Three Arrows Capital's Google search volume rose over 5,000%.

Three Arrows Capital, a Singapore-based cryptocurrency hedge fund, filed for Chapter 15 bankruptcy last Friday to protect its U.S. assets from creditors.

• Three Arrows filed for bankruptcy on July 1 in New York.

• Three Arrows was ordered liquidated by a British Virgin Islands court last week after defaulting on a $670 million loan from Voyager Digital. Three days later, the Singaporean government reprimanded Three Arrows for spreading misleading information and exceeding asset limits.

• Three Arrows' troubles began with Terra's collapse in May, after it bought US$200 million worth of Terra's LUNA tokens in February, co-founder Kyle Davies told the Wall Street Journal. Three Arrows has failed to meet multiple margin calls since then, including from BlockFi and Genesis.

• Three Arrows Capital, founded by Kyle Davies and Su Zhu in 2012, manages $10 billion in crypto assets.

• Bitcoin's price fell from US$20,600 to below US$19,200 after Three Arrows' bankruptcy petition. According to CoinMarketCap, BTC is now above US$20,000.

What does it mean?

Every action causes an equal and opposite reaction, per Newton's third law. Newtonian physics won't comfort Three Arrows investors, but future investors will thank them for their overconfidence.

Regulators are taking notice of crypto's meteoric rise and subsequent fall. Historically, authorities labeled the industry "high risk" to warn traditional investors against entering it. That attitude is changing. Regulators are moving quickly to regulate crypto to protect investors and prevent broader asset market busts.

The EU has reached a landmark deal that will regulate crypto asset sales and crypto markets across the 27-member bloc. The U.S. is close behind with a similar ruling, and smaller markets are also looking to improve safeguards.

For many, regulation is the only way to ensure the crypto industry survives the current winter.

New Stiglitz just dropped.

Here's the inflation story everyone believes (warning: it's false): America gave the poor too much money during the recession, and now the economy is awash with free money, which made them so rich they're refusing to work, meaning the economy isn't making anything. Prices are soaring due to increased cash and missing labor.

Lawrence Summers says there's only one answer. We must impoverish the poor: raise interest rates, cause a recession, and eliminate millions of jobs, until the poor are stripped of their underserved fortunes and return to work.

https://pluralistic.net/2021/11/20/quiet-part-out-loud/#profiteering

This is nonsense. Countries around the world suffered inflation during and after lockdowns, whether they gave out humanitarian money to keep people from starvation. America has slightly greater inflation than other OECD countries, but it's not due to big relief packages.

The Causes of and Responses to Today's Inflation, a Roosevelt Institute report by Nobel-winning economist Joseph Stiglitz and macroeconomist Regmi Ira, debunks this bogus inflation story and offers a more credible explanation for inflation.

https://rooseveltinstitute.org/wp-content/uploads/2022/12/RI CausesofandResponsestoTodaysInflation Report 202212.pdf

Sharp interest rate hikes exacerbate the slump and increase inflation, the authors argue. They compare monetary policy inflation cures to medieval bloodletting, where doctors repeated the same treatment until the patient recovered (for which they received credit) or died (which was more likely).

Let's discuss bloodletting. Inflation hawks warn of the wage price spiral, when inflation rises and powerful workers bargain for higher pay, driving up expenses, prices, and wages. This is the fairy-tale narrative of the 1970s, and it's true except that OPEC's embargo drove up oil prices, which produced inflation. Oh well.

Let's be generous to seventies-haunted inflation hawks and say we're worried about a wage-price spiral. Fantastic! No. Real wages are 2.3% lower than they were in Oct 2021 after peaking in June at 4.8%.

Why did America's powerful workers take a paycut rather than demand inflation-based pay? Weak unions, globalization, economic developments.

Workers don't expect inflation to rise, so they're not requesting inflationary hikes. Inflationary expectations have remained moderate, consistent with our data interpretation.

https://www.newyorkfed.org/microeconomics/sce#/

Neither are workers. Working people see surplus savings as wealth and spend it gradually over their lives, despite rising demand. People may have saved money by staying in during the lockdown, but they don't eat out every night to make up for it. Instead, they keep those savings as precautionary balances. This is why the economy is lagging.

People don't buy non-traded goods with pandemic savings (basically, imports). Imports don't multiply like domestic purchases. If you buy a loaf of bread from the corner baker for $1 and they spend it at the tavern across the street, that dollar generates $3 in economic activity. Spending a dollar on foreign goods leaves the country and any multiplier effect happens there, not in the US.

Only marginally higher wages. The ECI is up 1.6% from 2019. Almost all gains went to the 25% lowest-paid Americans. Contrary to the inflation worry about too much savings, these workers don't make enough to save, even post-pandemic.

Recreation and transit spending are at or below pre-pandemic levels. Higher food and hotel prices (which doesn’t mean we’re buying more food than we were in 2019, just that it costs more).

What causes inflation if not greedy workers, free money, and high demand? The most expensive domestic goods produce the biggest revenues for their manufacturers. They charge you more without paying their workers or suppliers more.

The largest price-gougers are funneling their earnings to rich people who store it offshore through stock buybacks and dividends. A $1 billion stock buyback doesn't buy $1 billion in bread.

Five factors influence US inflation today:

I. Price rises for energy and food

II. shifts in consumer tastes

III. supply interruptions (mainly autos);

IV. increased rents (due to telecommuting);

V. monopoly (AKA price-gouging).

None can be remedied by raising interest rates or laying off workers.

Russia's invasion of Ukraine, omicron, and China's Zero Covid policy all disrupted the flow of food, energy, and production inputs. The price went higher because we made less.

After Russia invaded Ukraine, oil prices spiked, and sanctions made it worse. But that was February. By October, oil prices had returned to pre-pandemic, 2015 levels attributable to global economic adjustments, including a shift to renewables. Every new renewable installation reduces oil consumption and affects oil prices.

High food prices have a simple solution. The US and EU have bribed farmers not to produce for 50 years. If the war continues, this program may end, and food prices may decline.

Demand changes. We want different things than in 2019, not more. During the lockdown, people substituted goods. Half of the US toilet-paper supply in 2019 was on commercial-sized rolls. This is created from different mills and stock than our toilet paper.

Lockdown pushed toilet paper demand to residential rolls, causing shortages (the TP hoarding story was just another pandemic urban legend). Because supermarket stores don't have accounts with commercial paper distributors, ordering from languishing stores was difficult. Kleenex and paper towel substitutions caused greater shortages.

All that drove increased costs in numerous product categories, and there were more cases. These increases are transient, caused by supply chain inefficiencies that are resolving.

Demand for frontline staff saw a one-time repricing of pay, which is being recouped as we speak.

Illnesses. Brittle, hollowed-out global supply chains aggravated this. The constant pursuit of cheap labor and minimal regulation by monopolies that dominate most sectors means things are manufactured in far-flung locations. Financialization means any surplus capital assets were sold off years ago, leaving firms with little production slack. After the epidemic, several of these systems took years to restart.

Automobiles are to blame. Financialization and monopolization consolidated microchip and auto production in Taiwan and China. When the lockdowns came, these worldwide corporations cancelled their chip orders, and when they placed fresh orders, they were at the back of the line.

That drove up car prices, which is why the US has slightly higher inflation than other wealthy countries: the economy is car-centric. Automobile prices account for 9% of the CPI. France: 3.6%

Rent shocks and telecommuting. After the epidemic, many professionals moved to exurbs, small towns, and the countryside to work from home. As commercial properties were vacated, it was impractical to adapt them for residential use due to planning restrictions. Addressing these restrictions will cut rent prices more than raising inflation rates, which halts housing construction.

Statistical mirages cause some rent inflation. The CPI estimates what homeowners would pay to rent their properties. When rents rise in your neighborhood, the CPI believes you're spending more on rent even if you have a 30-year fixed-rate mortgage.

Market dominance. Almost every area of the US economy is dominated by monopolies, whose CEOs disclose on investor calls that they use inflation scares to jack up prices and make record profits.

https://pluralistic.net/2022/02/02/its-the-economy-stupid/#overinflated

Long-term profit margins are rising. Markups averaged 26% from 1960-1980. 2021: 72%. Market concentration explains 81% of markup increases (e.g. monopolization). Profit margins reach a 70-year high in 2022. These elements interact. Monopolies thin out their sectors, making them brittle and sensitive to shocks.

If we're worried about a shrinking workforce, there are more humanitarian and sensible solutions than causing a recession and mass unemployment. Instead, we may boost US production capacity by easing workers' entry into the workforce.

https://pluralistic.net/2022/06/01/factories-to-condos-pipeline/#stuff-not-money

US female workforce participation ranks towards the bottom of developed countries. Many women can't afford to work due to America's lack of daycare, low earnings, and bad working conditions in female-dominated fields. If America doesn't have enough workers, childcare subsidies and minimum wages can help.

By contrast, driving the country into recession with interest-rate hikes will reduce employment, and the last recruited (women, minorities) are the first fired and the last to be rehired. Forcing America into recession won't enhance its capacity to create what its people want; it will degrade it permanently.

Nothing the Fed does can stop price hikes from international markets, lack of supply chain investment, COVID-19 disruptions, climate change, the Ukraine war, or market power. They can worsen it. When supply problems generate inflation, raising interest rates decreases investments that can remedy shortages.

Increasing interest rates won't cut rents since landlords pass on the expenses and high rates restrict investment in new dwellings where tenants could escape the costs.

Fixing the supply fixes supply-side inflation. Increase renewables investment (as the Inflation Reduction Act does). Monopolies can be busted (as the IRA does). Reshore key goods (as the CHIPS Act does). Better pay and child care attract employees.

Windfall taxes can claw back price-gouging corporations' monopoly earnings.

https://pluralistic.net/2022/03/15/sanctions-financing/#soak-the-rich

In 2008, we ruled out fiscal solutions (bailouts for debtors) and turned to monetary policy (bank bailouts). This preserved the economy but increased inequality and eroded public trust.

Monetary policy won't help. Even monetary policy enthusiasts recognize an 18-month lag between action and result. That suggests monetary tightening is unnecessary. Like the medieval bloodletter, central bankers whose interest rate hikes don't work swiftly may do more of the same, bringing the economy to its knees.

Interest rates must rise. Zero-percent interest fueled foolish speculation and financialization. Increasing rates will stop this. Increasing interest rates will destroy the economy and dampen inflation.

Then what? All recent evidence indicate to inflation decreasing on its own, as the authors argue. Supply side difficulties are finally being overcome, evidence shows. Energy and food prices are showing considerable mean reversion, which is disinflationary.

The authors don't recommend doing nothing. Best case scenario, they argue, is that the Fed won't keep raising interest rates until morale improves.

Russia's nuclear threat may be nullified by physics.

Putin seems nostalgic and wants to relive the Cold War. He's started a deadly war to reclaim the old Soviet state of Ukraine and is threatening the West with nuclear war. NATO can't risk starting a global nuclear war that could wipe out humanity to support Ukraine's independence as much as they want to. Fortunately, nuclear physics may have rendered Putin's nuclear weapons useless. However? How will Ukraine and NATO react?

To understand why Russia's nuclear weapons may be ineffective, we must first know what kind they are.

Russia has the world's largest nuclear arsenal, with 4,447 strategic and 1,912 tactical weapons (all of which are ready to be rolled out quickly). The difference between these two weapons is small, but it affects their use and logistics. Strategic nuclear weapons are ICBMs designed to destroy a city across the globe. Russia's ICBMs have many designs and a yield of 300–800 kilotonnes. 300 kilotonnes can destroy Washington. Tactical nuclear weapons are smaller and can be fired from artillery guns or small truck-mounted missile launchers, giving them a 1,500 km range. Instead of destroying a distant city, they are designed to eliminate specific positions, bases, or military infrastructure. They produce 1–50 kilotonnes.

These two nuclear weapons use different nuclear reactions. Pure fission bombs are compact enough to fit in a shell or small missile. All early nuclear weapons used this design for their fission bombs. This technology is inefficient for bombs over 50 kilotonnes. Larger bombs are thermonuclear. Thermonuclear weapons use a small fission bomb to compress and heat a hydrogen capsule, which undergoes fusion and releases far more energy than ignition fission reactions, allowing for effective giant bombs. 

Here's Russia's issue.

A thermonuclear bomb needs deuterium (hydrogen with one neutron) and tritium (hydrogen with two neutrons). Because these two isotopes fuse at lower energies than others, the bomb works. One problem. Tritium is highly radioactive, with a half-life of only 12.5 years, and must be artificially made.

Tritium is made by irradiating lithium in nuclear reactors and extracting the gas. Tritium is one of the most expensive materials ever made, at $30,000 per gram.

Why does this affect Putin's nukes?

Thermonuclear weapons need tritium. Tritium decays quickly, so they must be regularly refilled at great cost, which Russia may struggle to do.

Russia has a smaller economy than New York, yet they are running an invasion, fending off international sanctions, and refining tritium for 4,447 thermonuclear weapons.

The Russian military is underfunded. Because the state can't afford it, Russian troops must buy their own body armor. Arguably, Putin cares more about the Ukraine conflict than maintaining his nuclear deterrent. Putin will likely lose power if he loses the Ukraine war.

It's possible that Putin halted tritium production and refueling to save money for Ukraine. His threats of nuclear attacks and escalating nuclear war may be a bluff.

This doesn't help Ukraine, sadly. Russia's tactical nuclear weapons don't need expensive refueling and will help with the invasion. So Ukraine still risks a nuclear attack. The bomb that destroyed Hiroshima was 15 kilotonnes, and Russia's tactical Iskander-K nuclear missile has a 50-kiloton yield. Even "little" bombs are deadly.

We can't guarantee it's happening in Russia. Putin may prioritize tritium. He knows the power of nuclear deterrence. Russia may have enough tritium for this conflict. Stockpiling a material with a short shelf life is unlikely, though.

This means that Russia's most powerful weapons may be nearly useless, but they may still be deadly. If true, this could allow NATO to offer full support to Ukraine and push the Russian tyrant back where he belongs. If Putin withholds funds from his crumbling military to maintain his nuclear deterrent, he may be willing to sink the ship with him. Let's hope the former.

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Stop! Stop it! Two things to avoid when starting a YouTube channel. Critical. Possible channel-killers Its future revenue.

I'll tell you now, so don't say "I wish I knew."

The Notorious Copyright Allegation

My YouTube channel received a copyright claim before I sold it. This claim was on a one-minute video I thought I'd changed enough to make mine, but the original owner disagreed.

It cost me thousands in ad revenue. Original owner got the profits.

Well, it wasn't your video, you say.

Touché.

I've learned. Sorta

I couldn't stop looking at the video's views. The video got 1,000,000 views without any revenue. I made 4 more similar videos.

If they didn't get copyrighted, I'd be rolling in dough.

You've spent a week editing and are uploading to YouTube. You're thrilled as you stand and stretch your back. You see the video just before publishing.

No way!

The red exclamation point on checks.

Copyright claim!

YouTube lets you publish, but you won't make money.

Sounds fair? Well, it is.

Copyright claims mean you stole someone's work. Song, image, or video clip.

We wouldn't want our content used for money.

The only problem with this is that almost everything belongs to someone else. I doubt some of the biggest creators are sitting down and making their music for their videos. That just seems really excessive when you could make a quick search on YouTube and download a song (I definitely don’t do this because that would be stealing).

So how do you defeat a copyright defense?

Even copyright-free songs on YouTube aren't guaranteed. Some copyrighted songs claim to be free.

Use YouTube's free music library or pay for a subscription to adobe stock, epidemic sound, or artlist.io.

Most of my videos have Nintendo music. Almost all game soundtracks are copyright-free and offer a variety of songs.

Restriction on age

Age restrictions are a must-avoid. A channel dies.

YouTube never suggests age-restricted videos.

Shadow banning means YouTube hides your content from subscribers and non-subscribers.

Keeping your channel family-friendly can help.

I hear you complaining that your channel isn't for kids. I agree. Not everyone has a clean mouth or creates content for minors.

YouTube has changed rapidly in recent years. Focusing on kids. Fewer big creators are using profanity or explicit content in videos. Not YouTube-worthy.

Youtube wants to be family-friendly. A family-friendly movie. It won't promote illegal content. Yes, it allows profanity.

Do I recommend avoiding no-no words in videos? Never. Okay. YouTube's policies are shaky. YouTube uses video content to determine ad suitability.

No joke. If you're serious about becoming a content creator, avoid profanity and inappropriate topics.

If your channel covers 18+ topics, like crime or commentary, censor as much as possible.

YouTube can be like walking on eggshells. You never know what is gonna upset the boss. So play it safe and try to avoid getting on their bad side.

Mr. Beast, Dream, Markplier, Faze Rug, and PewDewPie are popular creators. They maintain it family-friendly while entertaining fans.

You got this.