Another rout on Wall Street followed the Fed’s fourth consecutive 75 basis point rate hike announcement. The Dow dropped 1.6%, the S&P shed 2.5%. Nasdaq took the cake: -3.3%.

Powell explains the Federal Open Markets Committee has not yet seen the signals it wants – and needs – to see from CPI data before it begins to lower rates back down.

“These rates are really back where they were before the global financial crisis,” Powell commented.

Nobody likes to hear a comparison to 2008, even if the situation is different this time around.

The housing market, which usually finds itself much closer to the Federal Reserve greenback spigot, is feeling the pressure amid continued rate hikes. Mortgage interest rates have risen significantly since last year, and the average 30-year fixed-rate mortgage moved from 3% at this time last year to nearly 7% today, according to data from Freddie Mac.

Big Tech too is beginning to reflect a downturn, heightening fears of recession. “Big Tech suffered its worst five-day stretch ever,” Goldman Sachs claims.

An Amazon sell-off on Tuesday pushed its market cap below $1 trillion dollars for the first time since April 2020. Meanwhile, shares of Airbnb fell nearly 13.4% after the company warned of slowing fourth-quarter growth as consumers sour on higher cost rentals and favor “urban and cross-border destinations.” It seems the post-Pandemic bull run has truly come to an end… People are starting to come home now.

Despite all these numbers, how is the consumer fairing?

A new Apple store grand opening in 2007. Notice the old cell phones. (Source: Patrick Haney / Openverse)

For one, we haven’t stopped buying iPhones. According to Time Magazine:

Apple’s shares are down nearly 16% since the start of the year, but in the last month, its stock price is up more than 7%, thanks in large part to an increase in max sales and growing revenue. Analysts say Apple is in better shape than its Big Tech peers since demand for its products remains high around the world, even in emerging markets.

We call this “pathological consumption”… and the iPhone economy has come to depend on our addictions.

Last year, the fintech sector raised a whopping $121.6 billion dollars according to data from Pitchbook. Although this year saw only a fraction of that figure– about $50.4 billion in the first two quarters– the numbers remain historically high.

“I don’t think Big Tech cares about recession,” my son Henry wrote to me yesterday. “They have so much money, it doesn’t affect them. Infinite demand from the consumer. Plus, a stranglehold on advertising channels and chock-full of macro thinkers… Bigger than macro. They think about humanity, not profit a lot of the time.”

Some might think his optimism is more a symptom of mass formation psychosis.

The Uber whistleblower Mark MacGann – former chief lobbyist in Europe, the Middle East and Africa – for example leaked more than 124,000 company files to the Guardian this year, revealing how the ride-hailing company flouted laws, duped police, exploited violence against drivers and secretly lobbied governments from 2013 to 2017.

“Some of these tech firms have become too big to govern,” MacGann assesses, “too big to regulate and are richer and more powerful than some of the states that are trying to regulate them.”

Having written extensively during the Tech Wreck in 2000-01, I feel like we’ve seen this movie before. Pathological consumption mixed with mass formation ideology. The difference back then? Amazon only sold books… and lost money on every book it sold. Facebook and Google – excuse me, Meta and Alphabet– weren’t even glints in Zuckerberg or Sergey Brin’s eyes. Heck, writing in Paris, we were still using dial up to get into our Compuserve accounts.

If Tech wrecks this time around, there’ll be a lot more than a stock market crash to worry about.

What do you think? Is Big Tech too big to fail? Can you imagine them pining for bailout money? You can write to me with your response here.

P.S. Back in 2000, Bitcoin was a decade away from its adventurous launch. And two decades away from the legions of Bitcoin evangelists who claim it’s too logical to fail. Rob Breedlove makes the case, right here.