Markets Get Their Shot in the Arm

The ‘Steroid Olympics’ is going public.

No, really.

The Enhanced Games, a new athletics competition where doping isn’t just allowed, it’s encouraged, announced this week it’s merging with a blank-cheque company in a US$1.2 billion deal.

Backed by Peter Thiel and Donald Trump Jr, the venture promises ‘Super Bowl-level’ half-time shows, and athletes juiced to the gills chasing world records.

World Athletics president Lord Sebastian Coe called it ‘nonsense’ and said any athlete who participates would be ‘moronic’.

The market apparently disagrees. Paradise Acquisition Corp is taking this thing to Nasdaq.

As I read this news, I couldn’t help but notice the parallels.

Currently, markets are seeking their own shot in the arm.

The Great Backflip

Last week was ugly.

AI doubts triggered a US$3 trillion sell-off. Rate cut hopes evaporated. The probability of the Fed cutting in December sat at a measly 30%.

Then came one of those classic reversals that’s all too familiar for anyone who’s watched central banks in the past.

A parade of dovish Fed speakers changed the tune. In just four days, rate cut expectations rocketed from 30% to nearly 90%.

Narratives shifted. Markets rallied. The S&P 500 is back to eyeing the magic 7,000-point barrier.

Veteran market watcher Mohamed El-Erian wasn’t impressed:

‘So much for forward policy guidance fostering stability and predictability.’

But investors don’t care about consistency. They care about the juice.

And right now, the Fed looks ready to deliver.

The Fed’s Beige Book

The latest Fed survey painted a bland picture, fitting its name.

Everything shifted, ‘slightly’, things moved ‘moderately’. But little shone positively.

Hiring fell across half the Fed’s regional districts. Consumers are pulling back. The recent government shutdown left federal workers — and the businesses that serve them — reeling.

Source: Barrons, LSEG

The shutdown has also been cited as an excuse for not releasing the October Jobs report, the CPI (inflation) report, and the quarterly GDP report.

But I’m sure everything is fine… right guys?

Reports or no, things are looking challenging in the US jobs market while costs rise.

It’s the classic central banking dilemma: a sputtering job market versus sticky prices.

Yet markets have made up their mind. An 84.5% chance of a cut in two weeks.

How Big Can You Be?

Let’s get back to our juiced-up athletes.

The Enhanced Games have attracted some serious names. British Olympic swimmer Ben Proud and American sprinter Fred Kerley have signed up.

Source: BBC – Ben Proud (looking juiced)

The first event is scheduled for Las Vegas next May. Swimming, athletics, and weightlifting. No drug tests. Just pure, chemically-assisted performance.

CEO Maximilian Martin claims that ‘performance enhancements, under the right clinical and medical supervision, can deliver long-term health and longevity benefits‘.

It’s a bold pitch. The investor presentation is less optimistic.

It warns of coordinated opposition from sports federations and anti-doping agencies. Venues and sponsors could distance themselves due to ‘sustained negative publicity’.

To get the ball rolling, they are projecting a US$37 million operating loss on US$52 million in revenue next year.

But backers include the Winklevoss twins and a Saudi prince. The deal values the company at US$1.2 billion.

Welcome to 2025, where a loss-making steroid sports league commands a billion-dollar valuation.

Sound familiar?

Juice Those Numbers

Here’s my concern with markets right now.

We’ve become dependent on the Fed’s needle. Every wobble gets smoothed over with dovish speeches and rate cut hints.

Another shot in the arm to send stocks higher.

In my opinion, markets are pricing in a lot of good news: rate cuts, reacceleration, and AI miracles.

If you’re positioned aggressively, consider whether you’re comfortable with that bet.

If you’re unsure, then make sure to keep your eyes peeled this week for a special Fat Tail Roundtable Event.

All Editors here at Fat Tail are sitting down for what could be our most consequential think tank session of 2026.

We’re talking markets, bubbles, valuations and what comes after AI.

If you’ve got any skin in the game, this could be the meeting to help you position for the new year.

If the Enhanced Games teach us anything, it’ll likely be that performance enhancement works — until it doesn’t.

The gains are spectacular. The side effects? Ask us in a few years.