"When the capital development of a country becomes a by-product of the activities of a Reddit meme, it is likely to be ill-done.”
I think it was Dan Nexon who remarked that he disliked the term "techbro" on the grounds that it was flattering and inaccurate; the reigning "tech" champions are deeply uncool people who have little recent expertise or even interest in tech but are extremely good at collecting rents. So I suggested "rentboys" instead.
I think the role of Middle Eastern sovereign wealth funds and SoftBank has been underreported. The sovereign wealth funds have been desperate to diversify and poured money into all sorts of weird places.
This is very timely, as Jim Chanos (the short seller that Jeff Skilling of Enron famously called an "asshole" on a hot mic in one of the last earnings calls before the company collapsed) has compared the AI-driven capital spending boom to fracking. The opportunity for financial chicanery with 100's of billions in CAPEX followed by rapid depreciation are vast, and so-called "earnings" may end up being just as fake as they were with fracking.
I'm reminded that in the UK after 1986 stock fundamentals started to disappear as a guide. The giant Nomura Securities started moving stocks and the joke was "Bug their offices to determine stock moves". At the same time, stock market moves just became trading strategies as big banks maneuvered other players to take losses. Silicon Valley became horribly corrupted by VC money, especially when the MO became "Create unicorns and cash out". CEOs acting like sports stars and paid accordingly helped create the vibes and "vaporware" and IP portfolios became weapons to disrupt competitors. Musk's Tesla remuneration is simply obscene. 600 PER stocks seem like Tulip mania to me. Eventually, a return to fundamentals will happen, we just don't know when.
I agree completely with you but I think we have to add to the mix the ad revenue which is enormous , it has made Google, meta and it expands at Walmart, Amazon etc. The fact that the fb and Google didn't choose to sell their products directly to the consumers still seems strange to me.
The coverage of Warren Buffet's most recent investor letter (largest cash position ever), along with Krugman talking about Jim Chanos's take on the AI bubble, got me thinking about how likely it is that Buffet will die the world's wealthiest person. The hiccup in the markets happening as I write this is a reminder of how quickly the tides of exuberant irrationality can recede, turning all the gamblers into nudists.
A "simple" shift to the loan-against-stock fraud would almost literally be just a new definition: a loan against a stock (or other asset) is a taxable "valuation event". The (snicker snicker tee hee) hack for most VCs and executives is their holdings don't have a valuation, so no change in asset value has occured. Anove definition (obvious in it's face) changes that.
"When the capital development of a country becomes a by-product of the activities of a Reddit meme, it is likely to be ill-done.”
I think it was Dan Nexon who remarked that he disliked the term "techbro" on the grounds that it was flattering and inaccurate; the reigning "tech" champions are deeply uncool people who have little recent expertise or even interest in tech but are extremely good at collecting rents. So I suggested "rentboys" instead.
This is a creativity on par with redefining "Santorum." I like it!
I think the role of Middle Eastern sovereign wealth funds and SoftBank has been underreported. The sovereign wealth funds have been desperate to diversify and poured money into all sorts of weird places.
This is very timely, as Jim Chanos (the short seller that Jeff Skilling of Enron famously called an "asshole" on a hot mic in one of the last earnings calls before the company collapsed) has compared the AI-driven capital spending boom to fracking. The opportunity for financial chicanery with 100's of billions in CAPEX followed by rapid depreciation are vast, and so-called "earnings" may end up being just as fake as they were with fracking.
https://open.substack.com/pub/paulkrugman/p/why-ai-spending-reminds-jim-chanos?r=2xzot&utm_campaign=post&utm_medium=web
I'm reminded that in the UK after 1986 stock fundamentals started to disappear as a guide. The giant Nomura Securities started moving stocks and the joke was "Bug their offices to determine stock moves". At the same time, stock market moves just became trading strategies as big banks maneuvered other players to take losses. Silicon Valley became horribly corrupted by VC money, especially when the MO became "Create unicorns and cash out". CEOs acting like sports stars and paid accordingly helped create the vibes and "vaporware" and IP portfolios became weapons to disrupt competitors. Musk's Tesla remuneration is simply obscene. 600 PER stocks seem like Tulip mania to me. Eventually, a return to fundamentals will happen, we just don't know when.
I agree completely with you but I think we have to add to the mix the ad revenue which is enormous , it has made Google, meta and it expands at Walmart, Amazon etc. The fact that the fb and Google didn't choose to sell their products directly to the consumers still seems strange to me.
The coverage of Warren Buffet's most recent investor letter (largest cash position ever), along with Krugman talking about Jim Chanos's take on the AI bubble, got me thinking about how likely it is that Buffet will die the world's wealthiest person. The hiccup in the markets happening as I write this is a reminder of how quickly the tides of exuberant irrationality can recede, turning all the gamblers into nudists.
A "simple" shift to the loan-against-stock fraud would almost literally be just a new definition: a loan against a stock (or other asset) is a taxable "valuation event". The (snicker snicker tee hee) hack for most VCs and executives is their holdings don't have a valuation, so no change in asset value has occured. Anove definition (obvious in it's face) changes that.