Venture capitalist Shervin Pishevar recently turned heads during a storm of 50 tweets. Prompted by an early-February slide in the Dow Jones Industrial Average, Pishevar began the storm by tweeting, “Some thoughts on financial storms I seeing brewing ahead. I expect a 6000-point drop in aggregate in the months ahead. Here’s why.”
Shervin Pishevar next fingered the culprits of the market’s 2018 woes. He cited increases in credit deficits and interest rates, and he stated, “Tax giveaways without matching service cuts lead to a descent into panic.” Continuing, he also noted, “Every asset class has proven to be overvalued.”
Additionally, he decried popular financial instruments with the potential to bring a new Great Recession. “All volatility indexes are suspect for trading. 24 ETFs with a combined market cap near $6 billion,” he remarked, and in subsequent tweets, he continued, “The inverse ETFs are over $3 billion of that and are at essentially zero overnight. Are the underwriters accountable? History says yes, regardless of the legalese written in the prospectus no one ever reads. Expect Credit Suisse to suffer the most.”
Shervin Pishevar also stated that Silicon Valley is losing its competitive advantage, a position he first took in the previous decade. “As I’ve said before,” he wrote, “Silicon Valley is no longer a physical place but an idea that’s gone viral. Entrepreneurship is a movement. Borderless!” A naturalized U.S. citizen, Pishevar then decried his nation’s current immigration policy and commented that rare talent will now go elsewhere.
Unhappy with U.S. infrastructure, Pishevar then shared a news article about a large train station that a team of 1,500 workers recently built in China in only one workday. He lamented, “Meanwhile, our infrastructure is in tatters, decrepit and decaying. Our government and companies are trapped in short-term thinking.” Click Here for more information.
Finally, Shervin Pishevar argued against growing monopolies. “The U.S. has allowed these monopolies to rise. Now, with cash abroad repatriated, their power grows. Witness cities begging for Amazon‘s business.”
Decision makers in the U.S. need not cede the nation’s standing in the global economy. They need only heed the warnings in Shervin Pishevar’s tweet storm.