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San Francisco Bubble

blog.larrold.com

71–80 of 393 posts

Re: San Francisco Bubble

#71

"Engineers are particularly spoiled. They can take an arbitrary sabbatical from work..." (on the about page) "...Currently a principal engineer at AppNexus on sabbatical..." ???

Ignoring the hypocritical nature of this statement, I take offense in this generalization in particular. If you're an engineer with a family here in SV, you cannot take a sabbatical. In most cases you need to get a job in a week or the rent will drive you to bankruptcy.

Oh come on with the hyperbole, if you didn't spend so much money on a nice area and expensive stuff you could afford it easily.

I don't get people who are so smart and yet simultaneously so stupid that they think spending $100,000 a year is normal.

Wake up, you're rich, you're just too stupid to realize you could be living at a much cheaper level.

Re: San Francisco Bubble

#72

Money has been close to free for years. As the interest rate ticks up everything will change. It's already starting to. More expensive borrowing, less leverage, and better places to put dollars than venture. The one thing I really agree with though is the funny thing that happens here with the word "engineer". If you can make a website you somehow qualify for the title software engineer. By Bay Area standards, I myse…

Interest rates aren't going to tick up. The Fed isn't going to raise rates, they're going to cut and launch a new round of QE. That's not even a debate at this point, it's blatantly obvious. Will that end at some point with another asset crash? Maybe, however it's not going to happen soon. The Fed will print your brains out first to support stocks and real-estate. They have a lot of room to abuse the dollar from where it's at today.

Re: San Francisco Bubble

#73

The guy makes some good points, and there does seem to be a lot of questionable startups, but it's not like they're tapping into public funds. Somewhere, somehow, some angel investor thought that it was a good team and a good idea and they were happy to part with their money. It's better that we live in a more optimistic world than one where every crazy idea is a bad idea. However, how is taking Uber to work every da…

> For $4 more than a bus

Depending on where you live, Uber/Lyft can be a lot more expensive than a bus.

In Dallas, a monthly public transport pass costs $80. This comes with unlimited uses of the buses and trains for an entire month. Let's say you work twenty days (four weeks) a month, with a trip each way. That amortizes to $2 a trip, less if you also use your pass for personal trips on weekends.

Lyft costs me about $11 on average to get me between home and work. If I were to take Lyft to and from work every day for a month, again assuming twenty working days a month, I'd be paying about $440 a month. That's not $4 more; it's $9 more. That's 5.5 times how much I'd be paying for public transport. Again, that's not counting using it for personal trips on weekends (here, the minimum is $5.70, including the trust & safety fee).

If Uber/Lyft is only $4 more than a bus in SF, then buses are way expensive there.

Re: San Francisco Bubble

#74
post #41

> Everything is too expensive. I’m from New York... I take issue with this one. It's entirely possible to live frugally while living IN San Francisco. I moved here about 7 months ago and expected it to be incredibly expensive but it hasn't been the case (beyond rent). The author mentions $15 crappy local IPAs but I've actually never found a beer for this price. There is no shortage of $7 craft beers you can buy at a…

Compared to NY, he's wrong. Compared to most other places, even other metro areas, he's very right :)

Prices in SF are definitely 2x-3x what I have paid anywhere else.

In fact, every time i visit, say, chicago, or atlanta, i'm strongly reminded of this fact.

Can you find quality places in SF where that's not true? I'm sure. But on average, it's definitely the case that it's significantly more expensive here.

You can compare the CPI as well: http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...

http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...

Groceries should not be 40% more expensive in SF :)

Re: San Francisco Bubble

#75

Earlier quoted context omitted.

I'm very hypocritical.

Yea no kidding. "AppNexus helps brands connect with consumers, empowering agencies and advertisers with a uniquely powerful approach to programmatic online advertising." Thanks for working on Ad Tech, the very thing that powers this bubble by trading attention as a commodity. Other people work on silly startups, but this shit is akin to HFT.

Unless microtransactions for content take off, and they haven't, ad tech is necessary to incentivize content on the web. 90% of the websites you read could not exist without the ecosystem that appnexus is a big player in. Hacker News, being one big ad for ycombinator, doesn't need to bother.

So he's doing a real thing that provides real value to the web. And it's actually a sustainable business, to boot.

Lastly, there's absolutely no need to get so personal -- if his article offended you, discuss the article.

Re: San Francisco Bubble

#76
post #62

This is why the free market is so great. 1. Everything too expensive? Good, don't live here, eventually enough people will leave to drive all of the costs back to other market norms. 2. Dumb startups? Good, they will fail, people won't be able to afford to live here and they'll leave. 3. People are spoiled? Uber is cheaper and more convenient in some cases than taking the local transportation. When people stop taking…

Part of the fallacy of this is the implication that you need "good" engineers for most startups. I think, frankly, that many startups need a website with a google form + some excel sheets to get started and if the thing takes off they can hire someone who can use google to bang on stackoverflow.

Very few things require genuinely novel pieces of code to work. Yes, lots of value can be captured using code, but you could totally start something like airbnb with a lot of manual labor clicking in a GUI.

Djikstra said "Beware premature optimization" and that's quite true. I think automation should be used when things hurt to bad to do manually anymore. For some people, that's any task which must be performed twice and then you write a script. For others it might be years manually updating excel for bookkeeping every night. One can go real far manually updating excel...

Re: San Francisco Bubble

#78

Money has been close to free for years. As the interest rate ticks up everything will change. It's already starting to. More expensive borrowing, less leverage, and better places to put dollars than venture. The one thing I really agree with though is the funny thing that happens here with the word "engineer". If you can make a website you somehow qualify for the title software engineer. By Bay Area standards, I myse…

Tangent but: I doubt the rate raise will stick. They'll probably have to cut it again. I see a "planet Japan" scenario in which global central banks are zero-bound for decades, if not "forever". Rapid growth is over. There are no more frontiers and birth rates are stabilizing. From an ecological point of view the stabilization of birth rates is good, but it basically breaks all the economic assumptions of the past 250+ years. A heavily leveraged credit economy does not work without fairly rapid growth, and until the economy is fundamentally restructured toward something built for a more steady-state mode of operation we'll have to hack it by constantly printing money to prevent deflationary collapse.

The only thing that might change this is something like the opening of the final frontier-- space. But in that case I'm not sure if it would... distances between say Earth and Mars are so vast that any Martian economy would effectively be a separate entity. It might experience rapid growth but I'm not sure if that would translate over here. The Homeworld might still be like Japan-- a zero-bound no-growth economy.

I suppose an AI explosion that wasn't destructive might change things too by creating a lot of new non-corporeal economic entities, but we're well off into sci-fi land here.

Edit: I don't necessarily mean that all forms of "growth" are over. We could still have tremendous growth in knowledge, technological capability, standard of living, and some amount of economic growth. But heavily leveraged inflationary credit economics requires crazy exponential growth in an absolute sense. Without crazy growth it breaks, and the only way to keep it nominally running is to pump money into it to prevent cascading default.

In a sense I think the "pop Austrians" are right that the present system is broken, but they've historically had the failure mode exactly wrong. The failure mode is not hyperinflation-- it's hyperdeflation that's permanently held at bay by money printing ("Japan"). That's because pop Austrians don't get the money multiplier. Almost all money in circulation is credit/debt, not M1. You'd have to print absurd amounts of money and make sure it's distributed more widely than banks to cause a non-localized hyperinflation in a credit economy. (Localized hyperinflation is possible due to bubbles but these usually collapse.)

Of course another way of keeping the illusion alive is to pump up localized credit bubbles repeatedly. These give the illusion to certain sectors or regions that the economy is still growing the way it should... for a while. But then they pop and you need another round of money printing to prevent hyperdeflation. Rinse and repeat. Meanwhile these bubbles distort the price structure of the economy, such as by making housing ridiculous or driving certain commodities crazy.

Re: San Francisco Bubble

#79

"There are thousands of dumb startups" This. Most of the blame is cast on the big companies (Twitter, Facebook etc) but the reality is that there are hundreds of smaller companies choosing SF and the valley in general. And again I say, until companies allow people to work from wherever this will be fueled more. Finding talent is getting ever more difficult already, if you expand your search area to the entire country…

"There are thousands of dumb startups" This is a feature not a bug. The whole VC model the Bay Area thrives on is based on the premise of hitting on only a small percentage of successful startups and you never know what's going to be a hit. Many successful startups have pivoted out of "stupid" ideas. I'm sure at one point "Blogging 140 characters at a time" was considered a stupid idea.

Twitter is well funded. Whether it's a successful business depends on when you bought in.

Re: San Francisco Bubble

#80
I've never lived in SF, but I've talked to companies out there over the years. Then I look at a cost of living calculator and rent prices and quickly write it off.

The place sounds like a magnet for talent, no doubt. But the flip side of that is, everyone going to SF leaves other locations talent-starved and willing to be very accommodating.

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