E28: Current state of public & private markets, Archegos debacle, US debt issues, wealth tax & more

Hundreds of SPACs raised in 2020–Q1 2021 now face a two-year clock to do deals, leading to re-traded valuations, heavy discounts, and only a small fraction of the many PIPEs in market actually getting done; sponsors without real capital or reputation will be exposed.

Hedge funds often run strict, parametric ‘year-to-date’ risk, forcing automatic de-risking when names fall by set percentages; when layered with macro shocks like inflation fears or Archegos-style liquidations, this creates exit stampedes and outsized price swings that don’t reflect fundamentals.

Hot, pre-revenue seed rounds now clear in the high-$20M–$30M caps for modest ownership, while later-stage SaaS and growth deals are also richly priced; some VCs are deliberately doing fewer new deals to instead raise bigger, opportunistic rounds for portfolio companies while capital is cheap.

Archegos used equity swaps and family-office exemptions to amass 5–10x leverage on concentrated positions without standard disclosure, leaving prime brokers holding multi-billion-dollar losses once margin calls hit—echoing LTCM-style notional exposure far beyond its equity base.

With debt surpassing 100% of GDP and trillions more in COVID relief plus broad ‘infrastructure’ and family programs, the hosts argue low rates are masking the long-run burden; if inflation or rates rise, debt service could crowd out entitlements, defense, and public investment.