The Everything Crash: JPow vs. Inflation
09/26/2022
If you ever need a quick indicator about the state of the financial markets, just take a look at my TikTok view count.
As the market plunged last week, engagement on the Tycoonist TikTok page also fell off a cliff. Sucks for me, but it wasn’t at all unexpected. Business and finance media viewership moves with the business cycle. The sheep get excited near the peak, only to fade away during the decline.
Looming over all of this is JPow. Many investors who applauded money printer go brrrr now blame the evil Fed for their losses. But personally, I’ve always viewed the Fed as a mostly reactive institution. This week we’ll cut to the chase on some of their recent moves.
Oh, and FYI—even though TikTok has dropped off, engagement on this newsletter has remained impressively high, if I do say so myself. Glad that I’m talking to people who are still in the game.
Love you fam.
Mike
Business Bites
Analysis, Reviews, and Weird Business News
Jay Powell vs. Inflation
Market News
Even as inflation continues to kick the global economy in the nuts, JPow has projected confidence and reassured the public that the central bank is going to fix this shitshow. Here’s what the Fed can and can’t do, and what that means for investors.
The Everything Crash: One could probably make a case that most asset price gains of the last few years can be attributed to low interest rates rather than earnings fundamentals. To use my favorite metaphor, now the lights are coming on at the club, and a lot of valuations don’t look so pretty anymore.
Interest rates are to asset prices what gravity is to the apple. -Warren Buffett
Powell’s Problem: the central bank can temporarily alleviate the worker shortage and energy crisis by killing demand, but the Fed can’t print oil or workers.
Mogul Moves
Tracking Big Investors and Business Leaders
Apparently not satisfied with crushing the stock market, Fed chairman JPow told reporters last week that the “housing market [has] to go through a correction” so that “prices go up…at a reasonable pace and people can afford houses again.”
Slack founder Stewart Butterfield, who sold his company to Salesforce CRM 0.00%↑ last year, said that tech valuations now look "pretty reasonable" in an interview with Yahoo Finance.
French billionaire Xavier Niel bought a 2.5% in European telecom company Vodafone, saying that he sees opportunity in the “streamlining” of the business.
Memes and Sarcasm
not the future we wanted, but the future we deserved
“Rome is fine, do not take your money out of Rome!”
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Contact
Email mike@tycoonist.co or reach out on social media.