up a lot after talking to several folks on the House side. He recently testified, though, in front of Senate Banking two weeks ago, and we didn't get too much out of that candidly. We saw a couple of questions from Senator Hagerty from Tennessee on the issues of promethium, for example, and Bitcoin ETF. We also saw some questions from Senator Lummis on SAB 121, which is more crypto accounting standards, and how do you custody actual crypto for banks. So I think we're going to see a lot more hard -hitting points from the House, especially on the Republican side. But I'd also like to caveat, as well, that the shutdown approaching, a lot of Democrats are going to use their time to hit the Republicans. It's just standard politics here. The Republicans are the ones in the House that are really slowing things down, unfortunately, when it comes to funding the government. So Democrat, any for the most part, is going to utilize their five minutes to not really talk about Gary Gensler, but talk about the Republicans shutting down the government. Because again, that's a major, major thing here. As much as crypto is big for us, the macro of all of the shutdown has a lot of implications. So we won't see crypto come up too much, but after talking to a couple offices, it does seem like we're going to have some definitely hard -hitting questions, very similar to what we saw earlier this year in the House. Yeah, and to your point of, you know, things have certainly changed since the last time he appeared, because you had the Ripple lawsuit decision, you had the Grayscale decision, where Grayscale won that, Ripple won a big chunk of theirs as well. And the Prometheum details are more about what Prometheum is and what they're up to. So do you think there's going to be some hard -hitting questions around that, those cases and those things that happened? Definitely. So if you recall, last time he spoke in front of the House Financial Services Committee, he kept saying multiple times, we have not lost a court case on crypto at all. We have brought several actions. And again, remind you, they call settlements wins. And so in their case, they were. They had won every single court case. But now that talking point is really faded because, as you mentioned, the Ripple case, the Grayscale case, there's also ones like the Coinbase suit going on right now. That's got a lot more attention. Actually, it looks a lot better for Coinbase post those decisions. And so he can't rely back on the courts here or say that, hey, look, I'm winning in all these court cases. And actually, especially in the Grayscale case, he lost 3 -0. And two of those judges were Democrat appointees and they're based here in D .C. And so I think that having that set the tone of like, look, you are really overextending here and you're losing in the courts, not by a small margin, by unanimous margin sometimes. And it's just not crypto. You are pushing the balance elsewhere where other industries like ESG or like private equity are seeing these wins and saying, you know what? I think we're going to actually have a chance to win against the SC as well. So like the ETF situation where crypto really just goes out ahead and fights a lot of these fires for more traditional finance. And then those folks kind of benefit from crypto's push. I think we're seeing some of that happening now with the Grayscale case and Ripple case and Coinbase case empowering other industries who feel like they are also having overreach from the SEC saying, you know what? I think we have actually a case here when we can actually win the courts. So I think it's going to be a major theme of this hearing going forward. But also there's going to be several other questions to your point about Prometheum. That was a major issue for that committee, which had Erin Caplan in front of that committee just a couple of months ago. And they reiterate all the talking points, securities laws are clear. The SEC gave us a way to work forward and move things forward. But that argument really fell apart pretty quickly. And we're seeing that in this case, that the Prometheum line that there is a pathway forward registration, there is a way to comply, just doesn't hold water. And so I'm pretty sure we'll see some members of Congress tighten the screws a little bit there because it's been really more of a black box, the SEC, of how this process went. Caplan just kept saying that we actually kept working the SEC and they were clear, but that has yet to even show itself. So I think there'll be a major other theme for this hearing as well. Now you mentioned Coinbase and everyone's looking at that lawsuit. There was also news reported, I think you mentioned it, where Coinbase CEO Brian Armstrong will be on the Hill. They've also launched an education campaign around crypto. Tell us about that. Yeah, Coinbase has been a godsend, candidly. Again, we used to have only about five or six lobbyists during the infrastructure fight. And again, we're going up against the banks who have over 150 plus lobbyists. We have going against other agencies or other groups that have way more funding. But Coinbase really has stepped up and said, look, the fights here in DC, we are committed to the United States and we're committed to resources here in the United States and DC to educate Congress, to educate regulators, and to showcase in DC why crypto is important for the future of the United States. And so they're having a huge Hill day tomorrow, actually. Again, it lines up not on purpose at all with Kerry Gensler testifying and of course also the shutdown too. But they're going to be having a whole set of presentations for Hill staff and members of Congress to learn from founders. It's not just Coinbase itself. They're also bringing in other founders from other companies and having a whole demo day, a Hill day, you can say, to educate various offices. And so I think it's really important to have. We're all seeing a lot of other folks from the industry come down. So it's going to be quite the crypto week here in DC. Of course, bad timing with the shutdown, but no one can really plan it like that. So we're really excited to see how that plays out, especially with all the heat recently more moving to AI in terms of interest, but also scrutiny. I think it's good to have more adults in the room and say, hey, look, crypto was the AI about one or two years ago. We're still here. We're fighting a lot of big battles. We need Congress's help to move the needle. But at the same time, let's show you why this is important and why this technology needs to be in America and not be based elsewhere. Because unfortunately, we're seeing a lot of folks migrate over to London, migrate over to the EU. And Coinbase is really taking a strategic stand saying, we're here to stay. We're here to comply with the rules, but we also need some action from Congress. So we'll see how that goes. Sure. Yeah, that's really great that they're doing that. And education advocacy are certainly key. And speaking of legislation and regulations, obviously, we had the market structure bill get marked up in the house. You also have the stable coin bill. What's the latest with those and the next steps? I know the shutdown is probably delaying a lot of things. What are the latest on those items? Yeah, so we were kind of expecting by October timeframe to have a vote on the stable coin bill and the market structure bill. There are other crypto bills as well that passed out of the house financial service committee, but those are the two main big ones. And so the plan was, hopefully, was after this whole shutdown drama that we would have a vote probably in October, but it's looking more like November now. And again, our message to folks is the closer we get to that 2024 election, we're almost a year out, all of a sudden, all bipartisan politics goes away and folks start retreating back to their bases. And it's my team versus your team. And that's when everything grinds to a halt in DC. We're already seeing that right now a little bit with the shutdown where folks are saying it's my team versus your team, but the Republicans are a lot more splintered on their teams. And so we want to make sure that we get these bills pushed out of the house on a good bipartisan basis and then showcase to the Senate why it's important to take up this legislation. Now, there are been some rumors going around recently. Again, Politico report on it, Punchbowl report on it recently, too, that Patrick Henry gave an interview saying, look, the Senate Bank Committee, my Senate counterpart, they're doing completely different things than we're doing in the house. We're focusing on crypto and capital formation and data privacy. They're more focused on marijuana banking, exec compensation, and banking regs. So we are in two different camps on two major different issues. But if we were able to make a trade of some sort, the priorities that Sherrod Brown, who's running for reelection in deep red Ohio, who's going to need all the help he can get, would at least his case to voters saying, look, I'm actually working on this committee that traditionally has not passed that many bills. Mind you, again, they haven't passed a bill, except for this year, for four years before that. And that's during his time as well as Republicans in the chair time. It's crazy. And so in order for this to move the needle, they have to have a trade. And I think that's what's really important to say. If this trade were to happen, a lot does have to happen. But this does provide a pathway potentially for crypto legislation to move forward to the president's desk. Again, a lot has to happen. A lot can mess this up. But this isn't one of the first few times we're seeing kind of a light at the end of the tunnel. And we're really excited by it now again. But we have to have a lot of education because the Senate has not really given too much thought to this issue besides a couple handful of really powerful champions. Yeah, boy, fingers crossed, toes crossed, everything, hoping they can get something through the House and then we can go through the Senate. Boy, I'm hoping something happens by early next year before the madness of the election cycle. Now, there's also the trial for Sam Beckman Fried and the whole FTX debacle. In addition, there's been new updates around Sam Beckman Fried's parents and how money was moved to his aunt and Stanford University and much more. What do you expect to happen in October with this trial? So the main issue that we're going to have here in D .C. is just the noise. A lot of people are going to be talking about the SPF trial. It does have a huge media attention, for better or for worse. And again, we've really at least made sure we tell folks in D .C., again, this is not a crypto problem. This is a complete scammer just using newer technology. But guess what? Same old playbook as we've seen with Madoff and others. But there is concern that there are, at least in the case of the House, for example, we're voting on these big bills. FTX came up as a reason to support the bill, as a reason also to oppose the bill. Some folks say, look, there's no coming of a customer funds. That's what FTX did. And this bill bans that. On the other end, they're saying, you know, well, this legitimizes the crypto market. So this could potentially make more FTXs come up down the road. And so we've seen FTX kind of being pulled in two different directions when it comes to supporting or opposing legislation. And so our concern is the 300 plus members of Congress who have not sat in a crypto hearing who may not even know what Bitcoin or Ethereum is, are they going to listen to the headlines and say, look, actually, SPF is all crypto, which we all know it's not the case. Or they're going to say, SPF did this fraud. That's why we need to pass legislation to make sure this doesn't happen again. And so we're trying to really thread that needle. Of course, you know, we still know everything is going to come out through the trial. There could be some regulatory implications. Again, the campaign donations is a major factor and a major reason why a lot of folks in Congress are a lot more put back by crypto and kind of staying away on the sidelines because they don't get burned again. But as we're seeing kind of recently with the indictment with Senator Menendez recently from New Jersey, some members of the Senate took money from his PAC. And so there's a lot of, you know, just it doesn't matter if you're in crypto, doesn't matter if you're a Singh Senator, there's a lot of issues when it comes to campaign financing as a whole. And a lot of folks are on their toes here. But I think, you know, we want to make sure that we showcase it. Folks, SPF kind of went abroad and tried to really railroad the industry here in D .C. by trying to screw DeFi with his legislation and trying to protect his fraud and scam. Let's make sure it doesn't happen again. Let's put some rules on the road because, yes, SEC is not providing that right now. They haven't for years. And so it's time for Congress to act. So we'll see how that makes the dynamics. I'm sure, again, there'll be a lot of D .C. ties and connections with that court case. So if there's anything damning, we'll soon find out. But our hope is that this actually encourages Congress to act rather than sit on the sidelines saying, no, we're good. Crypto is kind of all SPF, FTX. And what do you think about the dynamic of and I don't know if this is going to be discussed in the trial at all, but Sam Beckman Fried and FTX officials met with the SEC many times. These are confirmed things on the calendar. I believe Sam met with Gary Gensler, according to some calendar updates. Does that play a factor at all? Because obviously we don't know what was discussed and what was the agenda items. But would that bring any pressure on Gary Gensler? Like you met with this guy. Yeah. He said in the New York Times article back in December that he met with SPF, I think it was twice actually, SPF and Gensler personally. But again, also remind you, it's a big organization. SPF was in D .C., more than any CEO in any industry I've seen in my time in D .C. But at the same front, staff meet all the time too. I mean, it wasn't just SPF. He had a whole team of staff that helped out on this front, both at the CFTC, at the SEC and of course with Congress as well. And so Gensler said again explicitly that he met with SPF twice. But I think it'd be good to know, look, how many times does your staff interact? How long do those conversations go? What do they lead to? Because there were some rumors swirling around that FTX is going to get a pass of sorts. And again, those are rumors. We have not had confirmation of that. But the one thing about the court case is that it's going to bring all this to light. So if there's anyone that's saying anything half -truths here or they're trying to protect their character or protect their image, it could really bite them if they have been lying to the press or they've been getting half -truths here. And so if I were to chair Gensler, this likely will come up in tomorrow's hearing. The question is like, look, it's going to come out. The truth will come out. We just want to make sure you're shored up here because it's going to be really bad for you on top of all the other things that have been happening in the courts if you've been caught potentially lying here. And again, I don't see any reason why he would in this situation, but I think the focus should be also not just on SPF and Garrett Gensler, but where do the staffs and the senior level execs and regulators also meet from FTX and the SEC? Hmm. I'm very curious to get those details. Now, speaking of FTX, obviously with the relation with Binance, and I forgot to ask you this earlier, the judge recently said it blocked the SEC from conducting further discovery, if I'm not mistaken, with Binance US. Have you heard anything about that? Not as much, at least in the DC front, but at least when it comes to the Binance situation as a whole, there's still that looming DOJ investigation that a lot of folks in DC are waiting for that shoe to drop. Again, there's various rumors of why that DOJ lawsuit hasn't dropped. There have been confirmation reports of central sanction evasion violations, as well as money laundering violations by Binance and the parent company, not Binance US to my knowledge, but Binance. What is the relationship though between Binance US and Binance? Is that there much cohesion there or is there actually a pretty separate line between those two entities? So one thing's for sure though, a lot of folks in DC or in the early of 2023 are hearing a lot more from Binance. They were definitely hitting DC a lot more, trying to get their narrative out. And I think the mounting allegations are pretty damning. And we've seen a lot of folks who were in DC for Binance trying to deliver that message. They're not here anymore. It was a very short stint for them. So whether that be for the company having financial problems, whether it be more of the regulatory issues, that's unclear at the moment. I would lean more to the regulatory issues, but I think it's all going to come more to light as time goes on, but it's pretty bad. So we'll see exactly how Binance recovers from this, if at all. But at least here in DC, the folks that they had speaking, they largely aren't here anymore. Wow. And final item here, obviously you got the Gensler hearing tomorrow with the House Financial Services Committee. Is there any other major hearings for the remainder of the year that we should be aware of? Not at the moment, at least in terms of big ones. We are seeing some small hearings, rumors coming up right now for more of Senate banking. Again, if they do consider crypto legislation, they've only had one major crypto hearing so far this year, whereas the House has had over 13. But again, like I mentioned earlier, that's just two separate priorities for two separate chairs. But if this trade were to happen, I think I'd just keep an eye on Senate banking. They just had their first AI hearing last week. And as they kind of get more into the AI issues and tech issues in finance, that's going to eventually loop in crypto more and more. So I think we'll keep an eye on Senate banking. And then finally, if we are looking for those votes happening on the House floor for the stablecoin bill, as well as the market structure bill, I probably keep a little eye on the House as well. I guess I think lastly, I'll say now, too, is tax issues. We've been talking a lot about securities law, commodities law for quite some time. But tax issues are really percolating to the surface here. Senate Finance, which is Ron Wyden, who's a big champion for crypto, Democrat side, as well as Mike Crapo from Idaho, they actually put a request out to the industry and another stakeholder saying, look, what does taxation for crypto look like? Please help us. Who should be reporting 1099s? Who should be doing various filings and such? So that's just a request ended in early September. And so we potentially could see some action or at least some legislative hearings on what does crypto taxation look like. And I think it's a very important issue with the broker definition coming out from Treasury. There's a lot of comments going through that system right now. So we'll see where that lines up by keeping an eye on tax issues. That's going to be a major fight for quite some time. And I think it's going to be really important. It's a little nitty gritty, but it's very important for any business to operate in the United States. Yeah, absolutely. That's a big one. And I know there's been some other things happening. I think the FASB rule and with corporations being able to hold Bitcoin and things like that on their balance sheet, I believe there were some updates there. Don't have the full details, but there's certainly a need for further clarity and for individuals and institutions. Ron, always great information, man. Thank you so much. Happy to help. Thanks for having me.
News, Traffic and Weather
Fresh "Senate Banking Committee" from News, Traffic and Weather
"The major step in Congress that would open the doors to banks for weed businesses in our state. It is 730. The economy was a big issue in the second Republican presidential primary debate. Former New Jersey Governor Chris Christie says the national debt is not just a democratic problem. During the Trump administration, it's $7 trillion. $7 trillion in national debt, and now the Biden administration has put another trillion on and counting. Former Vice President Pence on the UAW strike. Joe Biden doesn't belong on a picket line. He belongs $7 trillion in debt. Being broadcast on the Fox Business Channel. Former President Trump skipped the debate. Instead, he spoke to workers at a non -union auto parts plant in Detroit. Mexico sent military troops, vehicle convoys, and helicopters into remote towns near the border with Guatemala after drug cartels blocked roads and cut off electricity in some areas over the weekend. SAG -AFTRA, the actors union will resume negotiations on Monday with Hollywood Studios. Stocks closed today. Daria Albinger, ABC News. News Radio 1000 FM 7. 97 Stay connected, stay informed. Good evening at 7 31. I'm Kelly Meyer and here are the top local Northwest stories. Washington's cannabis industry could be able to move away from the all -cash model under a bill that just passed the U .S. Senate Banking Committee. Northwest News Radio's Ryan Harris explains. The bipartisan
The Breakdown
A highlight from Could Oil and a Gov't Shutdown Screw Up Powell's Plans?
"Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Friday, September 22nd, and today we are talking oil, macro, everything that could throw the economy off. But before we get to that, if you are enjoying The Breakdown, please go subscribe to it, 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 at the show notes or go to bit .ly slash breakdown pod. All right, friends, well, we are sort of continuing the macro story today that we picked up around Powell and the FOMC this week. And one of the questions that Powell was asked was about risks that threatened to knock the economy off course. Two that he mentioned that we're going to spend a little time on today include oil prices and a potential government shutdown. Let's start with oil first. The price of crude oil has steadily increased over the past four months. From a low of around $70 in June, oil reached almost $90 a barrel for the US -based WTI benchmark contract and $95 per barrel and $95 per barrel for international Brent crude earlier this week. The price increase for crude has driven US gas prices back above $3 .80 per gallon, the highest level since last October. Overall, gas prices have ramped up by 20 % since the beginning of the year, according to AAA. Now, there are a number of factors all contributing to steadily increasing oil prices since the June lows. The first is OPEC+. The economic group of oil producing nations led by Saudi Arabia and Russia have recently curbed output. Production cuts, which were agreed to late last year, have been gradually implemented over the past six months. In July, Saudi Arabia voluntarily cut an additional 1 million barrels per day from its production quota, about 10 % of its previous output. Existing production cuts across OPEC have already been extended into next year and analysts expect Saudi Arabia to extend their voluntary cuts until March. On Thursday, Russia further constrained supply by banning the export of diesel and petrol. Russia is one of the world's largest suppliers of diesel alongside their status as producing around 12 % of the global supply of crude oil. The International Energy Agency said last year that Russian refineries produce, quote, roughly double the diesel needed to satisfy domestic demand and typically export half their annual production. Analyst opinions focused on the simplest explanation for the ban, retaliation for sanctions. Henning Gloestien of the Eurasia Group said, Russia wants to inflict pain on Europe and the U .S. and it looks like they're now repeating the playbook from gas and the oil market ahead of the winter months. They're showing that they're not finished using their power over energy markets. The Kremlin said the ban was temporary and aimed at addressing rising energy prices in domestic markets. However, they gave no timeline on when the ban might be lifted. U .S. and European policymakers have largely banned the importation of Russian refined fuel since February, which has required Russian supply to be routed through third party regions including Turkey, North Africa and Latin America. Now, OPEC cuts over the past year were predicated on a weakening demand profile heading into this year. At the time they were announced, recessions were expected across Europe and the U .S. China was an open question with the potential of reopening pushed back in the midst of additional pandemic waves. But since then, the European economy is sputtering along, albeit with dismal manufacturing data out of Germany. The sanctioning of Russian supply has caused European demand to be displaced to other regions with refining capacity, largely India and the Middle East. In the U .S., recession has been continuously pushed off into the future and oil demand is now back at all time highs with no signs of slowing. Although the Chinese economy has hit some turbulence recently, oil demand remains robust. Analysts expect China's oil demand to remain high as Beijing secures strategically important resources. What's more, analysts expect China's oil demand to remain high as Beijing secures strategically important resources in part to mitigate geopolitical risks as well as to shore up its manufacturing and transportation industries. So with oil prices spiking, many are wondering whether the White House will once again intervene in markets using the Strategic Petroleum Reserve. Between November 2021 and September of last year, the White House authorized a number of SPR releases. The final policy saw one million barrels per day provided into the market over six months. A small amount of oil was restocked earlier this year, but the SPR still sits at a little over half its pre -pandemic level. Earlier this week, a headline circulated proclaiming that quote, Biden says depleting SPR is on the table. This was later found to be a hoax with no legitimate source, but it demonstrates how difficult high oil prices could be for the U .S. economy heading into election season. To wit, many saw the SPR release as a political decision rather than an economic decision heading into the 2022 midterms. In the private sector, U .S. oil inventories have recently hit 40 -year lows of 46 -day supply, well below the longer -term average of 65 days. And while August's inflation reports already showed a small uptick due to oil -related prices, the effect is expected to be more profound across this month. Dario Perkins, an economist at T .S. Lombard said, That said, it is important to keep these recent inflationary developments in context. We are not yet in danger of undoing 12 months of solid disinflationary progress, not even close. Others suggested that high oil prices would have a greater impact on growth rather than inflation. Maya Bhandari, head of multi -asset at BNP Paribas Asset Management said, It really impacts the growth side of the Goldilocks equation rather than the inflation side of things over the long term. Theory is that sustained high oil prices begin to eat into disposable income for households alongside higher costs of production for manufacturing and logistics. These combine to reduce growth and potentially tip the economy into recession. Overall, this situation in the oil markets has, to some, many parallels to the liquid natural gas spike in the winter of 2022. Prices in some markets rose more than tenfold, European energy companies scrambled to secure supply at any cost, and multiple firms went bankrupt due to the volatility in markets. This week, Bloomberg reported that the trading arm of French supplier Total Energies has played a major role in bidding up the price of U .S.-based oil. Their source claimed that the firm is paying a premium for physical U .S. barrels, pushing the spread against futures to levels not seen since last November. With all of that said, there are some signs that the oil market is beginning to cool off. On Thursday, Brent crude futures fell to $92 per barrel, which represented the third straight day of price declines, which is the longest streak in almost a month. Warren Patterson, head of Commodity Strategy at ING, said the Fed's hawkish messaging has quote, put some pressure on risk assets, including oil. The dollar index has risen by 0 .8 % since Chair Powell left the podium, a large enough move to weigh on asset markets. Patterson said he still expects Brent crude to move above the $100 mark in the near term, but that he doesn't anticipate the move will be sustainable. So that is the view on oil overall. The thing that I am definitely going to be watching more than anything else is the political dimension of this. We are now entering the period where everything, even more than usual, is going to be completely wrapped up in what it means for the election season. If prices at the pump keep trending up, it seems very likely that the Biden administration will be willing to do what it takes, including SPR releases, to get those prices down. But that's just something we're going to have to keep an eye on. Now what about that other factor that Powell mentioned? Well yes, indeed, my friends, the US government is once again hurtling towards a shutdown after efforts to pass a short term spending bill were scuttled on the House floor on Thursday. House Speaker Kevin McCarthy attempted to marshal Republicans to vote through a package to keep the government funded past the end of September. Closed door negotiations continued late into Wednesday night, but were apparently unconvincing. The bill currently being considered is the $886 billion Defense Appropriations Act. The bill was stifled in the House after five GOP representatives refused to allow debate to begin by voting against a preliminary procedural rule. Democrats also voted against the measure and appeared to taunt Republicans apparently reveling in seeing the GOP's slim majority descend into chaos. Among the Republican dissenters was Marjorie Taylor Greene, who opposed the inclusion of $300 million in funding to the Ukrainian war effort. On Thursday, Politico reported that Pentagon sources have said Ukrainian operations have been exempted from any shutdown, making that part of the dispute rather moot. McCarthy sent House members home on Thursday night to return to Washington on Tuesday. He told reporters after the failed vote, quote, two people flipped, so I got to figure out how to fix that. That wasn't the impression they had given us. Now, this was McCarthy's third attempt at bringing the bill to the House floor. The current proposal on the table is a 31 -day stopgap funding mechanism to forestall a shutdown to begin next weekend. McCarthy remarked on the change in tone in Congress among that extreme element of the Republican Party, stating that, quote, this is a whole new concept of individuals that just want to burn the whole place down. Now, even if a 31 -day stopgap is passed in the House, it seems unlikely to make its way through the Democrat -controlled Senate. The bill includes a 30 percent temporary cut to domestic agencies and immigration law changes, neither of which are likely to get the seal of approval from Dems. Senate Majority Leader Chuck Schumer said instead of decreasing the chance of a shutdown, Speaker McCarthy is actually increasing it by wasting time on extremist proposals that cannot become law in the Senate. House Democrat leader Hakeem Jeffries remarked that the situation was playing out as a, quote, Republican civil war. Now, if it comes to pass, this would be the 11th government shutdown since 1980. The logic is that hard -line positions that don't enjoy support in the Congress can be put directly to the American people by shutting down the government and drawing attention to the impasse. Republican Ralph Norman said last week that, quote, we're going to have a shutdown. We believe in what we're doing. The jury will be the country. Still, the record on government shutdowns doesn't really support that strategy. Not one of the 10 previous shutdowns resulted in the dissenting group extracting concessions. Typically, the American people quickly turn on the party they view as blocking access to government services over a petty squabble. Alex Conant, a Republican strategist, said, This is such a dumb fight because there's no principle that we're standing on here. It's just bad tactics. While the dispute is nominally over excessive government spending, with Republican dissenters pushing for funding to be reduced back to 2022 levels, the underlying problem is, of course, the level of discord within the Republican Party. McCarthy was voted in as House Speaker after a record 15 attempts. The process took four days and frequently descended into a farce. This was only the second time in the post -Civil War era that a House Speaker had failed to be elected on the first attempt. Conant noted the terrible optics of a government shutdown of the Republicans' own making heading into election season, stating that, quote, Biden didn't win because of his political skills and soaring oratory. He won because Republicans blew themselves up with Trump. I'm afraid we're seeing history repeat itself, with the GOP once again helping Biden by shooting themselves in the foot. Of course, never one to shy away from controversy, Trump fanned the flames on Wednesday, posting that, quote, Republicans in Congress can and must defund all aspects of Crooked Joe Biden's weaponized government that refuses to close the border and treats half the country as enemies of the state. He added that, quote, This is also the last chance to defund these political prosecutions against me and other patriots. They failed on the debt limit they must not fail now. Use the power of the person to defend the country. Now, zooming out and trying to get away from the politics of the situation, which obviously is not the focus of this show. The reason that this was brought up at last week's FOMC press conference is that a government shutdown would halt the publication of government data. This would include employment, inflation and growth statistics, which are currently playing a key role in guiding Fed policy. Now, given how much the Fed has said over and over again, their policy is going to be driven by data, presumably not having access to that data would be a fairly big deal. Yet in spite of that, Powell tried to put on a brave face, saying, If there is a government shutdown and it lasts through the next meeting, then it's possible we wouldn't be getting some of the data that we would ordinarily get and we would just have to deal with that. Now, by way of some history, the longest ever government shutdown lasted 35 days. The dispute was around funding for the border wall and quickly turned public sentiment against the Trump administration. Republicans controlled both the House and the Senate, but the administration failed to convince their own party to fund the wall. At the time, Democrat Senator Jon Tester called it the most stupid shutdown I have ever seen in my life. However, if this week's display is anything to go by, that 2019 shutdown could soon have some competition for that title. Now, what does this all have to do with the crypto sphere? Well, I think in many ways these are just exemplary of the state of politics in general. And given that, perhaps it's not surprising that former Senator Pat Toomey is not optimistic about the chances of crypto legislation being passed during this Congress. Just prior to retiring from Congress at the beginning of the year, Toomey introduced his own crypto bill, which focused on stablecoin regulations. Now, the House currently has two major crypto bills eligible to be brought for a vote. One would establish a stablecoin framework while the other introduces more broad crypto regulations. While speaking at a Georgetown Law Seminar on Thursday, however, Toomey said, I don't see a path forward in the Senate regardless of how the vote goes in the House. He added that of the two, he sees the stablecoin legislation as having the best shot. The sticking point will likely be Senate Banking Committee Chairman Sherrod Brown. While Brown has been outspoken about the risks of crypto and the need to bring the industry to heel, he has so far remained extremely quiet on exactly what form of legislation would meet his approval. And of course, any crypto legislation would need the support of Democratic senators to pass a vote to become law. Still, during an interview on Thursday, Coinbase Chief Policy Officer Faryar Shirzad said that she thinks that Brown's lack of commitment to a legislative position might actually be a good thing. Shirzad said, Now, last week, Brown wrote a letter to head regulators at multiple agencies urging them to use their existing powers to crack down on non -compliant crypto firms. This of course seems to be the clear intention, at least at the SEC. On Tuesday, the head of that agency's crypto assets and cyber unit, David Hirsch, warned that more enforcement actions would be coming against crypto intermediaries, including DeFi protocols. Still, Toomey, who serves now as an advisor to Coinbase, views stablecoin legislation as the solvable problem. At the moment, Democrats are pushing for the Fed to serve a central role in regulating issuers rather than granting oversight power to state regulators. This preference is believed to be driven by the White House. Toomey said, He thinks that senior Democrats will get on board once the White House is satisfied with the stablecoin proposal. Although that proposal might have to wait until after the election, as Toomey said in the next Congress, I think it's quite possible to get something done.
Afternoon News with Tom Glasgow and Elisa Jaffe
Fresh "Senate Banking Committee" from Afternoon News with Tom Glasgow and Elisa Jaffe
"7 97 stay connected stay informed good evening 631 I'm Kim Shepherd bill O 'Neill at the editor's desk and here's what's happening the dramatic changes to the Washington ferry system are coming fast and as with West News Radio's John Libertini reports some of them are the stuff of childhood dreams Washington's diesel fuel powered ferries are responsible for 72 % of the transportation emissions we want to use clean produced explain could governor Jay Inglis enthusiasm the electricity that powers these boats are going to come from the state of Washington we're going to keep that money right here in state of Washington is still a senator to those folks books in Texas the first hydroelectric ferry could be in the water by next summer we expect to select a battery provider in the next month or so the entire fleet will be retrofitted but five new hybrid electric ferries are also the in budget matt von ruden is in charge of electrification we're removing four locomotive -sized diesel engines destroying them so they can never emit again also on the table hydrofoil ferries energy efficient boats that skim the water morgan fanberg gloss to naval architects what i think is the next solution in ferry transportation our visionary projects called foil ferry a cutting -edge high -speed all -electric passenger ferry concept the goal clean energy across the ferry system by 2040 john lobertini northwest news radio a key vote is giving hope to people in washington's cannabis industry trying to find a bank because pot still is illegal under federal law most banks have refused to work with the industry out of fear of reprisal but the updated safer banking act passed by the u .s senate banking committee would eliminate that fear senate president pro tem washington democrat patty murray has long pushed for this bill because she says otherwise law abiding businesses are being forced to operate solely in cash making them a huge target for crime and all because the federal laws on cannabis have not caught up with us here in washington state shay heinz operator of seattle's luxe pot shop says the increase in armed robberies and smash and grabs comes with more than impacts financial but also impacts to people nobody should have to come into work and be concerned of not making at it home night the original safe banking act passed the house seven times with bipartisan support but some analysts say republican support for the measure isn't as strong ryan harris northwest news radio an oregon convicted man of murdering convicted of murder for killing a law enforcement officer in clark county clark county sheriff sergeant jeremy brown was shot and killed while investigating a gun theft ring in vancouver he was in an unmarked uv conducting surveillance at an apartment complex when guillermo ray leon confronted him and shot him from behind ray leon was convicted of aggravated first -degree murder along with multiple other charges his brother was previously convicted for his role as the getaway driver norea leon faces mandatory life in prison when he is sentenced jeff pojol in northwest news radio coming up after traffic and weather why go false when you can have the thing real i'm brian calvert and guess who may be able to grow yeah that one will freak you out just uh stick around it's 634 northwest news radio you're home for breaking news traffic and weather every 10 minutes on the fours natalie malendez is in the high performance homes traffic center well in totem lake major flooding on 132nd street is happening between totem lake boulevard and 116th so it's best to try avoid to the area and inner bay seattle stop it goes on 15th avenue from a crash at how in the southbound this report is sponsored by macy's backstage what will you find at macy's backstage here's a hint fall fines 25 for in under like sharp blazers cozy sweaters cargo bands jackets and more find the latest trends and new arrivals at a macy's backstage store near you our next oldest traffic at 644. and your and forecast sponsored by northwest crawlspace services good evening we've got some rain showers around persisting through course the of tonight in a convergent zone between
The Breakdown
A highlight from The Five Most Important Stories in Crypto This Week
"Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Saturday, September 16th, and that means it's time for the weekly recap. Before we get into that, however, if you are enjoying The Breakdown, please go subscribe to it, 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 go to bit .ly slash breakdown pod. Hello, friends. Well, as you know, I have been doing something a little bit different for the weekly recap recently. I've been collaborating with Scott Melker, the wolf of all streets on Friday morning with a live show that we've been doing. That's basically a chance to count down what we think are the most important stories and have some more editorial analysis around them. Obviously, you guys know that when it comes to the normal breakdown show, the way that I insert editorial isn't me giving my opinion on every story that comes through. Instead, it's about how I curate the breadth of different opinions, and that's what really matters to me. I want you guys to have lots of different opinions so you can make up your own minds about everything that's going through this industry. However, people have responded to having a chance to have a little bit more of subjective that opinionated take. And so today, while Scott is in Singapore for token 2049, I decided that I would do my own countdown. This is pretty off the cuff. I'm just letting it rip. But these are what I think are the five most important stories in reverse order. Of course, we're going to do a countdown. Let's make it a countdown. At number five, we have the Gensler hearing and his subsequent comments. So what happened? Well, there was a standard oversight hearing for the SEC this week in the Senate Banking Committee. And of course, everyone in the crypto space was waiting with bated breath to see what soundbites would be trotted out against us this time. Certainly, they were there. Sherrod Brown, who's the chair of that committee, certainly used it as a chance to reinforce his view that a crypto is bad and that be the SEC's enforcement record is good. And Gary's prepared testimony also had some knocks on the crypto space as well. When it came to the hearing itself, the biggest soundbite from Gensler was when he responded to Sherrod Brown, saying right now, unfortunately, there's significant noncompliance and it's a field which is rife with fraud, abuse and misconduct. That was the headliner quotable that people ran with. And yet what was notable about crypto in this hearing was how little crypto there was in this hearing. Indeed, it was almost totally supplanted from the GOP as a topic of interest instead to be something like Exhibit A in a broader case that it seems like Republicans are going to be making for the American public heading into election season, which is about the overreach of Biden appointees and government agencies in general. There was a lot of antipathy towards Gary Gensler for his refusal to comply with Republican requests for oversight. Ranking member Tim Scott, for example, called this dereliction of Gensler's duties to the American people. And in general, it seemed like Republican members were gearing up for much bigger fights. Things like the major questions doctrine, which is a new vector for having the conversation about how much authority agencies and unelected officials can claim. Those seem like the battlegrounds that are shaping up in this pre -election season. So the reason that this hits number five at the list is not that there was something really substantive that was said. It's the fact that there wasn't. And indeed, that crypto has become part of a very different narrative, which is something that given that we are just at the beginning of presidential election season, I think we're going to see a lot more of. Now, as to the question of whether crypto not being a hot button congressional issue throughout the rest of the election cycle is a good or bad thing, I think that's a little bit in the eye of the beholder. Certainly, we had a pretty good chance to get some bad legislation on the books during the time when antagonism towards the industry was highest. But at the same time, you have a whole lot of people and a whole lot of companies and a whole lot of institutions that simply aren't going to touch the space with a 10 foot pole until we get some at least basic clarity. I think that if you are in that camp that wants that basic clarity, the best that you can hope for is some very targeted legislation such as common sense stablecoin rules or something like that. Number four on our list today, we have of course, Binance executives leaving. This was the only one that I knew had to be at this certain level. Because of course, four is CZ's favorite thing to say when anyone has anything to say about Binance this year. TLDR three executives left this week from Binance US making the total 13 across the entire conglomerate since June. News broke on Tuesday that Binance US CEO Brian Schroeder was gone. And then on Thursday, the head of legal and the chief risk officer followed suit. Now added to that we have allegations from the SEC that Binance US were not cooperating with document discovery and that their wallet provider is a Binance subsidiary offshore. In other words, effectively a direct allegation from the SEC that Binance lied earlier on in the lawsuit when they said that they would not send client funds to Binance International. Now CZ did come out and address the rumors around Brian Schroeder. He said in the tweet, there's been some speculation regarding recent management changes at Binance US. Brian Schroeder is taking a deserved break after accomplishing what he set out to do when he joined two years ago. Under his leadership, Binance US raised capital, improved its products and service offerings, solidified internal processes and gained significant market share, all of which helped to build a more resilient company for the benefit of our customers. We are grateful for his contributions. Of course, the crypto world falls into basically exactly two camps. The one who followed up that post saying thanks so much for the explanation. Of course, that's it. And the rest of us who are looking at it sort of shaking our head saying, of course, that's the only thing that you can say. So what's actually going on? Well, it seemed for a very long time like Binance had basically no future in the US. It is under absolute assault from basically every regulatory angle. And regardless of what turns up, there's already been a huge impact on market share. It doesn't have access to banks. And at this moment, we're seeing trading volume in the single digit millions for 24 hours, which effectively means it's not doing anything. We've had eight months of online science from that CEO Brian Schroeder. And so it's hard to imagine that there's any real future there. Now at the same time, it's important to remember that Binance doesn't necessarily need the US. It is still by far the biggest exchange in the world, although its market share has decreased as well. And it would be a pretty rational move at this point just to move on to greener pastures. Now that said, it does not at all feel like the regulatory story and the investigative story around Binance is done. And while I'm certainly not rooting for them to have done bad things, because God knows this industry doesn't need another SAM. I also would like whatever's going to happen to happen so we can get on through it. Speaking of SAM at number three, we have FTX selling approved. This has been a big emergent narrative, really more of a fear than a narrative. And the TLDR is that Galaxy Digital has been approved to start selling FTX's liquid crypto assets. FTX has about 3 .4 billion worth of liquid crypto to sell. And Galaxy has been authorized to sell 50 million of that this week and next week, and then 100 million per week after that. There had been some discussion before this approval around whether people could just get their crypto back instead of it being converted to US dollars. But basically, the bankruptcy estate said that that was just impossible based on how messed up things were internally at FTX. Now, why this matters is less the bankruptcy process and more about the market internalizing this deep fear that we have this big multi -billion dollar sell pressure coming right down the pipeline. Lots of people have pointed out that it's not in anyone's interest, Galaxy Digital FTX or any of us, for this group to just mass dump this and create negative price impact. But that hasn't stopped people from being scared. It feels to me like one of the next things we just have to get through and frankly might correspond with another round of negative press around SAM's trial coming up next month. But if we're asking for opinions, get through it, we will. I think the pressure will be less bad than people think it will. And I think there will be a little bit of a rebound narrative when people realize that it is less bad than they anticipated. At number two, we have the SEC but in a different context. The SEC settled their second case against an NFT project this week, that project being Stoner Cats. Now, I did a whole show about this. But basically, the important things about this are one, the SEC saying its jurisdiction extends to NFTs, two, the reasoning for the SEC's jurisdiction extending to NFTs making it seem like their jurisdiction extends to your Magic cards and your anything else as well. Three, for the fact that we are again seeing their strategy of going after smaller projects who have very little incentive to actually defend themselves and much more incentive to just settle and move on with their lives. And four, for the increasingly direct dissents from Hester Purse and Mark Ueda. Now, there are a lot of pieces of that. I don't really want to go into the whole NFT and collectibles argument again. I did that on the show a couple days ago. I will only say here that I do think that overreach in this area potentially undermines SEC authority in the long run, because I don't think it's going to hold up necessarily. I think the bigger thing to watch is once again, the culmination, the crescendo, if you will, and the coming endgame between this SEC and the industry. Now, of course, should the SEC be emboldened by another Democratic administration, things could just continue or even amplify. But it does kind of feel like we are at the period where most of the big shots have been fired, cases against Coinbase, cases against Binance, etc. And now they're back to trying to pick off easy targets that have implications that would lead to the accumulation of their own power. Perhaps once again, this is the reason that the GOP opponents of the SEC have decided to make the issue not crypto per se, but regulatory overreach in general and Gensler's desire specifically to expand his personal authority and the authority of his office in ways that undermine the authority of Congress. In other words, the reason that the Stoner Cats decision gets so high on this list is not so much the Stoner Cats decision. In fact, it's not hard to find people even in the crypto community who don't really want to go out on a limb to defend Stoner Cats. Instead, it's about what it represents in terms of the cycle and where we are in the fight versus the SEC, which leaves us with our number one, which is actually a news story that broke a week ago on Friday, which is Ripple acquiring Fortress Trust. Now, it's not really Ripple acquiring Fortress Trust. That's the number one. It's what has happened subsequent to that. Specifically, the very brief timeline of events is that last Thursday, this is Thursday, September 7th, said that there was an incident and that all client funds were safe. On Friday, however, Ripple announced an acquisition of Fortress, which coming right after that all client funds are safe announcement certainly raised some eyebrows. And indeed, by Monday, back to this week, we found out that this was actually a bailout and that $15 million was stolen from Fortress, which was made whole by Ripple. On Wednesday, Coindesk dug up the incident report from the software partner, and it appeared that the software provider and not Fortress themselves were the ones that had the breach. Although it also doesn't appear that Fortress were really abiding by the best practice security offered by that provider. On Monday, Anchorage Digital co -founder Diego Monica had discussed the issues with housing crypto custody within trust companies that may or may not have the technical expertise to do it safely. Now, it was related to the prime trust wallet incident, which, by the way, happened under the same watch of the guy who was running Fortress Trust. But it's certainly just as applicable here. Diego said it is an integration failure. It is a company that did not have the technical ability to do what they're saying that they do. So you've got multiple layers of why this story matters and why it's at the number one slot. First, you have the significance of this crypto institutional consolidation. Fortress was one of very few custodians, and so seeing them get acquired by Ripple will have Ripple effects for the rest of the industry. Second, I think that it is reflective of the larger brittleness of crypto institutions right now coming off of the chaos of the last two years. The infrastructure for big businesses and major funds and major investors to interact with this industry is very, very bad right now. Now, of course, a lot of that is due to the fallout of things like Operation Chokepoint 2 .0, where it's just getting harder and harder to be banked, for example, to get access to things like banking services and accounting services. But whatever the set of reasons, it has set back and will set back the industry. Obviously, one of the major positive trends that we have in crypto right now is the fact that major institutional players are circling around the edges, starting to wade their nose in. You've got Franklin Templeton adding their ETF application to the mix as a for example, and maybe that should be on the list as well. But it will be a significant barrier for those companies if they're not able to actually interact with these basic services like custody without having to go build it themselves. Now, the most likely outcome in my estimation is that they do, in fact, go build it themselves, that the companies who are good at all of these different parts of the traditional financial sector reapply simply that expertise to the crypto space. And I wouldn't be at all surprised if what happens and how the regulatory stuff resolves is that basically authority to do all these things is given to who the regulators perceive as the adults in the room. Another way of putting this is that in the same way that BlackRock is likely to get the first ETF, because that gives regulators the ability to say, look, we gave it to a safe party, I wouldn't be surprised if you see more and more crypto activity being managed by these storied, vaunted financial institutions that have long term relationships with the regulators themselves. At the same time, of course, there is no crisis without opportunity. And by the end of the week, Swann had announced that they have plans to spin out a Bitcoin only custody service. They announced that they are working with cold storage provider BitGo to develop the service and they are planning to structure it as a trust company. Now they are quite clear that this is a very difficult thing to do, that there is going to be a long period of getting the requisite regulatory approvals. But ultimately, I think it would be a huge boon to the ecosystem for that service to exist, especially from a service provider that Bitcoiners have built trust with. And that ultimately that combination of reflecting where the industry is, and the really low ebbs and hard points of what's happened over the last couple of years. But also the fact that there are multiple paths forward, some which we might prefer to others is why the Fortress Trust Ripple and now Swann situation makes my number one for the week. Anyways, my friends that is going to do it for the weekly recap. Let me know what you thought of this format. Come join us on the Breakers Discord. It's a great place to talk about this. I hope you are having a great fall weekend. And until next time, be safe and take care of each other. Peace.
Bloomberg Businessweek
Fresh "Senate Banking Committee" from Bloomberg Businessweek
"Now your company news radio. From Bloomberg World Headquarters, I'm Charlie Paluth. We begin with a developing Sony PlayStation Chief Jim Ryan stepping down. High profile American investors are being considered to help finance the PGA Tour's transaction with Saudi backed LivGolf in an effort ordered to ease political opposition to the deal. Lululemon Athletica has agreed to a five -year partnership ship with Peloton Interactive that involves tapping its online workouts and teaming up on barrel, apparel, a deal that helps the yoga wear company wind down an unprofitable foray into digital fitness equipment. Meta Platforms introducing its latest lineup of head -worn devices, taking fresh claim to the virtual and augmented reality industry just ahead of Apple pushing to the market. Some of the other stories that we're following. Sources tell Bloomberg the US Department of Justice has stepped up its probe into Credit Suisse Group and UBS over suspected compliance failures that allowed Russian clients to evade sanctions. Federal Trade Commission is reviving its challenge against Microsoft's $69 billion acquisition of video game company Activision Blizzard, a move which seek may to unwind the deal after it closes. The Senate Banking Committee is backing legislation offer federal protections to banks that offer financial services to cannabis businesses, which is still against federal law despite being legal in many states. And those are some of the company's stories that we are following for you at the Czar. I'm Charlie Pellet
The Breakdown
A highlight from The Senate Doesn't Seem to Care About Crypto Anymore
"Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, September 13th, and today we are talking about news that Binance US CEO has left the company. Before we get into that, however, if you are enjoying The Breakdown, please go subscribe to it, 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 go to bit .ly slash breakdown pod. Well, friends, last night I had assumed that today's show would be some combination of Gary Gensler testifying before the Senate with maybe a little side of CPI. But then last night, new Binance news broke that had the whole community chattering. So that's where we're going to start. According to anonymous sources, Binance US CEO Brian Schroeder has left the company. Chief legal officer Norman Reed will step into the role on an interim basis. Alongside the resignation, Binance US announced internally that it will slash around one third of its workforce, laying off approximately 100 employees. This is the second round of layoffs for the US -based exchange as they dig in to fight legal battles against the SEC and the CFTC. Binance US said in a statement, Now, if you are paying attention, not even closely, just at all, you will know that this is the latest in a series of high -profile departures across the Binance empire. At least 11 executives have now resigned across all Binance companies. Three key personnel left on the same day in July, including front -facing Chief Strategy Officer Patrick Hillman, amid rumors of dissatisfaction with how Binance CEO CZ handled rumors of a DOJ investigation. Five more executives quit earlier this month, with the headline resignation coming from Leon Fung, the head of Asia -Pacific operations. In all cases, the resignations have been officially explained by a range of personal reasons, probably capstone by former compliance officer Steven Christie's extremely weird Twitter thread, which included the statement that, Now, the wide -ranging lawsuits against Binance have largely come home to roost for their US subsidiary. Both the SEC and CFTC cases include allegations that reach deep within the international Binance empire. However, regulators have been careful to focus their attention on Binance US to ensure that they have clear jurisdiction. A key focus of litigation so far has been the flow of funds between Binance US and the international organization. All of this means that the focus on the domestic exchange has led to the US subsidiary taking the brunt of the consequences so far. More acutely, Binance US was essentially cut off from all access to onshore banking, forcing them to operate as a crypto -only exchange. This shutdown of financial services has led to a dramatic collapse in trading volume. Binance US captured around 22 % of US market share in April, but this figure has now dropped below 1 % as traders quite reasonably flee to safer shores. Schroeder is now the third Binance US CEO to walk away from the role. Both Kathryn Coley and Brian Brooks, who earlier served as CEOs for the exchange, have provided extensive testimony to regulators and law enforcement. Schroeder joined the firm as president in September 2021, well into the company's claimed attempt to clean up their operations. One consequence of that could be that he has significantly less scandalous information on how the exchange functioned than other former executives. So what are the community's takes on this? Well, as you would expect, the anti -crypto folks are cheering. They see Binance as the next and perhaps ultimate shoe to drop. However, many folks in the industry, regardless of what they think of Binance, view it as a sad episode that shows just how problematic the SEC's approach really is. Wolf of All Street's host Scott Melker said, The SEC killed Binance US without proving a single thing, without due process. It simply took accusations to scare away customers and partners. This is the legacy of Gary Gensler. Another take which I resonate with strongly comes from folks like Byzantine General who wrote, I don't know why people are up in arms about this. I thought it was quite obvious already since the SEC lawsuit that Binance was just going to wind down operations of their US branch. It's so small and completely inconsequential to Binance anyway. Or more crisply from Icebergi, just closed down Binance US already. It has seemed untenable for quite some time and this only seems to reinforce that point of view. Now the other big generator of conversation was investor Adam Cochrane. He tweeted, I've been saying if Binance blows up, we'll be fine in no time. Got a tip that I've not yet been able to fully verify, but I would lean towards it being true on, and if it's true, it'll be a longer, more painful ride than I thought. Life behind bars would be the good outcome for CZ. I've sent that tip to some journalists I think can confirm if it's real and will keep folks updated if I get anything back. But in good faith I had to redact my will be fine stance and replace it with, we'll probably be okay unless this other part is real, in which case holy eff we're really going to zero and going to have to rebuild up again over time. Anyway, fun times in crypto. Now this certainly got people chattering, but not always in a good way. Zero Knowledge consulting partner and founder Austin Campbell quote tweeted it and said, If you have a financial interest in an outcome and post that you have a rumor without saying what the rumor is, you are part of the problem in this space. This would have been prohibited conduct in most regulated markets. I certainly would have gotten in trouble for this at JPM. Now, interestingly, however, 4Lex4Shaw had a different take. They wrote, It's all so tiresome. Binance had the support of dozens of governments from Singapore to UAE to every corner of the global south, and Tether too. The U .S. can't cut the UAE, Caymans, Bahamas, and Singapore out of Eurodollar markets, so it can't de -dollarize Binance. Any successful prosecution of Binance has to cut off Binance's access to USDT, cut Binance off from access to UAE, Singapore, etc., Eurodollars, or prove beyond a shadow of a doubt a huge hole in Binance's balance sheet, i .e. accounting fraud. Everything else is just low -budget theater. If the U .S. can accomplish one of those things, Binance is dead. If the U .S. can't, CZ doesn't have to give a crap about what the U .S. government says, indicts, or cajoles. The latter possibility breaks a lot of people's brains, but I don't make the rules. The interesting take here is, of course, that in many ways the Tether and Binance stuff going on is kind of just a proxy war for the U .S. about the U .S. government trying to exert sovereignty over the Eurodollar market that they simply don't control. I think it's a really interesting lens through which to look at these prosecution efforts, as well as questions around USD stablecoins. Anyways, who knows what happens next with Binance, but it continues to be the biggest open question in the entire space. Now, moving back over more officially to the U .S. government side of things, SEC Chair Gary Gensler appeared before the Senate Banking Committee on Thursday at a routine oversight hearing. Now, coming into the hearing, Gensler reinforced his well -worn position on crypto and written testimony. He stated that, quote, Given this industry's wide -ranging noncompliance with the securities laws, it's not surprising that we've seen many problems in these markets. We've seen this story before. It's reminiscent of what we had in the 1920s before the federal securities laws were put in place. Brushing off the recent Ripple decision, Gensler asserted that, quote, The vast majority of crypto tokens likely meet the investment contract test. Given that most crypto tokens are subject to the securities laws, it follows that most crypto intermediaries have to comply with securities laws as well. Now, the hearing itself was kicked off by opening statements from Chairman Sherrod Brown. As the leading Democrat dealing with financial issues, any crypto legislation being moved forward in the near future would likely require Brown's seal of approval to become law. Judging from his comments about the state of the industry, that seems unlikely. Brown said, quote, The FTX collapse showed how dangerous crypto can be. But FTX wasn't a lone bad apple. It was just the most explosive example of the problems in crypto. The problems we saw at FTX are everywhere in crypto. The failure to provide real disclosure, the conflicts of interest, the risky bets with customer money that was supposed to be safe. FTX was just the biggest and the ugliest. For consumers, it adds up to billions of dollars gone. Bad actors keep flocking to crypto. They use it to launder money, to evade sanctions, to fund crime and human trafficking and terrorism. We need to protect workers and families in these markets. We need to clean up the scams and fraud. As Congress considers digital asset legislation, I'm glad the SEC is using its tool to crack down on abuse and enforce the law. Now, of course, a casual observer might suggest that 1. FTX was distinct, given that its former CEO is on trial for perpetrating fraud against his company, investors, partners and the public at large. And an observer might note that the SEC didn't use its tools to do anything about that or any of the other big examples of actual fraud and problems happening. Instead, it's wrote in after the fact to win settlements against projects too small to defend themselves and chalk it up as victories, which might, to some, be seen as much more politically motivated than actually driven by consumer protection. But that's just one take. Now, ranking Republican member Tim Scott used his opening comments to drag Gensler for his lack of engagement with congressional oversight. Scott noted that the Senate hasn't heard from Gensler since last September, despite the FTX collapse and several bank failures occurring in the interim. He said, complete and timely attention to congressional inquiries is critical to ensuring independent agencies remain transparent and accountable to the American people. Yet, sadly, your agency has fallen short in this obligation to be transparent and responsive to congressional oversight. Without pro -growth regulations, we are limiting opportunities for our kids and our kids' kids from being able to take control of their own financial futures. The American people have a right to know what their government is doing, and your agency's blatant refusal to respond to our constitutionally mandated oversight represents a dereliction of your duties to the American people. And yet, still, when all was said and done, the most striking thing about the hearing was just how much crypto had faded as a front -of -mind issue in Congress. Gensler didn't mention crypto at all in his brief oral testimony, and lawmakers had numerous more pressing concerns to discuss. Based on the questions, climate reporting rules and AI use and financial services ranked as much higher priority than crypto enforcement, even for previously fervent Democrats. We didn't even get the customary anti -crypto soundbite from Senator Elizabeth Warren, who instead used her time to rail against a perceived lack of toughness in new private equity disclosure rules. The crypto discussion, to the extent there was any, touched on pending crypto ETFs. Senator Bill Hagerty brought up the point that the SEC's rejection of the Grayscale Bitcoin Trust had been labeled arbitrary and capricious by a federal judge. He asked what the SEC would need to see in order to approve a spot Bitcoin ETF, to which Gensler responded that the agency is, quote, "...still reviewing that decision and reviewing multiple filings around Bitcoin ETPs. I'm looking forward to staff's recommendations." Now, on top of some of those specifics, many GOP senators had more general criticisms for how Gensler's SEC had conducted itself. Senator Steve Daines, for example, complained that the SEC has frequently overreached its mandate in attempts to expand its jurisdiction. He suggested that 80 % of the SEC's rulemaking efforts under Gensler were not required by legislation. Daines said, "...this means that the vast majority of the agency's rulemaking agenda has been voluntarily undertaken. Chairman Gensler, you are not an elected official that is beholden to your constituents. You are an unelected bureaucrat who has taken it upon himself to reshape American markets to your liking, to the detriment of innovation, of investors, and small businesses." What's more, it seems like many in the Washington establishment are not just concerned about Gensler when it comes to the crypto markets. Earlier this week, for example, the Wall Street Journal published an op -ed article penned by former U .S. Attorney General Bill Barr. Specifically, the article warned of Gensler encroachment into regulating the use of AI. But Barr was scathing in his attack of Gensler's leadership at the SEC more broadly. He wrote, "...this is only the latest example of Mr. Gensler's grandiose regulatory style. He takes on airy theoretical issues and attacks them with broad prophylactic regulations that are long on speculation and paternalism, short on evidence and rational analysis, and heedless of Congress and the Constitution. He claims these measures will head off speculative evils, but they are more likely to throttle the dynamism of U .S. markets." So how are we to sum this all up and make sense of it? To me, this was very clearly the first hearing of the next election cycle. Crypto is now an afterthought for Congress. Or maybe better put, it is an exhibit and an example of a broader narrative which is around SEC overreach. It seems fairly clear that people aren't that interested in getting regulation done for the industry and even on the GOP side are more interested in defeating a broader political agenda embodied by Gensler. The big themes were agency overreach, major questions doctrine, and the role of unelected bureaucrats, not crypto per se. But to the extent that anyone is looking for good news as relates to the election cycle, as finance lawyer at Davis Polk Scott Johnson pointed out, for those keeping count, Senator Sherrod Brown's odds are about 60 % chance to lose his seat next year as of now. Change isn't always necessarily good, but it certainly opens up new possibilities. But gear up, because we are definitely in the election part of the cycle. Thanks as always for listening, and until next time, be safe and take care of each other.
Sound ON
Fresh update on "senate banking committee" discussed on Sound ON
"Him as chair. They say he's a strict cop on the beat and maybe that's why Republicans like him so much. You talk to a lot of lawmakers coming and going from the hearing and as well we're going to talk about the Senate Banking Committee markup of the SAFER Banking Act and we have Nathan Dean with us, senior policy analyst at Bloomberg Intelligence. We are his clients here on Don, nice to see you sir. As always a specialist on both of these topics. Where do we begin with Gensler? theTeen modality. Thank you for joining us. We look forward to hearing more often. They always express displeasure with what he's doing and yet he continues with the rule making, he continues with enforcement actions. It doesn't seem like behaviorally inside the agency. Anything really changes. So what's the point? So it's sort of like when you said airing the grievances I was thinking of Festivus. Yeah, it's almost like There's so many Seinfeld references. For the rest of us. There have been kind of on every show. I But mean, this is an oversight hearing that always happens, you know twice a year and what you're trying to do in this case if you're the Republicans or even the Democrats for that matter is to try and influence some of the rule making process. Now Chairman Gensler is an expert at saying, look, this is up to the staff recommendation. This is up to, you know, the five commissioners and so forth like that. But you're trying to ensure that, you know, for example, the climate change disclosure rule, you that know, scope three, the emissions data gets included, put public pressure on him to do this. Now, look, a lot of this is just popcorn, like you mentioned, tomorrow, you know, we'll wake up and I don't think the world will have changed all that much. But, you know, it's certainly a game that they have to play every few months when he goes to the Hill and testifies. asked Well, this you know, of I Congressman Brian Stile. I said, what can you really, really do here? And his answer was what we're talking about at large on Capitol Hill right now. It was about funding. Follow the money. We get can very nuanced as to how the SEC is funded, in particular as it relates to the ability to roll out rules. It's easier said than done, but that's probably our best tool in the toolkit to do that. What do you think about that? Look, they've always tried to play with regulatory funding as a way to get the SEC or the CFTC or for that matter, any agency to do their bidding. You know, the SEC has to go every year to appropriations and say, please give me this. You know, Congress, they'll try to fund it, and this pains me because I love financial regulation, but financial regulation never gets to the point where it's worthy of risking a government shutdown or trying to have intense negotiations. So, you know, I think, though, certainly somebody will try, but ultimately when the lawmakers get into their huddles and trying to keep the government funding open and so forth like that, SEC funding really won't be part of the conversation. I have to ask you about safer banking, a little bit different than safe banking, and you're writing that this Senate committee approval raises chance of an actual law being passed, but not until next year is the point that you have made here. Safer banking, I read at Bloomberg Intelligence, not an elixir for ailing cannabis firms. The stocks have been popping on hopes here, though, haven't they? Yeah, so this is the safer, or previously was the Safe Making Act. The only difference is language over law enforcement powers. And that's where the holdup was today in the markup. There was actually, I think there were two key points in the markup. One was There's not consensus on this law enforcement Section 10 language. You know, Senator Lummis actually made a statement prior to markup the saying, look, let's just get through the markup. And then we'll hammer that language out when we do the floor vote negotiations. So there's still a lot more work that needs to be done there. The second thing is Senator Warnock raised an issue about criminal justice reform. no He voted against this bill because it didn't go far enough. Now, Senator Schumer said that he wants to attach this to the HOPE Act. But that raises questions of you may lose Republican support on that. So these are a lot of issues that you know, I just don't think can get hashed out in the next eight legislative weeks. And so when surprise me if this gets punted to 2024, and then you got to go through the House. Exactly. And you know, I just don't think there's any indication at this that point the House is willing to take this up. Now it's passed it in the past, but that was under Nancy Pelosi. Right. And so I'm just not sure I do think this will eventually get there. But I think it's actually going to be towards the end of 2024, when Congress is doing some cleanup bills, maybe it's a textual government funding issue to just get it through. But look, I think we'll be talking about safer banking for quite some time now. You know, I asked a Republican Congressman Scott Fitzgerald about whether or not this kind of legislation is something he could find himself supporting. And what he told me is I don't think there's any intent to have that come out of the House side. I then asked Democratic Congressman Jim Himes from Connecticut what he thought, and he kind of suggested it might happen. This is what he said. And I've heard the Chairman over and over again say some version of I don't really like it, but I probably won't stand in the way. And I don't speak for the Chairman, obviously. But we've been working on this for years. And you don't need to agree with the legalization of cannabis to say that dispensaries in states where it is legal shouldn't have $60 ,000 in cash at end the of the day. I think this could be a real win -win. Reminding us there, Joe, that this is really just about giving these companies access to the banking system so they don't have to do everything in cash. Right. And now the concern is how does this apply to, say, gun and energy companies when they're dealing with the banking system, which is a lot of the issue Republicans have. Do you think that is an issue really that Chair McHenry has? Yeah, absolutely. I mean, and to Representative when he said, look, the chairman may not oppose this or he's not going to stand in the way of it. That's a problem. He needs the chairman to actually say, look, we need to get this done because they control the chamber. And so it's easy for some of these Republicans to say we're not going to stand in the way. But for those advocates that want this bill done, you know, that's a problem. Now, when it comes to the guns and you know, you know, it's funny, a lot of the discussion today was not about cannabis in the markup. It was about how these law enforcement agencies could use their these powers for non cannabis issues. That issue is going to go to the house and it's going to be even more disruptive to try and get to a consensus. And so this really just comes down to Republican leadership of the house saying, look, can get we to this point? Can we pass this bill? And can we pass this bill with probably more Democratic votes than Republican votes? That's the old Boehner rule that, you know, that Republican speakers don't like invoking. So I'm just not exactly sure over the next six months. But I keep coming back to the fact that like there is this call it regulatory gap. And I think that they may be able to find a politically acceptable way to get this through towards the end of next year. If the original version of the bill, though, passed the House over a dozen times, wouldn't that have had a different outcome if they had stuck with the language that we've been looking at in the the safe banking ad for years? So that was under the Nancy Pelosi when the Democrats controlled the House. Yeah. And one of the reasons why didn't the bill pass then is because Senator Schumer and Senator Booker and the Senate Democrats tried to swing for the fences and get not just the Safe Banking Act, but also criminal justice reform. So it's the equity component, criminal justice that's going to be at this point. It's Section 10. It's the old Section 10 language about law enforcement powers because Operation Choke Point comes into play here. And then once you mention Operation Choke Point, you know, that opens up a whole other part of issues here.
The Bitboy Crypto Podcast
A highlight from Are Altcoins Still In Trouble? (Gary Gensler Not Giving Up)
"Dark AI agents, you know, giving us just answers that, you know, that they get access to, the government gets access to, the tech companies get access to those answers. Why can't we ask the crazy questions? We have Gary Gensler. He just had some comments. He just was speaking in front of the House Financial Subcommittee, I believe here in the SEC. Gary Gensler demonstrates an unbowed will to stand down from his stance towards crypto ahead of the Senate hearing. Here was the Senate, following the Commission's partial loss in the SEC versus Ripple lawsuit, and an even more clear -cut setback in the ETF contention. Gensler is seemingly poised to stand by his gambit, claiming he is out to protect both crypto users and issuers and investors. And in written testimony ahead of the Senate Banking Committee hearing, Gensler stuck to a consistent theme, lying. No, no, no, no, no. He's reiterating that nearly all transaction qualifies as an investment contract, subject to US securities laws. As I previously said, without prejudicing any one token, the vast majority of tokens likely meet the test. Given that most tokens are subject to the securities laws, it follows that most intermediaries have to comply with securities laws as well, hiding behind vague terminology like most and a vast majority. So, and then also likely meet. So he's staying away from anything where he could point to and say, hey, you, you issued us, you know, a clear -cut yes or no. No, he's doing the opposite. He's being vague. He's being obtuse. He's being gray and murky and swirly. And it's all smoke and mirrors, as they say. Likely, you know, likely meet. It's most crypto tokens, most intermediaries. All right. Keep scrolling here. Is he blinking back? Is that pollen? That's just pollen, right? Is that pollen? It's something. Maybe, maybe it's like the, the, the final act of a Pixar movie, you know, maybe, maybe that's maybe he's looking at DZ's portfolio. He's looking at the ape coin. He's just looking at another security, whatever it is, he's looking at it. He's so I actually watched like, you know, 40 some minutes of the oversight hearing this morning. And I mean, he's just like a broken record. Like, you know, crypto is just rife with, blah, it's just so terrible. It's non -compliant. You know, everything's a security. Like, I like really, I made a video, like, ironically, like, you don't even need to watch this video because we know what he's going to say. And then I watched it anyway. And he said everything I thought he was going to say. And it's so funny because you can obviously see, like, obviously the Democrats give him like the soft, the softball answers and agree with everything he says, and then the Republicans push back. And no matter what hearing it is, it's just such a clear divide on who's on his side, who's already like prepared the questions they're going to talk to, you know, and then the other side is clearly like, you're not helping anyone, you're not protecting investors, like you're saying one thing and doing another just classic, classic Gary. And I'm so sick of talking about him. Classic Gary is like an 80s sitcom character, the rascal neighbor kid that's like next door. And guys, I have a new strategy with the combatants against crypto. I'm gonna say their name one time, might be the last time you ever hear me say their name. I'm talking about Elizabeth Warren's tactics and the tactics used by people like her. There's going to be a new strategy we're all going to employ together, and it's going to help out the crypto industry. Thank Ryan Selkis for this one, giving me that idea. All right, let's talk about the wide ranging non -compliance here. This is what he's saying is the main issue with crypto. He also raised concern about non -compliance in the industry, which he termed, guys, it's wide ranging. Given this industry's wide ranging non -compliance with the securities laws, it's not surprising that we've seen so many problems in these markets. Gensler will be grilled about recent enforcement actions by the commission, which according to many observers have been nothing short of a witch hunt and an overreach of their mandate. I think we would all be in agreeance with that, right? Well, let's go from the SEC to the CFTC. CFTC commissioner plans to modernize investor protection with technology, with technology to minimize the danger. I'm sorry, God, God, that was terrible. That was my JTTI impression. That was top notch. It was an okay song, but I butchered it. All right, to minimize damages caused by financial fraud, Romero proposed the formation of the national financial fraud registry, a centralized record of all crimes and fines related to financial fraud. Isn't there like a website that does that already? I feel like we don't need to create more committees. And what was the word that they use here? We don't need a registry. To me, that just seems a little big brother ask. How about we just have a fun website where, you know, let's just detail all the things. We have the entire US debt. We have the GDP up. We have all these websites. They have all this information up. So why couldn't we do it with just companies that have been fined by the federal government and state governments are then one that has everything combined there. That's genius. Genius. All right. You know what? They're going to do it. They would. That's the thing is that they probably would. That's hilarious. All right. A spearheading this effort to amp up investor protections and guard rails. Romero appointed technology experts in FinTech, AI, crypto, blockchain, and cybersecurity to their advisory committee. Let's see here. We have Christy Goldsmith. Romero's the chairperson there. The commissioner revealed that the TAC experts are tasked with identifying ways to instill KYC, which stands for know your customer and AML processes, which stand for anti money laundering and to defy in crypto invest in avenues. We're also tasked with promoting responsible AI development because we can have those dark, dark AI agents, you know, giving us just answers that, you know, that they get access to, the government gets access to, the tech companies get access to those answers. Why can't we ask the crazy questions? Uh, you ever see some of those crazy prompts? I'm actually kind of for a little bit. We don't, we don't need a first grader to be able to, I don't even want to say them out loud. There's some dark prompts where you can find out ways to do a lot of harmful things that doesn't surprise me at all. I remember when chat GBT first came out, there was like this really long prompt where it would give you like chat GBT's answer. And then it would, it was like some name like Kevin Dan. Yeah. And it was, it would give you like the, the far right wing sort of answer. It was hilarious, but I don't, well, where is that prompt? Someone sent it to me, please. Well, yeah, they, they fix a lot of it, but yeah, we don't want someone to say, what's the most harm I can create on humanity with household chemicals. And then all of a sudden, you know, like mustard gas and you know, the, you know, we don't want anarchy cookbook version of chat, TPT on steroids. Yeah. Let's, let's, let's reel it in here. It's really didn't reel it in. Yeah. This basement talk, right? Yeah. Sorry, Drew. All right. Investigations have shifted away from primarily backtracking trade activities to monitoring social media platforms, such as X Reddit and Facebook. However, they also recommend the use of tools to aid such investigations. The registry would help investors do background checks for any investigations or fines for fraud imposed on the companies. Yeah. I just, I just don't want a whole agency. I don't want a whole registry. I don't want a whole entity of government spun up for this. Just make a little website. It's not that hard. We don't have to have a overseers and, you know, people in trench coats and briefcases knocking on your door in the middle of the night.
Sound ON
Fresh update on "senate banking committee" discussed on Sound ON
"I'm charlie pellet just getting word that epic games is asking the supreme court to review a california court ruling that found apples app store policies do not eight federal antitrust laws ethics request is the latest in a long -running battle between the maker of fortnite and apple over the way the iphone maker runs its marketplace billions of dollars in revenue are at stake for apple senate banking committee is backing legislation that would offer financial old federal actions to banks that offer services to cannabis businesses which is still against federal law despite being legal in many states honday motor america and kia america are recalling a combined three point three million cars with more here's blimberg's tom busby charlie the automakers say the vehicles are at risk of catching fire due to a break fluid leak that could cause an
The Bitboy Crypto Podcast
A highlight from Gary Gensler GRILLED By Senate! (Bitcoin's Next Big Step)
"Welcome to Discover Crypto! It is September 12th, 11 .32am, guys. We got some huge news with Gary Gensler. Just testified minutes ago. We have the breakdown on that also. We have some XRP news. Bitcoin, is it going to be ZK roll -up time for Bitcoin? And also, Google Cloud is controlling a giant, giant crypto ecosystem. Is it your favorite coin? What does it mean for that coin? Also, we have M 'lady got rugged for a million dollars, not rugged, a million dollars stolen by a rogue team member. And it might actually have Fed ties. Might be a Fed, a psyop, everybody. We got AJ on the side. We got Drew in the corner. Drew's walking around doing something. I don't know. I think he's grabbing an MRE for us to eat later. But guys, crypto markets are looking good. Bitcoin is pumping everybody. We're up. Things are feeling good. They're feeling bullish. We're going to hit refresh just to make sure. Look at that crypto market cap up 3 .3%, everybody. We're coming in at 1 .0. I'm going to round up $1 .08 trillion, 24 -hour volume. Kind of muted, actually. It's still below $50 billion. It's coming in at $48 .5 billion. Bitcoin dominance, I think, is up a little bit. Isn't that right, AJ? I will pull the chart in a minute. Yeah, Bitcoin dominance coming in at $47 .3 and ETH coming in at $17 .9, I guess. Still a little low, $27. Not as bad as we've seen in the frenzied activity areas like we're seeing today. Bitcoin up 4 .2%, shaking off $25K, laughing at $25K, and now above $26 ,000. If we look at the 7 -day, just looks like a little brief blip, almost like an opposite of what happened here. Here we had a BART. Then we had an inverse BART. And what's this going to be? Is this also going to be a BART? Does that mean we're going to head down? I'm not sure. What are you seeing in the charts over there for the dominance, AJ? Yeah, I just pulled the dominance chart, Drew, if you want to go to my screen. And if you look this yellow, I'll delete this line here to not confuse anybody. But if you look at this yellow line I just drew right here, I'll make it a little bit bigger so you can see it. If you look at this level right here that was previously the ceiling, has become the floor. It was rejected here as well. And the fact that Bitcoin dominance flipped there, this is a two -day chart, by the way, the fact that it flipped there is pretty bullish for Bitcoin dominance to find that spot. Also, breaking through the 50 on the RSI on the two -day chart, very relevant. It is putting in lower highs, lower lows. But let's keep a close eye on this, even if we go to, say, like a 12 -hour. And let's see how far this can run up. Are we going to get rejected below that previous high right around there? Or are we going to find a way to keep going up? Because really, if you look at right there. So we kind of got to keep a close eye on Bitcoin dominance moving forward. All right, we got someone saying the thing's a little bit hard to read over there. You know, I'd maybe agree that the orange and the color behind it could be a little bit more contrasty. I don't know if that's the right word there. All right, let's look at Ethereum. Ethereum is up 2 .7%, is now above 1600, using that as a psychological support level right there. We have BNB up 3%, XRP up 2 .2%, we have Cardano up 2 .5%, but Tron is up 5%, is looking really good. We go down to Bitcoin Cash, it is up 7 .2%, it's feeling really good. Where's DZs? One of his favorite coins, Chainlink, is up 2 .4%. Still below $6, so I might need to add to my 6 .2 Chainlink, maybe I'll buy 0 .8 today, get up to my lucky number 7. Let's look at the biggest gainers of the day though. We have Render and then Casper. Dang it, I am still mad about Casper. Casper is up 25 % on the week. I keep saying, oh, I missed the boat, I missed the boat, you know, but a lot of people are saying just buy it under a nickel, idiot. Do you have any Casper? No, but it's definitely a coin that I've been thinking about accumulating, just considering when it pumps, it rips. So I guess I'm going to keep a close eye on like the next retest of this. I'm going to get involved at some point here. It's just too good to know. I got to figure out what exactly the ecosystem does. What is it for? Someone asked me, yeah, what does Casper do? I would say go up and down a lot. We have Bitcoin Cash up, is the third biggest gainer of the day, 7 .2%. Rollbit finally shaken off the streak of losses. It is up 6 .7%, Injectives up 6 .5%, and then Huobi up 5 .6%. All right, let's look at the top losers though. It looks like a day of volatility. What's the biggest loser? Nothing really too crazy here. We have Tezos, XTZ, and people aren't feeling XTC when they see the price is the number one dropper for the day, and the top hundred is down 2%, and NEAR, nearly being the biggest loser of the day, it is down 1 .7%. And then APECOIN, just because, you know, I can't open this without seeing one of my coins in the top five of the losers because, hey, I guess I'm the bear symbol or something. I don't know what's going on there. I'm with you there because I see Quant here on my screen sitting at 92 .28. Yeah. That's awesome. That's, you know, the lower Quant gets, I just, you know, I'm completely okay with it. Quant is kind of a magnet to that $100 level, and this is a coin that's in my top five that I believe in a lot moving forward. So anytime you can get Quant on the low, I'm down. Let's get it. This is Matthew Broderick WarGames colors. Great reference. I actually said it looks like a 1984 defense, like, contract hub is actually what I said. So I should have said that. That was a funnier one. What else do we have? Deezy, you missed the boat. You missed the boat on Caspa. Brian Mavor, I told you yesterday to buy Caspa. Should I just buy the wick? Should I just be an idiot and buy the wick? Sometimes you just got to buy the wick. Yeah, buy the top. I like Quant. I like Quant as well, Metaspawn. I have a little bit of Quant. It's been a while since I checked my bag. So guys, make sure you're following us on Discover Crypto, everybody. We're testing new thumbnails. I'm not going to say I'm the biggest fan, but hey, Deezy did a wardrobe change for you for this thumbnail. You might see the black tea underneath it. Maybe I'll do a wardrobe change in the middle of the stream. If you check out Shorts, you can see the big, you can front run the news on Milady's and is really a fed plant project there. It's almost saying no Ewok. What does that even mean? Like the short, oh my God, I walked into that one. I walked into that one. I really walked into that one. All right, guys, let's, you're ready for the biggest news. Let's get it. All right. We have Gary Gensler. He just had some comments. He just was speaking in front of the House Financial Subcommittee. I believe here in the SEC, Gary Gensler demonstrates an unbowed will to stand down from his stance towards crypto ahead of the Senate hearing. Here's the Senate, not the House. Following the commission's partial loss in the SEC versus Ripple lawsuit and an even more clear cut setback and the ETF contention, Gensler is seemingly poised to stand by his gambit, claiming he is out to protect both crypto users and issuers and investors. And in written testimony ahead of the Senate Banking Committee hearing, Gensler stuck to a consistent theme, lying. No, no, no, no, no. He's reiterating that nearly all cryptocurrencies fulfill the Howey test, a legal standard that determines whether an asset or transaction qualifies as an investment contract subject to US securities laws. As I previously said, without prejudicing any one token, the vast majority of tokens likely meet the test. Given that most tokens are subject to the securities laws, it follows that most intermediaries have to comply with securities laws as well, hiding behind vague terminology like most and a vast majority. So, and then also likely meet. So he's staying away from anything where you could point to and say, hey, you issued us a clear cut yes or no. No, he's doing the opposite. He's being vague. He's being obtuse. He's being gray and murky and swirly. And it's all smoke and mirrors, as I say. Likely, likely meet. It's most crypto tokens, most intermediaries. All right, keep scrolling here.
Thinking Crypto News & Interviews
A highlight from SEC GARY GENSLER CONTINUES CRYPTO FUD, BILL HINMAN PROMOTED, FRANKLIN TEMPLETON BITCOIN SPOT ETF, & COINBASE VECHAIN!
"Welcome back to the Thinking Crypto Podcast, your home for cryptocurrency news and interviews. If you are new here, please hit that subscribe button as well as the thumbs up button and leave a comment below. If you're listening on a podcast platform such as Spotify, Apple or Google, please leave a five star rating and review. It supports the podcast and it doesn't cost you anything. Well, folks, scumbag regulator Gary Gensler testified before the Senate Banking Committee today and there weren't too many takeaways. He continued his lies about crypto, saying it's ripe with fraud, manipulation and, you know, his same bullshit narrative. But what we saw, there was some more members pushing back and asking him questions about regulation by enforcement. When are you approving the Bitcoin spot ETF and much more? I believe there's going to be more fireworks and more pressure on him in the House Financial Services Committee at the end of the month. So today, crypto made up a small portion of the questions that Gary Gensler got. He got a lot of questions around A .I., ESG and so forth. Here are some takeaways from some of the questioning that he received. The first is from Senator Steve Daines, a Republican out of Montana. The vast majority of the agency's rulemaking agenda has been a voluntary undertaking. Chair Gensler, you are not an elected official that is beholden to your constituents. You are an unelected bureaucrat that has taken it upon himself to reshape American markets. We do all we can do based on Congress's authority, Gensler responded. Not to be fair, Congress makes the laws. But Gensler, of course, is a corrupt bureaucrat out of control, right? He could be trying to put out clear guidelines working with Hester Peirce, who has provided many great solutions, such as the safe harbor proposal, and to be working with the crypto industry until Congress acts. But of course, he's not doing that. I just look recently, CFTC Commissioner Caroline Pham, she introduced a pilot program or proposal for a pilot program to work with the industry. So he could be doing these things. But of course, he's not. We know he's a puppet on strings controlled by the bankers in Wall Street who are looking to weaponize him, or they are weaponizing him, to shut down, to kill these crypto startups, such as Coinbase, such as Ripple, and so to allow his big buddies like the BlackRocks, the Goldman Sachs, and JP Morgan to come in and take over this market. Now, here's what Senator Bill Hagerty, Republican out of Tennessee, said. He asked what the SEC would need to see in order to approve a Bitcoin spot ETF, an issue the industry has been increasingly frustrated with. We're still reviewing that decision, Gensler said, about a federal court granting Grayskills petition for review of the SEC's denial of its Bitcoin ETF. I'm looking forward to the staff's comments. Now, once again, not much grilling happening. Yes, he got some criticism, but nothing like what the last House Financial Services Committee was like, where Patrick McHenry and all these folks were grilling the hell out of Gary Gensler. So this is pretty softball.
The Breakdown
A highlight from Crypto 2023: Even Vitalik Is Getting Hacked
"Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Monday, September 11th, and today we are catching up on everything in the cryptosphere from last weekend, including the founder of Ethereum getting hacked. Before we dive into that, however, if you are enjoying The Breakdown, please go subscribe to it, 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 go to bit .ly slash breakdown pod. Hello friends, hope you had a great weekend. Like I said, today we are doing a grab bag, catching up on just a ton of news, and let's start with the weird one. On Saturday, Ethereum co -founder Vitalik Buterin's Twitter account was compromised. The attacker used the account to tweet about a time -limited NFT promotion. Users that followed the link that tried to mint the NFT instead had their wallet drained. Around 700 ,000 in crypto tokens and NFTs were stolen. Now, the attack followed a similar pattern to many SIM swap attacks which have plagued high -profile crypto figures recently. An attacker fraudulently obtains control over the target's phone number and then uses two -factor authentication to gain access to Twitter or other services. The attacker then posts a link to a poison transaction for victims to sign. According to Unchained Sleuth's ZackXBT, there have been more than 53 SIM swap attacks over the past four months which have led to the theft of over 13 .3 million in crypto assets. Now, at this stage, we don't know exactly how the attacker gained access to Vitalik's Twitter account. Some assumed that Vitalik would be using more complicated security design than simple phone number based 2FA. If so, this attack speaks to much more sophisticated attacks targeting crypto figures. What was particularly insidious about this attack was how believable the fake communication was. The attacker's fake message was promoting a Q &A on a forthcoming Ethereum feature known as proto -dank sharding. Numerous high -profile industry figures were taken in by the fake message and signed transactions with their wallets. The highest profile NFT that was drained was the very first crypto punk to be claimed, valued at around $250 ,000. To some, the attack demonstrates a clear change in targets for scammers. DC Investors said, Still, others pointed out that it could have been a lot worse. Coin Bureau tweeted, Putting it more simply, CL207 tweeted, While Mac's short ETH, dude would have made $100 million, not $1 million. Still to others, this was just an example of how difficult it is still for normal people in the cryptosphere. Harrison at PompPunk on Chain wrote, Next up, staying in and around the Ethereum ecosystem, consensus -owned blockchain infrastructure firm Infura have announced plans to release a decentralized version of their service by the end of this year. Infura provides a range of blockchain infrastructure but are most well known for their Ethereum RPC nodes. As much as 50 % of Ethereum transactions are routed through Infura infrastructure, making their centralization an ongoing risk. As regulatory efforts move from enforcement to compliance, it's anticipated that regulators will look for intermediaries within the crypto ecosystem to deputize. And to many, a centralized Infura would be a natural fit for compliance enforcement. Indeed, we've already seen multiple instances of Infura being used as a tool for compliance. Last November, the firm announced that some 20 million Metamask users would have their wallets and IP addresses tracked using Infura. Consensus pushed back on the controversy by noting that Metamask allowed users to opt out by switching to a different RPC provider. In March, consensus blocked IPs from certain regions in an effort to comply with sanctions requirements. Also, in March, consensus blocked IPs from certain regions in an effort to comply with sanctions requirements. Users from Venezuela and Iran were among those who complained they could no longer use Metamask through Infura. At the time, consensus were criticized for restricting access more broadly than the sanctions called for, including blocking some U .S. residents who had emigrated from sanctioned nations. Still, it appears that consensus and the Ethereum ecosystem at large have grown increasingly uncomfortable with the censorship risk of RPC nodes. And Infura have been working on this decentralization project for over a year now. Now, the project will be rolled out in a number of phases. Infura refers to the first stage as the quote federated phase, where trusted partners will be brought on to run redundant versions of key infrastructure. Tom Hay, decentralized infrastructure product lead at Infura, said in a statement, We're looking to launch something later this year, and that is going to be a federated phase. The federated phase will last at least six months and will provide the network with the insight on how to build a sustainable model before introducing further decentralization. Now, according to the team at ConsenSys, aside from censorship resistance, adding more diversity and redundancy in RPC infrastructure could also improve the robustness of Ethereum in general. ConsenSys head of strategy Simon Morris said, If you have different people setting up their infrastructure in different ways on different cloud providers using different node software, then you can start to build antifragility into the system. Next up on this breakdown, a regulatory roundup. On Friday, the SEC filed their response in the Ripple lawsuit, arguing that the case should be allowed to proceed to appeal. Ripple had previously objected to the appeal, stating that the regulator had not made a sufficient argument to ground an appeal. The SEC is filing hitback, stating that, quote, The defendants themselves say that the issues have industry -wide significance and are of special consequence. They claimed that this pivotal decision should be subjected to the scrutiny of an appellate court to ensure a clear precedent is made. The SEC is filing hitback, stating that, quote, The defendants themselves say that the issues have industry -wide significance and are of special consequence. End quote. They claimed that this pivotal decision should be subjected to the scrutiny of an appellate court to ensure a clear precedent is made. The SEC noted that one judge has already rejected the Ripple decision as a persuasive precedent, opening the door to contradictory rulings. The regulator further argued that halting the rest of the Ripple case to deal with the appeal immediately would, quote, preserve the resources of the court. They even went so far as to take a swipe at Ripple, claiming that the firm was deliberately dragging out court proceedings. Speaking of the SEC, Republican House Whip Tom Emmer has introduced an appropriations amendment to rein in the SEC's crypto enforcement agenda. In a tweet, Emmer wrote, "...Gary Gensler has abused his authority to grow the administrative state to the detriment of the American people. Congress must use all our tools, including the appropriations process, to restrict Chair Gensler from further weaponizing taxpayer dollars." The appropriations amendment would limit the SEC from utilizing funds to pursue digital asset enforcement until comprehensive rules and regulations are put in place. Now, of course, Emmer has long been critical of the SEC's approach to crypto regulation. In June, he supported fellow Congressman Warren Davidson's SEC Stabilization Act proposal which would limit the authority of the SEC chair by introducing a sixth commissioner to require bipartisan support for regulatory actions. Gensler is scheduled to appear at an oversight hearing before the Senate Banking Committee on Tuesday. The House Financial Services Committee, meanwhile, will hold their SEC oversight hearing on September 27th. So we should get a chance to hear more about whether there has been any shifts in the Gensler -SEC attitude since some of these court proceedings have gone through. Now, moving over to the Fed. In a speech given at a fintech event on Friday, Fed Vice Chairman of Supervision Michael Barr made a number of comments about CBDCs and stablecoins. When it comes to CBDCs, Barr emphasized that the Fed is still firmly in the quote basic research phase and is far from making any decisions. Barr said that quote, Investigation and research are very different from decision -making about next steps in terms of payment system development and we are a long way from that. By way of detail, he explained that the research is currently focused on system architecture and tokenization models. Barr continued to reinforce the idea that the Fed won't make any decision on CBDC issuance without quote, clear support from the executive branch and the authorizing legislation from Congress. On stablecoins, Barr said quote, I remain deeply concerned about stablecoin issuance without strong federal oversight. If non -federally regulated stablecoins were to become a widespread means of payment and store of value, they could pose significant risks to financial stability, monetary policy, and the U .S. payment system. It is important to get the legislative and regulatory framework right before significant risks emerge. Now, Barr has recently spearheaded the Fed's Novel Activities Supervision Program, which requires banks to obtain a written non -objection before they can interact with stablecoins. He claimed that the safeguard was in line with previous guidance issued by the Office of the Comptroller of the Currency. Barr argued that strong federal oversight of dollar -backed stablecoins was in the Fed's interest, arguing that the tokens quote, borrow the trust of the central bank. Now, of course, federal oversight of stablecoin issuers has become a line in the sand for establishment Democrats who sought to hold up the progress of stablecoin legislation back in July. Barr also reflected on the July launch of FedNow, which is the new instant gross settlement system operated by the Fed. He said that FedNow has been made available to depository institutions of all size, but quote, while current volumes on FedNow are small, I expect that participation will grow over time. Now, next up, one we talked about a bit in the weekly recap, but giving the details just for completeness. On Thursday, the CFTC announced enforcement actions against three D5 firms — Open, 0x, and Derridex — all settled lawsuits for offering unregistered derivatives products to U .S. customers. The fines were relatively small — $250 ,000, $200 ,000, and $100 ,000, respectively — but the message was clear. CFTC Director of Enforcement Ian McGinley said in a statement, Somewhere along the way, DeFi operators got the idea that unlawful transactions become lawful when facilitated by smart contracts. They do not. The DeFi space may be novel, complex and evolving, but the division of enforcement will continue to evolve with it and aggressively pursue those who operate unregistered platforms that allow U .S. persons to trade digital asset derivatives. Now, while both Open and Derridex were offering derivatives trading, the situation around 0x was a little more complex. 0x is an Open DEX platform which allows anyone to list tokens. They attracted the attention of the CFTC by simply having derivative tokens with embedded leverage listed. The CFTC claimed that simply retaining the ability to draw fees from the trading, though not actually profiting from the platform and having access to shut down the platform, was sufficient to be held liable for how other developers use the platform. Now, one CFTC commissioner offered a scathing dissent to the enforcement action. Commissioner Summer Mersinger wrote, Although each case presents different facts, they have been lumped together for commission consideration and vote, presumably for messaging purposes, as quote -unquote DeFi cases. She added that, I am concerned that the Commission in these cases is taking another step down the path of bringing enforcement actions when we should be engaging with the public. It is important to emphasize that Enforcement First has not always been the CFTC's default position. These cases are especially concerning in that they represent a significant shift in position on the merits of engagement with DeFi market participants. Finally today, over in the UK, the United Kingdom Financial Conduct Authority have pushed back the commencement date of some elements of strict new crypto advertising rules. The core rules will come into force on October 8th. They require advertisements to be clear, fair, and not misleading. In addition, risk warnings will now be mandatory in incentivizing platform use with both monetary and non -monetary rewards is prohibited. Other parts of the regulations could be pushed back to as late as January according to the FCA. Individual firms would need to apply for additional time on a case -by -case basis. The regulator explained that firms are running up against technical issues implementing some parts of the new rules. In particular, a 24 -hour cooling -off period which would allow customers to ask for full refunds is proving difficult to comply with. It would require programming changes to platforms at a minimum, if not an overhaul to business models. Lucy Casseldine, Director of Consumer Investment at the FCA said, As a proportionate regulator, we're giving firms that apply a little bit more time to get other reforms requiring technology and business change right. We'll maintain our close eye on firms during this extended implementation period. Now, the FCA's strict new rules have been criticized for their broad scope and draconian punishments. Foreign firms that advertise to UK customers would be covered by the regulations, which capture social media posts, websites, and in -app advertising. Influencers would be held liable for their promotion of crypto products, and the failure to adhere to the new regulations could result in criminal charges. The maximum punishment for breaches includes an unlimited fine or even jail time. The FCA has said that the strict rules are designed to Prevent harm to consumers from investing in crypto assets that do not match their risk appetite. The regulator added that It is up to consumers to decide whether they buy crypto assets, but they should do so based on fair and accurate information that helps them make effective investment decisions. So friends, this is the other side of the prepping for the next bull run. It is going to be a much tighter environment, certainly for any types of promotions. Although whether that will end scams given where we started this episode, I think that remains to be seen. However, that is going to do it for today's episode. I appreciate you guys listening as always. Until tomorrow, be safe and take care of each other.
Thinking Crypto News & Interviews
A highlight from GARY GENSLER CALLS ALL CRYPTO SECURITIES AHEAD OF CONGRESS HEARING & SEC RIPPLE XRP APPEAL
"Welcome back to the Thinking Crypto podcast, your home for cryptocurrency news and interviews. If you are new here, please hit that subscribe button as well as the thumbs up button and leave a comment below. If you're listening on a podcast platform such as Spotify, Apple or Google, please leave a five star rating and review. It supports the podcast and it doesn't cost you anything. Well, folks, I want to start with news around scumbag regulator Gary Gensler. Tomorrow, SEC Chair Gary Gensler will be testifying before the U .S. Senate Banking Committee. And there will be two hearings this month that he's going to be appearing at. And tomorrow is the first. At the end of the month, he'll be testifying before the House Financial Services Committee. I think that's the one that's going to have the most fireworks the last time. It certainly did. Gary got a lot of grilling from Patrick McHenry and a whole bunch of other folks. So I can't wait for that one. So we'll see if he gets any pushback tomorrow. But ahead of his testimony tomorrow, he released a letter. And of course, he's reiterating the same old bullshit about how all crypto tokens are securities. And here's one of his quotes. Given this industry's wide ranging noncompliance with the securities laws, it's not surprising that we've seen many problems in these markets. Now here's what Taylor Barr of the Digital Chamber of Commerce had to say regarding those statements from Gary. Without clear rules of the road and notable regulatory gaps, it's not noncompliance. It's navigating uncharted waters. Yeah, I think we've seen this time and time again. Gary continues these false narratives. We know the market does not have clarity. We're seeing the judges and the courts. The judges are also like, what is the SEC calling a security? You can't even say which ones are security and which ones are not right. They're just the SEC is just throwing anything at the wall right now. And Gary continues lying. This is why we have to keep fighting folks. And we have to tweet. We have to use social media to our advantage. We have to make content. We have to contact our representatives. Now, Mike Selig, who is a crypto and a fin regulation lawyer at Wilkie Farr. He tweeted out some items regarding Gensler's letter. Chair Gensler says the vast majority of crypto tokens meet the investment contract tests. Now, former chair Clayton said every ICO is I've seen is a security. This is similar rhetoric, but different meaning. Unlike Clayton, Gensler says tokens themselves are securities. Judge Torres disagreed. So we know the Ripple ruling was certainly important for case law, highlighting Gary's lies and his false narratives. And even goes back to the Howie case where I've interviewed Hester Peirce, SEC commissioner, where she said she's trying to tell the folks there not to focus on the asset, but rather how it's packaged. So in the case of Howie, it wasn't the oranges, right? It wasn't the trees and the orange groves and all of that. It was rather his investment scheme, because if it was the fruit and the trees, that means every orange tree today is a security. All the oranges in the supermarket and that you have at your house is a security, which is nonsense, obviously, right? Because these tokens, folks, they exist on decentralized blockchains and they are distributed globally. They're outside the United States as well. Right. And you can't get the same rights as stocks. If you hold a token, you don't have voting rights in the sense of having equity and shares of the company and things like that. So it's not a security, but rather how it's packaged. That's the key. That's the differentiator. But Gary Gensler continues his lies. So we got to fight. Let's see how this hearing goes tomorrow. And if he gets pushed any type of pushback, I'm hearing a lot of Democrats and as well as Republicans, of course, are not happy with Gary with how he's doing things with the crypto market. Obviously, him taking a big loss with Grayscale and Ripple is significant. And I hope Coinbase mops the floor with this clown Gensler. And then I hope he gets he gets forced to resign. Now, the SEC is, of course, trying to file an appeal with the Ripple ruling. And here, attorney Frederick Foley shared some thoughts about that. He said, XRP community, SEC made decent arguments and Ripple countered them. Well, certifying the appeal is a discretionary standard. Judge Torres can do whatever she wants if she determines the three statutory conditions are met and there is enough wiggle room for her to certify, he says. But as I predicted earlier, I still say the likely outcome is she does not certified mainly because of the prejudice to the humans involved. Brad Garlinghouse and Chris Larson, without the claims against them, I would have to say 100 percent chance she certifies. Lastly, this case has a political element. So if that is a factor for Judge Torres, I don't think it is, but it's not without reason to think the opposite. She can avoid that issue by certifying and putting the onus on the second circuit as the court can simply deny the request. So we'll see. I don't think the SEC has any chance here. You know, once again, they can go ahead and file the appeal. Nothing wrong with that. But will they actually get it through and get something done? I don't think so. I think Gary Gensler has lost the narrative. Optics look very bad for him. And I can't wait to see what the ruling will be with the Coinbase situation. And I think another loss will be really bad for Gary Gensler. Now, a quick word from our sponsor, and that is Uphold, which makes crypto investing easy. I've been using Uphold since 2018, so I can certainly vouch for this platform. They have 10 plus million users, 250 plus crypto currencies, and they're available in 150 countries. You can also trade precious metals and equities on this platform, as well as 37 national currencies. You can swap between different currencies with precious metals and crypto currencies. It's pretty unique. So if you'd like to learn more about Uphold, please visit the link in the description. All right, folks. Now, with Ripple acquiring Fortress, which is the custodian, and this was a big move by Ripple, of course. Well, some details are coming out that Swan Bitcoin's custodian was Fortress and that Fortress was hacked, apparently. And some customer funds were lost and Ripple in their acquisition had to step in to cover the customer losses. This is wild. Now, you may say, who cares? Well, Swan Bitcoin is run by a bunch of Bitcoin maxis. Max Kaiser supports it. The other guy, Corey, I forgot his last name, but these guys are toxic. I mean, they're going around calling everything a shitcoin. They're attacking other coins. They're always, you know, just doing nonsense. It's like their M .O., right? That's the persona they've taken over. But a lot of people recognize it. They're just just toxic, man. Just disgusting people. And lo and behold, the irony, folks, that Ripple came and bailed them out. Right. And apparently this was confirmed because Mike Belshi, who was who is the CEO of BitGo, who I've had on the podcast many times, he confirmed some of this and that the folks at Fortress Trust have not been clear about the lost funds and things that have been happening. And it's spilling over to BitGo because BitGo's clients are calling and saying, hey, what's going on here? Right. What's with the breach and all that jazz? So it's a mess right now. So it's pretty incredible that these Bitcoin maxis got bailed out by Ripple.
The Breakdown
A highlight from How Stablecoins Could Save the Dollar's Global Reserve Role
"What's going guys, it is Sunday, August 6th, and that means it's time for Long Read Sunday. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, 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 go to bit .ly slash breakdown pod. Alright friends, happy Sunday! Today we are reading two pieces, both on the topic of stablecoins, and more specifically the topic of what stablecoins mean for the US and US dollars relationship with the rest of the world. The first piece is called, stablecoins, a potential counter to de -dollarization. The piece was written by Yiannis Giocas, a senior director of product innovation at Moody's Analytics. Yiannis writes, As the global economy continues to absorb geopolitical tensions, we see increasing speculation that the U .S. dollar's global dominance could wane, with a steady decline in the dollar's share of central bank reserves and increasing de -dollarization efforts among BRICS nations and other emerging markets. While the dollar is likely to remain the dominant reserve currency globally in the near future, domestic and foreign policies could erode its overall dominance. Amid these shifts, U .S. regulated fiat -backed stablecoins may offer a novel counter -narrative that can enhance the dollar's global power and mitigate the impacts of de -dollarization. The current global economic landscape is marked by an increased tendency among nations to diversify their reserves away from the U .S. dollar, exacerbated by the Federal Reserve's rate hikes to tackle domestic inflation. Small but growing allocations to other major currencies have reduced the U .S. dollar's share of central bank holdings to 58 % in the last quarter of 2022, from 71 % in 2000. Concurrently, the shadow economy, a sector comprising economic activities that are not officially recorded in a country's gross domestic product due to their illicit nature or the desire to avoid taxes or regulations, continues to be a significant part of many economies. Here, the U .S. dollar often serves as a preferred medium of exchange due to its stability and widespread acceptance. For example, in countries with high inflation like Turkey and Argentina, with rates of 38 .2 % and 115 .6 % as of June 2023, respectively, residents scramble to convert their income and savings into U .S. dollars for protection. Meanwhile, they face capital controls limiting foreign currency holdings and a central bank -set currency exchange rate that may undervalue their currency by up to 50 % as witnessed with Argentina's peso. Consequently, everyday consumers have been utilizing DeFi seeking refuge in stablecoins, thus overcoming these economic constraints. Amid this complexity, U .S. regulated fiat -backed stablecoins present a potential solution. These digital tokens are pegged to the value of a fiat currency, typically the U .S. dollar, and are designed to maintain a stable value relative to the underlying asset. They can offer the stability of the U .S. dollar combined with the flexibility and technological advantages of cryptocurrency, providing a novel financial tool that can help solidify the dollar's position in the global economy. As the regulatory landscape around stablecoins in the U .S. evolves, it is becoming clear that these digital assets could play a critical role in mitigating the impact of de -dollarization of the global economy, which, if left unchecked, could cause inflationary and cost -of -borrowing pressures for the U .S. Recent inquiry from the U .S. Senate's Banking Committee to stablecoin issuers like Tether and Circle highlight the growing awareness of the potential risks as well as benefits associated with these digital tokens. Jeremy Allaire, the CEO of Circle, has noted that well -regulated stablecoins can help reinforce the U .S. dollar's position in the global economy. He argues that if the Federal Reserve can gain control over non -bank stablecoin issuers, it can ensure these tokens are backed by secure assets such as dollars or treasury bills. This move could facilitate the introduction of a digital dollar into the core global economy, providing a robust counter to non -dollar trade regimes. Furthermore, U .S. regulated fiat -backed stablecoins could play a significant role in countries in which the dollar is currently widely used outside the formal economy. By replacing shadow U .S. dollars with blockchain -trackable digital tokens, these stablecoins could offer a more transparent and regulated alternative for transactions, thereby reducing the risks associated with the shadow economy. That said, as private enterprises, stablecoin issuers may be subject to fewer restrictions than alternatives such as CBDCs or tokenized deposits when expanding into new markets. This provides them with greater flexibility and potential for growth if they comply with their U .S. regulatory obligations. In conclusion, U .S. regulated fiat -backed stablecoins offer a potential strategy to counter de -dollarization efforts. By leveraging the stability of the U .S. dollar and the flexibility of digital currencies, these tokens could provide an additional tool for maintaining the global financial influence of the U .S. dollar. Our second piece today is a related piece by former Breakdown guest Austin Campbell. It's called Pass the Stablecoin Bill Now. Austin writes, This definition also reveals something very important about fiat -backed stablecoins in particular. They are old and understood financial products, using new technology. After the financial crisis, there was a significant period of reform in financial markets, where we gave preference to price stability products that worked properly, such as government money market funds or stable value funds, and penalized, restricted, or increased capital for those which did not work properly, such as deposits at highly leveraged banks, prime money market funds, or securitizations. This means we know how to define safe stable reserves for a stablecoin that are not a threat to financial markets. And this bill does this. At the same time, despite the lack of clarity and regulatory animus towards stablecoins in the U .S., the space has grown internationally from zero to well over a hundred billion dollars in less than a decade. Every dollar that flows into stablecoins is funding for the U .S. Treasury at a time when we desperately need it. Every dollar that flows into stablecoins is a dollar that can leave an exploitative local financial system, or a high -priced intermediary, and flow into a simple, transparent, cheap option, if structured like the payment stablecoins in the bill. Non -U .S. jurisdictions have realized the power of this innovation and are racing to take advantage of it. Singapore's MAS has granted a payments license to Circle, stablecoin projects are launching in Bermuda in the UAE, and First Digital has already launched a USD stablecoin in Hong Kong. Tether, perhaps the biggest beneficiary of the U .S. antipathy towards stablecoins, has now controls 80 billion dollars in assets, it recently reported profits of Q2 of more than 1 billion dollars. This means that the decision we face in the United States is not yes to stablecoins versus no to stablecoins, it is yes to stablecoins versus yes to stablecoins offshore. That stablecoins will proceed elsewhere means this is a critical decision for the United States from both a national security standpoint and a financial stability one. Onshore stablecoins, where the U .S. regulates the issuer, means that we will have the ability to perform client due diligence and understand money flows on every individual and corporation, engaging in the minting or burning of the stablecoins, giving us concrete knowledge of the starting point and ending point of every transaction that touches traditional dollar rails after being on a blockchain. It also means that we can ensure the reserves are transparent, segregated, properly managed, and put into instruments that are both stable for consumers and help fund the U .S. government and economy at a time of raising rates and growing deficits. In a worst case scenario, if the United States does not act, it also risks having the dollar no longer be the defining unit of account for crypto and blockchain. Perhaps it could be the euro owing to the passage of Mika, perhaps it could be the yuan owing to China reopening Hong Kong as a crypto hub and embracing the technology once more. Certainly the global share of reserves held in dollars have been falling, and the BRIC nations have been actively searching for alternatives to continued use of the dollar. A future where several decades forward blockchain technology is the backbone of financial services but dollars are barely used, and all of the information about the individuals or corporations transacting are in the hands of foreign governments, who may not be friendly to the U .S., is a bleak one for both the U .S. economy and the strength of the dollar. On the flip side of the coin, if the stablecoin bill HR 4766 is passed, the United States will have a regulatory framework that is likely best in class globally. Stablecoins will have federal recognition, with smaller projects able to be regulated at a state level, allowing for experimentation, but larger projects eventually being drawn into the federal regulatory apparatus. The payments stablecoins allowed within the bill will be transparent, conservatively reserved, with prudential oversight and clear rules around redemption and consumer protection. In short, they will work exactly like they are supposed to represent — safe, secure dollars on a blockchain. This is why it is paramount for the U .S. to act, as we cannot risk creating a future where it becomes a bit player in global markets. In that light, the arguments against advancing the stablecoin bill simply do not hold water. Stablecoins are not a systemic threat, as they are financial instruments we are already familiar with, merely using different ledger technology. The only losers, if HR 4766 advances, are entrenched incumbents like Tether, charging exorbitant fees to those of us who wish to use our financial system for payments. I will shed no tears on their behalf, and would urge the House and the Senate to embrace open, fair competition, where the U .S. is able to unleash innovation and our drive to bring better financial technology and inclusion to the world. Alright guys, back to NLW here for just a really quick wrap up. This will surprise you exactly zero, but I find the conversation about stablecoins in the United States to be so myopic and ridiculous and just patently absurd in every way. It is wild to me that there aren't more politicians who grok this notion that natural stablecoin demand is a way to extend the dollar's influence for another generation. Now the good news is I think that there are some politicians who actually do, and once again I kind of think it's more of an age gap than it is a party gap. But at least we're finally in a position where things are moving in this dimension, and I'm hopeful that in a year's time, let's say, we will have to be reading the same type of op -ed over and over again on LRS, and we will be on to being mad at the U .S. government for not getting something else. Anyways, I want to say thanks again to these authors for their great pieces, and thanks to you guys for listening. Until next time, be safe and take care of each other.
The Breakdown
Is Crypto Already Soft-Banned in the U.S.?
"Right Friends, today we are exploring a really interesting thesis that while crypto and Bitcoin are nominally legal in the U.S., there is effectively a soft ban on them that has much the same effect that any real ban would. The context for this exploration is a piece that came out in foreign affairs yesterday. Professor Hilary Allen published an article entitled the case for banning crypto and it's pretty much exactly what it sounds like. It is a full throated defense of an explicit total crypto ban rather than the half measure of implicit regulatory restriction. Now to understand the context of who this person is, Allen is a law professor from the American university, Washington college of law, and her opinion carries substantial weight and policy circles. She has made multiple appearances before the Senate banking committee in recent years, including appearing before Congress to speak to the risks of stablecoins, as well as the causes of the FTX collapse. She spoke in July 2021, addressing climate as a systemic risk, she spoke in December 2022, crypto crash why the FTX bubble burst. She spoke in July 21, addressing climate as a systemic risk, the need to build resilience within our banking and financial system, she spoke in December 21, stablecoins, how do they work? How are they used and what are their risks? And she spoke in December 22, crypto crash, why the FTX bubble burst, and the harm to consumers. More generally, she was also appointed to the financial crisis inquiry commission by Congress after the global financial crisis. She has scores of papers on all things crypto risk from DeFi to stablecoins, but she primarily specializes in systemic financial risk. The point being that this is not one of your random crypto critics on Twitter. This is someone who has the ear of many in Washington, D.C.. The latest article in foreign affairs spells out the problem as she sees it. When assets have nothing behind them, she writes, no reliable financial accounting practices or valuation techniques exist to expose the fraudulent manipulation of those assets. The result is that fraudsters have rushed into cryptocurrency exploiting the complexity and hype to dupe the unwary.
AP News Radio
Fed official: SVB itself was main cause of bank's failure
"A Federal Reserve official says Silicon Valley bank itself was the main cause of the bank's failure. In written testimony to be delivered to the Senate banking committee, the nation's top financial regulators asserting that SVB all management was largely to blame for the bank's failure earlier this month, and fed vice chair for supervision, Michael Barr, says regulators will also review whether a 2018 law that weakened stricter bank rules also contributed to the collapse, Barr pointed to the bank's concentrated business model in which its customers were overwhelmingly venture capital and high-tech firms in Silicon Valley. He also contains that the bank failed to manage the risk of bond holdings which lost value as the fed raised interest rates collapse was the second largest bank failure in U.S. history. Norman hall, Washington
WTOP
"senate banking committee" Discussed on WTOP
"The banking crisis sent shockwaves through the markets on Friday. They ended the day in the red. And now some are saying the banking rules aren't tough enough. CBS Scott McFarland. Even as President Biden calls for stiffer penalties for bank leaders who mismanage their lending institutions, the banking industry and the banking system is already in the sites of Congress. The chair of the Senate banking committee tells me they'd like to have hearings into the matter, the Senate majority leader says big legislation to safeguard American depositors is needed and Republicans are talking about better action from regulators. Vladimir Putin is a wanted man. The International Criminal Court issued an arrest warrant for him for war crimes in Ukraine. And Ukraine will be getting some more fighter jets soon. CBS's rabia asensio is there. A new show of solidarity for Ukraine from Slovakia following Poland together a pledge for at least 17 Soviet design fighter jets. While old or in need of repair, the hope is it could break Europe's hesitation to send even more war planes. The family of an army combat engineer wants more answers about her death at fort hood, CBS Janet's family and is there a mother says the army told her the combat engineer who served 15 months at fort hood, died by suicide Monday. The army sang in a statement, no fault players evident. For the army to say, no foul play, presumes, facts that have not yet been brought forth. Her parents and advocates for Hispanic Americans are expressing skepticism over how she died. She had been the target of alleged sexual harassment. Another January 6th defendant is going to prison. He's retired air force officer Larry Brock, and he has been sentenced to two years in prison two years of supervised release after prison and 100 hours of community service. Bates was convicted for storming the capitol on January 6th, dressed in combat gear and carrying zip tie handcuffs, he entered the Senate gallery and then joined other rioters on the Senate floor. They were inside just minutes after then, vice president Mike Pence, senators, and their staff were evacuated from the chamber to escape the mob attacking the building. Linda canyon, CBS News, Washington. Wyoming becomes the first state to outlaw abortion pills, medication abortion providers could serve 6 months in prison under the new law. And millions of brackets being busted after historic upset, fairly Dickinson became the second number 16 seed in history to win an NCAA tournament game beating top seeded Purdue. This is CBS News. Nobody should have to pay for one size fits all insurance coverage. Liberty mutual customizes your car and home insurance so you only pay for what you need. Liberty Mutual Insurance. Life's
AP News Radio
Silicon Valley Bank failed but Americans aren't worried. Why we still trust our banks.
"The public a week after the second biggest bank collapse in American history. Our banking system is sound. Yellen is the first administration official to testify since the collapse is of both Silicon Valley bank and signature bank and the government's decision to protect uninsured money at both. Americans can feel confident that their deposits will be there when they need them. Through federal deposit insurance and not taxpayer funds. But some Republicans call the move a bank bailout, and as Yellen talked with the Senate banking committee, ranking member Mike crapo criticized the government intervention. I'm concerned about the precedent of guaranteeing all deposits and the market expection expectation moving forward, calling the federal rescue action a
WTOP
"senate banking committee" Discussed on WTOP
"Above the Black Sea. Treasury secretary Janet Yellen is before the Senate banking committee this morning, where she's expected to say the banking industry is sound. The madness will begin soon, the NCAA men's basketball tournament starting today in earnest, and three teams in our region have games this afternoon. Keep it here for full details on these stories in minutes. Ten 18. It's traffic and weather on the 8s to read a Kessler in the traffic center. All right, now if you're traveling on the beltway it is the inner loop of the beltway near Allentown road and joint base Andrews the work set up in the left lane, those delays were back near two 14 central avenue, however now it's looking like that delay is actually easing, so they may have picked that work zone up already, where we do have a mobile street sweeping crew, however, is on the inner loop near the Baltimore Washington Parkway. This work is in the right lane, your delays are before route one in college park, outer loop delays coming off the spur and near the big curve headed across the American legion bridge toward Georgetown pike, the work in the right lane. Watch for any work set up on the interloop side as well, starting to see more volume in that direction. Also on the interloop in Virginia before 66 the work is in the right lane. On the George Washington Parkway, delay southbound after one 23 northbound has the delay after one 23, and also after the CIA, this is a single lane, getting by the work, if you're trying to get on the inbound Roosevelt bridge, keep an eye out for the delays he's found 66 out of roslyn, inbound on the bridge. It is the left lane getting you by the crash. In the district suitland Parkway at Stanton road, a single language by the work in each direction. We also have delays on northbound I two 95, near joy, based on a cost of bowling toward the 11th street bridge, a single lane should be getting by the work, the volume delay on southbound D.C. two 95, coming from the Baltimore Washington Parkway in route 50 all the way to east capital street. Its regency furniture's march mattress mania score big savings on top name brands like beauty rest black plus up to 60 months no interest financing and rapid delivery. Visit regency furniture dot com. I'm Rita Kessler WTO traffic. Time to talk about the weather storm team four is Mike Jennifer joining us live. Mike, this is a little more like it. Yeah, after the last couple of days, the wind gust over 50 miles an hour today is much nicer. Had a little bit of cloud cover earlier that has thinned out and I see so look for lots of sunshine this afternoon. One more temperature is much lighter wins our highs a little bit 60s. Tonight, clouds return, that'll keep temperatures up, so not as cold. Our lives up for 30s to mid 40s, breezy and mild tomorrow, a few light showers at times, but not a washout, but for a high in the low to mid 60s. Cold front comes through Saturday morning with it some showers then behind the front scars will clear. It's gonna turn rather blustery, has to be in the mid to upper 50s, lots of sunshine windy and colder on Sunday with highs, only in the low to mid 40s. Temperatures are rising nicely, culpeper for 44 Leesburg 46 and marker up to 48 orega national. Okay, Mike, Mike's forecast, brought to you by new look home design. Right now, save 50% on all roofing materials, and labor. Coming up on WTO can exercise help folks struggling with depression, ten
WTOP
"senate banking committee" Discussed on WTOP
"A quick look now at the top stories we're working on here at WTO P. The U.S. Military this morning released footage of the Russian fighter jet intercepting a U.S. drone over the Black Sea. Treasury secretary Janet Yellen goes before the Senate banking committee today where she's expected to say the banking industry is sound. And let the madness begin in earnest, the NCAA tournament getting its start today in earnest and three local teams have games this afternoon. Yeah, we already had that first four. Keep it here for full details on these stories in the minutes ahead. It's now 9 18. Traffic and weather on the 8s Jack Taylor would have you got. Oh, that is definitely one on fire here in Maryland on 95 going northbound. You're gonna find beyond 32 headed up toward one 75 along the left side. I think it's fully engulfed if not getting worse. And the smoke is kind of blowing across the northbound lanes. At one point we did see traffic using that left plane, don't do that. You've got an authority behind there, so at least stay out of the left plane for now, three to the right will get by, but as equipment arrives, that lane configuration could drastically change. There'd been an accident on Frederick 70 east out in your south street off the roadway left side, slow downs and alney, running south on Georgia avenue, headed down toward the ICC through the work zone, and it sounds like you're going to be under direction on kennel worth avenue down near 52nd avenue. This unclear what happened, but the hazmat response on scene definitely seems to be limiting lanes. We'd had a reported rec along 7 O four eastbound near sheriff road, bell was still a little bit slow topside outer loop, New Hampshire to Georgia, inner loop though, now a curious delay as you head right toward Pennsylvania avenue, two 70, we had a little late delay getting out of urbana toward one O 9, then slow on the southbound spur, getting onto the outer loop. We still have delays in Virginia, 66 east briefly at the beltway, then inside the beltway to Rosalind, you're fine. Three 95, they're slowing toward edsel road going northbound. Then again to cross the 14th street bridge, 28th, the wreck in chantilly was northbound before westfield's boulevard, taking away that left lane. The crash in woodbridge has you under direction north Ben en route one up near Powell's creek boulevard. For over 35 years in the DMV, Greenberg and betterment has helped tens of thousands of clients who have been hurting auto accidents or victims of medical malpractice, visit GB lawyers dot com and feel better. Jack Taylor TOP traffic. Storm team force Mike stunned if you like being outside, sounds like you have to make the most of things today. Today will be the best day of the next several. That is for sure. We do have some passing clouds right now. Some of us are seeing sunshine and some
AP News Radio
HSBC will buy UK subsidiary of collapsed Silicon Valley Bank
"U.S. regulators say there will not be a bailout, but they're moving to help depositors after the collapse of Silicon Valley bank and New York based signature bank. In an effort to shore up confidence in the U.S. banking system, the Treasury Department, Federal Reserve and FDIC announced that depositors with both Silicon Valley bank and New York based signature bank will be able to access their money today, and that an emergency lending program will allow banks that need cash to borrow the money from the Central Bank instead of selling off securities. On ABC News this week with George Stephanopoulos, Senate banking committee member Mark Warner, was asked if he regrets voting to loosen some of the banking restrictions imposed after the 2008 financial industry meltdown. We'll have time to look back on what the regulators did and didn't do. And why the bank management didn't get this right? President Biden says he'll address the bank situation this morning, and that he is firmly committed to holding those responsible for the mess fully accountable. I'm Jennifer King
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"28 minutes plus 6 in the evening on the Atlantic seaboard of the United States 28 minutes past 7 right here in Hong Kong and in Singapore and Rashad salaman. And Brian Kurdish, we are looking at markets in the Asia Pacific with a lot of red numbers here on the screens, hanging index futures down 1.3% and in terms of the cash market at the moment up and running in Sydney, the SX 200 is down about two thirds of a percent. So it could be a little bit of a tough slog today on this Wednesday in Asia. We'll get to the markets with Doug prisoner in about ten or 12 minutes, but for now some of the top stories. Looking at Chad J Powell saying the Federal Reserve is likely to lift interest rates higher than previously expected because of strong economic data. Powell also warned the Senate banking committee that the process of getting inflation back down to 2% has a long way to go. Senate Democrats responded with criticism towards a pal and the fed, senator Elizabeth Warren warning that more interest rate hikes will lead to millions of job losses and that, according to the fed's own projections and here is pal's response. Inflation is extremely high in its herding, the working people of this country badly, all of them, not just 2 million of them, but all of them are suffering under high inflation, and we are taking the only measures we have to bring inflation down. And putting 2 million people out of work is just part of the cost, and they just have to bear it. Well, they will working people be better off if we just walk away from our jobs and inflation. 6%. Indeed, and that was, of course, that J Powell there talking. He suggesting that there won't be a very significant downturn in the labor market. Friday's jobs report for February may offer further clarity, of course, and the strength of the labor market would also be hearing more from Paul as he testified before the House financial services committee Wednesday. Goldman Sachs CEO David Solomon says there's a chance the U.S. could avoid a serious economic downturn. He said the fed seems to be doing a good job during an uncertain time period. The chance of our having a soft landing here as we go through 23 into 2024 is meaningfully higher than I thought it was 6 months ago, but we've got a war in Europe. It's still very tough. We have very complex relationship between the west and China, particularly the U.S. and China, which is a headwind to growth and creates complexity. Separately though, Citadel founder and CEO Ken Griffin said, he kind of sees a set of four recession in the U.S.. He said that the fed is limited in how much it can do to fight inflation with rate hikes. Right, let's move to Intel. It is seeking more subsidies from the German government to move ahead with a chip manufacturing plant in the eastern part of the country. Bloomberg's and Kate's now reports. Intel postponed the start of construction on the more than $7 billion plant in Germany at the end of last year due to economic headwinds and is now looking for an additional four to 5 billion in funding and a statement until said disruptions in the global economy have resulted in increased costs from construction materials to energy. German officials say any additional subsidies must be approved by the European Commission. Intel is undertaking a massive expansion across Europe, including a research center in France and adding on to an existing chip facility in Ireland in Washington and Kate's Bloomberg daybreak Asia. The time is 31 minutes past the hour it's time for world news
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Column Murphy there. And if you look at the Chinese currency, we're offshore right now. We're trading 6 spot 9 zero 8 5 against the greenback. So our weaker by around two tenths of 1%. In the states, fed chair Jay Powell will begin at his testimony to Congress on Tuesday that story from Bloomberg, susannah Palmer. Powell speaks before the Senate banking committee on Tuesday and the House financial services committee on Wednesday. He is expected to suggest interest rates will go higher than policymakers thought just weeks ago if economic data continue to come in hot. Recent data, including a series of strong reports on jobs, prices, and consumption have traders betting that the fed will hike beyond the 5.1% level officials estimated in December. We get the next big reading on the economy on Friday with the release of the February jobs report. Susanna Palmer Bloomberg daybreak Asia. Well, earning season in the U.S. is winding down a bit, but we still have a smattering of results likely in the coming week. We have a preview from Bloomberg's Charlie pellet. Retailers, gap, and Dick's Sporting Goods are set to report earnings against a backdrop of waning U.S. consumer confidence. Katrina Dudley is portfolio manager at the Franklin mutual series, and she says investors are looking at inflationary signals and whether companies are able to pass those costs along. The risk is, as we talk about earnings, is that this is the risk to margins that we see is that the fact that you've got these higher worker costs and if you've been a company, you may not be able to pass that on or sufficiently pass it along in terms of pricing, which will compression margins. Among the names reporting this week, spirits company Brown forman, cybersecurity company CrowdStrike and Ulta Beauty. In New York, Charlie pellet, Bloomberg, daybreak Asia. 32 past the hour as we update global news. A report issued at China's national People's Congress has Taiwan's reunification
The Breakdown
Why Bitcoin Rallied 11% on Wednesday
"If you had asked me if we'd see a good old fashioned face ripping rally in this of all weeks, I might have been skeptical. The week opened up with news of major regulatory actions against paxos around BUSD, which is of course the third biggest stablecoin, and many are wondering if the SEC has a broader attack on stablecoins in its sights. Then of course there was the antagonistic hearing in the Senate banking committee that showed just how much more rhetorically emboldened crypto critics have become. And yet, just a day later, Bitcoin ripped up more than 11% in its biggest one day rally since last September, reaching over 24,700. Its highest price since a short lived post lunar recovery in August of last year. One hourly candle in the afternoon yesterday showed a 3.5% move all on its own, larger than any other entire day so far in February. Now, usually I wouldn't dedicate an entire show or even most of a single day to price action. But I think that the various interpretations of why Bitcoin is rallying actually creates a very interesting lens through which to explore pretty much everything happening around Bitcoin right now. Yesterday I tweeted why is Bitcoin going up right answers only and got more than a 160 responses. So let's chat about some of the big categories of how this move is being explained. And we'll start with the most boring and often the most true, which is just market structure one of the universal truths of Bitcoin moves is that for as much as we believe or want to believe their narrative or event driven, there is usually at least a big dose of market structure there as well. As you'd guess on a day with such big moves, there are pretty significant leverage on wines yesterday. Queen glass data clocked Bitcoin short liquidations at over 77 million for the day. Now that is a large total but still smaller than it was during a few of the biggest trading days on January. It's worth asking then how much correlation there was with stocks. IE was this a broader risk on move. It appears to have been isolated to crypto and the riskier end of equity markets.
CRYPTO 101
U.S. Senate Banking Chair Floats Possibility of Banning Crypto
"The Senate banking committee is coming out, recommending that the United States bans crypto. And this is literally the most laughable thing considering I've met the head of crypto at Bank of America this year. So I don't think they'd be very happy if this crony actually got his way. This is just another way of shaking our positions out. And trying to do one last flush out of hands that aren't weak, but extremely tired.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"I'm David west and while Congress is back in town because they need to do some work in order to keep the government going. We have a deadline of midnight on Friday and they have a continuing resolution now that they're studying and deciding whether to pass. To give us his perspective on where we are, keeping the government going, welcome. Democratic senator sherrod Brown of Ohio. He's chair of the Senate banking housing and urban affairs committee. So senator, thank you so much for being with us. I want to talk about that banking partner in a minute. But first, where are we with the continuing resolution? We have language, is it going to get done? Yeah, it's going to get done. I spoke with senator Schumer. I'm actually from the Washington airport when I arrived today. I talked about a number of things this will get done. There are a few sort of far right members of Congress that mostly want to spend their time trying to embarrass the president of the United States and put a royal the waters, but responsible people in both parties, my Senate colleague from Ohio or Republicans, Democrat and the overwhelming majority of us want to get this done. And it's bad for the country to shut the government down. It's bad for the employees. It's bad for the economy. So we'll get it done by Friday. So we'll get it done. You'll get it done. Let me ask when you pass it. Is it going to include the permitting provisions that were put in there in part because of the instance of Joe Manchin, your colleague from West Virginia? I don't know for sure I assume it will. I assume there may be a little further compromise there. But it sounds, it sounds to me like that. I wouldn't bet the farm that it will be in. I think the chances are it will, but I think either way we're going to we will to government will not shut down and we will pass the continuing resolution. It's our job to run the government day by day, week by week. And we have that responsibility. So, senator, I want to come back to your job as chair of the Senate banking housing and urban affairs committee. We all watched you here on Bloomberg last week as you presided over that hearing with the CEOs of 7 major banks. And I remember at the beginning you gave a little lecture there about how powerful those banks are, the assets they had, the backing they had from the federal government and given the pressure being put on regular ordinary working Americans this year, they're going to need those banks. Did you get out of the banks what you wanted? Yeah, well, to a point. I mean, you never fully, but this is the second annual hearing we've done. We will do this every year as long as I share this committee. We started it in the I believe the spring of last year. It's really to bring them in front of us to hold them accountable because we know that big banks have wield immense power over this economy. We know that the banks are getting more and more profitable as the economy is not growing nearly at the rate the banks are. We know the banks, we bailed this government, this country bailed the banks out a decade plus ago, yet individual consumers don't get bailed out. So they do have a special place. But our goal always is to hold them accountable. And as a result, we've seen some things improve over the last year, a number of these banks now are charging lower a few cases, no fees for overdrafts and other things. So we watch them the chairman of the Richmond fed said to me, several years ago, watch me watch what I'm doing and make sure you let me know that you're watching. And that's really the way that this committee and the Congress should on behalf of the American people look at look at the banks and the bank CEOs. As you communicate with these bank CEOs, either directly in those hearings or behind the scenes, do you have a wish list? Well, I have a wish list that only this committee used to be referred to as the Senate banking committee sort of colloquially. When I became chair, we talked about the whole name. Banking housing and urban affairs we did hearings for the first time on housing that had been done in years hearings for years on the issue of housing. And we know how far behind we are for where we want to get to. On housing. And so I guess I don't have high on the wish list, not the only one, but high on the wish list is that banks went to help help us with starter homes with people getting starter homes. There was a really good I believe front page Sunday piece in New York Times this week about how we're just not taking care of those first time home buyers that want to get into the market and buy the starter home and there for a whole host of reasons. It's not happening. And I'm really hopeful that the banks will work with us to make sure we can get people into starter homes so they can build wealth and can provide for their children better at all the things that accrual of wealth does for a family. Senator, one of the challenges for these bankers is environmental social and governance because they seem to be getting caught between some states who are saying, don't you pay attention to that or we won't give you our money. Our pension plan money and some pension plans saying you better pay attention to it. Is there anything you and Congress should do or could do to help them? Yeah, I'm a bit incredulous when I hear my colleagues just attack them because some of these banks actually believe some of these CEOs believe in racial diversity, relieve an opportunity, believe in giving more women a chance for management positions, giving more African Americans and Asians and Latinos, an opportunity to advance in the banks and help those people in the communities. And I'm also even maybe equally incredulous that there are still sitting if it actually is not in ideologically to my left on the committee who continue to deny climate change that deny the existence and the threat of climate and they beat these banks up because these banks are putting effort in looking more closely whom they lend to and who are socially responsible and who are destroying the environment who is improving the environment. So I support those efforts. I think most banks CEOs want to do that. And I think those politicians that are climate deniers are those politicians that think the world should be run by people entirely. People that look like me are just wrong. It's a senator, you mentioned, as long as your chair of that committee, you'll have those meetings with the banks every 6 months or so. There is a midterm election coming up, you will have noticed, you may well preside. On the other hand, there's some risk that it could switch. Give us a sense of what's at stake with respect to the banking housing and urban affairs committee, whether we have you as chair or your Republican counterpart. Well, just look at the contrast. And the former chair might crapo has become a friend. I serve with them for many years and admire and respect him. But he looks at the world very differently. There were, they never brought the CEOs at the banks in. They never did hearings on housing. They didn't do hearings on lending and diversity and climate and all those issues. They rarely discussed consumer protections. The banking committee was really all about how to make the banks more profitable, not about the economy overall, not about consumers, not about the communities and so I think that's the contrast and I would I'm not doing a commercial here for the Democrats to win the Senate but I think what the real contrast in this election is is the Republicans for the Senate nominated a bunch of people that have never run for office before. And don't really have a don't really have an understanding of sort of the public interest. And I think when I look at people like to Ryan in Ohio or I look at Warnock and Georgia or Cortes mass on Nevada, I've seen the kind of work they do to emphasize housing and emphasize consumers. So let's talk about Timur and just for one last question here because he's a Democrat. He's been serving the house. He like you really fashion as well. I think a bit as a populist, really representing the regular working man and woman in Ohio. At the same time, given where
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"And well, the Senate banking committee and the House financial services committee will be talking to the CEOs of the major banks this week and we welcome now one of the members of the House financial service committee. Indeed, the ranking member on the committee, he's Republican congressman Patrick mchenry of North Carolina. So congressman, thank you so much for being here. Give us a little preview from your point of view. What are you particularly interested in hearing about, questioning these CEOs about? Well, let's first see how we got here. In 2019 and two years later, committee Democrats, Democrats control the house. And Senate. Both wanted to have this major theater of the CEOs come in. And what we found then is that it was a hearing in search of a purpose. There was no big issue that was driving. Congressional oversight is really the state of the economy that people wanted to talk about. And lending and the community. So what I'm looking for is the substance of what's happening in America today With the lending looks like on Main Street, how people responding to inflation, which is indeed the biggest political question and economic question of the year. And what they're doing to prepare for a changing rate environment and the state of play as they exist with people return to the workforce and returning to the workforce. So it's a bigger economic issues that I think we should be focused on that should be the real key issues of the hearing rather than try talking points or trying to curry favor with the left with the social agenda out of banks. So congressman, we got a sneak peek of the prepared testimony of Jamie Dimon the CEO of JPMorgan. And he seems very concerned that they may be required to have more reserves, which I suppose could affect some of what you're talking about right now. If they have more reserves, they can't lend as much. That's true. And as they are forced through regulation to pull back from lending and makes things much tougher on Main Street, it changes the jobs issues that people are facing as a country. And it makes people families make really tough decisions. When they're a credit lines pulled in. So I think we've got to look at capital and liquidity standards. And as they affect as they affect Main Street and as they affect the cost and availability of energy. And this very changed energy debate that we've had in this country. And in the world. In the western world. What's happening now is with the energy prices going up. The American consumer and indeed the European consumer is saying, you know, we went safe, affordable, clean energy, or the cleanest energy possible, but safe and affordable seems to be an available seem to be the more important issues rather than this net zero carbon zero goal that a lot of large corporates have. Congresswoman, we have a midterm election you may have noticed coming up here about 7 weeks from today, in fact. And I'm sure you don't want to count any chickens before they're hatched. But at the same time, as voters go to the polls, it's useful for them to know if in fact there's a shift in the leadership. What would that mean, for example, for the financial service committee, if in fact you were to take over chairman, I understand you're not there. But if you did, what would be your priorities that we'd be different from what we've seen? Well, in the last four years, we've focused a great deal on social issues out of the House financial services committee. And I think we need to stick to the economic issues, the big drivers. So it'll be my focus. To deal with capital formation, availability of people to get lending, investment capital is starting to grow their businesses and for families to make decisions for themselves. The privacy protections that they have for their financial data. And finally, giving form and regulatory clarity to digital assets, the buying the selling of digital assets. And give consumers protection there as well as fostering this innovation that we're calling web three. So I think it's a very different atmosphere that I hope to bring to the House financial services committee if the voters give Republicans a majority in the House. They will. I'm so glad you raised the question of digital assets and some of those cryptocurrencies, certainly included in that. You've had your own proposals for regulation and perhaps reform. What would that look like if in fact you got your way? What would it look like for the crypto industry? Well, look, we've got to decide what is a true innovation. A digital asset has unique properties. We have some fraudsters in the marketplace. They need to be policed and held accountable. We also have things that are in that are described as digital assets that are securities and other things that are provided. So as to give them a regulator and we've given them a means of exchange and market structure. We also need an on ramp, which is stablecoin regulation that people know that when they digitize their dollar, it has a regulatory safety and that consumers can make the choices about the type of ways that they save and use their money. And so it's a multifaceted piece, but let's think about it as getting market structure legislation around the world digital assets. And then the on ramp, which is stablecoin regulations. Those are the primary drivers. Finally, cars will be before we get to that midterm. We also have to keep the government running. Maybe I should say you have to keep the government running. We're talking about a continuing resolution. Is there any chance it's going to get shut down? Are we going to get this consumer resolution? And if so, when? You never say never with Congress, but I don't anticipate it. There's bipartisan support to have a continuing resolution. With Democrats in control of the House, the Senate and The White House, they sample have not done their job of passing a budget. That funds our government for the fiscal year. So we'll help them through this to make sure we keep the government open, then we can have the major negotiations for the fiscal year after the midterms. Okay, Congress has always a pleasure to have you with us and really informative that's Congress and Patrick ma Henry. Mchenry, he is a Republican of North Carolina. Coming up with 7 weeks until those midterms
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Is down four tenths of a percent at one 22 18 against a broader broadly stronger dollar. That is about a Bloomberg business flash. Now here's Stephen Carroll with more on what's going on around the world. Thanks Anna Federal Reserve chair Jerome Powell has given his most explicit acknowledgment yet that steep race hikes could tip the U.S. economy into recession, Powell told the Senate banking committee a recession is possible and called a soft landing very challenging economists are increasingly flagging the likelihood of a downturn sometime in the next two years. Germany has announced it will trigger its next stage of its emergency gas plan as Russia slashes supplies to the EU, triggering the second stage could mean a change in the law to allow energy companies to pass on cost increases to homes and businesses. It may also include firing up more coal fired coal fired power plants to minimize gas disruption. And a second day of industrial action by rail workers is underway in the UK after talks on a deal failed. Today's walkout is expected to cause similar levels of disruption to action taken on Tuesday when 40,000 workers walked out in just 20% of the country's trains were left in operation. Global news 24 hours a day on air and on Bloomberg quicktake powered by more than 2700 journalists and analysts in more than a 120 countries. This is Bloomberg, Anna. Stephen, let's get to chart guru Eddie van der belt, who, at this time, a daily almost daily joins us to talk us through one of his charts and Eddie you have an interesting chart that perhaps ties into the fed conversation the fed conversation really dominating markets right now, how the fed responds to inflation and what risks that then puts on the U.S. economy and you're looking at this through the lens of mortgage rates. Tell us about the chart first. Yeah, absolutely. So today we're looking at, as you say, add mortgage rates. And I think the reason why Powell is so worried that perhaps there is a hard landing for the economy in store is that we are seeing mortgage rates shooting up. Now, when I look at the chart, terminal users can see it by running the NI chart chat function. And if they do that, they'll see they'll see a chart that has been trending lower really with some ups and downs from 2008. But since the start of about 2022, it has just shot higher. We have gone from average mortgage lending rates from alphabet two and a half percent in the U.S. to now nearly 6%, which is similar to what we saw back in 2008 prior to the crash, right? So this is sort of levels that brought the housing market down then. And this is, this is what the fate will be worried about. Because if you see those things push higher, it takes money out of people's pockets to have money to spend. And we see demand destruction. Yeah, we should do. I think it's one of those questions a lot of people are asking themselves is what's going to happen to their mortgage payments as rates go up. House prices though Eddie in the U.S. and those in the UK still looking very strong. Why is that in this greater equation of more expensive mortgages? Well, absolutely. So it's a conundrum. It's hard to explain at first class. But when you think about it, when you think about it this Sunday from the individual house homeowner, when people see mortgage, lending rates go up. And they worry about higher rates in the future. What do they do? They bring their purchases forward. So what we are seeing right now is we're seeing city steady demand for housing, which is something that doesn't, that change is very slowly. But we're seeing people bringing their purchases forward and we're seeing strong demand we're seeing a high turnover. We're seeing we're seeing mortgage applications still at a high at a high level. But that drops off very quickly and it dries up and then you have this double whammy of people not buying and people that we're going to buy having already bought if that made sense. But that's the mechanic. So I think what we're seeing right now is actually a precursor. It's the storm before the car, as you like. Okay, so people bringing forward those purchases may be in anticipation. How worried is Jerome Powell are the fed about this? I know that Patrick harker of the Philadelphia fed said, just yesterday, he's seeing signs of demand softening a bit and he was citing housing. What's the view at the fed? Yeah, you know, I think the fed is a little bit worried, but I think this is just listening to pal yesterday. Seems to believe that this is a price worth paying, right? That price stability is the one thing you mentioned over and over in that press conference. And I think they are willing to accept a little bit of softness in the housing market, a little bit of a hard landing, a soft hard landing if you like. As long as the economy doesn't completely completely crash. I think they primary focus here at the moment and we could hear that over and over again as you mentioned price stability is bringing twice as under control and bringing inflation under control. Eddie, thanks so much. Thank you very much for joining us Eddie van dwelt joining us there with a look at the mortgage market in the U.S.. I feel he mentioned soft, hard landing, soft hard landings. I feel we're going to get into a really pedantic conversation soon. About what is a soft landing? What is a hard landing? I saw some people have equating hard landing with recession, and I thought, oh, is that the received wisdom? But one for another day, perhaps. Well, philosophical discussion. Thank you very much. For that and coming up next on Bloomberg daybreak, Europe. We will have Charles capable with us in studio, we'll be talking us through the big corporate management team made in London today. We're going to be talking about boohoo
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Rates of this month and commence a series of hikes to curb the highest inflation in decades though Russia's invasion of Ukraine means it will move quote carefully Powell's remarks came today before the Senate banking committee heard those remarks live on Bloomberg radio Tech shares dragged down the equity market today ahead of tomorrow morning's jobs report by the way complete coverage the number breaks that 8 30 a.m. Wall Street time reaction and analysis as you have come to expect over the years Today traders are weighing the economic impacts of the war in Ukraine the rally in oil stalled West Texas intermediate crew down 2.6% one O 7 67 a barrel Brent the global benchmark down 2% one ten 73 a barrel Spot gold at 1936 the ounce ten year yield 1.84% S&P down 23 a drop there of 5 tenths of 1% the down dropped 96 points today while day by the way big swings we have the Dow down three tenths of 1% as stack tumbled 214 down 1.6% I'm Charlie pelota is a Bloomberg business flash You're listening to Bloomberg sound on with Joe Matthew on Bloomberg radio The headline on the terminal White House balks at Russian oil ban in new feud with Congress isn't that what this White House needed a new feud with Congress and it's a bipartisan effort on the oil ban here as I read on the terminal the Biden administration's objections.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Is Bloomberg radio This is Bloomberg daybreak Europe We will continue on a remorseless mission to squeeze Russia from the global economy peace by peace day by day and week by week We're dealing with an individual who doesn't play by the rules So I've always been very clear in my mind although he goes so far It is indeed a very dangerous moment It is basically the rewriting of these shorty system that we've known in Europe since the end of the Cold War Bloomberg daybreak Europe on Bloomberg radio And if a good morning for blunted I'm Caroline Hebner welcome to daybreak Europe Russian troops are bearing down on Kyiv more than a million refugees have now fled the country according to the UNHCR One of the tiny number of independent broadcasters in Russia has also closed but Russia's ostracism continues in terms of the markets then this morning European stocks now are down amidst the war in Ukraine Just a little though mining and energy stocks have led having said that because oil is soaring along with wheat and natural gas prices breakthrough now at a $116 92 up some 4% looking at the GMM screen You've got wheat up by 4.2% iron ore also 5.7% higher Brent as I say 3.6% higher So lots in that commodity space to be thinking about but also it's day two of Jerome Powell who now is being the Senate banking committee today Yesterday he was holding on to the idea that the U.S. would be able to weather higher borrowing costs and advocating with leaving a little bit of room but essentially advocating for a 25 basis point interest rate rise out of the U.S. in March Also things to watch in the markets gold now at $1930 the Troy outs up a tenth of 1% Bloomberg dollar spot index is from a tenth of 1% U.S. futures though are down a tenth for the S&P 500 and U.S. benchmark yields trading at one 86 dropping one and a half basis points this morning That is a look then at the market right now Now it's time for the.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"It's governor lael brainard facing the Senate banking committee This time seeking confirmation as the fed vice chair She says fighting inflation is the top priority And it's too high And working people around the country are concerned about how far their paychecks will go Our monetary policy is focused on getting inflation back down to 2% while sustaining a recovery that includes everyone This is our most important task To sum up what we've heard so far we welcome now Bloomberg international policy and economics correspondent he's mister Michael McKee So Mike what are the headlines at this point Jumping on the same train that everybody seems to be on at the fed that interest rates are coming telling members of the committee that the fed committee has agreed that there are going to be several rate increases this year and that they would be able to begin as soon as the tapering ends Now she didn't say we're going to start raising rates in March but the tapering ends in March So if you want to put her in that category she seems close enough to that The rest of it was as expected a lot of Republican criticism of certain political aspects of the fed's job but not necessarily of her She was asked about climate change and whether the fed should get involved in telling banks not to lend to oil and gas companies And she said we don't have that authority And we wouldn't do that Asked about stress tests for climate change She said I'm not advocating stress chest tests what I'm advocating is that we do climate scenario analysis so that banks know where their risks are from climate And just a moment ago she cited $630 billion in weather damage for the past 5 years in the United States which is at an all time high So obviously there are some loans that banks make that are going to go bad because the collateral has been damaged So when we talked on Tuesday after Jay Powell this morning you said he aced the interview The job interview How is lail brander doing And hasn't been his contentions as we thought We had pat too many for example coming out beforehand Really going after on some issues In this hearing I'm not sure they've been quite as tough as I thought They have not And another good example of that is senator John Kennedy of Louisiana he wasn't as deferential to her as he was to Jay Powell But he repeated the same things about too much debt and she seemed to handle all the questions in a fairly good manner So it does seem like she's going to be confirmed She may get some political no votes Some people who just will oppose her on political grounds She was asked about a contribution she made to Hillary Clinton because she was worked in the Clinton White House and then after when she went to the fed she donated to Hillary Clinton's presidential campaign She said that was actually a mistake that she didn't realize as a fed governor she shouldn't do that and she wouldn't do it again Yeah Fascinating Thank you so much Mike It's great to have you with us always as Michael McKee from Bloomberg For his sense of where the fed is and where it needs to go Welcome now a former member of the board Randy krasner served as an affair in the midst of the great financial crisis and is now Professor of economics at the Chicago bush school So professor thank you so much for joining us I want to focus on assuming that we do have Jay Powell in the position of chair We have it appears Labrador especially here What's the job in front of them Because both of them said inflation is a big problem They're going to have to adjust monetary policy from loosening from supporting to really tightening to some extent How difficult is that likely to be In ain't easy biggest what they've got to do is try to rain things in because there's been extraordinary support provided as when the crisis struck in March of 2020 they acted boldly as they should have done And I think it was very important to do But now they have to pull back inflation is very high And there's been a lot of physical stimulus and they have to pull back in a way that gradually takes the punch bowl away without cause the economy to go down but was quickly enough to bring inflation down That's a very difficult act to put on Now it's a moving target We don't know exactly what will happen with COVID or the omicron variant There are a lot of things we don't know And things can change over the course of the year At the same time if you looked at it right now if things kept going where they're going the market is anticipating only three or four price rate hikes in this year Do you think that's enough I think it's going to be four and a lot of it has to do with what's going to happen in the supply chain and that's when that has a lot to do with the impact of oma cron and potentially other variants that come down the line Certainly what we're seeing in China right now are an enormous number of lockdowns So what that means is that in two to three months you're going to see a lot of constriction of supply And so I think you're going to see a lot of continued price pressure So that's going to make it more difficult I think things may look a little bit better for a month or two and then they're going to become more difficult But the fed has to keep on tightening They have to make sure that they maintain credibility that they really are going to be fighting the inflation But they have to do that in a way that is smooth and doesn't spook the markets and doesn't cause the housing market to crash doesn't cause investment to crash This is really tough needle thread Do we have a sense of what the theory of inflation is the fed is following And how important is that Are they focused on expectations which can turn as you know on a dime We don't know exactly what causes them Are they falling back on a longer term sort of structural theory that because of demographics and globalization things that there are deflationary presents What's the theory that they have is they look at the data as they come in That's a very important issue And I think they do have a few different ones they're competing because I think we don't know what the right approach is because inflation has been so low for so long and surprisingly low for so long And now it's very very high and it's been this way for 6 9 months likely to be this way for another 6 or 9 months So I think they're very keenly focused on expectations Because of course the shocks that are happening are a lot of the shots that are happening are supply shocks Not enough chips being manufactured for relative to demand So price is shooting up Well of course the fed can't get into the business of making chips that get to anything about that But they have to act because they have to worry about inflation expectations going up People demanding higher wages firms than passing those costs on and that leading to a wage price spiral which they don't want to get into And so that's I think one of the key things they're going to be managing And then they'll worry about some of those longer term issues down the line Doctor Kroger I mean you serve the Fred you know better than I that there's a dual mandate It's price stability and full employment And until fairly recently I think the theory seemed to be we need to really support the economy to get the full program and we don't have to worry about this price stability Now prices are not quite so stable Is there a tradeoff or is there not between the two Because listening to share poll on Tuesday he seemed to suggest we need to get inflation down in order to get to full employment So that would be the way that I think about also I think what you need to do is have inflation expectations well anchored you need to bring inflation down because if you don't do that you're not going to get people investing You're not going to get people feeling confident in asset prices You're not going to get people feeling confident in the economy going forward But getting from here to there is not easy because one of the challenges is that.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"An easing in price increases in price pressures over the course of 2022 And obviously the fed is operating independently and the president has underscored the importance of the fed operating independently to make to take actions consistent with making sure that these price increases don't become entrenched We might get a read on how inflation expectations actually evolve after we get the Thursday read on U.S. factory gate prices or PPI Meantime the Senate banking committee will hold a hearing with fed governor lale brainer tomorrow This is on her nomination for vice chair of the board of governors Bloomberg's Michael McKee here with a preview Governor Brennan's nomination hearing may be a bit more contentious than the reception fed chair Powell got on Tuesday banking committee senators were largely content to get Powell's views on the economy and inflation and the implications for interest rates Brainerd however is likely to face tougher questions about the future of fed policies involving diversity and climate change She has advocated for both positions Republicans don't see as part of the Central Bank's mandate She will defend those efforts as vital to the fed's ability to boost growth and promote financial stability and although the questioning may be tougher brainer like Powell is expected to win confirmation Michael McKee Bloomberg day break Asia Okay we are hearing that the U.S. House leaders are moving forward on a China competitiveness bill that would allow authorized billions of dollars in funding to boost U.S. research and development and also give a leg up to the domestic semiconductor industry The bill was actually passed in June by the Senate but it hit a log jam at the house and that's due to pushback from both parties some progressive groups have criticized the bill as to aggressively focus on the competition with China They say this could ignite a new Cold War Meantime the business groups are pushing Congress to pass the measure There's no timing yet on a House vote but supporters say agreement on the content needs to be reached before the midterm elections All right let's get a check of the markets now at just about 33 minutes past the hour Checking with the futures hanging index futures up 7 tenths of a percent China futures up 9 tenths of a percent as mentioned at the beginning of this segment the ASX 200 the cash market there is up four tenths of 1% And most of the other futures are looking pretty solid although an EK future is at 28,685 They would be about two tenths of a percent below the cash close yesterday The dollar was sharply weaker overnight In fact it lost the most ground since May of last year down 6 tenths of 1% So that plays into some of the bullish considerations for equities Dalian one 1464 the Euro trading at a dollar 1444 in the Aussie at 72.8 U.S. since the yield on the ten year treasury 1.74% WTI crude is now at $82 and 77 cents We had a big jump in the Bloomberg commodities index was up 1.6% It's a corporate news bunko Santander is among the lenders exploring bids for cities retail banking operations in Mexico city said that it would sell that group and Citigroup may seek valuation of as much as $15 billion for a full sale We have strength in the sea and H the officer Chinese currency 6 36 27 against the greenback and we got some hedging of that high inflation with Bitcoin Bitcoin now up to $44,012 It's a solid gain of about $200 in change We shot back to you All right that is a look at markets at 25 minutes to the top of the hour Talks between Russia and the U.S. about Ukraine and native and that with nothing closer than agreement boxes in terms of resistor with global news No of course they say things went well but there are no agreements for issues of reality And.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Bloomberg quick take This is a Bloomberg business flash Markets seem to be getting a little bit more comfortable with the idea that the fed is a hawkish now in terms of inflation and what that may mean for the path of interest rates going forward Today a pet share Jay Powell was before the Senate banking committee for his confirmation hearing and he said the fed if it has to raise rates more over time it will and Powell went on to signal the fed will likely begin shrinking that balance sheet sometime this year General expectations are that we're going to get that first rate hike in March Now tomorrow will get that report on retail sales for the month of check that this is the consumer price index report for the month of December and that may in and of itself spark a little bit of a repricing of assets but for the moment equities are trading up NASDAQ composite the big gainer ahead by about 1.2% where the Dow is concerned we are hired by three tenths of 1% and in the broader market the S&P now hire by 6 tenths of 1% Energy shares tracking the price of crude oil higher the S&P 500 energy index is up about 3% Crude oil in New York better by 3.6% were trading just above 81 a barrel there is the risk of a weak demand as many businesses and factories reduce operations but the market seems to be refocusing on the low level of supply in the U.S. in the latest inventory data from the EIA stockpiles were at three month lows later today we're going to hear from the API in its report on oil inventories Ten year treasury with the yield of 1.74% that your Bloomberg business flash.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Midwest was most strongly affected in November of 2020 in the south at the end of last summer How closely does the fed look at differences in regional performance when making policy decisions We have to focus on the national level but of course we follow in this instance the earlier delta for example COVID rolled around the country on a regional basis That's not so much the case with aron It's so contagious and it's not the same everywhere but it really is going through the whole country at a pretty rapid rate But we follow that very very carefully I would say we didn't know much about vaccines and pandemics two years ago but we've all had two years to learn So we defer the experts though We don't substitute our judgment on medical issues for the experts but we talk to them all the time Well I look forward to following up with you on the diversity question Thank you mister A senator crapo is recognized from Idaho from his office I believe Yes thank you mister This is a great quote Beginning his questioning a fed chair Brown You're listening to live coverage of the Senate banking committee on Bloomberg radio On digital currencies You indicated that delays in releasing the report were because the fed wanted to ensure that their analysis was correct and to complete and that a release was expected in the coming weeks However that report still has not been released Do you have an.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"The difference between real and fake items I'm Brian shook And I'm Brian curtiss in Los Angeles Let's get you caught up on this hour's top business stories and the markets Fed chair J palace has officials should consider removing pandemic support a few months earlier He spoke before the Senate banking committee pal said it would be appropriate to discuss tapering at the next fed meeting that will be in a couple of weeks He said during that time there will be more data and the fed will learn more about the new army crony I'll also said the word transitory should no longer be used to describe stubbornly high inflation The test that we've articulated I think clearly has been met now You're absolutely right inflation has run well above 2% for long enough The word transitory has different meanings to different people I think it's probably a good time to retire that ward and try to explain more clearly what we mean We'll hear more tomorrow from Powell and also from treasury secretary Janet Yellen Australia's economy posted a smaller than forecast contraction as trade and fiscal support helped cushion a plunge in household spending GDP fell 1.9% in the three months through September expectations were for a drop of 2.7% In South Korea's exports hit a monthly record in November jumping 32.1% year on year Now this suggests that recovery in global trade Economists median estimate had been for a 27.2% increase All right let's check the markets The cost be in Seoul is up 1.6% on the back of that strong export data The hexing index is up 1.4% The nikkei rallying 8 tenths of 1% and in China the CSI 300 is essentially flat Dollar yen one 1344 and the yield on the ten year treasury 1.48% Global news 24 hours a day live and at Bloomberg quick take Brought to you by 2700 journalists and analysts in a 120 countries In Los Angeles I'm Brian Curtis This is Bloomberg.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Is the Asian trading session at fairing Brian Well it's a bit perplexing Juliet As I mentioned dull is surprising to see a slight bounce here We saw it just moments ago happen in futures and it's carrying through the cash markets The nikkei is now up three tenths of 1% I was a pretty rough day of sailing yesterday and perhaps this is just a little bit of a relief rally but Asian equity futures earlier were pretty much down across the board hanging index futures down a tenth of a percent China futures down about two tenths of a percent and nikkei futures were lower but now as I mentioned the cash is higher The ASX 200 in Australia is down It's down about two tenths of 1% And we're just looking at some of these other numbers and trying to see it through the prism of what we heard from Jerome Powell the fed chief He raised the notion of an earlier end to Bond tapering That means possibly an earlier hike in interest rates and he also told the Senate banking committee that it's time to stop using the word transitory to describe inflation So it's kind of a mea culpa We'll get you details on that in our own coverage in a moment The S&P 500 fell almost 2% down 88 points a drop of 1.9% The down down a similar margin the NASDAQ was down 1.6% The dollar was weaker though and that's generally good for assets in Asia Dolly in here one 1321 The Bloomberg dollar spot index moved down four tenths of 1% and we had a flattening of the yield curve big time yield on the tenure now has bounced It was just 1.44% before Tokyo open now one 47 Juliet Well fed chair Jay Powell says officials should consider removing pandemic support at a faster pace He was speaking earlier before the Senate banking committee The economy is very strong and inflationary pressures are high and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases which we actually announced at the November meeting Perhaps a few months sooner Pal said it would be appropriate to discuss tapering at the next fed meeting that'll be in a couple of weeks and he said during that time we're going to get more data and learn more about the new omicron variant Pal also said that the time has come to retire the word transitory to describe stubbornly high inflation He said the word has different meanings to different people and the fed should try to explain more clearly what it means when discussing high prices All right let's take a closer look at Salesforce It gave disappointing forecasts for revenue and profit The cloud based software company said that profit will be as much as 73 cents a share in the fourth quarter the problem was the market was looking at 82 cents Revenue will be at $7.2 billion also missing analyst estimates The guidance suggests that some Salesforce customers may be reluctant to pay for new projects That says COVID cases rise and the omicron variant emerges shares down about 6% in extended trading upon the news and the shares had fallen 4% in the regular session Jules Four and a half minutes past the hour time for global.
Bloomberg Radio New York
"senate banking committee" Discussed on Bloomberg Radio New York
"Fauci on where we are in the process of getting a vaccine approved for children and I ask for his views on booster mixing and matching But first fed chair Jay Powell has the support that could win him a second term to lead the Central Bank More than half of the Republicans on the Senate banking committee are backing him But his most visible opponent is democratic senator Elizabeth Warren I caught up with senator Warren this week in Washington to find out why she is opposed to Jay Powell's renomination My view is he ends his term We put somebody else in place And I think the fed is going to be better off And I think our economy is going to be safer Okay somebody else in place Let's talk about who that somebody else might be Are you talking with a Wednesday giving them any suggestions I mean you've told me that you think Lil brained for example you've read some of her writings You've been impressed by her I'm not going to talk about private conversations You know my view on this is right now the question is Powell to nominate or not renominate and I am in the let's not do this Are there other democratic senators who are with you in that position We heard you at the hearings I didn't hear shared Brown take a position exactly Some Republicans have come out and said they support Jay Powell Are you hearing from some of your colleagues that they at least be open to resisting Jacob You know I never want to represent anybody else's point of view But I am not the only person who has been concerned about his approach to regulation You know and I just want to put this a little bit of context The way I think about this I think back to 2007.
Bloomberg Daybreak Asia
Elizabeth Warren, JPMorgan CEO Spar Over Overdraft Fees at Senate Hearing
"Senate Banking Committee heard from CEOs of the sixth largest American banks. They were pressed about boosting lending, raising wages and diversifying stuff. Massachusetts Senator Elizabeth Warren noted the JP Morgan Chase made almost $1.5 billion from overdraft last year. She pressed JP moving Jamie Diamond and called him quote the start of the overdraft show. So here's the thing. You and your colleagues come in today to talk about how you stepped up and took care of customers during the pandemic, and it's a bunch of baloney. In fact, it's about $4 billion worth of baloney, but you could fix that right now. FBI See, reports said banks thrive through the pandemic. The industry generated a record $76.8 billion in profits during the first quarter. Democrats wonder why more of that money isn't going to middle class and low income families. They look for more answers. Tomorrow is all street, Sears testified before the House Financial Services Committee. It
The Breakdown with NLW
If You Sell Your Bitcoin, Michael Saylor and Jack Dorsey WILL Buy It
"Before powell spoke investors had started to get nervous in the us around the potential for an early unwinding of the fed's extremely aggressive approach to keeping rates low and stimulus etc. Because of this the market was getting out of stocks and into treasuries driving the yield of treasuries down and by the way if that sounded like greek to you. We're actually going to do a macro one show. And a bond specific show as part of that new kiddo show set as well either way powell gave testimony to the us senate banking committee on tuesday and said that the economic recovery remains uneven and far from complete and the path ahead is highly uncertain the bloomberg headline this morning about it said powell reiterates view that labor market has a long way to go. Pow pointed out that there are ten million fewer people employed. And that's a long way to go to maximum employment and this is really important the mandate the fed is actually two parts market stability. But it's also full employment the tools however that they have to achieve that full employment are limited and what we've seen is that asset prices tend to benefit before full employment is reached over the course of this year. We're likely to shift from the market stability part of that equation to the full employment part of that equation but it still promises a pretty aggressive approach from the fed powell also mentioned digital currencies saying it's a priority and that they'll be reaching out to congress about it in twenty twenty one so we'll have to come back to that soon next up on the brief today trouble in arc land i have discussed kathy would and arc pretty frequently here most recently in the episode last week i find it interesting. How a lot of the macro dynamics that are potentially interacting with bitcoin might be interacting with arc funds as well arc has seen a stratospheric rise over the last year but has been hammered. The past few days in fact it started a couple weeks ago as people started to get nervous about how concentrated arcs of some of their companies were remember. Our funds have specific feces around innovation. So there are frankly. Only so many companies they can buy if their fund owns to high percentage of those companies. The fear goes it could create risk in both directions that an issue in one company could create broader risk for arc or vice versa that arc could create new exhaustiveness risk for the companies themselves over the past few days however the concern has been less about that and more about this rise in treasury yields the innovation. Etf which is their flagship. Fell three sessions in a row. It had its worst today. Drops in september and again basically these yields were reflective as we just discussed of investors thinking that there was going to be pressure for rates to rise and for fed support on wind earlier than expected because of that they were moving out of the pricier parts of the market. I e tak. Now for her part. Kathy would said she wasn't worried said that she welcomed the correction and to be fair. She's gone from three billion assets under management in january twenty twenty two more than thirty in january twenty twenty one to more than sixty billion last week still. I think this is worth watching as a reflection of the bleeding edge of the markets. I don't think. Bitcoin is so correllated that you can watch these things move in tandem. But i do believe that. There's some proxy for how traditional investors might think about bitcoin at any given time based on the macro context lasts up on the today. Let's talk about the latest out of india. India as we've discussed has been very aggressive. Vis-a-vis crypto currencies with that seeming to only heightening right now a couple updates from the last few days rakesh ginger who's likened to an indian warren buffett. The billionaire investor he told. Cnbc never buy bitcoin that. Regulators should step in and ban cryptos in india and called bitcoin speculation of the highest order. So pretty much that. Warren buffett description is accurate at least when it comes to opinions on bitcoin at the same time however he also stated that india should focus on the creation of an official digital rupee. This was echoed by comments of reserve bank of india governor who reiterated that. The rbi has major concerns around cryptos but that they are working aggressively on a digital rupee. I wanted to point this out. Because i think it shows just how much india is going to really draw. This contrast between killing cryptos private cryptos and network cryptos while simultaneously trying to harness that momentum for an official central bank digital currency is that paradigm. That one can't survive while the other one does or are there different ways to look at