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Basel III is a new set of international banking regulations and the successor of Basel I & II. These regulations were put in place by the Basel Committee on Banking Supervision (BCBS), an entity led by the central bank governors of the Group of Ten (G10) and 27 other jurisdictions. Basel III’s draft was finalized in 2010, its reforms are a reaction to the 2008 financial crisis. The intention is to set in place a banking structure that can handle future financial shocks. Some reforms were rolled out through the 2010s, but starting January 1, 2023, Basel III started implementing the entirety of its regulation system and will gradually ramp up through the next five years. Basel III introduces 3 key changes - Minimum capital requirements for banks will increase from 2% to 4.5%, to ensure bank holdings have enough to sustain operating losses and still honor withdrawals. On top of this 2.5% increase, banks will also be required to add an additional 2.5% buffer to their capital requirement. This is to ensure the bank will be able to endure a financial stressor, such as a crisis. This overall increases capital requirements from 2% to 7%. A leverage ratio (measures debt) of 3%. This percentage can be higher depending on the entity. For example, insured bank holdings can have 5% and financial institutions can have 6%. This was put in place to manage highly leveraged entities to safeguard potential losses. Regulations on Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). Both are implemented as a way to ensure banks are liquid enough to withstand financial stress. LCR is the way to measure short-term resilience and NSFR measures long-term. A bank’s LCR is required by Basel to be 100% since 2019 - it's calculated by dividing high-quality liquid assets (HQLA) by estimated cash outflows during a 30-day period. This means banks need to have enough liquid assets (ex: short-term securities & cash equivalents) to cover all cash outflows for at least 30 days. A bank’s NSFR is the amount of stable current funding compared to the amount of required funding over a year, which should be 100%. Critics of Basel III note that regulations such as the capital requirement will make banks less profitable and push them to increase interest rates. Additionally, some fear that the regulations will hurt small businesses as banks may increase the capital holdings for mortgages and SME loans. Basel 3 Summary Basel 3 Implementation Timeline Chart

In May of 2023, Ramaco Resources announced that (with the help of the National Energy Technology Laboratory and Weir International, Inc.) they had discovered a deposit of magnetic rare earth elements within their Wyoming-based ‘Brook Mine.' Their press release stated that “core samples from the Brook Mine represent highly promising, world-class MREE (middle rare earth elements) and HREE (heavy rare earth elements) accumulations.” Before the discovery, the mine was valued to be worth $2 million. Now it could be worth as much as $37 billion. MREEs and HREEs are key to producing products such as electric vehicles, wind turbines, semiconductors, missile systems, and solar cells. The discovery comes at an opportune time, as China is set to restrict America’s access to its rare earth supply and services. According to the 2022 U.S. Geological Survey China owns 36% of the global rare earth reserves, while America owns 1.5% (this percentage does not take into account the newly found REEs within the Brook Mine). It’s estimated that just ¼ of the Brook Mine has 1.1 million metric tons of rare-earth oxides, while the potential of the remaining ¾ of the mine is undetermined. The major hurdle for Ramaco Resources is building a processing plant to refine the REEs. Normally rare earth elements mined in the U.S. would be shipped off to China where the processing infrastructure for the materials is more robust, but Randall Atkins (Ramaco CEO) plans to utilize a “mine to magnets” strategy. The plan is to domestically streamline mining the rare-earth elements, process them, and manufacture items needed for the transition to green-energy. The U.S. is in the process of incentivizing such initiatives with the rollout of the ‘Rare Earth Magnet Manufacturing Production Tax Credit Act of 2023’, where companies will be given generous tax credits for “domestic production of rare earth magnets.” Luisa Moreno of Defense Metals (a company that also works with rare earths) was quoted saying “Expertise has to be developed. China has it, we have to develop this side and do it in a competitive and efficient way.” - in regards to the American rare earth supply chain. Ramaco Resources - Brook Mine PR 2022 U.S. Geological Survey (page 135) Upcoming Rare Earth Tax Credit

Sam Bankman-Fried, also known as ‘SBF’ was found guilty on November 2nd of conspiring and committing wire fraud on customers and lenders, conspiring to commit commodities fraud, securities fraud, money laundering, and defrauding the U.S. and campaign finance laws. Bankman-Fried now faces a maximum prison term of 110 years. This conviction was made possible by testimonies from three individuals within Bankman-Fried’s “inner circle” on behalf of the Justice Department. All three individuals face fraud charges; they are Caroline Ellison (former CEO of Alameda Research), Nishad Singh (Former Director of Engineering at FTX), and Gary Wang (Co-Founder of FTX). ‘SBF’ started Alameda Research in 2017, a trading firm specializing in cryptocurrency that received initial funding from its founders and wealthy loaners. As acquiring more funding proved difficult, ‘SBF’ then started FTX in 2019, a crypto exchange that would work as a way to fund Alameda Research - this detail was unknown to FTX customers. Bankman-Fried stepped away from Alameda Research to head FTX. He assigned the CEO role to his close associate, Caroline Ellison. Ellison would later reveal that even though she was running the operation at Alameda Research, she would ultimately report to Bankman-Fried. Turmoil for FTX started when a balance sheet from Alameda Research leaked (Alameda and FTX are private companies, so financial statements are not made available to the public). The balance sheet showed that the “sister hedge fund” was propped up on FTT Token, a crypto made by FTX, which suggested the instability of Alameda as the FTT assets were balanced with over a billion in loans. The leak also shed light on the fact that the financial ties between the two companies were strangely close. Prompting a wave of worried FTX customers to take their money out of the exchange, FTX could only cover a percentage of the withdrawals. The company's dwindling customer base and inability to provide customers their money back forced FTX to file for bankruptcy, which prompted the investigation and eventual swarms of indictments aimed at the executives responsible for the corporate failure. Bankman-Fried used FTX customer funds (disguised as money from a wealthy contributor) to donate to both Democrat and Republican politicians such as Cory Booker and Lisa Murkowski, as well as PACs like ‘Protect Our Future.’ In recent years, ‘SBF’ has been one of the top political funders as a way to influence tech/crypto regulations and ensure FTX market share. Using funds to also invest in tech companies, property, and personal use. He is scheduled for sentencing in March 2024, with additional charges yet to face for bribery and bank fraud. If sentencing was not enough of a burden, new FTX management has filed a civil suit against 'SBF' for a billion dollars in fraudulent transfers. Customer funds in FTX were estimated to be 16 billion; of that, only 7.3 billion has been found. Charges against SBF - Indictment Doc

In mid-September, the IRS immediately halted processing new Employee Retention Credit (ERC) requests. This was off the back of the Justice Department arresting a New Jersey tax preparer in August named Leon Haynes. Haynes had filed over 1,000 false tax forms for clients he advised to take out fraudulent refunds. The DOJ reports that he informed clients “... that the government was giving out COVID-relief money for businesses and that they were eligible for the money simply because they had a business.” Haynes now faces 3-years in prison and a $250,000 fine for each false ERC claim. The IRS rolled out ERC during the pandemic as a way for employers to continue to pay employees. They would provide employers with credit up to $26,000 per worker if the government fully, or partially suspended that employer's operations. Assumedly there are many more fraudulent claims from 2020, a problem exacerbated by the pop-up industry of ERC consultants who advised clients on how to maximize their ERC refunds during the pandemic and years following. Most concerning is the possibility that these claims may be entirely liable to the clients rather than the consultant businesses that charged a fee from the ERC claims filed by their clients. The IRS intends to take many small businesses to court over their knowingly or unknowingly false claims. A key point of contention brought up by the IRS is that some filed ERC claims due to OSHA regulations, which the IRS states is not a viable excuse to receive the credit. They determine a definite qualification for ERC to be a provable drop in business revenue or a notice from their local government to suspend operations. The IRS has now warned employers who filed such claims in a statement, which laid out examples of what does and does not qualify for ERC. The IRS has even gone as far as to allow employers to repay their fraudulent claims without legal retribution - before receiving their audits. New claims for ERC will not be processed until sometime in 2024, as the IRS is working to identify as many fraudulent claims from 2020 before the window for audit closes on April 15, 2024. Following the expiration of the April 15 deadline, the IRS will be limited in its ability to pursue further taxes or recover funds. IRS Statement for ERC Qualifications DOJ Statement for Arrest of Leon Haynes

On October 25, Robert Card, a U.S. Army reservist killed at least 18 people at a bowling alley and restaurant in Lewiston, Maine. According to the Gun Violence Archive, this shooting has been the deadliest of 2023. Card was able to evade capture after the shootings, which led to the police raiding his home. There they found a suicide note addressed to his son; he was found dead on October 27 from a self-inflicted gun wound. Card had a history of mental illness. In mid-July, Card attended training at West Point. The commanders running the training program expressed concerns about Card after he behaved erratically and threatened others within the unit. He was then asked to get a mental evaluation, where he expressed feelings of wanting to commit a mass shooting at the Army Reserve Training Center in Saco, Maine, and revealed he was hearing voices. Card voluntarily committed to a mental health facility for two weeks during this time. Gun law critics point to the subjectively lenient portions of Maine’s ‘prohibited persons’ gun legislature. The portion of the legislature mainly being scrutinized is Section E of Chapter 15 of the Maine Criminal Court Procedure document. Prohibited persons can be classified as - (1) Committed involuntarily to a hospital pursuant to an order of the District Court under Title 34‑B, section 3864 because the person was found to present a likelihood of serious harm, as defined under Title 34‑B, section 3801, subsection 4‑A, paragraphs A to C; (2) Found not criminally responsible by reason of insanity with respect to a criminal charge; or (3) Found not competent to stand trial with respect to a criminal charge. Going forward from the shooting, stricter gun prohibitions on all individuals with a mental health history are being called for - regardless of not having a conviction record or undergoing voluntary mental health treatment. Michael Sauschuck, the Commissioner for Maine’s Department of Public Safety, was quoted, “People were talking about him and there may even have been some voices at play… Just because there appears to be a mental health nexus to this scenario, the vast majority of people with mental health diagnosis will never hurt anybody.” Another question for concern is why Card was only provided two weeks of treatment and then released. Modern mental facilities have cut durations of patient stays as a way to save on costs - it is unclear why treatment costs for soldiers are not subsidized to prolong care. Gun Violence Archive: Mass Shooting Data Maine ‘Prohibited Persons’ Gun Law

The recent spike in conflict between Israel and Hamas. Hamas is a militant group within Palestine and is one of its two political parties. It governs the Gaza Strip, while its opposing side, the Palestinian National Authority (PNA) governs the West Bank. Hamas attacked Israel on October 7, which killed hundreds. Hamas did this off the back of the PNA negotiating terms at the UN for a peace deal, which allowed concessions for the West Bank and for Israel and Saudi Arabia to pursue a nuclear program. Hamas is likely uncomfortable with this potential deal, as the terms have been stated to be in favor of the PNA West Bank portion of Palestine. Israel declared war on Hamas (aka the Gaza Strip portion of Palestine) after their attack. If Israel is successful in their war effort, it would dismantle Hamas and leave just the PNA to be the main political party of Palestine. Making it possible for the nuclear deal to be pursued and gain Israel a powerful ally in Saudi Arabia. However, declaring urban warfare could be a catastrophic event for the people living in the Gaza Strip. The number of casualties that come with this type of warfare may very well strain relations Israel has with not only the Western world but also potential future ties with other Muslim nations in the region. U.S. ships are currently stationed close to the region as a show of force and potential policing of both sides - Israel to not totally destroy Palestine, and vice versa. As the conflict between Israel and Hamas ramps up, the visibility of the Ukraine and Russia conflict has been momentarily blurred. It is believed that Russia would like to prolong the Israel conflict for as long as possible to maintain the unfocusing of its own war effort. China is also interested in helping Hamas as they look to be seen globally as peacemakers providing support to a smaller nation. Antoine Bondaz, a China expert at the Foundation for Strategic Research in Paris was quoted. “They will try to portray the U.S. as the factor of instability and China as a factor of peace. China’s goal is to present itself to the developing nations as an alternative—and as a more attractive alternative.” Additionally, China's backing of Hamas plays into opposing their rival India, which supports Israel.

The U.S. supply chain has been under pressure since the 2020 COVID-19 pandemic. The Global Supply Chain Pressure Index, provided by the Federal Reserve Bank of New York, exemplifies this trend in pressure. Recently, we’ve seen a downward trend in stressors on the supply chain, but some challenges remain. Changes made to alleviate pain points, such as automation in warehousing and procurement, a growing partnership with India has resulted in less reliance on China, and a focus on regionalization (manufacturing closer to where products are sold) have proven to be beneficial steps. Along with these changes, the U.S. is shifting its focus toward investing in the supply chain infrastructure itself. Notably, a focus on the “Soo Locks,” which currently comprises two locks named Poe and MacArthur that connect Lake Superior to Lakes Huron, Michigan, Erie, and Ontario. An estimated 49.9 tons of cargo is transported through the Soo Locks from across Lake Superior, including 90% of America’s iron ore, which makes the functionality of the Soo Locks a pivotal part of the U.S. supply chain. MacArthur, built in 1943, and Poe, built in 1896, have had regular outages over recent years due to the need for repairs. 1.6 billion has now been allocated towards sustainable repairs on these two locks, as well as the addition of a functional third lock. 44% of that 1.6 billion was provided by the Biden administration, which they were able to procure from a 1 trillion infrastructure law that was passed back in late 2021. However, due to a miscalculation in cost, additional funding will need to be acquired to finish the Soo Locks project. U.S. Rep. Jack Bergman stated, “In addition to inflation and the rising costs of everything from tools and equipment to personnel, the Army Corps made miscalculations in the original cost estimates — making the total cost of the project far higher than originally thought.” The current allocation allows the project to run through the 2025 fiscal year. As the importance of the project is being stressed in Washington to ensure supply chain stability, representatives are confident that the remaining funding will be provided in due time. Global Supply Chain Pressure Index Data

The FTC launched a lawsuit against Amazon on September 26. The suit’s basis implies that Amazon has an illegal e-commerce monopoly in the United States. Wrongful practices exemplified in the case document include allegedly hiking rates for sellers on Amazon who utilize their fulfillment services. These businesses are usually smaller in scale when they utilize Amazon’s fulfillment and would not be able to survive without the service. Therefore, small-scale sellers had no option but to pay the hiked rates. Additionally, the FTC accuses Amazon of suppressing competition and using an algorithm titled ‘Project Nessie,’ which enabled Amazon to conduct unethical practices. The case document states that Amazon can suppress competition effectively due to its massive scale, leveraging its size to make small to mid-sized companies unable to compete. If sellers tried to sell products lower than Amazon, Amazon could bleed costs on products to take that seller's business for the given product. In some cases, sellers who infringed on Amazon’s pricing and sold on the platform would be removed as a result. Amazon search results are accused of being anti-competitive, as results can be skewed based on sellers who pay to have advertising placements on the site. The case introduced the previously unknown aspect of Amazon’s alleged anti-trust behavior called ‘Project Nessie.’ Nessie was an algorithm (reportedly no longer being used) that could see buying trends across the online retail landscape and adjust Amazon pricing accordingly. It inflated pricing to maximize profits without online shoppers noticing the increases. If other sellers (like Walmart) were to change their prices based on the inflated rate, Nessie would leave the inflated pricing on Amazon, and the market would holistically be selling that product at a premium. If another seller sold that same product at a lower rate and it sold competitively, Nessie would readjust the pricing back to normal. This legal action against Amazon is due to new leadership within the FTC. Lina Khan, a 32-year-old lawyer and Associate Professor at Columbia, was appointed new commission chair in March 2021. As her term concludes in September 2024, she is spending the remaining time she has to address her concerns about emerging tech monopolies and pursue related cases. These charges against Amazon may be unsuccessful, as recent anti-trust charges against Meta and Microsoft were dismissed. Today, Amazon’s market share of e-commerce in the United States is roughly 40%. Full FTC vs. Amazon Case Doc

The Mediterranean cyclone, Storm Daniel, hit land on September 4 and lasted until September 12. The storm heavily impacted northeast Lybia, decimating the city of Derna. The death toll is estimated to be over 11,000. Given the extent of damage to buildings and infrastructure, finding missing persons within flooded areas and rubble is extremely difficult. The magnitude of destruction was made possible due to two dams breaking during the storm. These dams had not had proper upkeep funding since 2002. Turkish contractor “Arsel Construction Company” was supposedly hired back in 2007 to do repairs and confirmed on their website that the work was completed in 2012. With the recent news of the dam breaks, Arsel has now taken its website down - leaving many to wonder if the repairs were ever made. Libya has been in a state of conflict since 2011 when the first Libyan civil war began after security forces fired on protestors in Benghazi. This civil war led to a counter-movement that grew in popularity across the country and generated support from the UN. With UN support, the government fronted by Muammar Gaddafi was overthrown. Today Lybia is still trying to substantiate a new government ever since this upheaval. Two main groups in Lybia now fight over governance of the country. The “Government of National Accord,” (GNA) controls the western part of Lybia and is backed by the UN, Turkey, Italy, and Qatar. “Lybian National Army” (LNA) and “House of Reps” control the east of Lybia, they are backed by Egypt, France, the United Arab Emirates, and Russia. It’s worth noting that LNA is the group run by former Gaddafi leadership. Before Storm Daniel hit land, Lybian "Non-Governmental Organization" researchers had warned that the dams in Derna would not be able to handle the storm. Initially, the Mayor of Derna, Abdulmenam al-Ghaithiissued, ordered an evacuation of the city but was stopped by Haftar (current LNA leader) ultimately dooming residents. 8 Lybian officials have been charged by Lybia’s Prosecutor General for bad management and negligence. Survivors of the floods in Derna call for accountability and request the UN to get involved and launch an investigation. In order to silence vocal citizens, a media blackout in the area has been imposed. Internet and cell networks have been shut off, journalists have been detained, and UN officials have been barred from visiting.

Israeli Prime Minister, Netanyahu, announced at the U.N. that Israel and Saudi Arabia have been discussing a peace agreement that Israel hopes to close within the next few months. Netanyahu was quoted by Fox saying “If we don’t achieve it in the next few months, we might delay it by quite a few years.” This quote may be in regard to the seemingly favorable relationships between the leadership of the three parties involved in the agreement. Netanyahu (Israel) and Mohammed bin Salman (Saudi Arabia) may favor negotiating with the Biden administration on the deal, as the administration has been sympathetic to the cause of establishing Israel as a recognized nation in the Middle East. The Biden administration has stated it believes that Middle Eastern conflict is centered around the unrecognition of Israel and hopes that closing this agreement will pave a path towards peace. The proposal involves setting up a U.S.-overseen joint uranium enrichment operation in Saudi Arabia, which will be shared with Israel. Israel and Saudi Arabia have been at odds since Israel’s inception. The Middle East still sees Israel as a nation created by Western powers, that took land from occupying Arab Palestinians. Israel has been looking for ways to solidify its place in the region and hopes to develop allies through American backing. Utilizing this peace deal brokered by the U.S., Saudi Arabia would be inadvertently recognizing Israel as a nation. This agreement would result in Israel and Saudi Arabia being the only two nations in the Middle East with nuclear powers. However, Saudi Arabia has had hesitance in agreeing to the deal, voicing concerns about the treatment of Palestinians by Israel. It’s hard to say whether this is out of true concern or to save face with other Middle Eastern countries. The U.S. has been trying to work with Israel to meet such an agreement for the sake of Palestine and close the deal. Recent news has suggested that Palestinian President Mahmoud Abbas has agreed to an interim deal and expects Israel to declare a commitment to a two-state solution and that East Jerusalem be recognized as the Palestinian capital. This includes Israel stopping the construction of settlements along the West Bank, and Saudi Arabia resuming funding to the Palestinian Authority (the governing body). As for Saudi Arabia, they would like the U.S. to reopen the Palestine Liberation Organization consulate in Washington which was closed in 2018, as well as security guarantees that mirror what Japan and South Korea have with the U.S. Israel's U.N. ambassador has been very vocal about his disdain for Palestine, saying that the two-state solution will never be agreed to, but Netanyahu assures that the decision is his alone to make.

A massive influx of Venezuelan immigrants is arriving at the U.S.-Mexico border. The Biden administration has granted 470,000 of the first arrivals work permits, which hopes to ease financial strain on areas experiencing the impacts of immigration. Work permits have only been provided to immigrants who have arrived no later than July 31, any immigrants who arrive past that arrival date will not be given the same opportunity. The permits that were given out allow for these Venezuelans to live and work in the U.S. for 18 months. Permits do not typically allow for 18 months, usually, they last for only 12. Given the current state of Venezuela however, Homeland Security has allowed for an extension to provide the Venezuelans time for the country to get back on it’s feet. After the 18-month permit period, they are expected to return to Venezuela. Venezuela has been experiencing a significant economic crisis in recent years. According to the International Monetary Fund, the country's inflation rate has skyrocketed to 400%, and the unemployment rate was last reported as 35.6% in 2018. This situation is primarily due to Venezuela's reliance on its vast oil reserves, which happen to be the largest in the world. Today the country's oil supply has decreased by about 75%. Adding to this issue is the current hyperinflation in the global economy, which makes it difficult for citizens to acquire goods. The current global economic environment comes at a bad time for Venezuela, in 2019, the U.S. imposed sanctions on the country for "helping suppress democracy." These sanctions continue today and have caused a decline in oil production and investment. Given the news that America had given out work permits - Enrique Valenzuela the director of the State Council on Population in Chihuahua Mexico said “The latest measures by the U.S. government represent another pull factor (for immigrants)” Reports in Mexico continue to come in that there are record numbers of immigrants continuing to make their way through Mexico from neighboring countries, to presumably get to the U.S. border. Secretary Alejandro Mayorkas with Homeland Security has stated “Temporary protected status provides individuals already present in the United States with protection from removal when the conditions in their home country prevent their safe return. . . it is critical that Venezuelans understand that those who have arrived here after July 31, 2023 are not eligible for such protection, and instead will be removed when they are found not to have a legal basis to stay.” Homeland Security Statement on Immigrant Influx International Monetary Fund: Venezuela US-Venezuela Sanctions Overview

The Pac-12 college football conference is dismantling, with 8 of the 12 teams departing to join other conferences. The University of Utah, Arizona State, Boulder, and the University of Arizona joined the Big 12. The University of Oregon, the University of Washington, USC, and UCLA joined the Big 10. The recent departure of teams stems from the former Pac-12’s inability to develop a stable media rights deal in time for the upcoming 2024 season. The Pac-12 had backing from ESPN and Fox in previous seasons, with an annual value of 250 million. With the deal expiring, the Pac-12 looked to Apple to develop a new deal. Apple was prepared to pay 25 million per team (the Big 12 are set to get 31.7 million per team from ESPN/FOX), but Apple would include a bonus. They would pay more to the Pac-12 based on how many subscribers they could generate; the uncertainty of the added value made partners within the Pac-12 nervous for their bottom lines. As the Pac-12 deal talks progressed, the other competing conferences with established backers (Big 12 backed by ESPN/Fox & Big 10 backed by Fox/CBS/NBC) set their sights on acquiring valuable schools skeptical of the Pac-12 business strategy. Teams leaving the Pac-12 will still play in the 2023 season - but once the 2024 season begins, the previously mentioned teams will find their new homes in the Big 10 and 12. The then Pac-4, containing Berkeley, Oregon State University, Stanford University, and Washington State University, will have to game plan the best next step for them to take. There is speculation that the Pac-4 will merge or partner with the Mountain West Conference, but it has yet to be seen if the remaining Pac-4 teams would be on board with the partnership.