WeWork and Counterfeit Capitalism • Hacker News Board

Re: WeWork and Counterfeit Capitalism

#271

Post by kortilla » Wed, Sep 25, 2019, 9:39 PM UTC

rchaud wrote: post #191

helen___keller wrote: post #52

Earlier quoted context omitted.

> The subprime crisis is completely unrelated! And if anything it was proof that money-making assets should be scrutinized more. The subprime mortgage crisis is basically godwin's law for finance. Want to make something look awful? Compare it to CDOs or mortgage-backed securities.

I think the point the author was trying to make with "counterfeiting" wrt the subprime crisis is like this: counterfeit goods offer superficial similarity to the real thing, but are made of inferior materials when you unpack them. During the GFC, toxic mortgages were bundled in with mortgages with a high probability of repayment. Since the debt rating agencies gave those mortgage backed securities a AAA rating withou…

That’s not really what happened. It’s not that AAA rated MBS packages were secretly full of shit that should have brought down the whole rating. It was that the systemic feedback of over leverage wasn’t really taken into account.

The AAA’s wouldn’t have failed if it weren’t for the cascading effect of ARMs blowing out shit mortgages causing the financial system to get caught with its pants down.

In other words, the AAA criterion based on historical data would have been applied to the vast majority of each of the individual mortgages as well because they wouldn’t have been problematic assuming housing prices didn’t contract more than they ever had.

There’s a reason it’s called the subprime crisis.

Re: WeWork and Counterfeit Capitalism

#272

Post by buboard » Wed, Sep 25, 2019, 9:40 PM UTC

chrisseaton wrote: post #3

Some of these criticisms are just irrelevant personal abuse - like saying he doesn't think Neumann's t-shirt is fitted well.

Seems like this guy acts like rock stars of the past. And it s not like rock stars didn’t make tons of money

Re: WeWork and Counterfeit Capitalism

#273

Post by dredmorbius » Wed, Sep 25, 2019, 9:43 PM UTC

RodgerTheGreat wrote: post #132

legitster wrote: post #93

Earlier quoted context omitted.

I can't recommend the Stratechery piece enough (or Stratechery in general).

On the contrary, given the author's myopic and rosy perspective on surveillance capitalism as espoused in the article "Privacy Fundamentalism"[1] (and apparently amended in a follow-up which is paywalled), I find it hard to take anything on that blog seriously. [1] https://stratechery.com/2019/privacy-fundamentalism/

Even a viewpoint or philosophy you disagree with strongly can be useful as insight into "the other side's" thinking.

Stratechery is hit or miss in my view. It epitomises the definition: "An expert is a person who avoids the small errors while sweeping on to the grand fallacy."

I'd recommend giving it the occasional gander.

Re: WeWork and Counterfeit Capitalism

#274

Post by tathougies » Wed, Sep 25, 2019, 9:43 PM UTC

JumpCrisscross wrote: post #188

iamkroot wrote: post #80

Earlier quoted context omitted.

Why do private investors need protection? Why can't they be held responsible for the foolishness of their actions?

> Why can't they be held responsible for the foolishness of their actions? Because it's politically difficult. Sometimes, infeasible. The public often pays for defrauded grandmas' mistakes. There are also positive externalities to stable business environments. Diligence costs money. Putting some of that cost on the issuer, once, is more efficient than each investor incurring it. Consistent rules around fraud and disc…

Erm... okay, but grandma couldn't have invested in WeWork unless she was an accredited investor, and if she's an accredited investor, I'm not so sure we need to be feeling a lot of sympathy for her greed.

Re: WeWork and Counterfeit Capitalism

#275

Post by bduerst » Wed, Sep 25, 2019, 9:43 PM UTC

kizer wrote: post #119

jerf wrote: post #20

Earlier quoted context omitted.

At that level of income, clothes are a choice. Simply insulting him about his clothes may not be very helpful, but thinking about the message Neumann is sending with that clothing choice is productive. I'm inferring from the text that that picture is from an investor presentation, though I don't quite know, but if it was, those clothes are rife with meaning. They are as deliberately crafted as any of the words in tha…

Or, it's just a t-shirt.

In a behaviorial finance class I took we learned about a few hedge funds that followed CEO's during the 90's, and shorted their companies whenever the CEO underwent plastic surgery. Turns out that personal appearance insecurity of the CEO was inversely correlated to company performance.

From Steve Job's turtleneck to Zuck's zip-up hoodie, CEO appearance is a market signal that some speculators choose to use.

Re: WeWork and Counterfeit Capitalism

#276

Post by tathougies » Wed, Sep 25, 2019, 9:44 PM UTC

Ididntdothis wrote: post #122

briandear wrote: post #97

Earlier quoted context omitted.

401ks are rarely self directed investments though. You can pick fund types, but rarely, if ever, could you pick stocks. The 401k is heavily regulated. And nobody is “forced into the market.”

You are basically forced into the market if you ever want to retire. Where else can the regular guy get decent returns? Real estate?

Oh, there is an alternative? As far as I'm aware every form of 'I don't want to work, but be paid as if I am' is tied to market return on capital.

Re: WeWork and Counterfeit Capitalism

#277

Post by [deleted] » Wed, Sep 25, 2019, 9:48 PM UTC

vl wrote: post #269

buboard wrote: post #260

Earlier quoted context omitted.

I thought aws sprung out of investment in their own infrastructure. A happy accident of sorts, not some preplanned mammoth investment in building AWS from the ground up

Not at all. AWS, or rather S3 was a pet project of one of the very early Amazon employees who wanted to do something fun. It wasn't really taken seriously or had deep strategy at first. Once it's started to gain traction, Bezos realized the enormous potential and full-steamed-ahead AWS. Then it took many years for Amazon retail to actually start using AWS products in any meaningful way.

[deleted]

Re: WeWork and Counterfeit Capitalism

#278

Post by rodgerd » Wed, Sep 25, 2019, 9:48 PM UTC

WalterBright wrote: post #204

hef19898 wrote: post #143

Earlier quoted context omitted.

Totally agree with the last pint, people completely tend to ignore the effort and attention to detail Amazon puts into executive and planning. That plus a very sound strategy. Also Amazon was profitable, even if just barely, for the most time while growing appr. 20% constantly. Not comparable to, say, WeWork from what I know. But it shows how powerful that narrative can be.

I'm pretty sure Amazon was profitable all along - it's just that the profit was all spent on expanding the business. Hence, there was no taxable profit. Amazon was also able to make money selling products at little or no markup by taking advantage of the float. They'd collect money from the purchaser immediately, and would pay the vendor after 90 days. Then, Amazon would make interest on that money for the 90 days. I…

> Amazon was also able to make money selling products at little or no markup by taking advantage of the float.

Amazon's margin for a long time was rorting the tax system, something they enjoyed via federal regulatory capture. Their competitors were paying state and local taxes. They weren't.

Re: WeWork and Counterfeit Capitalism

#279

Post by airstrike » Wed, Sep 25, 2019, 9:56 PM UTC

anongraddebt wrote: post #245

clairity wrote: post #110

Earlier quoted context omitted.

> “This is a big topic in business school - never compete on price for that exact reason.” no. business school teaches you that you can compete on price (cost strategy), or on value (differentiation strategy). if you compete on price, you’re betting that you are, or will be, the most efficient provider in the market (e.g., walmart and its supply chain dominance). it’s completely viable/acceptable to compete on price.…

Technically it's not competing on price. It's competing on cost, a result of which is often, but not necessarily, a lower price point. Business strategy courses explicitly teach you that simply competing on price (that is, simply lowering prices in hopes that you'll beat the competition), will blow up in your face. A classic example (presented to my MBA class) was the two adjacent pizza parlors in NYC competing on pr…

I had the same example in my class... purple pride represent?

Re: WeWork and Counterfeit Capitalism

#280

Post by tlb » Wed, Sep 25, 2019, 9:57 PM UTC

wolco wrote: post #195

tlb wrote: post #112

Earlier quoted context omitted.

There are two ways to get to positive margins: Either drive down costs (as Amazon did) or increase price. Part of WeWork's plan is presumably to increase prices once tenants are locked in. The big question is how much lock-in they can achieve. The lock-in is largely caused by employee loyalty. Employees who like beer and camaraderie in the evenings may be hard to persuade to move to a soulless office park. It's a mic…

Would 50-80% of employees quit if a company moved to Sunnyvale? Was that a serious fact?

Yes, something like that depending on the company and how committed employees are. It’s a horrible commute.

But for many companies, even 10% of employees quitting is enough reason to stick with the expensive office space.