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Snapchat CEO Warns "Easy Money Policy" Has Created The Tech Bubble, "Matter Of Time Til It Bursts"
A month ago 24-year-old Snapchat CEO Evan Spiegel gave global sheeple investors a glimpse at the reality in Silicon Valley's and how the second tech bubble will burst (via his comments from 2013). Overnight he stepped up the rhetoric, as ReCode reports - itself in the midst of a stock-only buyout by Vox - Spiegel warns we are currently living through a tech bubble and that it’s a matter of when, not if, the tech bubble will burst. "People are making riskier investments and... there will be a correction," he warned, placing tha blame squarely on The Fed's shoulders, explaining that the bubble is being fueled by an "easy money policy" and low interest rates - that may not last much longer.
What Spiegel said in December 2013:
Fed has created abnormal market conditions by printing money and keeping interest rates low. Investors are looking for growth anywhere they can find it and tech companies are good targets - at these values, however, all tech stocks are expensive - even looking at 5+ years of revenue growth down the road. This means that most value-driven investors have left the market and the remaining 5-10%+ increase in market value will be driven by momentum investors.
At some point there won't be any momentum investors left buying at higher prices, and the market begins to tumble. May be 10-20% correction or something more significant, especially in tech stocks.
More importantly, Spiegel brings up an absolutely critical point for the second tech bubble fueled by social-media stocks: there simply is not enough ad spending dollars in existence to support the gargantuan market caps.
Total internet advertising spend cannot justify outsized valuations of social media products that derive revenue from advertising. Feed-based advertising units will plummet in value (in the case of Twitter, advertising spend may not move beyond experimental dollars) similar to earlier devaluing of Internet display advertising.
Evan Spiegel isn’t afraid to say that we are currently living through a tech bubble, even if he and his Los Angeles-based company are taking advantage of it. The CEO of the popular messaging service said on Tuesday that it’s a matter of when, not if, the tech bubble will burst.
“I think that people are making riskier investments and … there will be a correction,” he said on the first night of the Code Conference in an interview with Kara Swisher and Walt Mossberg.
“[I]t’s definitely something we factor into our plans,” he added.
The full interview is enlightening - it appears 'they' know it's just a matter of time...
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In other news Japanese Yen hit 124 to the dollar.
At what point will the Japanese get inflation?
I think 200/1 USD would do it.
I already like this guy. I wonder what will happen if they pull off banning cash and implement negative rates. I’m guessing we go from bubble to supper bubble in stocks but even more so in real-estate. Won’t prevent the eventual crash though.
Yes, because everyone needs a 24 year old douchebag to tell them that we're in a tech bubble, and it's going to burst. Next week, Evan is going to reveal the shocking fact that the sun rises in the east and sets in the west.
I am Chumbawamba.
This is the kid that turned down $1+Billion dollars in CASH from Facebook for SnatchChat.....Why is he so smart, again?
I guess it does not hurt that YET another large valuation shit-for-product company is run by a tribal-ist.
Speigelberg, drench us with some more OBVIOUS wisdom, please?
The only ones who created the "tech bubble" are the morons that kept buying and ran the P/E up to 200.
Buffet would never invest in ANYTHING with a P/E over 10. (normal market)
a billion in stock would have been my reccomendation.
it was a $3B offer from FB.
Snapchat CEO Reveals Why He Rejected Facebook's $3 Billion Offer
http://mashable.com/2014/01/06/snapchat-facebook-acquisition-2/
Yes, this is the greedy dumbfuck that turned down a $3 billion cash offer from Facebook because he thinks he can make much more in an IPO. Funny that the genius doesn't realize his net worth is based entirely on the tech bubble created by easy money policy. It will be schadenfreude when he gets completely wiped out.
Snapchat CEO Warns "Easy Money Policy" Has Created The Tech Bubble, "Matter Of Time Til It Bursts"
Yes, so this won't be a surprise...
Snapchat's Evan Spiegel: 'We need to IPO'
http://www.latimes.com/business/technology/la-fi-tn-snapchat-ipo-2015052...
'We need to IPO' = We want some of that easy money
Well, people in his age group are busy living less-aware twenty-something lives and are more likely to listen to him than the old people. And the fact that he sees this at 24 when most people are focused on getting laid is somewhat remarkable.
The carry trade is drying up. If memory serves me right, many dot com employees went postal. Most of the carrot on a stick wealth was promised thru IPO stock share guarantees. In the mist of boom, the employee was worked as a Hebrew slave mule.
The infertile 63 chromosome blind alley is a fitting metaphor for the Japanese economy as a whole, but that's what a keiretsu gets you.
Both excellent and on point above.
The "More Than You Can Carry" Trade?
Japan is the Federal Reserve's PhD grand experiment, coined Abenomics.
124 yen for a dolla, shouldn't toyotas be dropping in price? record american profits? fucking new toyotas clog the streets. wtf.
Toyota is the vehicle / brand of choice for all Muslim extremists since the 1970s.
It'll drop in price when the Toyota workers in California, Kentucky, Canada, etc. get paid in yen.
saying that there will be a correction is putting it very lightly indeed. 10-20% is optimistic
I remember the last time this happened.
Thank goodness the crappy CNBC commercials died with it.
Fly me to the moon? Yeah, I don't think so.
2000 was a tech bubble
2007 was a housing bubble
2015 will be a tech + housing + equities + debt bubble with a currency war for dessert.
massive credit expansion leading up to 1929, 1987, 2000, 2007, 2015.then credit contracts and the bubble defaltes.
anything that the credit reaches becomes a bubble. you correctly identified 2000 and 2007. but in 2015 i would specify that "debt" really means the bond markets including those of all the world's governments, which means that everything the government spends money on in now in a bubble, most notably: education, health care, auto industry, govt pensions, govt employee benefits and salaries and total # employed. it also includes corporate bonds which companies used to finance stock buybacks and further juice stock and other asset prices. everything is on super doses of credit steroids since everything perpetuates everything else. good lord i just convinced myself to go buy some more PMs
bond levitation with moar debt. gravity, where art thou?
Bubble? Where?
Look up to see that 747 flying right over your head.
Those IT playground snots better be looking for work in the Manufacturing sector.
Oh.............
Energy sector
oh..............
Logistics and transportation.
oh........
Service industry.
Bingo.
I think you're right. I started welding, now i'm one of those IT snots. I used to think welding or manufacturing would be a good backup plan, now i think i might need to learn how to operate a cash register and scan Doritos.
All my crap aside, good luck to you.
Only the first class toilets on a 747 discharge directly beneath the plane to fall to earth - the 1% prefer it that way.
How dare he speak the truth! He probably shouldn't be doing any home improvements involving a nail gun.
Did he snapchat the statment and accompany it with a picture of his cawk?
I maintain SnapChat == Chat Roulette for the "too dumb to set up a webcam" crowd.
The world's tallest midget (paper billionaire) is warning us about his bladder?
S'okay, we have back up systems. EVERYBODY BACK UP!!!
Momentum buyers will become momentum sellers
But a correction would cause the Fed to adopt 'an easy money policy' and 'low interest rates'? Right?
Lowerest! They're good with anything below the line on the chart marked "US government defaults".
"bubble is being fueled by an "easy money policy" and low interest rates - that may not last much longer."
Alan Greenspan...
Ben Bernanke...
Janet Yellen...
Someone, anyone, ask the 24 year old CEO to please define the term 'not much longer' as it seems to be taking forever, for this to occur.
Until he can sell his pile of paper nothings for different paper nothings? Or maybe he's trying to jawbone the market unaware that this is a melt-up and there's only one direction on the PPTs todo list?
Snap. Crackle. Pop.
Evan, why the Hanes T-shirt and girlie socks? If you have owned a BlackBerry phone, pressing the volume +/- key will take a screen shot. No iFag APP needed. FYI.
Evan, I can take photos on my BlackBerry. Then click on story maker. It creates a video with the option for background music. You might want to buy a blackberry passport to explore current technology. Good luck with IPO. I agree with your views on the QE free money expansion coming to a end.
I just copied and pasted this to send to a few buddies, I lol'ed - haven't seen "blackberry" associated with "current technology" in quite some time.
Thank you for the chuckle.
Your welcome. I love the passport. The wife has my old Z10 and a ZTE. Glad to bought the launch model, don't care for the AT&T rounded corners release.
The only issue is that I cannot make WiFi calls. T-mobile and BlackBerry need to mend the fence. Mrs Atomizer's are T-mobile equipped for WiFi. We are on Hilton Head Island, 4g LTE reception is touch and go. So I borrow her phone when needed.
guy became a billionaire because 16 year olds taking mirror pics of their tits didn't know their boyfriend's phone could do a screen capture.
What can be learned from the economic rape of Russia in re the next clusterfuck?
Harvard Mafia, Andrei Shleifer and the economic rape of ...Class?
Went to highschool with this prick.
He's part of the LA elite. His grandaddy donated an entire wing to the Stanford Law School.
He stole the idea to Snapchat from his friend and pushed him out of the 'company'.
And now he's lauded as a genius. GTFO.
Exactly. The kind of priveleged little shit that the LAPD would kindly not arrest even after he mowed down a pedestrian in broad daylight.
Presumaby in that case he's one of the Tribe?
“I think that people are making riskier investments and … there will be a correction,”
Must be the new name for computers, algos and the banksters
It's not just a tech bubble, it's the largest credit bubble in history...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
Age of The Kardashians
I will start the leasing rights bidding on her fat ass at $5000.
- George Orwell
Money=Microphone
Otherwise nobody would hear this wanker.
Didn't hear any of these fucks complaining whilst they cashed in. Now they see everyone's maxed out, they are all fuckin rightious. CUNTS.
That punk wouldn't know DUTCH AUCTION from a red herring.....................
They do know but other than this interview, they don't want to talk about it and let the cat out of the bag. If you have not seen it, the documentary Cybertopia, Dreams of Silicon Valley is excellent. It's done by VPro who does great documentaries, like the the Quants of Wall Street, The Wall Street Code and many more. I put most of them on my Killer Algorithms page.
It's almost scary as you really get to see how far apart our digital illits are in DC and how are "out there" on the other side these folks are and there's no meeting in the middle except for a few like this that speak out.
http://ducknetweb.blogspot.com/2015/03/cybertopia-dreams-of-silicon-valley.html
You get to see Draper, the VC that wants to split California into 6 states and the rest of the craziness they promote with virtual values. It works as the average US citizen is so gullible on what to believe and not to believe as news rigging is here too. Yeah, that's rigged too.
Words of Mark Twain..."It's easier to keep fooling people than convince them they've been fooled" and boy do I know that one as being one who tries to educate and share where I can. I'm a former developer and people do lie and cheat with computer code and math models, and they do it until they get caught by lawmakers that stumble on to some end result, they can recognize with a low hanging fruit type of violation...take bank fines for example..same stuff. SEC is not digging below that surface to get to the cause as Mary Jo White suffers from the Sebelius Syndrome of whacked out perceptions that are not true. She got the name and is gone, but the duping legacy lives on.
http://ducknetweb.blogspot.com/2015/05/privacy-duping-of-america-intangible.html
CEOs should talk about this daily or weekly.
- 1972-83, 1984-91, 2003-2015 all dates above 51%
Bank Private Credit to GDP for United States
2011: 55.47615 Percent (Data spans from 1961 to 2011)
http://research.stlouisfed.org/fred2/series/DDDI01USA156NWDB
- Who liked the 1980s Job Market?
- Who liked the Inflation of the 1970s?
- Who thinks the UK is the Best Model for US Economic, Financial, & Free Trade Policy?
How's that British Empire Doin' these days?
I generally could not give a flying fuck what this rich young entrepreneur has to say.
However, I know that a lot of my friends (who mostly live in SF and work in tech) are far more likely to listen to my warnings in the future if they are being echoed by their tech peers.
I'm also very pleased that he correctly leveled the blame directly at the fed.
Looks like Spiegel's getting an audit...
From his hacked emails this guy used to pee on girls he f***ed while drunk in college
I think it's important to know your speaker
There's nothing inherently wrong with that. I knew a girl who liked it.
Does anyone else remember watching this 60 minutues interview of the d-bags from Razorfish..
http://www.cbsnews.com/news/the-dot-com-kids/
"We've recontextualized what it is to be a services business."
Easy: need moar ad spending!