The Grinches that stole Christmas

It seems to be the season for Grinches and Scrooges

By Morf Morford, Tacoma Daily Index

For whatever reason, in 2022, about six weeks before Christmas, several companies – many of them the largest in their industries, if not the world, announced job cuts.

And not just a few job cuts; most cuts were in the thousands – and many of them were immediate.

And it wasn’t just Twitter and Meta (aka Facebook).

The so-called FAANGs (Facebook, Apple, Amazon, Netflix and Google) that dominated, if not illuminated our economy – and, maybe even more so, inspired fantasies of tech wealth and possibilities just a few months ago, seemed to shrivel in front of our eyes.

And how many companies (and careers) are they taking down with them?

From Cisco to Roku to Carvana, to Peleton, Google and Netflix, cut-backs and lay offs have become the theme of the season.

Merry Crypto to you

And then there is crypto.

FTX, which, up until a few weeks ago, had been among the world’s largest cryptocurrency exchanges, with claimed assets in the multi-billions of dollars is headquartered in the Bahamas.

Besides sounding more like the setting of a James Bond movie in the 1960s, what could sound more fantasy/fictional than a multi-billion dollar, Bahamas-based company operated by a team of twenty-somethings?

To quote an all too obvious phrase; what could go wrong?

Sam Bankman-Fried founded FTX in 2019 and rode the cryptocurrency boom to a net worth that Forbes magazine estimated at $26.5 billion barely a year ago.

In July of 2021 FTX was booming with over one million users.

But that was then…

Since those heady days, at least 100 other businesses have been pulled into the economic vortex of FTX – including Voyager Digital and Celsius Network – and the general, if not cataclysmic, decline has led some global investors to question the viability of the entire cryptocurrency sector.

Coinbase, for example, a competitor to FTX, thought it might prosper at FTX’s expense, but not if third-quarter earnings are any kind of indicator – Coinbase had $600 million in revenue and $1.2 billion in losses.

Comparisons are being made to the dot-com bubble, when it took people about five years to come back to tech stocks, with the primary difference being that those companies were real businesses with actual (not virtual) products and services.

And then there is Elon Musk

After buying Twitter for about $44 billion, Elon Musk has seen about half of Twitter’s advertisers leave, and users are abandoning Twitter for other social media outlets.

Tesla stock prices have dropped and recovered and dropped again based on the whims of the market (and ever more bizarre statements and behavior from Mr. Musk).

Perhaps Elon Musk is doing to social media what FTX did to cryptocurrencies; draining the entire industry of any relevance, authority or even reality.

The everything store

In what has been (and should still be) the busiest (and most profitable) season of all, Amazon has entered the record books as being (literally) the world’s biggest loser by dropping $1 trillion in value in just over a year.

Meta (formerly known as Facebook) and Microsoft have also dropped dramatically – but no one had so far to fall as Amazon.

In a rational and reasonable world, losses of jobs and numbers on this scale would be the ultimate indicators of an economy in trouble.

Many business analysts publicly say that these collapses are not “bellwether” indicators.

And certainly not the proverbial “canary in the coal mine”.

It’s hard to imagine how they couldn’t be.

I’d certainly like to know what those analysts and experts say (or do with their money) in private.

Who needs autocrats and “leaders for life” in places like Russia and North Korea (and Hungary and Myanmar, among many others) when we have technocrats at home making millions, if not billions, on our fears and seemingly infinite gullibility?