text: And finally, let’s check in with the housing bubble. Note that the last time the white line (existing single-family home prices) bubbled above the yellow line (average production employee wages), we had a housing crash. Powell this week signaled that he wants home prices to “correct,” and that’s possibly an understatement.I’ll end with some notes from a recent Citi Global Wealth letter to investors because this is the reality we’re facing: “Markets are deeply unsettled… A ‘rapid change of weather’ for the economy appears on the horizon… 10% [chance] of Robust [economic conditions], 20% Resilient, and 70% Recession…[The Fed is moving] so fast that the impact of their tactics is not apparent… How much tightening can the economy endure before credit costs rise and credit availability falls dangerously? … [T]he Fed’s medicine will have intended and unintended consequences. Its ability to counter mistakes will diminish over time… The case for a ‘recession’ or ‘stall’ in the economy in 2023 is quite strong and rising.”Nothing has changed in my view. The talk about how strong the economy is, how hot the jobs market is; all of it will change this fall as reality sets in. As always, we’ll provide timely warning if we see indicators of an impending crisis. – M.S.INSIDE THE BELTWAYWHITE HOUSE: President Joe Biden continues to meet with foreign officials at the United Nations General Assembly and then attends a Democratic National Committee reception before traveling back to the White House.CONGRESS: Nothing Significant to Report (NSTR)DARK MONEY A POLITICAL FOOTBALL: Speaking this week in support of the DISCLOSE Act, or Democracy Is Strengthened by Casting Light on Spending in Elections Act, Senate Majority Leader Chuck Schumer (D-NY) blamed conservative judicial power and the overturning of Roe v Wade on dark money, which the bill seeks to ban. “Let me say that again: the DISCLOSE Act will give every senator a choice: vote to bring transparency to our elections– remove the veil from this dark money that the public hates, that’s cascading into our elections–or stand on the side of dark money… You want to know one of the main reasons we have a MAGA court that overturns Roe v. Wade? That stands in the way of smart gun control laws, gun safety laws? That stands in the way of environmental progress? It’s because of dark money, in good part, dark money,” Schumer said. In a speech this week, President Biden laid into dark money, saying, “Right now, advocacy groups can run ads on issues, attacking or supporting a candidate right until Election Day, without disclosing who’s paying for that ad,” (Analyst Comment: The bill would, in part, force nonprofit organizations to disclose donors who contribute more than $10,000 over a two year period, and would identify a bevy of donors who have cited privacy concerns over their donations to, in some areas, unpopular causes. Conservative donors fear their identification would expose them to forms of social agitation, intimidation, boycotts, or other harassment. More importantly, it could enable lawfare and government targeting of these conservatives on the basis of their political donations. Senate Minority Leader Mitch McConnell accused Democrats of trying to further institutionalize the “naming and shaming of conservatives for ‘wrong think’ [that] was practically an official policy bank in the Obama-Biden IRS.” The bill is unlikely to pass due to strong Republican opposition, but it gives Democrats another drum to bang about conservative dark money ‘subverting democracy’. – M.S.)DOMESTIC INTSUMFOOD & AG: NSTRENERGY: U.S. Senator Joe Manchin (D-WV) introduced a new bill on Wednesday that would speed up the approval process for natural gas pipelines and power transmission for renewable energies. The bill is expected to be included in short-term funding legislation that must be passed before 01 October 2022 to prevent a government shutdown. – T.W.