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41,000,006 reasons why I think we're in a bubble

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Re: 41,000,006 reasons why I think we're in a bubble

#211

Post by okaramian »

danenania wrote: post #113
api wrote: post #107

Earlier quoted context omitted.

I don't think anyone is really being fooled anymore. They just get the game, and understand that cheap-money bubbles are a normal part of that game.

Well, a bubble is the result of people being fooled on an industry or economy-wide scale, so I think the fact that we still have them shows that plenty are fooled. I agree that many savvy players will participate with full knowledge of what's happening, but this only works for them because of all the suckers waiting in line.

It's not really a result of anyone being fooled. It's rational economic behavior to get in on a bubble which is why bubbles get bigger. The people that get screwed are the ones that dont get out at the right time.

Re: 41,000,006 reasons why I think we're in a bubble

#213

Post by trotsky »

cynicalkane wrote: post #210
trotsky wrote: post #162

Earlier quoted context omitted.

Bernanke has regularly referred to "Core Inflation" when discussing inflationary pressures. You can see his use of it as recently as Feb 3, 2011 in his speech to the National Press Club: http://www.federalreserve.gov/newsevents/speech/bernanke2011... The Fed's version of core inflation is the core PCE price index as you stated. The "core PCE price index [...] excludes the more volatile and seasonal food and energy pr…

Core inflation is not the main measure of inflation used by the Fed, so your previous statement is false. But you don't have to take my word for it--read the article you yourself linked. Nevertheless, overall inflation remains quite low: Over the 12 months ending in December, prices for all the goods and services purchased by households increased by only 1.2 percent, down from 2.4 percent over the prior 12 months. To…

I think you may have confused me with another poster regarding "rule the world money".

I did link to an opinion piece from the Journal that suggests that the Fed is exporting unrest to MENA via inflationary monetary policy. Whether this is intentional or accidental is hard to determine, but it would make a certain amount of sense if it was on purpose. None the less, I didn't write the piece nor is it my theory.

Note that the marketwatch article is a direct reprint from the Wall Street Journal (which I noted). The WSJ version is behind their paywall.

You seem to suggest that I hold a lot of fringe conspiracy views, yet the theories you take issue with come from the Journal editorial pages. Does that mean you hold the WSJ to be a fringe conspiracy paper?

Re: 41,000,006 reasons why I think we're in a bubble

#214

Post by hectorhector »

klenwell wrote: post #191
klenwell wrote: post #159

Earlier quoted context omitted.

This is a great point. To condense what you said a bit: the dot-com bubble followed the democratization of stock trading (which itself got a technological assist from the internet). Lots of people, myself included, who never bought a stock start using online trading accounts. The housing bubble followed the democratization of home buying. Lots of people who never had bought a house before (or a second or third house)…

Going to offer an answer to my own question: where's the next bubble? My boring answer has always been: commodities. Yeah, ordinary people can buy and sell precious metals now. But wouldn't it be more convenient if you could just directly buy a nicely packaged product online (with no service premium) that represents whatever arbitrary commodity or commodity future (or whatever it is you trade) you desire? I'm sure th…

bitcoin is just p2p paypal

Re: 41,000,006 reasons why I think we're in a bubble

#215

Post by danenania »

okaramian wrote: post #211
danenania wrote: post #113

Earlier quoted context omitted.

Well, a bubble is the result of people being fooled on an industry or economy-wide scale, so I think the fact that we still have them shows that plenty are fooled. I agree that many savvy players will participate with full knowledge of what's happening, but this only works for them because of all the suckers waiting in line.

It's not really a result of anyone being fooled. It's rational economic behavior to get in on a bubble which is why bubbles get bigger. The people that get screwed are the ones that dont get out at the right time.

Unless you are a very sophisticated trader (and likely even then), knowingly betting that a bubble will continue to expand is just gambling. You might get lucky and exit at the right time, but it's seriously -EV. That said, I don't really think the majority of small time investors think in those terms or are at all aware of how the monetary boom-bust cycle operates, which is why they get fooled into thinking they are better off when their nominal wealth increases as their real wealth deterioriates.

Re: 41,000,006 reasons why I think we're in a bubble

#216

Post by code_duck »

patio11 wrote: post #125
edw519 wrote: post #30

I don't know about the rest of the world, but we sure are in a bubble here at Hacker News. There seems to be a real disconnect between what people want to build/invest in and what people in the real world actually need and want to pay for. Just as sample of what I've witnessed in the past few years: Ask HN: How do you like my file sharing app? Ask HN: How do you like my social app for niche ? Ask HN: How do you like…

To add, approximately one half of people in the real world share a common demographic category with a sliver of HN users and a fraction of a sliver of what we create. Women have money. Go take it. Nobody else wants it in tech. (Well, aside from Groupon, Zynga, and a few other companies that missed the opportunity to make an iPhone app that you could wiggle to share photos.)

As far as commerce, Etsy has done very well in the female demographic. Their membership is heavily female.

Re: 41,000,006 reasons why I think we're in a bubble

#217

Post by bambax »

patio11 wrote: post #125
edw519 wrote: post #30

I don't know about the rest of the world, but we sure are in a bubble here at Hacker News. There seems to be a real disconnect between what people want to build/invest in and what people in the real world actually need and want to pay for. Just as sample of what I've witnessed in the past few years: Ask HN: How do you like my file sharing app? Ask HN: How do you like my social app for niche ? Ask HN: How do you like…

To add, approximately one half of people in the real world share a common demographic category with a sliver of HN users and a fraction of a sliver of what we create. Women have money. Go take it. Nobody else wants it in tech. (Well, aside from Groupon, Zynga, and a few other companies that missed the opportunity to make an iPhone app that you could wiggle to share photos.)

> Women have money. Go take it.

What do they want?!? I could never figure that one out.

Re: 41,000,006 reasons why I think we're in a bubble

#218

Post by sharonpaul »

wat55 wrote: post #91

Sorry, but the U.S. economy is a $14 trillion economy. Anyone who says we're in a bubble based on the aggregate Silicon Valley venture capital funding in the last year is getting ahead of themselves. Before you lecture us on a bubble, try to understand some basics on the U.S. economy.

I am commenting from the perspective of someone who is not in the US. Currently from the Asian region (excluding China), valuations are no where near that of the US. In Singapore alone, even with for a startup with vast customer based overseas is being acquired for only $10million. Yet, that $10million acquisition is more than enough to make the startup a superstar in our ecosystem.

Perhaps this bubble is only present in the states, but elsewhere in the world, valuations are still reasonable.

Re: 41,000,006 reasons why I think we're in a bubble

#219

Post by illumen »

run4yourlives wrote: post #207
edw519 wrote: post #30

I don't know about the rest of the world, but we sure are in a bubble here at Hacker News. There seems to be a real disconnect between what people want to build/invest in and what people in the real world actually need and want to pay for. Just as sample of what I've witnessed in the past few years: Ask HN: How do you like my file sharing app? Ask HN: How do you like my social app for niche ? Ask HN: How do you like…

Re: Customer 2: How can we reduce inventory by $300 million? I'm wondering if anyone has explored the outsourcing of inventory? In other words, would it be viable to establish a giant warehouse of all things that people could use as their own personal warehouse... like co-locating a server.

This is how a lot of businesses work. You place an order with company A. Company A orders from company B, then delivers to you.

There are reasons some companies do well at this. A lot of it has to do with setting expectations, and giving accurate information about pricing and availability.

Company B may only ever sell to a handful of other "retailers".

Re: 41,000,006 reasons why I think we're in a bubble

#220

Post by illumen »

klenwell wrote: post #159
grellas wrote: post #134

I guess it is a matter of terminology but I have to disagree on this one. A bubble is all-pervasive and extreme. It represents a systematic investment mania where everything becomes surreal. People sell vast tracts of land for a prized tulip. Junk companies with nothing to offer but a vague concept about revolutionizing how this or that will be done owing to some new phenomenon such as the internet make serial stock…

This is a great point. To condense what you said a bit: the dot-com bubble followed the democratization of stock trading (which itself got a technological assist from the internet). Lots of people, myself included, who never bought a stock start using online trading accounts. The housing bubble followed the democratization of home buying. Lots of people who never had bought a house before (or a second or third house)…

It is energy generation, and energy saving.
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