Get ready. This is gonna be one helluva fourth quarter. Interesting? For sure. Entertaining? If you like horror movies. Scary? Yup, even Halloween won’t top all this. There’s some real s**t starting to hit the proverbial fan. Keep your anti-anxiety drugs close.
So let’s start with what’s going on in “legal land.” First (in no particular order) comes the trial of Sam Bankman-Fried. Remember him? The head of FTX, the crypto ’empire’ that collapsed and allegedly used customer funds for a variety of “extra curricular adventures.” SBF was once going to be the rescuer of several bankrupt crypto firms but now faces some serious jail time. His ex-girlfriend and head of one of FTX’s subsidiaries has cut a plea deal with some ‘juicy’ testimony to come. This trial may very well have a BIG impact on the crypto (bitcoin) sector. Want a “tidbit” of some of what could come?
SBF reportedly considered paying former President Donald Trump $5 billion not to run for office, according to a new book by author Michael Lewis.
Next, a trial accusing former president Trump of fraud opened today in New York. The prosecution seeks a huge fine AND possibly seizing the Trump Tower in NY. This trial may have some very real unintended consequences, not only on the 2024 elections but also on companies doing business in NY. Or, considering doing business in NY. (Remember to NOT value your child’s drawing at $100K when you apply for a bank loan.)
Next 2.0. At some point very soon you can expect a court room battle between several firms that have sued the SEC (Securities Exchange Commission….not the football conference) to approve a spot bitcoin ETF. One judge has already sided with Grayscale and against the SEC, ruling the SEC should approve a bitcoin ETF. Again, this potential trial could have enormous impact on the crypto regulatory sector.
On to the financial markets. For the first two quarters of the year, investors frolicked and ignored such trivial things as inflation, rising interest rates and a potential recession. The third quarter ended with the realization that the Fed really means to quash inflation by keeping interest rates higher for longer. Labor strikes are spreading (not just the auto workers) for higher wages, a government shutdown was averted but rescheduled for the middle of November, political strife is picking up and the aforementioned courtroom battles are in play.
BUT, the most important thing? Investors realized stocks (and bonds) can go…….down. What happens if everyone decides to take some money off the table before year end? Hello fourth quarter.
But the worst thing about the beginning of the fourth quarter? What sport do I follow? College football is into week 6, the NFL is into week 5, the major league baseball playoffs are just beginning AND the NBA has opened training. Sport overload.
This new quarter is way over my head. Heading for the ‘pill cabinet.’ Better load up.