Hang on a minute!
I am gaining rep with the ones I am fighting!
Look at this: The systems I am allied with and I am not doing anything wrong to my rep is dropping, and the ones I am actually hunting locally - and am wanted with because of it - give me positive rep?
Please explain this to me...
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Edit: it is not consistent though; I logged out and in again, and now I have done several kills with no apparent change on the major powers' rep. But locally, I seem to keep gaining rep with the ones I have wanted status with. Is it just me, being dumb as a box of rocks..?
If you are talking about the little arrows, then those are the direction of change of the faction's influence within the system, not your reputation with that faction.