E65: VC markup dynamics, Russia/US tensions over Ukraine, Altos Labs raises $3B, Stripe mafia & more

During 2022, given the then-current (early 2022) U.S. economic conditions, the United States will be more likely than not to enter into some form of external military conflict if an opportunity arises, using conflict as a tool for political and economic cohesion.

“I did say, you know, at the end of the year, I do think that we're in this kind of economic status right now, that if there were an opportunity for conflict, we're probably more likely to want to engage in conflict than not, because it does create something that we all get behind. It creates, you know, kind of a political unity. It creates economic unity. It creates driving forces that maybe might help us through what is clearly a very volatile and difficult time at home. So let's see what happens.” View on YouTube

If the U.S. and Russia go to war over Ukraine (i.e., direct military conflict between the two), global equity markets will experience an extreme crash on the order of effectively wiping out equity values (a depression-level drawdown well in excess of standard bear markets) immediately following the outbreak of such a war.

“If this happens, the, uh, the stock markets will just go absolutely to zero. I mean, if you could have negative stock prices, this may be a good catalyst to.” View on YouTube

By the end of 2022, the United States will enter into some form of significant external conflict (military or quasi-military) driven in part by economic conditions.

“I think the economic seed is planted for us to be in some sort of conflict this year.” View on YouTube

In calendar year 2022, the U.S. Federal Reserve will raise the federal funds rate approximately five times, in increments of about 25 basis points each.

“we effectively now started to price in about five rate hikes this year. So probably 5 25 point rate hikes effectively that's what that's what the that's what the yield curve tells us.” View on YouTube

Over the tightening cycle that begins with the 2022 rate hikes, it will be very difficult for the Federal Reserve to achieve a soft landing; there is a substantial likelihood that a U.S. recession will be triggered before inflation is brought under control.

“I think that the risk of recession now is much higher than it was even a month ago. Now, you know, it's going to be hard to know. So basically, I think what we're saying is it's going to be very hard for the fed to engineer a soft landing here where we don't trigger a recession in the process of stopping inflation.” View on YouTube

In Q1 and Q2 of 2022, multiple established companies that previously appeared stable will issue earnings results or guidance showing revenue shortfalls on the order of 20–30% versus expectations, explicitly attributing the miss to unexpected supply-chain disruptions (e.g., lack of components or inventory to sell).

“What will happen is this quarter and next quarter, businesses that you didn't realize and didn't expect are going to get hit with supply chain problems are suddenly going to say, guess what? Our revenue is off by 2,030% because we couldn't sell this product because half our shelves are empty, because product didn't show up or whatever the narrative might be.” View on YouTube

Global supply-chain disruptions that were acute in early 2022 will mostly be resolved by late 2022 to early 2023, with major companies such as Apple and Tesla back to normal or near-normal supply conditions by early 2023.

“I'm less worried. Yeah. And the reason I'm less worried is when you actually talk to the companies that that are spending enormous amounts of money on CapEx, they've actually guided to the fact that by the end of this year and the beginning of next year, most of these things will be worked out... And they were pretty clear in the last few days that this will be done by 2023, early 2023.” View on YouTube

Global supply chain and CapEx-related disruptions affecting companies like Apple and Tesla will substantially resolve within roughly 6–9 months from late January 2022, with supply chain issues largely worked out by early 2023.

“I think I think we're I think we're dealing with a, you know, 6 to 9 month issue of having turned things off and now now rapidly trying to turn things back on. And we can't necessarily get that timing right. But I do think it'll work itself out faster than people expect. Personally that's what I think because the cost of Apple and Tesla specifically guiding to that is too enormous. You're talking about collectively almost 4 trillion of market cap. So they're not going to get something like this wrong. And they were pretty clear in the last few days that this will be done by 2023, early 2023.” View on YouTube

In 2022, cellular reprogramming/Yamanaka-factor-based age reversal and the Altos Labs effort to commercialize it will receive major mainstream media attention, including being featured on the front cover of multiple high-profile magazines within that year.

“What I what will be the new frontier in biotech and will completely rewrite Like, you know, the course of humanity is if we can take drugs and for a short period of time, completely reverse the age of our cells. And it sounds so crazy and so wacky, but it's being now proven in a single week. We've now had an amazing paper published, and we've seen the startup announced their $3 billion of funding to pursue commercialization of this technology. And this is going to be the year, I think this will be the front cover of a lot of magazines this year, as people realize that this is real and that it's getting commercialized.” View on YouTube