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Did my old job only exist because of fraud?

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Re: Did my old job only exist because of fraud?

#281

Post by fidotron »

RandyRanderson wrote: post #272

In Canada this is a huge scam. The government advertizes that it's funding incubators. Great, right? The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation. The cover is that the government doesn't know tech so it will give money to trusted partners and they will choose who to give the money to because they've been doing such a great j…

> The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation.

And the big accounting firms.

It's incredible how efficiently they divert all activity and attention from the core task, and then wonder why things don't take off.

Re: Did my old job only exist because of fraud?

#282

Post by cs02rm0 »

franze wrote: post #275
RandyRanderson wrote: post #272

In Canada this is a huge scam. The government advertizes that it's funding incubators. Great, right? The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation. The cover is that the government doesn't know tech so it will give money to trusted partners and they will choose who to give the money to because they've been doing such a great j…

Sounds like Europe....

https://www.plexal.com/our-partners/

Re: Did my old job only exist because of fraud?

#283

Post by TheOtherHobbes »

pyuser583 wrote: post #179
marcus_holmes wrote: post #141

Earlier quoted context omitted.

I've seen this happen because of accounting/corporate finance policy. Payroll is an ongoing commitment. Consultancy is a temporary service. Moving people from payroll to consultancy means they can reduce overhead in financial projections. Even though consultancy costs more, and employs the same people, it makes sense to do if it means you can convince shareholders and analysts that Opex will shrink in the future, and…

The problem arises when moving someone from payroll to consulting creates the illusion they are not necessary.

That's not Accounting's problem.

This is one of the many situations where counting beans creates idiocies, because GAAP has no concept of context, and management can play games to make the numbers look good while destroying real value.

That's Level 1 of the problem.

Level 2 is conscious fraud, either of investors or by investors. There are always startups that look suspiciously like their only purpose is to extract money from investors based on future promises that are... unlikely.

You can spot them because the promises keep being delayed, and/or they pivot to some other activity, but keep pretending to be a serious viable business with Exciting Plans™.

Level 3 is the one described by OP, where startups are cynically used by an incubator to extract fees and other income. This can overlap with genuine investment. It can be a triple win. No IPO? A nice cut of investor money. Unicorn IPO? A nice cut of a different kind of investor money. Successful business? A nice cut of the income stream.

Level 4 is straightforward investment fraud by banks and brokers. There are many, many variations on this, from "questionable relationship practices" to risk washing, to outright pump 'n dump, and even the occasional classic Ponzi.

The bottom line is that capitalism is inherently corrupt. There is no free market of rational actors inventing wealth and value for a glorious shared future.

There's an infestation of opportunists, fraudsters, and hucksters at all levels, and governments regularly have to step in to hide the mess and glue the pieces back together - sometimes because the people involved own parts of the government too, and it's better to make millions of working people poor than to go to jail.

Re: Did my old job only exist because of fraud?

#285

Post by mamonster »

worldthruword wrote: post #279
patkai wrote: post #212

Earlier quoted context omitted.

Behind many, but I sincerely hope not "every". A trivial counterexample is Warren Buffet: he simply saved and invested. Or consider inventors with patents.

https://finance.yahoo.com/news/warren-buffett-generated-doub... https://x.com/theallinpod/status/2022746722191938017 Chamath explains Warren Buffett’s secret to success: “Markets thrive when there's information asymmetry” “Now I'm gonna get a lot of people really upset with me.” “This is an example of Warren Buffet's returns pre- and post-Reg FD. Now what do you see?” “His returns were double the market returns when…

Buffett should get much more credit for pioneering/mainstreaming the insurance float game which is what minted a lot of the P.E billionaires once they learned the trick.

Re: Did my old job only exist because of fraud?

#286

Post by conductr »

vintermann wrote: post #173
jfengel wrote: post #110

Earlier quoted context omitted.

Managers love the idea that contractors can be fired more easily than employees. Except that this flexibility comes at a cost; people insist on being paid more to have an insecure job. The uncertainty never goes away. You can pay someone else to suffer it, but it will always cost more than dealing with it yourself. And that can be ok. Just don't fool yourself into thinking you're getting a bargain.

> Managers love the idea that contractors can be fired more easily than employees. Except that this flexibility comes at a cost; people insist on being paid more to have an insecure job. This is true, but it's not the whole of it. In some cases the manager goes to a cabin in the woods to drunkenly shoot at moose with the head of the contracting company. It's a saying that "the purpose of a system is what it does". I…

There’s a tricky variable called trust. As an employee hiring consultants, how do I build trust that you and your consultancy is going go deliver and make me look good? It usually involves building a relationship, activities like hunting or golf are classic examples of these activities.

Re: Did my old job only exist because of fraud?

#287

Post by ErroneousBosh »

shoo wrote: post #75
etothepii wrote: post #25

As a junior software engineer, I worked at a large UK bank. Senior management routinely seem baffled that they could announce redundancies or hiring freezes, yet technology costs would continue to rise. One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider. The provider must have added a substantial markup despite supplying the same engineer back to the same team,…

when i worked for an australian bank, one co-worker in a nearby team had been working on the the banks systems as a sysadmin for over a decade. the bank would go through cycles of "we need to reduce our headcount and outsource everything" and then 4 years later "we need to reduce spend on contractors and retain more knowledge and expertise in house". he'd survived multiple waves of it, switching back and forth betwee…

I know a large public sector organisation that had two extremely experience engineers take an early retirement package because there was a big restructure and they were getting 20 grand under private market rates. Six months later, they're hired back in for a year at 20 grand *over* market as contractors.

And they wonder why they're pissing out money like a drunk in a bus stop.

Re: Did my old job only exist because of fraud?

#288

Post by lscharen »

pjc50 wrote: post #269
throwaway2037 wrote: post #237

Earlier quoted context omitted.

Most large corporations treat these categories of employment as different budget line items with different rules and limitations: (1) full-time employees, (2) individual contractors, and (3) large contractor "body-shops" or outsourcing providers. Many times in my career, I have seen layoff a few from (1) then way over spend on (2) or (3). The mid-level manager who makes the decision gets to "claim" that expenses were…

Related to this, the massive advantage of AWS is that it allows staff to buy infrastructure without having to raise purchase orders. If you ask permission for spending, it's a very onerous and frustrating process. If you just deploy stuff and get billed for it, it's much easier! Even if that's more expensive than having your own cloud. Worse, if you have on-prem, you have to have staff . They might even be permanent.…

> If you ask permission for spending, it's a very onerous and frustrating process. If you just deploy stuff and get billed for it, it's much easier!

This point is underappreciated as it appears in many forms and can really help reconcile things that seems obviously wasteful (they may actually be wasteful, but sometimes financial structure makes this hard to determine in an honest capacity).

Capital costs and operational costs are a similar dichotomy. When I was in graduate school, the university was breaking ground on new buildings at the same time that staff layoffs were underway. On its face this seems grossly unreasonable, but staff salaries were paid from one funding bucket and capital improvements (new buildings) were funded by a completely independent state-level allocation process and those buildings that were breaking ground had essentially been locked in 5 to 10 years prior.

Re: Did my old job only exist because of fraud?

#289

Post by greengreengrass »

Not commenting specifically on the companies and VC/PE firm discussed there, but this and the comments demonstrate just how many firms exist to do things other than make a profit. I think I understand why people with the big bucks can play these games and why it's tax-efficient for them.

I often reflect on how much I've grown personally in companies that are clearly not going anywhere. Trying to do more with less can lead to... interesting... technical solutions. And in every company I've worked in, I have at one time or another been on a "cloud costs reduction" squad, which normally shortly precedes my deciding to move on from said company.

I've also worked at the opposite end of this scale – companies with so much cash and no desire to turn a profit any time soon - and that's more problematic, as there's just no pressure to actually ship anything and every problem (and I mean _every_ problem) is solved with money or by hiring specialists.

There's sometimes a fine line between a legitimate business pursuing ambitious goals that are ultimately doomed to failure and one that exists to commit fraud. And it's often not possible for an employee (even a fairly high-ranking employee), who often has limited information, to determine which is which.

Re: Did my old job only exist because of fraud?

#290

Post by cubefox »

franze wrote: post #275
RandyRanderson wrote: post #272

In Canada this is a huge scam. The government advertizes that it's funding incubators. Great, right? The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation. The cover is that the government doesn't know tech so it will give money to trusted partners and they will choose who to give the money to because they've been doing such a great j…

Sounds like Europe....

Yes, I remember someone explaining that a similar thing happens with all kinds of research grants in the EU. Some companies specialize in writing very complex grant proposals in just such a way that they are likely accepted, and then produce some useless bullshit reports. Actual specialized companies with expertise in the matters the grant is about don't have the knowledge of how to fill out grant proposals in a way that gets them accepted by bureaucrats because they don't know how the decision process works. Depressing.
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