Walking Backwards.

Loaded handguns.

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1. Jay Powell has sent a strong signal that the Federal Reserve will slow the pace of interest rate rises next month in an otherwise hawkish speech warning that the US central bank has a long way to go in its fight against inflation. “The time for moderating the pace of rate increases may come as soon as the December meeting,” the Fed chair said during an appearance at the Brookings Institution on Wednesday. The remarks from Powell suggest the Fed is preparing to “downshift” to a 0.5 percentage point increase when it meets in two weeks after it raised rates by 0.75 percentage points at each of its past four meetings. “My colleagues and I do not want to over-tighten,” Powell said in a question-and-answer session following the speech. (Source: ft.com)

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2. Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, made his first public appearance on Wednesday since his business empire imploded this month, insisting that he “did not ever try to commit fraud” and repeatedly saying he didn’t know the extent of what was going on within his crypto businesses. In a live interview at The New York Times’s DealBook conference in Manhattan, Mr. Bankman-Fried blamed “huge management failures” and sloppy accounting for the collapse of his $32 billion company, which has sparked civil and criminal investigations. Those investigations are focused on whether FTX broke the law by lending its customers’ funds to a trading firm, Alameda Research, which Mr. Bankman-Fried also owned. Speaking via a video feed from the Bahamas, where FTX was based, the 30-year-old said he didn’t “knowingly commingle funds.” At another point, he said, “I didn’t know exactly what was going on.” A full transcript of the interview is here. (Source: nytimes.com)

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3. David Morris:

It is now clear that what happened at the FTX crypto exchange and the hedge fund Alameda Research involved a variety of conscious and intentional fraud intended to steal money from both users and investors. That’s why a recent New York Times interview was widely derided for seeming to frame FTX’s collapse as the result of mismanagement rather than malfeasance. A Wall Street Journal article bemoaned the loss of charitable donations from FTX, arguably propping up Bankman-Fried’s strategic philanthropic pose. Vox co-founder Matthew Yglesias, court chronicler of the neoliberal status quo, seemed to whitewash his own entanglements by crediting Bankman-Fried’s money with helping Democrats in the 2020 elections – sidestepping the likelihood that the money was effectively embezzled.

Perhaps most perniciously, many outlets have described what happened to FTX as a “bank run” or a “run on deposits,” while Bankman-Fried has repeatedly insisted the company was simply over-leveraged and disorganized. Both of these attempts to frame the fallout obfuscate the core issue: the misuse of customer funds. (Sources: coindesk.com, nytimes.com, wsj.com)

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