FTX Crash Isn't Stressing US Credit System

Earlier last week, crypto exchange FTX had to deny customer withdrawal requests of about $5 billion. FTX lent about $10 billion of customers’ funds to Alameda Research for trading purposes. John Ray III is the new CEO of FTX. He was the man who cleaned up the mess at Enron. He says the situation at FTX is even worse, describing what he calls a “complete failure” of corporate control. (Here is his November 17 bankruptcy petition.)

This is just one of many speculative bubbles that have burst since early last year (e.g., ARK, SPACs, meme stocks) without causing a credit crunch or a recession, which is consistent with our rolling recession scenario.