Back to a Bull Market?

[The Daily Peel... ]() Nov 14, 2022 | Peel #337 Market Snapshot Thursday’s euphoria waned to end the week on Wall Street, with stocks gaining slightly and the USD extending its drop. FTX declared bankruptcy, and SBF may be on the hook criminally. Stakeholders are swirling to grab the last bits of value from the belly-up exchange. [image] This Is the Holy Grail of Investing [image]( There’s a reason that successful founders like Marc Andreesen and David Sacks go into venture capital—it’s f*cking awesome. Huge paydays without grueling hours, wearing Allbirds to work, and having the best entrepreneurs in the world grovel at your feet. What’s not to like? The only problem is breaking in. You think landing a PE interview is hard? Getting into VC is on another level. To put yourself in the best position possible, you need to know the tools of the trade. 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Banana Bits - WeWork will [close about 40 locations](=) ahead of next year as it trims some of its fat going into next - The OG teen vaping stick [secured funding]() to stave off bankruptcy but will reduce its payroll by 30% - Sequoia and other FTX backers are marking their holdings to zero, causing [9-figure losses]( overnight - The U.K. is taking a look at [attracting more immigrants](=) to fill its gigantic labor hole Macro Monkey Says Can JPow Finally Downshift? The Fed breathed a collective sigh of relief after October’s CPI print. The fight isn’t over, but the prospect of bashing the economy with a hammer has lessened. It’s even better than the headline—core CPI, which excludes food and energy, [rose only 6.3%]() YoY. Economists expected much heftier increases. - For a while there, there was concern that rate increases might not have had the same horsepower they used to. That would’ve been a big problem for the Fed, since it lacks many other inflation-fighting tools in its arsenal. - JPow was clear that he’d rather wallop the economy than be too light on inflation and risk entrenched price increases. Since the current path seems to be working, he can just stay the course instead of turning it up to 11 - Betting odds for a 50-pointer in December sit at [around 90%]() The talk of the town is now where the terminal rate will end up. Since price gains are already slowing, the Fed might opt to slow its pace of increases but still plan on keeping rates steady somewhere around 4%-5%. Comments from Fed governors have been mixed. Some are already declaring a slower path forward, while others are tempering the enthusiasm and saying there’s still a long road ahead. Whether the upbeat print will lessen the pain of a recession is up in the air. Every day brings another behemoth announcing layoffs, and you gotta think those unlucky few will pare back their spending, which will ripple through the system. But if we get a full-blown Santa Claus rally to end the year, and people’s wallets feel a little fatter while they’re holiday shopping, sidestepping a 2023 recession could be in the cards. Meme of the Day [image] [Source](=) What's Ripe Crude Oil (CL.1) ↑ 3.26% ↑ - C-19 Zero is getting scaled way back in China, pointing to more bustling business activity and, therefore, higher oil demand - It should be interesting to see if China continues loosening restrictions and rejoins the endemic-C-19 world Coinbase ($COIN) ↑ 12.84% ↑ - When one of your biggest rivals goes belly up, that market share has to go somewhere, and $COIN stands to scoop up many of FTX’s former customers - Queen Cathie scooped up shares this week, betting that DeFi will survive its Lehman moment What's Rotten Softbank ($SFTBY) ↓ 3.22% ↓ - Masa has taken it on the chin since the C-19 tech bubble popped, with his startup-focused Vision Fund [down $10 billy]() in the quarter - The problems got worse this week as the battered Japanese bank got caught in the FTX imbroglio Duolingo ($DUOL) ↓ 13.36% ↓ - DAUs grew [over 50% YoY](), but a hefty loss in the quarter sent shares downward - The annoying a** bird can get on your nerves, although maybe that’s why the language-learning app works so well for people Data Peel [image] [Source](=) Thought Banana A Bigger, Badder Tax Man Root canal or dealing with the IRS—which is more enjoyable? The American tax agency has been underfunded and outmanned by armies of lawyers minimizing every penny that huge conglomerates fork over each year. Remember the Inflation Reduction Act? Buried under the glitzy climate grants was an [$80 billion investment](=) in the IRS, giving it the firepower to wrangle taxes out of the most well-lawyered individuals and companies. - Best case scenario: the extra bodies and tech upgrades will increase tax income by far more than $80 billion in the coming years - To put it in perspective, the entire agency operated under a shoestring budget of less than $14 billion last year - This past week, Joey B [tapped veteran taxman Dan Werfel](=) to head up the newly equipped agency If you’ve ever mailed a check that the IRS didn’t get or took months to open and deposit, you have a tiny understanding of the stone age that this key government institution currently operates in. Take the last few years’ stimmies. Theoretically, sending out checks to taxpayers shouldn’t be that difficult—they already have most bank accounts and addresses. Yet between PPP payments and processing paper returns, the IRS [found itself buried]() under a mountain of mail that took months to crawl out of. That’s embarrassing for the biggest economy on the planet. We can and should do better. Opponents of the funding say the IRS is inherently screwed up and should have its power limited. But that guarantees crappy tax collections, which often mean higher-than-necessary rates for real workin’ folk. The [CBO estimates](=) that “a $1 increase in spending on the IRS’s enforcement activities results in $5 to $9 of increased revenues.” Those are Madoff-type returns. The big question: Will the IRS be able to get its act together and generate a return on its $80 billion transformation, or will it get swallowed up by bureaucracy and bloat? Banana Brain Teaser Friday — If you randomly choose one of the following answers to this question, what is your chance of getting it right? A) 50% B) 25% C) 0% D) 25% 0%. No matter which answer you choose, you are incorrect. All of the answers create a logic loop. Today — It’s 100 bananas off the [WSO's VC Course](=). LFG! I love to dance and twist and prance, I shake my tail, as away I sail, wingless I fly into the sky. What am I? Shoot us your guesses at [vyomesh@wallstreetoasis.com](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) with the subject line “Banana Brain Teaser” or simply [click here to reply!](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) Wise Investor Says “Be a Continuous Learning Machine.” — Charlie Munger How would you rate today’s Peel? [image](=) [image]() [image](=) [All the bananas](=) [Decent]() [Rotten AF]( Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? 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