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Banks generally love high interest rates. Look at JPM clocking in at $13B profit in Q3. Cloud regulation is coming anyway (and as I said, it is kind of already

Banks generally love high interest rates. Look at JPM clocking in at $13B profit in Q3. Cloud regulation is coming anyway (and as I said, it is kind of already there for some cloud uses in financial services), your idea of all cloud users being pure price takers also doesn't match my experience.

GabeIsko 3y ago
You are cherry picking a bit there. Take a look at [bank stocks](https://www.nerdwallet.com/article/investing/best-bank-stocks https://www.nerdwallet.com/article/investing/best-bank-stock...). The reason banks don't "like" high interest rates is it devalues the market rate all the bonds they usually hold. I guess Chase has done a good job navigating. Regardless, it isn't long term bad for banks because they are getting great rates now. But it still goes to show that banks are ultimately beholden to Federal reserve actions, at the end of the day. Believe me, CSPs absolutely wield power when it comes to pricing. Especially in enterprise deals - those are probably more favorable honestly. But I do think we will see regulation around it. I think of CSPs as utilities.
- RandomLensman 3y ago
  I am always talking about large banks. The main business is not holding bonds, but they can suffer a transitional effect on their portfolios, that's all. Btw., Bank of America just under $8B in Q3. You and I have a different experience regarding unidirectional pricing power, but maybe that is related to the different banks we have in mind.
  - GabeIsko 3y ago
    Yeah, we would be fairly in trouble if banks just depended on low rates indefinitely. But more expensive debt is worse for them in the short term - that's what banks sell. I'm talking about in principle. At the end of the day, a healthy dollar that doesn't inflate super hard is better for US banks. Banks are such an odd thing to bring up as proof of a capitalism still working in a macroeconomic sense, because they don't "do" anything. Sure they provide financing, but they don't build roads or bridges or software, or medical equipment, or make movies or anything productive that is supposed to improve our quality of life. Meanwhile, 40% of Americans can't afford a 400 dollar emergency. How is that a sign of healthy finance? I think it is worth considering - how is there a system of life where banks are super profitable, and no one can afford any credit? Yanis puts forward a theory in Technofeudalism - that it is really technology enabling all of this, but there are stark economic consequences. Whether or not that theory is right or wrong, it is compelling to consider. I'm fairly familiar with enterprise software deals at Well's Fargo, from the vendor side. That's all I'm going to say about that. Everyone wants to make a deal, but at the end of the day there are really only 2 cloud providers: AWS and Azure, Amazon and Microsoft. They set the pace, they set the price. Even on bigger deals than banks. At least from where I sit.

GabeIsko 3y ago

You are cherry picking a bit there. Take a look at [bank stocks](https://www.nerdwallet.com/article/investing/best-bank-stocks https://www.nerdwallet.com/article/investing/best-bank-stock...). The reason banks don't "like" high interest rates is it devalues the market rate all the bonds they usually hold. I guess Chase has done a good job navigating. Regardless, it isn't long term bad for banks because they are getting great rates now. But it still goes to show that banks are ultimately beholden to Federal reserve actions, at the end of the day. Believe me, CSPs absolutely wield power when it comes to pricing. Especially in enterprise deals - those are probably more favorable honestly. But I do think we will see regulation around it. I think of CSPs as utilities.

RandomLensman 3y ago
I am always talking about large banks. The main business is not holding bonds, but they can suffer a transitional effect on their portfolios, that's all. Btw., Bank of America just under $8B in Q3. You and I have a different experience regarding unidirectional pricing power, but maybe that is related to the different banks we have in mind.
- GabeIsko 3y ago
  Yeah, we would be fairly in trouble if banks just depended on low rates indefinitely. But more expensive debt is worse for them in the short term - that's what banks sell. I'm talking about in principle. At the end of the day, a healthy dollar that doesn't inflate super hard is better for US banks. Banks are such an odd thing to bring up as proof of a capitalism still working in a macroeconomic sense, because they don't "do" anything. Sure they provide financing, but they don't build roads or bridges or software, or medical equipment, or make movies or anything productive that is supposed to improve our quality of life. Meanwhile, 40% of Americans can't afford a 400 dollar emergency. How is that a sign of healthy finance? I think it is worth considering - how is there a system of life where banks are super profitable, and no one can afford any credit? Yanis puts forward a theory in Technofeudalism - that it is really technology enabling all of this, but there are stark economic consequences. Whether or not that theory is right or wrong, it is compelling to consider. I'm fairly familiar with enterprise software deals at Well's Fargo, from the vendor side. That's all I'm going to say about that. Everyone wants to make a deal, but at the end of the day there are really only 2 cloud providers: AWS and Azure, Amazon and Microsoft. They set the pace, they set the price. Even on bigger deals than banks. At least from where I sit.