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Facebook Won’t Survive the Two Icebergs
It is now or never
A good indicator of a stock market gone out of control is to compare the gross national product to the market capitalization of public companies. It is not an exact estimate, but it comes close.
While the world remains stuck in the pandemic, the US market lives in a league of its own. As 2021 came to a close, the total market cap to GDP reached an astounding 229%.
In comparison, China was at 94%, Germany at 60%, the United Kingdom at 118%, and India at 115%.
Due to low-interest rates, everyone was drawn to the same set of assets; as investors outbid each other, the stock market nicely disconnected itself from reality and marched upwards.
As soon as the Fed signaled it would raise the interest rates, reality smacked investors in the face. Fund managers were forced to reassess their risk estimates, causing a small meltdown in January.
The US stock market “suffered its worst start to the year since the global financial crisis”. Technology stocks took a beating, and Facebook took the brunt of the blow. I know, I have to call them Meta now. But that only makes a difference to Zuckerberg.
Meta Platforms Inc.’s one-day crash now ranks as the worst in stock market history. The Facebook parent plunged…
