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During the housing bubble years, there were bubble articles as early as 2004, although it didn't truly pop until 2008. I remember I would sometimes frequent hou

by joeax 11y ago

During the housing bubble years, there were bubble articles as early as 2004, although it didn't truly pop until 2008. I remember I would sometimes frequent housing bubble blogs in 2005-2006, and there you would find a lot of vitriolic pushback especially from those in the real estate industry. Also, early on the blogs themselves would constantly complain how the 'MSM' was ignoring the bubble. It wasn't until 2007 that the word 'bubble' caught on everywhere. Based on the chronology of those articles you mention the bubble talk has ramped up considerably in 2015, making me wonder if we are close to a pop.

thaumaturgy 11y ago
The chronology of the articles I listed is probably more closely related to Google's bias towards more recent search results coupled with TechCrunch's expansion ever since its sale to AOL in 2010. I'm disinclined to put the time into a more rigorous analysis, but I doubt there's much that can be implied just from a change in the number of articles I found over time. I think there are enough fundamental differences between the housing bubble and a potential tech bubble -- if there is one, which I have no opinion on -- that it's not very helpful to compare the two. Housing prices were driven by cheap credit becoming available to a middle class that wanted to improve its financial position by buying homes as investment properties. That's pretty unlike what's happening here, if in fact anything really is happening at all.
- joeax 11y ago
  I can tell you from my own observation that these "tech bubble" articles are becoming more and more frequent. TechCrunch, Bloomberg, BI, others. Correlation, perhaps, but something to consider. To your second point - on the surface these two "bubbles" would appear different, but dig deeper and they are fundamentally more similar. With the housing bubble it was fueled on the backend by foreign and institutional investors buying up MBS (mortgage backed securities) like mad, causing the frontend (banks and lenders) to issue credit to anyone with a pulse (and some without as I've heard dead people got approved also). Similarly with the tech bubble, hedge fund investors and others are jumping into the foray joining VCs and making deals at sky high valuations. To me, the willingness of investors to take smaller stakes in companies for more cash amounts to "cheap credit". Bottom line, if there is a bubble, what will happen is funding will dry up, and any startups trying to raise capital will be out of luck. Even the so called unicorns will be under pressure to turn a profit once they realize they have nowhere to turn for more capital. The end result will be mass layoffs and a glut of out of work tech workers. Believe me this is the last thing I want, being a software engineer myself. But I already went through it once in 2001-2002, so I figure better be somewhat prepared than deny a bubble even exists.

by joeax 11y ago

thaumaturgy 11y ago

The chronology of the articles I listed is probably more closely related to Google's bias towards more recent search results coupled with TechCrunch's expansion ever since its sale to AOL in 2010. I'm disinclined to put the time into a more rigorous analysis, but I doubt there's much that can be implied just from a change in the number of articles I found over time. I think there are enough fundamental differences between the housing bubble and a potential tech bubble -- if there is one, which I have no opinion on -- that it's not very helpful to compare the two. Housing prices were driven by cheap credit becoming available to a middle class that wanted to improve its financial position by buying homes as investment properties. That's pretty unlike what's happening here, if in fact anything really is happening at all.

joeax 11y ago
I can tell you from my own observation that these "tech bubble" articles are becoming more and more frequent. TechCrunch, Bloomberg, BI, others. Correlation, perhaps, but something to consider. To your second point - on the surface these two "bubbles" would appear different, but dig deeper and they are fundamentally more similar. With the housing bubble it was fueled on the backend by foreign and institutional investors buying up MBS (mortgage backed securities) like mad, causing the frontend (banks and lenders) to issue credit to anyone with a pulse (and some without as I've heard dead people got approved also). Similarly with the tech bubble, hedge fund investors and others are jumping into the foray joining VCs and making deals at sky high valuations. To me, the willingness of investors to take smaller stakes in companies for more cash amounts to "cheap credit". Bottom line, if there is a bubble, what will happen is funding will dry up, and any startups trying to raise capital will be out of luck. Even the so called unicorns will be under pressure to turn a profit once they realize they have nowhere to turn for more capital. The end result will be mass layoffs and a glut of out of work tech workers. Believe me this is the last thing I want, being a software engineer myself. But I already went through it once in 2001-2002, so I figure better be somewhat prepared than deny a bubble even exists.