Economists are willing the economy to recovery

Hello and welcome to Alts Cafe

[Remember, I’m off on holiday the next couple weeks, so you’ll be treated to two special issues of Alts Cafe while I’m away.]

This is a quickfire look at what’s driving your alts week.

TLDR:

  1. Altcoins like SOL ​crashed​ back to earth
  2. Homeowners are fleeing Florida
  3. VC funding is down in nearly all sectors and geographies
  4. It was a no-good very bad quarter for wine

Macro View

All signs are pointing to a recovery. Both real and armchair economists are willing it to be. Keep an eye on the ​consumer debt report​ out August 8th. If you see credit card and auto loan rates rising, that’s a leading indictor of trouble.

Bullish News

  • After inflation slowed to 3% last month, a ​number​ of ​economists​ are calling for no more rate hikes.
  • US Treasury Secretary Janet Yellen make some ​remarks​ that would give the Fed cover to stop hiking rates.
  • US consumer sentiment ​jumped​ to the highest level in nearly two years in July.
  • Retail sales ​rose​ slightly in June.
  • Canadian inflation ​fell​ to a 27 month low.

Bearish News

  • One key measure ​points​ to a recession starting in Q3.
  • Stricter lending regulations will ​hike​ rates on many credit products, making everything more expensive.
  • Company earnings for S&P 500 companies are ​down​ 8% year over year.
  • China ​missed​ GDP growth expectations. Possibly worse, the unemployment rate among young people ages 16 to 24 was 21.3% in June, a new record.

What are we doing?

​ALTS 1​ Fund news:

We’ve got our eyes on a blue chip Pokemon card but have questions beyond our expertise. If you’re a Pokemon card expert, please get in touch.

Real Estate

McKinsey ​published​ a report last week that confirmed what everyone already knows:

“Hybrid work is permanent, suburbs are booming, demand for retail and office space in urban cores could fall by nearly 40 percent its 2019 levels within a few years.”

I’d be surprised if this surprises any of my readers, but it’s worth calling out that the idea / reality has gone mainstream now.

The headline clickbait number is that McKinsey expects $800 billion worth of office space to be wiped out by 2030. Sounds like a lot until you realise that’s ​less than 1/3 of Microsoft’s market cap​.

It’s also worth nothing the global office space market is ​perhaps​ $25 trillion.

Bullish News

  • Senior living properties are ​looking​ at a 3% price hike this year.
  • Boston is ​offering​ tax breaks for office to residential conversions.
  • The WSJ ​says​ the US housing recession is over.
  • US single-family homebuilding fell in June, but permits for future construction ​rose​ to a 12-month high.

Bearish News

How to invest in real estate right now:

I’m still out of the real estate market [no change].

Crypto & NFTs

Here’s what you need to know:

Another mixed week for crypto, but the tickers keep ticking up.

Fairly flat week on week.

A great week for NFTs!

NFTs good

Bullish News

Bearish News

  • Alt coins like ​SOL​ crashed back to earth last week after the Ripple decision sent them ripping the week prior.
  • Ron DeSantis continued his campaign against central bank digital currencies, ​saying​ he’d ban them on day one of his hypothetical presidency.
  • Binance ​fired​ 1,000 people as it continues to ​lose​ market share.
  • NASDAQ ​killed​ its plans to launch a crypto custodian service.

How to invest in Crypto & NFTs right now:

It’s accumulation season.

Startups

Bullish News

Bearish News

  • Carvana was downgraded and shed 16% of its share price last week. It’s still up — ​incredibly​ — 900% on the year.
  • Bolt is being ​investigated​ by the SEC.
  • Proptech startup Latch is ​laying​ off 59% of its US and Taiwan-based workforce — 82 positions.
  • Cameo ​axed​ more than 80 employees as well.
  • VCs that raised funds during the tech boom are ​scaling​ down their megafunds.
  • Lots of 💩 data:
    • European VC deal volume was ​down​ more than 60% in the first half of 2023.
    • Spacetech companies have only ​raised​ $2.4 billion so far in 2023. They topped $12.1 billion in (all of) 2021.
    • LatAm funding is ​down​ 83% this year.
    • Meanwhile, Web3 funding is ​down​ 76% YoY.

How to invest in startups right now:

Do you think things will get better or worse? Or both? It all feels very Dickensian, doesn’t it?

Quick Hits

Wine and Spirits

From ​Vinovest’s​ ​quarterly report​:

No matter how you measure performance, the wine market unquestionably hit a lull in the second quarter. The average Vinovestor saw their portfolio decline -4.45% in value in that time. This downturn bucks a trend of positive growth in five of the last six quarters.

The average portfolio was down around on the quarter. The three biggest headwinds, according to Vinovest:

  • China’s slowdown — it’s a big market
  • Champagne and Burgundy have cooled after a red hot 2021 – 2022
  • European economic troubles

​Vinovest​ is, unsurprisingly, optimistic about Q3.

That’s all for this week. I hope you enjoyed your coffee and this edition of Alts Cafe.

Cheers,

Wyatt

Disclosures

  • This issue of Alts Cafe was brought to you by our friends at AKUA and Diamond Standard.
  • We hold BTC and ETH in our ​ALTS 1 Fund​. Apart from those, we don’t own any other assets or vested interests in the companies mentioned in this email.
  • There are a couple affiliate links above. If you click them, we may get a couple bucks.

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Author

Picture of Wyatt Cavalier

Wyatt Cavalier

With a background in finance & intelligence analysis, Wyatt has an unhealthy obsession with finding the best blue chip investment opportunities. His previous newsletter, Fractional, resonated deeply with subscribers, bringing actionable insights and unconventional trading strategies. His rare book collection specializes in banned editions. He currently lives in Spain with his beautiful wife, three young boys, and dog Monty.

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