The Biggest Mystery on Wall Street:
- Zeke Faux, a Bloomberg reporter, joins the podcast to discuss his new book "Number Go Up: Inside Crypto's Wild Rise and Staggering Fall".
- Zeke has investigated financial frauds and has been around the world investigating crypto-related activities.
- The book explores the shady characters involved in the crypto industry, including scammers and questionable founders.
- Tether is highlighted as a central figure in the book, with its stablecoin being compared to chips in an offshore casino.
- Tether's lack of transparency regarding its backing raises concerns among regulators and market observers.
- The discussion touches on the use of crypto for illegal activities such as human trafficking and scams targeting unsuspecting victims.
- The conversation also delves into the allure of crypto for investors looking to get rich quick and how scammers take advantage of this mindset.
- Despite the risks associated with crypto, there are still those who believe in its potential and promise.
When Will the Recession Arrive?:
- The current interest rate hiking cycle has not led to a recession as expected by many market participants.
- Leading indicators suggest that a recession should have already occurred, but it hasn't materialized yet.
- The historic rate hikes haven't had the desired impact on slowing down the economy or causing a significant downturn.
- Unemployment rates remain low at 3.5%, indicating that the economy is still strong despite tightening measures.
Why Hasn't There Been a Recession?:
- While there are no definitive answers, one possible explanation is that previous assumptions about interest rates' impact on the economy may need to be reconsidered.
- Other factors like corporate capital expenditures (Corp CapEx), consumer expectations, margins, etc., have not aligned with predictions of an imminent recession either.
Potential Impact of Blockchain Technology:
- Various companies like Visa, JP Morgan, Citigroup are exploring blockchain-based solutions for faster payments and merchant transactions.
- The adoption of blockchain technology by traditional financial institutions could lead to more efficient processes and lower fees for international transfers.
- However, there is skepticism about whether these initiatives will actually come to fruition or have a significant impact on the overall economy.
The VIX (volatility index) and Market Conditions:
- The VIX is at multi-year lows during a tightening cycle, which is unusual.
- The low VIX suggests that volatility and liquidity are not major concerns in the market currently.
- The cost of money, or interest rates, doesn't matter as much when consumers and corporations are already well-positioned with cheap debt.
Sector-Specific Recession Impacts:
- There may be rolling recessions in certain sectors such as housing, technology, freight, and entertainment industry.
- Some sectors like consumer cyclical and corporate communications may not be affected by recession due to their relative stability.
Mystery of High Yield Spreads:
- High yield spreads have been going down despite negative economic indicators such as rising consumer credit, bankruptcies, and defaults. This is seen as a mystery on Wall Street.
Rising Oil Prices and Consumer Demand:
- Rising oil prices could potentially lead to higher inflation and impact consumer demand for goods and services.
UFC-WWE Merger Potential:
- The UFC-WWE merger could create a new powerhouse sports entity called TKO that combines wrestling and fighting events. It has the potential to become more profitable globally.
Delta Airlines Stock Performance:
- Delta Airlines stock is under pressure from rising oil prices and unrealistic expectations for future performance.