6 ms·

I've lived in SF since the early 90s and have been through several business cycles. It feels like 1999 all over again, maybe 1998. A couple months ago I saw an

I've lived in SF since the early 90s and have been through several business cycles. It feels like 1999 all over again, maybe 1998. A couple months ago I saw an ad on the NY subway for a company that delivers dog food and pet supplies to your door (deja vu anyone). Property prices and rents in SF have spiked 30-40%, in some cases doubled, in less than a year. Same pattern as with the NASDAQ in 1999-2000. This is predictably driving the cost of doing business up, especially for companies that need to pony up for an actual office, payroll, etc. Of course the details are different from 1999, but it feels a lot like that time. As Mark Twain said "History doesn't repeat itself, but it does rhyme."

jamesaguilar 13y ago
> A couple months ago I saw an ad on the NY subway for a company that delivers dog food and pet supplies to your door (deja vu anyone). To be fair, this is a lot more feasible now than it was back then. I'm not sure what's making it so. Higher volume of willing-and-able-to-internet customers? Better routing? But I cite as evidence the number of established players who are dipping their toes into the same-day-service market.
- eli_gottlieb 13y ago
  I'd be more willing to believe in pet-goods delivery as part of a generalized grocery-delivery service.
  - potatolicious 13y ago
    Normally yes, but NYC is sort of the Big Exception in the US - it's the only city in the country where the density is so insanely high that I can imagine niche delivery businesses surviving. We've seen this with eBay Now - the economics are sustained by limiting service to only zip codes with sufficient density.
  - dhimes 13y ago
    I agree. The main problem with the original idea, IIRC, is that the product is cheap and heavy-- low margins and high shipping costs. The consumer was simply better off getting it at the store.
  - simonholroyd 13y ago
    the ads i've seen in the subway are from wag.com, which is indeed part of a generalized delivery service.
- jdietrich 13y ago
  Delivery costs have plummeted because of the enormous amount of machine intelligence being used by courier companies. Better routing algorithms reduce fuel and staffing costs, better machine vision technology allows package labels to be read and sorted at high speed. Mail-order companies and delivery services have formed a symbiotic virtuous circle of business development - greater volumes of mail reduce per-unit costs, which encourages an increase in volume. Amazon are the prime (no pun intended) example of this, with their progressive diversification into selling bulkier and lower-value items.
jusben1369 13y ago
I believe that poster has since been debunked as part of a comedy website.
wavesounds 13y ago
I was still a kid then but in 1998/1999 was there active talk of a bubbles like there is now? I feel like we have had varying levels of bubble phobia for at least a year now. It's starting to feel like it would be more surprising if there wasn't a bubble then if there was. And isn't the whole point of a bubble that people are bidding something up unaware that it's value is fictitious? Which seems difficult if everyones constantly talking about a bubble, no?
- jtbigwoo 13y ago
  In 1999, I think there was a lot more effort going into the stories explaining "Why This Time Is Different." There were a few cautionary stories back then, but most of the tech press and most of the mainstream press was full of hype. There was a cottage industry back then creating stories explaining how the Internet was going to let the economy grow and grow and make us all rich. I still see those stories, but it seems like many more people want to be The Guy Who Spotted the Bubble rather than the Pied Piper
- jonnathanson 13y ago
  "I was still a kid then but in 1998/1999 was there active talk of a bubbles like there is now?" Yes, and the prevailing counterargument at the time was, "But this time it's different! The fundamentals of everything have changed, because...internet!" If you look at historical bubbles, and particularly at historical technology bubbles -- the South Sea Bubble, the Mississippi Bubble, the 1920s Bubble, the bubbles of the mid to late 1800s -- "This time it's different!" has been a pretty consistent pattern of denial. Typically there's a rational basis for the exuberance at first, but this onto this basis is piled a whole lot of speculative investment and fervor, wildly inflating valuations beyond the boundaries of plausible expected return. Some of that mass irrationality has to do with easy access to capital, and some of it has to do with easy openings to capital markets. The latter is usually required to really kick a bubble into high gear. [So the operative question in this case is: what effect will the opening of private startups to public investment have?] Are we currently in a bubble? Really, really hard to say. I don't feel qualified to make that judgment. But to answer your question, yes, most bubbles have at least a few naysayers who are bearish on the situation. But their voices tend to get drowned out, especially by those with interests in keeping the bubble going.
mbesto 13y ago
There's a great Drucker quote here: > The greatest of modern economists, the late Joseph A. Schumpeter, labored mightily for twenty-five years to find the “cycle.” But at best, his “business cycle” is the result of so many different cyclical movements that it can only be analyzed in retrospect. And a business-cycle analysis that only tells where the cycle has been but not where it will go, is of little use in managing a business. Basically, let's all stop laboring over whether there is a bubble or not, no one can predict it.
- 7Figures2Commas 13y ago
  > ...no one can predict it. Nonsense. It's quite clear that the extraordinary actions of the major central banks over the past several years has inflated numerous bubbles. The question is not whether they exist, but how big they can get, how long they can last and how they will pop or deflate. In other words, precisely timing a bubble's demise and accurately estimating the magnitude of a correction so as to benefit from the correction may be damn near impossible for most of us (markets can remain irrational for longer than men can remain solvent, and all that) but it's quite possible to recognize growing risk that a market isn't pricing in, and adjust your behavior accordingly so that you're less exposed to the risk.
  - mbesto 13y ago
    > Nonsense. > may be damn near impossible for most of us Huh? > but it's quite possible to recognize growing risk that a market isn't pricing in I'm genuinely curious if you know anyone who has the ability to do this? If you know someone, I'm putting all of my stock in their company.
    - 7Figures2Commas 13y ago
      > Huh? As I said, precisely timing a bubble's demise and accurately estimating the magnitude of a correction so as to benefit from the correction may be damn near impossible for most of us. And even if you do time the market well and have a good sense of the size of a correction, you probably don't have access to the investment instruments that will allow you to reap the greatest rewards. > I'm genuinely curious if you know anyone who has the ability to do this? If you know someone, I'm putting all of my stock in their company. What do you mean? Right now in the Bay Area, you have lots of folks in tech who refuse to recognize that today's hot market is in large part fueled by monetary policy. They assume that they have job security and will always be able to jump to another six-figure job with a phone call or two. As a result, many fail to save. And many spend a very large portion of what they make in unproductive ways because they believe their risk of loss of income is close to zero even though it is actually much, much higher. This[1] is a good example of the mentality that is particularly prevalent amongst younger engineers and entrepreneurs here. You don't have to be a hedge fund manager to see the froth in the market today, and even if the fun could potentially carry on for years more, any individual in tech in the Bay Area can reduce his or her risk exposure by a) avoiding certain types of employers (even if they pay handsomely today) and/or b) taking the opportunity to save while compensation levels are so high. [1] http://www.futurealoof.com/posts/the-san-francisco-safety-net.html http://www.futurealoof.com/posts/the-san-francisco-safety-ne...
marincounty 13y ago
Yea--I've noticed a pattern too, but it seems like I'm wrong so many times--especially with the stock market. The first crash was easy to spot, but this one seems different. I know so many people still living off the bubble money they made in 2000. I see a lot of people struggling. I've seen wages go down, but the average american tries to keep up appearances. I sometimes wonder if Obama secretly knows how bad the economy is going to be in a few years? I think he knows the minimum wage will be very important to so many people in the future? I've noticed that divide between the rich and poor is really getting bigger.
- brianmcconnell 13y ago
  The basic problem isn't so much having a standard distribution of rich and poor (a large bump in the middle with tails on either side), what's happening now is we are trending towards having a big pile of poor people, relatively speaking who are wage slaves and can't afford basics like rent and health care, and another much smaller pile of rich people who could give fuck all about everyone else. Our system works pretty well when the rich are slightly have mores (slightly better house, car, etc) but when they just cleave off of the rest of society, there isn't a good outcome to be had there.

jamesaguilar 13y ago

> A couple months ago I saw an ad on the NY subway for a company that delivers dog food and pet supplies to your door (deja vu anyone). To be fair, this is a lot more feasible now than it was back then. I'm not sure what's making it so. Higher volume of willing-and-able-to-internet customers? Better routing? But I cite as evidence the number of established players who are dipping their toes into the same-day-service market.

eli_gottlieb 13y ago
I'd be more willing to believe in pet-goods delivery as part of a generalized grocery-delivery service.
- potatolicious 13y ago
  Normally yes, but NYC is sort of the Big Exception in the US - it's the only city in the country where the density is so insanely high that I can imagine niche delivery businesses surviving. We've seen this with eBay Now - the economics are sustained by limiting service to only zip codes with sufficient density.
- dhimes 13y ago
  I agree. The main problem with the original idea, IIRC, is that the product is cheap and heavy-- low margins and high shipping costs. The consumer was simply better off getting it at the store.
- simonholroyd 13y ago
  the ads i've seen in the subway are from wag.com, which is indeed part of a generalized delivery service.
jdietrich 13y ago
Delivery costs have plummeted because of the enormous amount of machine intelligence being used by courier companies. Better routing algorithms reduce fuel and staffing costs, better machine vision technology allows package labels to be read and sorted at high speed. Mail-order companies and delivery services have formed a symbiotic virtuous circle of business development - greater volumes of mail reduce per-unit costs, which encourages an increase in volume. Amazon are the prime (no pun intended) example of this, with their progressive diversification into selling bulkier and lower-value items.

jusben1369 13y ago

I believe that poster has since been debunked as part of a comedy website.

wavesounds 13y ago

I was still a kid then but in 1998/1999 was there active talk of a bubbles like there is now? I feel like we have had varying levels of bubble phobia for at least a year now. It's starting to feel like it would be more surprising if there wasn't a bubble then if there was. And isn't the whole point of a bubble that people are bidding something up unaware that it's value is fictitious? Which seems difficult if everyones constantly talking about a bubble, no?

jtbigwoo 13y ago
In 1999, I think there was a lot more effort going into the stories explaining "Why This Time Is Different." There were a few cautionary stories back then, but most of the tech press and most of the mainstream press was full of hype. There was a cottage industry back then creating stories explaining how the Internet was going to let the economy grow and grow and make us all rich. I still see those stories, but it seems like many more people want to be The Guy Who Spotted the Bubble rather than the Pied Piper
jonnathanson 13y ago
"I was still a kid then but in 1998/1999 was there active talk of a bubbles like there is now?" Yes, and the prevailing counterargument at the time was, "But this time it's different! The fundamentals of everything have changed, because...internet!" If you look at historical bubbles, and particularly at historical technology bubbles -- the South Sea Bubble, the Mississippi Bubble, the 1920s Bubble, the bubbles of the mid to late 1800s -- "This time it's different!" has been a pretty consistent pattern of denial. Typically there's a rational basis for the exuberance at first, but this onto this basis is piled a whole lot of speculative investment and fervor, wildly inflating valuations beyond the boundaries of plausible expected return. Some of that mass irrationality has to do with easy access to capital, and some of it has to do with easy openings to capital markets. The latter is usually required to really kick a bubble into high gear. [So the operative question in this case is: what effect will the opening of private startups to public investment have?] Are we currently in a bubble? Really, really hard to say. I don't feel qualified to make that judgment. But to answer your question, yes, most bubbles have at least a few naysayers who are bearish on the situation. But their voices tend to get drowned out, especially by those with interests in keeping the bubble going.

mbesto 13y ago

There's a great Drucker quote here: > The greatest of modern economists, the late Joseph A. Schumpeter, labored mightily for twenty-five years to find the “cycle.” But at best, his “business cycle” is the result of so many different cyclical movements that it can only be analyzed in retrospect. And a business-cycle analysis that only tells where the cycle has been but not where it will go, is of little use in managing a business. Basically, let's all stop laboring over whether there is a bubble or not, no one can predict it.

7Figures2Commas 13y ago
> ...no one can predict it. Nonsense. It's quite clear that the extraordinary actions of the major central banks over the past several years has inflated numerous bubbles. The question is not whether they exist, but how big they can get, how long they can last and how they will pop or deflate. In other words, precisely timing a bubble's demise and accurately estimating the magnitude of a correction so as to benefit from the correction may be damn near impossible for most of us (markets can remain irrational for longer than men can remain solvent, and all that) but it's quite possible to recognize growing risk that a market isn't pricing in, and adjust your behavior accordingly so that you're less exposed to the risk.
- mbesto 13y ago
  > Nonsense. > may be damn near impossible for most of us Huh? > but it's quite possible to recognize growing risk that a market isn't pricing in I'm genuinely curious if you know anyone who has the ability to do this? If you know someone, I'm putting all of my stock in their company.
  - 7Figures2Commas 13y ago
    > Huh? As I said, precisely timing a bubble's demise and accurately estimating the magnitude of a correction so as to benefit from the correction may be damn near impossible for most of us. And even if you do time the market well and have a good sense of the size of a correction, you probably don't have access to the investment instruments that will allow you to reap the greatest rewards. > I'm genuinely curious if you know anyone who has the ability to do this? If you know someone, I'm putting all of my stock in their company. What do you mean? Right now in the Bay Area, you have lots of folks in tech who refuse to recognize that today's hot market is in large part fueled by monetary policy. They assume that they have job security and will always be able to jump to another six-figure job with a phone call or two. As a result, many fail to save. And many spend a very large portion of what they make in unproductive ways because they believe their risk of loss of income is close to zero even though it is actually much, much higher. This[1] is a good example of the mentality that is particularly prevalent amongst younger engineers and entrepreneurs here. You don't have to be a hedge fund manager to see the froth in the market today, and even if the fun could potentially carry on for years more, any individual in tech in the Bay Area can reduce his or her risk exposure by a) avoiding certain types of employers (even if they pay handsomely today) and/or b) taking the opportunity to save while compensation levels are so high. [1] http://www.futurealoof.com/posts/the-san-francisco-safety-net.html http://www.futurealoof.com/posts/the-san-francisco-safety-ne...

marincounty 13y ago

Yea--I've noticed a pattern too, but it seems like I'm wrong so many times--especially with the stock market. The first crash was easy to spot, but this one seems different. I know so many people still living off the bubble money they made in 2000. I see a lot of people struggling. I've seen wages go down, but the average american tries to keep up appearances. I sometimes wonder if Obama secretly knows how bad the economy is going to be in a few years? I think he knows the minimum wage will be very important to so many people in the future? I've noticed that divide between the rich and poor is really getting bigger.

brianmcconnell 13y ago
The basic problem isn't so much having a standard distribution of rich and poor (a large bump in the middle with tails on either side), what's happening now is we are trending towards having a big pile of poor people, relatively speaking who are wage slaves and can't afford basics like rent and health care, and another much smaller pile of rich people who could give fuck all about everyone else. Our system works pretty well when the rich are slightly have mores (slightly better house, car, etc) but when they just cleave off of the rest of society, there isn't a good outcome to be had there.