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So, this brings us to the possibility that WeWork is a symptom of a broader problem, which is that all that money which central banks have been printing since 2
by rossdavidh 7y ago
So, this brings us to the possibility that WeWork is a symptom of a broader problem, which is that all that money which central banks have been printing since 2008 has mostly gone into doing stupid stuff. Eventually, the reality beneath the accounting always comes to the fore. In 2008, the reality that spending so much labor and resources on ever bigger houses for people who already had houses, didn't really produce much benefit (probably not even for the people living in the new houses).
The money glut printed since 2008 has mostly not gone into new productive capacity, it has gone into a lot of software-related hooey like Slack, WeWork, Uber, and various new social networks. I don't even think these have improved the target sectors that much, far less have they been worth the labour and other resources put into them.
It feels like another Fiscal Crisis is coming.
- onlyrealcuzzo 7y agoAll that money did not go to fund "hooey" tech companies. $450B total has gone into VC since 2009. Stock buybacks in 2018 for U.S. companies alone was $1.1T. Total global QE is $12.3T. U.S. stock buybacks alone could be about $5.3T--or an order of magnitude more than global VC investment.
- sol_remmy2 7y agoI'm not sure why you're trying to draw a connection between stock buybacks and QE when there isn't one. Stock buybacks are just tax-optimized dividends.
- linuxftw 7y agoStock buybacks are a misappropriation of capital fueled by QE/low interest rate environments.
- tjr225 7y agoI feel like Slack is a little out of place there. It provides a pretty great platform for work collaboration. I haven't used teams, but it's pretty great compared to say, Skype for Business, for instance.
- HNcantBtrustd 7y agoI see the tech bubble as well. It was aided in low education investors who are able to invest easier than ever. I see technology as useful, but there are many companies that have not found a path to profit. this doesn't work.
- streetcat1 7y agoThe money did not got anywhere. It probably stayed within the banking system. Money is created only via debt, not by bank to bank lending, and not by printing. Also, money is actually becoming cheaper (10 year yield is at its lowest) and we are probably entering a negative yield regime. The underlying root cause is technology and demographic. I.e. the "glut" is due to low demand and not due to high supply. This is one of the reason that you see this big valuations.
- waylandsmithers 7y agoI'd say WeWork and Uber provide real services that people want-- they're just not doing it profitably.