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US Republicans clinch majority, investment giants bet on turmoil and the crypto fallout spreads. Republicans won a narrow House majority tha [View in browser]( [Bloomberg]( US Republicans clinch majority, investment giants bet on turmoil and the crypto fallout spreads.  Republican showing Republicans won a [narrow House majority]( that gives them the power to halt President Joe Biden’s agenda, yet their slim margin marked a letdown for a party that had counted on decisive election results as a springboard for the 2024 presidential race. The party finally gained the minimum 218 seats needed to control the chamber, the Associated Press reported Wednesday night. While slender, the majority hands Republicans control of committees with subpoena authority, allowing them to make good on campaign pledges to investigate Biden’s administration and family, as well as social-media companies that conservatives claim are biased against them. Turmoil bets Investment giants with a combined $2.3 trillion in assets are [bracing for a challenging 2023]( and casting their nets far and wide for opportunities. Fidelity International CEO Anne Richards said that sentiment in Asia — including China — could rebound faster than other parts of the world. Ontario Teachers Pension Plan CEO  Jo Taylor is looking to mining assets, with rare earth minerals and metals a key target. Meanwhile, Temasek International’s Chief Investment Officer Rohit Sipahimalani said now is the time to slow investments and help companies in its portfolio survive the impending economic downturn. Crypto fallout After helping spark a crypto crisis, former FTX.com CEO [Sam Bankman-Fried published a series of tweets]( that combined apologies for his failings with his perspective on what went wrong at the companies he founded and ran. “We got overconfident and careless,” he [said](. Meanwhile, the fallout from FTX is[sideswiping the Gemini crypto exchange](that’s owned by the billionaire Winklevoss twins. It halted redemptions from its Earn product, which lets investors accrue as much as 8% in interest by lending out their crypto, leaving $700 million of customer money tied up. Cautious markets S&P 500 futures fell 0.1% as of 5:21 a.m. in New York, while Nasdaq 100 contracts were flat. The dollar traded near session highs, weighing on most Group-of-10 currencies. Treasury yields climbed across the curve, led by 10-year rates. Oil and gold fell, while Bitcoin pared earlier declines. Coming up… It’s a busy day for Federal Reserve speakers, starting with St. Louis Fed President James Bullard at 8 a.m., followed by Fed Governor Michelle Bowman at 9:15 a.m and Cleveland Fed President Loretta Mester at 9:40 a.m. An hour later, we’ll hear from Fed Governor Philip Jefferson and Minneapolis Fed President Neel Kashkari. US jobless-claims data are also due, along with a sale of $15 billion of 10-year TIPS. In the UK, Chancellor Jeremy Hunt is set to deliver a fiscal statement.  What we’ve been reading Here’s what caught our eye over the past 24 hours: - [Fatal crashes]( highlight rising danger of illicit charter flights - Porsche debuts a modern, [$220,000 off-road 911Â]( - Empty plots in [Dubai’s palm-shaped islands]( reveal risks of housing boom - Only [bananas for runners](: Hong Kong’s struggle to exit Covid curbs - China checks on [banks’ liquidity]( - UK braces for [£55 billion of spending cuts](, tax hikes - Starbucks US workers[plan a walkoutÂ]( And finally, here’s what Joe’s interested in this morning On the Odd Lots podcast today, we begin to tackle the downfall of the Sam Bankman-Fried empire. Our first guest is [Evgeney Gaevoy](, the founder and CEO of Wintermute, the largest crypto market-making operation. His firm was an active market maker on FTX, and while it got some money off the exchange before it went bust, it did ultimately take a hit. FTX had a reputation for being a high-quality place to trade, in part because it allowed for easy cross-margining of assets (basically allowing a trader to use any base asset as collateral to get leverage). But one thing that Evgeney notes is that the actual throughput on the site -- how much one could trade -- was, in his words, "abysmal." FTX was scaling, he said, but not by nearly the numbers it needed to be. So in his view, that cross-margining came at a computational cost that was proving difficult to improve. Another thing that's interesting is he notes that, at least as of when we recorded the interview on Monday, that Wintermute had pulled its market-making activity from some lesser "tier three" exchanges right now. Not necessarily because they think they're going to collapse, but basically that they need to do more due diligence in order to feel comfortable trading there. Of course, the problem this week is that we're seeing more operations seize up and freeze redemptions, which in banking can create self-fulfilling spirals. We also talked about his perception of Alameda, and how it managed to (seemingly) lose so much money. One theory that's floating out there is that it was essentially a loss leader for FTX, that rather than serving as a true market maker, its job was to take losses in order to give professional investors more gentle liquidations on the site. He's not sure if that is in fact the case, and it remains a big mystery, but it seems plausible. On this note, our second guest in the episode is [James Block](, who was an [early FTX/Alameda whistleblower](. He made the good observation that providing trading for professional institutions is not necessarily particularly profitable. Coinbase has been an example of this, where the margins on retail trading are far higher than they get from the pro offerings. As such, you can imagine how FTX, despite having built up this massive position and reputation as a top destination for professional crypto traders, may not have been the money printing behemoth that everyone assumed. The whole conversation is worth listening to. Check it out on [Apple]( or [Spotify](. And tomorrow we'll be releasing the second half of our look into FTX, with a conversation with Bloomberg Opinion's own Matt Levine. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwartÂ]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. 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