November 21st, 2022

Welcome

"Only when the tide goes out do you discover who's been swimming naked" - Warren Buffet Here's what you need to know:

• FTX, one the world's largest crypto-currency exchange absolutely imploded on itself last week led by the CEO, Sam Bankman-Fried (a.k.a the J.P Morgan of Crypto, lol). Along with leading the company to bankruptcy and resigning as CEO, his net worth also decreased from $16 billion to $0.

• Twitter seems like it's being held together by a roll of duct tape and the few employees left. The company found themselves in a bit a chaos last week with the whole blue checkmark fiasco as impersonating became a little too easy. Furthermore, account bans have been lifted including former U.S president, Donald Trump.

• Meta fired 11,000 employees in efforts to reduce expenses. You read that right: 11 thousand! Does Mr. Zuckerberg's think he will be able to create his long-term project of the metaverse all alone? Looks like it.

• Elizabeth Holmes, founder and CEO of Theranos, has been sentenced to 11 years in prison for defrauding investors in her failed blood-testing company that raised over a billion dollars. This arrest has raised debate in the whole "fake it 'til you make it" culture.

Disgruntled investors include:

• Media mogul Rupert Murdoch

• Venture Capitalist Tim Draper

• Walgreens (the pharmacy & retail chain)

• Orgacle Founder Larry Ellison

Capital Markets: CPI Report entices investors

After the CPI report, markets climbed with the S&P 500 rose 6.5% and Nasdaq up 9.5% in the following days.

SpaceX, Elon Musks other, other company is seeking a $150 billion dollar valuation which would make it the 2nd largest privately held company behind Bytedance (TikTok's parent company). Apple continues to stay stable as many tech companies struggle to keep shareholders happy. In 2022, Apple has improved their gross profit margin and cost of revenue. Take a look at Apples structure since their IPO.

Crypto: The young, messy haircut, T-shirt effect

A quick run-down of what transpired with FTX:

1. Whispers of solvency issues & lack of assets to cover client funds came out two weeks ago

2. CEO Sam Bankman-Fried (SBF), tweeted all is well, don’t listen to rumours, inevitably leading to more rumours and uncertainty of the company

3. FTX's token, FTT dropped 75% in 1 day

4. Binance promptly announced they would acquire FTX – Then followed an even more prompted statements saying they will no longer acquire the exchange within a day apart

5. SBF apologized for back-run rumours, then resigns, leading to more tweets and statements about fraudulent systems and a whole bunch of nonsense to cover his back

6. FTX files chapter 11 bankruptcy leaving many shareholders and FTX users in quite a loss, exposing many public figure that had marketed FTX

These past two weeks has possibly been the most impactful time for crypto-currency. It has caused many to re-think not just crypto, but overall trust in corporate management. For some reason, a young crypto guru had the world fooled that he was a new titan of industry, equipped to change global currency systems as we know it today. Although many might be happy that crypto has taken this debatably inevitable dive, it begs to questions wether it was for the best, or has it slightly destroyed a system that may very well be beneficial to society in the future, all due to reckless management. Dive deeper: Visualized FTX Balance Sheet

Similar to FTX, Bitcoin is not having a great week either. After last week’s FTX collapse, the crypto market has been collapsing. BlockFi, another major player in the crypto world has also announced it was preparing for Bankruptcy. FTX’s collapse has brought the crypto market back to its 2-year lows, with over 3 Billion US$ owed to its top 50 creditors. From BTC to ETH, most cryptos are trending downwards. Bitcoin has lost over 15% of its value since the beginning of November.

Fixed income: CPI reports inflation has gone down

The latest CPI report indicated inflation has eased slightly in the month of October bringing annual inflation to 7.7%, down from 8.2% in September. After this report, the stock market soared to their biggest rally since 2020. Although we are seeing sign of cooling inflation, unemployment is expected to climb. In the recent months, we've seen 120,000+ layoff in major public companies (73k in tech alone), with Q4 layoffs just beginning. *Dot com crash layoffs were around 107,000*

Looking a little closer at the CPI data, as no surprise we're noticing Energy as the largest mover in percent changes, mostly due to fuel prices.

According to these experts, house prices are going down across the country. Unsurprisingly, Vancouver remained the most expensive city, where one needs an income of $220,700 in order to be able to afford the average home.

Bad news for renters: the average rent has gone up 12% in the past year. Do Canadians know what they’re doing when it comes to investing, mortgages or interest rates? Protests reveal basic misunderstanding of how the economy, monetary policy and compound interest work. Don't know what those things are? You should. Here's a great place to start

Commodities and World Currencies: Oil prices coming back to affordability?

OIL Crude oil markets are heading towards a more reasonable price for its consumers. Last week alone, oil fell more than 10%, representing the biggest drop in price since April of 2022. Increased COVID-19 worries in China as well as a slowing down international economy have led to this big slump in U.S. oil futures. With a recession looming around d the corner and consumer spending slowing down, many are predicting the economy will slow down in the upcoming months.

Industrial Metal Industrial metals surged initially when the Russia Ukraine war broke out causing supply shortage. However, as economic uncertainty rose and COVID measures increased in China, Industrial Metals performance took a tumble. After recent ease in COVID lockdown in China, prices have jumped again.

Grab n' Go

Trouble, trouble, trouble for Taylor. This is Canada. Will twitter make it? Just in case they don’t: How to download your Twitter Archive. Is Elon worth a $56bn pay package? Ask a Delaware judge. Survey says: Canadians want pay transparency.

Struggling to keep it together till Holidays? Bishops has got you covered. BU students can contact Empower Me Mental Health and Wellness Support 24 hours a day, 7 days a week, 365 days a year at 1-833-628-5589.