050: More microchips, bug eating, and war
Big week fellas and ladies.
Edition 50 of Arb Letter and we just passed 13,000 Subscribers, with more joining Arb Letter premium each day. Wild milestone. I have to admit I am glad that we were able to scale the Arbitrage Andy/Arb Letter community off Instagram so quickly. Also want to say thank you to all of you guys, not trying to sound soft as fuck, but it does mean a lot to me to have people genuinely appreciate my viewpoint and commentary. I am going to continue building out this brand and the content we cover in the coming months. Excited to have a tight knit community to do that with.
My hope is we are building a group relatively like minded individuals. Super fulfilling and I recommend more people A.) try to write more often and B.) find a side hustle you genuinely enjoy and just be consistent. You will see results if you commit.
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MARKETS & CRYPTO
U.S. stocks moved higher Thursday with a decent comeback from recent aggressive selling backed by a strong number of decent quarterly results from Macy’s and other select retailers. A bit of good news considering the recent battering of WMT and TGT. Plenty of amusing blow ups this week in the equity markets on many of the Covid darling stocks while crypto markets continue to appear bearish.
Below you can check out the S&P 500 1 Month chart to give yourself a sense of where we currently stand. Especially after some of the relief we saw today, it seems this could be the start of a more aggressive bear market rally or a dead count bounce before the big show. So far today, equity markets continue to recover, while crypto lags.
Andreessen Horowitz raises $4.5 billion crypto fund this week amid some choppy crypto markets
Signs that inflation is close to peaking near it’s 40-year high could be a positive catalyst for stocks according to Goldman Sachs.
Snap Inc. (SNAP) fell 43% this week, getting absolutely BODIED
Oil & gas prices have mooned recently and world energy markets have been continually destabilized by the War in Ukraine.
Elon Musk raised his commitment in his takeover bid for Twitter to $33.5 billion
Amid some interesting retail stock movement, the department store Macy’s pumped 19.3% today after beating Street estimates
Jane Fraser, CEO fo Citigroup had the following to say about the consequences of a disrupted supply chain and the impact it will have on availability of food globally.
“Food is the big worry here, because that could be the wildcard. When people are hungry around the world – and there’s going to be 1.5 billion hungry people without necessarily the means or the access to food, particularly in Africa but not only – that is a problem.” (CNBC)
International Monetary Fund Managing Director Kristalina Georgieva had mirrored similar concerns Monday.
US equity markets were probably overvalued before this year’s slump and the Federal Reserve’s tighter monetary policy "appears to be more right than wrong,"
Tyler Dickson, Citigroup’s global co-head of banking
“The younger generation says the older generation has devalued the dollar or the value of other currencies, so maybe something new isn’t so bad,”
David M. Rubenstein, co-founder of the Carlyle Group
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Unfortunately to add to all the madness we already have occurring in the world we had a severe tragedy this week in Uvalde, Texas when a psychotic gunman killed 21 people including 19 children and two teachers. The gunman used an expensive Daniel Defense AR15 setup and more details about the confusion are continuing to leak as we learn more about how this disgusting act transpired. I am not going to glorify this piece of shit by putting him in my letter, but clearly severe mental illness/bullying played a part in this atrocity.
There’s been a wide range of emotions this week about Gun Control, legislation, and mental health in America and justifiably so.
Steven McCraw, director of Texas Department of Public Safety, said Friday that the commander on scene during the Uvalde, Texas, elementary school mass shooting made "the wrong decision" by not breaching the classrooms where the gunman was with students and teachers sooner (Axios). Beto O Rourke stormed into a Texas gathering with Governor Abbott this week, Beto is a known anti gun advocate. The NRA, perhaps being a bit tone deaf, is hosting a convention in Texas in the coming days.
Beto O’Rourke blamed Republican Gov. Greg Abbott for inaction on gun control and interrupted a news conference screaming at Abbott
Ukraine's Foreign Minister Dmytro Kuleba issued an urgent plea Thursday evening for Western leaders to send his country more "heavy weapons" to help Ukrainian forces counter a powerful Russian offensive in the eastern Donbas region (CBS)
Ray Liotta, the blue-eyed actor best known for playing the mobster Henry in “Goodfellas” died today at the age of 67. Great guy, great movie, absolute shame.
The World Economic Forum’s (WEF) annual meeting – canceled in 2021, delayed earlier in 2022 – formally kicks off Tuesday in Davos, Switzerland. Cryptocurrency companies and advocates opened the parties up on Sunday with bitcoin (BTC) pizza stall/ food courts and blockchain displays setup throughout the meeting grounds.
Davos is essentially Elysium. For those of you not familiar Elysium was a dope film with Matt Damon. In the movie the poor (99% of humans) live on earth in horrible conditions in the future while the rich live on a luxury space station known as Elysium with all the nice things you can imagine. That’s basically what the World Economic Forum is in Davos. A gathering of the most elite billionaires, business people, and socialites/ While us peasants sit through high inflation, pandemics, supply chain woes, and awful social/political division. It’s actually getting pretty comical at this point.
George Soros headlined the event and started absolutely wylin talking about the War in Ukraine and threat it poses to potentially igniting WWIII. “Our civilization may not survive” he said, echoing that the War in Ukraine has shaken Europe to it’s core. Beyond that, there were sustained talks about supply chain issues, food shortages, and of course, the rising oceans.
Apprently one-third of the roughly 270 panel discussions through Thursday’s finale have been focused on climate change and efforts to reach “net zero” emissions while seeking cleaner sources of energy.
Attendees and hosts at Davos typically face criticism about flying in on emissions-spewing corporate and private jets. They announced recently they have allegedly offset 100% their carbon emissions from the attendees activities by supporting environmental projects.
These topics dominated the gathering alongside the obvious call outs of the War in Ukraine, some grim predictions by George Soros, and surprisingly quite a bit of crypto and defi.
Attendees and hosts at Davos typically face intense criticism about flying in on emissions-spewing corporate and private jets. They announced recently they have allegedly offset 100% their carbon emissions from the attendees activities by supporting environmental projects. As someone with experience in the energy markets, I can say definitively ESG and offsets are an absolute scam.
While Crypto and Climate Change took their fair share of air time from other topics, the War in Ukraine was a looming dark spot for the conference. Zelensky addressed the WEF this week re-emphasizing the need for economic and military support as the country continues to repel the Russians. The conflict in the Donbas region specifically has escalated in the eastern part of the country.
Rumors of Putin health issues and severely waning spirit for war in Russian by civilians will be interesting pieces to see play out in the coming months.
Ukrainian Foreign Minister Dmytro Kuleba told Davos attendees on Wednesday that Ukrainian soldiers were taking heavy losses and casualties in Donbas because they lack the tools to fight Russians from a distance effectively. other world leaders expressed concern that the War in Ukraine was taking attention away from other key issues. LOL. Sounds like an elite problem.
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