The Unhedged Awards

Episode Summary

Executive Summary: The Unhedged podcast presents its 2023 awards show, celebrating winners and losers in finance. Hosts Ethan Wu, Robert Armstrong, and Katie Martin award Unhedgies for categories like Scam of the Year (Binance), Deal of the Year (Michael Dell's VMware deal), Central Banker of the Year (Hafize Gaye Erkan of Turkey), IPO of the Year (NFT Gaming Company), Prediction of the Year (Unhedged's bond call), and Trade of the Year (cruise line stocks). The episode highlights key market events, including the banking crisis, IPO drought, and central bank policies.

Main Topics: Scam of the Year (Priority: 5/5): Binance wins for its $4.3 billion fine and extensive illegal activities including trades with sanctioned entities. Deal of the Year (Priority: 4/5): Michael Dell's role in the Broadcom-VMware deal, turning $6 billion equity into a $60 billion stake. Central Banker of the Year (Priority: 4/5): Hafize Gaye Erkan of Turkey for orthodox rate hikes under President Erdogan, restoring investor confidence. IPO of the Year (Priority: 3/5): NFT Gaming Company (ticker NFTG) listed at $14.15, now trading at $0.36, symbolizing a weak IPO market. Prediction of the Year (Priority: 3/5): Unhedged's October 23 call to buy long bonds near the 10-year yield peak, yielding 100 bps gain. Trade of the Year (Priority: 5/5): Cruise line stocks (Royal Caribbean +144%, Carnival +125%) as a bet against recession.

Key Arguments: Binance's scam is more comprehensive than FTX due to its breadth of illegal activities. Michael Dell's deal success redeems his past misjudgment about Apple. Hafize Gaye Erkan's orthodox policies are a miracle given Turkey's history of unorthodox monetary policy. The IPO market is at a 10-year low, with few notable deals except Birkenstock. Unhedged's bond call was its best prediction in a year of many mistakes. Cruise line stocks' performance reflects a strong bet against recession, despite high debt and discretionary nature.

Data Points: Binance fine: $4.3 billion - Largest US Treasury fine of all time Michael Dell's equity contribution: $6 billion - Turned into $60 billion stake (10x return) NFT Gaming Company stock decline: From $14.15 to $0.36 - Market cap under $5 million CAB Payments stock drop: 72% - Three months after IPO 10-year Treasury yield peak: ~5% - Unhedged called the top on October 23 Royal Caribbean total return: 144% - Third best in S&P 500 Carnival total return: 125% - Fourth best in S&P 500

Pivotal Quotes: "I think it's very hard to beat Binance, right? Similar jam, CryptoShop. When it got fined for no fewer than 4.3 billion of your earth dollars, that includes the largest US Treasury fine of all time, the rap sheet for Binance covered a lot of ground. And I mean a lot of ground like trades with North Korea, trades with Iran, trading with Al-Qaeda, trading with ISIS, involvement in the narcotics trade, in organized crime." — Katie Martin: Arguing for Binance as Scam of the Year over FTX "If you'd have said to me at the start of this year, Erdogan's going to win again, he's going to appoint a whole new central bank chief, and actually investors are going to start sniffing around Turkey after the disaster that they've had with this thing over the years, I'd have told you to have a lie down. But this particular central banker has got market trust. It's a miracle." — Katie Martin: Nominating Hafize Gaye Erkan for Central Banker of the Year "Somebody knew it. Somebody in the booth knew it. Someone is cruising for cruising right now. This trade, this basically. If you bought those stocks at the beginning of this year, that is basically the hardest core bet against recession that a person could possibly make." — Ethan Wu: Describing the cruise line stock trade as Trade of the Year

Implications: The awards highlight a year of regulatory crackdowns (Binance), a weak IPO market, and surprising resilience in consumer stocks. Central bank orthodoxy is returning in unexpected places (Turkey), and the bond market may have peaked. Investors should watch for continued volatility and potential recession bets.