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End Game: Cringely's predictions for 2009
- bootload 18y ago"... and Season 2 of NerdTV never appeared ..." sigh... anyone care to have a stab at VC's becoming banks & tech becoming self financing?
- russell 18y agoI suspect that the returns are too low to cover the failures or rates would be too high for the successful ones to afford. The real problem is that banks borrow short and lend long. They cant take the risk. Maybe VCs could package SBA loans. Others have suggested small investments from non-sophisticated investors. Maybe they could set up a mutual fund that invested in letter stock. Letter stock is stock that is not registered with the SEC and cannot be publicly traded.
- hendler 18y ago"11) ... While investments in technology will continue, the really smart VCs will realize there is a much better and more certain way to make a ton of money in the short term: start a bank. ..." I think he's right, in a way. I don't think we're talking about traditional banks, but more like a federally sanctioned micro-loan enterprise. These smaller lending facilities can be much more specialized. When I worked to get a _secured_ loan in 1995 to start a multi-media business the bank officer "didn't get it". And for that bank, it was the right choice. Mostly, I'd really just like to see something replace credit cards as my loan device. When money is near 0% and credit cards are nearing 30% (amortized daily accrual) - these "banks" would have my interest.... err, I mean, business.
- Raphael 18y agoIndividuals should just be allowed to borrow directly from the Fed.
- stcredzero 18y agoHow do you vet them? I've run into a lot of people who would do that then purposely default.
- nazgulnarsil 18y agoa micro-loan bank that lends only to college graduates in the tech sector would probably be ultra competitive because default rates would so much lower than average that they could give awesome rates. who wants to start a 100% reserve bank, make profits in this manner and start the honest banking revolution?
- olefoo 18y ago> because default rates would so much lower than average that they could give awesome rates. That assumption should be questioned. First off, most if not all new ventures lose money. Second, if you are giving away free money you will attract scam artists. Third, do normal banks consider engineers to be a better credit risk than say lawyers?
- nazgulnarsil 18y agoI envision a YC like diligence process. More intensive than normal loans. But people do it for the low rates.
- eru 18y agoWhy mix-in the 100% reserve idea?
- nazgulnarsil 18y agofractional reserve banking makes the assumption that you can predict what the loan market will look like if you need to sell off any assets. relying on your ability to predict the future is not sound finance.
- eru 18y agoOK. Though I liked explicit term-deposits better (and they would also work with that idea).
- daydream 18y agoHow is something universally practiced (as is fractional reserver banking) not sound finance? The current crisis was not brought on by retail/commercial banks. It was caused by investment banks using way to much leverage, and trading complex financial instruments that where the risk was poorly understood.