FTX and crypto world, all that can be said is that there will be massive changes going forward, too many 'strange stuff gone on'' to be polite, too many people got caught with it all, as usual SEC and others get in there too late... : risk is the whole story is far from over, it can get worse, giant margin call etc etc. Investments in FTX MtM down to zero. FTX might have been some sort of very bad combination of LEHL (illiquid, undercapitalized) and something like MF Global (illegal use of client funds to fund its own terrible investments). The regulators probably quite happy in a way, ''we told you so' a while back, for now at least there does not seem to be much contagion but beware! Watch stuff like Tether etc, if stocks go down from here (CPI this afternoon), the Fed didn't seem to mind too much recently, if a mainstream bank was caught into this crypto deleverage then the CB will notice though, as long as it is specific to crypto, suspect FED won't mind too much, we still hvae 60ish bps priced for December Fed meeting, still think 50bps most likely scenario in Dec
U.S med terms take away, IMHO, Reps will 'have' to move on and away from Trump fast for De Santis, and the Dems should do the same with Biden, and go with someone like Buttigieg Republicans limped toward control of the House as Democrats eyed maintaining the Senate in an election that boded better for Joe Biden and worse for Donald Trump than forecast. Biden said he still plans to run again for president in 2024. Despite GOP themes of inflation and crime, voters also focused on abortion rights and the threat to democracy itself. Still, the fate of the president's agenda hangs in the balance and government gridlock looms
Chicago #Fed’s Evans Says It’s Time to Slow Pace of Rate Hikes >>> something breaking underneath...shadow banking and crypto, techs, ARKK and the non-profitable Index type names..Bond strategists-economists see terminal rate 4.75/5.00%-BBG
France just legislated that every parking lot for 80 cars or more must be covered by solar panels that’s 11GW of new solar (same as 10 new nuclear reactors) powering millions of homes - zero new land needed - brilliant idea clearly
The pace of #earnings downgrades has accelerated in the US, especially compared to Europe, as a Citigroup Inc. gauge of US earnings changes has had 23 consecutive negative prints, the longest losing streak since early 2020 - Bloomberg
IEA's Birol: OPEC+ Production Cuts May Put Further Upward Pressure on Inflation and Weaken the Global Economy. Oil Prices Flirting with $100 a Barrel "Real Risk" for Global Economy
Credit-Suisse, the embattled Swiss lender is marketing an 11-year fixed-to-floating-rate dollar bond at around 9 per cent – levels more consistent with where high-yield borrowers are currently trading, according to Bloomberg indexes.
Russian troops ordered to leave Kherson. Israeli military analyst: 70% of Russia's Black Sea Fleet is incapacitated. "This does not mean that they are drowned, just incapacitated, meaning they can't carry out any offensive actions," Yigal Levin, former officer of the Israel Défense Forces, told Radio NV
U.S Techs sell-off everywhere, retail consumers hurt by higher inflation, real-estate falling at fastest pace since 2011, industrial manufacturing activity softer, financial layoffs beginning on relatively large scale on revenues decline, clearly not very good signs
Markets :
Crypto world going for the big selloff by the looks, where was BTC in March 2020 - just before the big QE from the FED and all other CB's ?... with many stocks back to pre-covid levels, like Disney yesterday, why shouldn't BTC go back down towars 7K area, ETH was <200$.. >>> this is not a call just an observation
ARK Innovation ETF sell-off deepens as crypto-related stocks like Robinhood, Coinbase, Block & Roblox crash, ARK now down almost 80% from high.
Gold to take back its right as 'the' safe heaven
USD weakened into med-term elections; this may have to reverse on a solid CPI and/or CPI is softer, and markets start to price 25bps for Dec and a shift etc etc
U.S 10's bond auction last night was pretty awful, biggest tail since 2016 (3.5bps), 30's coming now
Equity markets were also bought into med-terms, struggling, though for now we keep in sight 3600/3900 SPX500 range, with the soft weak names still under pressure, real economy vs the rest struggling (crypto, ARKK, GS non profitable companies type index, highly leverage balance sheet, China still not really recovering etc)
we could see some pretty decent moves either way from after this CPI, as it is likely to set the tone for year-end
Reporter: "Do you think @elonmusk is a threat to national security?"
Biden: "It's worthy of being looked at."
Saxo : Today we look at the sudden shift of the plot over the last 24 hours as the crypto contagion effects from the meltdown in that space have reached sufficient magnitude to impact sentiment across markets. We emphasize caution on the network effects among many clusters of assets held by the same hands holding crypto. Also, a look at where we are with the equity risk premium as investors better not hope for "normal" equity valuations. A glance at FX and the USD rising on liquidity concerns and brushing off the drop in US treasury yields, which brings into question the reaction function around today's October US CPI release, which may not have the impact previously anticipated, even on a surprise
Here is what the FED was saying approx 1 year ago :
- interest rates will not have to rise until 2024
- don't worry, we are expecting a safe landing
- a recession is very unlikely
- housing market is not a bubble
- and the best one, inflation is transitory, will fall to 2% in 2022
- literally all statements were wrong
- ECB is still wrong and blaming global warming for higher inflation!
Bitcoin's electrical cost has just been breached for the 2nd time only in 5 years. The electrical bill for the average miner is now greater than the income earnt
Contrary to Evans, Richmond Fed President Tom Barkin says the central bank has to accept higher risks of causing a recession as the price of getting control of inflation: "If we back off for fear of a downturn, inflation comes back even stronger and requires even more restraint."
Ontario Teachers’ Pension Plan faces a hit on investment in crypto trading platform FTX - The Globe and Mail got out of energy, oil and bought into crypto's...The irony of Ontario Teachers Pension Plan investing in FTX, which is actually banned in Ontario (because Canadian regulators deemed them too risky)...
Meta laying off more than 11,000 employees: Read Zuckerberg's letter announcing the cuts (cnbc.com) Mark Zuckerberg apologizes as #Meta announces 11,000 jobs cut. Says ‘I got this wrong.’ Job cuts represent ~13% of Meta’s employees BUT that's just about 1/3rd of the jobs Zuck has created since the pandemic
Nassim Nicholas Taleb on Twitter: "There is no such thing as a "liquidity" crisis with cryptos. A liquidity crisis is for something that has some hard intrinsic value. This is just a crisis." / Twitter and this is the real issue imho The Block: Lack of FTX buyer would leave 'giant hole' in crypto markets: Circle CEO
‘This Is Ron DeSantis’ Party’: ‘Morning Joe’ Panel Says Trump ‘Lost’ America | The Daily Caller Trump was furious yesterday, particularly about Mehmet Oz, and was blaming everyone who advised him to back Oz -- including his wife, describing it as not her best decision, according to people close to him
Challenges to financial stability | Sveriges Riksbank “It is not the Riksbanks role to facilitate individuals participants who have taken excessive risks”
As recently as June of this year, Credit Suisse "aced" the Fed's stress test. And now, 4 months later, CS was forced to sell assets, fire thousands and raise billions in emergency capital ... at very expensive levels ! Credit Suisse forced to pay junk-level yields for cash infusion | The Straits Times
..Sales down 22.5% in the last 3 months. Losses up by 180%, for every $1 of product it sells costs $1.82 to make...........
Have a great day Team PVM