🍋 2022 Predictions Down Horrendously

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Good Morning! Wall Street bonuses are starting to roll in, and they’re not looking pretty. With annual revenue down 40% for many investment banks, bonuses are expected to fall around 30%.

But hey, at least some of you with desk jobs might be able to work on your gains at the office gym. An estimated 20-40% of office space remains vacant, and building owners have been turning former cubicles into gyms and film sets.

Speaking of financial woes, SBF apparently had to borrow a cool half a billion from his own hedge fund to invest in Robinhood. And in other depressing news, the U.S. came in a measly second place on a list of countries with the least amount of annual leave.

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1. Story of the Day: Why Your 2022 Predictions Flopped

Turns out the so-called experts totally missed the mark on their 2022 predictions. And as we approach 2023, no one can seem to agree on what's in store for the upcoming year.

Why did everyone get their 2022 predictions wrong? The Federal Reserve thought they had 2021's inflation under control, but boy were they wrong. Policy experts thought the inflation spike was ‘transitory’ and just a temporary blip. But we found out this year that inflation turned out to be a full-blown explosion to the tune of a four-decade high.

And don't even get us started on the top Wall Street analysts. They predicted a mediocre year for the markets, but instead, we're headed for the worst year since the 2008 financial crisis.

Maybe it was tough to predict how Russia’s invasion of Ukraine would impact inflation or oil prices. Few saw China sticking to its zero-Covid policy which prolonged global supply chain woes. Global uncertainty threw a wrench in everyone’s 2022 predictions, but investors are starting to price that volatility into markets.

But at least we have 2023 to look forward to. The Fed is raising interest rates, but traders are betting on rate cuts. Meanwhile, CEOs are predicting a recession, but some economists are saying everything's going to be okay.

Takeaway: ​​It seems like every year, investors, analysts, and economists are constantly getting caught off guard by the unexpected twists and turns of the market. And if the past year is any indication, 2023 is sure to bring even more surprises. The only thing we can be sure of is that we should all approach the coming year with a healthy dose of humility and a willingness to expect the unexpected.

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, premium research/resources and weekly Knowledge Drop newsletter, check out our Insiders membership.

Stocks closed lower as investors weigh housing data and recession concerns.

Movers & Shakers

• (+) Tesla ($TSLA) +3% after the stock snapped a 7-day losing streak

• (–) Apple ($AAPL) -3% because of supply chain issues.

• (–) Southwest ($LUV) -5% after flight cancellation backlash continues.

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Top Reads

• The fintech reckoning is upon us (CNBC)

• What Google needs to do to break even on its NFL deal (YF)

• CFOs see slim chance of soft landing in 2023 (CNBC)

• Active investing poised to be on the rise in 2023 (YF)

• Metaverse off to ominous start after VR headset sales shrank in 2022 (CNBC)

• Even a soft landing would be hard on stocks (WSJ)

• Best and worst real estate markets for 2023 (Fox)

• Big tech’s big flops of 2022 (Vox)

• That free Starbucks drink is about to cost more (CNN)

• What to expect from crypto the year after FTX (CT)

4. Book of the Day: A World of Three Zeros

Muhammad Yunus, who created microcredit, invented social business, and earned a Nobel Peace Prize for his work in alleviating poverty, is one of today's most trenchant social critics.

Now he declares it's time to admit that the capitalist engine is broken -- that in its current form it inevitably leads to rampant inequality, massive unemployment, and environmental destruction.

We need a new economic system that unleashes altruism as a creative force just as powerful as self-interest.

Is this a pipe dream? Not at all. In the last decade, thousands of people and organizations have already embraced Yunus's vision of a new form of capitalism, launching innovative social businesses designed to serve human needs rather than accumulate wealth.

They are bringing solar energy to millions of homes in Bangladesh; turning thousands of unemployed young people into entrepreneurs through equity investments; financing female-owned businesses in cities across the United States; bringing mobility, shelter, and other services to the rural poor in France; and creating a global support network to help young entrepreneurs launch their start-ups.

“Economic growth is a rising tide that lifts all boats.”

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5. Short Squeez Picks

• Some thoughts on investing

• How to manage your time more effectively according to machines

• 23 things to look forward to in 2023

• Inside the world’s highest apartment

• 7 simple habits for 2023

• Job board - Company of the Week

6. Daily Visual: Tesla Nose-Diving

Tesla Share Price

Source: Axios

7. Daily Acumen: How To Survive The Complexity of Financial Markets

The most important qualities that you need to survive the complexity of the financial markets are a combination of –

1. Humility, and

2. Fine-tuned BS detector.

You need humility to prevent yourself from overcomplicating investing more than it needs to be and taking risks greater than you’re able to handle.

And you need a fine-tuned BS detector to protect yourself from the swarms of sales pitches and get-rich-quick schemes that plague the industry.

There are other things – a good grasp of basic arithmetic and accounting, delayed gratification, and the ability to live below your means. But those first two are most important.

8. Memes of the Day

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