The market meltdown is coming

And it’s probably going to make 2008 look like a walk in the park, if these valuations are any guide:

Hedge fund manager David Einhorn warned of dangers for retail investors that he sees in the market, and one of his main examples was a tiny New Jersey deli with a market capitalization of more than $100 million.

The Paulsboro, New Jersey-based Your Hometown Deli is the sole location for Hometown International, which has an eye-popping market value despite totaling $35,748 in sales in the last two years combined, according to securities filings.

“Someone pointed us to Hometown International (HWIN), which owns a single deli in rural New Jersey … HWIN reached a market cap of $113 million on February 8. The largest shareholder is also the CEO/CFO/Treasurer and a Director, who also happens to be the wrestling coach of the high school next door to the deli. The pastrami must be amazing,” Einhorn said in a letter to clients published Thursday.

Hometown, which appears to have begun trading in 2019, according to FactSet, has shares that trade over the counter and rarely has more than a few hundred shares change hands per day. Often, there are no trades logged in an entire trading day.

Still, the company’s market cap is just over $100 million, according to FactSet.

If $18k in annual sales is worth $100 million, then I’m a multibillionaire. On paper. In Clownworld. Sadly, what passes for Clownworld’s money is observably less legitimate than Zimbabwe’s. And there are already numerous TV ads for stock-investing apps, which should send shivers down the spine of anyone even vaguely familiar with socionomic theory.

UPDATE: It appears a credit crunch is already underway. If the banks aren’t extending consumer credit, particularly to consumers with excellent credit scores, it’s usually because they are having trouble selling or servicing their own debts.

Outraged customers have hit out at Barclaycard after thousands had their credit card limits slashed – some by as much as 99 per cent.  One longstanding customer, who has never missed a payment, said his credit limit was cut from £11,000 to £300, another saw theirs drop from £11,800 to £250, and in the biggest cut seen yet a 62-year-old said his limit dived from £25,000 to £300.