FTX suffered a “complete failure of corporate controls” that culminated in an “unprecedented debacle”
New CEO John J. Ray, saying he has never seen anything like it in his 40 years of re-structuring
It gets better, well if this were an SNL script. The FTX audit firm of Prager Metis (who?) claims to be the “first ever CPA firm to officially open its Metaverse headquarters in the Metaverse platform Decentraland.” What next, Peter Pan as CEO and Tinkerbell as CFO? Actually it was a 30 year old CEO known to wear shorts to meetings while headquartered in the Bahamas, what could go wrong?
Long Term Capital Management preceded the dot.com bust, AIG was before the sub-primer bust, and we have Archegos, Trevor Milton convicted at Nikola, and FTX crypto going from billions to bust in a week or two. Recall FedEx dropped 20% in one day and Facebook/Meta is down 70% this year. How many more unexpected failures before investors run for the exits?
The Industrials are down 36,500 to 28,500 and then bounced to 34,000. I am not expecting much more movement until the new year. Next week is trade shortened Thanksgiving and then December which is rarely a big deal given month to month holidays. Be wary, momentum indicators are topping, so I am not ruling out another bout of selling, it is just a matter of when.
Last week we thought crude oil would rally given the weakness in the U.S. Dollar. Problem is, no one told the oil traders that. Oil topped just over $90 earlier this month. As I write this Friday morning January 2023 is down today 1.72% trading at $80 even. Now the dollar strengthens, the Chinese home builder bonds are near trash, and crude oil prices weaken. For those of you travelling this month, gasoline futures have likewise fallen from $2.60+ to $2.36. That should translate to low pump prices by Christmas.
I don’t know of a way to buy into the hottest product around. That would be the Taylor Swift 52 date Eras Tour. Ticketmaster sold 2 million tickets just this last Tuesday. The system received 3.5 billion requests. Ticket sales have been halted.
Next week will be shortened with no trading on Thursday and surely very light next Friday. Enjoy your holiday.
