Times are going to get rougher, much rougher.
From NYPost:
Market experts say stocks could continue falling until they’ve lost half the value from their peak in last year’s bubble heyday - meaning the bottom might be a Dow Jones industrial average at 7,000. (…)
While bear markets are officially triggered by a 20 percent drop, at their worst, they can have a sell-off of 45 percent to 50 percent.
Since the Dow’s record close above 14,000 a year ago yesterday, the Dow has tumbled 5,585.34 points - or almost 40 percent. (…)
The economy’s pace will shrink at a 0.2 percent rate in the third quarter, but sharply accelerate to 0.8 percent by Christmas.
Stocks took the brunt of the slowdown fear due to weaker corporate profits ahead and frozen credit markets.
It was the seventh straight session of losses as investors bailed from the market in droves, despite new efforts by the Treasury and the Federal Reserve to goose the stalled economy with hundreds of billions in cash.
“We’re way beyond fundamentals. This is just pure panic, that’s all it is,” said Chris Orndorff, head of equity strategy at Payden & Rygel.
What surprises me is the panic that is setting in amongst VC backed companies:
- Seesmic lays off 7 people, or 33%.
The 33% sounds ominous, but it’s “only” 7 people. Still, not sure if “only” is a fair term to use when people lose their jobs. But the thing is, Seesmic has raised a lot of money from very deep-pocketed firms and people:
The startup in February announced a $6 million Series A round from a long list of investors, including: Atomico Investments, the firm operated by Skype co-founders Niklas Zennström and Janus Friis; SoftTechVC founder Jeff Clavier; LinkedIn Corp. founder Reid Hoffman; TechCrunch founder Michael Arrington; angel investor Ron Conway; former AOL chief Steve Case; FON founder Martin Varsavsky; Goldman, Sachs & Co. managing director Michael Parekh; Knight Center for Digital Media Entrepreneurship director Dan Gillmor; video blogger Steve Garfield; SupportSoft Inc. co-founder Mark Pincus; Topica Inc. founder Ariel Poler; and Pulver.com founder Jeff Pulver.
The fact that they’re not using this downturn to ramp up means that they’re very pessimistic, either about the market or the product. That is a bad sign, but I am not sure if it’s a systematic negative sign. In fact, call me a dick, but I think this is a typical move to blame the economy even though there are probably unique/unsystematic woes. Something, I think, that Nick Denton did just last week, too. I mean, ask yourself, does the Web really need a Seesmic? More on this point here.
The thing is, it’s not only VC-backed firms that are panicking. Privately held ones that technically don’t need to worry about short term demands are also “streamlining” operations:
What’s odd about this is that parent Mansueto is not laying folks off from the print side of operations, but the online unit. Is that normal? Not really.
Today I got the third email this week from a VC looking to unload an asset.
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