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How tech’s defiance of economic gravity came to an abrupt end

economist.com

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Re: How tech’s defiance of economic gravity came to an abrupt end

#41

Post by p_l »

fosk wrote: post #18
birdymcbird wrote: post #8

Earlier quoted context omitted.

“Soon” is mid 2024 at the earliest. The start ups haven’t really even begun to trim fat. Big tech like amazon, meta, google will increase attrition targets in addition to actual layoffs. I could turn out to be wrong but id bet there’s many more waves of cascading pain before before things turn other way. Turning other way doesnt mean we immediately go back to excess hiring, empire building, lack of focus, free uber r…

Contrarian signal, for the sake of having a conversation: - I think we will experience a massive deflationary bust. The inflation narrative is over, it’s all about a potential recession now. - By Summer 2023 we will experience YoY deflation and the Fed will cut then, or even sooner in anticipation to that. - We may see hikes pausing as soon as February, and cuts starting in the summer as a result of rapid disinflatio…

> As China fully re-opens, those will be resolved.

"Reopening", and caused by it pandemic speedrun is already bringing back more supply chain disruptions

> - Russia’s war with Ukraine will end (Putin is now agreeing to potentially think about negotiations). Oil prices will ease

Putin is trying to "win" the war by insisting on talks where they keep the territory. Anyone looking closely knows that's not going to be accepted even as a premise to start talks.

Re: How tech’s defiance of economic gravity came to an abrupt end

#42

Post by UncleEntity »

fragmede wrote: post #25
hestefisk wrote: post #15

Earlier quoted context omitted.

Indeed. The economics that OP stipulate, do not factor in interest rate and cost of labour (engineers).

Given the Internet, the cost of labor for distribution of digital goods over that is cheap as all hell when compared to the cost of labor to distribute any sort of physical good because first you have make copies of this physical good, which starts off by requiring additional raw material input. Say we've got this mp4 file that everyone wants. Let's use bittorrent for our digital distribution. So we need to: create a…

Your cost analysis totally overlooks the cost of producing the “mp4 file that everyone wants”.

Re: How tech’s defiance of economic gravity came to an abrupt end

#44

Post by sharemywin »

georgebarnett wrote: post #27

With all industries are converting to software and every person on the planet moving towards owning a smartphone it surprises me that there’s an ongoing narrative that tech is collapsing.

Tech stock prices are based on extreme growth numbers. the problem is the denominator, it's so big for most tech companies they can't continue to grow at 20-50% a year. so if your P/E goes from 30+ to 10 or worse 3-5even if your E is still strong but flat alot of wealth disappears. if people feel broke they don't spend money on things. the new phone isn't as important as say eating. also alot of tech didn't have to compete and could still grow wildly. name a non-competitive area of tech these days? a blue sky opportunity. that doesn't entail hard engineering. autonomous cars, fusion, solar all require massive amounts of slog it out engineering.

Re: How tech’s defiance of economic gravity came to an abrupt end

#45

Post by danaris »

voisin wrote: post #37
cmmeur01 wrote: post #35

Earlier quoted context omitted.

Any normal time period would be considered “extremely hot” compared to the last decade+ of artificially low rates.

Can you expand on why you think inflation was “artificially low”?

I read it as the interest rates being artificially low...

Re: How tech’s defiance of economic gravity came to an abrupt end

#46

Post by willcipriano »

birdymcbird wrote: post #8
spaceman_2020 wrote: post #5

Earlier quoted context omitted.

The dominant narrative among investors and funds, at least in my domain (web3, tech investing) has been that "Fed will pivot soon, and the party will start anew". As long as that narrative remains strong, nobody will dump everything. New investment might stall, but no panic in the ranks. The real panic will set when the pivot does not happen. Or if it does happen and inflation comes roaring back, leading to a longer…

“Soon” is mid 2024 at the earliest. The start ups haven’t really even begun to trim fat. Big tech like amazon, meta, google will increase attrition targets in addition to actual layoffs. I could turn out to be wrong but id bet there’s many more waves of cascading pain before before things turn other way. Turning other way doesnt mean we immediately go back to excess hiring, empire building, lack of focus, free uber r…

Right after the election, we learned that the employment numbers turned out to be cooked (https://www.cnbc.com/video/2022/12/22/philadelphia-fed-sugge...) that was in large part the justification for the rate hikes, I think they end in the next few months and start to decline this year.

Re: How tech’s defiance of economic gravity came to an abrupt end

#47

Post by balsam »

georgebarnett wrote: post #27

With all industries are converting to software and every person on the planet moving towards owning a smartphone it surprises me that there’s an ongoing narrative that tech is collapsing.

Nope.

From TFA: “But just as chip production bloomed, demand withered, thanks to falling sales of pcs and smartphones.”

The narrative is apparently backed by data. Where’s the data for your counternarrative

Re: How tech’s defiance of economic gravity came to an abrupt end

#48

Post by plaguepilled »

georgebarnett wrote: post #33
hef19898 wrote: post #29

Earlier quoted context omitted.

Tech =|= software =|= start-up. Those three things are unrelated, and the tendency to equate tech with software let a lot of issues on all fronts in the last decade or so.

I disagree - tech _is_ software and it’s so ubiquitous that it’s essentially invisible.

As yes, CPUs, those things famously bought because of the software that runs it. Certainly not because of any fabrication advances by a given company, hohoho. All tech is software!

Re: How tech’s defiance of economic gravity came to an abrupt end

#49

Post by ngoilapites »

spaceman_2020 wrote: post #5
givemeethekeys wrote: post #2

When the DotCom bubble burst, and after 2009, traffic in the Bay Area cleared up. Commuting time got cut by half. Homes in many neighborhoods, apart from the very best school districts, became attainable. This has yet to happen. Unemployment is still quite low. The music is just starting.

The dominant narrative among investors and funds, at least in my domain (web3, tech investing) has been that "Fed will pivot soon, and the party will start anew". As long as that narrative remains strong, nobody will dump everything. New investment might stall, but no panic in the ranks. The real panic will set when the pivot does not happen. Or if it does happen and inflation comes roaring back, leading to a longer…

I do not see any reason to think FED will pivot in a 2-3 y horizon.

Re: How tech’s defiance of economic gravity came to an abrupt end

#50

Post by ChrisMarshallNY »

Avicebron wrote: post #34
georgebarnett wrote: post #33

Earlier quoted context omitted.

I disagree - tech _is_ software and it’s so ubiquitous that it’s essentially invisible.

Planes, trains, and automobiles are tech. Software is a specific subset, software is a subset of tolling and techniques that's applied to "tech" no more than circuit boards, wires, or the wheel. It doesn't have a special elevated status. The more people understand that the faster people will stop hero worshipping it.

> stop hero worshipping it

I guess that's the case for software-centric platforms. It was not my experience.

I worked for hardware-centric corporations, for most of my career, and became used to having software treated as a "nice to have, but not essential" part of the product. In many cases, my work (and myself) were treated with contempt. I got used to being sneered at.

In my experience, this was a disastrous attitude, because, despite lots of folks wishing it weren't so, hardware, these days, is software.

Software pervades everything, from the compiled silicon on peripheral ASICS and FPGAs, to the firmware that drives said chips.

In my experience, firmware was treated as hardware, and the same rigid, waterfall process was applied to firmware, that was done for the hardware.

Worked great.

Until it didn't.

Software is a drastically different beast from hardware. I won't bother going into the reasons. Anyone with a smattering of knowledge in the area, can list them.

In any case, the hardware folks would treat any attempt to leverage the flexibility that software allows as "cowboy, low-quality, laziness." It was Waterfall, or you were a "bad engineer," and "lazy and undisciplined."

I'm really big on Disciplined software development. That does not make me popular with this crowd. It also does not mean Waterfall.

In my opinion, there's no way to avoid the difficult parts of engineering, but it's also important to be adaptive, responsive, and, dare I say it, "agile."

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