The WC – Let’s all pay off our debts

June 8, 2022 | ± 4 minutes

New here? The WC is a random mix of useful / interesting / notable stuff that gets pumped into your inbox every Wednesday.

And yes, we know WC also means toilet. I’ve had to live with these initials for 43 years.

Let’s go!

Is it America’s turn to go off a cliff?

In last week’s WC, I talked a bit about how the UK is in a death spiral.

Now I think it might be America’s turn.

The difference? The UK’s problems are obvious (hello, Brexit + incompetent PM); it’s much more subtle across the pond.

The problem? The American consumer is in big trouble. Stuff costs too much, and rather than putting off big purchases (and little ones), Americans continue to spend.

In case you live under a rock, this is how housing prices look:

That’s a 100% increase since 2010.

But both those data points are fine, as long as wages increase to match, right?

This is how various bands of Americans have done.

Looks ok, right? I’ll do the maths for you:

  • Top 5% – Wages increased 56% since 2010
  • Top quintile – 48%
  • 2nd quintile – 47%
  • 3rd quintile – 30%
  • 4th quintile – 33%
  • 5th quintile – 33%

So, housing prices have doubled, with no slow down in sales. Credit card spending is up nearly 20% year over year. And non-inflation-adjusted wages are up less than 50% total over the last 12 years for all but the top 5% of Americans…

The good news? Americans are still paying off their debts, and they’re doing so at historic rates.

Data via NY Fed

How long do you think that’s going to last? (More on this in a moment.)

Everyone’s getting fired!

In tech, anyway.

Coinbase has a hiring freeze.

Clubhouse is firing people.

Tesla is cutting 9% of its staff. And trying to force even more to quit.

It’s got so bad that TechCrunch has started a tracker.

Recall the chart above showing that only the top 5% of workers are really increasing their wages. Welp, most of the folks getting laid off here are in that camp.

Wine is king (again)

Every year, Wine-searcher.com publishes its list of most-searched for wines.

Two years ago, something funny happened. Five of the ten most-searched-for wines weren’t wines at all. They were whiskies.

This year, all ten are actual wines again, and only 13 whiskies made the top 100 (down from nearly 40 two years ago).

So what do people want? They like red wine, they like Bordeaux, and they like blends.

From those 250m searches on the platform, over half the top 100 bottles are red Bordeaux blends.

Château Mouton Rothschild

There is more vodka in the top 100 than Riesling and Sauvignon Blanc combined.

Bitcoin is back, baby (maybe)

It’s not been a great 2022 for Bitcoin.

Ouchtown, bro. Population you.

But the price seems to have stabilized around $30k for the last several weeks. Perhaps more tellingly, nearly a quarter of all 2022 inflows into exchange-traded Bitcoin funds have happened in the last seven days. What does that mean?

That institutional (smart) money is getting back into Bitcoin in a big way.

How about BTC’s little bro, Ethereum? Ninth straight week of outflows, I’m afraid.

Here’s a great thread breaking down all last week’s data.

Distribution > Product

People say that first-time entrepreneurs obsess over the product, and second-time founders obsess over the distribution.

That’s because, without fantastic distribution, no one cares about your product. The world will not, in fact, beat a path to your door if you invent a better mousetrap.

Case in point – Zelle vs Venmo. By all reasonable measures, Venmo is a superior product. Looks better, easier to use, better support, all that. But Zelle’s focus on integrations with lots and lots of banks (over 1,000 at last count) means it transacts far more volume.

If you’re building something, figure out how you’re going to sell it first.

Stefan recreating that scene from Austin Powers

What caught your eye this week? Respond to an any email. We always read our inbox.

Cheers,
Wyatt

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Picture of Wyatt Cavalier

Wyatt Cavalier

With a background in finance & intelligence analysis, Wyatt has an unhealthy obsession with finding the best blue chip investment opportunities. His previous newsletter, Fractional, resonated deeply with subscribers, bringing actionable insights and unconventional trading strategies. His rare book collection specializes in banned editions. He currently lives in Spain with his beautiful wife, three young boys, and dog Monty.

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