The US is in for a heck of a recession in 2023

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

It was a short and quiet week on the US equities front.

Hope you all enjoyed Thanksgiving if you celebrate.

Meanwhile, things got spicy in China as the CCP faces the most significant threat to its authority since  Tiananmen Square .

While I think the chances of China’s CCP collapsing are remote at best, there are a number of possible outcomes to this turbulence that could destabilize the global economy. Definitely keep an eye on the situation:

I expect things to get much worse before they get better.

Bullish News

  • Black Friday sales set a  record  in the US despite concerns about inflation, the economy, and tech layoffs.
  • Federal Reserve officials earlier this month  agreed  that smaller interest rate increases should happen soon.

Bearish News

  • Genevieve Roch-Decter lays out a  compelling  case that the US is in for a heck of a recession in 2023. I agree.
  • Europe will get hit  hardest  by the global slowdown, with the UK getting it worst.
  • Institutional money is  betting  on a big decline in the US equities market.

What are we doing?

 ALTS 1  fund news:

Nothing new here.

Crypto

Here’s what you need to know:

Crypto is shrugging off the FTX contagion and getting back to business as usual, more or less.

The Fear and greed index is looking bullish, ticking back up to 28 from last week’s low of 21.

The fear and greed index is often a (slightly) leading indicator of where crypto is moving.

Bullish News

  • Salvadoran President Nayib Bukele is  doubling  down on his Bitcoin bet despite the massive price drop, promising to buy one Bitcoin a day starting last week.
  •  Binance  is  committing  $1 billion to establishing an industry recovery initiative (IRI) to invest in companies from the digital assets sector.

Bearish News

  • New York Governor Kathy Hochul has  signed  a bill cracking down on crypto mining in the state. The bill imposes a two-year moratorium on new permits for proof-of-work mining operations that rely on carbon-based fuel to power their activities.
  • Only $740m worth of assets have been  tracked  down from the smoldering heap of excrement that is FTX.
  • Regulation is  coming .
  • The Argentina and Portugal fan tokens from Socios are down 50% since the start of the World Cup.

What to do with that info:

Buy and hold.

Real Estate

Here’s what you need to know:

All eyes are on the Case-Schiller Index for September, which comes out this Tuesday.

Bullish News

Bearish News

  • Big tech layoffs will  probably  put downward pressure on some of America’s biggest markets.
  • Home sales  fell  for the ninth straight month in October, while new home starts  dropped  over 4%.
  • Investor buying of homes  tumbled  30% in the third quarter, a sign that the rise in  borrowing rates  and high home prices that pushed traditional buyers to the sidelines are causing these firms to pull back, too.
  • Office occupancy rates are half pre-Covid levels in the UK, at just 30%. England’s office stock is falling at the  fastest rate  for 20 years.

What to do with that info:

Don’t get divorced, move for a job, or anything else that’ll trigger a forced home sale.

NFTs

Here’s what you need to know:

NFTs followed ETH up last week as the FTX contagion cleared up a bit.

Bored Apes, Chromie, and Doodles were the big winners of the week, while The Currency led the laggards.

Bullish News

  •  Royal , one of the biggest names in the burgeoning music NFT space, has finally  launched  its long-promised marketplace for music royalty rights.
  • ApesCoin DAO is  launching  an NFT marketplace.

Bearish News

  • Yuga Labs (Bored Apes) is under investigation  again .
  • Metamask  announced  it will track user data for all 21m of its account holders.
  • NFT trading volume continues to  decline .

What to do with that info:

We’re starting to look at  undervalued  NFTs from blue-chip projects.

Startups

Here’s what you need to know:

I spoke about this a bit last week, but the startup economy is about to grow up real fast.

Easy money’s gone, cash flow is king, and profits are a thing again. So is the case with Pipe, which has  ousted  its three founders, and is on the hunt for an adult to take the reins as CEO.

Unlike the last couple of years, 2022 and beyond will punish “growth at all costs” mindsets.

Investors are putting a premium on disciplined capital management.

Don’t worry, we’ll be back to throwing money at ten-minute grocery delivery again by 2024.

But it’ll be powered by AI this time.

Bullish News

  • Funds led by and focussing on non-traditional backgrounds are on the  rise .

Bearish News

  • Investment in crypto startups was  down  50% from September to October.

What to do with that info:

Tighten up your belt and focus on cash.

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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