CPI COMES IN SUPER HOT, PEACE TALKS FAIL

For a long time vulture capitalists have enjoyed an environment of free money and soaring asset valuations — leading to big dicked paydays and exalted net worths. We can see it in almost every new IPO since 2009 — price to sales rations north of 30 was/is commonplace. That era is 100% over, as inflation grips our throats and threatens to suffocate the economy.

The CPI came in hot at 7.9% and that’s rather conservative. I imagine next month’s number will be north of 10%. How does a central bank fight hyperinflation? Simple — it crashes the economy.

Last time CPI was here, the Fed Funds rate was 13% pic.twitter.com/OIS56gCDK0

— zerohedge (@zerohedge) March 10, 2022

Here’s a price to sales table, courtesy of Stocklabs, for the tech sector. That’s right we have at least 50% of downside to get down to 2008 levels.

Even if we do not smash lower to 2008 levels, at 2.9x sales — we are still extremely overvalued on a historical basis. I know — the average stock is down 40% from their highs and you’re sick of losses. SIR — that was a bubble. What you are seeing now is a correction. To properly correct in an environment where money isn’t free, you will begin to see companies in search of capital. Those who cannot raise dilutive offerings will go bankrupt and see their shares swim all the way to zero. Back in the dot com days, I recall seeing innumerable stocks crash to zero and just 6-12 months prior were viewed by most traders as really great companies.  If you’re company isn’t free cash flow positive, its share price is in danger.

If gas is too high, get an electric car pleb.

WHITE HOUSE: IF YOU DRIVE AN ELECTRIC CAR, HIGH GAS PRICES ARENT AFFECTING YOUpic.twitter.com/n2nPvW7j81

— The_Real_Fly (@The_Real_Fly) March 10, 2022

On the war front, peace talks have failed and Russia is committed to attacking until their terms are met.

NASDAQ futs are -200, WTI is +3.6%, and the US 10yr fast approaches 2%. Stagflation is here.