Welcome To The Dark Side Of "It's Different This Time"

Tyler Durden's picture

Authored by Mark St.Cyr,

There has not been a mantra that’s emulated a teenagers go-to excuse of “Because!” for both tactical effect, as well as childish reasoning than the term “it’s different this time.” And for nearly the last 10 years that phrase has meant something entirely different to two distinct groups.

The issue at hand is that one side (i.e., “The Valley”, Wall St., and its sycophantic chorus of enablers throughout the financial/business media) is going to suddenly become aware that this once reliable sword against any and all reasoning not only had an ominous double entendre like quality, but also a double-edged-sword. And the cleaving of reputations, along with investment dollars and sense has only just begun.

So what about the other side you may be wondering since I said there were two? Fair point, and it is this:

The other-side as we’ll now call them (where you can place me if you wish) also understood that, yes, it was different this time, but not in the way that the prior believed. And that is the key. e.g., Believed.

The prior truly believed and embraced that it was different this time. In other words, fundamentals of any sort whether they be tried and true business metrics, paying customers, profits, net profits, __________(fill in the blank) were suddenly immaterial for measuring a business for what its valuation could, would, or should be.

Business 101 was reduced to: Get an idea, Get funded, Get listed, Get out, rinse repeat. And if you didn’t “get out?” Then the only metric that mattered is “eyeballs for ads.” i.e., Spend (or lose) $100mm per quarter is perfectly acceptable, and even encouraged, as long as you can show 102 million eyeballs came for free. Why? “It’s different this time.”

This is what business, valuations, metrics, and fundamentals had now become, and again here’s the key – they believed – would remain forever more.

The others understood (and argued) that yes, it was indeed different, but not for any of the reasonings or defensive arguments put forth by the prior. It was different but for only one key distinction: it was only made possible via central banks (the Fed. in-particular) pumping $TRILLIONS into the markets via one channel or another.

And here’s where “belief” comes into play that works against the farcical belief that it was – different.

Once the Fed. and others began withdrawing or halting their “free money” programs, the first to suffer the consequences would be the true believers, disciples, and evangelists of the “it’s different this time” paradigm. And guess what? That is precisely what has, is, and will continue to happen. Why? I’ll just use the abbreviation, IDTT.

When the Fed. seemed ready, and all too eager to continue printing, anything and everything seemed not just possible in “The Valley” but also for much of tech in general, especially for anything deemed disruptive. Fundamental business metrics be damned.

Losing $Billions quarterly? Have no fear; raise a few $Million and declare you’re worth $Billions. And if you’re truly daring: Raise $100’s of millions and declare you’re worth $10’s of Billions! e.g., The more you’re losing means, the more you’re winning! Why? IDTT!

But as I alluded to earlier – then comes the dark-side of the new “religion.” For you can’t have the good without the bad, right?

To illustrate this I can’t help but be reminded of a scene that comes near the end of the movie “Constantine” (2005 Village Road Show™) starring Keanu Reeves. (a personal favorite I’ll add)

The scene takes place between the Devil (Peter Stormare) and Gabriel (Tilda Swinton) where Gabriel who had been stirring up quite the mischief on Earth tries to muster his angelic powers to smite the Devil only to find – IDTT – when suddenly nothing happens; and the Devil rebukes the entire affair with one simple, but foreboding phrase, “Looks like somebody doesn’t have your back anymore.” And with it renders Gabriel to now live according to the effects of the mortal world.

The entire “It’s different this time” complex along with its evangelists, and true believers just had a very similar revelation or experience. For the Fed. has now declared in no uncertain terms – they too – no longer have someone’s back. And the IDTT resulting effects can no longer be contained behind the closed doors, or closed minds with any IDTT prayers for salvation.

Where’s the proof for such a claim? Fair enough, to wit:

(Chart Source) The above are: Twitter™, Twilio™, Snap™, Blue Apron™)

I initially used the prior three back in March in the article, “Silicon Valley: From Rarified Air To Exhaust Fumes” to demonstrate how the IDTT model has reacted since it became apparent it was – different this time. i.e., Once the Fed. and other central banks remove their largess in any way? “Looks like somebody doesn’t have your back anymore.” Seems appropriate, no?

What’s so telling of the above is the progression of time it now takes to show the fallacy of the IDTT model and belief. For the last chart of the above (far right) shows Blue Apron’s inability to not only hold any semblance of “so worth it” valuation, it couldn’t even stay above its IPO debut of $10 that was dramatically cut back from a $15 – $17 range, where it closed well below its offering some 13 trading hours later.

Yes, that’s hours, not days, not weeks, months, or years. That’s why the above chart is so telling. Those bars on the far right chart above represent 15 minute intervals. You think IDTT? Hint: You better believe it is.

All I heard across much of the main stream business/financial media when it came to the now ill-fated IPO debut of Blue Apron were phrases such as “bad business model” or “bad metrics.” They were bandied about with so much consistency I couldn’t help but marvel when only months prior such heresy talk was euphemistically met with IDTT arguments for the likes of Snapchat. (Remember all the video reports of everyone on “news” desks and reporters augmenting their photo looking ridiculous prior to the IPO to show how “cool” or “so worth it” this was?)

But if you’re still one of the “true believers” and think this all just some IPO hiccup in the road to 401K salvation where the next one will more than make up for any losers? I’ll just share with you something which I said would also appear that the entire IDTT complex stated could or would never happen. From the article “Is This Uber’s Theranos Moment” To wit:

“The revising of valuations and more came when suddenly everyone no-longer could justify the valuations based on “it’s different this time” arguments.

 

That argument works fine when the Fed’s QE program is in full effect and works like some magical cloak to hide the naked fallacy that a company with less than $100 Million in revenues is worth some $9 BILLION because the VC’s invested say it is. (I can’t help myself from laughing as I typed that, it’s so far beyond ludicrous.)

 

But once the term “law suits” and more get thrown across a unicorns saddle? Let’s just say – viewpoints, and valuation metrics begin to change, and change quickly.”

Today’s proof for such? Fair point, here’s something from none other than the Harvard Business Review™ and again, to wit:

“Uber Can’t Be Fixed – It’s Time for Regulators to Shut It Down”

When you do nothing but defend an argument against any and all business reasoning or sense, using nothing more than “Because!” or “It’s different this time” type arguments, along with the other coveted types of “disruptor” styled defenses as to just label or group critics into some form of conspiratorial, tin-foil-wearing, gloom-and doom, Chicken Little’s, nay-sayers? It works fine, until IDTT comes face-to-face with the prospects of:

“Looks like somebody doesn’t have your back anymore.”

Welcome to the dark side – aka – reality.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
I am Jobe's picture

Plenty of MBA's being pumped out to justify their exisitence. Also I see lots of Ads in Texas for the bozos to go to school for MBA's. 

J S Bach's picture

When it's really "different this time" is when the U.S. counterfeit dollar loses its status as "world currency".  Until then, the Digital Mystery Tour will roll along uncontested.

Zorba's idea's picture

well said..."the Digital Mystery Tour"is now officially coined.

LawsofPhysics's picture

yes, I agree, and when all the world's governments force you to pay your taxes in computer "bits" you will know the truth.

playit's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.jobproplan.com

Banker Buster's picture

The other day I found it interesting to see the reactions to the selloff with people on twitter saying things like "PPT you need to come in now" and "where is the PPT?"  These people were also people I thought were for free markets and to let the markets act naturally and were against fed intervention.  We were down a little over 1 percent for fuck sakes.  I was completely disappointed these people would call for the fed to "save" a market at the slightest down day.  I'm guessing they had some long position that they were concerned with, but anyone buying into new positions up here at ATH's is mental.  Very short sighted.

 

This isn't new to most readers here but the problem with a PPT from a market perspective is the distortion it creates.  As with any centrally controlled socialist type of system, in the long run the only ones that do well are the ones close to the Govt.  If you are buying dips because you think the PPT has your back, one day they will not and you will get blindly crushed.  One the other hand, the problem for sellers of an over done market is if the PPT comes in, you will also get crushed.  So the only ones that benefit are those that know when the PPT will or will not come in.  Doesn't work in the long run, the govt needs to stay out of the market or there will end up being no market, i.e. Japan.  

Antifaschistische's picture

it works in the short term AND the long term....IF you know when/what the PPT will do.   and THAT is the big money game....and we're not in it.

All Risk No Reward's picture

The debt-money bust part of the operation is where the rubber hits the road... that's when the DMM vacuums up the assets of the masses that are forced into bankruptcy.

All you people deceived into the concept of the dollar losing its value...

YOUR DEBT-SLAVERY TO INEXTINGUISHABLE DEBT IS THE VALUE UNDERLYING THE DOLLAR, BOZOS!

Stop paying your mortgage and the Mega-Bank takes your house.

Don't pay your car payment and they take your car.

Etc...

And since there is not enough money available on Main Street to pay all the Main Street debts, well, IT WILL BE MUCH MORE LIKE A GAME OF MUSICAL DEBT-CHAIRS... WHERE THERE ARE WAAAAAY MORE DEBTORS THAN CHAIRS THAT REPRESENT THE PAYING OFF OF DEBTS.

But, I know, parroting someone else's narratives in an echo chamber is what ordinary people value a whole lot more than reality, which is EXACTLY why we've been punked as badly as we have been punked.

Yog Soggoth's picture

If you can't afford it you don't need it. I am investing in fishing hooks, 22 shells, hog traps, and the Patriotic Campaign to Attack Canada. PCAC. We don't have a website yet, but have many volunteers.

All Risk No Reward's picture

All good ideas, but...

...the name PCAC makes it sound like it is Fed funded...

That name would get you on the terrorist watch list and would play well in the media when they Bankster Black Ops blow something up and blame it on you guys.

Change the name to something positive like...

Patriots Against Debt-Money Monopolist Mega-Corporate Fascist Tyranny.

With a name like that (dead on accurate), at least you won't hit the news rotation when the goons take you out.

GunnerySgtHartman's picture

And plenty of those MBAs have destroyed good companies over the years, too.

xtremers9's picture

These overvalued tech stocks are going to get nailed in the next recession. Apparently, every tech founder is out to "save/change the world"

Seasmoke's picture

It's different this time. Physical Gold and Silver are worthless.

wanderer9641's picture

If yours are worthless, I will take them off your hands as a favor to you.

vxpatel's picture

confirmed

shadow seer bad

Insurrexion's picture

For fuck's sake.

Get to the point.

buzzsaw99's picture

so in this illustration the fed is god. egad.

Buckaroo Banzai's picture

The Fed has honed its money printing and delivery techniques to the point where they can firehose trillions of dollars into the equity markets without accidentally spilling a drop anywhere else. So in a sense, it actually is different this time. Yellen wasn't talking out of her ass when she claimed that we'll never see another stock market downturn in her lifetime.

Blue Dog's picture

We could have a crash at any time. Valuations are higher now than in 1929.

LawsofPhysics's picture

"valuations"...  yes, but priced in what?

 

"Full Faith and Credit"

small axe's picture

The Swiss National Bank's $80 billion in US equities is fully invested in "different this time," symbol FKYU

WillyGroper's picture

this lady used to work for lehmann.

says insiders selling hand over fist & buying tangibles.

when you consider SNB/ESF buying, especially dividend paying stocks, it makes sense when they pull the rug out the result will be the largest financial devastation/wealth transfer in history.

http://sgtreport.com/2017/07/lynette-zang-next-market-meltdown-means-frozen-financial-system/

 

with all the vectors of which we are being attacked, i've no doubt they'll pull an emp for maximum depop.

Zorba's idea's picture

This market insanity will end when Janet's Good ship Lollypop sinks..meanwhile business as usual..keep licking everybody.

Consuelo's picture

 

 

 

“Uber Can’t Be Fixed – It’s Time for Regulators to Shut It Down”

 

 

And just who regulates the 'regulators'...?

 

It seems perhaps Uber hasn't mastered the art of $$$lobbying efforts.

max powers's picture

"who will babysit the babysitters?"

www.youtube.com/watch?v=0htZ7ocCk-Q

^ Lard = ministry and jello

a Smudge by any other name's picture

Seriously I don't get the Uber haters. Sure their CEO might be a dick but I don't want to kiss him, I want good transport options. So it's overvalued. That will change. Regulators SUCK. Taxi and limo commissions SUCK. Protected crony industries SUCK. Everyplace Ubers goes the market determines what it prefers which means that government run transport takes a gut shot and crawls to the hospital bleeding. Where it should be let to die.

icedoc's picture

I read the referenced HBR article. His main point is that Uber's business model is based on illegality, that is, they break the current laws in doing business. Yet their success is based on the consumer-public embracing their illegal activity, so if we are a nation and states of "We the People", it would seem that the laws and regulations the author defends are actually indefensible since the people embrace the lawbreaker. Which means to me that the laws themselves are illegitimate and need to be altered or removed, not Uber. But the author is an attorney so we should not expect him to embrace the people; that would be against his own self interest.

Yog Soggoth's picture

What? You know how to lobby Trump? You sneaky Mexican. I can't even warn him of attacks! Everyone pay close attention to this Consuelo dude.

blindfaith's picture

 

Excellent article, thank you for posting it.

 

I think the following also applies to the fake media, CNN WPO< NYT< NBC< CBE< MSNBC< etc.

When you do nothing but defend an argument against any and all business reasoning or sense, using nothing more than “Because!” or “It’s different this time” type arguments, along with the other coveted types of “disruptor” styled defenses as to just label or group critics into some form of conspiratorial, tin-foil-wearing, gloom-and doom, Chicken Little’s, nay-sayers? It works fine, until IDTT comes face-to-face with the prospects of:

“Looks like somebody doesn’t have your back anymore.”

Welcome to the dark side – aka – reality.

 

RightLineBacker's picture

I agree.

The only difference is that this crash will be met with cheers and great rejoicing by at least 1/2 of the USA population.

It will be hailed as the great Liberal Propaganda Death Day.

Long live truth!

MAGA!

CNONC's picture

The link "Uber Can't be Fixed," is a good read.  The points made about Uber's inherent unlawfulness also apply to AirBnBn and Amazon.  While Amazon's compliance with sales tax laws is better now than in the past, the company derived its initial advantage over competitors from illegality.  The most hyped players in the self driving car markets are similarily unlawfl in their approach to business.  There will come a time when this matters, and it is the investors, creditors andequity holders of all these firms that will pay the price.  Paying for eyeballs is a bad business, as it was in 1999, but at least it an honest mistake.

mobrule's picture

Last time what was new and different was insurance companies like AIG insuring mortgages, which delayed the bust. When AIG collapsed so did everything else followed. This time we are in the midst of an 'energy miracle' but this can only delay the bust for so long.

LawsofPhysics's picture

"reality", LMFAO!!!!

Sure, sure, go ahead Mr. Yellen, raise the FFR to 5% and sell the Fed's balance sheet!!!!

I triple dog dare you!!!!

In the meantime...

"Full Faith and Credit"

Herodotus's picture

When the S&P500 gets back down to the March, 2009 low of 666, the FED will panic and institute QE4.

ThanksIwillHaveAnother's picture

Sorry but assets get too expensive for supporting income and credit at some point.  We are near that point.   GM has over 100 days inventory and building.

johnjkiii's picture

There's nothing as pliable as an "expert" opinion. In early out late and vice versa, these paid hacks will beat anyone willing to listen to a mental pulp about how "accurate" their predictions no matter where they wind up. AND, they get paid for this horse-shit.

alfredhorg's picture

And there's nothing more reliable than an "amateur" opinion who fails to create ANY horseshit, but manages to beat the best investing minds of Harvard, Yale, and Columbia for ten years:

https://howibeatgold.wordpress.com/2017/01/25/trash-dump-worker-invests-...

hongdo's picture

+1 for the Constantine reference