4 ms·

> Risk has already come off Are you able to elaborate on the derisking you've been seeing?

ttul 8y ago
Angels pulling out last minute because they are worried about their stock portfolio. Investors withdrawing from a levered strategy because of the same concern.
- deleted 8y ago
  [deleted]
anonu 8y ago
Many companies are laying off right now...
- nickles 8y ago
  Respectfully, that's not the sort of color I was hoping for. Instead, consider evidence of derisking as exhibited by recent moves in HY OAS [0]. [0] https://fred.stlouisfed.org/series/BAMLH0A0HYM2 https://fred.stlouisfed.org/series/BAMLH0A0HYM2
  - azernik 8y ago
    Perhaps, but when it's industry-wide it's often a good leading indicator. My previous employer's only layoffs ever were in 2008, when one of their investors (I believe A16Z?) sat down the founders of their portfolio companies and told them to cut down, because the crunch was coming. These are companies whose management is in very close personal contact with the capital markets, and so often make decisions very quickly in response to what's going on there.
    - nickles 8y ago
      > Perhaps, but when it's industry-wide it's often a good leading indicator. As far as I'm aware, employment data is considered a lagging indicator [0], as labor tends to be reasonably sticky. > These are companies whose management is in very close personal contact with the capital markets, and so often make decisions very quickly in response to what's going on there. I was fishing for other data, in part, because current data does not support the assertion that layoffs have accelerated [1][2]. In fact, initial claims data appears to be at -- or close to -- historical lows. [0] https://www.thebalance.com/lagging-economic-indicators-list-index-and-top-3-3305860 https://www.thebalance.com/lagging-economic-indicators-list-... [1] https://fred.stlouisfed.org/series/ICSA https://fred.stlouisfed.org/series/ICSA [2] https://fred.stlouisfed.org/series/IC4WSA https://fred.stlouisfed.org/series/IC4WSA
- adrianN 8y ago
  Many companies are hiring right now. Some companies are hiring and laying off simultaneously.
tanilama 8y ago
Layoff, cost cutting.
- deleted 8y ago
  [deleted]
baybal2 8y ago
> Are you able to elaborate on the derisking you've been seeing? The giant amount of credit that was raised for LBOs during last 5 years of stocks rally. A lot of those LBOs went sour.
- stevehawk 8y ago
  LBO?
  - lclarkmichalek 8y ago
    Leveraged Buy Out. You use the value of the company you are acquiring to guarantee junk bonds that you sell to raise the money to buy the company. Barbarians at the Gate is a popular book that goes into the details while telling the story of a large LBO.
jhayward 8y ago
One indicator is the number of large venture IPOs. I see Dell going public again, for instance, as an indicator of Michael Dell not wanting to carry the private concentration of assets as a risk any further.

ttul 8y ago

Angels pulling out last minute because they are worried about their stock portfolio. Investors withdrawing from a levered strategy because of the same concern.

deleted 8y ago
[deleted]

anonu 8y ago

Many companies are laying off right now...

nickles 8y ago
Respectfully, that's not the sort of color I was hoping for. Instead, consider evidence of derisking as exhibited by recent moves in HY OAS [0]. [0] https://fred.stlouisfed.org/series/BAMLH0A0HYM2 https://fred.stlouisfed.org/series/BAMLH0A0HYM2
- azernik 8y ago
  Perhaps, but when it's industry-wide it's often a good leading indicator. My previous employer's only layoffs ever were in 2008, when one of their investors (I believe A16Z?) sat down the founders of their portfolio companies and told them to cut down, because the crunch was coming. These are companies whose management is in very close personal contact with the capital markets, and so often make decisions very quickly in response to what's going on there.
  - nickles 8y ago
    > Perhaps, but when it's industry-wide it's often a good leading indicator. As far as I'm aware, employment data is considered a lagging indicator [0], as labor tends to be reasonably sticky. > These are companies whose management is in very close personal contact with the capital markets, and so often make decisions very quickly in response to what's going on there. I was fishing for other data, in part, because current data does not support the assertion that layoffs have accelerated [1][2]. In fact, initial claims data appears to be at -- or close to -- historical lows. [0] https://www.thebalance.com/lagging-economic-indicators-list-index-and-top-3-3305860 https://www.thebalance.com/lagging-economic-indicators-list-... [1] https://fred.stlouisfed.org/series/ICSA https://fred.stlouisfed.org/series/ICSA [2] https://fred.stlouisfed.org/series/IC4WSA https://fred.stlouisfed.org/series/IC4WSA
adrianN 8y ago
Many companies are hiring right now. Some companies are hiring and laying off simultaneously.

tanilama 8y ago

Layoff, cost cutting.

deleted 8y ago
[deleted]

baybal2 8y ago

> Are you able to elaborate on the derisking you've been seeing? The giant amount of credit that was raised for LBOs during last 5 years of stocks rally. A lot of those LBOs went sour.

stevehawk 8y ago
LBO?
- lclarkmichalek 8y ago
  Leveraged Buy Out. You use the value of the company you are acquiring to guarantee junk bonds that you sell to raise the money to buy the company. Barbarians at the Gate is a popular book that goes into the details while telling the story of a large LBO.

jhayward 8y ago

One indicator is the number of large venture IPOs. I see Dell going public again, for instance, as an indicator of Michael Dell not wanting to carry the private concentration of assets as a risk any further.