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The first Congressional crypto hearing of the post-FTX era went down on Capitol Hill yesterday, Axios' Crystal Kim reports.

Why it matters: The spectacular flameout of crypto exchange FTX — and the contagion that preceded and followed it — could finally provide momentum for U.S. regulation of the industry.

• The perception of many outside Washington is that while crypto collapsed, Congress and regulators dithered, as the Washington Post recently reported.

Driving the news: At yesterday's hearing, the Senate agriculture committee chairwoman Debbie Stabenow highlighted the "lack of clear, consistent rules" that have allowed the industry to flourish, while American consumers lose billions.

• "When exchanges accept customer funds for trading, they must not be allowed to gamble with those funds," Sen. Stabenow (D-MI) said, referencing one of the issues behind FTX's unwinding.

Go deeper: Commodity Futures Trading Commission chairman Rostin Behnam was the sole witness at the hearing.

• He emphasized the need for lawmakers to grant his agency the authority to create rules and oversee crypto trading.
• "We need surveillance of market activity," Behnam said.

Worth noting: Behnam also expressed support for Stabenow's Digital Commodities Consumer Protection Act (DCCPA) — which he says would have "prohibited" some of the actions at FTX from taking place.

Catch up fast: The most recent version of the proposed measure would place many cryptocurrencies under the purview of the CFTC.

• Stabenow during the hearing said that the legislation would still allow the Securities and Exchange Commission to have oversight over crypto that it deems securities.
• Yes, but: The DCCPA has received criticism for its connection to none other than FTX and its disgraced founder, Sam Bankman-Fried — it's been called the "SBF bill" due to their perceived influence over it.

The intrigue: While crises can be big motivators for elected leaders to reactively push through regulations, some lawmakers may not want to do anything that appears to legitimize cryptocurrency right now, as Axios' Brady Dale wrote.

• An op-ed in FT Alphaville argues just that. "Just let crypto burn," wrote Stephen Cecchetti of Brandeis International Business School and Kim Schoenholtz of NYU’s Stern School of Business.
• "Actively intervening would convey undeserved legitimacy upon a system that does little to support real economic activity," they wrote.

What we're watching: Yesterday’s hearing was presumably just the beginning.

• Notably absent was “any witness who can speak on behalf of the banking industry or the FDIC, Fed, Treasury, OCC, or CFPB,” said Jenny Lee, a former bank regulator who's now a partner at the law firm Reed Smith, in an email.

Next up: The House financial services committee scheduled a Dec. 13 hearing entitled “Investigating the Collapse of FTX, Part I.”

• Bankman-Fried himself hinted that he may even testify.

🚛 Tesla begins delivering its first Semi trucks. (Axios)

🛑 Ye is no longer buying Parler, and got banned from Twitter again. (Axios) (Axios)

💸 AGs file a new request to stop Albertsons' dividend. (Axios)

⚖️ Independent examiner to be appointed in FTX bankruptcy. (Axios)

Americans are spending most of what they're earning these days, Emily writes.

• The savings rate in October was the lowest since 2005 — and the second-lowest on record, per Commerce Department data released yesterday.

Why it matters: Thanks to higher prices and a return to "normal" life that has folks traveling and going out again, Americans are spending more and saving less.

• And for now, many are sitting on a lot of savings — so they don't need to sock as much money away.

Zoom out: A lot of folks built up a big cash cushion over the past couple of years (note the big spike in the chart above) but with inflation trending higher than wage increases, at some point, something's got to give.

• "Americans’ cash war chest has been dwindling, and the spending extravaganza cannot last," writes Kroll's global chief economist, Megan Greene, in the FT.

A key economic indicator is flashing red: An index measuring factory activity shows a contraction for the first time since 2020, Emily writes.

• The Institute for Supply Management's index of manufacturing activity released yesterday pulls from a survey of manufacturers about business conditions.
• It dipped below the 50 threshold that separates economic expansion from contraction — driven by a decline in orders for new stuff.

Why it matters: A contraction could be a signal of an economic slowdown to come. (And, as we say often, this is basically what the Fed wants.) Analysts trotted out the R-word:

• The level is "consistent with a stagnation in broader economic growth," Paul Ashworth, chief North America economist at Capital Economics, said in a note yesterday. Further declines could be coming, he said, "leaving it consistent with a recession."
• "Manufacturing's contraction is likely a harbinger of a recession that we expect to begin in Q2 2023," Oxford Economics said in a note about the data.

Yes, but: Sounds scary, but keep in mind that at this point most recession forecasts are predicting a relatively mild downturn. Also, it's just one data point.