Friday Market Essentials Run Down
119: Long week of chaos and absurdity
Happy Friday everyone I hope the week was profitable and quick for you if you don’t like your day job. Insane week from a financial and global news perspective.
Quick markets overview before the weekend. Make sure you guys get out there slam some tequila units, work out, play the Call of Duty, and live your best life.
If you guys missed it we dropped our Guide to Beating the Lizard People (an allegory) this week. It was focused on the financial, social, and physical ways we can all work to become better and outlast a lot of the chaos of the times we live in.
With so much going on socially, politically, and in markets we wanted to offer some guidance for folks who are feeling the anxiety and confusion about how to move forward that we have all likely felt from one time or another.
You can find the post in our archives — it was one of our most engaged of all time.
Now for a quick overview of markets and global news for the week.
Markets
Equities are flat Friday morning after some volatility and chop that defined the week. Crypto markets continue to stagnate as the repercussions of ponzis and leverage ripple through the industry, impacting a number of firms.
The aftermath of the FTX debacle continues to play out as many speculate on the true nature of what was actually going on at FTX.
The financial fraud that occurred at FTX was bigger than Enron. John Ray III, who is the new boss of the bankrupt crypto exchange, said the company had suffered an “unprecedented and complete failure of corporate controls” and that he had never seen anything like this in his entire career in restructuring.
This guy spent most of his career sifting through the rubble of massive companies that had catastrophic failures so for him to say that about FTX means this really was an F-up of biblical proportions.
It begs the question — how did so many sophisticated investors and individuals completely miss the ball on a fraud and scandal of this caliber? Below you can see the investors involved and impacted by the FTX scheme.
There are rumors of videos of orgies and sex tapes floating around tied to the company and it’s employees.
We can only hope that these never surface lmao.
Just in this morning - the $142 billion hedge fund Man Group is launching a crypto hedge fund - BUT CRYPTO IS DEAD GUYS ITS ALL OVER FOREVER
Bitcoin, the leading crypto assets has now fallen 75% from record highs of roughly $69,000 at the top of the bull market
This measure, known as the CBOE U.S. equity put/call ratio, has hit the highest — or most bearish — level on record in recent days (Axios)
Home sales have declined for the ninth straight month in October. Higher interest rates and persistent inflation have kept new buyers on the sidelines for the time being. Some deals to be had in the future?
A quick note on FTX/Twitter drama etc. Mainstream outlets like NY Times, NY Post, Forbes, and others are completely misrepresenting the implications and nuances of these events — primarily the FTX fraud. It’s a good time to reassess subscriptions to these companies because they literally lie in their headlines. Take this one for instance from Forbes this morning:
Alameda Research CEO Caroline Ellison is a math whiz who loves Harry Potter and taking big risks. She is also one of the supporting players in Sam Bankman-Fried's FTX catastrophe — and a new darling of the alt-right.
Mini rant over but seriously, this shit is absurd lol.
Drama has been unfolding on Twitter and the internet as Elon Musk’s hard deadline for employees to step up or resign passes. The workforce has apparently been whittled down by roughly 90% of its staff — going from (7.5k to 750).
What message and implications does this have for the rest of the corporate world and tech industry? We think it will send a clear signal there is excess and waste in the corporate ladder — that’s what happens when you hire woke 25 year olds pay them $400K and give them free snacks and unlimited PTO.
What a joke lol. In any case we will see how Elon’s take over plays out. There is growing rage and freak outs online from liberals and wokesters.
Activists in San Francisco seemed to project messages onto the Twitter headquarters on Thursday night, criticizing Musk.
Elon claims that twitter usage is at an all time high amid the controversy and has seemed to double down on his efforts to fire toxic employees as well as minimize headcount.
Bank of America downgraded COIN (Coinbase) — its price target is now $50 down from $77. Once again here - anyone or any institution investing in these companies fundamentally does not understand the use case or attractiveness of self custody crypto/bitcoin. Avoid.
The Salvadoran President Nayib Bukele, who rose to fame as one of the large international proponents for crypto, is doubling down on his Bitcoin bet despite the massive price drop, promising to buy one Bitcoin a day starting on Friday. Do you guys think this will pay off?
On Wednesday — two JPMorgan economists Michael Feroli and Daniel Silver wrote that they see the U.S. in a "mild recession" in the second half 2023. This would come along as the Fed looks to complete its mission to flatten inflation. It’s safe to say that only moderate progress has been made in this pursuit so we remain hesitant to get too frisky with equity longs (YF)
Pension Giant Ontario Teachers' Plans to Write Off All $95 Million Invested in Crypto Exchange FTX - Coindesk — BIG OOOOOF
We’re beating a dead horse here but with the uncertainty and chaos in crypto markets — security should be your top concern at the moment. We’ve written guides on how to secure your crypto and you can find them in the archive.
I would highly recommend this weekend that you purchase a form of cold storage, for us we prefer Ledger or Trezor. Secure your crypto and get it off these exchanges.
Even Grade A exchanges we use to keep our trading allocations and some different alts could have issues.
Don’t be naive and get rocked.
Don’t be like the unfortunate souls who lost literally everything in FTX.
The central theme of crypto and more specifically Bitcoin is to hold your own funds and be your own bank. By using cold storage you make it incredibly difficult for a anyone to steal your crypto.
“Fed Chair Powell recalibrated monetary policy at the November FOMC meeting by adopting a new speed vs. destination’ paradigm – indicating an intention to reach a higher terminal fed funds rate while doing so at a slower pace”
— EY Parthenon Chief Economist Gregory Daco said in a note (YF)
Crypto sentiment is at all time lows based on some internet indicators and our takes on what we are seeing on Twitter and social media. Why wouldn’t it be after something as catastrophic as FTX. But —- we do recommend reading through white-papers, use cases, and watching some of the assets you think could last through this bear cycle.
Right now when everyone is convinced it’s all over is a great time to big up distressed and forcefully sold assets to accumulate a bag for a a sunnier day.
Global News
The G20 summit dominated the international news cycle this week along with further provocations from North Korea.
Among the more interesting interactions at G20 were between Russia, India, the US, China, and Canada.
Trudeau got plastered by Xi after leaking details of a conversation they had to the media — he walked off like an injured puppy dog after getting scolded. India and Britan interacted with new PM Richi Sunak speaking with India’s Modi who is a big fan.
Many countries urged Putin to stop the War in Ukraine amid the backdrop of two Polish citizens being killed by a missile earlier in the week.
North Korea launched another intercontinental ballistic missile (ICBM) Friday, Japan has said it has the potential range to reach the US mainland.
Ukraine's electricity chief warned of potential power outages Friday as Russia begins to focus targeting of Ukraine's energy infrastructure with heavy artillery and missile attacks. It is thought that as much as 40% of the country's energy could be impacted as winter approaches quickly.
According to a recent report, the FBI is now “concerned” about reports that secret “police stations” linked to China have been set up across the entire United States (InsiderPaper).
Beer sales have been banned around Qatar World Cup stadiums: via FIFA
House Speaker Nancy Pelosi (D-Calif.) has made the decision to step down from Democratic leadership
According to Rasmussen Reports — nearly 48% of Maricopa election centers had printer or tabulator malfunctions on election day
The GOP won control of the House on Wednesday night, gaining the needed 218 seats to take over — Dems still control the Senate. It’s expected that the right will now bring many investigations forth that had been previously stifled. This began with the announcement this week of an investigation into President Biden and his son for his foreign business dealings. Rep. James Comer and Rep. Jim Jordan say they have evidence from whistleblowers.
Things continue to get more and more Orwellian as the Lizard People — who we spoke about in our post on Monday — continue to vie for power and control over mankind.
We’ve talked about vaccine passports, CBDCs, and other tools of oppression in Arb Letter before but it seems the Lizard People cannot let these concepts die.
Select G20 leaders made declarations, which called for digital COVID-19 certificates for international travel along with other systems designed to monitor an individuals health, movement, and status.
If you go look at the final communication piece, (republished and available on the White House website) you will find some chilling language about what these people want to impose on us and our international friends.
"We remain committed to embedding a multisectoral One Health approach and enhancing global surveillance, including genomic surveillance, in order to detect pathogens and antimicrobial resistance (AMR) that may threaten human health."
Article 23 within this piece states:
We acknowledge the importance of shared technical standards and verification methods, under the framework of the IHR (2005), to facilitate seamless international travel, interoperability, and recognizing digital solutions and non-digital solutions, including proof of vaccinations.
We support continued international dialogue and collaboration on the establishment of trusted global digital health networks as part of the efforts to strengthen prevention and response to future pandemics, that should capitalize and build on the success of the existing standards and digital COVID-19 certificates (ZeroHedge)
So you see all the theories about tracking and big brother and using the pandemic for implementing even closer mass surveillance are not conspiracy.
They are literally spelling out what they want to do and it’s on the White House website lol.
Look forward to seeing you guys Monday for our deep dive post on the top 10 books we recommend for macro analysis and following world trends and global developments. If you want to invest globally, take advantage of opportunities, and get a read on how things will likely play out in the coming years I recommend taking a look.
Have a great weekend.
If you want to get an early jump on holiday shopping or get fitted with the best crypto/finance merch in the market check out our new crypto collapse collections featuring merch from FTX, Alameda, and more.
I think the notable thing about El Salvador’s announcement is that it’s so small.
This is a commitment of under $7M over the course of a year at these prices
Great as always Andy! Hope Dad life is treating you well so far!