Happy Holidays, Merry Christmas, and jingle all the way. Week 51 which went by, a week leading up to a jolly weekend and a week with no rate hikes from the feds. However, this week did mark some bizarre turn of events which no one can fully conclude the meaning of. This week also highlighted some of the biggest losers and causes of losses, and the one responsible for all the losses as 2022, a week away, almost comes to an end. Here’s the top news from the space of money, investing, fintech and finance from the Pen Team.
CHOPPING WOOD STOCKS
In February this year, Cathie Wood founder and CIO of ARK Innovation, said that her innovation stocks are “way undervalued” fast forward 10 months and that might actually be true. Since 2021, her investment firm has shed almost $50bn in assets, which effectively means she’s lost on every single stock the firm holds, which includes Tesla Inc.
LOW ON BATTERY
The Pen team’s top 5 favorite celebs to cover and uncover are busy doing too many things at once, and apart from being one of the founding members of OpenAI which has created ChatGPT and officially put Google in “code red”, he’s also busy figuring out what the hell he’s going to do with Twitter. All the while dumping Tesla shares (essentially taking investors money who still believes in the mission of Tesla) to fund his next brilliant idea, which some might argue is the same SBF has been doing (taking investors' money and using it frivolously), Elon just did it legally. Consequently, the share has dropped almost 61% wiping out the most investor wealth of any other company (apart from FTX of course).
OPM – OTHER PEOPLE’S MONEY
Since we’re on the path of losing, let’s go a bit local. The hometown of Penning Copenhagen situated in Denmark, which is also the country home to ATP, which is a compulsory pension fund that all wage-earning citizens of Denmark are obliged to pay (8%). As early as September, ATP blatantly stated that Private Equity may become a ‘pyramid scheme’, and are themselves now the subject of a giant loss of "the" people’s money. $36bn to be exact. The blame Is shifted toward raising inflation, drop in financial markets, and rate hikes but the core reason for the giant loss is due to ATP gearing their investments, which essentially means they’ve invested for borrowed money on top of the people’s own money. DeFi much?
BILLIONS DOWN THE WELL
When the going is good for all and the market is headed towards the northern hemisphere, one might think it’s Christmas every day. Unfortunately, when times are too good you lose touch with reality and start to become a bit more frivolous, thinking that it’ll all recover back tomorrow, kind of like Wells Fargo might’ve done. The Bank illegally charges fees and interest on auto loans and mortgages and had cars wrongly repossessed and consequently have to pay $3.7bn in fines…to whom? After they made how much money from “stealing” money from clients? Ripple CEO blatantly compares their (Wells Fargo) money mismanagement to the same as FTX collapse. Meaning it’s okay to be frivolous with clients' money as long as it’s regulated or?
A CASE OF HOUDINI
The whole FTX drama has been a bit of a head-scratcher and giant face-palmer, but it seems like the agents of destruction have mastered the arts of the great Houdini. Not only did SBF make bail on a $250million bond after claiming to only have $100K in his bank account, his former partner the CEO of Alameda Research Caroline Ellison, who was facing 110 years in prison has gotten off with a plea deal of $250K bail (that’s x1000 less than SBF’s bond), surrender of travel documents and forfeit of assets.
COINBASE GETS VASP’ED
Now to something a bit softer and more positive in terms of progression. Coinbase recently secured a VASP registration in Ireland VASP which means Virtual Asset Service Provider, means a company is allowed to conduct business activities revolving around digital assets, something which Penning has been in possession of since mid-2022. Just Fyi.
US SENATORS XMAS GIFT
Now for some more good news, depending on how you chose to look at it. A week after delivering his farewell address on the floor of the U.S. Senate, outgoing Pennsylvania Sen. Pat Toomey has quietly introduced another piece of cryptocurrency legislation. The Stablecoin TRUST Act—a backronym for Transparency of Reserves and Uniform Safe Transactions—would establish a federal regulatory framework for "payment stablecoins," and is designed to guide Congress towards a path of "sensible regulation of cryptocurrencies". Now we all think that’s great news, as it shows signs of regulators wanting to work together with the industry rather than working against it. As for stablecoins, Penning has something very exciting to showcase in early 2023.
SEARCH BUT DON’T TWEET
Now back to Elon. Why what and why now only Elon knows. But Twitter has officially added BTC and ETH price indexes to its search function. We’ll just leave it at that.
Till we yield again