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> European's are much more risk-averse than Americans, you'll never get the funding you'll need for a scale-up like Uber because it's too risky. The key differ

> European's are much more risk-averse than Americans, you'll never get the funding you'll need for a scale-up like Uber because it's too risky. The key difference is that Europe has actual pensions backed by some sort of government scheme where the current working generation pays into a pool that gets then distributed to the current pensioner generation. That means we don't have trillions of dollars of money that is desperately screaming for the even most minuscule return and is spread so wide across all possible investment asset classes that even a complete collapse of one investment won't wipe out even close enough money to be actually felt by the pensioners. One might of course argue "hey let's just change over to stock-market based schemes", but that's effectively the same - if you are working now and paying in into an ETF or whatnot, someone will have to be working 30 years in the future to generate the wealth you will be drawing off of.

FirmwareBurner 2y ago
>the current working generation pays into a pool that gets then distributed to the current pensioner generation How do you manage to sell a government controlled Ponzi scheme tied to demographics as a benefit?
- MITSardine 2y ago
  I'm not going to argue for or against it, but it's literally not a Ponzi scheme. There's no need for infinite growth for it to function, it can work at equilibrium.
- mschuster91 2y ago
  The stock markets, as I detailed, are also a Ponzi scheme - and I'd argue, at least for pensions, an even worse Ponzi scheme than government redistribution systems. The latter are at least government backed, but when the stock markets crash, your investments go kaboom because you got duped into investing in Bernie Madoff investments or whatever you have zero recourse. During Covid, there actually were a few suicides in the first lockdown era when the markets dipped 20%.
  - FirmwareBurner 2y ago
    >an even worse Ponzi scheme than government redistribution systems Government redistributions systems as retirement, are an unsustainable political weapon where politicians keep promising higher pensions in exchange for votes from boomers, which will be extracted by higher taxes on the youth rather than from any economic productivity gains like the stock market. But they youth can choose to not have kids anymore or emigrate out to places that won't fleece them. See Greece. > but when the stock markets crash, your investments go kaboom because you got duped into investing in Bernie Madoff investments or whatever you have zero recourse. You either don't understand the difference between the stock market and pensions, or don't understand the difference between investment and speculation. Private pension plans have all kinds of stock in them you can't avoid them, but at least they're based on economic productivity and not working population in your country which doesn't seem to want or able to afford kids. If the stock market were to crash, as you suggest, then the government based pension would also collapsed because the economy as a whole would collapse so there wouldn't be any jobs to pay taxes for the current retirees. >During Covid, there actually were a few suicides in the first lockdown era when the markets dipped 20%. Were those pensioners or people who put their savings in meme stocks? Because long term investors don't fear any dips as they've been long int he market to not be affected by a temporary dip which is cancelled out by the long term gains over 40 years. Since we're talking about pensions, not speculations. Edit: Never mind, I just realized I was explaining basic economics to someone calling himself "proud Antifa" in his profile.
DoingIsLearning 2y ago
> The key difference is that Europe has actual pensions backed by some sort of government scheme where the current working generation pays into a pool that gets then distributed to the current pensioner generation. That means we don't have trillions of dollars of money that is desperately screaming for the even most minuscule return and is spread so wide across all possible investment asset classes that even a complete collapse of one investment won't wipe out even close enough money to be actually felt by the pensioners. I disagree with the diagnose, the issue as I see it is that there is indeed more risk averse behaviour in European Investment Banking and VC's. Also there is not enough competition in banking in Europe it's effectively the same banking group's since the 1800's which again impacts risk behaviour. They can all get very attractive returns with near zero risk in real estate investment. Anyone in the VC scene in Europe will demand a huge amount of due diligence and large fraction's of the company for moderately small amounts of investment, because they probably struggled a lot more to round that funding. You either have central European banks ear marking specific loans for R&D/Seeding only or you need to make real estate less attractive to park money into.

FirmwareBurner 2y ago

>the current working generation pays into a pool that gets then distributed to the current pensioner generation How do you manage to sell a government controlled Ponzi scheme tied to demographics as a benefit?

MITSardine 2y ago
I'm not going to argue for or against it, but it's literally not a Ponzi scheme. There's no need for infinite growth for it to function, it can work at equilibrium.
mschuster91 2y ago
The stock markets, as I detailed, are also a Ponzi scheme - and I'd argue, at least for pensions, an even worse Ponzi scheme than government redistribution systems. The latter are at least government backed, but when the stock markets crash, your investments go kaboom because you got duped into investing in Bernie Madoff investments or whatever you have zero recourse. During Covid, there actually were a few suicides in the first lockdown era when the markets dipped 20%.
- FirmwareBurner 2y ago
  >an even worse Ponzi scheme than government redistribution systems Government redistributions systems as retirement, are an unsustainable political weapon where politicians keep promising higher pensions in exchange for votes from boomers, which will be extracted by higher taxes on the youth rather than from any economic productivity gains like the stock market. But they youth can choose to not have kids anymore or emigrate out to places that won't fleece them. See Greece. > but when the stock markets crash, your investments go kaboom because you got duped into investing in Bernie Madoff investments or whatever you have zero recourse. You either don't understand the difference between the stock market and pensions, or don't understand the difference between investment and speculation. Private pension plans have all kinds of stock in them you can't avoid them, but at least they're based on economic productivity and not working population in your country which doesn't seem to want or able to afford kids. If the stock market were to crash, as you suggest, then the government based pension would also collapsed because the economy as a whole would collapse so there wouldn't be any jobs to pay taxes for the current retirees. >During Covid, there actually were a few suicides in the first lockdown era when the markets dipped 20%. Were those pensioners or people who put their savings in meme stocks? Because long term investors don't fear any dips as they've been long int he market to not be affected by a temporary dip which is cancelled out by the long term gains over 40 years. Since we're talking about pensions, not speculations. Edit: Never mind, I just realized I was explaining basic economics to someone calling himself "proud Antifa" in his profile.

DoingIsLearning 2y ago

> The key difference is that Europe has actual pensions backed by some sort of government scheme where the current working generation pays into a pool that gets then distributed to the current pensioner generation. That means we don't have trillions of dollars of money that is desperately screaming for the even most minuscule return and is spread so wide across all possible investment asset classes that even a complete collapse of one investment won't wipe out even close enough money to be actually felt by the pensioners. I disagree with the diagnose, the issue as I see it is that there is indeed more risk averse behaviour in European Investment Banking and VC's. Also there is not enough competition in banking in Europe it's effectively the same banking group's since the 1800's which again impacts risk behaviour. They can all get very attractive returns with near zero risk in real estate investment. Anyone in the VC scene in Europe will demand a huge amount of due diligence and large fraction's of the company for moderately small amounts of investment, because they probably struggled a lot more to round that funding. You either have central European banks ear marking specific loans for R&D/Seeding only or you need to make real estate less attractive to park money into.