The Federal Funds Rate (FFR) is the target interest rate set by the Federal Reserve System (Fed)'s policy-making body (FOMC). This target is the rate at which the Fed suggests commercial banks borrow and lend their excess reserves overnight to each other.

The FOMC meets 8 times a year to set the target FFR. This is supposed to promote economic growth. The overnight lending market sets the actual rate based on commercial banks' short-term reserves. If the market strays too far, the Fed intervenes.

Banks must keep a certain percentage of their deposits in a Federal Reserve account. A bank's reserve requirement is a percentage of its total deposits. End-of-day bank account balances averaged over two-week reserve maintenance periods are used to determine reserve requirements.

If a bank expects to have end-of-day balances above what's needed, it can lend the excess to another institution.

The FOMC adjusts interest rates based on economic indicators that show inflation, recession, or other issues that affect economic growth. Core inflation and durable goods orders are indicators.

In response to economic conditions, the FFR target has changed over time. In the early 1980s, inflation pushed it to 20%. During the Great Recession of 2007-2009, the rate was slashed to 0.15 percent to encourage growth.

Inflation picked up in May 2022 despite earlier rate hikes, prompting today's 0.75 percent point increase. The largest increase since 1994. It might rise to around 3.375% this year and 3.1% by the end of 2024.

Genius or lucky?

From the title, you might think I'm selling advertising for a financial influencer, a dubious trading site, or a training organization to attract clients. I'm suspicious. Better safe than sorry.

But not here.

Jake Freeman, 20, made $110 million in a month, according to the Financial Times. At 18, he ran for president. He made his name in markets, not politics. Two years later, he's Wall Street's prince. Interview requests flood the prodigy.

Jake Freeman bought 5 million Bed Bath & Beyond Group shares for $5.5 in July 2022 and sold them for $27 a month later. He thought the stock might double. Since speculation died down, he sold well. The stock fell 40.5% to 11 dollars on Friday, 19 August 2022. On August 22, 2022, it fell 16% to $9.

Smallholders have been buying the stock for weeks and will lose heavily if it falls further. Bed Bath & Beyond is the second most popular stock after Foot Locker, ahead of GameStop and Apple.

Jake Freeman earned $110 million thanks to a significant stock market flurry.

Online broker customers aren't the only ones with jitters. By June 2022, Ken Griffin's Citadel and Stephen Mandel's Lone Pine Capital held nearly a third of the company's capital. Did big managers sell before the stock plummeted?

Recent stock movements (derivatives) and rumors could prompt a SEC investigation.

Jake Freeman wrote to the board of directors after his investment to call for a turnaround, given the company's persistent problems and short sellers. The bathroom and kitchen products distribution group's stock soared in July 2022 due to renewed buying by private speculators, who made it one of their meme stocks with AMC and GameStop.

Second-quarter 2022 results and financial health worsened. He didn't celebrate his miraculous operation in a nightclub. He told a British newspaper, "I'm shocked." His parents dined in New York. He returned to Los Angeles to study math and economics.

Jake Freeman founded Freeman Capital Management with his savings and $25 million from family, friends, and acquaintances. They are the ones who are entitled to the $110 million he raised in one month. Will his investors pocket and withdraw all or part of their profits or will they trust the young prodigy for new stunts on Wall Street?

His operation should attract new clients. Well-known hedge funds may hire him.

Jake Freeman didn't listen to gurus or former traders. At 17, he interned at a quantitative finance and derivatives hedge fund, Volaris. At 13, he began investing with his pharmaceutical executive uncle. All countries have increased their Google searches for the young trader in the last week.

Naturally, his success has inspired resentment.

His success stirs jealousy, and he's attacked on social media. On Reddit, people who lost money on Bed Bath & Beyond, Jake Freeman's fortune, are mourning.

Several conspiracy theories circulate about him, including that he doesn't exist or is working for a Taiwanese amusement park.

If all 20 million American students had the same trading skills, they would have generated $1.46 trillion. Jake Freeman is unique. Apprentice traders' careers are often short, disillusioning, and tragic.

Two years ago, 20-year-old Robinhood client Alexander Kearns committed suicide after losing $750,000 trading options. Great traders start young. Michael Platt of BlueCrest invested in British stocks at age 12 under his grandmother's supervision and made a £30,000 fortune. Paul Tudor Jones started trading before he turned 18 with his uncle. Warren Buffett, at age 10, was discussing investments with Goldman Sachs' head. Oracle of Omaha tells all.

What quarterly bank earnings reveal

Big banks know the economy best. Unless we’re talking about a housing crisis in 2007…

Banks are crucial to the U.S. economy. The Fed, communities, and investments exchange money.

An economy depends on money flow. Banks' views on the economy can affect their decision-making.

Most large banks released quarterly earnings and forward guidance last week. Others were pessimistic about the future.

What Makes Banks Confident

Bank of America's profit decreased 30% year-over-year, but they're optimistic about the economy. Comparatively, they're bullish.

Who banks serve affects what they see. Bank of America supports customers.

They think consumers' future is bright. They believe this for many reasons.

The average customer has decent credit, unless the system is flawed. Bank of America's new credit card and mortgage borrowers averaged 771. New-car loan and home equity borrower averages were 791 and 797.

2008's housing crisis affected people with scores below 620.

Bank of America and the economy benefit from a robust consumer. Major problems can be avoided if individuals maintain spending.

Reasons Other Banks Are Less Confident

Spending requires income. Many companies, mostly in the computer industry, have announced they will slow or freeze hiring. Layoffs are frequently an indication of poor times ahead.

BOA is positive, but investment banks are bearish.

Jamie Dimon, CEO of JPMorgan, outlined various difficulties our economy could confront.

But geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices are very likely to have negative consequences on the global economy sometime down the road.

That's more headwinds than tailwinds.

JPMorgan, which helps with mergers and IPOs, is less enthusiastic due to these concerns. Incoming headwinds signal drying liquidity, they say. Less business will be done.

Final Reflections

I don't think we're done. Yes, stocks are up 10% from a month ago. It's a long way from old highs.

I don't think the stock market is a strong economic indicator.

Many executives foresee a 2023 recession. According to the traditional definition, we may be in a recession when Q2 GDP statistics are released next week.

Regardless of criteria, I predict the economy will have a terrible year.

Weekly layoffs are announced. Inflation persists. Will prices return to 2020 levels if inflation cools? Perhaps. Still expensive energy. Ukraine's war has global repercussions.

I predict BOA's next quarter earnings won't be as bullish about the consumer's strength.

Here’s why that’s baloney

Mark Cuban popularized entrepreneurship.

Shark Tank (which made Mark famous) made starting a business glamorous to attract more entrepreneurs. First off

This isn't an anti-billionaire rant.

Mark Cuban has done excellent. He's a smart, principled businessman. I enjoy his Web3 work. But Mark's work and productivity theories are absurd.

You don't need to outwork everyone in this recession to live well.

You won't be able to outwork me.

Yuck! Mark's words made me gag.

Why do boys think working is a football game where the winner wins a Super Bowl trophy? To outwork you.

Hard work doesn't equal intelligence.

Highly clever professionals spend 4 hours a day in a flow state, then go home to relax with family.

If you don't put forth the effort, someone else will.

- Mark.

He'll burn out. He's delusional and doesn't understand productivity. Boredom or disconnection spark our best thoughts.

TikTok outlaws boredom.

In a spare minute, we check our phones because we can't stand stillness.

All this work p*rn makes things worse. When is it okay to feel again? Because I can’t feel anything when I’m drowning in work and haven’t had a holiday in 2 years.

Your rivals are actively attempting to undermine you.

Ohhh please Mark…seriously.

This isn't a Tom Hanks war film. Relax. Not everyone is a rival. Only yourself is your competitor. To survive the recession, be better than a year ago.

If you get rich, great. If not, there's more to life than Lambos and angel investments.

Some want to relax and enjoy life. No competition. We witness people with lives trying to endure the recession and record-high prices.

This fictitious rival worsens life and work.

If you are truly talented, you will motivate others to work more diligently and effectively.

No Mark. Soz.

If you're a good leader, you won't brag about working hard and treating others like cogs. Treat them like humans. You'll have EQ.

Silly statements like this are caused by an out-of-control ego. No longer watch Shark Tank.

Ego over humanity.

Good leaders will urge people to keep together during the recession. Good leaders support those who are laid off and need a reference.

Not harder, quicker, better. That created my mental health problems 10 years ago.

Truth: we want to work less.

The promotion of entrepreneurship is ludicrous.

Marvel superheroes. Seriously, relax Max.

I used to write about entrepreneurship, then I quit. Many WeWork Adam Neumanns. Carelessness.

I now utilize the side hustle title when writing about online company or entrepreneurship. Humanizes.

Stop glorifying. Thinking we'll all be Elon Musks who send rockets to Mars is delusional. Most of us won't create companies employing hundreds.

OK.

The true epidemic is glorification. fewer selfies Little birdy needs less bank account screenshots. Less Uber talk.

We're exhausted.

Fun, ego-free business can transform the world. Take a relax pill.

Work as if someone were attempting to take everything from you.

I've seen people lose everything.

Myself included. My 20s startup failed. I was almost bankrupt. I thought I'd never recover. Nope.

Best thing ever.

Losing everything reveals your true self. Unintelligent entrepreneur egos perish instantly. Regaining humility revitalizes relationships.

Money's significance shifts. Stop chasing it like a puppy with a bone.

Fearing loss is unfounded.

Here is a more effective approach than outworking nobody.

(You'll thrive in the recession and become wealthy.)

Smarter work

Overworking is donkey work.

You don't want to be a career-long overworker. Instead than wasting time, write down what you do. List tasks and processes.

Keep doing/outsource the list. Step-by-step each task. Continuously systematize.

Then recruit a digital employee like Zapier or a virtual assistant in the same country.

Intelligent, not difficult.

If your big break could burn in hell, diversify like it will.

People err by focusing on one chance.

Chances can vanish. All-in risky. Instead of working like a Mark Cuban groupie, diversify your income.

If you're employed, your customer is your employer.

Sell the same abilities twice and add 2-3 contract clients. Reduce your hours at your main job and take on more clients.

Leave brand loyalty behind

Mark desires his employees' worship.

That's stupid. When times are bad, layoffs multiply. The problem is the false belief that companies care. No. A business maximizes profit and pays you the least.

To care or overpay is anti-capitalist (that run the world). Be honest.

I was a banker. Then the bat virus hit and jobs disappeared faster than I urinate after a night of drinking.

Start being disloyal now since your company will cheerfully replace you with a better applicant. Meet recruiters and hiring managers on LinkedIn. Whenever something goes wrong at work, act.

Loyalty to self and family. Nobody.

Outwork this instead

Mark doesn't suggest outworking inflation instead of people.

Inflation erodes your time on earth. If you ignore inflation, you'll work harder for less pay every minute.

Financial literacy beats inflation.

Get a side job and earn money online

So you can stop outworking everyone.

Internet leverages time. Same effort today yields exponential results later. There are still whole places not online.

Instead of working forever, generate money online.

Final Words

Overworking is stupid. Don't listen to wealthy football jocks.

Work isn't everything. Prioritize diversification, internet income streams, boredom, and financial knowledge throughout the recession.

That’s how to get wealthy rather than burnout-rich.

Hiring is difficult, but you shouldn't compromise on team members. Or it may suggest you need to look beyond years in a similar role/function.

Every hire should be someone we'd want as one of our first ten employees.

If you hire such people, your team will adapt, initiate, and problem-solve, and your company will grow. You'll stay nimble even as you scale, and you'll learn from your colleagues.

If you only hire for a specific role or someone who can execute the job, you'll become a cluster of optimizers, and talent will depart for a more fascinating company. A startup is continually changing, therefore you want individuals that embrace it.

As a leader, establishing ideal conditions for talent and having a real ideology should be high on your agenda. You can't eliminate attrition, nor would you want to, but you can hire people who will become your company's leaders.

In my last four jobs I was employee 2, 5, 3, and 5. So while this is all a bit self serving, you’re the one reading my writing — and I have some experience with who works out in the first ten!

First, we'll examine what they do well (and why they're beneficial for startups), then what they don't, and how to hire them.

First 10 are:

• Business partners: Because it's their company, they take care of whatever has to be done and have ideas about how to do it. You can rely on them to always put the success of the firm first because it is their top priority (company success is strongly connected with success for early workers). This approach will eventually take someone to leadership positions.
  

• High Speed Learners: They process knowledge quickly and can reach 80%+ competency in a new subject matter rather quickly. A growing business that is successful tries new things frequently. We have all lost a lot of money and time on employees who follow the wrong playbook or who wait for someone else within the company to take care of them.
  

• Autodidacts learn by trial and error, osmosis, networking with others, applying first principles, and reading voraciously (articles, newsletters, books, and even social media). Although teaching is wonderful, you won't have time.
  

• Self-scaling: They figure out a means to deal with issues and avoid doing the grunt labor over the long haul, increasing their leverage. Great people don't keep doing the same thing forever; as they expand, they use automation and delegation to fill in their lower branches. This is a crucial one; even though you'll still adore them, you'll have to manage their scope or help them learn how to scale on their own.
  

• Free Range: You can direct them toward objectives rather than specific chores. Check-ins can be used to keep them generally on course without stifling invention instead of giving them precise instructions because doing so will obscure their light.
  

• When people are inspired, they bring their own ideas about what a firm can be and become animated during discussions about how to get there.
  

• Novelty Seeking: They look for business and personal growth chances. Give them fresh assignments and new directions to follow around once every three months.

Here’s what the First Ten types may not be:

• Domain specialists. When you look at their resumes, you'll almost certainly think they're unqualified. Fortunately, a few strategically positioned experts may empower a number of First Ten types by serving on a leadership team or in advising capacities.
  

• Balanced. These people become very invested, and they may be vulnerable to many types of stress. You may need to assist them in managing their own stress and coaching them through obstacles. If you are reading this and work at Banza, I apologize for not doing a better job of supporting this. I need to be better at it.
  

• Able to handle micromanagement with ease. People who like to be in charge will suppress these people. Good decision-making should be delegated to competent individuals. Generally speaking, if you wish to scale.

Great startup team members have versatility, learning, innovation, and energy. When we hire for the function, not the person, we become dull and staid. Could this person go to another department if needed? Could they expand two levels in a few years?

First Ten qualities and experience level may have a weak inverse association. People with 20+ years of experience who had worked at larger organizations wanted to try something new and had a growth mentality. College graduates may want to be told what to do and how to accomplish it so they can stay in their lane and do what their management asks.

Does the First Ten archetype sound right for your org? Cool, let’s go hiring. How will you know when you’ve found one?

• They exhibit adaptive excellence, excelling at a variety of unrelated tasks. It could be hobbies or professional talents. This suggests that they will succeed in the next several endeavors they pursue.
  

• Successful risk-taking is doing something that wasn't certain to succeed, sometimes more than once, and making it do so. It's an attitude.
  

• Rapid Rise: They regularly change roles and get promoted. However, they don't leave companies when the going gets tough. Look for promotions at every stop and at least one position with three or more years of experience.

You can ask them:

• Tell me about a time when you started from scratch or achieved success. What occurred en route? You might request a variety of tales from various occupations or even aspects of life. They ought to be energized by this.
  

• What new skills have you just acquired? It is not required to be work-related. They must be able to describe it and unintentionally become enthusiastic about it.
  

• Tell me about a moment when you encountered a challenge and had to alter your strategy. The core of a startup is reinventing itself when faced with obstacles.
  

• Tell me about a moment when you eliminated yourself from a position at work. They've demonstrated they can permanently solve one issue and develop into a new one, as stated above.
  

• Why do you want to leave X position or Y duty? These people ought to be moving forward, not backward, all the time. Instead, they will discuss what they are looking forward to visiting your location.
  

• Any questions? Due to their inherent curiosity and desire to learn new things, they should practically never run out of questions. You can really tell if they are sufficiently curious at this point.

People who see their success as being the same as the success of the organization are the best-case team members, in any market. They’ll grow and change with the company, and always try to prioritize what matters. You’ll find yourself more energized by your work because you’re surrounded by others who are as well. Happy teambuilding!

The crypto market crashed in June 2022. Bitcoin and other cryptocurrencies hit their lowest prices in over a year, causing market panic. Some believe this crash will benefit future investors.

Before I discuss how this crash might help investors, let's examine why it happened. Inflation in the U.S. reached a 30-year high in 2022 after Russia invaded Ukraine. In response, the U.S. Federal Reserve raised interest rates by 0.5%, the most in almost 20 years. This hurts cryptocurrencies like Bitcoin. Higher interest rates make people less likely to invest in volatile assets like crypto, so many investors sold quickly.

The crypto market collapsed. Bitcoin, Ethereum, and Binance dropped 40%. Other cryptos crashed so hard they were delisted from almost every exchange. Bitcoin peaked in April 2022 at $41,000, but after the May interest rate hike, it crashed to $28,000. Bitcoin investors were worried. Even in bad times, this crash is unprecedented.

Bitcoin wasn't "doomed." Before the crash, LUNA was one of the top 5 cryptos by market cap. LUNA was trading around $80 at the start of May 2022, but after the rate hike?

Less than 1 cent. LUNA lost 99.99% of its value in days and was removed from every crypto exchange. Bitcoin's "crash" isn't as devastating when compared to LUNA.

Many people said Bitcoin is "due" for a LUNA-like crash and that the only reason it hasn't crashed is because it's bigger. Still false. If so, Bitcoin should be worth zero by now. We didn't. Instead, Bitcoin reached 28,000, then 29k, 30k, and 31k before falling to 18k. That's not the world's greatest recovery, but it shows Bitcoin's safety.

Bitcoin isn't falling constantly. It fell because of the initial shock of interest rates, but not further. Now, Bitcoin's value is more likely to rise than fall. Bitcoin's low price also attracts investors. They know what prices Bitcoin can reach with enough hype, and they want to capitalize on low prices before it's too late.

Bitcoin's crash was bad, but in a way it wasn't. To understand, consider 2021. In March 2021, Bitcoin surpassed $60k for the first time. Elon Musk's announcement in May that he would no longer support Bitcoin caused a massive crash in the crypto market. In May 2017, Bitcoin's price hit $29,000. Elon Musk's statement isn't worth more than the Fed raising rates. Many expected this big announcement to kill Bitcoin.

Not so. Bitcoin crashed from $58k to $31k in 2021. Bitcoin fell from $41k to $28k in 2022. This crash is smaller. Bitcoin's price held up despite tensions and stress, proving investors still believe in it. What happened after the initial crash in the past?

Bitcoin fell until mid-July. This is also something we’re not seeing today. After a week, Bitcoin began to improve daily. Bitcoin's price rose after mid-July. Bitcoin's price fluctuated throughout the rest of 2021, but it topped $67k in November. Despite no major changes, the peak occurred after the crash. Elon Musk seemed uninterested in crypto and wasn't likely to change his mind soon. What triggered this peak? Nothing, really. What really happened is that people got over the initial statement. They forgot.

Internet users have goldfish-like attention spans. People quickly forgot the crash's cause and were back investing in crypto months later. Despite the market's setbacks, more crypto investors emerged by the end of 2017. Who gained from these peaks? Bitcoin investors who bought low. Bitcoin not only recovered but also doubled its ROI. It was like a movie, and it shows us what to expect from Bitcoin in the coming months.

The current Bitcoin crash isn't as bad as the last one. LUNA is causing market panic. LUNA and Bitcoin are different cryptocurrencies. LUNA crashed because Terra wasn’t able to keep its peg with the USD. Bitcoin is unanchored. It's one of the most decentralized investments available. LUNA's distrust affected crypto prices, including Bitcoin, but it won't last forever.

This is why Bitcoin will likely rebound in the coming months. In 2022, people will get over the rise in interest rates and the crash of LUNA, just as they did with Elon Musk's crypto stance in 2021. When the world moves on to the next big controversy, Bitcoin's price will soar.

Bitcoin may recover for another reason. Like controversy, interest rates fluctuate. The Russian invasion caused this inflation. World markets will stabilize, prices will fall, and interest rates will drop.

Next, lower interest rates could boost Bitcoin's price. Eventually, it will happen. The U.S. economy can't sustain such high interest rates. Investors will put every last dollar into Bitcoin if interest rates fall again.

Bitcoin has proven to be a stable investment. This boosts its investment reputation. Even if Ethereum dethrones Bitcoin as crypto king one day (or any other crypto, for that matter). Bitcoin may stay on top of the crypto ladder for a while. We'll have to wait a few months to see if any of this is true.

This post is a summary. Read the full article here.