Nuclear Crab Market Blues
034: Russia stalls, Crypto Executive Order, Bio Labs
We’ve been living through some insane times the last two years but the last two weeks have proven to be incredibly unpredictable. WWIII on the horizon, record inflation levels, growing mistrust of institutions and government bodies, decreasing faith in legacy monetary systems, and trailing impacts of the scam-demic that we’ve all now forgotten about.
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MARKETS & CRYPTO
Equity markets continue to chop with heightened volatility as global conflict scares retail and encourages larger players to be be more inclined to enter risk off positions. Although, if we see some sort of positive news out of the Russia Ukraine conflict I fully expect a nice rally.
Dow futures rose on Friday roughly 200 points or around 0.6%. S&P and Nasdaq futures jumped roughly 0.8% and 1%, respectively, on hopes of progress in Russia-Ukraine ceasefire talks (CNBC)
CPI came out today at 7.9% the highest rate in 40 years. At that rate you’re losing an entire month of earnings.
IRS is planning to hire 10,000 workers to tackle backlog of 20 million unprocessed returns
Crude oil prices edged higher after tumbling on Thursday, when U.S. West Texas intermediate slid back below $110 per barrel after topping as much as $130 a barrel in recent sessions.
(Reuters) - Crypto firms in the United Arab Emirates (UAE) are being deluged with requests to liquidate billions of dollars of virtual currency as Russians seek a safe haven for their fortunes, company executives and financial sources said
Institutional #Bitcoin trading volume: 2020: $120 Billion 2021: $1.14 Trillion source: Coinbase
In my opinion $BTC has been ranging waiting for further clarity on some of the more serious macro factors in play. While it is far from ATHs, I still think the relative range it’s been hanging out in is solid compared to some of the more violent decreases we’ve seen in Tech and with other risk on assets. I will be looking to cut some. exposure if we revisit the low 30’s range as I do think escalations in Russia/Ukraine have the capability to further swamp markets, particularly if NATO or neighboring countries get involved.
The United States and allies have begun to examine digital assets and the implications of their use in potentially getting around some of the sanctions imposed by the global community. To be fair, this is how crypto is designed and exactly what, it is supposed to allow for. An interesting angle of this conflict.
"The Department of the Treasury, through new guidance, will continue to make clear that Treasury’s expansive actions against Russia require all U.S. persons to comply with sanctions regulations regardless of whether a transaction is denominated in traditional fiat currency or virtual currency," according to a fact sheet published Friday. "Treasury is closely monitoring any efforts to circumvent or violate Russia-related sanctions, including through the use of virtual currency, and is committed to using its broad enforcement authorities to act against violations and to promote compliance." (Coin Desk)
Treasury spokespeople did not immediately return a request for comment on what the guidance will say or when it will be published.
We’ve seen some interesting developments in recent weeks from institutions as Hedge Funds get involved, investing billions into various cryptos. Additionally, there seems to be an exodus of talent so to speak, of teams and individuals leaving traditional finance occupations to start work in crypto or defi.
The co-head of digital assets at banking giant Citi, Alex Kriete, announced Thursday his departure to start a new cryptocurrency venture.
Kriete, who spent less than 12 months in his crypto role, but 11 years at Citi overall, made the announcement via his LinkedIn page, stating he has decided to take on a new professional “challenge.”
“Unsurprisingly to those who know me, I believe digital assets will continue to grow in importance to global capital markets and the formation of new business models,” said Kriete. “I could not be more excited to assist in the maturation of this market.” (Blockworks)
SENTIMENT
"The inflation fire was already hot and now with war-driven inflation added to the mix, it will grow even hotter, setting off a scramble by the world’s central banks to pull back their stimulus earlier than expected," Chris Rupkey, chief economist at FWDBONDS, wrote in an email. "A spike in inflation rates has preceded economic recessions historically and this time prices have soared to levels that once again pose a threat to growth."
Many see regulation and adoption as negatives within crypto, but in my opinion this is only further validating the asset class. Crypto is too big to fail completely at this point, regardless of if we see a sizeable correction in the near future. The FUD ( Fear Uncertainty Doubt) narratives coming from parties (below) who are dependent for allocations into normal equity assets do not like that the adoption is scaling rapidly. Why would they? They have no idea what it is.
“At this early stage in the history of cryptocurrencies, the Department has serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies, or other products whose value is tied to cryptocurrencies,” the Labor Department wrote (Coindesk).
GLOBAL NEWS
Typically we cover all global events in Arb Letter but with the scale and seriousness of the Russia/Ukraine conflict it makes sense to devote the space we have here to cover a best we can. If there are topics or conflicts you want more coverage on feel free to drop them in the comments below.
JUST IN: RUSSIA THREATENS TO ABANDON AMERICAN ASTRONAUT WHO IS IN SPACE STATION WITH TWO RUSSIANS - FBN
Roughly one week after placing a ban on Facebook in Russia, the country’s communications agency Roskomnadzor announced it will ban Instagram in the coming days
President Zelenesky of Ukraine: "It is impossible to say for how many more days we must liberate our Ukrainian land. But it is possible to say we will do it," Zelensky said, according to rough English translations of his remarks by Ukraine's U.N. mission. "Because we have already reached a strategic turning point. We are already moving toward our goal, toward our victory."
Syria’s military has begun recruiting troops from its own ranks to fight alongside Russian forces in Ukraine, promising payments of $3,000 a month – a sum up to 50 times a Syrian soldier’s monthly salary (The Guardian)
US actor Jussie Smollett has been sentenced to 150 days in jail after a jury found that he lied to police about being the victim of a hate crime in Chicago
India said Friday it accidentally fired a missile into Pakistan this week because of a “technical malfunction” during routine maintenance, giving its version of events after longtime foe Pakistan warned the incident could have “unpleasant consequences.” (NBC News).
Oh and just when you thought we might be moving past the biological weapon/agent narrative of the last two years, another juicier story line emerges.
While many have urged followers of the Russia/Ukraine conflict to be weary of fake and misinformed updates from the region, one thing seems to be true across all of the mediums reporting on the event. The Russians have stalled, and Putin’s frustration grows every day his forces are unable to complete what was supposed to be a quick and decisive victory over Ukraine.
Footage has been coming out at a steady pace of the Russians getting absolutely wrecked. Armor getting blown the fuck out, Gunships and helicopters shot down, and troops running around aimlessly taking 7.62 rounds to the ass. It looks like a cluster fuck and anyone watching it can tell the Russians are engaging in indiscriminate killing and wanton violence against a Civilian population that is resisting with strong, collective efforts.
The Russians military tactics have come under scrutiny from Western advisors and experts given the disjointed and often ineffective methods they’ve been employing
The U.N. says at least 564 civilians have died in the Ukraine war, but the toll is probably much higher (New York Times).
Without a doubt the number is higher. An additional issue is the growing rhetoric and implications of Belarus and other Russian cronies potentially getting involved in Ukraine. Just this morning there was some sort of explosion on the Belarus border. Ukraine immediately denounced the event as an attempt by Russia or Belarus to escalate the crisis and create a false flag opportunity.
The conflict has taken a heavy toll on civilians living within Ukraine, as families are displaced, children and noncombatants killed, and refugees flood to surrounding countries borders. Not to mention the soldiers on both sides who are dying for literally no reason. For what? Territorial ambitions or the go of Putin? Absurdity. Many images have been circulating of dead Russian soldiers, and as the West and the world scales up particularly harmful and impactful economic sanctions, one wonders how long the Russian people back home will put up with this.
The older equipment and features of many of the Russian armies groups and forces suggests that the country may not have been investing as much as previously thought by experts. Many of the vehicles and kits used by Russian military forces appear to be in the range of 20-30 years old. Also worth mentioning substantial amounts of equipment and vehicles are actively being abandoned by Russian forces across the country.
To sum up the graphic below does a solid job of summing up developments over the last 72 hours.
COP HERE
Hoep everyone is doing well and taking care of themselves in these crazy times. Make sure to take care of your mental health. I think the toll is large for most everyone a we live through the saga of the last two years. Things are not what they appear and our elite masters have plans of their own that they are hell bent on completing and putting into motion. That much is obvious at least to me.
Cheers
Andy