The US gets downgraded

Hello and welcome to Alts Cafe

[Remember, I’m off on holiday week, so you’ll be treated to a special issue focussing on climate change’s impact on residential real estate]

This is a quick-fire look at what’s driving your alts week.

TLDR:

  1. Consumer sentiment continues to rise in the US
  2. Lending is getting tighter
  3. Chinese real estate is in Big Trouble
  4. Indian startup investing is down 75% YoY
  5. The Ripple ruling might be in trouble

Wyatt

Macro View

Rough week the US got Fitch slapped by the ratings agency, losing its AAA status.

Bullish News

  • Annual U.S. inflation rose at its slowest ​pace​ in more than two years in June.
  • US consumer sentiment rose in July to the highest since October 2021 as inflation continued to ​ease​. Pundits ​agree​ things are pretty good.
  • The ​NASDAQ​ was positive for the fifth straight month in July.

Bearish News

What are we doing?

​ALTS 1​ Fund news:

Nothing here

Real Estate

Bullish News

  • Mortgage payments have been ​flat​ for the last three months (down 0.1% last month)
  • Immigrants could ​save​ American homeownership.
  • Strip malls are the ​new​ self-storage facility.

Bearish News

  • US residential mortgage lending is getting ​tighter​, which will further depress demand.
  • ​Blackstone’s​ $68 billion flagship property fund is ​holding​ a fire sale in order to meet redemption requests and fund the purchase of AI data centres.
  • The wage gap between various US metros is at its ​widest​ point ever with Philadelphia seeing a 6.6% YoY growth compared to only 2.6% in Houston.
  • Chinese home sales are down a ​third​ year over year.
    • Possibly because Chinese millennials ​spent​ 46% more on Starbucks lattes this year.
  • Chinese property manager Evergrande Services plunged $1.6 billion when trading ​resumed​ Wednesday.
  • Property insurance prices in Florida ​continue​ to climb. Rates are up 28% YoY in ​Miami​.
    • And the city faced its first net migration ​loss​ in decades.
  • Salt Lake City is in the top five for both property ​tax​ increases and home ​insurance​ hikes YoY.
  • Foreign purchases of US homes was ​down​ for the sixth straight year
    • But last year’s 14% decline was lower than the overall purchase rate in the US.
  • Local shopping malls ​continue​ to be worth much less than they used to be.
  • The US construction industry ​needs​ 650k workers to keep up with demand; their lack is slowing down project completion and increasing prices.

How to invest in real estate right now:

Read next week’s Special Edition on how to invest in residential real estate against the apocalyptic spectre of global climate change (it’s not all bad news).

Startups

Bullish News

  • ​Uber​ has now ​lost​ a bit less than $32 billion. Shares were ​down​ on the news.
  • ​Goldman​ thinks AI investments will ​top​ $200 billion by end of 2025. Surprised we’re not there already.
  • Vietnamese EV maker VinFast will ​IPO​ in the US at a $23 billion valuation via SPAC.
  • North American banks are ​winning​ a global race to transform banking into an AI-first industry.

Bearish News

  • Funding for Indian startups was ​down​ 75% YoY in the first quarter of 2023.
    • And the Indian startup ecosystem did not mint a single unicorn in the first three months of 2023
    • And 84% of Indian VCs surveyed said that growth-stage startups faced difficulty in raising funds.
    • But VC, CVCs and PE investors have announced 40 funds worth more than $3.6 billion so far this year to support Indian startups.
  • European IPOs are at their ​lowest​ level since 2009.
  • Investing in climate-tech is ​cooling​ down.

How to invest in startups right now:

Semi-conductors, baby.

Crypto & NFTs

Here’s what you need to know:

Crypto held steady in a choppy week.

3

Likewise sentiment. Looks like another steady week.

crypto fear and greed

NFTs continued their slide and are only slightly up on 2023.

5

Bullish News

  • Tether ​said​ its assets rose 5.7% to $86.5 billion in the second quarter of 2023, while it made more than $1 billion “operational profit”, a 30% increase on the previous quarter.
  • Even though crypto is illegal in China, Binance ​manages​ to do $90 billion worth of transactions there anyway.
  • The crypto arm of Japanese investment bank and brokerage Nomura ​won​ a crypto operating licence in Dubai.
  • Terraform Labs and its founder, Do Kwon, ​will​ face fraud allegations.

Bearish News

  • The SEC asked Coinbase to ​halt​ trading in everything except bitcoin.
  • Several stable pools on Curve Finance using Vyper were exploited on July 30. The ​thieves​ stole $47 million.
  • SBF may have been ​behind​ the BALD rug pull. Because of course.
  • Robinhood’s crypto earnings were ​down​ 18% last quarter.
  • Worldcoin may ​share​ your iris scans with government agencies.
  • Nifty’s has ​shut​ down.
  • A US judge has ​backtracked​ on the Ripple ruling, which has negative implications for alt coins.

How to invest in Crypto & NFTs right now:

It’s accumulation season.

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 ​Percent​ and ​Fundhomes​
  • 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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