The FTX shock is wearing off slowly

Hello and welcome to Alts Cafe

This is everything you need to know about what’s going on in the world of alternative assets, best enjoyed with your morning coffee.

Let’s go!

Macro View

US markets ended slightly up after an eventful week.

Both non-farm payrolls and wage price increases beat expectations last week, which sounds good but it means the Fed is more likely to continue aggressively raising rates.

The market  expects  50bps in December, followed by another 50bps in February.

Overall, though, it was a great November, as nearly every asset class globally was up on the month.

In fact, everything reversed — what was up went down; what was down went up.

If you’re looking for a compelling take on why the US stock market is set for a major crash,  this  is a well-reasoned one.

Bullish News

  • Global shipping rates have  declined  to near-pre-pandemic levels, which will help drive down inflation.
  • All three major US indexes made back-to-back monthly gains for the first time since 2021, with the Dow Jones exiting bear territory.
  • China’s central bank moved to  backstop  growth by boosting lending to households and businesses.
  • Yields on longer-term US Treasuries have  fallen  further below those on short-term bonds than at any time in decades. This indicates the market is winning the war on inflation. JPow  disagrees .
  • Eurozone inflation  fell  more than expected, its first decline in 17 months.
  • Gas in America is now  cheaper  than before Russia invaded Ukraine.

Bearish News

  • American, Australian, and Canadian manufacturing  con  tracted in November .
  • Germany, EU, and UK showed 46.2, 47.1 and 46.5 prints, respectively. Each is a decline but a slight uptick from the month prior.
  • The world’s poorest countries now  owe  $62 billion in annual debt service to official bilateral creditors, an increase of 35% over the past year.
  • Brazil is at its  highest  risk of default in four years.
  • US consumer confidence  slipped  to a four-month low in November.

What are we doing?

 ALTS 1  fund news:

Looking into Pokemon.

Crypto

Here’s what you need to know:

Another solid week for crypto, as the FTX shock is wearing off gradually.

The Gear & Greed Index is holding steady into the end of the year and is also off its FTX-induced lows from a couple of weeks ago.

The Gear & Greed Index is often a (slightly) leading indicator of where crypto is moving.

A persistent question around Sam Bankman-Fried is “why the hell isn’t he in jail yet?” Many pointed to his significant donations to democratic campaigns as a possible reason. Perhaps he’s got the government in his pocket.

Maybe that’s true, but it turns out he  donated  just as much to Republicans; he was just sneakier about it. He was playing both sides all along.

Just one more sign of his psychopathy.

Bullish News

  • Crypto markets lingered between being stable and ticking up slightly, despite a metric sh*t tonne of bad news.

Bearish News

  • BlockFi  filed  for bankruptcy. Says it will  return  customer funds as soon as possible.
  • Kraken is  paying  $360k for “possibly violating Iran sanctions.” It’s also  laying  off 30% of its workforce.
  •  Soon , crypto providers will have to report details of their European Union clients’ transactions to national tax authorities. Italy is  considering  a 26% crypto tax.
  • Investors  pulled  $20B from crypto asset managers like Grayscale and Coinshares in November.
  •  Bybit  and  Swyftx  are laying off 30% and 45% of their employees, respectively.

What to do with that info:

If this hasn’t killed crypto, what will?

Real Estate

Here’s what you need to know:

Lots of people, myself included, have been chicken-littling about the construction market.

As new starts slow, surely construction jobs must fall away…or not?

Up and right.

The US construction jobs market had a solid November, adding around 25k new jobs going into winter.

I’ve been saying for months that there will be significant layoffs in construction. Maybe I’m wrong? Maybe I’m early? Sometimes being early is just as bad.

Bullish News

Bearish News

  • Germany’s housing market is set to  decline  25% from peak to trough.
  • Blackstone’s $69B real estate fund is  limiting  redemptions.
  • The median income needed to buy a typical home has  risen  to $88,300. That’s almost $40,000 more than it was prior to the start of the pandemic.

What to do with that info:

This market has another year to play out. Sit on the sidelines if you can.

NFTs

Here’s what you need to know:

It was mostly a flat week, with a few projects were *slightly* up, others — a bit down.

VeeFriends and Chromie dragged the index down a bit, while Moonbirds, Doodles, and Azuki led the way up.

Bullish News

  • NFTs are getting festive — Binance is  waiving  trading fees on NFTs for December, and Decentraland is  holding  an ugly sweater wearables contest.
  • Timex  launched  a watch exclusively for BAYC holders.
  • Warner Music has  signed  an agreement with Defiant to bring music to the blockchain.

Bearish News

  • Coinbase says Apple  blocked  its last app release on NFTs in wallet.
  • NBA Topshot clone Candy Digital has  layed  off 33% of its staff. The company was once valued at $1.5B.

What to do with that info:

Companies continue to build in the bear market. I’m on the lookout for projects with utility.

Startups

Here’s what you need to know:

Tech layoffs are trending up again, with over 500 mentions on earnings calls in the fourth quarter.

Over 30% of total mentions are from tech companies, even though there actually aren’t that many tech employees as a total percent of the American workforce.

Q1 2023 is coming.

Bullish News

  • Web3 juggernaut and notable NFT investor,  Animoca Brands , has  unveiled  a massive $2B Metaverse fund.
  • Web3 payments startup MoonPay has  poached  Keith Grossman, currently president of Time magazine.
  • Last week’s ChatGPT frenzy has whet the appetites of investors and founders. How  big  can AI get how quickly?

Bearish News

What to do with that info:

Pivot your startup to AI and raise a $15m seed round.

One more thing.

With apologies to my wife…

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

Any comments, questions or concerns – let us know.

Cheers,

Wyatt

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Author

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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