Dotcom Bust 2, New & Improved | Wolf Street

Employers are trying to hire people away from other employers. And workers are job hopping. They’ve discovered that suddenly they have leverage in the labor market and can get better jobs, higher pay, and better working conditions, perhaps even in other industries, where employers are desperate to hire workers.

So there is massive churn in the labor market, with people jumping jobs because compensation packages are better on the other side of the fence, and it is through this mechanism of churn that wage increases have spread throughout the economy, at the steepest rates in four decades, though they’re still not enough to make up for raging inflation.

The Federal Reserve’s $5-trillion in money printing since March 2020 inflated asset prices across the board, from stocks with the most ridiculous valuations to even more ridiculous cryptos, to such an extent that people took huge risks based on a wing and a prayer, and made hundreds of thousands or millions of dollars in the shortest amount of time, and expected for this to continue, and decided that they would forget about working and just trade miracle stocks and crypto blessings.

On October 9, 2002, the Nasdaq, at 1,114, was back where it had first been in April 1996, six years earlier.

Some of the biggest cryptos are down over 50% from their highs. There are over 10,000 cryptos. Many are down nearly 100%. Tons of them appear to have died.

The opportunities to get wiped out are much greater now. But hey, no biggie. Investors had it so good for so long. But that ride cannot go on forever. And we’ve been through this before. And at some point, lots of people will come back from their long travels, and others will mothball their trading rigs, and others will say goodbye to what’s left of their cryptos, and they’ll start looking for jobs again. But we’re not anywhere near that point yet.

Dotcom Bust 2, New & Improved | Wolf Street