NY Mag: 5 Obvious Signs We Were In A Bubble

The Clues You Missed: 5 Super-Obvious Signs We Were in a Financial Bubble
By Michelle Celarier


:pushpin: 1. The stadium-naming-rights curse.

:pushpin: 2. Mass-produced monkey cartoons worth billions of dollars.

:pushpin: 3. Meme stonk slogans in the sky.

:pushpin: 4. The SPAC king was ready to **** **** up.

:pushpin: 5. The capitulation of the skeptics.

About the stadium-naming-rights curse, which hit me like a tuning fork last year when I saw SOFI Stadium, I thought early on, “Kiss of death?”

Crypto is perhaps the most obvious place to look for missed signals that things had gone too far. For most of last year, bitcoin seemed impervious to the critics who called it a Ponzi scheme and the regulators around the world who threatened or enacted restrictions. In the end, though, the market top in crypto was foretold by one of the most famous curses in a financial bubble market: arena-naming rights.

In early November — just as bitcoin was peaking — the Staples Center in Los Angeles said it would change its name to Crypto.com Arena after selling the rights to crypto.com for $700 million, which ESPN called “the richest naming rights deal in sports history.” That was just months after the crypto exchange FTX bought the naming rights to the Miami arena where the NBA’s Heat play. Such deals have become a red flag to investors who remember that Enron went bust shortly after the high-flying energy firm snagged the rights to name the Houston Astros’ ballpark. The New England Patriots’ stadium outside Boston was, at the tail end of the dot-com bubble, briefly named CMGI Field after a then-high-flying internet incubator — but within a matter of months, everyone agreed that the deal no longer made sense.

Naming-rights deals are “generally the crossroads of hubris and arrogance and management believing their own b.s.,” says former financial journalist Herb Greenberg, who jokes that his decision last summer to abandon a plan to become an activist short seller was also a market-top indicator. After writing research for short sellers for several years, Greenberg crossed over to the long side, taking a job penning stock tips for a financial research firm.