E114: Markets update: whipsaw macro picture, big tech, startup mass extinction event, VC reckoning

All right, everybody. Welcome to the All In podcast. We're back. Thanks to Friedberg and Sacks for moderating the show into the lowest ratings-

(laughs)

... in its history. (laughs)

(laughs)

Hold on, hold on. Please give the keyboard warriors that are their bot armies some respite here. They tried their best. It just didn't work.

They did try their best. They just ... It's, it's okay.

I think the ratings of the last episode must be a result of Google, uh-

Yeah.

... down-ranking us as a result of our honesty about not wanting to get more boosters-

So Sacks, you're on the Brigadoon train.

... because somebody at Google, some lower level functionary, to push a button-

Push a button.

... to, uh, shadow ban, I mean, visibility filter us.

It's everything except the moderation skills-

Yeah.

... of the two Davids.

No way is the moderator (laughs) turning it into Fox Sunday.

Can't be that.

I'm going all in.

Let your winners ride.

Rain Man David Sachs. I'm going all in.

And I said we open source it to the fans and they've just gone crazy with it.

Love you, man. Nice.

West Coast queen of quinoa. I'm going all in.

The reaction I got from our COVID vaccine discussion was, hey, pretty fair and balanced. Like, not in a, in a joking way, but like, actually like, yeah.

Yeah, the warning on YouTube was pretty benign actually.

Yeah. It's like, "If you want COVID information, click here. Thank you." (laughs)

Yeah.

Okay. Let's talk about the market data. The Fed raised 25 basis points. The market obviously has ripped since then. The jobs data this morning was crazy. We added 517,000 jobs, more than 2X December, and well above the estimates of 188,000 jobs. The Fed, I think, is starting to realize they can f- inf- obviously impact inflation and slow down speculative assets, but they're having a very hard time with the labor market, uh, obviously. Labor participation actually is growing. We've talked about that many times here. It's bumped up to 62.4%. We all know it peaked at like maybe 69% during the 2000 time period. Wage growth though continuing to slow, so that is some good news there. And obviously risk-on assets are ripping the last couple of days. Chamath, what's your take on where we are with the market and the Fed's action, which people are starting to believe will be another 25 basis point hike and then maybe staying high for the rest of the year? Did you, uh, hear their comments? You think dovish? What's your take on the market?

I watched Powell's speech and it was really amazing because in December he was extremely hawkish and he was basically like, "Listen, we're gonna keep rates higher than you like and longer than you want." And that was pretty clear, and the markets reacted. And then not but 35, 40 days later, he essentially said, "We have two 25 basis point hikes left to go," and he's going to try to stick the landing essentially. And even though the rest of the language in his entire speech and the press conference, if you read it in the absence of his body language, so if you just read the transcript, would seem very hawkish as well, but the reality was he basically capitulated. And then the market essentially said, "Okay, we're at the end of this thing." And we've talked about this before, but markets tend to bottom six to nine months before it's clear that you could have done this. And so we're a little bit off to the races in the short term. It's compounded by a couple of other factors. One is that at the end of last year, so many people were tax loss harvesting, which means if you had some gains somewhere else, you sold some things that were losing money so that you could net the two together. You saw a lot of stocks, Tesla was probably the poster child for this, trade all the way down to like $108 a share and it's effectively doubled in the last 30 days, right? So, everybody tax loss harvested. Everybody de-grossed. Nobody was really owning anything. And then when Powell basically said, "We're mostly done," there's been so much systematic buying right now that nobody's really well positioned. To me, this is very similar and eerily reminiscent of the end of 2018 and beginning of 2019. And if you guys remember, at the end of 2018, October, November, December, the markets just fell, and part of it was Powell's gonna raise rates, inflation's getting out of control, et cetera, et cetera. And then we got all this data that said China may be entering a real period of malaise and Powell capitulated. Again, trying to stick the landing. And long story short, he didn't. That was a head fake and the markets just ripped higher. Then we went into the COVID pandemic and all of that stuff happened. So, I think we're about to replay a little bit of that, at least in the next 30 to 90 days. The pain trade is to go up, so that's probably where we're going.