12 ms·
Businesses are in for a mighty debt hangover
- monkeydust 4y agoNot just businesses - countries too!
- qup 4y agohttps://archive.is/77Zvv https://archive.is/77Zvv
- jobba_job 4y ago[flagged]
- fnordpiglet 4y agoWhile many think it’s a hype cycle, which it is to some degree, I think generative AI is about to pour gasoline on economic growth.
- rlytho 4y agoThe question is how? Same old “everyone starts a tech company and white collar workers continue to exploit manual laborers” or local AI craters entertainment and software employment as viable options for the masses since the machine can just generate state asked of it, so we kick off rebuilding/modernizing all the crumbling real infra?
- matrix_overload 4y agoBe careful with your estimations. Generative AI currently resembles VR in 2018. Very impressive as a technology, and will certainly find its niches, but grossly overestimated by the public.
- bink 4y agoAnd with very little moat, allowing any company big or small to dip their feet in the waters. It's likely to be a commodity.
- BaculumMeumEst 4y agoThe difference is that generative AI is actually useful for ordinary people.
- jonplackett 4y agoAnd also doesn’t require a you to buy a $3000 computer to use it. The price of VR hardware is still a massive drag on adoption - even if it was AMAZING most people aren’t going to buy the necessary hardware chat GPT, and for a while Midjourney are FREE And they save you time and effort VR=fun(ish) AI=fun+useful
- koito17 4y ago> chat GPT, and for a while Midjourney are FREE They are free for now. Eventually OpenAI will no longer be able to subsidize the compute costs of GPT-3.5 and GPT-4 for everybody... But yes, let's enjoy GPT-4 at cheap prices while we still can. I don't think we'll be able to in the near future. I've been interested in a while in running some AI models locally, but ironically, I'd need to purchase a $3,000 computer to do so, and consider the steep hikes to my electricity bill as I run that machine.
- taneq 4y agoFortunately I specced my laptop for vr so it should be able to quantized LLaMA 7b at least. ;)
- jonplackett 4y agoMS have put it in Bing. Google will catch up and put it in google search. I will happily pay whatever OpenAI charge to not have ads It’s just too useful not to Midjourney is the same. Saves soooooooo much time. It pays for itself for the month in a day
- jayd16 4y agoYou can get a stand alone headset for $399 but I guess that being a secret even among tech people is also a data point.
- cm2012 4y agoVR at its height was a hobby platform. Chatgpt alone is used by 100m+ people a month now.
- themodelplumber 4y agoEven if all it did was enable a new level of college cheating, which we can already read about today, it'd have hundreds of times the impact of VR. (Not an endorsement of cheating, just an observation of practical effect)
- adhesive_wombat 4y agoMaybe colleges will actually have to figure out this thing called "teaching" again instead of just dectupling[1] fees and deferring everything else to some half-baked MOOC and some YouTube lectures. Any university course that can be cheated on using ChatGPT now has about as much value as a Masters in Pi Digits did in late 1949[2]. And any university that doesn't teach the use of the technology will be underserving it's students, since like it or not, it's out there now. [1]: https://www.bloomberg.com/news/articles/2012-08-23/college-tuitions-1-120-percent-increase https://www.bloomberg.com/news/articles/2012-08-23/college-t... [2]: https://www.pocket-lint.com/laptops/news/109122-computer-calculating-pi-eniac-first/ https://www.pocket-lint.com/laptops/news/109122-computer-cal...
- tunesmith 4y agoAll I know is that computer programming is qualitatively an entirely different thing than it was six months ago, different than it has ever been in the decades preceding. Programmers that never had to think about "what" to do are are just implementation machines are going to be hurt by this. Programmers that have to think hard about strategy, design, specification are about to be massively more productive. The ability to clearly communicate specifications; "what to do"; is more valuable than ever because it's the one way to unlock massive productivity gains.
- ChatGTP 4y agoWon’t this be actually bad for the economy ? I’m personally not spending as much because I’m not clear if I’ll have a job when ChatGPT-5 comes out. I’d say many people are doing similar things ? Less jobs is not necessarily a good thing ?
- mikea1 4y ago> Less jobs is not necessarily a good thing ? The rollout of the lightbulb significantly reduced the economic potential of candlemakers, but it improved the quality of life for society overall. So, whether technological advancement is a "good thing" depends on which group you are in: the one with obsolete skills or the one that benefits from cheaper and/or better goods and services. Either way, the overall economy benefits from creative destruction. [0] https://en.m.wikipedia.org/wiki/Creative_destruction https://en.m.wikipedia.org/wiki/Creative_destruction
- SoftTalker 4y agoNot having to pay developers 6-figure salaries might be a good thing in the big picture.
- epicureanideal 4y agoOr ideally, we can keep making 6-figure salaries, but be able to accomplish more in the same number of hours.
- 4y ago
- jonplackett 4y agoI bought a quest and enjoyed it. But it mostly gathers dust in my cupboard. I used it for maybe a month regularly. I am using generative ai every single day for many months so far. And every day I am still amazed by it - especially GPT-4. Virtually every day I get excited about a new thing I could do with it. It’s amazing (like VR was, for a bit) but also a lot more terrifying and awesome. I don’t think it’s the same
- oxfordmale 4y ago>> Virtually every day I get excited about a new thing I could do with it. That is pretty much the definition of a hype cycle. I am old enough to remember the flury of microwave cookbooks that came out in the 90s when the microwave became commonplace. People were finding out new things they could do with the microwave each day. These days it is mostly used for warming up food and microwave popcorn
- jonplackett 4y agoBut we all have a microwave… because ultimately they are really useful
- oxfordmale 4y agoYes they are useful, just not for cooking five course meals. AI will have it use, the only question is for what.
- jonplackett 4y agoThe question is what __else It already has so many uses. That’s my point. There will be more, unknown uses, but there are a lot right now that are already potentially world changing.
- fnordpiglet 4y agoAll things in a hype cycle have this characteristic but not all this that have this characteristic are a hype cycle. The iPhone is an example. I remember iPads people laughed “it’s a giant phone! So silly!” Etc. To the point made, something can be in a hype cycle because it is obviously useful, but for what we aren’t sure - so there’s a huge creative grasping, and convergence of hucksters and con artists, that boils down into what is the long lasting utility. (Ala microwave) The thing is the utility is realizes right now by a lot of folks and the only tool folks are using is a crappy web UI onto a chat bot. Crypto had no utility ever, just some crypto anarchist dream of a world without the Treasury. VR is neat but rarely useful.
- pb7 4y agoI don’t see this resemblance at all. VR has peaked and plateaued at nothing more than a gimmick just like crypto. The hype around AI is because it was immediately useful from day 1 of a commercial product.
- Mistletoe 4y agoI anticipate I will find it somewhat useful in Microsoft Office products in the future. Beyond that I don’t know. Logos are easy to make now. Knowledge workers should probably think about becoming plumbers and AC repairmen. Something where you use your hands, because AI doesn’t have hands.
- pazimzadeh 4y agoI think that's what makes it a hype cycle. A period of massive short term growth/expansion/copy-cats followed by a selection process for the actually useful products, like the dot com bubble
- nkozyra 4y agoBoy, I don't know. VR really isn't positioned to disrupt entire industries while companies are already figuring out how to replace people with LLMs.
- fnordpiglet 4y agoI’ve been working with the tech for a long time now, and I’m convinced we’ve only scratched a very cursory amount of the value waiting. People are focused too much on its ability to write and emit bad code and say silly things and making it read poetry in the voice of a Dalek. Particularly generative multi modal AI hooked up into a feedback loop with classical AI and reasoning techniques, solvers, optimizers, etc, will be remarkable. For instance: I uploaded an image of a saloon with cowboys playing cards and asked one of the multimodal models to describe the scene. It did with details about the game and the card table etc. Acting as a goal base agent I told it we need $20. It said it could either play cards or work at the saloon and recommended saloon work as it’s assured. I advised it to play cards and describe how to walk to the card table and to provide an image with the card table labeled and the route annotated with obstacles. It was able to do this. This could be fed into a navigation system. I then uploaded an image of a bunch of card hands and asked it to classify each hand as what it’s holding and the relative strengths. It was accurate. Using a optimizer it could feed the visual card state and play an optimal game. Etc. Each one of these tasks would have been absurdly hard five years ago.
- soared 4y agoLike crypto and VR, sounds pretty cool but it’s not clear how this fuels economic growth.
- fnordpiglet 4y agoIt’s a toy example of solving an abstract task that using classical techniques would have been impossible, but by combining the abstract semantic capabilities of LLMs with classical techniques becomes fully achievable. The problem with classical agents and other techniques is they fail hard when faced with a landscape that was unanticipated or requires a comprehensive semantic awareness beyond the models domain. LLMs provide a space where abstract semantic “reasoning” can happen. It isn’t a deterministic optimizer in any way, no matter the attempts to show it can do basic math tasks etc with larger models and context lengths. But why does it have to? There are tasks, class as classification, description, semantic analysis, and others it does very well at. By combining techniques you can create agents that are much more robust and autonomous in many different situations that wasn’t practical before. This example could very well have been a factory robot that can use LLM to assist in solving unanticipated challenges, expanding its generalized capabilities beyond a very narrow and specific task set. For instance, the same machinery can have the ability to assemble many different things with minimal additional programming by providing it with specifications, drawn plans, quality control criteria and examples, etc. The LLM can use those to encode instruction to its specialized sub systems that operate with classical techniques to achieve some goal based optimization. The “glue” so to speak to achieve the abstract task is supplied by the LLM. As it performs if it’s doing things wrong reprogramming is as simple as promoting it with the error and examples of better. Through reinforcement techniques the more it performs the tasks and encounters edges and errors the better it’ll get. Compared to current factory floor robotics this would be a remarkable advancement as floors could be reconfigured more rapidly, and the set of specialized machines could be reduced to a more general and commodity set.
- fnordpiglet 4y agoHere’s another example of real life improvements - my wife, who isn’t an English speaker, asked ChatGPT to write her a letter to the immigration service requesting a visa for her brother to visit. She filled in basic details like names and visit details and it provided a beautiful letter, conforming to what an immigration lawyer would typically write. She then took that, edited it slightly, and sent it off. What would have a multi hour task for her of research, struggling to write it, and editing, or hiring a lawyer, was reduced to a casual prompt and some light amendment. You might consider this example pedestrian and trivial. But it materially improved my wife’s life. VR and crypto have never done that for people in their day to day tasks. Neither have Alexa, and I’ll go further, the web made it easier - but this entirely solves the problem. These situations happen all the time in varying forms. I don’t need to convince anyone though. Y’all will see in five years.
- ssalka 4y agoHaving engaged in a couple previous hype cycles (2017 crypto, 2020 tools for thought, 2022 Twitter alternatives), this one feels qualitatively more mainstream, and thus overall larger - it's not just tech bros getting into these tools, it's virtually everyone. So I tend to agree that we're going to see a big AI boom in the coming years. My main question at this point is whether regulation and/or lawsuits will hamper any of that progress or at least slow it down.
- yCombLinks 4y agoAI feels far more like the internet hype cycle of the mid to late 90's and the smart phone hype cycle of the mid to late 2000's than anything you listed. Your examples didn't make much noise outside of niche interested audiences. AI hype is everywhere.
- jvanderbot 4y agoThis one feels more than all those but less than web 1.0. it'll be big for a bit, but it can't do everything everyone wants.
- ryandrake 4y ago> this one feels qualitatively more mainstream, and thus overall larger - it's not just tech bros getting into these tools, it's virtually everyone. This may just mean the bubble is inflating faster than with the previous examples. Mainstream excitement often = it's about to pop. The time to sell high and bail on crypto was when it became mainstreamed in the general public. I think the exact day was when Elon Musk hosted SNL and mentioned Dogecoin. The time to bail on Real Estate was when the receptionist in your office quit to become a Realtor. The time to bail on dotCom 1.0 was when your dad had a web site idea.
- zamnos 4y agoDogecoin is down from the 2021 high but this Internet thing seems to have had legs. AMZN is up at $113 from shy of $4 circa 2001. Sounds like your dad's one for one. What's his thoughts on ChatGPT?
- JohnFen 4y agoI hope you're right. I think it's more likely to bring economic devastation.
- kersplody 4y agoGenerative AI still needs time to mature before it will have a massive impact. It's just hard to from a company around a product that changes on a week-by-week or even day-by-day basis. The only companies winning big in the immediate term are those creating the models themselves. As soon as generative AI can largely manage and automate the integration of IT components effectively, that's when I expect to see the explosion.
- bryanlarsen 4y agoI suspect it's like most future tech: its impact on the next couple of years is over estimated and its impact 10-20 years out is under estimated.
- spaceman_2020 4y agoI believe this as well. The productivity gains from AI promise to be astounding.
- vbezhenar 4y agoAI will push lots of people out of work. And will let capitalists to make money at faster rate. That might cause economic growth, technically.
- rlytho 4y ago[flagged]
- paxys 4y agoIt's a necessary pain. Better for the bubble to gradually deflate and find a steady state than to keep expanding unchecked till we get to a repeat of 2008.
- gourdo 4y agoWhat a coincidence it will be a pain absorbed mostly by those working pay check to pay check and not the politicians and bankers with a legal moat of grifting off our agency.
- nathanaldensr 4y agoRight--a gradual deflation with absolutely no consequences for the grifters.
- cma 4y agoHow are politicians going to absorb an economic shrinkage? What percentage of total personal net worth is owned by federal politicians in the US? Maybe it's higher than I would have guessed, but there are only 537 federally elected offices and no federally elected billionaires. I see some numbers thrown around that the total net worth of congress is $2-3 billion. That's only $9.00 per American at the upper end. Even a complete personal bankruptcy of all of them wouldn't have measurable economic effect on its own.
- wildrhythms 4y agoMy reading of their comment was the politicians enable such unchecked bubble growth.
- gourdo 4y agoPublicly that’s their wealth and benefit for holding office. You think the politicians pay for much of the luxury they experience? You should Google the recent headlines about SCOTUS
- cma 4y ago
- 0zemp2c 4y ago[flagged]
- penneallagricia 4y agoWhat's the point of keeping track of debt if you can keep raising it indefinitely? Why not just forget about it and use the available resources as needed.
- zebomon 4y agoIt's just a legacy system. We're still in the process of converting it.
- SoftTalker 4y agoAn alternative to repaying debt is inflating it away, which is what we've been doing.
- layman51 4y agoIs it possible for the US to take on bigger and bigger debt because it has a huge national defense budget? I have often heard that household/consumer debt cannot and should not be treated the same way as the debt a government holds. But it is still something to be concerned about because Argentina printed a lot of money to pay off debts I believe and that devalued their currency a lot.
- tehjoker 4y agoNo, the economy must decide between guns and butter. Military expenditures are destructive and wasteful. The US can afford its disproportionate and non-productive military expenses because it is subsidized by the rest of the world buying US treasuries and the dollar as the world reserve currency since the end of Bretton-Woods combined with sovereign fiat. This is a world historical anomaly that is underappreciated. When the world dollar regime goes, so too will our unbounded budget and ability to impose global sanctions unilaterally.
- SoftTalker 4y ago
- MilStdJunkie 4y agoAnyone who funded (multiple!!) stock repurchase with bond issue in the last five years deserves whatever they get. Particularly in low margin, high capital industries like aerospace.
- drumhead 4y agoTo be fair equity is just another type of debt. If you can retire it and replace it with debt that cost even less then it's quite a sound move.
- MilStdJunkie 4y agoI wasn't aware that was a thing - how is equity a type of debt? They seem to differ in their core concepts. I'm not being snarky or anything - I'm genuinely curious about the reasoning! Equity debt, I get that, it's like a home equity loan, or, well, a corporate bond, kinda. Assuming that equity≅debt - which, respectfully, I'm not - isn't it comparing an unknown rate of depreciation + an unknown future commodities market versus a very known interest rate environment? The latter of which, circa 2018, there was nowhere to go but up, and everyone knew it. Depreciation . . aerospace, forecasting is crap even assuming it even exists; I'm lucky if they know what's on their own shelves. A lack of fundamental comprehension of what the word risk actually means . . eh, that's endemic, actually.
- spott 4y agoEquity is an ownership stake in a company, including an ownership of future profits. In some sense a company is promising in the future to return profits to shareholders. While the company is in a growth stage and healthy, that need to return profits to shareholders is put off indefinitely. When a company is healthy but not growing, they are expected to return those profits to shareholders (the debt comes due). I agree that it is a shaky metaphor, but the idea that equity/debt is a promise to return money to the holder eventually can allow you to put them in the same bucket if you squint.
- 4y ago
- nologic01 4y ago> Suddenly, borrowing money in order to fork it over to shareholders makes less sense in a world of higher interest rates What a lot of people probably dont realise when they read the term "business" is how big a fraction of management attention, incentives and remuneration is pure financial engineering: a parasitic game between financiers, accountants, tax code, central banks and company treasuries that has nothing to do with the mission of the company. A modern corporation is a gigantic financial spreadsheet with its real assets a mere footnote. In its most benign form debt is an accelerator for a healthy business that is growing. It is possible to get a debt hangover when misestimating actual business prospects and that is a serious enough challenge of its own. The virtual reality of Wall Street and the obese financial system only serves to inflate the volatility. That is by design because volatility is precisely what it is milking.
- monero-xmr 4y agoIt may be true that at the top of any corporation is a lot of financial engineering and games. But at the bottom is the actual work, and when the leaders neglect the bottom is when the vultures swoop in to remind everyone. There is a sick game in the world. The cause is not the workers, it’s the elites. However cold water washes away the crabs.
- carlosjobim 4y agoThat actual work is in many cases just for keeping up appearances. The company owners and leadership know that the product or whatever their staff is working on is doomed to fail from the beginning, but need something to show to /with bankers and politicians to increase borrowing. Just think about how many truly awful competitors there are in any market or product sector. If you noticed, don't you think they've noticed?
- lazide 4y agoBoth hands are required to clap, and frankly workers play their own games too. The vast majority of folks have no issues enabling terrible situations for a paycheck, and pretending to work isn’t exactly new either.
- andy_ppp 4y agoTax the people who are creditors and return some of the money to debtors, we could do this for all debts and sure it would be painful but life would go on. The current situation where the wealthy farm out their money to people and make over sized profits with extremely low risk has to be blunted at some point; the debts owed by the US government to the rich is do excessive at this point there has to be a plan to recover some of it. We must find a way to redistribute some of the rent seeking at some point or have society collapse as the rich acquire every last bit of wealth.
- alexschnapp 4y agoYou realize that you are a creditor to your bank right? This just means all savings at a bank will be taxed.
- andy_ppp 4y agoI don’t make any returns on that at all. I think a short sharp one off redistribution is better than endless austerity for the poor and socialism for the rich. I’d love to hear some other proposals about how to pay our debts, I think interest payments for governments are set to surpass GDP or something. Seems like we need to find a way to tax back some of the money the super wealthy are lending to the government.
- zamnos 4y ago> I don’t make any returns on that at all. You might want to consider switching to to a High Yield Savings Account so that you do.
- WJW 4y ago> I don’t make any returns on that at all. That doesn't make you any less of a creditor; the money in a bank account is a liability for the bank from an accounting standpoint. The bank is indebted to you for the exact amount in your bank account. How much of your money do you think should be taxed to repay debts of the poor?
- jerf 4y agoSomething I've noticed when reading financial news lately is that having the interest rates so low for so long has raised an entire generation of people who no longer separate between having money and borrowing money. Carefully read news articles about recent businesses in trouble, and notice how casually the articles implicitly claim that the problem is solved by extending them more credit. Banks are in trouble because their assets became worth less have their problems solved by lending them more money, on time frames that can't even remotely bridge the problems. It's also subtly a theme in a lot of other text too, where borrowing is if not outright conflated with having money, certainly it's very close. It's not the same, though. Not even in a ZIRP environment, and certainly not in a non-ZIRP environment.