Shervin Pishevar has come out strongly to criticize the US economy. He believes that a steady decline is in the offing and Americans should brace themselves for time tough times ahead. For more on what the early Uber investor had in mind, let’s take a look at his elaborate Twitter rant – it went on for a full 23 hours.
In mid-December 2017, Shervin Pishevar chose to step aside from his position at the helm of Sherpa Capital. Damning allegations had been made against him and the reputation of the firm was at stake. He took to twitter to tender his resignation and stayed mum for the months that followed. He resurfaced in February on the same platform not to defend himself, as many expected, but rather to talk tough about the US economy.
He anticipates Bitcoin prices to hit a low of $2,000. The effects of the decline will however not last for long as he expects the prices to stabilize in due course. Investors in gold are likely to reap big from this state of affairs.
Shervin Pishevar is known for speaking his mind and he didn’t hesitate in making claims that the stock market will experience a 6,000 point drop. This would mark the beginning of a financial storm as the rest of the market including equities will be casualties. The uncertain responses from Washington to global trade deals inform these statements. The rate of underemployment is receiving no favors from the static economic system.
The Silicon Valley has lost its tech-appeal and Shervin Pishevar insists that other nations are catching up. The competitive zones are expected to spearhead the tectonic shift in the industry. Given that entrepreneurship knows no borders, China and the rest will soon gain the tech hub status. The ailing state of infrastructure in the country will take its toll on the technology of the US.
The monopoly of multi-billion firms did not amuse Shervin Pishevar. Speaking on the state of entrepreneurship, he insisted that startups would have a hard time getting on their feet. Facebook, Microsoft and Apple are among the heavy weights standing in the way of progress as far as he is concerned.
Only time will tell whether any of his assertions hold water.
Shervin Pishevar has not gained much popularity for his doom-filled opinions on the state of the equity markets and his harsh critiques of the Fed’s reckless monetary policies. But truth isn’t decided by committee. And it turns out that most of Shervin Pishevar’s insights and predictions have been well worth paying attention to.
A bubble blown from hot air
Shervin Pishevar has easily been the most vocal critic of the Federal Reserve’s policies and their justifications for those policies of anyone throughout Silicon Valley. Shervin Pishevar has repeatedly characterized the Fed’s open-market interventions as incredibly risky and their reasoning for those policies as specious. Now, he says that the current stock market woes are the direct result of the Fed’s tinkering in the free markets over the last decade.
Pishevar says that the historically low interest rates, in some cases leading to the ridiculous situation of real negative interest, has incentivized corporations to begin massive amounts of corporate buybacks using those cheap funds as financing. This surge in corporate buybacks, as well as private investors using virtually free money to speculate in equities, has led to one of the most clear-cut asset bubbles in the history of the U.S. stock market.
Shervin Pishevar says that many of the largest companies are now trading at Schiller P/E ratios in the 30s, far higher than historic norms. He says that such heightened valuations make it highly unlikely that future returns will be anywhere near historic norms, with all of the implications that such a scenario has for institutional investors.
Pishevar has also stated that the incredibly low interest rate environment of the last decade has inflated other bubbles, including in the realm of real estate. There, he says, the unaffordability of housing is contributing to a homelessness crisis at the same time that it makes it impossible for young families to form and begin accumulating wealth. Ultimately, says Pishevar, all of these bubbles are slated to be deflated, leaving trillions of dollars in wealth destroyed and possibly sending the economy into a depression.
Few people in the country today have had such up-close and personal experiences with the founding of successful tech ventures as serial entrepreneur and financier Shervin Pishevar. Now in his 40s, Shervin Pishevar has been at the forefront of the tech industry since the mid-90s. He has been personally responsible for the founding and incubation of tech startups ranging from Airbnb and Uber to Social Gaming Network and Virgin Hyperloop.
Shervin Pishevar is also one of Silicon Valley’s thought leaders. He runs one of the most popular Twitter feeds of any venture capitalist in the Bay Area. It’s a safe bet that when Shervin Pishevar tweets on a topic of national importance, the most influential leaders in the country are hanging on his every word.
In a recent barrage of tweets, Pishevar laid down some solid arguments for why tech monopolies should be watched very carefully and why it’s likely that they will eventually need to be broken up. As someone who was there throughout the entire early stages of both Airbnb and Uber, Pishevar has seen, up close, the immense perils that new startups face. He says that the tendency of the top five tech monopolies —Google, Apple, Microsoft, Amazon and Facebook — to run out or buy out any competitor that looks like they may even possibly pose an eventual threat to their business has become a major problem.
One of the means by which these tech giants can push out competitors or make their businesses non-viable is through the use of a little-understood but highly effective weapon: lawfare. Pishevar cites the ongoing legal battles that Uber has been forced to deal with due to nuisance lawsuits filed by autonomous-vehicle rival Google. Pishevar points out that Uber is a far smaller company, and it has been compelled to waste tens of millions of dollars defending itself in court from spurious claims made by Google.
While Google has virtually unlimited resources, the millions spent by Uber are seriously cutting into its bottom line, taking money away from operations and research and development programs. Through exploiting these asymmetries, the big tech monopolies can drive incipient competition out of markets.