E151: WW3 risk, War with Iran?, 4.9% GDP, startup failures growing, new Speaker & more

there's going to be a real economic cost to bear on the order of several trillion dollars over time because someone has to underwrite that real estate ... it actually translates economically through the reinsurance and insurance markets into the real estate markets fairly quickly

it's become economically untenable in a lot of places for these folks to be able to insure, insure their home

Dara Uber is reportedly planning buying back upwards of 20% of the Uber shares in the next five years ... I think it's the public market companies showing the path profitability, buying back stock

I didn't think cruise was sophisticated enough, or really GM, who's their backer, was sophisticated enough technologically to get this right. And I still maintain that

the three IPOs we've had, have not fared particularly well, and the market just seems to get harder and harder for tech companies, even profitable ones

Clavio is down 16% since this IPO ... even for the names that just IPO-ed, it's not looking too good

But it's really confounding for the markets. I think it's really bad for markets in general. It's probably the worst for private companies

I don't think Wall Street and Main Street can be disconnected forever. I think it's got to reconcile one way or another

I think there's going to be a lot of shutdowns of venture firms. I think a lot of venture firms are going to shut down

So instead of being 1.8x, they're all going to return 0.7x or 0.5x, and they're going to lose money

It's going to be hard to make outsize returns unless and until the entry price is completely correct ... they've partially corrected, but they may not have fully corrected

at some point, the consumer realizes that they're just not as wealthy as they thought they were ... you just wonder if the consumer is like Wiley Coyote and has gone off a cliff but just hasn't looked down yet

everybody's going to wake up with a heck of a credit card bill at 15 or 20 percent, and they're not going to be able to pay it

The whole stock market this year is being held up by seven stocks ... If you look at the overall S&P 500, excluding those names, it's flat for the year ... And now those seven names are starting to crack

if you are at 100% net dollar retention, okay, which means that you're kind of treading water ... That company now comps to roughly three to five times ARR

And so since August, what you've seen are the large leading edge public fintech companies just get absolutely murdered

the market clearing trade may be 25 to 30 billion now. Now 25 to 30 billion for Stripe, you're incinerating $70 billion of equity value

I've been approached by a number of people who are doing, buying strips of GP interest and strips of LP interest in venture funds

when they have definite buyer interests at a certain price, that tells you that the market now has found or is in the process of finding the market clearing price

there's significant material and industrial production shortages, not just in the US, but around the world, to support rising conventional wars that seem to be scaling all over

our industrial capacity is so hollowed out that it's going to take us five plus years to replace our stockpiles of artillery ammunition, of javelins, of stingers

When an event like this happens, those reinsurance markets take a loss and the loss causes them to raise rates significantly ... the insurance companies pass those rates on to consumers and to property developers and to the people that have mortgages

major US banks are facing large unrealized losses. Bank of America had unrealized losses of $131 billion on securities in Q3

if you sell your house, you lose your 3% mortgage. Now you have to get a new one at 8%. So everyone stopped trying to sell their house. The number of real estate transactions has gone down a lot

This is the bubble of 2021 working its way through the system ... So I think you're going to see this dynamic for the next 18 months or so. But this is not a new dynamic. This is the lagging indicator of what we've been talking about since the regime change of the first half of 2022

I'll just note when a company does shut down, that process typically takes two or three quarters ... anything you're seeing in 2023, that might be a shutdown where the employees were all laid off in late 2022

The one that needs cash continuously and will for a long period of time is really screwed

Eventually, the Fed monetizes all this stuff. It's the only path, which, by the way, will inflate a lot of financial assets