E83: Market slide continues, and how to address Uvalde

Episode E83 (“Market slide continues, and how to address Uvalde”) was released on May 27, 2022.【1†cite†turn1search3】 In the transcript, Jason refers to the Palmer Luckey All-In Summit session and says it will be "coming out next week," framing it as part of “a great week [of] all-in content next week.”【1†cite†turn1search2】 This clearly predicts that the Palmer Luckey confrontation/session will be released as a podcast in the following week (i.e., the week of May 30–June 5, 2022).

However, the Palmer Luckey All-In Summit session appears as the episode "#AIS: Palmer Luckey on Anduril," which podcast platforms consistently list as being published on June 22–23, 2022 (e.g., iHeartRadio on June 22 and Apple Podcasts/Libsyn on June 23).【3†cite†turn3search0†turn3search2†turn3search10】 That is roughly three to four weeks after E83, not in the next week/early June window Jason described. Therefore, although the episode was eventually released, the specific timing prediction (“coming out next week”) was wrong.

The condition in Chamath’s scenario essentially did occur, and the equity‑market part of his prediction played out, but the Federal Reserve part did not.

1. Did the Friday inflation data look “reasonably good”?
   • On Friday, May 27, 2022, the BEA released the Personal Income and Outlays, April 2022 report. Headline PCE inflation (the Fed’s preferred gauge) rose 0.2% month‑over‑month and 6.3% year‑over‑year, down from 6.6% in March; core PCE slowed to 4.9% from 5.2%.(bea.gov)
   • Multiple summaries framed this as a moderation in inflation and evidence it may have peaked: e.g., coverage noted that the PCE index was “the first slowdown since November 2020” and that price pressures were “finally…moderating, at least for now.”(americanchemistry.com)
   • The same data showed consumer spending up 0.9% and personal income up 0.4% in April, described as a “healthy” pace that supported ongoing growth.(bea.gov)
   → That matches his condition of moderating inflation with still‑positive (“moderate”) growth.

2. Did the Fed signal a less aggressive tightening path as a result?
   • Around that time, Chair Jerome Powell had already signaled plans for back‑to‑back 0.5‑percentage‑point hikes in June and July and pledged to keep “ratcheting up” rates until inflation was coming down in a “clear and convincing” way.(ottawa.citynews.ca)
   • Reporting on the May 27 PCE data explicitly noted that, despite the slight cooling, inflation was still very high and most economists expected the Fed to continue raising rates, not ease off.(bangordailynews.com)
   • In fact, at its very next meeting on June 15, 2022, the FOMC increased the pace of tightening, delivering a 0.75‑point hike—the largest since 1994—underscoring a more aggressive, not less aggressive, path.(en.wikipedia.org)
   → The data may have given “ammo” in an abstract sense, but the Fed did not actually signal or adopt a less aggressive tightening path.

3. Did equity markets “go boom” immediately afterward?
   • U.S. equities rallied strongly into and on that Friday. On May 27, 2022, the Dow rose about 1.8%, the S&P 500 2.5%, and the Nasdaq 3.3%; it was the first positive week for the major indices after a long losing streak.(businesstimes.com.sg)
   • Coverage tied the move directly to the PCE release, describing the rally as driven by “signs of moderating inflation” and evidence that inflation might be at or near a peak.(thenationalnews.com)
   → This is consistent with his claim that, under those conditions, “the markets will go boom,” at least in the short term.

Net assessment
Chamath was directionally right that moderating inflation data would spark a short‑term equity rally, and that’s exactly what happened after the May 27, 2022 PCE release. However, the normalized prediction also requires that the Fed signal a less aggressive tightening path, and subsequent communications and actions show the opposite: the Fed stayed hawkish and then tightened even more aggressively in June. Because that key component failed, the overall prediction—taken as stated in the normalized form—is best classified as wrong, albeit with a partially correct market call.

Key question: Did the U.S. economy experience a recession in 2022 as formally classified by standard arbiters (especially the NBER)?

1. NBER has not declared a 2022 recession. The National Bureau of Economic Research (NBER), which is widely treated as the official arbiter of U.S. business cycles, did not date a U.S. recession in 2022. Its listed recessions jump from the COVID recession of February–April 2020 with no additional recession through and including 2022.
2. GDP did fall for two quarters, but that was not treated as a recession. U.S. real GDP contracted in Q1 and Q2 of 2022, but grew again afterward; despite this, the NBER’s Business Cycle Dating Committee explicitly did not designate 2022 as a recessionary period, largely because employment, income, and industrial production remained strong and continued to grow.
3. Consensus by major institutions and media (e.g., Federal Reserve commentary, Congressional Research Service, and major financial press) as of 2023–2025 consistently refer to a 2022 slowdown or growth scare, not an official U.S. recession, and clarify that no NBER recession was recorded for 2022.

Because the prediction specifically said the U.S. was headed into a “serious downturn or recession” that would be (in effect) recognized as such in 2022, and the U.S. did not have an officially dated recession in 2022, the prediction is wrong.

Chamath’s conditional prediction was that if a macro slowdown forced meaningful downward revisions to corporate earnings forecasts, then U.S. equity markets would likely make their cycle low around the time those revisions occurred, within roughly 2–3 quarters of May 2022 (i.e., by about Q1 2023).

1. Macro slowdown and earnings forecast cuts in the next 2–3 quarters
• The U.S. economy experienced a clear slowdown in 2022: real GDP contracted at an annualized –1.6% in Q1 2022 and –0.9% in Q2 2022, meeting the common “technical recession” definition and widely described as a technical recession. (cnbc.com)
• By late 2022, analysts were sharply cutting forward S&P 500 earnings estimates. A Bank of America note in early November 2022 described a “complete U‑turn” in 2023 EPS estimates: 2023 EPS for the S&P 500 was down 3.6% just since the start of October and about 8% below its June 2022 peak, with forward estimates “cut much larger than usual.” (equity-insider.com)
• Goldman Sachs similarly slashed its S&P 500 EPS forecast in November 2022, noting that since the start of Q3 analysts had already lowered aggregate S&P 500 EPS by about 7%, versus a typical ~3%, and warning of “additional negative EPS revisions” ahead. (investing.com)
• Over the following year, the calendar‑year 2023 EPS estimate fell from roughly $250 in mid‑2022 to about $219 by May 2023 (a ~13% cut), confirming that earnings expectations were indeed revised down materially over the 2–3 quarters after May 2022. (timelytopics.com)

2. Timing of the U.S. equity market low
• The S&P 500’s 2022 bear market trough is widely recorded as October 12, 2022, when it closed around 3,577, about 25% below its January 3, 2022 peak. (marottaonmoney.com)
• Multiple retrospectives identify that October 2022 low as the bottom of that bear market cycle, after which the index entered a new bull market and subsequently advanced more than 20% and later to new all‑time highs (e.g., surpassing 5,000 in February 2024 and 6,000 by November 2024), without revisiting or undercutting the October 12, 2022 level. (campaignforamillion.com)

3. Match to the prediction
• The macro slowdown and associated downward revisions to earnings forecasts clearly materialized over the 2–3 quarters after May 2022 (roughly through late 2022 and into early 2023). (equity-insider.com)
• The S&P 500 made its cycle low on October 12, 2022—about 4½ months after the May 2022 podcast and within the 2–3 quarter window Chamath referenced. That low occurred right as cuts to 2023 EPS estimates were accelerating (notably during Q3/Q4 2022 earnings season). (marottaonmoney.com)

While earnings revisions continued somewhat beyond that exact date, the main elements of Chamath’s call—(1) a macro‑driven earnings downgrade cycle and (2) the equity market’s ultimate low occurring during that downgrade phase and within the next 2–3 quarters—did occur. On that basis, the prediction is best classified as right.

Multiple independent data points show that, as 2022 wore on and funding conditions tightened, startups increasingly used structured terms (especially enhanced liquidation preferences) to preserve prior high valuations rather than accept headline down rounds.

• In June 2022, TechCrunch reported that many Series A/B companies that had raised at rich 2021 valuations were now doing “overly structured flat and extension rounds” instead of clean down rounds, and that these structured deals were “the most common thing we’re seeing at this moment.” The article describes investors adding punitive terms (e.g., high liquidation preferences, participating preferred) explicitly to avoid reducing the last round’s valuation. (techcrunch.com)
• On SVB Financial Group’s Q3 2022 earnings call, management said: “right now, we’re not seeing a lot of down rounds, we’re seeing more structured rounds,” explaining that companies were keeping the same price but adding a 2x liquidation preference and similar terms. This was described as what they were actively seeing in late 2022, and framed as a way to protect valuations while markets reset. (nasdaq.com)
• Carta’s "State of Private Markets" data for Q1 2019–Q2 2023 show that the share of rounds with investor‑friendly terms like liquidation multipliers and participating preferred rose to unusually high levels by late 2022 / early 2023 (8.2% of rounds in Q1 2023, 6.1% in Q2 2023), which the report characterizes as elevated “when the venture market tightens up and funding is harder to find.” (carta.com) This implies a marked increase in structured deals versus the 2019–2021 period.
• Valuation Research Corp’s analyses of the post‑2021 downturn note that down rounds reached multiyear highs in 2023, but that statistics undercount effective down rounds because many companies chose flat or structured financings instead. They state explicitly that the number of structured new rounds—featuring downside protection, cumulative dividends, and liquidation preferences at multiples of the original issue price—was increasing, used to avoid marking headline valuations down even though economics were equivalent to a down round. (valuationresearch.com)
• Follow‑on commentary in 2023 describes structured term sheets as “back in vogue”, with new investors demanding liquidation preferences up to 4x as an alternative to cutting valuations, again confirming the pattern sacks described—structure used to mask what would otherwise be down‑round pricing in a tougher market that began in 2022. (techcrunch.com)

Taken together, these sources show that starting in mid‑ to late‑2022, as startups that had raised at peak 2021 valuations ran into a much tougher funding environment, there was a clear, noticeable increase in structured rounds with features like multiple liquidation preferences and other preferences used specifically to preserve prior valuations. That matches sacks’s prediction on both timing (“later this year”) and mechanism (structure used to avoid down rounds), so the prediction is best judged as right.

Evidence from late 2022 shows that the tech talent market was clearly less overheated than it had been in early 2022, matching Sacks’s directional and timing call.

By the end of 2022, multiple sources describe a marked shift from a candidate‑scarce “talent war” to a market with more job seekers and fewer postings. A 2024 Appcast benchmark report notes that at the end of 2022 and continuing through 2023, tech companies engaged in layoffs after a period of over‑hiring, producing a shrunken market with fewer job postings and “hordes of eager tech employees” chasing those jobs. (scribd.com) An executive‑search survey summarizing late‑2022 conditions similarly concludes that large‑scale tech layoffs increased the supply of candidates and “eased the shortage of recent years.” (kestria.com) Data from layoff trackers and news coverage show that mass tech layoffs began in the last quarter of 2022 and then intensified into 2023, with well over 150,000 tech workers laid off globally in 2022 alone, making it one of the worst years on record for the sector. (newstarget.com) A December 2022 ZipRecruiter/WSJ analysis (reported here via summary) explicitly describes the tech job market as slowing even though many laid‑off workers were still being rehired quickly—indicating a cooling from the prior frenzy rather than a collapse. (reddit.com)

On compensation and bargaining power, the environment was also less “hot” by late 2022. For example, Amazon’s stock had fallen roughly 50% from mid‑2021 to late 2022, leaving many employees 15–50% below target total compensation despite previously aggressive hiring and pay practices. (advisorfinder.com) Combined with hiring slowdowns and layoffs across Big Tech, this reduced candidates’ leverage for ever‑higher offers and multiple competing bids compared with the peak boom in early 2022.

Taken together, these contemporaneous data points show that within roughly six months of the May 2022 episode (by late 2022), the tech talent market had indeed cooled materially from its earlier red‑hot state, even though it remained relatively strong by historical standards. That aligns with Sacks’s prediction that “within the next six months, the talent market is not going to be as hot.”

Jason said on E83 (released May 27, 2022) that “Freiburg will be back next week, as will the Palmer Luckey explosive episode. So look for a great week of all in content next week.” E83’s date is confirmed as May 27, 2022. (metacast.app)

Looking at the release schedule right after that:

• In the following days they released several All-In Summit "#AIS" episodes: Glenn Greenwald & Matt Taibbi (May 28), Mar Hershenson (May 30), MP Materials CEO James Litinsky (May 31), and “Opening chat with Miami Mayor Francis Suarez” on June 3, 2022. (allinchamathjason.libsyn.com)
• The Suarez episode’s notes and video summary explicitly show the Besties reunited in Miami and list David Friedberg among the hosts, so Friedberg was indeed back on the pod by June 3 (i.e., during the week after May 27). (podcasts.apple.com)

However, the Palmer Luckey episode titled “#AIS: Palmer Luckey on Anduril” did not come out that same week. Across multiple platforms (Libsyn, iHeart, Goodpods, Listen Notes, Glasp) it is dated June 23, 2022 (with iHeart listing June 22, but all around that late-June window), nearly four weeks after E83. (allinchamathjason.libsyn.com) In the main-episode feed, E84 (June 24) even opens by discussing a "one‑month hiatus," reinforcing that this block of Palmer Luckey + main episodes happened after a longer break, not "next week" after May 27. (sites.libsyn.com)

So while part of Jason’s statement (Friedberg returning and there being lots of Summit content) did come true in the following week, the specific claim that the Palmer Luckey “explosive episode” would also drop that next week is clearly false given its late‑June release. Because that key element of the prediction failed, the overall prediction is best scored as wrong.