🍋 Cryptogeddon Continues

November 09, 2022

Together With

 "A pretty good trader is someone who gets half of things right and changes their mind a lot." — Sam Bankman-Fried

Good Morning! Adidas named a new CEO, and he’ll have his hands full after the Ye deal fallout. Americans are starting to feel the interest rate squeeze and household bankruptcy filings are climbing toward 2007-08 levels. Elon Musk sold $4 billion of Tesla stock after completing his Twitter takeover. 

Goldman Sachs wants to buy a fintech company that could help the bank win more credit-card programs. Barclays joined its competitors in cutting investment banking jobs. After failed metaverse bet, Meta will also start cutting jobs today. And airline executives don’t expect cheap flights to come back anytime soon.

1. Story of the Day: Crypto's Poster Boy Falls

Doesn’t look like crypto winter is going away any time soon. The crypto market approached a meltdown this week as a liquidity crunch swept through the market. But Binance, the largest crypto exchange, came to the rescue and bought FTX, its largest competitor.

The drama started when the CEO of FTX, Sam Bankman-Fried ("SBF"), reportedly badmouthed Binance to regulators. CZ, CEO of Binance, had some tricks up his sleeve and caused a Bank(man) run on FTX, which forced it on the brink of bankruptcy. 

CZ sold $2 billion worth of the FTX coin FTT over the weekend. FTT immediately dropped 15% overnight, and FTX’s customers tried to withdraw over $6 billion in a 72-hour span. FTX didn’t have the necessary capital, and outsiders worried the exchange could go bankrupt.

Similar liquidity events pushed Three Arrows Capital and Celsius into bankruptcy a few months ago. But FTX is much larger in scale. Some worried that, if FTX failed, the industry could see a Lehman-style meltdown.

Binance stepped in and bailed out FTX. But crypto investors aren’t too thrilled that one of the most powerful crypto firms was on the brink of bankruptcy. Bitcoin and Ethereum closed down 11% and 15% respectively yesterday. 

Takeaway: We all knew the crypto industry was volatile, but FTX’s near-collapse is something else. FTX began the year bailing out struggling crypto firms, and now it sees itself on the other side of the table. Who knew that while FTX was bailing other companies out, it was levering itself to the t***. Turns out SBF was a degen too just like the rest of us. After Magnus Carlsen-ing SBF, CZ made sure he rubbed it in:

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.

Stocks closed higher ahead of midterms, but the crypto market crashed after the FTX news.

Movers & Shakers

  • (+) Planet Fitness ($PLNT) +9% because fitness is making a post-pandemic comeback.

  • (+) Kohl's ($KSS) +7% after its CEO plans to resign.

  • (–) Robinhood ($HOOD) -19% after the company had high exposure to crypto and FTX.

Private Dealmaking

  • Apiiro, an applications security startup, raised $100 million

  • Hopper, a travel booking app, raised $96 million

  • Lusaris Therapeutics, a biotechnology company, raised $60 million

  • Zest AI, an AI-powered lending startup, raised $51 million

  • Attain, a commerce data company, raised $25 million

  • Carta Healthcare, an AI-driven clinical data solutions startup, raised $20 million

Top Reads

  • Goldman Sachs economist thinks a soft landing is possible (Axios)

  • Consumer confidence is near a decade low (CNBC)

  • Credit card balances reach record $866 billion as consumers feel interest rate squeeze (Fox)

  • Elon Musk’s acquisition exceptionalism (Axios)

  • Judge denies Elizabeth Holmes’ motion for a new trial (CNBC)

  • Investors dump Lyft on signs Uber is snatching market share (Reuters)

  • What midterm elections could mean for the U.S. economy (CNN)

  • Midterms could be stock market gold, but wild cards remain (Fox)

  • Another wave of layoffs hits tech (YF)

A Message from Mystery Vibe

Mystery Vibe is changing the game for men in the bedroom with their Tenuto 2 product.

Their product Tenuto 2 is an award-winning (and the world’s only) flexible, wearable couples vibrator.

Kiss performance anxiety goodbye with powerful sensations from four robust motors that act like a natural enhancer. Increase stimulation to key erogenous zones on both you and your partner, at the same time.

Get creative with sixteen intensity levels, Bluetooth capabilities, 100% water resistance, and the power to create custom vibration patterns that leave you and your partner breathless.

Experience pleasure in a whole new way at 25% off during MysteryVibe’s early Black Friday sale.

4. Book of the Day: Superhubs

Superhubs is a rare, behind-the-scenes look at how the world's most powerful titans, the "superhubs," pull the levers of our global financial system. 

Combining insider's knowledge with principles of network science, Sandra Navidi offers a startling new perspective on how superhubs build their powerful networks and how their decisions impact all our lives. 

Superhubs reveals what happens at the exclusive, invitation-only platforms - The World Economic Forum in Davos, the meetings of the International Monetary Fund, think-tank gatherings and exclusive galas. 

This is the most vivid portrait to date of the global elite: the bank CEOs, fund managers, billionaire financiers and politicians who, through their interlocking relationships and collective influence are transforming our increasingly fragile financial system, economy and society.

“The best investment you can make in a knowledge economy, is an investment in yourself.”

5. Short Squeez Picks

A Message from Personal Capital

Are your savings on track for retirement?

Download the Personal Capital app and use their free, award-winning financial tools to see all your accounts in one place, calculate your ideal retirement age, and learn your total net worth.

6. Daily Visual: Office Occupancy Rates, by Day of the Week

2021-2022; Among offices using Kastle systems; As of Oct. 26, 2022

Source: Axios

7. Daily Acumen: Talent

“There are two types of talent: natural and chosen.

Natural talent needs no explanation. Some people are just born better at certain things than others.

While natural talent may win in the short term, it rarely wins in the long term. A lot of people who are naturally talented don't develop work at getting better.

Eventually, naturally talented people are passed by people who choose talent.

How can you choose talent?

When you focus all of your energy in one direction for an uncommonly long period of time, you develop talent.

Results follow obsession.”

Source: Farnam Street

8. Crypto Corner

9. Memes of the Day

 

 

*****

What'd you think of today's email?

Login or Subscribe to participate in polls.

Reply

or to participate.