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!
Table of Contents
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.
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.
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?
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
- Mortgage rates continued to retreat from 7%.
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.
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.
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…
I'm sporting this delightful moustache to help raise money for Tunrayo, who was diagnosed with breast cancer this year.
— Wyatt Cavalier (@itiswyatt) November 30, 2022
If we can get $500, I'll keep the 'stache through Christmas.
Donate here 👉 https://t.co/SGEVhOHUh4 pic.twitter.com/2HGOXorL7K
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