Tech and Housing Bubble on the Brink: San Francisco Condos Plummet as Hedge Funds Dump Big Tech Stocks

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The bursting of the tech and housing bubble is sending shockwaves through the markets, with ominous signs pointing to an impending economic downturn. San Francisco, a city synonymous with skyrocketing real estate prices, is witnessing a significant shift as condos are now priced under $1000 per square foot for the first time in eight years. This unsettling development comes alongside a series of WARN notices, indicating a rise in job cuts and economic uncertainty.

According to reports from Goldman Sachs, the so-called “Magnificent 7” tech stocks—Microsoft ($MSFT), Apple ($AAPL), Google ($GOOGL), Meta ($META), Amazon ($AMZN), NVIDIA ($NVDA), and Tesla ($TSLA)—have been under consistent pressure. Hedge funds have been offloading shares in 15 out of the last 17 trading sessions up to December 4, signaling a lack of confidence in the once high-flying tech sector.

Mark Spitznagel, Chief Investment Officer of Universa Investments, a prominent Wall Street bear, is sounding the alarm, declaring the United States to be in the “greatest credit bubble of human history.” He criticizes the Federal Reserve’s monetary policy, accusing central bankers of creating a “tinderbox time bomb” that is poised to explode into a major market crash in the coming years. Spitznagel believes the Fed’s actions have created a precarious situation that resembles the conditions leading up to the 2008 Financial Crisis.

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Adding to the concerns is the news that bank credit has officially entered contraction territory. This

indicates a shrinking availability of credit, a phenomenon that has only occurred once since 1974—during the 2008 Financial Crisis. The contraction in bank credit is often seen as a precursor to broader economic challenges, raising fears of a significant downturn.

The housing and tech market convergence paints a grim picture for investors and homeowners alike. As San Francisco’s real estate market experiences an unprecedented dip, it serves as a microcosm of the broader economic challenges facing the nation. The once-bustling tech stocks, which led the market to historic highs, are now facing a mass exodus by hedge funds, casting doubt on the sustainability of their valuations.

Amidst these warning signs, the year 2024 is shaping up to be a volatile one, with analysts and experts urging investors to prepare for the possibility of a “huge crash.” As the bubble appears to be nearing its bursting point, market participants are left grappling with the fallout of an era marked by exuberance, speculation, and, potentially, a severe correction that could reshape the financial landscape for years to come.

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‘There’s no real good end’: This Wall Street bear says the US is in the ‘greatest credit bubble of human history’ — and it’s going to pop. How to prepare your portfolio for a ‘huge crash’