E137: Inflation cools, market rips, Ripple/MSFT beat regulators, NATO summit, cocktails of youth

Chamath’s call has essentially played out as described.

1. Did a cyclical bottom occur between mid‑2023 and end‑2024?
Within his 12–18 month window, the S&P 500 made a major low on October 27, 2023 at 4,117.37, which became its 52‑week low and has not been undercut since.(statmuse.com) From that point the index rallied strongly, closing 2023 at 4,769.83 and ending 2024 at 5,881.63.(statmuse.com) That October 2023 low has so far been the key trough of the current bull leg (later corrections, including April 2025, bottomed well above it).(spglobal.com) So a durable cyclical low did fall inside his July 2023–December 2024 window, even though the deeper bear‑market bottom was in October 2022.

2. Did the broad US equity market move “materially higher” from that bottom?
From the October 27, 2023 low (4,117) to the December 31, 2024 close (5,882), the S&P 500 rose about 43%.(statmuse.com) Over calendar 2023 and 2024 it gained roughly 24.2% and 23.3%, respectively, for a two‑year increase just over 53%, the strongest such stretch of this century.(spglobal.com) By late 2025, the index is around the mid‑6,000s, implying gains of roughly 60%+ from the October 2023 low, which comfortably qualifies as “materially higher.”(statmuse.com) Other major US indices (Dow, Nasdaq, Russell 2000) also posted substantial positive returns over 2023–24, confirming broad‑based equity strength even if performance was led by large‑cap growth.(spglobal.com)

3. Did this happen while rates stayed “persistently higher” (not back to near‑zero)?
The effective federal funds rate was about 5.1% in July 2023 and held at roughly 5.3% through the end of 2023 and most of 2024, before easing modestly to 4.48% in December 2024 and around 4% in 2025—far above the near‑zero levels of the 2010s.(ycharts.com) Commentators have explicitly noted that the 2022–24 bull run unfolded despite policy rates staying unusually high compared with prior cycles.(marketwatch.com)

Nuance: Many analysts mark October 12, 2022 (S&P 500 at 3,577) as the bear‑market bottom and start of the current bull market, which is earlier than Chamath’s 12–18 month window.(seekingalpha.com) But within his stated timeframe the market did establish the main subsequent cyclical trough (October 2023) and then advanced dramatically while rates remained well above zero.

Given that the core thrust of his prediction—a significant bottoming phase in that window followed by a large equity rally under persistently higher rates—has been borne out, the forecast is best judged as right, albeit a bit loose on where the overall bear‑market bottom began.

Both key elements of the normalized prediction match subsequent outcomes:

1. No U.S. recession from mid‑2023 through end‑2024 (soft‑landing outcome).

   • The NBER Business Cycle Dating Committee’s chronology still lists the most recent peak as February 2020 and the most recent trough as April 2020, with no additional peaks or troughs dated through at least late 2024. That implies no officially recognized recession occurred in 2023 or 2024.​​​​(nber.org)
   • A commonly used NBER-based recession indicator (YCharts series tracking NBER peak‑through‑trough periods) shows a value of 0.00 (i.e., not in recession) for every quarter from Q2 2023 through Q4 2024.​(ycharts.com)
   • By late 2024, multiple mainstream assessments described the U.S. as having effectively achieved or being on the cusp of a soft landing: inflation had fallen substantially from its 2022 highs while GDP continued to grow and unemployment remained relatively low. (en.wikipedia.org)
     Together, these indicate that, under the standard NBER definition, the U.S. avoided entering a recession over the period in question, consistent with the prediction of a soft landing.

2. Federal Reserve began cutting interest rates in 2024.

   • The FOMC’s rate‑history record shows that on 18 September 2024 the Fed lowered the target range for the federal funds rate to 4.75–5.00%, with the prior setting having been higher. This is recorded as the first cut of that easing cycle.​(en.wikipedia.org)
   • The Fed then cut again at its 7 November 2024 and 18 December 2024 meetings, with reporting on the December move noting it was the third rate cut of 2024 and reduced the key rate to around 4.3%.​(en.wikipedia.org)
     This directly satisfies the prediction that the Fed would start cutting rates sometime in 2024.

Since (a) no NBER‑defined recession was recorded between mid‑2023 and the end of 2024 and (b) the Fed indeed began cutting rates in 2024, Sacks’s combined prediction is substantively correct.

The 2023 Atlantic hurricane season was above normal and historically active, but it was not the most active season on record by any standard.

Key 2023 stats:

• 20 named storms, 7 hurricanes, 3 major hurricanes, ACE ≈ 148.2.
• This tied 1933 for 20 named storms, but overall ranked only 4th for most named storms in a season. (en.wikipedia.org)

Record benchmarks:

• Most named storms on record: 2020 with 30 named storms (14 hurricanes, 7 major) – explicitly described by NOAA and WMO as the most active Atlantic hurricane season on record in terms of total storms. (ncei.noaa.gov)
• Highest ACE on record: 1933 with ACE ≈ 259, well above 2023’s ~148.2. (en.wikipedia.org)

NOAA and WMO summaries of 2023 repeatedly characterize it as above-normal and note that the 20 named storms make it the fourth-most-named-storms season since 1950, not the first.(nesdis.noaa.gov) Thus, although Friedberg was directionally right that record-warm Atlantic sea surface temperatures helped produce a busy season, the specific prediction that 2023 would be "the biggest hurricane season we've ever seen" (i.e., the most active on record in storm count or severity) did not come true.

Available evidence shows the U.S. is well below 90,000 155mm shells per month as of late 2025, but official plans still target a production capacity in roughly that range by 2026–2028, and the prediction’s window (2025–2028) has not yet closed.

Key points:

• A 2023 Army plan aimed to boost 155mm production from about 14,000 per month to 85,000 per month by FY 2028—very close to the “about 90,000” level Sacks referenced. (defensenews.com)
• U.S. planning documents and summaries (e.g., Wikipedia drawing on DOD statements) describe a goal to raise production to roughly 90,000 shells per month (about 1 million per year) by around 2025, later adjusted in other reporting to mid‑decade. (en.wikipedia.org)
• A 2024 Congressional Research Service report notes that monthly U.S. 155mm output had risen from ~14,400 (2022) to 40,000 per month by 2024, with an Army target of 100,000 per month by the end of 2025—showing the intended scale of industrial capacity but not yet reaching it. (congress.gov)
• In April 2025 testimony covered by Business Insider, Gen. Christopher Cavoli stated that the U.S. then produced about 40,000 155mm shells per month, and “hopes to reach a monthly production capacity of 90,000 rounds in 2026.” (businessinsider.com)
• Additional coverage in 2025 on production shortfalls reports that, despite plans for 75,000–100,000 per month by late 2025, actual output stalled near 40,000 per month, and the 100,000‑per‑month goal has slipped to around mid‑2026. (thedefensewatch.com)

Interpretation vs. prediction:

• Sacks’ prediction was not that the U.S. already would be at 90,000 per month in 2025, but that industrial capacity would reach roughly 90,000 per month at some point between 2025 and 2028.
• Current data show production capacity and output are still below that level in 2025, though official U.S. plans and investments explicitly aim for ~90,000–100,000 per month capacity by 2026–2028.
• Because we have not yet reached the end of the stated 2025–2028 window, and the U.S. still actively plans to hit roughly that level within this period, we cannot yet say definitively whether the prediction will end up being correct or incorrect.

Given that the deadline has not passed and the key threshold (~90k/month capacity) has not yet been reached, the status of the prediction is “inconclusive (too early)” rather than clearly right or wrong.

Ripple’s partial court win did, in substance, “hold through appeals,” and it was not overturned. Judge Analisa Torres’ July 13, 2023 ruling that XRP is not a security when sold programmatically on secondary markets became the key precedent, and the SEC’s later appeals were ultimately dropped as part of a 2025 settlement that ended the case while leaving those core findings intact.(en.wikipedia.org)

After that decision, there was a clear shift toward crypto firms proactively suing or aggressively countersuing the SEC instead of quietly settling:

• Pre‑enforcement and declaratory suits directly attacking SEC authority over crypto assets multiplied:

  • Lejilex and the Crypto Freedom Alliance of Texas sued the SEC in February 2024, asking a federal court to declare that secondary‑market token trades on their planned exchange are not securities transactions and that the SEC lacks jurisdiction over such digital assets.(cointelegraph.com)
  • Beba LLC and the DeFi Education Fund sued the SEC in March 2024, seeking a declaratory judgment that a free token airdrop is not a securities transaction and that the SEC’s digital‑asset enforcement policy violates the Administrative Procedure Act.(defieducationfund.org)
  • The Blockchain Association and Crypto Freedom Alliance of Texas jointly sued the SEC in April 2024 to vacate the Commission’s broadened “dealer” rule, arguing it exceeds statutory authority and threatens crypto market participants.(reuters.com)
  • Consensys sued the SEC in April 2024, explicitly asking a court to rule that Ethereum and related MetaMask activities are outside the SEC’s authority and calling the agency’s crypto campaign unlawful overreach.(reuters.com)

• Exchange and infrastructure providers began suing the SEC after receiving Wells notices or facing investigations, instead of waiting to be sued or rushing to settle:

  • Crypto.com filed a civil complaint against the SEC and all its commissioners in October 2024, immediately after a Wells notice. Its own statement says it is suing “to protect the future of the crypto industry in the U.S., joining a series of our peers who are actively defending themselves and taking action against a misguided federal agency acting beyond its authorization under the law.”(coindesk.com)
  • Bitnomial Exchange sued the SEC in October 2024 over XRP futures. Crucially, Bitnomial’s press release explicitly relies on the Ripple ruling, noting the “landmark determination” that XRP is not inherently a security and citing that as the basis to ask a court to block SEC jurisdiction over XRP futures.(bitnomial.com)

• Major targets of SEC enforcement have also been more willing to fight in court rather than immediately settle. Coinbase sued the SEC in 2023 over rulemaking and then fully litigated the SEC’s enforcement case until the agency dismissed it in 2025; Kraken likewise contested the SEC’s later exchange case, which was eventually dropped without penalties or admissions.(cnbc.com) Legal commentary in 2024 explicitly describes the crypto legal community as “emboldened by a recent string of court victories,” with Ripple’s July 2023 win singled out as a key example motivating new pre‑enforcement challenges against the SEC.(dlnews.com)

By 2024–2025 there are well over “a handful” of crypto‑related plaintiffs (exchanges, token issuers, DeFi advocates, trade groups and watchdogs) suing the SEC to narrow its jurisdiction or invalidate its approaches—easily approaching Jason’s informal “ten counter‑lawsuits” benchmark once you include suits like Lejilex/CFAT, Beba/DEF, the dealer‑rule challenge, Consensys, Crypto.com, Bitnomial and allied litigation challenging SEC practices.(defieducationfund.org)

Causality is not purely Ripple—other factors like the Grayscale ETF win and later political shifts under the Trump administration also encouraged firms to fight the SEC.(en.wikipedia.org) But Jason’s core forecast—that a sustained Ripple victory would embolden crypto projects and companies to “stand up for themselves” and increasingly litigate against the SEC rather than reflexively settling, producing a wave of counter‑lawsuits challenging the SEC’s position—matches the observed post‑2023 pattern well enough to count as right in outcome, even if not every firm chose that path.

The condition for Sacks’s prediction largely did occur: Judge Torres’s July 2023 summary‑judgment ruling—finding XRP is not a security in programmatic exchange sales—survived the SEC’s interlocutory-appeal attempt and was later locked in when both sides dropped their appeals and resolved the case by settlement, leaving the favorable portions of the ruling intact.【1search1【4news13【

However, after that ruling, crypto companies as a group did not shift to a default strategy of refusing settlements. Many post‑Ripple SEC crypto enforcement actions still ended in conventional settlements:

• Bittrex and its former CEO agreed in August 2023 to settle SEC charges over operating an unregistered exchange, broker, and clearing agency, paying about $24 million.【2search0【
• ShapeShift accepted an SEC cease‑and‑desist order in March 2024 and paid a civil penalty to settle allegations it acted as an unregistered dealer.【0search0【0search2【
• Bankrupt lender Genesis Global Capital agreed in March 2024 to a $21 million civil penalty to resolve SEC charges over its lending program.【2news13【
• eToro USA (September 2024) and Silvergate Capital (July 2024) likewise entered into SEC settlements involving penalties and remedial undertakings, and the SEC’s FY 2024 enforcement report specifically highlights multiple crypto matters resolved by settlement (including BarnBridge DAO), indicating settlements remained standard.【2search1【3search0【2search3【

It is true that some large, well‑funded players—Ripple itself for years, plus exchanges like Coinbase and Kraken—chose to litigate aggressively rather than immediately settle. But these are notable exceptions, not evidence that the default industry-wide strategy flipped; the bulk of crypto defendants, especially smaller or distressed firms, continued to settle as before. Even Ripple ultimately agreed to a monetary settlement to end the case, undermining the notion that “no settlements” became the standard operating procedure.【4news12【4news13【2search6【3search1【3search3【

Because Ripple’s favorable ruling did stand but the predicted broad shift away from settlements did not materialize, the prediction is best classified as wrong.

Available post‑July 2023 evidence does not clearly confirm or refute Jason’s specific prediction about SEC challenges to crypto‑sector M&A deals.

1. Very few (if any) SEC enforcement actions have targeted crypto M&A transactions themselves.

   • SEC enforcement in 2023–2025 has focused on crypto lending programs, unregistered offerings, exchanges/brokers, custody failures, and fraud (e.g., Terraform Labs, Rari Capital, Galois Capital, Mango DAO, Silvergate, Abra), almost all unrelated to mergers or acquisitions.(sec.gov)
   • Corporate filings show crypto‑related business combinations (SPACs and other deals involving blockchain/digital‑asset businesses) proceeding through normal disclosure and review, not being singled out by SEC enforcement or blocked via litigated challenges.(skadden.com) Because there are essentially no clear SEC enforcement test cases centered on crypto M&A, Jason’s claim about how such cases will be handled (settle vs. fight) cannot be directly tested.

2. General SEC‑crypto pattern: settlements remain common, though more firms do fight in non‑M&A contexts.

   • Aggregate SEC data for FY 2023–2024 show hundreds of enforcement actions, with only a small fraction going to trial; most—including crypto matters—are resolved through settlements or consent orders.(sec.gov)
   • At the same time, several major crypto firms (Coinbase, Robinhood, Crypto.com, Consensys and others) have become more willing to litigate or pre‑emptively sue the SEC over classification and registration issues, and some investigations/lawsuits have been dropped without settlements—indicating a more aggressive legal posture generally, but again not in the specific M&A‑challenge setting Jason described.(politico.com)

Because (a) there are almost no SEC enforcement cases squarely about crypto‑sector M&A deals to observe, and (b) overall SEC–crypto enforcement still largely relies on settlements outside that niche, the prediction about M&A‑related SEC challenges cannot be cleanly validated or falsified. That makes the outcome ambiguous rather than clearly right or wrong.