They Don't Make 'Em Like They Used To
See You in Court
Has Spring Sprung for Crypto
J.D. Power's 2022 Initial Quality Study is out, and the results are problematic. According to the firm's research, new-vehicle quality plummeted by 11%. That's the most precipitous drop in the 36-year history of the survey.
The Point: J.D. Power asks new car buyers to rate the quality of their purchases. Overwhelmingly, these people are finding that they don't build cars like they used to. That's not surprising given how supply chain bottlenecks have forced manufacturers to cut corners when necessary to keep cars rolling off assembly lines. But the 11% drop is simply stunning. "The worst we ever saw was 3% year over year," David Amodeo, director of global automotive at J.D. Power, told CNBC. "That's just massive! I didn't have an appreciation for all of the challenges that everybody was going through until we saw the data and synthesized it." Of course, we all know the supply chain crisis has stoked inflation. But it's jarring to see so clearly that we're paying more for lesser products.
The Securities and Exchange Commission has denied yet another bid to launch a spot Bitcoin ETF in the U.S. This time, it was Grayscale's application to convert its Bitcoin Trust into an ETF.
The Point: The rejection hardly comes as a surprise. The SEC has denied every spot ETF application (those that would own actual Bitcoins rather than derivative instruments) that has crossed its desk. The regulator consistently maintains that the spot proposals would insufficiently protect investors. What's different here is that Grayscale isn't taking the verdict lying down. The firm announced it was suing the government watchdog shortly after the ruling was released. "Grayscale supports and believes in the SEC's mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation -- and we are deeply disappointed by and vehemently disagree with the SEC's decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market," said Michael Sonnenshein, Grayscale's CEO.
In a note, strategists at the bank wrote that the current cycle of "deleveraging" is nearly complete.
The Point: Let's just get this out of the way right up front: take this with a grain of salt. Analysts spend their days researching markets, but they don't have crystal balls. With that said, their work is obviously worth considering. JPMorgan's research shows that crypto firms and investors have drastically reduced their debt. With less debt in the system, assets should be less susceptible to wild price moves (in either direction). That could indicate the worst of this "crypto winter" is behind us.
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