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Sometime about 20 years ago we all got used to the idea of companies not having to actually make money on their business operations and I worry the bill for thi
by bandrami 5mo ago
Sometime about 20 years ago we all got used to the idea of companies not having to actually make money on their business operations and I worry the bill for this is coming due soon
- weakened_malloc 5mo agoIt's been that way for a loooooong time https://en.wikipedia.org/wiki/Tulip_mania https://en.wikipedia.org/wiki/Tulip_mania
- edelbitter 5mo agoIs that not the commonly cited example for commodity trading, whereas meaningful comparison of fundamentals to market capitalization only started much later?
- weakened_malloc 5mo agoThe idea is broadly similar, but I guess here's another example with a company this time. https://en.wikipedia.org/wiki/Bengal_Bubble_of_1769 https://en.wikipedia.org/wiki/Bengal_Bubble_of_1769 The point is that I don't think irrational exuberance in stocks is a recent thing.
- rsynnott 5mo agoOh, they had those too back in the day: https://en.wikipedia.org/wiki/South_Sea_Company https://en.wikipedia.org/wiki/South_Sea_Company
- riffraff 5mo agoIt would appear that the relative tax inefficiency of dividends over buy backs (and lack of wealth taxes) has fundamentally messed up the business world. Alas, I don't see that likely to change.
- bandrami 5mo agoAlong with the "borrow tax-free against unrealized equities gains" hack.
- nh23423fefe 5mo agoTaking on leverage risk and paying interest is a "hack"?
- bandrami 5mo agoYes, because it's income and we all know it's income and it should be taxed
- nh23423fefe 5mo agoso you want to tax home equity loans or 401k promissory notes?
- plorkyeran 5mo ago401ks and loans for houses are already things which have specific tax carveouts, so the idea that those would be exceptions even if secured loans in general were taxed doesn't seem like a particularly bold idea.
- bandrami 5mo agoYes to both, though I'm willing to listen to a carveout for HELs on primary residences (particularly if they're for improvements)
- mike_hearn 5mo agoWhat's the proposed link here? Wealth taxes don't seem to incentivize the creation of profit. If anything it's the reverse: business owners are incentivized to keep ploughing profits back into the company because it reduces the apparent value of the firm if it's not profitable.
- dmix 5mo agoThe article says they had $5B in losses (half of which was -$2.5B for xAI) but also just signed a $15B/yr contract with Anthropic which would almost double their revenue Anthropic is also allegedly profitable https://www.reuters.com/business/anthropic-nears-first-quarterly-profit-agrees-pay-spacex-125-billion-monthly-2026-05-21/ https://www.reuters.com/business/anthropic-nears-first-quart...
- bandrami 5mo agoAnthropic is profitable only if you carry forward the discounts they get for the first two months of this deal. That's why they're specifically talking about Q2. They start having to pay $1.6B/mo to SpaceX in July.
- spwa4 5mo agoBut they can cancel with 90 days notice ...
- bandrami 5mo agoTrue but they're still committed to providing the compute they're getting from SpaceX to their clients. The cynic in me says this is a numbers game by Elon and Dario to screw up Sam's IPO, along with SpaceX's filing (using the individuals' names rather than the companies because I also think this has become damagingly personal to the players involved).