The Wall Street Journal reports that SPAC mania is winding down:
Now, the hype is giving way to reality. Like so many investment fads, what at first seemed like a way to earn easy money has revealed itself to be full of potential perils. The threat of tighter regulation is looming, and high-profile stumbles by some companies that went public via SPACs have taught investors some harsh lessons. It turns out investing in unproven upstarts isn’t for everyone, and with interest rates looking likely to rise in coming months, all sorts of speculative investments from technology stocks to bitcoin are getting hit.
Imagine that. SPACs are essentially a way for companies to go public without all the annoying rules the SEC puts in place to ensure everyone is being honest. Who needs all that bureaucratic nonsense, anyway? We can read a balance sheet, amirite?
So, yet again, we learn that there's no such thing as easy money. If you think there is, it's only because you haven't looked hard enough. But don't worry: we've been learning that lesson since the invention of money, and it still hasn't stuck. Your chance is still out there.
Once again, Donald Trump's involvement in a trend shows that the trend has peaked and is on the decline. He's only smart enough to hop on things that had their heyday a while ago. I would put white power in this category of "you know it's over when the con men arrive" as well.
(I'm referring to Trump's "media" company being a SPAC with Chinese money or something or other...)
White power? Nope.
Substitute NFT for SPAC in that post and you can see exactly the same thing. Any time that anyone tries to sell you "free money", one should run in the opposite direction. Unless you are the one selling the free money, of course. In which case, the trick is to get out *just* before the regulators come a-knocking.
I beg to differ. There is easy money, as long as you are OK grifting conservatives, because there is a never ending stream of conservative marks waiting to give you money for the most transparent scams.
But, yeah, SPACs. Got it.
Well, unless you’re the federal government anyway.
Well the stock market seems to be settling down from unsustainable highs, i.e. bizarre P/E ratios. Though I'm not sure why it started now....
B4's [Brandon's Build Back Better] isn't going to pass, so the people who actually spend money reliably aren't going to have as much. Gross sales will fall, followed by gross margins, and nobody was paying taxes anyway so net margins have to decline too.
Turns out that the government running a deficit is actually good for the economy. Who knew?
Everybody on the leftie side of the aisle?
Build Back Better???? Irrelevant. Economic normalization is creating corrections in asset markets. Disinflation has come.
Trump's spac is a major weight on the Republicans 2022 election campaign. Doesn't look good. Swing voters know.
For some reason or another, inflation at the high end of the economy is seen as a good thing even if it only benefits a sliver of the population. When we got rid of our equalizing tax code, we had massive inflation at the high end. A bottle of Petrus cost $350 back in the 1990s. Now, your lucky to get it for less than $4K. There are also those insane P/E ratios. It's the same thing. Rich people inflation.
There is so much capital floating around looking for a return on investment, that you can create a market in anything and make a pile on it: NFTs, SPACs, high end real estate, song back catalogs, you name it. There's an air of desperation about it, but none of it is sustainable because in the end, there has to be some kind of cash flow. Right now, the only cash flow comes from unloaded on sucker investors. For forty years, most people have been tapped out, so very few new investments can actually produce a real return. That has led to asset inflation, and it is a rich people's problem.
Strangely, at the lower end where 90% or more of us live, we are finally seeing a bit of inflation and it's supposedly a bad thing. The horror seems to be that wages are rising along with prices. If you work for a living, unlike the wealthy, you can run to stay in place. If you don't work for a living, you are losing ground. Naturally, the Federal Reserve has to stomp down on this kind of inflation right away.