5 ms·

I was too young then, but did that crash have the same "everyone and their mother sees it coming and have been talking about it months before" feeling? Cause t

I was too young then, but did that crash have the same "everyone and their mother sees it coming and have been talking about it months before" feeling? Cause this "crash" is surely like that – it has to be the most "expected and talked about" one in modern times...

deleted 4y ago
[deleted]
__s 4y ago
Yes
kerbs 4y ago
I was young too, but I think the .com bust was far more obvious than the housing crash which snuck up on a lot of people.
- bcrosby95 4y ago
  The housing crash was obvious - talk to anyone trying to buy a house in 2004 or even 2003. By 2005 or so I had friends that were getting cold called with offers of nodoc nodown interest only loans.
  - kerbs 4y ago
    Was it obvious Bear Stearns and Lehman Brothers would collapse? That Morgan Stanley would need a bailout? The crisis with the housing criss wasn't that housing collapsed, it's that the world economy went along with it.
    - acdha 4y ago
      It wasn’t necessarily obvious that specific banks would fail but it was obvious that the big guys were playing high-risk games and were going to be left with a lot of foreclosures or writing off a lot of paper value. This was known to basically everyone in the industry, too - I briefly considered buying in New Haven in 2008 and got mortgage pre-approvals from a few banks. I had an interesting conversation with an older loan officer at a Connecticut state bank, who was the only one who didn’t approve me for WAY more than I thought reasonable and explained why very matter of factly, and noted that since his bank didn’t resell the mortgages as CDOs they had to be more careful about risk.
- somenameforme 4y ago
  I would argue that this is not because it was difficult to see coming, but because most people have a bias that makes it difficult for them to imagine something that's "normal" abruptly coming to an end. This was the era of "I got a loan for this house in 10 minutes. I added granite counter tops, mopped the floor, and sold it for a $20k profit in 9 days." type shows. TV is TV, but that was genuinely happening. The market was just completely broken.
  - kerbs 4y ago
    The part of the housing crash that I was inferring was hidden to most was how deep the credit markets were tied up in housing, to the point where a housing bust meant banks collapsed and all money was frozen. I was young(ish) at the time, but I imagine some knew housing wasn't sustainable. I'm not sure there were many outside the stars of The Big Short quite knew how vulnerable the entire banking system was because of housing before it all came down.
yardie 4y ago
2001 crash primarily affected tech and finance. Everyone else that worked in physical atoms just got on with it and did their job. 2008 crash was different. Literally everyone was over-leveraged and swimming debt. This feels more like the 2001 crash coming than the 2008 crash. Most of the economy will trundle along while those running on VC money will fade away.
- ghaff 4y ago
  To be sure the 2001 crash was also mixed in with 9/11 and its aftereffects. But, in general, I agree. 2001 was catastrophic for a lot of people in the broad tech domain--as in not even a sniff of work and, for many, just got a job any job doing something else. I was really lucky to get a related job at the small company someone who I had been a client of in a prior role ran. Things still got difficult over the following year but I had not so much as a nibble otherwise. Offers were withdrawn, tons of companies went under, even the big firms like Cisco had massive layoffs.
  - khazhoux 4y ago
    > To be sure the 2001 crash was also mixed in with 9/11 and its aftereffects The dot-com crash was in the Spring of 2000.
    - ghaff 4y ago
      It wasn't a point in time. I was laid off a couple weeks after 9/11--and there were many subsequent layoffs at many companies through ensuing weeks and months. It probably began around Spring of 2000. I was at an analyst conference around that time when Cisco reported down-earnings.
    - yardie 4y ago
      I remember friends coming back to the university job fair telling me how bad it was out there. With 1-2 years experience they came back to our engineering job fair looking for internships and entry-level positions. Those without prospects just rode it out in graduate school. If you weren't in a position to repay student loans it was better to load up more debt and delay it a few years. I was c/o 2003. There was a lot of slack in the entry-level pipeline as companies were recovering but didn't need to seek new graduates because there was a 3 year backlog.
suzzer99 4y ago
In 2000 it was a lot more obvious that dotcom prices were completely untethered from reality. Same for home prices and handing out loans like candy in 2006. This one is more of a general "Hey this market is too high", but nothing as concrete that's completely out of whack imo.
daxfohl 4y ago
Plenty of people prognosticating a crash every year since 2009 but it never came. Most of us expected a long term crash in 2020 but it was a quick rebound. This year seemed like something was off but maybe just temporary due to supply chains and Ukraine, since spending and employment was still strong. I'd not say a crash is written in stone yet.
- potatolicious 4y ago
  > This year seemed like something was off I feel like the elephant in the room here is crypto? There was some frothiness between 2009 and now, particularly around businesses with intensely negative unit economics (see: Uber, WeWork) and their sustainability. A lot of the prognostications around a crash then was specifically skepticism about these companies commanding sky-high valuations without line of sight to profitability, but at least there was some fundamental value there. Then we started going even frothier and abandoning even the pretense of fundamentals with the crypto and NFT fad. That was a lot harder of a bubble to keep going. My read is that the crypto bubble burst (as it very well had to) and it (along with rate hikes) triggered a general re-evaluation of tech that included all of the perennially unprofitable companies, and taking them down several pegs. Unclear where we go from here - but IMO the skeptics from 2009 were right on their merits (even if spectacularly off on the timing), and it took an even dumber, even bigger bubble built on top of it to cause the industry to fall over.
hindsightbias 4y ago
The .com eventually became obvious in the last year or so, but before that is was 4 years of lunches with ex-coworkers in some .com telling me "you just don't get it."
matwood 4y ago
The .com crash was obvious it was going to happen, but when was the problem [1]. Companies were IPOing with no business model and no clear path to one. Imagine if the majority of the nasdaq was SPACs and crypto...yeah. I wish fuckedcompany.com was still around because it cataloged the implosion of the insanity. [1] The market can stay irrational longer than you can stay solvent.
- jonathankoren 4y ago
  > I wish fuckedcompany.com was still around because it cataloged the implosion of the insanity. Kozmo was the GOAT in the dead pool. Blows my mind that Kozma's failed business model is back and bigger than ever, but with the same fundamental profitability problems.
  - matwood 4y ago
    Haha...I will always remember Flooz [1] as my personal 'WTF is going on'? [1] https://en.wikipedia.org/wiki/Flooz.com https://en.wikipedia.org/wiki/Flooz.com
    - bombcar 4y ago
      They were missing a blockchain!
  - WillPostForFood 4y ago
    Amazon Prime is Kozmo with a profitable version of the business model.
    - matwood 4y ago
      Talk of Kozmo has made me want to peruse failed .com companies and see if any of the models could work today.
      - acdha 4y ago
        A ton of them do exist but run by grownups. For example, I worked for a web development company which had Petco as a client. The pets.com people were trying to get purchased and they asked us to talk with them. It was obvious that they were running way too much overhead - we’d talk with their technical team on the phone & people would outright volunteer that they didn’t have much to do and were mostly waiting for the IPO lotto tickets - so they failed but today just about everyone buys pet supplies online. The idea was fine but they didn’t understand they were in a low-margin industry. That pattern showed up a lot, especially where things like shipping were key chokepoints. Cement.com memorably failed but you can easily order building supplies in many places because the real value is proximity and there wasn’t a high-margin business as a middleman.

deleted 4y ago

[deleted]

__s 4y ago

Yes

kerbs 4y ago

I was young too, but I think the .com bust was far more obvious than the housing crash which snuck up on a lot of people.

bcrosby95 4y ago
The housing crash was obvious - talk to anyone trying to buy a house in 2004 or even 2003. By 2005 or so I had friends that were getting cold called with offers of nodoc nodown interest only loans.
- kerbs 4y ago
  Was it obvious Bear Stearns and Lehman Brothers would collapse? That Morgan Stanley would need a bailout? The crisis with the housing criss wasn't that housing collapsed, it's that the world economy went along with it.
  - acdha 4y ago
    It wasn’t necessarily obvious that specific banks would fail but it was obvious that the big guys were playing high-risk games and were going to be left with a lot of foreclosures or writing off a lot of paper value. This was known to basically everyone in the industry, too - I briefly considered buying in New Haven in 2008 and got mortgage pre-approvals from a few banks. I had an interesting conversation with an older loan officer at a Connecticut state bank, who was the only one who didn’t approve me for WAY more than I thought reasonable and explained why very matter of factly, and noted that since his bank didn’t resell the mortgages as CDOs they had to be more careful about risk.
somenameforme 4y ago
I would argue that this is not because it was difficult to see coming, but because most people have a bias that makes it difficult for them to imagine something that's "normal" abruptly coming to an end. This was the era of "I got a loan for this house in 10 minutes. I added granite counter tops, mopped the floor, and sold it for a $20k profit in 9 days." type shows. TV is TV, but that was genuinely happening. The market was just completely broken.
- kerbs 4y ago
  The part of the housing crash that I was inferring was hidden to most was how deep the credit markets were tied up in housing, to the point where a housing bust meant banks collapsed and all money was frozen. I was young(ish) at the time, but I imagine some knew housing wasn't sustainable. I'm not sure there were many outside the stars of The Big Short quite knew how vulnerable the entire banking system was because of housing before it all came down.

yardie 4y ago

2001 crash primarily affected tech and finance. Everyone else that worked in physical atoms just got on with it and did their job. 2008 crash was different. Literally everyone was over-leveraged and swimming debt. This feels more like the 2001 crash coming than the 2008 crash. Most of the economy will trundle along while those running on VC money will fade away.

ghaff 4y ago
To be sure the 2001 crash was also mixed in with 9/11 and its aftereffects. But, in general, I agree. 2001 was catastrophic for a lot of people in the broad tech domain--as in not even a sniff of work and, for many, just got a job any job doing something else. I was really lucky to get a related job at the small company someone who I had been a client of in a prior role ran. Things still got difficult over the following year but I had not so much as a nibble otherwise. Offers were withdrawn, tons of companies went under, even the big firms like Cisco had massive layoffs.
- khazhoux 4y ago
  > To be sure the 2001 crash was also mixed in with 9/11 and its aftereffects The dot-com crash was in the Spring of 2000.
  - ghaff 4y ago
    It wasn't a point in time. I was laid off a couple weeks after 9/11--and there were many subsequent layoffs at many companies through ensuing weeks and months. It probably began around Spring of 2000. I was at an analyst conference around that time when Cisco reported down-earnings.
  - yardie 4y ago
    I remember friends coming back to the university job fair telling me how bad it was out there. With 1-2 years experience they came back to our engineering job fair looking for internships and entry-level positions. Those without prospects just rode it out in graduate school. If you weren't in a position to repay student loans it was better to load up more debt and delay it a few years. I was c/o 2003. There was a lot of slack in the entry-level pipeline as companies were recovering but didn't need to seek new graduates because there was a 3 year backlog.

suzzer99 4y ago

In 2000 it was a lot more obvious that dotcom prices were completely untethered from reality. Same for home prices and handing out loans like candy in 2006. This one is more of a general "Hey this market is too high", but nothing as concrete that's completely out of whack imo.

daxfohl 4y ago

Plenty of people prognosticating a crash every year since 2009 but it never came. Most of us expected a long term crash in 2020 but it was a quick rebound. This year seemed like something was off but maybe just temporary due to supply chains and Ukraine, since spending and employment was still strong. I'd not say a crash is written in stone yet.

potatolicious 4y ago
> This year seemed like something was off I feel like the elephant in the room here is crypto? There was some frothiness between 2009 and now, particularly around businesses with intensely negative unit economics (see: Uber, WeWork) and their sustainability. A lot of the prognostications around a crash then was specifically skepticism about these companies commanding sky-high valuations without line of sight to profitability, but at least there was some fundamental value there. Then we started going even frothier and abandoning even the pretense of fundamentals with the crypto and NFT fad. That was a lot harder of a bubble to keep going. My read is that the crypto bubble burst (as it very well had to) and it (along with rate hikes) triggered a general re-evaluation of tech that included all of the perennially unprofitable companies, and taking them down several pegs. Unclear where we go from here - but IMO the skeptics from 2009 were right on their merits (even if spectacularly off on the timing), and it took an even dumber, even bigger bubble built on top of it to cause the industry to fall over.

hindsightbias 4y ago

The .com eventually became obvious in the last year or so, but before that is was 4 years of lunches with ex-coworkers in some .com telling me "you just don't get it."

matwood 4y ago

The .com crash was obvious it was going to happen, but when was the problem [1]. Companies were IPOing with no business model and no clear path to one. Imagine if the majority of the nasdaq was SPACs and crypto...yeah. I wish fuckedcompany.com was still around because it cataloged the implosion of the insanity. [1] The market can stay irrational longer than you can stay solvent.

jonathankoren 4y ago
> I wish fuckedcompany.com was still around because it cataloged the implosion of the insanity. Kozmo was the GOAT in the dead pool. Blows my mind that Kozma's failed business model is back and bigger than ever, but with the same fundamental profitability problems.
- matwood 4y ago
  Haha...I will always remember Flooz [1] as my personal 'WTF is going on'? [1] https://en.wikipedia.org/wiki/Flooz.com https://en.wikipedia.org/wiki/Flooz.com
  - bombcar 4y ago
    They were missing a blockchain!
- WillPostForFood 4y ago
  Amazon Prime is Kozmo with a profitable version of the business model.
  - matwood 4y ago
    Talk of Kozmo has made me want to peruse failed .com companies and see if any of the models could work today.
    - acdha 4y ago
      A ton of them do exist but run by grownups. For example, I worked for a web development company which had Petco as a client. The pets.com people were trying to get purchased and they asked us to talk with them. It was obvious that they were running way too much overhead - we’d talk with their technical team on the phone & people would outright volunteer that they didn’t have much to do and were mostly waiting for the IPO lotto tickets - so they failed but today just about everyone buys pet supplies online. The idea was fine but they didn’t understand they were in a low-margin industry. That pattern showed up a lot, especially where things like shipping were key chokepoints. Cement.com memorably failed but you can easily order building supplies in many places because the real value is proximity and there wasn’t a high-margin business as a middleman.