FTX, Binance and Crypto

While everyone is watching election ballot drops and wondering what the hell is going on in Maricopa County, investors in FTX are wondering what the hell is going on with their accounts. This is getting a lot of coverage in the financial channels, but outside of that … not much! Yet, those who are impacted are probably feeling really horrible about what’s going on. Binance is in then out. What are these folks going to do?

Overall, what does this mean for crypto? Do people who have money elsewhere invested in various cryptos head for the exits, hold on for dear life (HODL), or what? Bitcoin and Etherium took a beating today on the market, and it will be interesting to see how the whole crypto market holds up in the days, weeks and months ahead.

Disclosure: Zero holdings in crypto.

Stocks and Election Thoughts and Elon Musk

• Since I last blogged, the stock market went into a bear market. It remains stuck! Every rally attempt has been beaten down by the bears, chief among them Federal Reserve Chairman Jay Powell. He’s been on a relentless interest rate hike to tame the beast of inflation.
• “Too much money chasing too few goods.” All the covid stimulus, including the stimulus checks, eviction moratoriums, halting student debt repayments, rates near 0%, and government deficit spending and various bills (infrastructure, “inflation reduction act”), juiced spending and inflated asset prices. Meanwhile, the pandemic itself has led to economic shutdowns and supply chain shortages around the globe. And did I mention a war in Europe? Russia invading Ukraine and the subsequent sanctions has driven up the costs of oil and natural gas, while putting pressure on things like fertilizer, wheat, and other things.
• As rates go up, stock market valuations have come down. In addition, corporate earnings reports have been lackluster and future guidance has been poor. We are also seeing companies announce hiring freezes and layoffs. This could accelerate going forward.
• California’s tax revenues are coming in light! To be expected, as California receives a lot of tax revenue from a small number of people and companies, and if earnings are down and capital gains are non-existent, tax revenues will fall short.  So much for the budget surplus of yesteryear!

My thoughts on it all: I’m 100% invested and have ridden the bear market down. I continue to add to positions and reallocate to stocks and sectors that I think will do well going forward. I’m not chasing the hot stocks and sectors that have outperformed during the bear market. I’m more interested in tech and growth that will outperform once the bear market ends and the new bull market unfolds. Patience… Patience… Patience…

• Elon Musk takes over Twitter, and immediately announces layoffs and upcoming changes to the platform. There are a lot of “hot takes” on how this is going and how this will play out. My hot take is that he makes a lot of changes, the changes are mostly well-received over time, and he takes Twitter public again as a hot IPO. Or maybe I’m just borrowing that hot take from something I read on Twitter! 
• NFL Sunday! Another day to remind me that my fantasy football team is a bunch of hits and mostly misses week to week! But at least the Dolphins have a fun offense to watch again.
• Election hot take: I don’t know. Generic polls seem mostly useless, as most House districts are gerrymandered. Maybe the polls have more value in statewide elections. Polls seem close for the Senate. GOP might get the House. I think the GOP does well in local races that are out of the national spotlight. 
• The Senate races are going to be close and contested. I’m not an election denier or believe cheating was found in 2020. But, I’m not sure our election systems aren’t designed to allow cheating by both sides. I just don’t know how they would do it, or do do it. We have so many different voting systems around the 50 states, different rules and laws, precincts, polling locations, drop boxes and mail-in ballots. We don’t have voter ID. Signature validation software is sketchy. Again, I don’t think any cheating was found in 2020. 

And Then, Two Years Later

• Has it been two years since I blogged? We were all so much younger then! Netflix… Federal Reserve… Apple Macs… Let’s gooooo….
• Meanwhile, Joe Biden is President and kinda/sorta hanging in there, with inflation raging, war raging, crisis on the border raging, and the stock market teetering. But it seems like COVID-19 is winding down a bit, right? RIGHT?
• I heard a federal reserve dude, Boston I think, talk about how maybe - just maybe, the Fed wouldn’t have to be so aggressive if the economy was slowing down. Or something like that. We’ve also heard that they feel they need to get to “neutral” faster than anticipated.
• Do we talk about Netflix stock today? That’s a big drop. If you recall from my earlier blog posts and podcasts, I mentioned maybe 20 years ago or so that I didn’t buy Netflix because I was worried about competition. I WAS EARLY, OK??? $NFLX
• I will say about Netflix that it seems like their in-house content is of less quality than some of their competition. Some is good enough, for sure. But some… eh. And the prices have gone up.
• Happy 420 day! 
• Netflix is still great though. Watch it almost daily here!
• I bought a Mac Studio M1 Ultra. Probably way more than I need but it was in stock locally so just got it.  First time with a Mac, and you always remember the first time! More later. Maybe I will do a blog post on what I think of the thing. Zippy but strange coming from a Windows only user for decades.
• Maybe COVID ended up hurting Netflix, in that the damn virus hurt production releases of some of the hits. It’s hard coming back to a show after a long break. “We were on a break!”
• If the Fed doesn’t hike or hints at a “wait and see” approach, does the market rally?
• If Russia ends up winning in Ukraine at least partially and things wind down, does that help?
• End of COVID dividend? Back to travel? Back to doing things other than just streaming Netflix? (I’ve been traveling a lot lately).

Stocks... Election... ACB Hearings...

• Stock market mixed a bit today.  Earnings season is kicking off.  JNJ COVID19 vaccine trial halted.
• What's better for stocks? A blue wave sweep where Biden wins and the Dems take the Senate and keep the House?  So says Guggenheim's Scott Minerd.
• Disney announces that they're reorganizing and focusing more on streaming!  Shares trading about 4% higher as I type.
• It's Amazon Prime Day!  (If you need another Echo Dot).
• The big question for investors, is whether Disney stock will receive a higher PE multiple on the news.  I have owned $DIS for a long time, and it has underperformed this year and recently. Hard for travel and vacation related stocks to thrive in a COVID19 world.
• Yesterday, I tuned into the opening remarkds on the ACB hearing for the SCOTUS. I decided not to watch today.
• But I did watch some of the Apple Event on the new iPhone! The latest and the greatest! These things used to be kind of exciting, but it seems like improvements are marginal in the terms of how most of us use the phone.
• I watched "Christopher Robin" on Disney+ recently. (Spoiler: No time travel or world ending plague involved).
• I would think investors prefer gridlock, like we have now. The government is basically at a standstill. No legislation can be passed. Status quo! Full speed ahead!
• The Blue Wave Sweep would happen if the polls are right as of today. Are they?

ACB Hearings and Stocks Surging!

• The stock market rally continued today...  Apple iPhone event?  ACB hearings?  Amazon Prime Day?  Or just general enthusiasm about the economy?
• Yes, the economy isn’t working for everyone - if that’s even a thing. I think a lot of the strip mall shops and restaurants are still struggling due to people wanting to avoid COVD19. But other parts of the economy around tech, remote work and shopping are doing well.
• I’d like to take October off from the movie streaming services.  At least the “new releases” lists. There is one Halloween horror movie after another. Not my thing!
• The Nasdaq is just 1.5% down from all-time closing high!
• Who has had a Beyond Meat burger (or anything)?
• I suppose the COVID19 vaccine and therapeutic stocks are another speculative area.  I think we know the major players, right?
• I did watch The Social Dilemma on Netflix. The horror of social media...
• I watched some of the Amy Coney Barrett hearing today. Uh, nobody is going to learn anything watching that. Just looked like a bunch of nonsense to me.
• Amazon Prime Day tomorrow.  If you don’t already have 12 Echo Dots around your home, here’s a chance to pick up a few more.
• Started watching Home After Dark on Apple+ and it’s not bad.  Kid sleuth tries to solve a crime sort of thing.
• Anyway... Happy Columbus Day!

Trump or Biden?

• Trump or Biden?
• Watch the polls!
• If the polls tighten over the next 3 weeks to within a few points, then Trump will win. I believe this means that the polls up through today were engineered. And, that the polling companies will have to close the gap to remain credible after the election. 
• If the polls don’t tighten, then Biden will win in a landslide. Everyone on Twitter who told you the polls are engineered are just batshit crazy!
• Whoever you want to win, if he doesn’t, relax! There will be another election in 4 years!

Are the Polls Acccurate?

Are the polls accurate?

If you look at the overall national polls, Biden is up by a large amount. If you look at the polling in the Battleground states, and even some of the usually “safe” Republican states, Biden is up.

Are the polls wonky? Have the polls been manipulated to show Biden running away with the election to discourage Republican voters?

I think one “tell” that the polls could be rigged would be if the huge Biden leads start to narrow the close the country gets to the election date.  If Biden truly is leading by a significant margin, the polls will remain the same and Biden will cruise to a landslide victory.  If Trump is ahead or the nation is closely split, the polls will have to narrow to within a reasonable margin of error to maintain credibility going forward.

Watch for the polls to narrow.  If that doesn’t happen, Biden will probably win big.  If the polls narrow, then look for a Trump win.

That’s my opinion as of today, anyway.