WeWork and Counterfeit Capitalism

What if its totally irrelevant to the larger issue and the nitpicking of minor parts of an article are just used to distract and diffuse any conversation actual issues?

The whole thing about subprime mortgages and how jp was slow to get in isn't entirely accurate. I mean I guess it could have been the actual reason since there's always a disconnect between management and the ones actually doing the work, but the structured credit team at jp Morgan was acutely aware at the time how the whole cdo business was going out of control. This was because they were also the team who invented the cds and knew the whole cdo business made 0 sense and active chose to refrain. It's documented very well in the book "fools gold" which is a pretty good read.

You presume to tell others how to arrange their priorities? Very well. I will say that you are wrong. It is a fine priority to defend people from unfair jabs and accusations. These attacks damage the quality of our public discourse, which is in bad enough shape already.

You will find no shortage of fair jabs and meaningful accusations to be aired in the matter of WeWork. They are scathing enough on their own. Random sniping about T-shirt quality detracts from the points that matter.

I think there's a space for a one-stop business services company. Office space with utilities, with the definition of utilities expanded to include Internet access, catering, software licenses, shared IT staff, and such does make sense. I also think, though, it's a new tweak on the office real estate business and not a groundbreaking tech business that needs to be valued the way a tech company would be.

This doesn't excuse WeWork being excessively unprofitable but low or negative returns don't directly imply anything "Counterfeit".

I like to point out that low or negative real returns on stores of value have historically been the norm. Before financial systems existed, almost all investment had negative returns if you didn’t put work and energy into them. To store value, you had to accumulate stuff, buildings or land. Most options either had high maintenance costs, were subject to risk of damage from natural causes and theft, were very volatile or required hard labor to get production out of.

Even more recently, it has often been difficult to get low risk, hassle free, liquid, positive real returns. From a basic science perspective this seems to reflect the laws of thermodynamics that tell us that everything tends to decay without a constant supply of work and energy. In general, most things require maintenance to keep their worth.

The 20th century may have been an outlier. Because of unprecedented demographic and technological growth, positive risk free real returns on liquid assets were easy to find. It is possible that under favorable conditions, wealth can have positive returns and even compound into very good long run returns but it is not a guarantee and there is nothing natural about it. It may not continue forever, particularly amidst an aging and retiring population in a world no longer as rich in easy to exploit natural resources.

While people are used to get negative returns on very short term purchases, you buy fresh vegetables at the supermarket even if they degrade over time, they can’t seem to accept the normalcy of negative returns on longer term assets despite the tendencies inherent in the laws of physics. In nature, squirrels’ nut caches have a certain percentage of losses from theft and spoilage. Returns tending towards the negative are natural even if they can seem unusual for people just out of the 20th century.