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WeWork and Counterfeit Capitalism

mattstoller.substack.com

381–390 of 440 posts

Re: WeWork and Counterfeit Capitalism

#381

Earlier quoted context omitted.

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.

If there was regulatory capture it surely couldn't have been provided by them given they didn't exist yet. They were doing exactly what the tax system was designed to do - promote investment no trickery involved.

One can legitimately argue that the system sucked or could have been done better but it is not exploitation in the sense of a glitch any more than handling moving by selling your furniture, mailing your small items, and then buying new stuff insread of renting a van since depreciation losses would be less than moving expenses.

Catalog precedent was what they used for taxes and even a large company using it to sell everything enmasse wasn't new either - Sears Catalog.

Re: WeWork and Counterfeit Capitalism

#382
post #321

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.

That’s because it’s such a massive example of a systematic corporate private capital failure that was bailed out by equally massive public power while regular people were left on the hook. No other industry has gotten that kind of bailout that far into supposed maturity.

I think that is only because of the relative age of sectors given the sheer number of times airlines got bailed out.

Re: WeWork and Counterfeit Capitalism

#383

Earlier quoted context omitted.

Not to pick nits, but gambling your business on self driving cars being just around the corner is nuts. They aren’t gonna happen for decades, if ever. We may well have teleportation before self driving cars because it turns out that solving teleportation is easier...

Humans can drive cars, but not teleport. Driving cars is definitely easier.

Today, but if the ability to teleport (last I heard we can teleport a single particle half a meter - but not even an atom) gets the needed breakthroughs... If teleportation worked and was safe [insert other considerations that I don't know here] I'd teleport to work instead of hoping for a self driving car. Today it looks like the self driving care will be practical sooner, but who knows how the science and engineering will really advance.

Re: WeWork and Counterfeit Capitalism

#384

Earlier quoted context omitted.

Ben is one of the greatest thinkers in technology writing today - period. You're only depriving yourself of an important perspective in this case. He's open to arguments and is extremely reasonable. If you're only looking for writing that agrees with what you already believe then you might be disappointed, but if you're looking for extremely thoughtful thinking on strategy and technology then you won't find anyone be…

The article I referenced boils down to dismissing fears of online privacy invasion as alarmism. Exploring his own site's dependencies, Ben concludes that the third parties phoned home to for every visitor are probably harmless. He recommends that discourse focus on striking a balance between technology being convenient and secure, and not worrying too much. This essay reflects a profound failure of imagination with r…

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Re: WeWork and Counterfeit Capitalism

#386
post #224

Earlier quoted context omitted.

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…

Bookstores provide a lot of service value, a decent bookstore will allow you to find similar material, allow you to browse as you please (instead of the skimpy sample pages), usually contain an expert that can offer advice and allow you to walk out with your purchase. Additionally it's common to see a heavy effort at investing in the atmosphere. Amazon has succeeded at beating bookstores in none of these categories -…

Bookstores only offered negative value to me, outside of selling me what I wanted. Amazon allows me to purchase stuff without having to interact with another human. Not everyone is extroverted and introverts get drained by human interaction. I don't even have to talk to a human when returning stuff.

Re: WeWork and Counterfeit Capitalism

#387

> WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses. > This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is wrong, wrong, wrong. The difference is Amazon saw what the marginal costs coul…

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Re: WeWork and Counterfeit Capitalism

#388
WeWork and Uber are viable businesses which are heroically trying to absorb flood of excess capital sloshing around the world today. Both WeWork and Uber have potentially enormous TAMs which can justify insane valuations despite being loss-making. And both WeWork and Uber had charasmatic but highly dysfunctional (from a management perspective) leaders who were able to combine salesmanship with dirty dealing to solve the problem facing the big institutional investors - having too much money and nowhere to put it. You can't parcel up $100bn into tiny packets and participate in hundreds of thousands of series A/B/C/Ds - instead you find a business with a plausably enormous TAM, a founder who is essentially a professional PR/brand builder (so as to reassure your clients), pump them full of cash and wait for the IPO.

WeWork didn't quite make it over the line this time, but I wouldn't count them out just yet.

There is nothing stopping WeWork or Uber becoming profitable businesses, even if it means they have to forgo volume (for Uber, they almost certainly have to increase fares. WeWork would have to stop building new locations). The explaination for why they don't is the above.

Re: WeWork and Counterfeit Capitalism

#389

Earlier quoted context omitted.

> 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.

If there was regulatory capture it surely couldn't have been provided by them given they didn't exist yet. They were doing exactly what the tax system was designed to do - promote investment no trickery involved. One can legitimately argue that the system sucked or could have been done better but it is not exploitation in the sense of a glitch any more than handling moving by selling your furniture, mailing your smal…

A friend of mine after moving several times discovered it was cheaper to just throw away all the furniture (i.e. give it ot Goodwill) and buy new at the new place than ship it.

Re: WeWork and Counterfeit Capitalism

#390
"If you know Dimon’s actual reputation, him getting suckered isn’t surprising. From what I heard back in 2009, Dimon is a mediocrity who essentially got lucky his bank was too slow to get in on the subprime scam in 2006; he then used his bank’s incompetence at getting into the bubble as justification for how prudent he was."

I take issue with this.

Nothing to do with Dimon or the subprime crisis particularly but rather, what I think is an important logical fallacy.

I think (hope) there is a formal name for this - please correct me - but I internally label it the "missed extra point fallacy":

"My team played better but they had a weird, missed extra point and so they lost the game - but they are certainly the better team."

This is wrong thinking, in my opinion.

There was a game. The game had rules. People participated. The team with the highest score when the game ended was, by definition, the better team.

I don't know how much credit one should receive for not being wiped out by the subprime crisis, etc., but however much credit that is, Jamie Dimon should get it.

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