Bubble Confirmed: From Sock Puppets To Action Heroes

Tyler Durden's picture

Submitted by Mark St.Cyr,

There are times when not only truth is stranger than fiction, but also, when serendipity coincides with moments that are branded into the pages of history where they become the allegory of the times. Sometimes its hard to judge or pick just one. Reason being they’ll seemingly come one right after another instead of that just one, almost surreal, moment. I believe we are in one of those “one right after another” moments – punctuated with “the surreal.”

There’s no better illustration of these than the dreaded “front page magazine cover” proclaiming not only that the good times are here; but rather, the far more important underlying premise: they’re here to stay and will only get better! All the while insinuating – to worry about anything is a fool’s errand. i.e., “everything is awesome!”

Time™ has had the unfortunate honor of running more than one of these “everything is awesome” cover stories just before it fell apart. For who can forget their now famous/infamous story regarding housing in 2005 titled “Home $weet Home.” Or, how about their earlier example that ran in February of 1999 depicting Rubin, Greenspan & Summers as: “The Committee to Save the World.”  We all know what happened next in both instances. Awesomeness was not what followed.

They are far from the only one. Barron’s™ has had its share. Although they might not have marked the exact date either “the meme,” or premise of the cover story usually told you all you needed to know. That maybe – just maybe: things were getting a little too far ahead of itself for its own good. And, one would be prudent to see these as warning signs of the times. Just for a reminder here’s the example from March 24, 2008 Barron’s, “Are You Ready for Dow 20,000?” Need I remind anyone what happen next?

So once again here we are in 2015 entering our first earnings quarter without the benefit of QE and the “everything is awesome” meme is deteriorating faster than an Atlanta GDP report and it’s none other than Barron’s that just might once again mark a memorable point in history with their latest cover story piece dedicated to not only a bank, but the banker himself. The story is titled “JPMorgan Rising.” The cover depicts CEO Jamie Dimon with the title “Back On Top.”

Personally, I couldn’t shake the eery feeling that a celebratory cover depicting both a bank as well as its CEO that was saved via taxpayer funds and was one of the central players in the financial meltdown that nearly dragged the entire monetary system down with it just a few years ago. Could once again be the focal point as they are once again vaulted to “back on top” status – to possibly – mark a top.

Surely it’s different this time in history than last. For what made banks iconic as well as worthy of praise in the old days is not what makes them this today. For in days of yore banks once loaned money to reliable worthy souls and businesses, and paid meaningful interest rates on depositors funds. Today you’re nickle and dimed into oblivion with once unimaginable fees which for some also include paying for (wait for it…) the privilege to deposit! All the while your trades and more might be front-run, sold, traded against, who knows what. That and building an earnings report that has the appearance of so much financial engineering it leaves most Non-GAAP devotees enviously wishing: How can we access that loan loss reserve thingy? Brilliant!

Yet, this cover coincides at the exact time the very bank of these bankers (e.g., The Federal Reserve) is possibly whispering to those very entities “Better get the heck outta Dodge because this thing is coming unglued!”

I can’t help but muse how that cover and story will be seen 12 months from now? After all, if what we’ve seen coming out of the banking sector as to how the latest crop of CDS, ABS, MBS, High Yield, carry trades, currency risks, and more that’s been added to their balance sheets in the wake of a Fed. no longer providing the QE to sustain the previous growth. Or worse – might actually (gasp) raise rates sending carry risk and turmoil throughout the entire sector. It might very well be the “next” in a long line of cover story marking points in history.

Who knows what will happen tomorrow. And the old sage of “History doesn’t repeat itself, but it sure does rhyme” is well worth heeding. But when you start seeing history not only rhyme: but take to the stage sporting its own vocal harmonizer and backup dance crew? As I alluded earlier: exercising prudence – might be an understatement.

Which brings me to today’s possibly next installment into the annuls of historic “bubble marking” memes. With a depiction so telling it can be used on its own as an example to explain just how – a picture says a thousand words. And where should it come from? None other than the one place synonymous, along with being the poster child of marking bubbles and manias: Silicon Valley.

Currently Silicon Valley is still believing they are breathing rarefied air, when in fact – they’ve been inhaling their own exhaust.

This is a place that now believes multi-billion dollar valuations are so yesterday. After all we’re talking about “The Valley” where unicorns and rainbows adorn the stationary for Non-GAAP earnings reports. So today the goal of every new or old start-up (whether you can show an actual net profit or not ) is to espouse valuations of tens of billions! Of course that’s regardless if you lose or have a cash burn rate faster than a HFT laser signal can front-run a competitors microwave signal to the exchanges. For in the valley of silicon  “everything is still awesome!”

So just when you thought you’ve seen it all. Where you wonder if there ever could be a moment in time which could rival the current iconic poster-child of the earlier tech boom bubble like the sock puppet mascot of Pets dot com. Comes not only one to rival, but quite possibly to surpass it.

Remember my earlier reference that you should really pay attention and heed when you see the rhyming dancers take to the stage? Well this time it takes a cartoon caricature to what can only be described as “another level” indeed. To wit: VC’s as – Cartoon Super Heroes. Below is a screenshot that comes from the public website CB Insights™.

Photo credit CB Insights™

Photo credit CB Insights™

Now let me make this clear so there’s no misunderstanding. This is not a shot, or call out, of the people depicted. I don’t know them and it’s not about them. After all they might not have even been consulted for this drawing. (and if they weren’t I feel for them) That’s neither here nor there. What I’m directly speaking too is “The meme.”

In other words: it’s all about the get in – get funded – get out fairy tale mentality that’s overly prevalent in Valley land. Where it now seems all you need to do is call up your friendly “Super Hero” of choice and Bammo! Get ready for your own personal venture capital roller coaster ride to the land of billions!

I truly feel this just might be as, if not more so, of an iconic “bubble top” marker than the now infamous sock puppet than anyone in the tech world dares to imagine.

Currently the markets are showing great stress in coming to grips with the reality that QE indeed has ended. All the “fast money” associated with those trillions of dollars made possible by the Fed. has come to an end. (at least as of this writing) The story that was previously acceptable in most VC funding rounds of “someday we’ll actually turn a net profit” will now not only be shunned, but will be replaced with, “Excuse me, but the only story line I want to hear is – Where’s my money?!” And “super-hero” is not what is going to come to mind.

If the stresses now rearing their head within the markets continue I’ll make a prediction.

What you’ll not find more of going forward is VC’s strewn across the skies dawning capes and spandex searching through an ever-expanding universe of start-ups to fund. No. What you’ll find is a lot of the once so-called “wonder companies” that were previously funded desperately seeking additional funding of any type possible. Not to expand, or to buy the next greatest “eye balls for dollars model” to compliment their existing “now desperately seeking eyeballs for dollars” model.

What they’ll be in is a frenzy seeking funding – for their very own survival. Because Non-GAAP “We’re killing it!” earnings reports won’t do the most important thing in a recessionary downturn alongside the reality of no more “free” money.

And what’s the most important thing?

The ability to generate actual net profits garnered from servicing satisfied customers that actually purchased what you made available for sale at margins that in turn pays: the help, rent, and other bills – consistently. Period.

 

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ozzzzo's picture

Eery? If you don't even bother to run a spell checker, how can we trust you to check your facts? Constant spelling and grammar errors ruin your credibility as a writer.

knukles's picture

Eery is a word, meaning a feeling of fear.

RU-GAY2's picture
RU-GAY2 (not verified) knukles Apr 5, 2015 6:23 PM

Cryptophobia:  The irrational fear of the inevitable future of currency and trade.

TheReplacement's picture

Why use a spelling of the word that the vast majority of people will have to look up to confirm it is actually a word instead of the one that all people will accept on sight?

Hell, I assumed he mispelled it.  There are so many mistakes with posts on ZH that is my default setting. 

cherry picker's picture

I try and use a spell checker and many times it inserts words that I don't notice right away, like there - their, and grammar checking?

Without some type of grammar control it would be difficult to interpret what a writer is trying to convey, but the software is still far from perfect and not all rules should be followed to get a point across.

Spelling and grammar do not always represent the veracity of what is written.

TheReplacement's picture

I totally agree when it comes to trying to share this information with others.  If I send this link to coworkers they will completely ignore the meaning once more than one spelling or grammatical error is noticed.

In a way it is too bad.  In another it just proves old pappy write when he said, details matter.

 

Edit:  I say this all as a commenter, not an author so blow me.

ebworthen's picture

Most used car salesman would be more fitting than these V.C.'s

It looks funny with the "E" capitalized, and you're probably used to seeing it as "eerie".

explosivo's picture

I was bothered by the misuse of the word "too" instead of "to". Otherwise it was a decent article.

 

When I think about the signs of the times I think about all of those cultural marxist parading in the street advocating some new nonsense.

A Lunatic's picture

Why bother satisfying customers when you can simply pay a lobbyist to get laws enacted that force people to use your business while undermining the competition, which in turn solves those pesky revenue issues.....

cornfritter's picture

Yup, and the "dream" is a central world bank, with a central world gov (UN) and the MNCs circling as satellites. i.e. the successes we see in "Merica" apsire to go global (makes things more efficient by reducing hordes of overlapping regulatory hurdles you see)

Wild Bill Kelso's picture

The looters can only take from the producers for so long before production stops.

I think Ms. Rand may have actually hinted at this phenomenon..

suteibu's picture

Those are some ghey looking superheroes.   But are they faster than an HFT, more powerful than a steaming pile of Warren Buffet, and able to leap SEC regulations in a single bound?

cornfritter's picture

I doubt they could outstink the "sage", but the SEC'll sure conduct them accross with bells on - those insider fat cats make a fortune.  wink wink nod nod - we'll protect them there retarment accounts - and it's gone...............

Cheduba's picture

Anyone else notice the thousands of superhero movies coming down the pipeline from Disney-Marvel? (ugh!)

TV shows, movies, using the billions dollars from Disney for advertising, please tell me that Disney will implode and spin off all of its tentacles.

buzzsaw99's picture

egad what vacuous drivel. a piece filled with cliche but devoid of substance, meaning, or structure.

A Lunatic's picture

It makes more sense if you read it while wearing a Power Rangers costume.....

grunk's picture

Balding superheroes?

nmewn's picture

Follically challenged, the PC crowd will eat you alive and gnaw on your bones for saying "balding".

Its just, plain ole meany pants ;-)

q99x2's picture

Bitcoin last price $261.43

Something is up. That be Bitcoin.

RU-GAY2's picture
RU-GAY2 (not verified) q99x2 Apr 5, 2015 6:21 PM

 

 

Bitcoin is the greatest!

Satoshi is our way in the virtual world!

Zerohedge readers worship Satoshi!

 

nmewn's picture

I wear sunglasses at night.

davidalan1's picture

"Are you ready for dow 20,000, well are you punk?

Atomizer's picture

Did the White House alter the Easter egg hunt for EBT cards?

Oldwood's picture

We have an economy of which a large part of its value is consumed by government and wasteful spending and another significant portion dependent upon redistributing the remaining value in the gambling casinos we call "markets", which produce nothing but instability that threatens the remaining wealth producers have left to support themselves. It is a cancer consuming us all. A prosperous economy is one that produces things, useful things that make our lives better. Fewer and fewer produce anything, either because they lack the opportunity or simply prefer to do nothing at all...or maybe set behind a monitor placing bets and hoping for enlightenment and opportunity to fleece a muppet, large or small.

cornfritter's picture

So true.  Nonetheless, super[heroe | whore]s must line up and throw sphagetti at a wall that supposedly represents a real economy, and see what sticks.  More dot com facebook apples microsofts oracle intels- it's the apps you know?  all in the apps, or possibly the cloud, it's all so very sophisticated.  Space technology and genetics maybe... something real clever.

Atomizer's picture

Had Mrs. O been served spicy chicken wings and watermelon, Grover would not of had a chance. The pornstar Secret Service would have arrested him. 

Sesame Street: Michelle Obama & the Most Important Meal

http://m.youtube.com/watch?v=RaTMdOeZzVo

knukles's picture

Had that been fried chicken and watermelon, that it woulda been racist.  As is, congratulations on the stylish presentation of healthy food choices.

Atomizer's picture

Guess you missed the punchline, a unemployed government snitch working the system ate Mrs. Obama's breakfast. Naturally, that wasn't the message served. It fell on it own gracies. 

delacroix's picture

fried chicken, watermelon, cadillac car.   we ain't as dumb as you think we is.

devo's picture

Is it my browser issues, or does bloomberg no longer show stock futures? It's been happening for a few weeks, ever since the market started to take a dump...on up days they'd show the + gains, and on down days they show gibberish. e.g. right now shows spy as even.

Atomizer's picture

You're under suspicion for carrying a registered fire arm, drinking a bloated soda drink, and smoking a cigarette in dim lighted alleys. 

Fuck Bloomberg. Sink or swim platform. There are others. It will cost you about 80k. Don't rely on MSM tickers. FYI. 

DOGGONE's picture

"The Public Be Suckered" March on minions!
http://patrick.net/?p=1223928

Grumbleduke's picture

Valley Douchebags: Let's get social (cocksuckers)!

https://www.youtube.com/watch?v=Sv6byr_JKuk