People assume that 1.2 trillion was lost(stock market). However that money still exists, just the ownership has changed. Today was probably the largest transfer of wealth ever.
In my opinion this is a good thing. You can't have unchecked growth forever. You need to have a downturn to jolt consumer confidence and investor confidence.
So when my portfolio dropped today, who exactly got that money? I didn't sell any stocks, mind you. I just had X dollars worth of stock this morning, and now I have < X.
You buy a car for $20,000. A year later, the Bluebook tells you it's worth $10,000. Who got the $10,000 that you've "lost"?
When your portfolio "dropped" today you didn't gain or lose anything. You still own the same tiny fraction of some company. All that happened is that some guy sold his tiny fraction to some other guy for less than you paid.
Please consider the context of the comment I was replying to. In your example, who "gets" the 10K I lose? No one. A car changing in value is not wealth transfer. A stock going down in value is not wealth transfer.
At least, that's how I understand it. I was curious if the original commenter meant something different.
Not of all the value lost is depreciation. A lot of the value is determined by the market. For example, Hondas and Toyotas have better resale than a Ford. The principle is still the same thing basically.
A car is depreciated on the books per standard rules and traditions, generally around 5 years.
Computers are depreciated around 3 years.
The above is true only if a purchase is "capitalized" and classified as an asset. This "depreciation" allows you to deduct a loss per that 3 or 5 years on your taxes, or incrementally decrease your assets on your balance sheet.
If it is not capitalized and classified as an asset, it is an expense. An expense is noted on the income statement and the entire cost is accounted for in that quarter.
I think we're really talking about two different things. You're talking about depreciation as it applies for tax purposes. I'm talking about what's the actual price of a used car. Depreciation tries to make a baseline guess at what rate the value of car will fall, but does not set the actual price of the car in the market.
you're right, we are talking about 2 things, and your approach is more accurate - however. most entities will value an asset based off of a formula, not market price.
Each day, only a small part of a company's stock change hands. However, the price of all stocks change, based on that valuation. That is what happened, a lot of stock was valuated as less then it was before (which means that paper money just disappeared).
A quote from Wall Street is perfect here.
"It's not a question of enough, pal. It's a Zero Sum game - somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred - from one perception to another. Like magic."
Bleh accidentally upvoted you instead of downvoted, but this is blatantly false. If money were a zero sum game, then how do we have growth and inflation? The money supply grows, ideally at the same pace the economy grows. Businesses create wealth, and as transactions that transfer wealth grow in number, we need more money to facilitate those transfers of wealth.
The money itself is only as good as the wealth it can purchase, and as that wealth steadily grows, we need more money to carry out the transactions. So it is by no means a zero sum game.
yup my bad, I forgot to mention it was a movie but i still believe it is a one-sum game, where one person or a company has made more money than they had before, from this bubble.
wealth can be destroyed when entities default - just as you hint.
wealth could have been transferred today if people were allowed to short securities, but what actually happened to many was the realization of losses on the books of the finance industry - at least those who bought for the short term.
but you also have wealth being transferred to those who have been holding stock for several years (long term) and watched them wildly appreciate over the past 5 years, and started selling in the past 2 weeks when they realized the bubble has burst.
the point is that there is quite a bit ($1.2 trillion) less wealth in the world today than there was yesterday. There are a lot of clueless folks who think when 1.2 tril is lost, someone else made 1.2 tril. It's possible a few people made money today, but the losses greatly outweighed any gains (short-selling, puts, etc).
I'm not convinced that we can solve the worlds big problems like poverty just by spending money.
I don't claim to have the answers.. but I think it will take a lot more than money to solve these problems. That's assuming they can even be solved at all.
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A friend who played with the new Android device say that there's no way it's comparable to the iPhone... but yes, this one device isn't what Android is about.
Android looks like a serious threat. The big question is how will google treat the Android developers.
Phone vendors don't like developers massing around with their devices, users do like it.
The vendor that will reach the finish line first will be the one that will produce a stable product with a solid API where 3rd party software won't damage the phone performance.
If my theory is correct at the moment RIM (Blackberry) are in front.
Palm's products were stable, with a good developer environment, but the hardware itself started to look ancient compared to the PDAs that HP and others were offering at the time.
Seems like Palm did the software part great, and failed majorly on keeping the hardware up to date (they missed the boat or were late to the party on flash memory cards, color screens, and wireless, that I can remember anyway).
I disagree with almost every point. Palm had flash memory, color screens, and wireless before, or with, everyone else. (I do concede that they made incremental hardware "improvements" with every new Treo, instead of researching and adding innovative features.)
On the other hand, Palm did not add features to their operating system for what must be 7 years now. They did go up a version by adding 320x320 resolution support, but it was more of a hack than anything else. Each individual component (app, database) was still limited to 64k in size from what I recall. Palm was run by business people (more so than Android and the iPhone have since) who thought incremental updates of screen and camera resolution and doubling the onboard memory from 32MB to 64MB were good enough improvements each year.
Palm also did not have a Blackberry-like push e-mail app until maybe two years ago (and even that was because of a third party e-mail app; the default app that Palm owned and installed with every Treo did not even support IMAP.) But around the same time as adding IMAP support by purchasing the rights to a 3rd party e-mail client, they decided to start supporting Microsoft Exchange and running Windows Mobile on half of their new devices every year.
What happened? Apple fans originally loved PalmOS because it wasn't Microsoft. It was based on Apple's Newton. Secondly, the Palms worked better with Apple computers than Microsoft's devices did. Third, supporting the Palm could prevent Microsoft from dominating the mobile world on top of the PC world. Finally, Palm "sold out" and went with Windows Mobile, instead of improving or rewriting their aging operating system.
With the iPhone, Mac lovers could now get a real, current Apple product. I think that was the greatest gift to Mac users and Palm fans who were getting sick of Palm's insignificant incremental improvements.
Now if by software you mean the freedom anyone has to write and distribute a 3rd party app for a Palm device, then yes, they are still the easiest to release apps for. A developer doesn't need anybody's permission except that of the user themselves. But as far as the software PalmOS created and owned--such as the operating system and mail client--only minor improvements were made over the past seven years.
If I remember correctly there was a great deal of hope that Palm would turn-around when it acquired Be. They royally messed up the next-gen OS that they created using the BeOS/BeIA properties they acquired in a move that reminded me of Apple's Copeland fiasco.
What lesson should he have learned, exactly? I think rather that he has taught us a big lesson of late -- open or not, if you create a compelling product, people will break down your doors and line up for hours in order to get it.
You have to keep in mind that the app store was a response to people jail breaking the iphone and installing 3rd party apps. Apple never wanted developers messing with it's precious device but they finally gave and look what happened.
I'm not so sure. The only thing Apple is dominant at right now are mp3 players, and to my knowledge those don't/can't compete against any sort of open platform. There's no question that their computer sales are doing pretty well, and that quality sells, but they're still far from dominant.
Why isn't an open source mp3 player winning against the iPod?
Customers don't care if things are open or not. Unless android is put on drop dead sexy phones with killer features, it'll fail.
The end user doesn't care about openness directly, just as they didn't care about it in the case of Windows vs. Mac or internet vs. AOL. It's the benefits of openness they care about.
In the case of cell phones, the benefits are large and obvious. In the case of mp3 players I can't think of any.
They cared in the case of AOL vs internet, because AOL completely sucked.
Similarly, a growing number care in the case of Windows vs Mac/Linux, because Windows is so awful.
Is the iPhone, or other smartphone for that matter broken enough to cause pain to users?
I don't know, you could be right, but I don't see the problem that gets solved by Android right now for the average user.
Windows didn't take over the market because Mac OS sucked. It won because it allowed scores of OEMs to make all sorts of computers targeted at all sorts of consumers.
That's the same with the iPhone. Believe it or not, a lot of people hate AT&T. Or they have family on Verizon, and get free minutes when talking to them, so they sign up with Verizon. Or Sprint or T-mobile or whoever else. Or they get 15% off from work.
No matter how great the iPhone is, being tethered to AT&T means that >2/3 of customers won't even consider it. What this means is that Android, by being on whichever carriers want it, immediately appeals to at least 2x the number of customers. It could be significantly less good than the iPhone, and it will still sell more.
Then there's the form factors. It might be hard to believe, but most people just want to talk on their phone. Android can be on a cheap-ass clamshell. People with cheap-ass clamshells might still want to check the weather, play simple games, etc, so there will still be a market for apps there.
A lot of people use their mobile for business. They care about call quality, battery life, and a keypad, all things the iPhone sucks at. Those people will, on whichever carrier their company has a deal with, have Android phones available to them that fit that needs. (No idea if any will make inroads on Blackberry though.)
The iPhone has Apple/AT&T's marketing budget. Android has Google, a bunch of OEMs, and a bunch of carriers.
Put Android on something like the iPod Touch with GPS and advanced IM apps, and you could get middle school and high school kids hooked on this, especially if the rates could undercut cell phones by a factor of 2 or 3. (Which would be easy to do.)
By advanced IM apps, I meant something that could get connectivity through Wimax or EVDO. As for getting them hooked, if you remember awhile back, kids were heavily into pagers. IM style communication integrated with GPS that they'd get with a music player (which they need anyhow) might create a similar trend with middle school kids.
Android wouldn't be necessary, but that would bring an open App development ecosystem with it, which would be great.
Pagers died out long ago here too. The point is: there was once a trend among youth where alternative cheap communications was used in place of the cell phone.
If that can happen once, it can happen again. And SMS price structure is bloated. Things are ripe for a change.
That's not very rational. will you have kids? Do you have loved ones? Do you have dreams/hopes? Do you have knowledge? Everyone has something to lose. Just because it's not tangible doesn't mean it's of no value.
It was more of an exaggeration than anything. Right now I own books, a desk, a couple computers and clothes. Everything else (couch, futon, etc) was either bought for the temporary, inherited or purchased on the cheap. Up and moving for YC wasn't hard at all (I didn't even need a moving truck).
I'm sure I'll eventually have more stuff when I have kids, but "owning nothing" now has just made things a lot easier.
Two and a half years ago, I (effectively) owned nothing except the contents of the two suitcases that I brought to the US with me. That wasn't liberating, it was just inconvenient and annoying, and I had to start reacquiring stuff immediately so I had places to sleep and things to eat.
Then, a few months ago, I was forced out of my home by a fire, taking only the bare essentials. Most of my stuff was undamaged, but due to the reconstruction work I couldn't get at it for a couple of months. That,as it happens, also sucked.
There's definitely something to be said for having stuff.
I guess it depends more on the person then. I was in a similar situation when I moved to Boston and we've gotten more work done in two months than our competitors have in two years. And, most importantly, we're happy.
When I was a financial analyst I had tons of "stuff" and really it just caused me stress and worry. I liked the idea of having stuff instead of the "stuff itself". I think that's a PG quote. To each his own though.
