5 ms·

I can't count how many times I've read similar comments on HN in the last 10yrs

by dmix 4y ago

cbayram 4y ago
Rising interest rates is what’s different this time around
- ejb999 4y ago
  rising interest rates, and an economy that is beginning to falter.
  - datavirtue 4y ago
    Citation needed.
    - ejb999 4y ago
      then go find one.
      - deleted 4y ago
        [deleted]
    - yeahsure22 4y ago
      How about bank failures? As in multiple banks have now failed.
      - VHRanger 4y ago
        The bank failures (SI, SBNY, SIVB) were tied to stuff that grew 300% in 2 years (speculative VC crap, crypto) It's bad, but likely still a contained collapse (hopefully!)
        yeahsure22 4y ago
        It doesn’t work like that, these banks didn’t fail because of exposure to particular industries. They failed to manage their IR risk just the same as every other American bank. Now they will all be in for some serious pain. In 2021 it would have been considered fringe economic theory for rates to hit 5%. Most economists would have told you it was more likely to be at -1% now.
  - jlmorton 4y ago
    The doomsayers have shifted from "we've been in a recession for six months, they just changed the definition of a recession" to "an economy that is beginning to falter." I'll take that as a sign that the economy remains robust.
    - checkcircuits 4y ago
      Really? That seems bold. They quite literally changed the definition of a recession. Just because it's not a historically accurate recession does not mean we are not in, nor that are not heading into, one. ZIRP is dead, there's no indication interest rates will go down any time soon, CPI indicates food costs are not moving, energy is still expensive, layoffs are picking up steam, housing is at it's most unaffordable time in history, etc. You look at the gestalt sitting in front of you and you say "the economy remains robust". Lord, I wish I had your naivity^W^W^W^W^W^W^W optimism. I lived through the GFC and suffered the consequences of hedonistic money policy. History may not repeat but it certainly rhymes and all of this is starting to smell very familiar to me. I'm not in possession of a crystal ball but as it stands there is still too much money in the economy. The VAST majority of stock value since the GFC has been from stock buyback programs and not bottom line increases. That alone should tell you the possible origin of the next disaster.
  - KoftaBob 4y ago
    Based on what?
    - samstave 4y ago
      Falter or maybe 're-balance' --> Look at all the thousands of layoffs in tech, the price of real-estate at all sectors, interest rates, savings-account rates of the population, homeless, unemployed, under-employed etc. There are a fuck-ton of factors that all have not-so-rosey outlooks. Its amazing we dont have an actual game "sim America" and you get to fiddle with all the various economic levers in our tax code and see the output based on real data coming from various sources in the economic space (like farm, military, foreign subsidies, etc) One that takes in the budget proposal from .gov and lets you fiddle with the model and such and crowdsource the best model outcomes through millions of game players - rewarded kind of like the lottery - everyone pays $1 a month to come up with the best model - its run through many simulations and the best model wins a bunch of cash. and then, wait for it, chatGPT writes an actual budget bill to be voted on.
endisneigh 4y ago
most of the last 10 years had near 0% interest rate
- lazide 4y ago
  It’s really mind boggling that SVB put so much money into bonds with long maturations at essentially zero or negative interest rates. I wonder how many others did similar?
  - nemo44x 4y ago
    It's not like they wanted to. Loads of money was coming in from funded companies but the demand for loans was low. So they had to put the money somewhere and banks (not just SVB) began putting record amounts into treasuries. At least they got something from them so they could pay interest on things and keep the lights on. The government printed a ton of money and demand for loans crashed after the pandemic started. People even paid loans down. Many companies weren't borrowing much because of supply chain issues - why borrow if you can't use it? I'm not blaming the government - unemployment went through the roof for awhile and they had to protect people. But this is a side effect that no one really saw. That the treasuries would lose a lot of value because of super rapid interest rate increases while companies start eating away at their runway because no new investment is coming. It all makes sense today but literally no one saw this coming a couple weeks ago.
    - HDThoreaun 4y ago
      No, they did not have to put the money somewhere. They could've kept the cash as cash if they wanted to. Holding cash is free for a bank, it's not like their costs increased since they weren't paying any interest on deposits. They could've bought derivatives to hedge against the likely scenario that interest rates increase. They could've bought 1 year bonds instead of 10. They really fucked up here. > But this is a side effect that no one really saw. Literally everyone except SVB saw that long term bonds would decrease in value post pandemic when interest rates increase. Interest rate increases lowering the value of bonds is quite literally the most basic rule of bonds.
newaccount2021 4y ago
[dead]
Invictus0 4y ago
I hate comments like this. Bad things just don't happen anymore just because the last 10 years of doomsday predictions turned out to be wrong?
- Me1000 4y ago
  Bad things can happen but they’re more likely to be predicted accurately when someone puts up some data. But most of these doomsayers are just working from vibes. “It feels like”. They’re unhelpful comments.
pigsty 4y ago
If everyone’s saying we’re in a bubble, we probably are. Just because it keeps getting bigger doesn’t mean it’s not going to pop. We’ve had 15 years of people getting billions for phone apps made in 12 months and forgotten in 6. Random individual software startups are valued more than basically the entire hardware industry under them. Bitcoin peaked out at 1.28 trillion and it still has no use beyond being a converter from dollars, to crypto, to dollars again with the occasional hand wavey “dude it’s totally completely secure and stable and everyone will use it in the future as a currency! Look how much I made by investing at the peak!” story.
- Otek 4y ago
  No, if no one is saying that we are in a bubble, then we might be in one. Because when everyone thinks it’s a bubble they are extra careful. When they don’t think about it, they just grow the bubble
- hnfong 4y ago
  If literally everyone's saying we're in a bubble, by definition we wouldn't be. Nobody would be buying at ever higher prices in a bubble, so who's making those trades? Sure, you might claim those people are unhinged and don't count, but they'd say the same to you. Unless you actually start going to your broker and buy a bunch of PSQ your comments here carry as much weight as mine.
  - SamBam 4y ago
    People can simultaneously believe they're in a bubble and still be buying. They may believe that they'll be able to sell before it pops. Or they may believe if it keeps growing long enough it won't matter that it's a bubble, because they'll have made enough money.
treis 4y ago
Can you give some examples?
samstave 4y ago
Were you around during the 2001 bust? It was surreal. I had a BBQ at my house and had ~75 attendees... all tech workers. of the ~75 people there, ~3 had jobs. I was out of work for 18 months during that period. Luckily I had a background in Animation and Architecture to fall back on and got a job designing tech companies when the crisis lifted. 2008 was worse though.
kilgnad 4y ago
The true death of silicon valley will come as a slow burn. Arguably the burn has already begun years ago.

I can't count how many times I've read similar comments on HN in the last 10yrs

by dmix 4y ago

I can't count how many times I've read similar comments on HN in the last 10yrs

cbayram 4y ago

Rising interest rates is what’s different this time around

ejb999 4y ago
rising interest rates, and an economy that is beginning to falter.
- datavirtue 4y ago
  Citation needed.
  - ejb999 4y ago
    then go find one.
    - deleted 4y ago
      [deleted]
  - yeahsure22 4y ago
    How about bank failures? As in multiple banks have now failed.
    - VHRanger 4y ago
      The bank failures (SI, SBNY, SIVB) were tied to stuff that grew 300% in 2 years (speculative VC crap, crypto) It's bad, but likely still a contained collapse (hopefully!)
      - yeahsure22 4y ago
        It doesn’t work like that, these banks didn’t fail because of exposure to particular industries. They failed to manage their IR risk just the same as every other American bank. Now they will all be in for some serious pain. In 2021 it would have been considered fringe economic theory for rates to hit 5%. Most economists would have told you it was more likely to be at -1% now.
- jlmorton 4y ago
  The doomsayers have shifted from "we've been in a recession for six months, they just changed the definition of a recession" to "an economy that is beginning to falter." I'll take that as a sign that the economy remains robust.
  - checkcircuits 4y ago
    Really? That seems bold. They quite literally changed the definition of a recession. Just because it's not a historically accurate recession does not mean we are not in, nor that are not heading into, one. ZIRP is dead, there's no indication interest rates will go down any time soon, CPI indicates food costs are not moving, energy is still expensive, layoffs are picking up steam, housing is at it's most unaffordable time in history, etc. You look at the gestalt sitting in front of you and you say "the economy remains robust". Lord, I wish I had your naivity^W^W^W^W^W^W^W optimism. I lived through the GFC and suffered the consequences of hedonistic money policy. History may not repeat but it certainly rhymes and all of this is starting to smell very familiar to me. I'm not in possession of a crystal ball but as it stands there is still too much money in the economy. The VAST majority of stock value since the GFC has been from stock buyback programs and not bottom line increases. That alone should tell you the possible origin of the next disaster.
- KoftaBob 4y ago
  Based on what?
  - samstave 4y ago
    Falter or maybe 're-balance' --> Look at all the thousands of layoffs in tech, the price of real-estate at all sectors, interest rates, savings-account rates of the population, homeless, unemployed, under-employed etc. There are a fuck-ton of factors that all have not-so-rosey outlooks. Its amazing we dont have an actual game "sim America" and you get to fiddle with all the various economic levers in our tax code and see the output based on real data coming from various sources in the economic space (like farm, military, foreign subsidies, etc) One that takes in the budget proposal from .gov and lets you fiddle with the model and such and crowdsource the best model outcomes through millions of game players - rewarded kind of like the lottery - everyone pays $1 a month to come up with the best model - its run through many simulations and the best model wins a bunch of cash. and then, wait for it, chatGPT writes an actual budget bill to be voted on.

endisneigh 4y ago

most of the last 10 years had near 0% interest rate

lazide 4y ago
It’s really mind boggling that SVB put so much money into bonds with long maturations at essentially zero or negative interest rates. I wonder how many others did similar?
- nemo44x 4y ago
  It's not like they wanted to. Loads of money was coming in from funded companies but the demand for loans was low. So they had to put the money somewhere and banks (not just SVB) began putting record amounts into treasuries. At least they got something from them so they could pay interest on things and keep the lights on. The government printed a ton of money and demand for loans crashed after the pandemic started. People even paid loans down. Many companies weren't borrowing much because of supply chain issues - why borrow if you can't use it? I'm not blaming the government - unemployment went through the roof for awhile and they had to protect people. But this is a side effect that no one really saw. That the treasuries would lose a lot of value because of super rapid interest rate increases while companies start eating away at their runway because no new investment is coming. It all makes sense today but literally no one saw this coming a couple weeks ago.
  - HDThoreaun 4y ago
    No, they did not have to put the money somewhere. They could've kept the cash as cash if they wanted to. Holding cash is free for a bank, it's not like their costs increased since they weren't paying any interest on deposits. They could've bought derivatives to hedge against the likely scenario that interest rates increase. They could've bought 1 year bonds instead of 10. They really fucked up here. > But this is a side effect that no one really saw. Literally everyone except SVB saw that long term bonds would decrease in value post pandemic when interest rates increase. Interest rate increases lowering the value of bonds is quite literally the most basic rule of bonds.

newaccount2021 4y ago

[dead]

Invictus0 4y ago

I hate comments like this. Bad things just don't happen anymore just because the last 10 years of doomsday predictions turned out to be wrong?

Me1000 4y ago
Bad things can happen but they’re more likely to be predicted accurately when someone puts up some data. But most of these doomsayers are just working from vibes. “It feels like”. They’re unhelpful comments.

pigsty 4y ago

If everyone’s saying we’re in a bubble, we probably are. Just because it keeps getting bigger doesn’t mean it’s not going to pop. We’ve had 15 years of people getting billions for phone apps made in 12 months and forgotten in 6. Random individual software startups are valued more than basically the entire hardware industry under them. Bitcoin peaked out at 1.28 trillion and it still has no use beyond being a converter from dollars, to crypto, to dollars again with the occasional hand wavey “dude it’s totally completely secure and stable and everyone will use it in the future as a currency! Look how much I made by investing at the peak!” story.

Otek 4y ago
No, if no one is saying that we are in a bubble, then we might be in one. Because when everyone thinks it’s a bubble they are extra careful. When they don’t think about it, they just grow the bubble
hnfong 4y ago
If literally everyone's saying we're in a bubble, by definition we wouldn't be. Nobody would be buying at ever higher prices in a bubble, so who's making those trades? Sure, you might claim those people are unhinged and don't count, but they'd say the same to you. Unless you actually start going to your broker and buy a bunch of PSQ your comments here carry as much weight as mine.
- SamBam 4y ago
  People can simultaneously believe they're in a bubble and still be buying. They may believe that they'll be able to sell before it pops. Or they may believe if it keeps growing long enough it won't matter that it's a bubble, because they'll have made enough money.

treis 4y ago

Can you give some examples?

samstave 4y ago

Were you around during the 2001 bust? It was surreal. I had a BBQ at my house and had ~75 attendees... all tech workers. of the ~75 people there, ~3 had jobs. I was out of work for 18 months during that period. Luckily I had a background in Animation and Architecture to fall back on and got a job designing tech companies when the crisis lifted. 2008 was worse though.

kilgnad 4y ago

The true death of silicon valley will come as a slow burn. Arguably the burn has already begun years ago.