🍋 Bonus Szn bout to be LIT

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Short Squeez
December 23, 2021

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“When you’re rich, you don’t write checks. Straight cash, homie.” — Randy Moss

Good Morning! It's Christmas szn, which means Mariah Carey’s "All I Want For Christmas Is You" is back. Despite being nearly three decades old, the song made another return to top of the Billboard Hot 100 song charts, the first time a song has ever reached that level of popularity in three distinct runs (2019, 2020, 2021). Supply chain issues aren't sparing anyone and are hitting pet food now. Some pet owners have been forced to feed their pets human food as they struggle to find brands of food their pets eat. In other major news, Taco Bell is adding chicken wings to its menu on January 6, which will last for a week.

1. Story of the Day: Bonus Szn Bout to be LIT

Bonus szn on Wall Street is expected to be a record one this year as deal-making activity has been off the charts. Global M&A topped $5.5 trillion through last Thursday, which had never previously topped $3.5 trillion.

Largest US banks have all had record years. Morgan Stanley made $4 billion of profit in Q1 this year (had averaged $3 billion of annual profit during CEO Gorman's first half-decade of running the firm). Goldman broke its annual profit record around Labor Day and JPMorgan is on track for $45 billion (hadn't pulled $25 billion until 2018).

Despite the expected fat bonuses, there is still a feeling of unease on Wall Street. Many are exhausted from the 2 years of the global pandemic, which still seems to be going strong. There is also a sense that the work is boring and more fun opportunities lie elsewhere.

Crypto blew up this year and stories of how 18-year-old crypto traders are overnight millionaires are not settling well with the Wall Street elite. Many also believe that the market is frothy af, artificially stimulated by JPow's printer, and the show is about to end or burst soon.

Despite the gloom and doom, we predict everyone will be OK once the cash hits their bank account.

Short Squeez Takeaway: Thicc bonuses have been a way for Wall Street firms to keep their workforce "happy" for a long time. Banks showed restraint last year, wary of giving large bonuses in a pandemic. But the floodgates are expected to open this year. For y'all that stuck around after thinking about quitting every day of this year, bonus day might be the happiest day of the year for you. So make sure to take it all in, savor it, and get ready for another year of grinding in 2022.

Source: Axios, Bloomberg

2. Markets Rundown

Stocks ended higher for a second straight session yesterday extending a rebound from a 3-day losing streak on omicron worries.

Movers & Shakers

  • (+) Tesla ($TSLA) +7% after Elon Musk said he sold “enough stock” to reach his goal of offloading 10% of his shares.

  • (+) Coinbase ($COIN) +3%  after Oppenheimer named the company a top pick for 2022.

  • (–) CarMax ($KMX) -7% despite reporting better-than-expected quarterly results.

3. Top Reads

  • The best Wall Street deals of 2021 (Puck)

  • MicroAcquire raises $5 million for its startup sale marketplace (Axios)

  • The paranoid style in American investing (BB)

  • Self storage is the pandemic’s hot property (WSJ)

  • Wall Street culture is changing (BB)

  • Chipotle hides the assembly line, testing new online-order-only ‘Digital Kitchen (Verge)

  • Restaurants are packing their host stands (Eater)

  • Why friends are buying homes together (NBC)

  • Maersk buys pan-Asian warehouse operator for $3.6 billion (Axios)

A Message from Polymarket: Bitcoin or ETH?

After peaking in early November, cryptocurrencies have been in a bit of a slump lately. At the time of writing, Bitcoin was down 13.8% and Ethereum was down 14.8%. In a note, chief market strategist for All Star Charts J.C. Parets stated that “The evidence points to this being yet another derivative-induced selling event.” However, even with the current state of the market, some analysts believe that this could lead to the opposite effect happening at the start of 2022. Will the currencies bounce back as we close out the year?

Which cryptocurrency will perform better in December 2021: Bitcoin or Ethereum?

Polymarket traders are currently forecasting a 45% probability that Bitcoin will perform better than Ethereum by year end. Will Bitcoin be able to mount a comeback or will Ethereum continue to perform better?

Trade now or follow the odds on Polymarket. Use code “OWS” to get reimbursed up to $100 on your first day of trading!

4. Book of the Day: The Perfect Bet: How Science and Math Are Taking the Luck Out of Gambling

For the past 500 years, gamblers-led by mathematicians and scientists-have been trying to figure out how to pull the rug out from under Lady Luck. 

In The Perfect Bet, mathematician and award-winning writer Adam Kucharski tells the astonishing story of how the experts have succeeded, revolutionizing mathematics and science in the process. The house can seem unbeatable. Kucharski shows us just why it isn't. Even better, he demonstrates how the search for the perfect bet has been crucial for the scientific pursuit of a better world.

“Luck is just probability taken personally.”

5. Short Squeez Picks

6. Daily Visual: Government Spending on Childcare for Toddlers

Annual public spending per child on early childhood care

Source: NYT

7. Daily Acumen: Influence of Stress

As well as causing mental and physiological responses, stress tends to amplify other biases as well. In the face of stress, almost all human mental biases tend to worsen as the body goes into fight or flight mode. 

Stress is the cause of rapid decisions and immediacy, which has given rise to the elite soldiers' motto: "In combat, you will never rise to the level of your expectations, but you will fall to the level of your training." Take a breath, step away and take a few moments before making any important decisions. 

Source: FS

8. Crypto Corner

9. Memes of the Day

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