THE WOLF STREET REPORT: Big Tech & Startups Getting Ready for Reality

Shedding jobs, offices, and warehouses. It’s kind of sobering. Reality has that effect, after a drunken binge (you can also download the WOLF STREET REPORT wherever you get your podcasts).

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  172 comments for “THE WOLF STREET REPORT: Big Tech & Startups Getting Ready for Reality

  1. 2banana says:

    Hudson Yards is taking a beating!

    • otishertz says:

      Beatings in NYC have a tradition of being by the docks.

      • joedidee says:

        I don’t need office
        I need some storage which is still outrageously priced

        • Sit23 says:

          No. You need to minimalize. It would be cheaper to give your junk to charity shops than to pay storage fees for keeping it.

        • VintageVNvet says:

          VERY VERY GOOD comment, far damn shore!!!
          Been trying my best, with lots of help from my ”better half” to ”give away” as much as possible,,, especially the tons and tons of ”stuff”.
          WAAYY too much stuff even after three ”’yard sales” with everything dimes on dollars,,, etc.,
          WE, in this case the family we in a tiny house per the better half’s choices/dictates as our Wolf is very well informed about and helps us to become better informed, etc.
          THUS, NO debt and able to help others in our ”hood” by our choice, NOT ”GUV mint” dictates.
          Thanks again for Wolf and many of the great ”commentariat” on

        • Mark says:

          Flea mall rent is about the same price as storage unit, maybe a sensible solution for some situations…

  2. polistra says:

    Why did they go on hiring binges in the first place? Hiring is EXPENSIVE. Diversity compliance, training, slow ramp-up to full efficiency. Normally corporations are slow to hire and fast to fire.

    I find it hard to believe that Amazon and Apple, who are in charge of the entire economy, didn’t account for their own scheduled plans to pop the bubble they created.

    • 2banana says:

      Because most humans are linear thinking in nature and believe the trend will go on forever.

      • Phoenix_Ikki says:

        Hot hand fallacy is well and alive. The general symptom of this is usually this time is different and going up can be parabolic and irrational but coming back down, never and it will just be a minor adjustment and very orderly. My 5 yrs old think the same way too, I guess a lot of people grow up to have that unbridled optimism and hopium in how system and cycle works

        • phleep says:

          It is in our DNA. An excess of water of food supply in any species leads to overgrowth, then often a die-off. The imperative is to spread one’s genetic material as widely as possible.

      • COWG says:

        Zero cost / low cost money covers up a lot of inefficiency…

        It’s not important until your stock price is hit, then it is…

        But only then because the heavy hitters who own your stock start giving you the stink eye…

    • JD says:

      I think it’s more simple than that. As a middle manager, you will get flayed alive for not having enough employees, machines, capacity, etc and leaving money on the table, but you are MUCH LESS likely in large companies to get the same level of scrutiny for over-capacity. If the lean times come, you’ve either moved positions, left the company or were already part of the layoffs (middle managers are quick to be let go). Nearly every incentive to middle managers is on the side of building vs leaning out operations.

      • unamused says:

        Distorted incentives are sometimes covered in accounting courses but are otherwise allowed to proceed until they detonate. Aligning the interests of management with those of the firm was first identified as one of the fundamental problems of capitalism in the 19th century, and regularly comes back to bite.

        All such problems are ultimately management problems, but money flows uphill, blame flows downhill.

        The management of civilization has numerous serious escalating problems it is unwilling and/or unable to control. In due course it won’t just be a few corporations they’ll be blowing up, but in the meantime they’ll pursue their own short-term interests.

      • Gomp says:

        Most manager mindsets rely on more underlings = more power.

      • chas says:

        Parkinson’s Law nicely restated here.

    • Anthony A. says:

      “Why did they go on hiring binges in the first place?”

      JD nailed it above.

      Also known as “Empire Building”.

      • JD says:

        I continue to struggle with this even today. I am a Senor Middle Manager in a Fortune 100 company that everyone would recognize. With that said, while I don’t care as much about the # of people in my org chart, my job gets stunningly easier the more people I have, the more full time employees I have vs part time employees, and the more I pay people (less attrition). Nearly everything I should be incentivized to do, I am not. Conversely, almost everything I should not do makes my job easier, increases my raises/promos/equity/bonuses. I’ve desperately tried not to become cynical, because I tell myself that every major corporation can’t be this inept, but the more I read Wolf Street, I’m convinced that my situation is more likely the rule, rather than the exception.

        • Sit23 says:

          I think Dilbertian is the correct description of most US corporate philosophy.

        • cb says:

          JD said: ” my job gets stunningly easier the more people I have,”
          what happens to the bottom line attributed to your oversight and your ongoing viability?

    • Bobber says:

      Why go on the hiring binge in the first place?

      All it takes is one bicyclist to start sprinting, then the rest have to follow closely or they fall too far behind. They all start sprinting.

      In other words, 10% of it was a bold/crazy few who wanted to transform industries and gain market share in a failed effort. 90% of it was companies investing to simply defend market share against these lunatics. With zero interest rates, the lunatics had plenty of cash to play around with. Shame on the Fed for encouraging wasted efforts and bubbles.

      I think the Fed was following the advice of Paul Krugman, who thinks you can keep workers busy by digging holes and refilling them. This bubble was a version of that.

      Sure, there was some innovation, but not nearly enough for the efforts expended. The country would have been much better off if it built long-term infrastructure, rather than instant meal delivery, advertising, and social media.

      • unamused says:

        “I think the Fed was following the advice of Paul Krugman”

        Krugman didn’t believe The Fed would carry it to such an extreme just to help out the bank cartels. He was wrong, and has admitted it. He should have known better: the practice of taking profitable but ultimately destructive policies to extremes has been identified as SOP by numerous historians and economists going back to Adam Smith.

        • phleep says:

          Krugman failed to foresee some exogenous shocks. But they always happen.

        • cb says:

          Unamused said: “Krugman didn’t believe The Fed would carry it to such an extreme just to help out the bank cartels.”
          Such lack of vision. You would think Krugman knows who the FED works for. But then again, who does Krugman work for?

        • Russell says:

          Bobber – Krugman worships MMT.

      • phleep says:

        Adam Smith pointed out the downsides (we now call agency problems) of business ownership and management getting too far apart (as in large corporations). I see over-refined and effete corporate types obliviously making calls with other peoples’ money, burning cash. Meanwhile their end is taken care of. Look at Boeing. General Electric. What is going ON there? What weird form of human judgment has evolved there?

        • Venkarel says:

          I just sold some GE stock with a basis of close to $2000 per share.
          They did a 8 to 1 reverse stock split somewhere along the way.

        • Flea says:

          Boeing is very important,for national security. Except like all things ,cost cutting and incompetent engineers can’t build planes that fly

        • Dan Romig says:


          It was not the engineers that took a decades-old air frame and put a more fuel-efficient, but heavier and larger engine on it.

          The CFM LEAP-1B engine is not what the engineers who designed the 737, which first flew in 1967, had in mind. But in 2017, the two were combined.

          MCAS software versus aerodynamics and physics. Engineers wanted to go with the latter. Accountants went with the former.

          Boeing’s CEO and President, from 13 January 2020 until now, sat on GE’s Board of Directors in 2005. He sat on Boeing’s Board in 2009. He has Bachelor’s degree in accounting from Virginia Tech.

        • Bobber says:

          Flea, it’s important the the US have an aircraft manufacturer, but don’t assume it should be mismanaged Boeing. Let it fail. Let it’s assets move to a new better managed company.

      • otishertz says:

        Ahh kruggles, I want to pet him and give him taffy

      • Einhal says:

        It’s not even just not productive. Paying someone to bring your food to your door has a lot of negative consequences. It breads a society of lazy, incompetent people.

        • Sit23 says:

          What’s wrong with taking a few minutes to cook a yummy curry and rice? And make sure you have a nice wine or equivalent, and some decent music on the stereo whilst doing so. In our house, the cook always chooses the music.

      • enough says:

        “The country would have been much better off if it built long-term infrastructure, rather than instant meal delivery, advertising, and social media.”

        This. This. This. This!
        I Fxxxing hate what we created here!

    • Mistake to think the big tech companies freezing hiring has anything to do with the economy or their business.

      Are they not still making plenty of money?

      The real reason they announced alkeged hiring cuts is to help the Fed jawbone down the economy — thus helping to avoid more damaging interest rate cuts.

      It worked too — look at these discussions.

      • AD says:

        I agree as the layoff and hiring freeze announcements by the mega caps like Apple are mostly for large-scale psych ops on Wall Street.

    • Harvey Mushman says:

      “Why did they go on hiring binges in the first place? Hiring is EXPENSIVE. Diversity compliance, training, slow ramp-up to full efficiency. Normally corporations are slow to hire and fast to fire. ”

      At my company there was a genuine need to increase the head count on the manufacturing floor. After the 1st few months of Covid-19 we were swamped with orders. Another shift was added. They hired so many workers that the salaried people (me) can no longer park on site. We have park our cars at an abandoned gym and take a shuttle into the factory. Now the problem is that we cannot get some of the semiconductor components that we need.

    • Cytotoxic says:

      Amazon and Apple haven’t and cannot create bubbles.

    • SomethingStinks says:

      Multiple facets, big workforce creates an illusion of complexity. It makes the top dog feel more important and he can brag about the large teams he managed in the previous place, so he can scam the next place even more. Lastly there’s tribes working at each of these IT shops, so hiring a friends wife, mother, grandma, kid, dog etc for made up high dollar positions is standard practice.

    • Gooberville Smack says:

      What is not to understand? They hire when things are booming or else they miss out on making money. They lay off when it slows down. Looks like their scheduling is just fine, it’s all ‘at will’ employment anyways.

  3. JG says:

    No housing sale price crash coming unfortunately. Yes crash in sales transactions, list/”wish” prices, and refis, but not actual sale prices.

    • Wolf Richter says:

      Hahahaha, prices already starting to sag… You just gotta be a little patient to see the full effects. This takes years to play out. Home prices don’t work like crypto charts

      • Chris says:

        Last I checked the rental market in SoCal is an absolute firestorm, and the amount of people not living in homes, who wish they could live in homes shows no lack of demand.
        That’s going to act as a nice barrier to prices, as long as some folks out there can pencil out the difference of having their renters pay off their mortgage, just as it has been in Idaho and Illinois.

        The notion the market acts like some sort of moralistic disciplinarian makes for a nice narrative, but doesn’t always follow through.

        • Phoenix_Ikki says:

          Then I would highly encourage you to invest in SoCal market now if you think the demand will be strong moving forward and we have hit a high plateau.

          After all, listing is still low by historical standard and with so much rental and buying demand ever, don’t miss out now before price go higher again.

        • Chris says:

          I would, if I could get a mortgage at 2x the Fed’s rate like some people can.
          Until then, I’m still getting fleeced by the middleman.

        • SocalJohn says:

          Chris, listen to yourself. You just identified a key reason why the market is crumbling.

        • Jon says:

          I am in so cal
          San diego to be specific
          Seeing multiple price reductions and huge crash in sales volume and increasing inventory.
          The rents are not sustainable from income perspective nor are prices
          Something has to give in.
          Either all become millionaire or prices and rents come down bog time 😀

        • ru82 says:

          In my flyover area, there is no shortage of housing units (houses, condos, apartment). Apartments have been built right and left the past 10 years. These are apartments to rent, not condos to own.

          Funny but there are only 3300 (normally 10k) houses for sale and there is over 6500 apartment to rent and I see more apartments being built and few homes being built.

          Over the past 3 months the housing picture has changed. The price of houses have not dropped but the following has occurred:
          1) 3 months ago, houses were all going 5% to 10% over asking.
          2) Now house prices are the same but are being sold under asking price.
          3) I have seen a just a few price reduction occurring now too.
          4) Several people I know who are young millennials or old Gen Z’s and who have been outbid on houses the past 2 years are now getting winning bid on houses. They are buying the fringe homes. I say fringe as they are not in the top school districts but border the top school districts. These new buyers are also without kids so school ratings do not matter much right now. But because they are buying up these fringe houses and the house prices have bee going up, this is raising the demographics from low income(high school graduate families) to middle class (college graduates). Thus the schools will get better because of these young college graduate families.

          FYI – Most are buying with FHA 3% down programs.

          5) Almost impossible to find a starter home fixer upper. It seem like all homes in the low price range that are for sale have been remodeled already. I am guessing this is because of all the flippers who the past 3 years have been cold calling anyone who has equity in their home.

        • CrazyIvan says:

          Chris, It must be nice living in your own reality. Prices are crashing all around us and you can’t see it? Panic mode next.

      • Old Ghost says:

        Interesting. These big companies were hoarding workers, warehouse and office space, and now may be getting into “difficulty”.

        I wonder how long before they line up looking to be bailed out by either the FRB or the government?

        I don’t think money printing” is the correct term to use. It is more like “credit printing/creating”.

        • Wolf Richter says:

          The chip makers will likely be getting $52 billion in federal subsidies, that’s nearly a done deal. So that’s a place to start.

        • Phoenix_Ikki says:

          Gotta love the people that cries about socialism. Subsidize companies over and over again, free market capitalism. Subsidize individuals/general population…oh no, nobody wants to work anymore…

        • LK says:

          I think people want to work. They just don’t want to work *for* the kind of people that have been employing them *serving* the kind of Karens making demands of them.

          I know what the calculus is when push comes to shove, that workers are going to be put on the sacrificial altar to preserve the companies, the pecking order is well established. So I ask you: what sane individual would want to buy-in to that status quo, knowing that they are the grist for someone else’s bread?

        • Phoenix_Ikki says:

          The people don’t want to work narrative is BS to a large extend. Much easier to blame the next person/generation than to fix the root cause.

          Case in point, a researcher/professor in Canada dug through all the news articles in there last 100 years plus. There were people saying people don’t want to work going back to 1890s.. You will not see MSM dispel this false narrative, they are the main culprit in driving this point so people can be distracted from the real issue of not wanting to work for a Ahole

        • 91B20 1stCav (AUS) says:

          Phoenix/LK-the part of that phrase that always gets left off is: “…for a pittance…” (‘…somethin’ for nuthin’ and your chicks for free…-knopfler).

          may we all find a better day.

        • Winston says:

          “The chip makers will likely be getting $52 billion in federal subsidies, that’s nearly a done deal. So that’s a place to start.”

          That’s for sure. If it’s good enough for Nancy’s hubby, it’s good enough for everyone.

          I used to follow microprocessor technical developments in great detail, not for investment purposes, but because that’s a technical area that has long interested me. When Intel established an effective monopoly over AMD and significant technical progress (architectural, not feature size) therefore virtually ended due to the lack of real competition for them, I stopped paying attention.

          Now, I could kill myself. Check out the graph of AMD’s stock price before and after their comeback.

        • Einhal says:

          Phoenix, many people have been decrying corporate subsidies for decades. You just haven’t been paying atention.

        • Phoenix_Ikki says:

          @Einhal I have been paying attention, read my post, this implies some people not everyone. I am aware of a lot of people see this type of corporate welfare and call it out as it is, I am merely implying to those including politicians that can only blame one side of the equation.

        • ThePetabyte says:

          52 billion is a rather small price to pay to keep China from cornering a rather important component of humanity.

        • Wolf Richter says:

          Intel incinerated massive amounts of cash on share buybacks over the past 10 years, and so now it wants the taxpayer to hand it more cash to invest in chip plants??? These people are nuts, and they’re winning.

        • ThePetabyte says:

          Indeed the ends never justify the means. Accountability should have been present from the start and Intel along with many others should not have been allowed to perform buybacks.

      • Kunal says:

        Sales are falling not the sale price. RE owners are rich and they will be happy sitting on the property without reducing the price. They know that inflation is running 10-20% so sooner or later prices will rise as cost of construction, permit, materials etc. is rising rapidly. Bay Area construction cost is now running $400 per sq ft, in SF its almost $800. Now do the numbers.

        Yeah Wolf and many other bears, Bay Area RE is totally crashing. Prices are only up 6% vs. last year (after 20% run the year before), and DOM is up to 12 days. 12 days is the sign of the apocalypse. Homes aren’t even getting a single offer yet they are some how selling in 12 days.

        • Wolf Richter says:


          “Sales are falling not the sale price.”

          RTGDFA that I linked. You trolls refuse to look at data because you’re AFRAID of the data? Or because you’re actually just trolling with braindead BS, knowing that it is braindead BS???

          The second table in the article that I linked shows in red shows the year-over-year declines in home prices by county. And because you REFUSE to look at the data and just keep trolling with your nonsense, here is some of the DATA in the table from the linked article. This was marked in RED:

          Year-over-year declines in home prices — and this is just the beginning:

          San Francisco, house prices: -2.6% yoy;
          San Mateo (Silicon Valley), house prices: -5.3% yoy;
          Contra Costa, house prices: -1.3%

          In the Bay Area, you said, “Prices are only up 6% vs. last year”

          Hahahaha, another one of your effing lies. Prices are up only 3.7% v. last year. And BTW they were down 7% month-over-month.

          Every one of your trolling comments since last fall has been proven wrong by reality: the Fed will never taper, the Fed will never end QE, the Fed will never hike rates, the Fed will never start QT, and now: home prices will never fall. Don’t you see how silly this is?

        • Wolf Richter says:

          Kunal, I’ve probably reached the end of the line with your BS. Just an FYI.

        • Swamp Creature says:

          The real estate market here in the Swamp is dead. The farther out commuting suburbs are seeing houses sitting, with for sale signs everywhere. We don’t work those areas but I would not want to own one of these new townhouses. I see a repeat of 2005/2006. Anyone who believes otherwise is ill informed. Lenders are laying off loan officers left & right. Brokers are canning Realtors by the hundreds of thousands. I heard 1st Guarantee Mtg just filed for bankruptcy. Same with Sprout Mtg, This is just the beginning. ENJOY.

        • Whatsmynameagain says:

          We tried to buy last year in a certain area but the sale fell apart, then prices continued to skyrocket and we bailed, feeling priced out and not wanting to buy at what I thought could be a peak (we had offer accepted May 2021, deal fell apart in September, litigation settled in November). That whole period, everything hitting the market seemed to have offers within hours, and was off the market within a couple weeks. It was a frenzy.

          We don’t live there now. Had to move away. Sucked. But I still watch the real estate there closely. Homes are sitting. And sitting. And languishing. 30 days. 45 days. 60. Many deals have fallen through and the houses have been on the market 90+. Price reduction after price reduction. I can actually go back to my favorites on Redfin now and the same homes are still there, active listings.

          Even if we buy there, it has to be for less than we were offering before in order for us to afford the new monthly payments, and a lot of people we knew who were home searching while we lived there were in a similar financial situation to us.

          Tldr… Prices are coming down.

        • Jon says:

          Bay are is in treacherous water when it comes to real estate because of these reasons::
          People moving out.
          Stock market crashing.
          Companies moving out.
          WfH trends.
          Crypro crashing.
          Cheap money gone.
          High mortgage rates.
          Rate hikes.

          Real estate can be saved if FED pivots and starts doing QE again.

        • Jon says:

          Home prices are not defined by the price to build or inflation.
          Home prices are defined by monthly mortgage payment affordability

        • JeffD says:

          What about the CRE that still has to pay the mortgage while the property sits empty? I think most CRE is financed, right? Or does the Fed just let those slide because they own the MBS and don’t want the money?

      • 8_mile_road says:

        // Hahahaha, prices already starting to sag… You just gotta be a little patient to see the full effects. This takes years to play out. //

        I am looking forward to move back to San Francisco, once the housing price drop significantly, e.g. back to year 2011 levels. Sacramento is not bad, except the climate and boredom.

        Alas, if my parents know the bidding game of housing market, we could have lived in Fremont in 2011. They were defeated by foreign cash buyers.

        • RH says:

          I have bad news for you: the US is becoming a more desirable place for foreign investors, not less. Note what is going on in China: nothing says trustworthy bank like tanks parked in front of it to deter people from trying to withdraw their money.

          The protesters, for whom the tanks were placed, actually protested in mainland China and sought to get the help of the CCP– about the frauds committed upon them by CCP members: that is similar to a person in 1930 going protesting in front of the NY organized crime headquarters (headed by Luciano or Lansky then?) about all the gambling, prostitution, illegal alcohol use, and drugs in Chicago. LOL

          It makes our corrupt banksters, who are merely stealing about a trillion US dollars a year as of now through their “Fed” creating inflation, their tradition for decades, appear almost virtuous — I said “almost.” No wonder that CCP crooks may want to cache their $3.5 TRILLION plus in stolen funds in US real estate despite the threat of sanctions and forfeiture.

      • Gabby Cat says:

        In some parts of the country prices are slowly coming down, but in Central Ohio we still have the same insanity of last year. In central Ohio, there is still lower inventory and homes getting up to 50K over asking price while waving contingencies. Sellers, especially new home builds, are starting to incentivize. Free upgrades, buying down points, and paying closing cost. The bottom dollar is still up $30 a square foot compared to 2020. Now new home builders are idling their new subdivisions because not enough people are buying at their requested prices. Perhaps there is a new game in which they are willing to wait this out versus dropping prices? Could that happen?

        • Jon says:

          Builders would be the first to offer price reduced and bail out. They are generally smarter than mom and pop seller and have better sense of market.

      • ooe says:

        They do. See the collapse in home prices from the peak of Spring 2006 to the bottom in 2012.

    • Dan says:

      We have a lot of houses cutting $75-100k in the Denver area. Houses are starting to fall back to February and March levels.

    • Lucca says:

      The housing crash is just getting started. I’ve been keeping track of the real estate listings in many areas of the country for the last year and the number of listings and price cuts have risen dramatically. It won’t be long before there’s a glut of homes on the market, especially now that companies are starting to lay off workers.

      • Phoenix_Ikki says:

        Might be true but for many, it will be not in my area. This is definitely the case for majority in LA, OC, SD..of I get a dollar for everytime I hear why these areas are price crash proof, I would have enough money to buy a Bitcoin by now

        • Harvey Mushman says:

          I’m in Ventura County, CA. I have now started getting emails from REDFIN notifying me that prices are falling and to check out their new listings. I haven’t visited the REDFIN website in years. I got the first email on Wednesday, and I got the 2nd one today. As Bob Dylan would say “The times they are a changing”.

      • Cookdoggie says:

        Haven’t heard from Swamp Creature in awhile, wonder how busy his appraisal business is these days, and which direction it’s trending.

        • Wolf Richter says:

          Swamp Creature last commented at 8:08 PM time stamp, on a prior article and at 7:58 PM in this thread, further up, and he did talk about the swamp’s RE. His comment starts out with: “The real estate market here in the Swamp is dead.”

    • SocalJohn says:

      Even the realtors are acknowledging price declines. Denial is one of the strongest indicators of a bubble.

  4. Phoenix_Ikki says:

    I really hope we are not in the complete sober phase cause unless we are looking at ARKK, SNAP and some of these money losing expert tech stocks the market in general is still pretty expensive, if anything we are maybe at a stage of acknowledging you are drunk but still trying to have a good time.

    The market is still behaving like Papa Powell didn’t do last call already and still hoping for him to either sneak one through

    • phleep says:

      > The market is still behaving like Papa Powell didn’t do last call already and still hoping for him to either sneak one through

      Spot on! Ultimate tragedy if this stumbles back into Fed put as usual. Just an insult to any discipline or integrity.

      Some businesses out there need to fail, or be bought, or whatever. Some people hired in an hiring “orgy” need to be laid off. If that doesn’t happen, we are back in Powell put-land, sliding down the same hill. Inflation and dollar-decline could get REALLY no fun.

      Some house profit needs need to evaporate. There is NO painless path. It doesn’t exist.

    • RT says:

      SNAP at $10/share is still a joke. That company…. Seriously, what a Ponzi scheme. Cathie Wood @ ARRK… the emperor has no clothes. 🤡 show.

  5. Michael says:

    Fascinating. The supply shortages caused by government shutdown of the economy and mind numbing fiat stimulus caused an unsustainable supply spike. Wonderful example of the domino effect. Entropy in motion.

  6. Harvey Mushman says:

    I see some similarities between the article and company where I work… but on a much smaller scale.

    Last week my boss sent out an email to our department. It was marked URGENT. She needed to know

    – Our highest level of education (degree)
    – What are our technical areas of expertise
    – And how many years of experience in those fields of expertise.

    My boss said that she was being requested this information from her boss.

    A red flag went up as soon as I read the email.

    • CrazyDoc says:

      In a large heathcare company. All hiring now needs to be reviewed at the very top (aka hiring freeze).

      • Carbpow says:

        After reading the comments I wondered if I had been transported back to 2007.
        Only difference being Covid shutdowns being a factor. I guess its easier to blame a virus than “irrational exuberance”.

    • Gomp says:

      Seems to me a good “boss” would already know these things.

      • El Katz says:

        or could find out from HR.

      • Harvey Mushman says:

        That’s what I thought also.

        • Coffee says:

          Maybe its a warning to the low achievers to seek employment elsewhere. Easier and cheaper for the company if they quit then it they were laid off.

        • El Katz says:

          Coffee: The low achievers won’t leave as they likely can’t replace the job. The ones that will leave are the over achievers as they can more easily move.

        • Ethan in NoVA says:

          A degree and years of experience doesn’t mean it’s a good or valuable employee. The managers should be providing input on good and bad team members.

    • Ed C says:

      Hmmm. Sounds like a merger or layoff could be in the cards? Best case they are working on a proposal and trying to impress a potential customer.

    • Cookdoggie says:

      Tell your boss all that was on the last TPS report.

    • Flea says:

      Just ignore the e mail

    • Peter Gibbons says:

      I don’t miss those days of working for a bunch of corporate idiots. 5 years with Gannett and 2 other Fortune 500 companies each a 1 year stint… I saved enough to put up the middle finger. Telling everyone the truth while you leave was enjoyable. However, starting your own gig isn’t easy – although I wouldn’t have it any other way. F the Bobs and TPS reports. Been working from home for 16 years (pre Covid times 🤣)… and cleaning fish on TPS reports since. Boom.

    • Sit23 says:

      Most people would think that your bosses might already have that information. An obvious opportunity for bullshitting against their bullshit.

    • SomethingStinks says:

      Did they call a staff meeting to introduce the consultants Bob slydell and Bob Porter to the team? Is next Friday a Hawaiian shirt day?

  7. JamesO says:

    Love the way you see and explain the patterns Wolf! A true gift! Now how do we get you to replace JP? I can just imagine that first meeting with the FRB. Make it a stand up meeting- no chairs – and only serve healthy snacks at break … or better yet make them do some exercise to get blood back into their brains.

  8. Tomas says:

    Hey Wolf great work as always! Do you think this sort of commercial real estate paradigm shift indicates a rising risk of commercial MBS trouble a few years down the line?

    For example all the blue-chip office space in NYC & SF was certainly not initially financed as a risky asset right?

    • Tomas says:

      There’s a noteworthy amount of non-agency CMBS floating around correct?

    • Wolf Richter says:

      Yes, office CMBS are already being watched closely for this reason. But the companies I described are big companies that are not going to default on their office or warehouse leases.

      What will happen is that they will put them on the sublease market – nice facilities at a lower rate. Companies will grab them, and in doing so they are upgrading for less. And they’re leaving their current offices in older buildings. That’s flight to quality. Older office towers, built in the 1980s, for example, will lose their tenants and default on their mortgages, and the landlord will let the tower go back to lenders (special servicer representing the CMBS holders), which will sell them for cents on the dollar. We’ve already had a bunch of examples of this type happening. So it’s not the latest office towers that will get in trouble, but the older ones – and the CMBS that contain their mortgages.

      • Tomas says:

        Very informative response thank you!

      • Gomp says:

        It seems then that overall vacancy rates should rise.

        • Wolf Richter says:

          Yes, and they’re already 27% in San Francisco, and over 30% in Dallas and Houston and in some other cities. These are huge catastrophic vacancy rates, as I pointed out in the podcast.

      • Steve says:

        Agree. But I don’t think commercial real estate will be bought until all the debt is defaulted everywhere and we truly find the bottom of this fake printed money debt fiasco. Just too much risk not knowing when the turn around will come or if it will come facing a possible depression. Subleasing down is also like catching a falling knife. Reorganizing and waiting for the smoke to clear might end up being better. Liquidity positions will be very important. If you can survive going bankrupt you might be one of the lone survivors if you have a sustainable business model in a depression.

        • cb says:

          “fake printed money debt fiasco”


          It’s not fake printed money, it’s real printed money and it’s in the system where it is staying.

          and your saved dollars are worth less

      • Wes says:

        It’s not the fall that kills you, it’s the sudden stop at the end.

  9. Michael Engel says:

    1) Intel and AMD are hooked on Taiwan Semi ==> please China. AAPL too. We depend on China for rare earth, med stuff, fridges and steel safes.
    2) NDX is down because the insane republicans short millions of NVDA shares, playing politics with silicon valley.
    3) Construction is shifting from the salt water cities to the flyover areas from Texas, Az to Indiana.
    4) Intel is building a fab in Ohio.
    5) W.Va coal, Oh natgas, Pa water and three rivers hwys might boost the industrial midwest as it did during the Gilded Age.
    6) The Fed raise rates. Zero rates are good for buybacks, bonuses and executive perks, keep the zombies alive. Higher rates enhance businesses that have real innovative stuff to sell.
    7) To produce software co need office space. To produce hardware co
    need industrial plants. The days of software might be over.

    • Uber Driver says:

      ” Intel and AMD are hooked on Taiwan Semi ”

      AMD is completely dependent upon Taiwan Semi. Intel has future plans with TSM.

      Maybe Intel should have invested in the company instead of doing share-buybacks. No worries, the US govt will now support those buybacks!

    • Ed C says:

      You can develop software pretty much anywhere. Lots of people doing so at home. Just VPN into the company servers.

  10. Bobber says:

    Whenever you see an article citing a huge amount of “open jobs”, you must understand how that was determined. For example, it was common for large companies to place a dozen ads in various cities for a single work-from-home job. This is a practice that popped up in the last 2-4 years that is skewing the “open job” statistics.

    I imagine a lot of the start-ups were doing this in an attempt to hire the best and brightest around the country.

    • Wolf Richter says:


      I love you but this is BS. You STILL DON”T GET IT. Job openings are NOT BASED ON JOB ADS. How many times do I have to repeat that? They’re based on the actual job openings companies report to the Census Bureau by a sample of 21,000 businesses. My little company got one of those surveys a while back.

      • SoCalBeachDude says:

        US Bureau of Labor Statistics

        Monthly Employment Situation Report: Quick Guide to Methods and Measurement Issues

        On this page, you can quickly locate BLS documentation about the methods underlying the numbers that appear each month in the Employment Situation news release. This page also provides links to related information pertaining to measurement issues; this includes information on various topics such as the birth/death model used by the payroll survey, the population controls used by the household survey, and comparisons between the two surveys. Also see Frequently Asked Questions about Employment and Unemployment Estimates.

        Payroll survey (methods and measurement issues) | Household survey (methods and measurement issues) |
        Comparing payroll and household survey employment
        Payroll Survey — Methods and Measurement Issues

        The Current Employment Statistics (CES) program, also known as the payroll survey or the establishment survey, is a monthly survey of approximately 145,000 businesses and government agencies representing approximately 697,000 worksites throughout the United States. From the sample, CES produces and publishes employment, hours, and earnings estimates for the nation, states, and metropolitan areas at detailed industry levels.

        Series covering all employees hours and earnings were officially added by CES on February 5, 2010, with estimates beginning in March 2006. Historically, CES hours and earnings series covered only production and nonsupervisory employees.

        The CES employment series are estimates of nonfarm wage and salary jobs, not an estimate of employed persons; an individual with two jobs is counted twice by the payroll survey. The CES employment series excludes employees in agriculture, private households, and the self-employed.

        For more information, see the Concepts section of Chapter 2 of the BLS Handbook of Methods at; this section includes definitions of the types of data available from the survey. More information is also available under Available Data in the CES Technical Notes at

        A wide array of public and private policy makers use CES data because it is one of the earliest indicators of economic conditions each month. Major users of CES data include many government agencies and entities, financial markets in the United States and around the world, and business and academic analysts, researchers, and forecasters.

        For more information, see the Uses section of Chapter 2 of the BLS Handbook of Methods at

      • Bobber says:

        FYI, I am not questioning Census Bureau data, or your data. I trying to make the point that some hacks out there are pointing to job LISTINGS as evidence of an overabundance of jobs. Those listings are unreliable, as indicated in my example.

  11. Michael Engel says:

    SF Swallowtails empty shells.
    China will not invade Taiwan because we are hooked on TSM.

  12. Steve says:

    Now we will begin to see how fake all the fake jobs are. What makes a fake job? One that nobody wants, and most important one built on an artificial economy. Through excessive money printing and interest rate repression the FED has basically been the economy subsidizing it. All of this artificial money led to all kinds of crazy startups with no viable business model other than Ponzi theory. Jobs and an economy should be based on earned income wealth not a debt economy full of ponzies. If I put a trillion dollars into the economy myself you can imagine how many people will start any type of job chasing easy free money. Just because there is a job posting does not mean it is a real job as I put it. It is just a real job posting. The FED with their trillions created an artificial economy with unsustainable fake jobs in every type of sector. None of this was sustainable over the last 14 years. Also a reason why people don’t understand the reality of real Jobs versus fake jobs is that they never factor in the debt against the monetary input of the Fed because of perpetual can kicking viability. All of these trillions put in the economy went in mostly as debt too. Ponzi businesses everywhere looking for greater fools. I include crypto and R.E. even. A balance sheet has two sides and eventually needs to be reconciled. Since Fed debt expansion theory is only boom and bust anymore kicking cans up and down, we are now going to see debt reconciliation in this recession. And everyone to their dismay will now see in reality what is a real job and a fake job, what was the fake economy and what will come to be as the existing real economy. Reality has been made a moving variable here. Greed, corruption, short-sightedness… Some economic lessons are extremely expensive and painful. Especially when they’ve never been taught before as we are all in uncharted territory now.

    • Thomas Krawczyk says:

      Your 100 percent right

      Time to return to the basics

      Blocking and tackling

    • Ed C says:

      When you say fake jobs it makes me think of ‘purple squirrel’ jobs. SW development jobs asking for experience and expertise in so many areas that no human being could possibly measure up. 5 years experience in a SW language 2 years old for example. Just a ploy to show that no local candidates available so they can import H1-B foreigners? I’m past that now. I’m retired.

      • Ha, funny and true!

        Techies hate unions so they had nobody to speak up for them when they got rolled into the bushes.

        Tech money decided elections.

        Tech money gets what it wants in DC — at least so far.

        But trends change as do those elected.

    • Dave Kunkel says:

      Many years ago when the Java programming language was only about 3 years old, I saw a job posting wanting a Java programmer with 5 years experience.

    • Augustus Frost says:

      You are right but it won’t be overnight unless there is a massive financial crash.

      BTW, you can also add a noticeable percentage of the 70% of the world’s lawyers to the list of fake jobs. It’s probably less now as other countries follow the US but that’s what it used ot be, reportedly.

  13. Thomas Krawczyk says:

    Intel a matter of national security
    Intend to make major investments soon 175,000 on this chip maker
    Buy the unloved

  14. Michael Engel says:

    Madison Ave rotation : from utube to Wolfstreet.

    • phleep says:

      Best site ever.

      But once enough humans “discover” something, troubling dynamics tend to follow. If everybody goes to Hawaii, it dies. Their affection and presence kills it. Pretty much the story of California. There is an optimal size of followers. But there are exceptions to all that. Warren and Charlie, for example.

  15. Bobber says:

    On the East Side of Seattle area, home prices have risen roughly 50% in two years, largely based on inflow of tech immigrants and tech job growth by Amazon, Facebook, Google, Expedia, and Microsoft. If all these companies have halted hiring and office expansion, it will be interesting to see what happens to housing prices. I think a 35% home price drop is within reality, which would only rub off two years of frenzy.

    Microsoft announced a $4B office renovation a couple years ago. I wonder if they are reevaluating that expansion. They should be.

  16. RockHard says:

    Wolf, IDK if you read Gergely Orosz. he’s a former FAANG employee who now writes on tech hiring on Substack and Linked In. He recently wrote

    >We’re now in the situation where many Big Tech companies have slowed down hiring: Google, Facebook, Microsoft (Including Azure), Twitter, Netflix, and Tesla are in this group, and Apple will likely join them in September. The only major company where hiring is as before is Amazon.

    He also reported that GitHub (owned by MSFT) is cancelling all outstanding interviews and offers in their pipeline.

    • Augustus Frost says:

      Google, Facebook, and Twitter are advertising companies. The advertising market is in its own massive bubble, from all the other bubbles and the mania. It’s going to get body slammed when the economy takes a dive.

      Netflix is a media company, not “tech” either.

      Amazon is predominantly a retailer, outside of AWS.

      Tesla isn’t a tech company either.

  17. Cytotoxic says:

    What do you think the price of oil and other commodities will be doing in the next several months? Couple years?

  18. SOL says:

    Empty commercial real estate in CA and WA are no good for home prices in Bend. WFH equity refugees cashed out of their markets and now it sounds permanent. Great.

  19. alan says:

    Oil on its way to $50 a barrel.

    • Anthony says:

      Who can afford $50 a barrel if you go into a bad recession

    • AD says:

      I read the Dallas Fed Energy Survey a few weeks ago and it showed a break even price for West Texas Intermediate at around $60.

      West Texas Intermediate was around $65 to $70 in early 2020 just before the COVID pandemic started.

  20. dang says:

    Amazon is not a viable business model and I feel that their cut backs are good news. Pretty much my feeling about most if not all the companies you mentioned.

    Tesla has a market cap that is greater than the top 11 car companies in the world.

    Drab reality is like waking up at Woodstock on Monday morning.

    • OutWest says:


      ‘Amazon is not a viable business model’

      Welcome to the future…

    • SocalJimObjects says:

      There’s no need for feelings here. Amazon has been profitable for quite a while. Some people just can’t face reality. They have overhired during this pandemic, thinking that people will just sit home and use Amazon services throughout the day.

      • Einhal says:

        Amazon web services is a viable model. But they don’t make anywhere near the margins they’d need on actually selling stuff to justify their valuation.

        In other words, AWS is a “tech” company. Selling stuff, even if you do it through a fancy app, is not. It’s plain retail.

        • Augustus Frost says:

          Yes, that’s right. Most “tech” companies aren’t tech. Don’t sell tech products or services.

          For most companies, the “tech” label is Wall Street marketing to inflate the stock price.

        • SocalJimObjects says:

          Sure, but they are profitable as a whole. Did I say anything wrong?

          Until the Government breaks them up or whatever, you can’t just cherry pick one part of the company to back up your assertion. You can also say that without ads, Google is unprofitable. Dah, obviously, but so what?

    • RockHard says:

      The podcast only reported on Amazon cutbacks in office space and warehouses. They’re still hiring for IT, I got invited to a hiring event for the Alexa team last week – not a job opening, a job fair, so they have lots of job openings.

      This particular podcast is covering a lot of ground – there’s the CRE trends, some caused by WFH, some caused by staffing cutbacks, there’s the hiring freezes and layoffs, then there’s discussion that swings between startups and mega market cap companies like Meta, Tesla, Apple, and Alphabet. There’s stuff on SPACs. Wolf has observed that the market has fallen apart in stages, starting with the most hyped stocks, and now it’s starting to hit the mega-cap tech, but this gets confused a bit with this presentation.

      I don’t know about the thesis of hoarding workers, that was probably happening at Meta and Alphabet to an extent, but the hiring market in tech is just tight. I know people at Amazon and I’ve interviewed there, the idea that they’re hoarding just doesn’t hold water. Amazon runs something like a 5-10% annual turnover; their annual review system is designed to churn the low performing employees. For most people that I know in tech, 5 years is a long time at any one job, and in spite of the reputation for being lazy, most software engineers won’t stay long in a position that doesn’t give them meaningful work.

      • JD says:

        That is because they PIP up to 10% of their workforce and between 10-20% quit within 18-24 months of start date. They need to perpetually hire just to offset those gawd awful attrition numbers.

    • “Drab reality is like waking up at Woodstock on Monday morning.”

      Still tripping!

  21. polecat says:

    A drunkin binge … !?!

    Wolf – why .. They’ve managed to burn down the ENTIRE public Tavern!

    So now we’re left without respite. Glasses are to be found empty, straight lines or no..

  22. DR DOOM says:

    I would hate to think I got sacked because I was hoarded like butt wipe. Sorry Bob but we gotta let you go because you were never used. Here is a Mega-Pack of designer aloe butt wipe just to show you we care.

  23. AD says:


    I saw your reply to Kunal. Below is an excerpt from WESH’s website. I suspect Florida will see at least 1/2 of its COVID gains for real estate to be erased.

    The only positives that may limit the drop are that people still want to move here from the north and vacation rentals do well here.

    From what I’ve seen, the average rate for a beach condo in the Florida panhandle (Pensacola to Panama City Beach) is around $375 a night; it was $200 back in 2017.

    Orlando named most vacant major U.S. city, study says

    ORLANDO, Fla. —
    Data company Clever Real Estate has ranked Orlando as the number one city in the country with the highest vacancy rate.

    According to the company’s study, Orlando’s vacancy rate exceeds 15 percent–the only major city to do so.

    In total, they say close to 161,000 housing units sit vacant in Orlando.

    Three other Florida cities also ranked among the top. Miami was second on the list. Tampa was third and Jacksonville seventh.

    The study says a majority of the areas with high vacancies, including Orlando, are located in tourist-centric regions that tend to have a lot of vacancies associated with unused seasonal homes.

    Local real estate broker Antonio Srado told WESH 2 News that may be true but he doesn’t believe it paints a full picture of Orlando’s housing market.

    “I think as it relates to our market locally, a high vacancy rate is not a good indicator of our market performance,” Srado said.

    • Clete says:

      @AD: You both hit the point and missed the point.

      For example, up here in the Florida Alps of North Carolina, we’re all going back by Thanksgiving at the latest. Check that vacancy % come January.

      Also: no one who relocates to Florida is thinking “I want to live in Orlando.” They’re moving to one of the coasts, either on the west side where the air is clear, or the east side, where the mooks abound.

  24. Michael Engel says:

    Next month US third “best” to command visit Taiwan. SPX might plunge.

  25. Michael Engel says:

    NVDA might plunge.

  26. Crush the Peasants! says:

    Value is subjective and fluid.

  27. SocalJimObjects says:

    Either way, don’t worry guys!!! The recession will be temporary just like that inflation!!

  28. Michael Engel says:

    Tsunami might flood Tianjin & Beijing.

  29. Scared Millenial says:

    The solution is simple, convert the office to residential or employee housing even. Probably won’t have any trouble getting people back into the office if their commute is in the same building.
    More and more office towers being built in Dallas. I’ve started to wonder if it’s a conspiracy, perhaps post apocalyptic climate controlled safe havens for the future when we can’t breath outside air?
    Other than being laid off, I’m concerned about the stalled office towers that will litter the streetscape for the next decade. There needs to be some form of accountability but hard to get when the CEOs walked off with giant bonuses and left the companies bankrupt.

    • Clete says:

      I suspect you could persuade a lot of younger single workers to live in a apartment upstairs from work if the amenities were there. Put a bar on the rooftop and a gym in the basement and there’s zero commute cost.

  30. ooe says:

    what happened to the 25,000 jobs Amazon promised VA for tax benefits?

  31. ooe says:

    AOC was correct again in the NY should have given Amazon 3 Billiion for jobs that they were not going to create.

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