Macro & Markets: Bancor in Trouble, Stocks Still Not Cheap, & Inflation Predictors

A pulse on relevant macro, market, and crypto developments:

Bancor is in trouble

Bancor is an AMM with what it advertised as “impermanent loss protection”. This is provided by way of BNT printing to offset any IL yield farmers experience.

It has been rumored that Celsius and 3AC were large farmers in Bancor, and have recently withdrawn their LP and market dumped BNT, crashing the price and creating an inflationary spiral for BNT printing to maintain its IL protections.

As an extraordinary measure, the Bancor team has paused its IL protection.

Some sources with greater detail:

https://twitter.com/ChainLinkGod/status/1538750054865207296

https://twitter.com/fullyallocated/status/1538958931435094016

https://twitter.com/Bancor/status/1538662297635282949

Leading indicators of inflation continue to see positive moves

We shared some encouraging data on shipping container costs for all major global routes in our last update, and have some more positive data regarding inflation directionality. Remember, the Fed operates solely on lagging indicators. Here are some encouraging leading ones:

Apartment List National Rent Index leads official rent CPI by about 6 months and is on major downtrend.

Manheim used car prices lead used-car CPI by around 2 months, also continue strong downtrend.

Airfare prices look like they’re heading lower.

We are undergoing the most rapid compression of stock valuation multiples in history (!).

If you’re a SaaS investor, this may not surprise you.

Though rapid compression doesn’t necessarily mean cheap, historically speaking.

At bear market bottoms, the average trailing P/E ratio is about 11.7 (range of 5.7–17.6). The current S&P trailing P/E is 18.5. So multiple compression may not equal multiple bottoms quite yet.

Stay safe out there. 🤝

Disclaimer

The information presented here is meant for educational purposes, and is not investment advice. Any past performance, projection, forecast or simulation of results does not necessarily indicate any investment’s future or likely performance. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by STRIPS Finance.

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