As IPOs Kathoomph, Exit Doors Close with Big Implications for the Broader Startup Scene

Dotcom bust all over again, but bigger after 13 years of money printing.

By Wolf Richter for WOLF STREET.

Only 8 IPOs started trading in April, after 2 IPOs and March, and 8 each in January and February, down from the 24 to 43 range a year ago, and down from 61 at the peak in June, according to data from Renaissance Capital:

Of the four IPOs that started trading last week, one of them has kathoomphed 92% from the pop-peak, and another by 51%. “Two more micro-caps popped upwards of 350%, before dropping later in the week – by now a familiar pattern,” said Renaissance Capital in a note sent out to subscribers over the weekend.

Ostin Technology [OST], a Chinese company, started trading on Wednesday on the Nasdaq with a spectacularly artificial pop from the IPO price of $4 a share to $40 at the end of the day, and on Thursday continued the spectacularly artificial pop to $47.97 a share, but then kathoomphed 92% by Friday evening, to $3.72.

Belite Bio [BLTE], a Chinese biotech, set the IPO price of $6 a share. On Friday, its American Depositary Receipts (ADR) started trading at 13.95 and made it up $17.50 by midday for a nicely artificial “pop,” and then kathoomphed 51% from the pop-peak, to $9.50 by the end of the day.

The Renaissance Capital IPO ETF [IPO] has plunged 53.8% since February 2021. It tracks major stocks that went public roughly over the past two years before they’re gradually being faded out from the index. Its largest 10 holdings currently:

IPOs are one of the exit strategies for early investors, from angel investors and venture capital (VC) firms to Softbank. And that exit is now getting barricaded by investors as they are losing interest in regularly getting thackamuffled by these shares sometime after the IPO, a process that started in February last year, and some of which I tracked in my Imploded Stocks column.

And there is now a lot of navel-gazing going on in the startup industry because this is dotcom bust all over again, only bigger and broader.

Bill Gurley, a general partner at the Silicon Valley VC firm Benchmark, and one of tech’s top dealmakers, explained this phenomenon on Friday in a series of tweets:

An entire generation of entrepreneurs & tech investors built their entire perspectives on valuation during the second half of a 13-year amazing bull market run. The “unlearning” process could be painful, surprising, & unsettling to many. I anticipate denial. Some thoughts:

1) Previous “all-time” highs are completely irrelevant. It’s not “cheap” because it is down 70%. Forget those prices happened.

2) Valuation multiples are always a hack proxy. Dangerous to use. If you insist, 10X should be considered AMAZING and an upper limit. Over that silly.

3) You may be shocked to learn that people want to value your company on FCF [Free Cash Flow] and earnings. Facebook trades at 14X GAAP EPS, & is growing 23%. What earnings multiple are you assuming?

4) Revenue & earnings QUALITY matter.

Then Jeff Bezos chimed in with Bill Gurley, and tweeted on Friday, even as Amazon’s shares shookalacked 14%, bringing their decline since July 2021 to 34%:

Bill is without doubt one of the smartest people I know and always worth listening to. Most people dramatically underestimate the remarkableness of this bull run. Such things are unstoppable … until they aren’t.  Markets teach. The lessons can be painful.

Bezos knows whereof he speaks, not only from AMZN’s current decline but from Amazon’s near-death experience during the dotcom bust.

Amazon was one of the few companies that came out alive and thrived. Countless pre-IPO companies shut down when the funding ran out because VCs were no longer funding them after the exits were blocked.

And countless companies that had managed to have an IPO and trade publicly also shut down and their shares went to zero, and the investors that had become the end-users of those shares ended up having to contact the brokers to remove those worthless figures from their account.

And there are still survivor out there from the dotcom bust, whose shares remain far, far below where they’d been in 1999.

What Gurley called “a 13-year amazing bull market run,” ended in February 2021 for IPO and SPAC stocks, and it ended later in 2021 for other stocks, and it has now more broadly ended as the stock market has seriously spiraled lower.

The “13-year amazing bull market run” was powered by waves of QE and by interest rate repression. QE has ended. Interest rates have started to rise. And QT, the opposite of QE, will be announced this week and start in May or June. It’s a different ballgame now.

IPOs can still happen, and can still succeed, but now the companies need to have real potential, real revenues, and the valuations will be a lot lower. Hype-and-hoopla stocks will get shookalacked.

But with the exits closing for investors in startups, fresh money flowing into these companies is getting scarcer, as investors are getting pickier and more prudent, and a bevy of startups will run out of funding, and then that’s it for them.

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  197 comments for “As IPOs Kathoomph, Exit Doors Close with Big Implications for the Broader Startup Scene

  1. Scott says:

    The wildcard in this is the astronomical amount of investment in private equity … it would seem like those funds need an outlet which may continue to influence valuations.

    • Shandy says:

      No money to made here from my stand point.
      Yikes, if you allow me this looks like a same old pistol wiped trade gone sour. Take one dollar and divide by two. Stash away half of that (of course) then invest casually.
      Thats whst I’m in for.

      • SpencerG says:

        This is the moment for preserving your money.

        • Old School says:

          Easier said than done when money is fiat and real interest rates are negative.

          Current situation is really bad for first time home buyers. Asset price drop of 30 – 50% in stocks and housing would be good for some.

        • John H. says:


          “This is the moment for preserving your money.”

          Quantitatively or qualitatively, is “money” tomorrow likely to be the same as “money” today?

          The slow evolution of the nature of CB “reserves” have created the monetary and fiscal upheavals — along with the outrageous speculation and valuations — of today, IMO.

          If the Fed’s balance sheet (along with other CB’s around the globe) has been progressively degraded, then is money really a safe investment alternative?

        • SpencerG says:

          To answer both of you… when the market is overpriced BEFORE the Fed takes away the punch bowl… getting to the sidelines is the right move for the moment. Some of the best stocks of the past five years are plummeting by 50 to 80%. Losing 5 to 8% to inflation is nothing by comparison.

          There will be more moments to come.

      • Edward M says:

        Do what you know. You may not become a Bezos, but you have a good chance to live well.
        I know investment real estate. However, I am a cherry picker and have been on the sideline for years. If nothing else, I am patient.

    • Wisdom Seeker says:

      Private Equity was trying to escape via SPACs, but that’s not gonna work now.

      On the other hand, the time is ripe for new Private Equity pitches to pension funds. Pension managers, facing the double-whammy of losses on both stocks AND bonds, will be desperate for anything that either isn’t dropping like a rock or doesn’t have to be constantly marked to market.

      Hide enough private-equity turds behind a veil of obfuscation and maybe they’ll be able to keep all those funds “seemingly solvent” for another 6-12 months?

      • Cas127 says:

        Agreed…but the jig is up when the public pension funds go cash-flow negative (payouts higher than contributions plus invt returns) – then mark-to-mendacity can’t “save” anybody anymore.

        And that long warned of day of demographic doom is a helluva lot closer than it has been.

        Then who will save us…the Swalwells of the world?

        • Jay says:

          Medicare Part B (Drs) was in the red $500B last year. Part A (Hosp) Trust Fund goes negative in 2026. SS goes red in 2034. We’ll know if a couple of years how COVID affected SS trajectory. My bet is the D-Day moves forward at least 2 years. And like you suggest, once the stock market finishes tanking in the next 12 – 18 months, then things get urgent for a lot of pensions, especially since there might not be the kind of bull market we’ve seen since April 2020. The next 2-4 years will determine if the federal government entrenches MMT or pulls back from the fiscal abyss by some measure.

        • VintageVNvet says:

          Nah J, covid got rid of many old and elderly esp in USA and Italy and other where where old folks were very well taken care of, and who were only being kept alive through tons and tons of synthetic pharmaceutical drugs, ”drugs” clearly doing what were expected, as well as the tons and tons of very good care in what used to be called ”old folks homes.”
          Going forward without or even with that support, things will be and should be quite different, I HOPE.
          My last visit to my local and very wonderful VA Clinic convinced me that I do not really ”need” to take the focus from the gallant and very very badly wounded folks who I saw there, so that maybe and perhaps VA Med folks can keep me kicking a few more years and take resources away from the folks with NO LEGS, etc…
          God Bless us all, eh

        • Brian says:

          This is not true. They will simply allocate other budget monies to pensions and raise taxes.

        • 91B20 1stCav (AUS) says:

          VVNV-amen, brother.

          may we all find a better day.

        • Augustus Frost says:

          “This is not true. They will simply allocate other budget monies to pensions and raise taxes.”

          We’ll see how long that lasts. California was deep in the hole both after the bust and the GFC. The state has a huge surplus now. Other states aren’t as dependent upon the mania, but this doesn’t mean the taxpayers will plug any gap no matter how large either.

          Some state pensions are in dire shape now, like Illinois and Kentucky. Illinois is either losing population or if not, it’s a replacement by poorer new residents for the more affluent who are leaving.

          The pensions may be protected by the state constitution but that doesn’t keep people from voting with their feet. No one has an obligation to be a permanently indetured tax serf.

          Federal bailout? Maybe or maybe not. I wouldn’t build my future around it.

        • c_heale says:

          California is not in a good place when it comes to water supply.

      • kam says:

        It never ceases to amaze me how the U.S. government allows American dollars to be scammed by Chinese scam artists.
        I thought patriotism would restrict scamming solely to American scammers.

    • Cas127 says:

      Or all that idle PE/VC money could simply, wisely, be returned to investors.

      Of course, for intermediaries without insight or integrity, it is better to burn out (other people’s money, at a fee) than fade away.

      More seriously, the huge surplus of idle money at a handful of funds in strangled geographic proximity just highlights a perpetual lack of imagination/effort.

      It is though it is inconceivable that a decent business idea ever arose anywhere other than NYC, SF, or Silicon Valley – when the truth is those locations have also produced a surfeit of *stuuuupid* ideas along with their successes.

      Frequently because the decision-makers insist on over-stuffing local markets with money.

      This is a bit of an exaggeration, but only a bit – there is way too much money in way too few locales…and people have been noting it for decades.

      • Einhal says:

        Astute point, which also explains housing distortions. Obviously, the Bay Area has other advantages, like a mild climate, beautiful landscape, hiking, wine country, and relatively close to the beaches, but the $4 million 3 bedroom houses in Mountainview while you can get the same house in other places for $200 thousand is a function of just too much money floating around the Bay Area.

        • Flea says:

          That’s why it’s called a market,your choice to pay up or get a luxury tent haha

        • SomethingStinks says:

          All those advantages you list are on paper only. The beautiful landscapes are usually in some state of forest fire, the beaches are crowded. Roads are filled with moronic 3rd world drivers with no driving sense. The weather is mild but only in a 10-15 mile patch right next to the coast. Go to Tracy and you will be in Arizona.

        • 728huey says:

          There are some benefits to living in NYC or the Bay area if you’re into those services provided there. The big reason people were given for moving into NYC or Silicon Valley was that the best jobs were there and the talent pool of the best and brightest could be found there, which is why the biggest investment banks and high tech companies were based there, and why private equity was also located in those places. But as the pandemic showed, it isn’t necessary to be based in those areas to make oodles of cash. There’s no particular reason why Goldman Sachs or Citigroup couldn’t conduct their business in Manhattan, Kansas instead of the Manhattan financial district in New York City, nor is there any reason why tech companies can’t do business in the Missouri, Ohio or Tennessee valleys instead of Silicon Valley.

      • Augustus Frost says:

        I have seen little evidence of innovation this entire century. Maybe in the medical field but nothing close elsewhere to the ICE, transistor, and microchip, much less electricity or the telephone.

        Most of these companies sell overhyped products or services, like Uber and AirBNB worth tens of billions.

        Uber is a taxi dispatch service and a mechanism for the broke and jobless to attempt to monetize their car. AirBNB, a hotel reservation service and another mechanism to financialize residential real estate and ruin neighborhoods.

        • jm says:

          Absolutely incredible advances in communication bandwidth and cost, and storage capacity and cost. Less than 20 years ago a 64 MB flash memory stick was large. Nowadays 64 GB is hohum. Factor over 1000. Two terabyte HDDs about $100. Gigabyte intercontinental data transfers hohum.
          Fifty years ago when I worked at a world-leading process control instrumentation company in Japan, we communicated with plant engineering companies in the US by teletype at about 120 characters a minute. Text only. Punched paper tape. A few years later we got fax machines. Very, very expensive, the size of a washer-dryer. Still slow, but at least we could exchange drawings. International phone calls were seriously expensive.
          Then fax machines got faster and cheaper. Phone calls got cheaper. Enormously cheaper. It was this that made globalization possible. Add computer aided design and CNC machining.
          I’m reading these comments and writing this from an airplane over the mid-Atlantic. Unthinkable even a few years ago.
          And playing hooky from reading a programming book downloaded to my tablet.

          Little evidence of innovation???!?!?

        • Zark Muckerberg says:

          Hopefully, a talented group get tired of their company’s bull$hit and kickstart a new era elsewhere, akin to the silicon valley pioneers.

    • Tony says:

      In the meantime, Private Equity is buying up healthcare. You’d be shocked at how many medical doctors’ practices they’ve bought in addition to other sectors of health care…

    • sunny129 says:

      Private Equity Corporations!?

      Some are good but many are NOT. I have dipped slowly into ‘some’ of them, who appear to stabilize or lose very little during mkt downturn. They seem to employ effective derivitives against the mkt. Their dividens are very attractive
      I have invested in NONE of the above Cos!
      Again it is in my speculative portion of my portfolio. NOT for the novice. One has to do your own due diligence!

  2. JustTruth says:

    13 years of outright and permitted fraud and theft of the country by the US Government, large corporations and Wall Street. Benchmark and Amazon were participants in this pillaging. Nothing amazing about that. Yes, it needs to come to an end, and people who robbed the country need to pay. Amen.

    • Old School says:

      Someone said that current economic situation can no longer be solved by PhD’s at Fed playing more games with the fiat system. Reality is going to punch us in the face.

    • David Hall says:

      Amazon got flooded with shipping costs for returned merchandise. They delivered merchandise to residences and businesses at rock bottom prices putting malls out of business. Now they get accused of robbery. Crooks accused legitimate businesses falsely.

    • Gen Z says:

      The American Dream was that hard work, frugality and saving was a ticket to home ownership, but that is no longer the case today when Blackrock and the Ontario Teachers Pension Fund are buying up residential properties to rent to the working class for higher prices than the mortgage would cost.

  3. Bruce says:

    Reading SF Business Times last week, and their “40 under 40” list of top executives. Oops. Make that 39 under 40, as one had company shut down in April due to funding issues. More whiz kids to follow in the future….
    The thing that always amazed me was that so many companies had huge valuations yet were still unprofitable even after as long as 10 years in business. Unlike the real world where you don’t last long losing money. Hopefully this upcoming QT brings a bit of reality to the business world.

    • andy says:

      Amazon is unprofitable for almost 30 years now. They do break out above zero now and again. But they make up in volume.

      • Old School says:

        China was allowed into the WTO and Walmart, Amazon and Apple made the most of government policy.

      • Flea says:

        They keep investing in there company vans,buildings people

        • andy says:

          They invested in Rivian vans and lost tens of $Billions in under 6 months. They lost something like $400,000 on each ugly van.

        • char says:

          Amazon lost paper profits. Not real ones

    • perpetual perp says:

      innocent question but who pray tell
      confirmed valuations? p/e makes no sense without earnings.

  4. Dan Romig says:

    “Companies need to have … real revenues.”

    Ah yes, most people have figured this out before they’ve gone to business school for their MBA.

    • SpencerG says:

      It is amazing to me how much time we spent in our MBA accounting classes on “Revenue Recognition.” There is a lot of gamesmanship out there.

      My favorite example was the Supercomputer company back in the 80s (not Cray but a competitor) that was selling LOTS of supercomputers… with a clause in the contracts that said you could return them for a full refund for up to five years. Wanna take a guess what research labs were doing long after the salesmen had pocketed their commissions?

      • Augustus Frost says:

        Revenue recognition accounting has undergone changes recently, but what you describe is why focusing on earnings is wasted effort.

        It isn’t real money, it’s an accounting number with most of it permanently buried in the balance sheet never to be seen by the majority of supposed “investors”.

  5. Anthony A. says:

    From Seeking Apha:

    “In its initial public offering, OST sold 3.38M shares, raising about $13.5M.

    OST is headquartered in China but incorporated in the Cayman Islands. Its products end up in items like consumer electronics, LCD screens and auto displays.”

    An IPO to raise $13.5 million? Pretty small. These guys have a small manufacturing plant(s) in China and produce LED displays….so if one buys in, you own nothing.

    • andy says:

      Chinese Alibaba is incorporated in the Cayman Islands. Did not stop it from reaching $700 Billion on the Nasdaq. There is a sucker born every minute. In the US we have three generations.

    • phleep says:

      Cayman Islands is a conduit to allow securities sales in US markets.

      There is no collection of suckers with loose change like the USA — the world knows that well.

      That is, until

      1) US markets delist the company for bogus financial reports, or
      2) ultimate rug-pull happens when Xi just says stop.

  6. JJ says:

    I would like to know WHY Bezos tweeted the investment wisdom as he did. What’s his motivation for it? You don’t become worth hundreds of billions by being altruistic, and Bezos’ tweet seems to work against his own interests by making prospective investors in his stock more cautious about buying and elevating his net worth. At least it appears that way on the surface, so what’s his angle with this?

    • SocalJimObjects says:

      Yeah I was thinking about this too. Perhaps he’s already sold off everything using Total Return Swaps or something.

      Say Amazon stumbles, he gets to fire the current CEO and come back as a savior. The board will also give him a ton of cheap options. It’s a can’t lose situation for him.

    • ace says:

      Knows downturn is inevitable and wants history to reflect he knew it was coming

    • andy says:

      I missed the investment wisdom in his tweet. What was it?

    • fajensen says:

      Ex-Wife got half his shares and new boyfriend half his years?

      • VintageVNvet says:

        NO f, she ”only” got $35BB worth, and has and continues to give it to very good non profit entities as fast as she can ”vet” non profits…
        SHE is likely the real source of much of the physco-spiritual foundational thinking/activities of the, so far, amazing company…
        And, far shore, she is donating SO much to SO many good as they get these days outfits that she is in our prayers every day.

        • Harrold says:

          The ex-wife’s parents provide the initial funding for Bezos. The ex-wife was one of the first employees. She already owned 1/2 the company.

    • phleep says:

      Bezos has Elon envy. He tweeted lately against Elon (about China ties) too. He wants to become another zillionaire Twitler nuisance.

      Too much time on his hands at the old space platform.

  7. Depth Charge says:

    I find the horrendous waste of money to be disgusting. Instead of investing in the future of the US, the powers that be decided to just gamble the future away so a few could become obscenely wealthy at the expense of everybody else. Jerome Powell should be fired tomorrow morning.

    • Harrold says:

      What is really disgusting is the amount of money spent, yet infrastructure is in horrible shape. Ports and railroads are old and under sized. Airports have software from the 60s. Bridges crumbling. And of course, the big one — the electric grid is at capaciy at a time when people are switching to EVs.

      Something has to be done about wasteful spending on the military and medical monopolies. If there really are 11 million job openings, should there be so much socialism? How about a referendum on the US as the world’s police force.

      • andy says:

        Spent? That money was stolen. Thanks to us and the representatives we keep voting in.

        • phleep says:

          Money was redistributed, and inflation is part of the tax that pays for it. It cheapens the government’s cost to “repay” it. This prolonged the illusion of social harmony. But everything has a cost, real or illusory.

          Which circles back to the theme of this article: illusions die hard, especially when a person has been paid up and all giddy from them. Then only pain will clean the mind (and NFT wallet).

        • perpetual perp says:

          the gov does what the oligarchs tell them to do. Congress controls spending and taxing (i.e., monopoly control of money) and oligarchs control Congress. So stop being such a chump and blaming government! It’s the obscenely wealthy class you chumps so envy that steal your labor!

      • Wolfbay says:

        The red and blue team war mongers are united. Military spending through the roof.

        • phleep says:

          That has been at the core of the model nonstop since 1940. (Not December 1941.) My grandparents owned small businesses in the western US. But dad was US Army (Korea, war era) and GI Bill helped him through college into a classic US middle class berth.

          The welfare state was created to buttress the warfare state. Japan and Germany pioneered that social contract going into the early 1900s. Power elites decided they needed reasonably healthy factory workers and soldiers, and a reasonably compliant population to whom long term financial promises had been made. So they got nicer to the masses. When this contract goes away (as when Nixon banned the draft, and the USA stopped taxing for wars), pray tell, what replaces it? Printed money and social chaos so far is the answer.

        • 91B20 1stCav (AUS) says:

          phleep-a small semantic distinction, here (as one who was drafted and has ALWAYS paid it attention)-the draft was SUSPENDED (registration by 18yr olds required and now often only observed in the breach), not banned. Hoped in vain that the possibility of being drafted would encourage fellow citizens to pay more and circumspect attention to our nation’s policies on the many levels required to reduce the necessity of a draft in the future.

          That said, the necessity can, and probably will, return, but the ‘…printed money and social chaos…’ you reference may have greatly reduced the citizenry’s willingness to answer the call…

          may we all find a better day.

        • Augustus Frost says:

          “That said, the necessity can, and probably will, return, ”

          You are predicting the US is going to be invaded?

          If not, then no, it isn’t necessary. There is no existential external threat about to invade the US on the horizon to warrant it, only wars of choice. Without one, everyone else can defend themselves.

        • 91B20 1stCav (AUS) says:

          AF-given humanity’s ongoing and overwhelming history of willingness to slaughter each other for reasons good, ill, or indifferent vs. it’s history of non-violent (arms OR finance) cooperation, i stand by my statement…

          may we all find a better day.

      • Flea says:

        How about making people on welfare get a job

      • Happy1 says:

        Social program spending at the Federal level dwarfs defense and infrastructure spending.

    • Shandy says:

      A’men brother

    • fajensen says:

      Maybe they all know something about the future that we don’t?

      • Kenny Logins says:

        Federal Reserve tightening, and appearing to become more serious as time passes in recent months, despite obvious impact on markets, counter to Q3/4 2018 tightening where the same tightening was quickly reversed.

        Stock performance since Nov 2021 when tightening was announced.

        Only a lump of rock wouldn’t be able to understand what’s coming.
        Tightening = smoking crater in stock values.

        However 14 years of enabled moral hazard has left all investors in fomo if they don’t BTFD.

        So BTFD into the tightening.

        Bag holders galore for Musk, Bezos, Satya who are all selling at peak WTF values.

        Only when the Fed soften on a previously indicated course of action should one prepare to BTFD.
        For now it appears the Fed want a smoking crater.

      • phleep says:

        The wild startup thing was a guess about the future, which nobody truly knows. At best, it is fantastic and a pillar of progress. At worst, inevitably the scams creep in.

    • Old school says:

      Seems pretty clear that Fed policy since GFC had the result of causing too much speculation and didn’t help real economy very much if at all.

      • VintageVNvet says:

        At this point OS, certainly seems clear that the FRB has NOT helped the ”real” economy AT ALL since 1913!!!
        Reading that one dollar today is worth ONE PENNY in 1913 purchasing power???
        That alone should be sufficient for any rational thinker to understand that whatever the ”mandate(s) of the FRB, helping WE the PEONs is clearly NOT one. Not even close.
        And some of us who have been particularly involved in analyses of COST of ”real” stuff over the last 50-60 years have seen this first hand.
        Just one example: my earnings mowing lawns in mid 1950s would cost TEN times that much today == rediculosity far shore!
        P.S. LOVE the new nomenclature in this article == YEAH BABY!!!

      • Augustus Frost says:

        There is no reason to expect that “printing” and distorting the cost of capital to supposedly make economically unviable investments add up will increase prosperity.

        When this is over, it will be evident that the FRB facilitated an unprecedented misallocation of real resources, with the country poorer for it.

    • Gen Z says:

      Same thing in Canada, except is that homeowners became insanely wealthy.

      Houses that used to sell for C$50,000 a few years ago in the Ontario wilderness got sold for over C$500,000 in a matter of months after the Bank of Canada started buying mortgage backed securities in 2020.

      Middle aged persons with a high school education boasting on FB & Twitter that they sold their homes for millions of dollars and are living the life in SEA, Costa Rica owning large farmland as huge as the City of Toronto itself.

      • Anthony A. says:

        “Middle aged persons with a high school education boasting on FB & Twitter that they sold their homes for millions of dollars and are living the life in SEA, Costa Rica owning large farmland as huge as the City of Toronto itself.”

        Gen Z, you don’t really believe that, do you?

        • Gen Z says:

          In Canada, yes. There are braggers who like to act Boomer on the young people and boast on Twitter how they became millionaires.

  8. SocalJimObjects says:

    People who piled into index funds are overall still up big if they entered a couple of years ago. In 2017, the Nasdaq was around 6000 after all.

    • Anthony A. says:

      Yes, there is still a long way to go down. And I believe it is coming. Pretty historic times when stocks and bonds can crash at the same time. House values will be along shortly to join the party.

      • VintageVNvet says:

        Saw an article Sunday evening reporting 10 locations where housing is already down 5% or more AA…
        Gotta and Gonna happen once again, as the reported ”value” of our house is over 4 Times what it was 6.5 years ago!!!
        Hope all y’all are ready for this crash this time.

        • MiTurn says:

          “as the reported ”value” of our house is over 4 Times what it was 6.5 years ago”

          And the subsequent property taxes too. Our county is quick to raise valuations for tax purposes, slow to bring them down.

          I hope there is a crash in RE prices, if only to make homes affordable for my kids.

        • VintageVNvet says:

          nah mit:
          here in the saintly part of the tpa bay area, as in FL in general, our property taxes are very limited as per the same guy who got that passed in CA came here and got the same concept passed by FL legislature.
          very limited rises, and, on top of that for ”homesteads”, LOCAL FL areas have additional beneficial reductions in rises for property taxes for elderly, etc.
          I really have NO wonder at all why SO many folks are moving to FL these days, and never mind the politics, though they seem to be attractive to a lot of folks from the blue controlled states too for some reason(s).

        • Anthony A. says:

          VVN, why are so many moving to FL?

          Probably for the bugs, the humidity, the TRAFFIC, the Blue Hairs, cheap and plentiful drugs, and, last but not least, to witness Florida Man in action. LOL

          (Oh, I forgot…..the hurricanes)

        • VintageVNvet says:

          just for FUN AA,
          NOBODY living anywhere near Houston, in spite of perhaps your local hood being declared best hood in USA recently should ever,,, ever refer to TRAFFIC elsewhere as a challenge, eh?
          As to ”Florida Man”,,, some of us have hope that ”they” will let him continue as Governator until his terms are limited,,, and NOT drag him off to the SWAMPed lands,,, eh

        • Anthony A. says:

          VVN, yeah we have traffic, no matter how good this neighborhood is! And it’s getting worse as time goes on with TONS of folks moving to the north side of Houston. And then we have the “new” people coming across the border (without cars).

    • John H. says:

      It’s almost ancient history, but Chart 29 in Friedman’s Monetary History examining years 1929 thru 1933 is eye-opening:

      – Stocks (S&P): 180 to 45, by way of 254

      – Corporate yields (Baa): 5% to 9% by way of 11%

      – Fed Discount Rate: 5% to 4% by way of first 6%, then 0.5%

      The Great Depression was a different age and circumstances, I know, but these gyrations are indicative of the strength of a market reversal, and how doubly messed up things become under subsidized and centrally-controlled banking.

      • phleep says:

        But once the crash happened and Depression was setting in, didn’t Friedman argue, the Fed NEEDED to enlarge money supply then, and didn’t?

        • John H. says:


          As a monetarist he believed that the central bank can and should manipulate the monetary levers.

          Friedman, RIP, was a great free-market advocate, and extremely logical and persuasive. (Really fun to listen to his debates on Free To Choose .org)

          But, sadly, he believed in market-based pricing on everything EXCEPT the one thing that everything else is priced in terms of: Money.

          We all have our inconsistencies, I guess…

      • Augustus Frost says:

        Your S&P data point has to be off. The Dow only hit 381 on September 3, 1929.

        Yardeni’s site has it at 32 on September 7th.

        As for subsidized banking, Davidson and Rees-Mogg in one of their books claim that bankers testified AGAINST deposit insurance before the McFadden Commission (?). A quote is included purportedly from the commission hearings.

        The quote is entirely 100% accurate.

        • John H. says:

          Thanks for your comments, Augustus.

          Good catch on the “S&P” that I referred to in my comment. It was not today’s S&P 500, and I apologize if I mislead you.

          Check out Chart 29 on p. 304 of A Monetary History of the United States 1867-1960 (Friedman and Schwartz,, Princeton University Press, 1963), I think you’d appreciate the chart and the surrounding text. In the text they refer to the “Standard and Poor’s composite price of 90 stocks,” indexed to 1926. I can’t speak to Yardeni’s numbers, or whether the index used by F&S was somehow merged into the S&P 500.

          That said, I think you’ll agree that the history presented by the chart — extreme market volatility in the shape of a stock index rising by 120% in 3 years, then dropping 75% — might be worthy material for market participants as they ponder potential outcomes to 12 years of hyper-active fed policy-makers.

          I was confused by your question about deposit insurance, and banker opposition to it. All government policy has detractors, I suppose, so it’s no surprise that some bankers (the good ones!) might have been against it back then. Regardless, the policy prevailed, and that subsidy exists.

          I was also thinking of other subsidies including IOR, but headlined by the periodic BAILOUTS that drive most taxpayers crazy.

    • c_heale says:

      If they cash out…

  9. John Apostolatos says:

    The IPO narrative over the past two years was this: The Fed will keep interests rates at 0 and money printing at full throttle for the foreseeable future, so where are you going to put your money?

    Most of these companies had no real business model and sometimes not even a real product. They would borrow massively and push up the IPO price by buying their own shares to create momentum and suck in the gullible investors.

    Now their narrative is that the Fed will stop at 1% and we will be “back to QE in 2023,” and as such there are still some greater fools in the market for their IPO. We shall learn more after the Fed meeting this week.

    Amazon, Apple, and Walmart were the greatest beneficiaries of the stimulus cash injections. The sputtering consumer is clearly showing that monetary policy is pushing on the string and Powell knows it, and unless the government can agree on another massive stimulus injection, you can kiss the economy goodbye. Biden is pushing for student loan forgiveness and more child tax credit to delay the inevitable, but I don’t believe it will be enough.

    • Mr. House says:

      “student loan forgiveness”

      Yet those haven’t been paid for the past two years…. and the consumer is still tapping out. Not sure forgiving would do anything else other then drive interest rates higher at this point.

  10. 2banana says:

    It’s not the revenue.

    It’s what is left after costs are taken out.

    For realapoo!

    “IPOs can still happen, and can still succeed, but now the companies need to have real potential, real revenues, and the valuations will be a lot lower. Hype-and-hoopla stocks will get shookalacked.”

  11. nsa says:

    Anyone remember the dotcom era magazine, Red Herring, dedicated to the heroic venture capitalists, entrepeneurs, and technologists of the late 1990s? Lots of inspiring stories about little twerps in their dorm rooms with a new killer ap being capitalized for tens of millions of dollars. Covers adorned with dotcom startup management teams: fruity looking prematurely bald guys in black turtle necks and hipster tennis shoes..with smirky grins like they just swallowed the canary. And always the relentless worship of ersatz wealth and the luxury lifestyles of their dotcom startup idols. The magazine disappeared in 2003.

    • Wisdom Seeker says:

      LOL. I’m waiting for the return of F*, Bank-Implode-o-Meter and all the other greatest hits of the 2006-2010 debacle.

      Meanwhile, though, I’m with DR DOOM below: I think we’re going to see another short squeeze / dying-cat bounce here. S&P needs to revisit 4400 or so and suck everyone back in on the long side, before it can truly plunge.

      • SocalJimObjects says:

        I can see this happening. I called it wrong last Thursday with my Chairman Xi comment. It can’t be a coincidence though that Chairman Xi tried to boost the market a week ahead of the FOMC. He’s obvious long the FAANGS stock. Perhaps he’s one of AARK’s investors?

      • HotTub Marmalade says:

        Bank Implode-o-Meter is still around

      • Ethan in NoVA says:

        Pud of F*dcompany said he wouldn’t do it anymore since he is friends with too many execs of those companies. He also “lost” all the old site data as well. Total bummer.

      • Gooberville Smack says:

        I want some! I still have the same handle from back then.. gooberville smack!

    • Wolf Richter says:

      Thanks for bringing it up again. Disappeared from my consciousness it seems.

  12. DR DOOM says:

    Fear and capitulation ain’t showed up yet. Everyone expects it will be this week. More than likely it will be the opposite. When fear and capitulation shows up it will come at the right time to hurt as many people as possible. That is one thing you can always count on in the stock market. It loves carnage and max pain when it rolls over. Over leveraged Boomer speculators with margin exposure and property that “can only go up” might want to apply now for that Wall-Mart door checker job to get ahead of the rush.

    • Djreef says:

      Exactly. We have a lot more room to run on this.

    • Old School says:

      I blame the Fed. The average person doesn’t begin to grasp the financial system. If Fed runs a policy that rewards leverage for a decade, then average person will jump on board as that appears to be the way the economy works.

      • Root Farmer says:

        Old School,

        “I blame the fed.”

        And I blame Congress. The only entity with the authority to manage the fed. Instead, Congress is a co-conspirator.

    • phleep says:

      Consumers still having springtime consumer-frolics. Free at last, right? No, the White Squirrel has appeared.

      Maybe it will all work out. (Cue sinister laughter.)

      • Dan Romig says:

        As if on cue.

        Giant sunflower seeds are cleaned and processed by Friederichs Seed in Foxhome, Minnesota before going to the Giant brand plant to be roasted.

        They taste great!

      • DR DOOM says:

        The Cherokee believe The White Squirell has magical powers. Highlander Scots like mine that married into the Cherokee located in the valley’s of The Great Smokies in N.C. And Tenn. have heard stories and some have stories in their families of The White Squirell.

        • Dan Romig says:

          Dad was born, Robert William McClelland. He was adopted and had his name changed. By blood, I am DanBob McClelland from the Clan of McClelland, Galloway, Scotland.

          These seeds are grown near Foxhome, Minnesota and cleaned by Friederichs Seed before going to Giant and being roasted, packaged and sold. Their Friederichs family and Romig family are united together in business.

        • Dan Romig says:

          The reason I repeated this was that my comment was waiting in moderation. Just an FYI.

          “We are all mutts in America.” according to the movie ‘Stripes.’

          But both of my grandfathers, the other from Budapest, married women from Wales. So, they had that in common.

      • Softtail Rider says:

        Glad to hear all you aren’t from Olney, Illinois the home of the White Squirrel.

        At risk of being deleted but couldn’t resist.

        Have a great day.

    • phleep says:

      I love Watergate guy Ehrlichman’s sinister-lawyerly phrase: a “modified limited hangout.”

    • sine99 says:

      “Fear and capitulation ain’t showed up yet. Everyone expects it will be this week. More than likely it will be the opposite. When fear and capitulation shows up it will come at the right time to hurt as many people as possible.”

      There is wisdom in this statement and I want to give credit to Dr Doom for summarizing this concept nicely.

      I’m not making any predictions about what is or isn’t going to happen, but the market slaughters typically start when even the bears least expect it. For people who live though these busts in the past, this is one of the
      hallmark lessons learned that Dr Doom is sharing here.

      I’ve seen some dotcom-era nostalgia (or anti-nostalgia) in the comments to Wolf’s article here about the IPO bust, so one of the things I’d like to add is this: The dot-com crash didn’t really get going until March 2000. Prior to New Years, there was a lot of fear over “Y2K” bugs, etc. Everybody was relieved the world didn’t end on Jan 1st. Everybody was relieved LTCM didn’t bring an end to the party in 1998. Everybody was relieved that the recent Fed rate hikes weren’t damaging the economy. Nothing seemed to bring the economy down. All the fear had disappeared. Everybody was breathing a big sigh of relief. Perma-bears started capitulating.

      March rolls around, weather is beautiful in California, people are enjoying
      life, all is right with the world. Bam, meltdown begins on some lazy, sunny spring day. (March 24, 2000).

      It is worth noting in this history that the Fed started raising rates in November, 1998. There were six rate hikes between November 17, 1998 and March 21, 1999, according to the data I have been able to find.

  13. The Option says:

    Renaissance would’ve been the best short

  14. Island Teal says:

    Might be a good time to take a look at how too incorporate both Ag and Au into your financial tool kit for asset protection. You will be very happy later that you did. 💵💵💵

    • phleep says:

      By the time the crowd figures out “the next life-raft,” it is too late for that one. As now, being well pre-positioned on some assets will assure one is not underwater.

    • MiTurn says:

      “incorporate both Ag and Au into your financial tool kit”

      Island Teal, that’s a wise idea. Sort of an ‘anti-fiat-money.’

  15. Anthony says:

    With all the doom news, I guess today may be bounce day as nothing goes up or down in a heck of a straight line, that is, if your markets are open as they are all closed here in the UK and large parts of Europe ???

    • phleep says:

      Futures are flat at the moment.

      Memories of 2008-09, when weekends were tense circuit-breakers in market descents (at least for the peasant masses who couldn’t trade then).

  16. RM says:

    I really wonder what this portends for the bay area economy, including housing market. So much of the local economy and housing has been fueled by the rise in equity funding of companies that had no business being in business.

    This appears to be along slog ahead in the bay.

    • Wolf Richter says:

      Housing in San Francisco more closely tracks large moves of the Nasdaq than mortgage rates. Smaller moves don’t matter, but a 50% Nasdaq selloff that is sustained for a while and knocks out funding for the startup scene is correlated to housing downturns, rents first, then home prices.

      • TonyT says:

        Was there a big Nasdaq selloff in 2008?

        (I’m thinking a more accurate description is that the high end Silicon Valley housing market (so SF, Palo Alto, and similar?) tracks Nasdaq, but cheaper markets (e.g. condo) and areas are also affected by mortgage rates. And, of course, there’s also the layoff rates – with the massive liquidity of the past decade or so, many people have forgotten about when the Silicon Valley roller coaster goes down).

        • Wolf Richter says:

          “Was there a big Nasdaq selloff in 2008?”

          Yes, it kathoomphed 55% from 2007 to 2009, nearly back to the dotcom-bust low of 2002, and back where it had fist been in 1996.

          After 13 years of money printing, people forget (or never knew) what stocks can be like and how investors can get thackamuffled.

      • RM says:

        Agreed as it relates to Housing, but many other correlations have been broken. It used to be said that the Office Market also tracked the Nasdaq. This relationship seems to have been busted or disconnected over the past couple of years as Nasdaq has done well while the Office Market has suffered. Sure, we’re talking about different segments of RE market but my point is that correlations can also disconnect. I think that Housing is going to be very tough in the bay area for many years ahead.

  17. BuySome says:

    News Flash…Kerplunck Industrial Latex Limited (KILL) is seeking to finance a gaseous inflation into the ionosphere. As a result, they will be recruiting investors and floating an IPB….Inevitable Public Bankruptcy. Meanwhile, university paleontologists have uncovered the fossilized remains of a species to be labled Collectosaurus Wrecks. The discovery has entailed an examination of the remains of its’ stomach, said to be holding more than five thousand pounds of worthless paper promises. It is believed the animal gorged itself to depth while wading through the murky waters of a tar pit.

    • TimTim says:

      …all bones intact as it appears it didn’t even have enough energy to bounce at the point of death.

    • Wisdom Seeker says:

      Thank goodness NFT’s solve those indigestion problems… when digital “assets” go to zero, there’s so much less mess to clean up!

  18. Xaver says:

    I agree. Waiting to see some collapses in the PE space.

  19. TimTim says:

    ‘WTF’ they’ll say as their stocks get kathoomped and their egos get shookalacked (down) the whole wazoo.

  20. The very first thing to recognise is a simple fact; when you use the existing IPO concept for start-ups; you can only use the underlying thoughts of a few hundred Venture Capitalists to guide the future economy. In so doing, you automatically exclude the millions of others, who presently lie outside of the accepted structure of suitable recipients for such investment.

    What we need to do is return to the original concept of all start-ups to start very small and are allowed to grow organically, until they can show the necessary ability to regularly record, over at least several years, sufficient profits to attract the attention of what were once described as “Institutional Investors”, such as Insurance companies or Pension funds. They in turn would only support successful delivery of regular dividends; deeply scrutinise the management structure; allowing all ordinary stock market investors the certainty of long term successful returns on their own personal investment.

    That now old fashioned concept allowed millions of start-ups to create the widest possible view of future business success; yet with only the most successful, delivering regular dividends, to ensure a stable stock market success for the long term. We must turn back the clock to re-build a successful long term economy.

    • TimTim says:

      Is the recent IPO craze, however, a useful lesson in which characters to avoid in the years to come?

      • phleep says:

        Useful unless you wind up sleeping under an overpass. And the folks in Hoovervilles are less civilized than they once were.

    • BaritoneWoman says:

      Emphasis on showing “sufficient profits”.

      WeWork, for instance, didn’t turn a profit, yet it was allowed to feed at the VC trough for several cycles. The music stopped when it attempted to go IPO.

    • Peanut Gallery says:

      But you are describing making investors change the way they evaluate?

      That’s a pretty big ship to turn around.

      Cheap money is a part of this overall story, but let’s face it… People like to speculate. And the incentive structures that currently exist help encourage speculation

  21. entee says:

    Kathoomphed, Thackamuffled, Shookalacked.
    Three highly descriptive words but I can’t find them in any dictionary. So I tried to imagine the sound of the described action but that left me with a vacant space between my ears. My imagination was unable to cope. Then I thought O.K., Wolf is trying to describe with new words the enormity of the collapses he is witnessing. I wondered then would Shakespeare have used these words. But no, I don’t think so.
    On the other hand, top marks to Wolf for journalistic licence to inject some humour into his words.

    • Wolf Richter says:

      A commenter raked me over the coals for using normal words like collapse or plunge to describe these situations and exhorted me to be more creative :-]

      • VintageVNvet says:

        and you DID GOOD Wolf,,, congratulations!! and please keep keeping on with it!!!
        for those youngsters, boomers included, who for any reason did not totally grasp onto MAD magazine,,,
        try to find back issues where there were SO many new word constructions that it was pure joy for folks just for the stimulus to our imagination(s)

      • Wisdom Seeker says:

        I love it … every financial crisis deserves its own fresh vocabulary!

        New Words Entering the Language in times of crisis:

        1929: Hoovervilles (re-used upthread)

        1970s: Stagflation

        1997: Irrational Exuberance.

        2000: Dot-Com. “Monthly Unique Visitors”. “Monetizing Eyeballs”

        2010: “Flash Crash”

        2008: Robosigning. Bank Failure Fridays. Implode-o-Meter.

        2022: SPACs. Shookalacked.

        There are more, and will be more to come!

  22. Winston says:


    • MiTurn says:

      Look it up in your Wolfsters Dictionary.

      • VintageVNvet says:

        Some of us would prefer a subscription to that constantly updated digital resource over another mug, eh
        ( ( Perhaps especially for those of us who might possibly be described as ”long in the tooth”,,, ”digitally challenged” ,,, ”crusty old farthers” etc., etc. ) )

      • Winston says:

        I did an intertubes search and only found this headline. I’d assumed it means “ka-thumped,” but thanks for the klarificashon anyway.

  23. unamused says:

    RE: shookalacked.

    Love the sound effects. No audio required. Perfect for those shazbot moments.

  24. phleep says:

    All the dreamers/scammers are being flushed out by the succession of short squeezes and dead cat bounces. Loss has a way of focusing the mind. The dips will continue as the system is cleansed of (at least a good solid measure of) the decadence that crept in. The commies have reeducation camps, we have market realities (if a market is allowed to operate). God forbid Powell blinks and the decadence starts again, because the patient is in bad shape and in need of serious rehab. If not, it is back to crazy-town, kiss your currency goodbye (for real this time), and the fragile tatters of social peace illusions with it.

  25. phleep says:

    The musical chairs game is stopping and those whose portfolios are furthest from real assets (and a reasonable amount of liquidity to keep it all going), furthest out there in la-la-land will get their clocks cleaned. It seems there is a retrenchment now (everywhere, at many scales, local and global) to take flight to perceived durable value in real assets. Nations too are holding onto their commodities chips tightly. But this too can be overbought in the world of easy investment switching.

    The guy who does “Digging to China” on youtube notes a crackdown there on use of such phrases as La La Land. What a great way to fix things: just start declaring everything illegal. They are already declaring huge cities as basically jails. Why not just wall the whole country and say the entire place is a prison and reeducation camp? Our way is no less hilarious.

  26. phleep says:

    Is today just a bip-bip-bip thunk? Or a grand Kablooey?

  27. Brent says:

    Anyone needs easy college credit in “Ancient Financial History” ?

    All-around winner in the late 90’s was “Lexington Troika Dialog Russia” fund which skyrocketed 178% in 1997.Probably because the name had oh so much panache.

    -Lexington: a whiff of British respectability invoking images of conservative bankers in top hats

    -Troika: three stallions galloping across the snowy Siberia toward sunrise

    -Dialog: stern yet fatherly Western tycoons lecturing reformed Commies under the portrait of Vladimir Lenin

    -Russia: Atlas shrugged and awoke in 1991 like Slumbering Lion

    By the 1999 the fund was dead.Turns out it was run by 2 young guys with no financial experience & one gal who did short time at JP Morgan.

    Short obituary can be found at SEC website.

  28. Peanut Gallery says:

    Funniest part of Gurley’s tweet:

    “You may be shocked to learn that people want to value your company on FCF and earnings.”

    Have people become THAT disconnected with reality in fantasy land? That is sad

    • Anthony A. says:

      ………”FCF and earnings”…..what are those used for (today’s Robinhood crowd)? And of course, the Reddit crowd.

    • unamused says:

      Those of you who are not video game enthusiasts will never understand their strategy.

      • 91B20 1stCav (AUS) says:

        una-never an enthusiast, but understood your point all-too-well when browsing the shrinking printed newsstand in the supermarket some years ago and saw a video-gaming magazine whose cover trumpeted: ‘…all the latest hacks and cheats…’.

        may we all find a better day.

    • Wolf Richter says:

      FCF = free cash flow. I have now added this in brackets to his quote. I should have done this in the first place. I hate unexplained acronyms.

  29. I think I would just buy the ARK fund. She seems to know and she is isn’t afraid to trade around her positions. Look at AAPL. scrapping the bottom for years. You put all your eggs in the wrong basket, too bad. Now you are betting on how the new economy shakes out, which is double tuff from just picking stocks in a Fed friendly environment. China is going retro Maoist, cross currents. Everybody has a shortened time line right now.

  30. SoCalBeachDude says:

    5-year Treasury rate briefly goes above 3%, with 10-year rate also approaching that mark

  31. Poor like you says:


    • unamused says:

      Additional financially-relevant words can be adopted from The Books of Bokanon.
      For example, “duffle” refers to the destiny of thousands of people when placed in the hands of a “stuppa”. A “stuppa” is a fogbound child.

      The use of words like these is usually discouraged because they too accurately describe how the world is terminally mismanaged.

  32. Michael Gorback says:

    The Millennials are hitting their spending years as they approach 35. They’re not still living in their parents’ basements because they have inherited the house. They’re going to have an IoT in their homes. Hell, I’m an old codger turning 69 this week and I manage my security systems, garden water features, hunting trail cameras, and thermostat with my phone. I draw the line at Alexa.

    You probably have no idea where their interests lie or where they will put their money. They are crypto fans and look to Coinbase as an investment, not JPM. They don’t watch ESPN because they’re busy watching online gaming tournaments. Some Millennials make a living playing in these tournaments. The industry will probably coalesce into some startups that will go ballistic.

    Millennials are going to buy these disruptive companies and leave you in the dust. You can dance on the graves of OKTA, CRWD, DDOG and other startups but in the dot-com bust who survived and thrived? Cisco or disruptor Amazon?

    Look for good management with skin in the game because they’ll have to do what’s best for shareholders. Look at the burn rate and whether the business is viable in a rising rate scenario. Do they have a war chest to make it through? Are they already profitable?

    The surviving disruptors will largely depend on management and the ability to weather the storm.

    • Anthony A. says:

      Happy Birthday old man! LOL

    • Harrold says:

      The oldest Millennials are already in their 40’s. Their spending years are muted to the afore mentioned student debt they have accumulated. I wouldn’t plan on having them bailout out the stock market any time soon.

    • unamused says:

      “Hell, I’m an old codger turning 69 this week and I manage my security systems, garden water features, hunting trail cameras, and thermostat with my phone.”

      Sounds like the HAL 9000 model. Once Cyberdyne Systems completes its hostile takeover you can hook yourself up in a pod and power it with your own nervous energy.

      You’re not old at 69. I don’t expect to place better than second or third in the senior bodybuilding tournaments by the time I get there.

      “The Millennials are hitting their spending years as they approach 35.”

      Unfortunately they tend to be confused about the meaning of ‘disposable income’.

    • Dan Romig says:


      My local newspaper’s business section on Monday has a look at insider’s action on the bigger local companies. There’s a few of them in the TwinCities, by the way.

      Your advice is very good.

      Many of the trades are options exercised and promptly sold. That I understand, as it seems reasonable to get paid. The ones I like seeing are where top brass simply buys outright to add to fairly large positions. It is nice to see how many shares owned, and what that net value is, after the ‘Insider Trading.’

      Today’s report on Target (which I own some of):
      M. K. Kremer, Officer sold 8,602 @ $250 on 20 April. Owns (Directly holds) 9,909 shares.
      J. Sando, Officer sold 2,000 @ $250 on 20 April. Owns 27,358.
      C. A. Sylvester, Officer sold 2,030 @ $250 on 20 April. Owns 7,891.

      Those trades do not give me ‘warm fuzzies.’ Not huge numbers, or made by the top brass, but the wrong direction. Target is @$225 as I type, and topped at almost $252 YTD on 21 April.

      Just used as an example ….

      Happy Birthday to you.

      As I finished my bike ride today, at a good clip with a tailwind, I sang to myself, “The Old Man is Down the Road” by John Fogerty.

      I have a decade to go to reach you Doc. Keep on, down the road!

    • Depth Charge says:

      Considering nearly half of Boomers have zero retirement, methinks your ASSumptions could prove a bit Flavor Aid-ish. Poverty is generational.

    • TheAltonRoute says:

      I was born in 1982. Crypto looks like a bunch of gibberish to me, an extension of video game fantasies to the world of money wrapped up in some sort of religious cult.

      • Augustus Frost says:

        It’s literally nothing and only exist because of the asset mania. Literally anyone can create one.

        At least with fiat currencies, it has to be accepted for debt and tax payments and any financial transactions with the government.

  33. Don Engelbach says:

    Shookalacked?? Kathoomphed?? Thackamuffled?? Boomalaka boomalacka? Is that official wall street talk?? Talking to my broker, I think it is Thackamuffed. France and Estonia in mid 1700s tacked on the ‘l’. It made it rhyme with more words.

  34. SoCalBeachDude says:

    The Fed can’t prevent a recession, Larry Summers and his co-author say

    Recession is ‘almost inevitable’: former Fed governor Ferguson says

    Actually, what is really inevitable and certain is a real depression which is very long overdue and very much needed to fix things.

    • Wolf Richter says:

      A recession may be needed to wring the excesses and distortions out of this economy and out of the financial markets, and end the shortages of goods and labor. Business debt needs to blow up in large amounts (bankruptcies) in order for businesses to move forward and expand without that debt overhang, and a recession, if it’s allowed to do its thing, would do that.

      “Recession” is not a four-letter word. It’s part of the business cycle and credit cycle.

      • Augustus Frost says:

        The type of recession that is necessary to accomplish what you describe isn’t a “normal” one. The economy and financial system are far too distorted from artificial demand, distorted cost of capital, and the loosest credit conditions in history.

        The US may be (one of) the cleanest dirty shirt(s) around, but the long-term fundamentals in this country still absolutely suck.

        Actually attempting to normalize accumulated distortions will result in plunging living standards.

        Filling the gap with more government entitlement spending will substantially defeat the purpose of any supposed economic cleansing process. It will only load the federal government’s balance sheet with more future unpayable debt, to be “repaid” by more future “printing”.

        There is never something for nothing.

  35. UrsaTaurus says:

    thackamuffled kathoomphed shookalacked

    Bravo, sir.

  36. Volvo P-1800 says:

    Interesting day in Stockholm where the OMX flash crashed 8% this morning. Someone with a fat finger at Citi allegedly had a very bad day.

    • unamused says:

      Whales have flukes, and since this was a fluke it means a whale was probably involved.

      In finance, a whale is any individual or company who has enough money and power to directly influence the price of a cryptocurrency or stock, usually in a negative way.

      The ‘London Whale’ trader Bruno Iksil achieved Wall Street notoriety by losing $6.2 billion with a single trade, a feat rarely equaled by the greatest stuppas in the FIC.

  37. Gen Z says:

    US Treasury yields just topped 3%!

    Canada is a bit lower because the Realtors are probably colluding with Adam Vaughan to protect the real estate bubble.

  38. Seen it all before, Bob says:

    OMG! (Said with a Valley accent.)
    IPO is up 80% in 5 years? Should I buy more?

    Famous words I said in 1999 before the next 70% kerplop with Lucent(Bell Labs) ($45(1996)->$128(1998) -> $73(1999) -> $1.75(2002) ).

    Thank you again, Wolf for helping me re-live my past and learn from my mistakes.

    • Happy1 says:

      We lived in Los Altos during that time and had a friend who’s company was acquired by Lucent (optical switch company or something similar). They had paper worth of about 38 million which evaporated down to about 400K on the time-line you provided.

  39. ru82 says:

    It looks like commodities are dropping.

    Oil is down. Grains are rolling over. Fertilizer prices have rolled over. Silver is dropping, Uranium is dropping. Oil is steady and not rising.

    Maybe the one .25% rate increase plus some jaw-boning is all we needed. LOL

    We are looking at an interesting scenario. Usually rate hikes are used to cool down a hot economy. The economy is to hot so they use the hikes to slow it down. Well we just had a terrible GDP print, ISM is dropping, so raising rates into a shrinking GDP sort of is new theory.

    • Wolf Richter says:

      “Oil is down.”

      Wait a minute.

      WTI = $105 up today, up from $98 on April 24, up from $94 on April 11, but OK down from the crazy spike in spike on March 8, up 62% from a year ago.

      Similar with other commodities. These things are volatile. Don’t draw conclusions from minute-to-minute moves.

      • VintageVNvet says:

        not only that, but at 5 pm est, all energy components up quite a bit for the day so far, but definitely VERY up and down recently in HUGELY swipes at the latest trade/news
        beginning to think to keep the 3rd vehicle so as to be able to fill them all when the price of gas goes down 10-20%, then make the gas last a couple months until it goes back down again, etc.

  40. Swamp Creature says:

    Noticed a lot of first time home buyers here are starting to take out ARM’s to get their foot in the door with the rapidly evolving interest rate environment. Did one recently for 5.65%. Next you will seen interest only mortgages and option ARM’s. Lenders have stopped paying their bills. We’re in arrears for over 3K in receivables from deadbeat lenders. These lenders are scum. We even held up settlements by not submitting final inspections, and using it for leverage to get paid. The hate mail that we are getting is overflowing our Earthlink e-mail server. Home buyers are getting screwed as well, as the delay causes them to have to pay a higher rate of interest.

    • Anthony A. says:

      My RE Broker friend here in Texas just had a deal close on a small house and it went for the actual appraised value, not a penny over. It was an investment 3 BR, 2 bath older house. No bidders, only one interested buyer.

      Broker friend said he is not seeing much action at all. He expects the worst this summer.

    • Dan Romig says:

      Swamp Creature,

      As I replied a week ago on your comment regarding accounts not being paid off & lenders not compensating you for services rendered, I hope that the truth comes out, and that these companies go out of business.

      Stay strong to your code and maintain your honor and integrity, no matter what others, without a code or integrity, do towards you.

      All the best to you sir.

  41. Einhal says:

    Wow. DOW up 500 points in 30 minutes. Looks like Jerome and the rest of the PPT were on the crapper and finally finished up to start trading!

    • Wolf Richter says:

      Yes, Jerome was finally able to round up the PPT in a timely fashion and herd them back to their trading desks, and prevent them from heading straight from the crapper to the bar, according to sources familiar with the crapper.

      • unamused says:

        You know we’re in trouble when you’re depending on aging alcoholics with constipation to save you.

  42. sunny129 says:

    Another Positive spin(s) from the financial media:

    1. 0.5 basis increase is already ‘baked’ in the cake!? So what? No more hikes? Remember ‘peak’ inflation’ kool aid a couple weeks ago?

    2 These stocks soared during the pandemic, and then crashed. TEN are now expected to double in price

    3 GS- Cos are going start buy-bacl shares after the black out which expired, on Monday

    4. once Fed outlines their hike-plans, Mkts will digest and start ascending ( damn the fundamentals)

    MKt indexes will remain violently volatile rest of the year along with expected more than one fierce bounces.

  43. patrick27106 says:

    tbt-sqqq- sjb-sds- been working very well – going to be even better over the next 18 months

  44. cb says:

    Bill Gurley said: ……….

    2) Valuation multiples are always a hack proxy. Dangerous to use. If you insist, 10X should be considered AMAZING and an upper limit. Over that silly.

    10X what?

    • Wolf Richter says:

      “10x” can mean all kinds of things, such as 10 times revenues, 10 times EBITDA, etc. In this case, since we’re talking VC firms not PE firms, my guess is a valuation at IPO/sale of 10 times the invested money.

  45. Zark Muckerberg says:

    Bezos know whats up. He sacrificed many water bottles to the pee pee shrine to achieve his success.

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