Is The Bottom Almost Here?

[Dalal.Holdings]

49 minutes ago, Spekulatius said:

The ads are targeted . Google is very good at finding out what you are interested in. I got a lot of ads from car dealers and car companies because I was researching cars about a month ago for example.

 

I have yet to see an ad from any of those business you mentioned above.

 

I think folks will be surprised by how incestuous tech is and how big Tech is not immune...

 

Many firms are Dead Firms Walking

[changegonnacome]

12 minutes ago, Dalal.Holdings said:

I think folks will be surprised by how incestuous tech is and how big Tech is not immune...

 

Many firms are Dead Firms Walking

 

Yep its been a virtuous circle -

 

VC firms fed into start-ups......start-ups bought ads......ads drove valuations of earlier VC investments.....which beget more VC investment & performance records.....which attracted more outside capital.....which fed more startups....who bought more ads and services from 2nd generation micro-services start-ups....which drove valuations........

 

I've a friend in tech........who's startup company just did an audit of all the 'hot' SAAS services they built their enterprise stack on......not to save money but rather to understand if any of these services were to cease existing....how might their workflow & internal processes be effected........counterparty service risk is real when you've built your company on top of every hot B2B software startup....legacy companies sitting on Office365/SAP/Oracle.....rarely have to ask themselves such questions.

[Ulti]

[Dalal.Holdings]

I'm just glad I got to live through a decade of VC subsidized cab rides and food delivery

[Dalal.Holdings]

3 hours ago, changegonnacome said:

 

Yep its been a virtuous circle -

 

VC firms fed into start-ups......start-ups bought ads......ads drove valuations of earlier VC investments.....which beget more VC investment & performance records.....which attracted more outside capital.....which fed more startups....who bought more ads and services from 2nd generation micro-services start-ups....which drove valuations........

 

I've a friend in tech........who's startup company just did an audit of all the 'hot' SAAS services they built their enterprise stack on......not to save money but rather to understand if any of these services were to cease existing....how might their workflow & internal processes be effected........counterparty service risk is real when you've built your company on top of every hot B2B software startup....legacy companies sitting on Office365/SAP/Oracle.....rarely have to ask themselves such questions.

 

 

META and TWTR imminently cutting back on their Office365 and Adobe subscriptions.

 

You'll see this at a large scale as the startup ecosystem goes thru a mass extinction event.

 

The revenue isn't as "sticky" as everyone thinks.

[Dalal.Holdings]

AMZN cutting Office365 subs by about 10k now…

[Spekulatius]

1 hour ago, Dalal.Holdings said:

AMZN cutting Office365 subs by about 10k now…

So, these 10k people that Amazon lays off are going to be working construction in the future and don't need Word or Excel any more? Yay!

[Dalal.Holdings]

9 minutes ago, Spekulatius said:

So, these 10k people that Amazon lays off are going to be working construction in the future and don't need Word or Excel any more? Yay!

 

Based on popular Tik Toks showing a "day in the life of a Meta employee", etc:

 

I think that soon the current shortage of workers in restaurant/airport/service industries will be addressed. Not sure they'll need Office365.

 

[Parsad]

Quants Forced to Shed $225B in Short Positions.  Cheers!

 

https://finance.yahoo.com/news/quants-forced-shed-225-billion-221532432.html

[changegonnacome]

 

Not huge call to say inflation has peaked........Ken reckons 2-handle by end of 2023.......hope he's right

Edited November 15, 2022 by changegonnacome

[Dalal.Holdings]

Arthur Burns was fooled when inflation seemed to "finally cool off" in 1974...turns out it was only "transitory"

[thowed]

I don't understand this chart?  It says 1974-84 experience, but the x axis is 17 years.

 

Am I missing something?

 

I asked the author on his substack, but didn't get a reply.

[Parsad]

3 minutes ago, thowed said:

I don't understand this chart?  It says 1974-84 experience, but the x axis is 17 years.

 

Am I missing something?

 

I asked the author on his substack, but didn't get a reply.

 

The black line is 1974-84.  The orange line is current inflation overlapping the 1974-84 range.  

 

While it seems to mimic the 70/80's economic environment, this is neither here nor there.  I remember all of these graphs overlapping past periods back before and after the GFC.  Yet, we saw tremendous government intervention that totally changed the direction of the current period relative to the period compared. 

 

It's why Fairfax and many distressed value manager's performance looked so poor over the last decade as they were expecting a stagnating period, not growth as it became with all of the easy money and low interest rates. 

 

History never repeats but may rhyme.  Analysts on both sides constantly try to make it rhyme to their tune!  Cheers!

[Spekulatius]

On 11/14/2022 at 2:05 PM, Dalal.Holdings said:

 

Based on popular Tik Toks showing a "day in the life of a Meta employee", etc:

 

I think that soon the current shortage of workers in restaurant/airport/service industries will be addressed. Not sure they'll need Office365.

 

I remember all these charts in 2008 or 2012 that mimicked 1931. It’s amazing what you can do if you pick just the right starting point and scale with charts. I bet I could create a chart that looks just like the one we have know and predicts we are going to the .

Edited November 16, 2022 by Spekulatius

[Sweet]

6 hours ago, Dalal.Holdings said:

Arthur Burns was fooled when inflation seemed to "finally cool off" in 1974...turns out it was only "transitory"

that would be terrible for stocks if inflation followed that chart 

[Gregmal]

3 minutes ago, Sweet said:

that would be terrible for stocks if inflation followed that chart 

That’s why fear mongering is effective.

[UK]

Interesting. I am not sure if I understand this chart correctly, but if inflation really soon will be decreasing as the chart suggests and will reach 2-3 range sometime after start of 2024, would not that be extremely bullish for the next 2 years? And before 2025 just go back to BRK and cash again:)))

 

Edited November 16, 2022 by UK

[Gamecock-YT]

Inflation has peaked as the US is pumping out 1MM barrels of oil a day in artificial supply from the SPR. What happens when they stop? 

 

 

 

[UK]

2 minutes ago, Gamecock-YT said:

Inflation has peaked as the US is pumping out 1MM barrels of oil a day in artificial supply from the SPR. What happens when they stop? 

 

 

 

 

I think that price of oil it is not so important at this point, especially for core inflation. Housing and shelter and prices of goods will be two positive things reducing inflation from now on. Not sure about servIces but the bigest problem I think is wages, which are somewhat programed to still increase for some time Just look at all these ongoing labour union disputes and negotiations. 

[Dalal.Holdings]

11 hours ago, UK said:

Interesting. I am not sure if I understand this chart correctly, but if inflation really soon will be decreasing as the chart suggests and will reach 2-3 range sometime after start of 2024, would not that be extremely bullish for the next 2 years? And before 2025 just go back to BRK and cash again:)))

 

The chart says to not pay too much attn to monthly CPI

 

I look back at the past to learn that the future is not so predictable and to exercise caution, I’m sure some people don’t look back at all…

[Spekulatius]

The issue in the 70's was that the Fed was easing too quickly. Inflation in the 70's was not consistently high all the time, it came in waves. For example in 1976 it almost looked like everything was OK.

 

However, while inflation did come down, it never came down low enough and for an extended period of time. So the Fed saw all clear (or was pressured to see all clear) and started to ease and quickly thereafter, inflation started to rise again.

 

Do this a few times over and the Fed lost all the credibility until Volker squashed it.

 

The key learning from the 70's  is that the Fed needs to keep the rates higher for longer to prevent  flareups again.

Edited November 16, 2022 by Spekulatius

[CorpRaider]

Seems like human nature and political impulses might make a similar path fairly likely.  "Mission accomplished!"  Human confirmation/under reaction/loss or pain aversion = stuff trends.

Edited November 16, 2022 by CorpRaider

[Ulti]

https://rosebros.ca/blogs/podcast/104-craig-fuller-freightwaves-why-global-supply-chain-is-pointing-to-dark-clouds-over-the-economy

 

An excellent podcast , data driven , about global supply chain , inflation and interest rates.

[changegonnacome]

On 11/16/2022 at 12:46 PM, Spekulatius said:

The key learning from the 70's  is that the Fed needs to keep the rates higher for longer to prevent  flareups again.

 

This is it - I expect a flare up of sorts in early 2023.....why......because the Fed started too late to fully inform Q4 2022 comp discussions across the economy & the economy hasn't weakened enough even now......such that early 2023 will be filled with retrospective 2022 CPI+ incorporated into a large swath of wage increases that will flow through into incremental nominal spending increases in Feb/Mar in an economy STILL potentially at FULL employment..........and the cycle begins again to a certain extent.

 

The solution.......and people wont like this......is that the Fed needs to hold the economy's head under the water for the WHOLE of 2023 such that (1) unemployment rises significantly above its natural rate introducing slack into aggregate productive capacity & (2) Q4 2023 comp discussions need to be informed by job security....not CPI.....such that dis-inflationary forces take hold into late 2023/early 24 and only then can you consider easing off with the knowledge that Q4 2024 comp discussions will have target CPI incorporated.

 

Thats the correct prescription IMO lets see if the implement it or do the popular thing and give the market what it wants which is the much talked about 'pivot'.

Edited November 18, 2022 by changegonnacome

[Gregmal]

10 minutes ago, changegonnacome said:

This is it - I expect a flare up of sorts in early 2023.....why......because the Fed started too late to fully inform Q4 2022 comp discussions across the economy & the economy hasn't weakened enough even now......such that early 2023 will be filled with retrospective 2022 CPI+ incorporated into a large swath of wage increases that will flow through into incremental nominal spending increases in Feb/Mar in an economy STILL potentially at FULL employment..........and the cycle begins again to a certain extent.

With the energy and shelter elements starting to cross outrageously high comps, where exactly does the above then come from? Housing and energy have almost no shot at being anywhere near Q1–Q2 2022. Same for most commodity inputs. We d need like 100% increases in the smaller inputs to move the needle with the aforementioned stuff coming down.