I lived through the dot-com crash and got out safely after hearing something so ludicrous that I had to ask myself "How insane does this industry have to be for someone to think they can build a high growth internet company out of home cement delivery?" My memory may be playing tricks, but it was something like that.
After 2008 I became interested with crashes throughout history. There are so many fascinating little details that added up to one giant mess.
There’s a great scene where the CEO of a Goldman-style bank is recapping the last 100+ years of global financial collapses and he mentions, “we just can’t help ourselves.”
Will Emerson: Jesus, Seth. Listen, if you really wanna do this with your life you have to believe you're necessary and you are. People wanna live like this in their cars and big f-in' houses they can't even pay for, then you're necessary. The only reason that they all get to continue living like kings is cause we got our fingers on the scales in their favor. I take my hand off and then the whole world gets really f-in' fair really f-in' quickly and nobody actually wants that. They say they do but they don't. They want what we have to give them but they also wanna, you know, play innocent and pretend they have no idea where it came from. Well, thats more hypocrisy than I'm willing to swallow, so f em. F normal people. You know, the funny thing is, tomorrow if all of this goes t-s up they're gonna crucify us for being too reckless but if we're wrong, and everything gets back on track? Well then, the same people are gonna laugh till they p-ss their pants cause we're gonna all look like the biggest p-ssies God ever let through the door.
Which illustrates the real point: "what we have to give them" is debt. Can we grow debt from this point forward?
In the short term: I don't see what the problem is with growing debt at this point.
Oh and, btw, the FED will never repay its balance sheet. It's just not going to happen, ever, under any circumstances.
Which gets me to my, seemingly rather unique, position: this is not a financial crisis (at least not yet). There's problems yes, but there's also a lot of money to solve them. Which means they will get solved, quickly. And just because we're recovering from the mother of all supply crunches and the numbers are going down to readjust, we see a lot of models crying "recession". There is no real recession. There's a recession in money paid for things. There's no recession in physical goods being distributed, quite the opposite. People aren't suddenly vastly more indebted (like in 2008) than they can be.
There was such a big problem with supply and demand that when we all collectively decided to take away to artificial roadblocks, which turned out to be the point some idiot Russian decides to use to ... and supply and demand had such a big and such a wide ranging adjustment to make that it took the the law of supply and demand ~12-18 months to adjust prices, of which some 6-8 months are still in the future. Now supplier prices are adjusting down, not for housing, not for finance, but for everything else, and everybody cries recession. Wrong. Supply just shot through the roof and demand is actually rising. The same refrain is seen everywhere. Prices for X ROCKETED up, and are coming back down rather quickly. Take your pick cars, flights, food, chips, ... There are confusing factors, such as with housing: people have been using SUBSIDISED money for housing and this is being wound down, people are getting kicked out of the housing they're in. So ... lots of complaints. But this is actually an indication, of course, of too much demand, not too little. Too much demand, too much people yelling here's money, now give me ... This shouldn't lead to a recession!
Of course my problem is ... I'm "fighting the FED". The FED disagrees with me. Of course. I'm fighting JUST the Fed at this point. I'm still on the side of the ECB, BOJ and PBOC ...
I kind of enjoyed watching it and at the same time I don't think it's a good movie. It's so overly dramatic, the conflict between the characters is super vague, and the most annoying thing is the language they use - a lot of the time the characters talk to each other with metaphors and generic cliches to the point where they aren't saying anything. But the thing is that everyone in the room works in finance, they have no reason to be super generic and non-technical (apart from making the movie more accessible).
I imagine that people who work in finance would like it even less than I did.
Big Short was a movie that other people loved but I just didn’t really like all that much. I don’t even know why. I think maybe the cameo scenes made it feel a little dumbed down?
I’d also watched Inside Job not long prior and really enjoyed it, but others found it too dry. Different strokes I guess.
Well it's not really about the numbers - the details of the collapse don't really matter. In the context of the last crash we know the global economy is brought down by financialised insanity and fraud. It's a morality play showing what's happening inside the first firm to realise the house of cards is about to collapse, and who are about to bring it down themselves by being the first out the door. The details aren't really the point.
Felt the opposite, he really exuded that cold-and-carefree-but-wise archetype I'd expect from a mid-2000s cocky hedge fund manager who got themselves into that position in the first place.
> After 2008 I became interested with crashes throughout history. There are so many fascinating little details that added up to one giant mess.
I would recommend looking into Jeremy Grantham. Not saying he's right about everything, but he really views himself as a "bubble historian" and he's got some great commentary on bubbles and crashes.
Interestingly, his experience during the dot com bubble and crash is pretty fascinating. He saw the bubble pretty clearly, but he got out early which caused his investors to withdraw something like half of his assets under management. He was eventually proven right of course, and his strategies did very well during the crash.
Which also points out why diversifying can be emotionally difficult. If you're well diversified you should expect to do worse than the market when it's booming, and better than the market when it's crashing (i.e less volatility). The problem with that for money managers is that it's very easy for clients to feel "Hey, the market is exploding, and I'm paying this person who is underperforming the market!", and then, when the market falls, even if the manager overperforms the market (but still has negative returns) "I'm paying this person but he's doing worse than if I just kept my assets in cash!"
I kinda loved some near ending scene of Big Short. The investor is talking with the fun manager and saying "Market is at all times low and you are buying". Kinda hammering home that they don't really know and are just following the general sentiment...
One of the big wake up calls I had during that time was a friend telling me about Webvan. At the time I was younger and not investing so the conservation was mostly around how great the food was, cheaper than up scale stores and they delivered. The echo that reflected much of the dot com era was as he mentioned "how do they make money doing this". The wild part is the wages they paid was higher than other delivery drivers, I worked in a warehouse at the time and frequently heard of seasoned UPS and FedEx drivers leaving to drive for the company.
Funny that webvan is always cited as an example of a startup that could never work, but really just an early example of do something that doesn't scale and just keep doing it until you somehow make money. But VCs weren't yet ready for the unicorn burn.
Juicero was the mirror product, then: An overpriced orange juice machine, with little packets that you can only buy on subscription, but can’t suspend while on holidays, with a QR code to prevent you from consuming after your holidays. It is also down if it can’t reach the Wifi. It showed that you can overcharge and make everything become a cloud subscription, because money was unlimited on the consumer side this time.
Surprisingly, it didn’t work outside of the Bay area. Some entrepreneurs have difficulty seeing the world’s situation beyond their local horizon.
While I can see luxury food delivery kind-of working (wealthy workers in the office ordering lunch, wealthy home workers ordering lunch, fitness nuts who want calories and good food without cooking), Juicero was just plain ridiculous.
Competition from local supermarket is too strong. I can get freshly squeezed juice from the store machine anytime I want for cheap.
Plus juice is kind of a crappy high sugar project that’s bad for you?
Relatedly, I have no idea how “Joe and The Juice” stores remain in business. They’re in super valuable real estate in cities across the country and as far as I can tell never have anyone in them.
Do they? How long have the same ones been around 5 or 10 years yet?
On other their products likely have such margin it might be possible with enough sales. The components aren't too expensive, there isn't massive number of labour and equipment isn't that big of investment either likely...
I keep hearing this, but I don‘t really think fresh orange juice, for instance, is as bad as sth like sunny delight or soda. I do not have a source though.
> Competition from local supermarket is too strong.
Honest question: Do startup millionaires still go shopping themselves? I imagine when you are between the area where you have a gardner for time-to-time tasks and don’t have “un majordome” yet to serve you at any time, there’s an entire higher-class-market-but-not-elites who would be interested in Juicero?
You, and everyone that responded to you, have no idea what Juicero was. It wasn’t orange juice at all, or any type of fruit juice. It was green juice. The founder made millions selling his chain of green juice stores on the east coast so he short had a history of success.
I have a friend that worked there so I even tried the product. I thought the idea was vastly overpriced, but it definitely had the chance of working. Lots of people are into green juice vs fruit juice and they were trying to create a new market.
> It wasn’t orange juice at all, or any type of fruit juice. It was green juice.
This is a distinction without a difference. It doesn't matter what the juice is called. It doesn't change the fact that it's idiotic to pay hundreds of dollars for a machine that just squeezes bags of fruits and vegetables, and needs an Internet connection to ensure you're locked in to only squeezing the company's pricy bags.
What it shows is people who criticize the company don’t actually know anything about it. If you’re going to criticize actually take the time to understand instead of throwing rocks thinking you’re so smart because you read a headline.
"Green juice" is fruits and vegetables, FYI. Look at their marketing material. The bags listed the ingredients on the front and they included things like apple and pineapple.
The problem wasn’t the real world part it was the internet. I was there at the time, it was clear there was some value in all the delivery services and so on the issue was that it was so painful and tedious to dial in with a modem and wait for photos to download and navigate the catalog on a 56k (or 128c or whatever) connection, often losing your cart and having to start over.
And that was for those of us that were literary in digital stuff and comfortable with the internet. A lot of people just hadn’t gotten around to using it much yet.
It just wasn’t time yet. And there wasn’t any massive network effect or lock-in to capture like there was with something like a social network.
- Cement is extremely perishable.
- Contruction projects need cement at very precise times.
- When that precise time will occur is hard to predict -- construction projects have a lot of delays.
- In a city there are a lot of construction projects at any given time.
So using software to coordinate cement mixing and delivery has a lot of potential to reduce waste -- or that is, it did back in the dot-com boom when CEMEX started working on that. If you heard about that back then, you were hearing about something with a lot of promise! From what I remember it worked out really well.
After 2008 I became interested with crashes throughout history. There are so many fascinating little details that added up to one giant mess.