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I do not see comparisons of today with 2001 or 2008 as hyperbolic. I was working during both of those and remember them as fairly localized. Large areas were de

by ptero 4y ago

I do not see comparisons of today with 2001 or 2008 as hyperbolic. I was working during both of those and remember them as fairly localized. Large areas were demolished, but there were plenty of other areas to move into for sharp, technically literate folks. I had friends who, in 1999, were freshly-minted millionaires at Microstrategy, then lost it all less than a year later. And a friend who joined Lehman after his Wharton MBA in the summer of 2006. While it was not fun to be in the middle of the burst they all easily found high paying jobs within a few months. I suspect this crisis may be worse as, after spending trillions on covid lockdowns, we have fewer options to spend our way out of this problem. The pain in both 2001 and 2008/9 was limited as the US pumped money into economy and inflated another bubble just as the previous one was bursting, and I think this option is not easy to use today. But I am not an economist, we shall see in a couple of years how this shakes up.

ghaff 4y ago
In the technology sector 2000/2001 was pretty bad. Obviously some large established companies weathered the storm relatively well. But the carnage even at companies like Cisco and EMC was immense. And they were still a lot better off than the dot-bombs. A ton of people were unemployed or underemployed for a long time and quite a few left the industry. I was laid off right after 9/11 and I have no illusions that I was very lucky to land a job (at reduced comp with someone I knew well) quickly given that I otherwise didn't even have a nibble.
matwood 4y ago
I went through both 2001 and 2008. Maybe crypto is relatable, but beyond that it's not close. Overall, companies have great balance sheets now. The VC funded, questionable businesses will have some washouts. But, in 2008 the whole financial system was coming apart - not localized at all. I remember going long on BofA and thinking if they go under it doesn't matter if I lose my investment.
- cmrdporcupine 4y ago
  I went through both, as well, and I'd say this is maybe similar to the early stages of the 2000/2001 contraction in that it's in particular affecting tech and happening rather slowly. Certainly not 2008, which was abrupt and severe, but didn't affect the tech sector as strongly as other sectors. I wouldn't rule out that in 6 months the parallels with 2001 are more pronounced. However I agree it's not really close, especially with Google/Facebook/Apple/Amazon, etc. are still printing money at an incredible rate and that money continues to sprinkle into other parts of our sector. During the .com crash there was a severe pullback in general on investment in the online startup space in general and it wasn't until the Google IPO that I felt we were truly out of that phase.
  - supernovae 4y ago
    the only parallel to 2001 i see is crypto. The rest of tech is on pretty sound footing all things considered.
tptacek 4y ago
There is nothing going on in the tech industry today that even resembles 2001. For that matter, neither did 2008.
- randomsearch 4y ago
  Yet. Crashes are not instantaneous. Crypto alone is easily a dot com sized scandal. Cheap cash has led to a lot of dysfunctional and gigantic industries, eg food delivery. We are nowhere near the bang yet.
  - jpgvm 4y ago
    The entire crypto market is a drop in the bucket. It could all go to zero tomorrow and not have any significant impact on anything (except maybe risk sentiment for a short period). The cheap cash situation on the other hand is the elephant in the room. Unprofitable companies are about to be under immense pressure. I don't know if there is going to be much of a bang rather than a very long deep slide for equities (especially tech) as indices undergo P/E compression. When we start seeing 12 P/E then maybe things will turn around.
    - randomsearch 4y ago
      > The entire crypto market is a drop in the bucket. It could all go to zero tomorrow and not have any significant impact on anything. That's what I used to think, until I began to see how connected it was to other parts of the economy. Once financial institutions get involved, you just don't know how connected that system is anymore.
      - imtringued 4y ago
        Sorry but crypto is anti medium of exchange. The real economy doesn't give a damn about bitcoin.
      - jpgvm 4y ago
        No matter how connected it is a $1T total market cap (at it's peak) is just not large enough to matter. If it goes to zero it goes to zero, no large financial institutions will shed a tear other than for whatever fat fees they were making selling crypto derivatives to their whale clients.
supernovae 4y ago
The thing is, We don’t have fewer options. We’re just exploding over with talking heads telling us we can or can’t do something.

by ptero 4y ago

ghaff 4y ago

In the technology sector 2000/2001 was pretty bad. Obviously some large established companies weathered the storm relatively well. But the carnage even at companies like Cisco and EMC was immense. And they were still a lot better off than the dot-bombs. A ton of people were unemployed or underemployed for a long time and quite a few left the industry. I was laid off right after 9/11 and I have no illusions that I was very lucky to land a job (at reduced comp with someone I knew well) quickly given that I otherwise didn't even have a nibble.

matwood 4y ago

I went through both 2001 and 2008. Maybe crypto is relatable, but beyond that it's not close. Overall, companies have great balance sheets now. The VC funded, questionable businesses will have some washouts. But, in 2008 the whole financial system was coming apart - not localized at all. I remember going long on BofA and thinking if they go under it doesn't matter if I lose my investment.

cmrdporcupine 4y ago
I went through both, as well, and I'd say this is maybe similar to the early stages of the 2000/2001 contraction in that it's in particular affecting tech and happening rather slowly. Certainly not 2008, which was abrupt and severe, but didn't affect the tech sector as strongly as other sectors. I wouldn't rule out that in 6 months the parallels with 2001 are more pronounced. However I agree it's not really close, especially with Google/Facebook/Apple/Amazon, etc. are still printing money at an incredible rate and that money continues to sprinkle into other parts of our sector. During the .com crash there was a severe pullback in general on investment in the online startup space in general and it wasn't until the Google IPO that I felt we were truly out of that phase.
- supernovae 4y ago
  the only parallel to 2001 i see is crypto. The rest of tech is on pretty sound footing all things considered.

tptacek 4y ago

There is nothing going on in the tech industry today that even resembles 2001. For that matter, neither did 2008.

randomsearch 4y ago
Yet. Crashes are not instantaneous. Crypto alone is easily a dot com sized scandal. Cheap cash has led to a lot of dysfunctional and gigantic industries, eg food delivery. We are nowhere near the bang yet.
- jpgvm 4y ago
  The entire crypto market is a drop in the bucket. It could all go to zero tomorrow and not have any significant impact on anything (except maybe risk sentiment for a short period). The cheap cash situation on the other hand is the elephant in the room. Unprofitable companies are about to be under immense pressure. I don't know if there is going to be much of a bang rather than a very long deep slide for equities (especially tech) as indices undergo P/E compression. When we start seeing 12 P/E then maybe things will turn around.
  - randomsearch 4y ago
    > The entire crypto market is a drop in the bucket. It could all go to zero tomorrow and not have any significant impact on anything. That's what I used to think, until I began to see how connected it was to other parts of the economy. Once financial institutions get involved, you just don't know how connected that system is anymore.
    - imtringued 4y ago
      Sorry but crypto is anti medium of exchange. The real economy doesn't give a damn about bitcoin.
    - jpgvm 4y ago
      No matter how connected it is a $1T total market cap (at it's peak) is just not large enough to matter. If it goes to zero it goes to zero, no large financial institutions will shed a tear other than for whatever fat fees they were making selling crypto derivatives to their whale clients.

supernovae 4y ago

The thing is, We don’t have fewer options. We’re just exploding over with talking heads telling us we can or can’t do something.