The first dominos are falling. The others will soon follow. When Big Tech makes up a sizable marketcap of the markets, and most folks are passively invested these days, it will hit everyone.
Economic data just out showed that wage growth is slowing. For normal folks that sounds bad, for economists it means inflation is finally being tamed.
What good is making more money if your money becomes worth less? The hard part is selling people on why stopping the status quo is actually a good thing.
The crazy prices of cars and homes was a great example of mania that was unsustainable.
if you believed inflation was rapidly coming down now it would not be the time to get bearish on stocks
Inflation is not rapidly coming down, it is stubbornly beginning to ease.
The upshot is that while CPI is probably over-measuring inflation today, and we're basically back to baseline, earlier in the year we were probably running closer to 11-12% inflation with the real housing numbers.
There will be pain because there's always pain to come with the mind bogglingly good times? I mean I and so so so many others in tech have done well enough in the last 5 years or so to weather quite a bit to understate the tech market leading up to this. Sure there's going to be unlucky folks who enter the market at the tail end of the current round of musical chairs, but even the doomsayer admits the long-term is up so...
The only people I feel bad for are those who missed out because they were too busy thumbing their noses down at the crowd.
Speaking of musical chairs it feels like people want the bank to keep playing as the ship goes down. Will we recover from it? Almost certainly we will, but the pain inflicted on many during that time will not be fun. We have an new generation in the workforce that has really only known prosperity for as far back as their conscious memories stretch.
If money was my profession then you'd best believe I'd be capitalizing on this. Look at Citadel's profits from last year, despite being initially caught off guard, and losing a fair amount, at the hands of folks from Wall Street Bets.
I do wholeheartedly believe this downturn will be worse than 2008 and 2000, perhaps on the levels we saw during the 1970s and 1980s, or slightly worse. I don't believe people see this as even remotely possible and that, I believe, is dangerous.
> There will be pain because there's always pain to come with the mind bogglingly good times?
There was never anything interesting about being able to call out a 2008 or a 2000 because every single year in between them someone was always saying this was going to be the year of "tulip mania come roost".
People would see dips in 2010 and point to them as obvious proof that 2008 was just the tip of the iceberg, and they had about as much to go on as you would if you weren't able to pull up a graph of the years that follow today.
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What makes it interesting (read: worth saying out loud) is if you can put your money where your mouth was and actually bet something, then win on that bet.
But saying stuff like "Pain inflicted during that time will not be fun"... well duh? You're telling me that a correction after the market rallies 400% in a decade that included a world-shifting global pandemic is going to be painful?
I don't know, I guess I just get rubbed the wrong way by broad gesturing with nothing being put down on it when it comes after a period that has literally been defined by the same.
The last decade has been so much of it in fact, that at this point even another "1970s or slightly worse" wouldn't cover the losses we've been promised.
https://www.yahoo.com/now/morgan-stanley-michael-wilson-says...
Advertisers.
Who makes advertisers spend?
Consumers.
What happens when consumers are unemployed?
...
https://www.sec.gov/Archives/edgar/data/1288776/000119312509...
2009 was tougher, where revenue growth slowed to 8.5%
https://www.sec.gov/Archives/edgar/data/1288776/000119312510...
This all while unemployment rocketed upwards
As they are today with GCP, security, user assurance, and everything under Alphabet not labeled Google.
Yes, ad makes up a huge %age of revenue for Aplhabet, but it’s not the only dish at the buffet.
2008/9 are not a good comparison because they were smaller companies and so much ad spend was moving from offline to online.
Maybe Meta would have to stop spending a fortune on VR if revenue declines, but it would take a lot to hurt them.
Any idea what the new headcount is doing? I can think of very little change in their services over the last handful of years, but apparently they have doubled in size in the last five! At best I could point at waymo, but they've gained 2k compared to 70k. And they already gutted stadia but that was never very big.
While 120,000 people may have been recently laid off at high profile tech companies, that's only 0.07% of the jobs market. (and many of them are highly employable and have new jobs)
If you think it's wrong, there are other measures of household economic activity that can be used in conjunction. For instance, if people lose their jobs, they're going to spend less money, which hasn't happened yet (at least through Nov '22): https://www.bea.gov/news/2022/personal-income-and-outlays-no...