5 ms·

> The big example is railways - all the original investors lost their money. Can someone build up on this?

pjc50 10y ago
https://en.wikipedia.org/wiki/Railway_Mania https://en.wikipedia.org/wiki/Railway_Mania but more recently the Channel Tunnel, which makes a small operating profit these days but also lost most of the original investment and went through bankruptcy: https://en.wikipedia.org/wiki/Eurotunnel https://en.wikipedia.org/wiki/Eurotunnel (The railway mania wikipedia page even blames low interest rates for it! Personally I'm of the opinion that the government can set its bond coupons to whatever it likes and investors are not owed a minimum return, but there we go) Edit: since the original comment was quite popular, I'll make some forward-looking statements: there is likewise a lot of investment which needs to be done in order to decarbonise, has major social benefits, but will not necessarily be profitable in the market. Even the highly distorted market that is energy. It may turn out that substantial negative interest rates are needed to finance the transition.
- deleted 10y ago
  [deleted]
- AndrewKemendo 10y ago
  Is it because there was not enough demand from consumers to justify the cost, but that rail was too important a piece of infrastructure that it couldn't just go away? I mean the top performing asset class for Berkshire Hathaway had been railway for a long time, albeit carriers not rail infrastructure.
- jest3r1 10y ago
  Happened in Toronto ... last year. Built a half Billion dollar express railway line from airport to downtown, funded 100% by taxpayers, and no one was riding it because the fares were too expensive. Had to lower fares and now it's bleeding money (but people are riding it). http://www.theglobeandmail.com/news/toronto/metrolinx-to-slash-fare-for-struggling-airport-express-train/article28839671/ http://www.theglobeandmail.com/news/toronto/metrolinx-to-sla...
- dilemma 10y ago
  >The railway mania wikipedia page even blames low interest rates for it! Personally I'm of the opinion that the government can set its bond coupons to whatever it likes and investors are not owed a minimum return, but there we go It's not about opinions but cause and effect.
- dannyobrien 10y ago
  Also the overprovision of fiber-optic network capacity in the U.S. telecom market in the late nineties: https://www.princeton.edu/~starr/articles/articles02/Starr-TelecomImplosion-9-02.htm https://www.princeton.edu/~starr/articles/articles02/Starr-T...

pjc50 10y ago

https://en.wikipedia.org/wiki/Railway_Mania https://en.wikipedia.org/wiki/Railway_Mania but more recently the Channel Tunnel, which makes a small operating profit these days but also lost most of the original investment and went through bankruptcy: https://en.wikipedia.org/wiki/Eurotunnel https://en.wikipedia.org/wiki/Eurotunnel (The railway mania wikipedia page even blames low interest rates for it! Personally I'm of the opinion that the government can set its bond coupons to whatever it likes and investors are not owed a minimum return, but there we go) Edit: since the original comment was quite popular, I'll make some forward-looking statements: there is likewise a lot of investment which needs to be done in order to decarbonise, has major social benefits, but will not necessarily be profitable in the market. Even the highly distorted market that is energy. It may turn out that substantial negative interest rates are needed to finance the transition.

deleted 10y ago
[deleted]
AndrewKemendo 10y ago
Is it because there was not enough demand from consumers to justify the cost, but that rail was too important a piece of infrastructure that it couldn't just go away? I mean the top performing asset class for Berkshire Hathaway had been railway for a long time, albeit carriers not rail infrastructure.
jest3r1 10y ago
Happened in Toronto ... last year. Built a half Billion dollar express railway line from airport to downtown, funded 100% by taxpayers, and no one was riding it because the fares were too expensive. Had to lower fares and now it's bleeding money (but people are riding it). http://www.theglobeandmail.com/news/toronto/metrolinx-to-slash-fare-for-struggling-airport-express-train/article28839671/ http://www.theglobeandmail.com/news/toronto/metrolinx-to-sla...
dilemma 10y ago
>The railway mania wikipedia page even blames low interest rates for it! Personally I'm of the opinion that the government can set its bond coupons to whatever it likes and investors are not owed a minimum return, but there we go It's not about opinions but cause and effect.
dannyobrien 10y ago
Also the overprovision of fiber-optic network capacity in the U.S. telecom market in the late nineties: https://www.princeton.edu/~starr/articles/articles02/Starr-TelecomImplosion-9-02.htm https://www.princeton.edu/~starr/articles/articles02/Starr-T...