January 6th, Tesla Dumping, McCarthy murked
152: Market and Global News Updates for week of 1/6
Hope everyone had a good week back and a great start to 2023.
Next week for paid subs we will put out our highly anticipated post “How to get rich made simple”. This post will cover the origins of why we started Arbitrage Andy and Arb Letter and who our primary influence was -
formerly known as WallStreetPlayBoys.BTB was instrumental in our inspiration and eventual success. They formed an early replicable blueprint for amassing wealth, assets, and living a good fulfilling life.
As a young impressionable 20 year old, I was and now at 30, am, forever grateful for their simple guidance early on that helped me get to where I am today in my career, business, and life.
You won’t find a better online quasi - mentor that gives it to you in a straightforward and direct manner. At first you might think it’s brutal or too tough, but eventually you understand they have experience to share and know the blueprint for succeeding.
If you are eager to level up in 2023 and take control of your life and finances, this is an absolute no brainer.
You won’t find me recommending many resources like I do them. Post comes out Tuesday and we will be doing a big giveaway for followers and subscribers as well.
Let’s get into markets and global news for this week!
Markets
Jobs report dropped today leading the Dow and market higher. Initial fears by some traders and investors are that this wasn’t nearly bad enough to get the Fed to slow down on rate hikes.
The U.S. economy added 223,000 jobs in December, beating many economists’ expectations for a number around 200,000.
Remember that the Fed needs to see some direct effect on jobs and employment for them to be convinced that progress is being made on the inflation fighting front. Bit counterintuitive and alarming for folks in roles or jobs that aren’t revenue producing or are redundant.
That result is lower than November’s 256,000 payrolls, which was revised downward. October’s result ended up also being revised downward. Wages grew 4.6% year over year (Barrons).
Next week most of Wall Street will be completely focused on CPI for December which will give us a good sense of where the Fed might continue for the duration of 2023. Energy futures for crude oil along with refined products and natural gas have all fallen in the new year
European gas stocks are well above seasonal norms, Saudi Aramco this week cut prices for oil shipped to Asia, and OPEC members' output unexpectedly rose last month, a Reuters survey found (Yahoo Finance).
Weather in Europe has been unusually warm and initial expectations of a drastic crisis because of Russia’s energy war and supply gluts have been overblown leading to the dump in speculative bets.
It will be interesting to see what impact this has on Putin’s decisions in the next several months.
US unemployment rate fell to 3.5%, which was lower than expectations
Amazon (AMZN), Salesforce (CRM), and Vimeo (VMEO) all announced major job cuts this week as layoffs continue to escalate in tech while bonus predictions are low for Wall Street
The Southwest Airlines shit show over the year-end holidays may end up costing the airline up to $825 million dollars
Fed Reserve member Neel Kaskhari said on Wednesday he sees rates move to 5.4%
Half of millennials (defined in this survey as 23-38 years old) and 75% of Gen-Zer (18-22 years old) respondents have left a job, both voluntarily and involuntarily, partially due to mental health reasons. (CNBC).
Former Federal Reserve Chairman Alan Greenspan believes a US recession is the “most likely outcome” of the Fed’s aggressive rate hike policy that has set out to stop inflation. He joins a growing group of economists predicting an imminent economic downturn soon (CNN)
Tesla (TSLA) stock has lost some serious thunder while Elon Musk has been crusading against wokeness in his Twitter acquisition.
The stock is down 38% in the last month.
Crypto continues to move mostly sideways while the dust continues to settle on the FTX case and other high profile ponzis and scams. We feel confident that most sizable leverage has been wiped from the system, which is good for the long term, but we also won’t rule out the possibility of a another delayed blow up or contagion effect.
Tyler Winklevoss, of Gemini Exchange, wrote a letter earlier in the week to Barry Silbert of Genesis, accusing DCG of owing Genesis customers $1.6 billion and calling the business relationship between DCG and Genesis “beyond commingled.”
This issue has made it impossible for Gemini to let Earn customers redeem their assets on gemini. Earn is the Gemini lending scheme to earn APY on crypto.
We redeemed a sizeable MATIC position from Gemini the literal day before this happened.
Genesis lost $2.4 billion loss after major borrowing partner Three Arrows Capital failed to meet margin calls on its loans starting June 16. Gemini customers are owed $900 million in deposits by Genesis.
It’s worth noting that Genesis also owns Grayscale, sponsor of the world's largest bitcoin trust, GBTC, as well as crypto media outlet, Coindesk, and crypto mining financier, Foundry (Yahoo Finance).
Today’s rally is great and feel good but we are still on guard for a larger correction if the Fed decides that they aren’t backing off yet on their fight against inflation to ensure it doesn’t become persistent.
Our Dividend Growth portfolio we constructed last week is doing well so far. We are up 8% on Intel, 6% on AT&T, 8.3% on Verizon, and 5% on 3M.
Obviously not much duration here but still good to see the dividend portfolio picking up some nice gains from what could be a local bottom for a bit.
Facebook is simply a value buy for this portfolio — we own more outside this but thought it could be a decent level to add some and bolster this portfolio if we see a resurgence in 2023.
Market Sentiment
"We have seen two-way flows ahead of the data release, with some clients putting on short-dated put spreads on BTC and ETH for downside protection. At the same time, there has also been buying interest in short-dated call spreads”
—Dick Lo - CEO, TDX Strategies (CoinDesk)
Global News
The War in Ukraine seems to be taking a back seat to domestic political chaos in the United States as the Republican in fighting leads to no elected speaker and a staunch resistance to electing Kevin McCarthy.
McCarthy has lost 11 consecutive House roll call votes in the bid to become speaker.
Rep. Patrick McHenry, a key McCarthy ally, told CNN they have “momentum” now and expects more votes today according to CNN live updates.
In his memoir Price Harry, the Duke of Sussex describes his 25 Taliban kills as "chess pieces taken off the board" from his time as Helicopter pilot in the Helmand Province of Afghanistan. He is taking flak for how he worded it
A group of hackers worked to leak the email addresses of 235 million Twitter users
Convoys of Sinaloa cartel members and soldiers set up roadblocks along various Sinaloa highways after the military recently captured Ovidio Guzman Lopez, a leader of the Sinaloa cartel who is the son of infamous illegal size lord Joaquin "El Chapo" Guzman
Bills safety Damar Hamlin who collapsed in an NFL game earlier this week had his breathing tube removed overnight and has now been able to talk with his family and doctors, the team said. Upon waking up he apparently asked who had won the game…. hard! (NYTimes)
The US is sending Ukraine an additional $3 billion in military aid with a huge package that includes dozens of Bradley fighting vehicles
A Connecticut judge has suspended the law license of a lawyer for Alex Jones on the heels of the Sandy Hook defamation trial. Why? We don’t know. But seems legit.
Thousands of people gathered this week to pay their final respects to Brazil legend Pelé, as a funeral procession carrying his coffin passed through the streets of Santos (BBC).
If you missed it we released a Covid Post reviewing the recent data dumps, vaccine commentary, and current events.
But use your judgement. If you aren’t open minded about the hypocrisy and lies we’ve seen during the last two years I would advise against it. It can be upsetting.
With the leaks that continue to come out at Twitter since Elon Musk’s takeover we have been shown a sophisticated and systemic effort to mislead the public by the government, different types of NGOs, and 3 letter agencies.
Most recently we have (above) evidence that there was an entire bot army of fake doctors on Twitter spreading ACTUAL misinformation on the pandemic, vaccines, and covid 19.
Absurd stuff.
Today is the anniversary of January 6th. There’s been a lot of noise recently about the details of that day but we now know without a shadow of a doubt that the FBI was present, and played a key part in orchestrating, encouraging, and antagonizing people that were there on that day.
This is shaping up to truly be a mini Reichstag Fire.
Half of the country still believes this was an actual insurrection and some have even said that the event was as bad or worse than 9/11 and Pearl Harbor.
We’ve covered this before, but it’s apparent to us now that this entire event was not what it initially seemed, calls for security support were continually denied, and chiefly, the Feds were there helping to make matters worse and egg on the MAGA psychos that were there that day.
In the above screenshot you can see Ray Epss, an FBI agent, within January 6th Committee records saying that he:
“I was in the front, I also orchestrated it”
He also told people there to “go into the Capitol”
This guy still hasn’t been arrested and wasn’t mentioned at all in the final January 6th report. Absolutely ridiculous lol.
You cannot make this up.
Not only was it conspiracy that the Feds were present that day (that’s now absolutely true), but the relentless campaign to label January 6th this horrific and scary event is now clearly a campaign to drum up hatred for the right and give the government the green light to monitor “extremists” into the future indefinitely.
Classic big government.
True insurrections involve guns, politicians getting dragged out into the streets, and other drastic things we see in third world countries with no rule of law.
As much as certain people on the left and in the mainstream media want it to be this big horrible organic anti government takeover attempt (and ANY google search will back this up, lol) — it simply wasn’t. It was a show. It was an excuse to ban Trump and others on social media, and it was the perfect event to get 50% of the country to support corrupt government without realizing it simply because they saw the people they hate storm the capitol.
Frustrating more people don’t get it.
It was merely a tool to seal the coffin on trump, expand the government’s cause for surveillance and monitoring of “domestic extremists”, and clinch the W for the Biden administration.
We never voted for Trump but we call it like we see it.
Big government is nobodies friend.
That’s all clear as day now and we hope people see it even if you do hate “the right”.
Hope everyone has a great weekend.
We’ll be hitting the gym, signing up for some firearms classes we want to take to further some of our training and experience, and working on Arbitrage Andy’s newest and biggest venture yet that we hope to launch this summer.
We’re currently reading two books if yall need a weekend read:
Fanatical Prospecting - Jed Blount
The 6:20 Man - David Baldacci
We will see paid subs Tuesday morning for our giveaway and guest post with
on how to get rich, stack assets, and get ahead in this insane world that we live in.
—Andy
Disclaimer - I am a 30 year online business owner, former trader and salesmen, and financial meme account brand. None of this should be considered formal financial or life advice — all views are my own opinion. You should thoroughly research financial decisions you make and know the risks involved.
We strive to synthesize and distill the best information on various topics out there combined with our no nonsense commentary on markets, politics, and life.
We’re still learning as well so make sure to drop a comment, add some feedback, or share our two cents so the community can become that much better.
“We’ll be hitting the gym, signing up for some firearms classes we want to take to further some of our training and experience”
Based
Love these free posts whenever I can get them. Will be upgrading to paid soon, thanks Andy!