Uber is awash in easy cash. Private investors have pumped money into the company on increasingly generous terms with surprisingly few constraints for years. Why? Because with real interest rates so low and monetary policy so loose, they were reaching for return anywhere they hoped they could to find it.
In this respect, Uber is not alone. Snap was able to go public on terms that gave shareholders remarkably few rights. The values of major tech stocks like Google, Apple, Facebook, Netflix and Amazon have all soared to record highs. In such an environment, one fears another “Minsky moment.” It is time for the Fed to change course. It is reassuring to see that Janet Yellen is apparently thinking the same way.