A Theory: The fortune 1,000 got together and had a chat. I think it was in Montana, but that's not relevent.
You see, they are getting really tired of Greeny's rising interest rates. Oh yea, you may point out that the traditional measurement of T-bills, notes, and bonds haven't had much of a rise in interest rates. Ah, but let us not forget that the price of government securities has been supported by a shrinking supply. Indeed, corporate borrowing rates have risen substantially.
So, the fortune 1,000 decided to play Greeny's game. They decided that they needed to throw the equity market into a tail spin so that Greeny might worry and stop raising interest rates.
Ah! an idea arose that while the conspiring fortune 1,000 companies were about to report good 3Q earnings, they should warn the market of an impending slowdown, even with no slowdown in site, and cause the market to tank on a conspired prediction.
So, now a dilema arose; who should warn? If everyone warned the effect would be too strong. It was determined that about 30% of them should warn and two industries should take the lead.
Well, since the point is to influence interest rates by lowering equity prices, it was decided that those who would most benefit from a strong bond market and lower equity prices should warn and sacrifice their equity price in the short term in order to gain better interest rates. Indeed Telecoms and VC's Must Warn!
You see, telecoms love debt financing and would benefit greatly by reduced interest rates. So, it was decided that telecoms must warn, and warn they did.
Who else would benefit the most? Venture capital firms of course! You see, while many point out that a poor IPO market is bad for VC's, they miss a VERY important factors. VC's don't just sell companies, they buy into companies. And just like everybody else, they like to buy low and sell high. Well, over the last 2 years they have been selling high and they now need to replenish their inventories and have billion$$$ on the sideline that they need to invest. Well, a tanked market drives down the investment price for VC's dramatically and they will benefit greatly.
So, there you have it. The fortune 1,000 got together and decided to play ball. Telecoms and VC's were the fall guys, but will be some of the biggest beneficiaries in the longer term.