Time for the tech bubble to burst?

Forget 2008. What is happening today is much more like 2000.
For example, consider WeWork.

In documents for a bond offering seen by Bloomberg and the Financial Times, one unusual performance metric stood out. It was "community-adjusted EBITDA," which Edwards described as "an entirely new, nonsense valuation metric."

Normally, companies subtract only interest, taxes, depreciation, and amortization to derive EBITDA, an alternative gauge of their performance that strips out the effects of tax and accounting decisions.

WeWork, however, also excluded elemental expenses like admin and marketing costs to derive a community-adjusted EBITDA of $233 million last year, even though its losses doubled to $933 million and its revenue also doubled to $866 million, according to The Wall Street Journal.

"For those with long memories this is surely be [sic] reminiscent of that series of spurious valuation metric such as price/eyeballs ratios that we saw at the peak of the 2000 tech bubble," Edwards said.

Nonsense valuations is one way to note how crazy things have gotten on NASDAQ, but it's not the only way.
The most obvious indicator is the profitless IPO.

Dropbox Inc. and Spotify Technology SA are poised to join a growing list of newly public companies that aren’t making money, signaling an increasing tolerance for loss-makers when investors believe there’s potential.

More than three-quarters of the 108 companies that completed IPOs in 2017 reported per-share losses in the 12 months leading up to their debuts, according to data tracked by Jay Ritter, a finance professor at the University of Florida.

The share of loss-makers in the IPO market has been rising. Last year, it reached the highest percentage since the peak of the dot-com boom in 2000. By contrast, data spanning nearly four decades shows 38% of companies are typically unprofitable when they go public.

That’s particularly true in the tech sector, where 17% were profitable last year, barely higher than 14% in 2000.

ipo.png

Of the 15 technology companies that have gone public so far in 2018, only three had positive earnings per share in the preceding year.
Some of these companies are losing absolutely massive amounts of money, yet still plan to go public.

Uber, which is expected to go public next year, reportedly lost $4.5 billion last year as it sought to expand internationally and fought price wars with competitors including Lyft. Snap lost $3.4 billion last year, its first as a public company. Airbnb just had its first profitable year after a decade of investor-backed losses.

But the smell of burning cash has spread beyond Silicon Valley. Spotify, the popular music streaming service based in Sweden, lost $1.5 billion last year, even as it continued to add millions of users. New York-based Blue Apron, the meal-kit delivery service that conducted one of last year’s most-watched initial public offerings, has not yet had a profitable quarter. ADT, the home-security company based in Boca Raton, Fla. that went public this year, posted a $157 million loss last quarter.

Snapchat, for example, is valued at $34 Billion, despite losing ever more money.
snap.png

Now there are those that will say that they will eventually make money, but that's what they said in 2000 too.
Not everyone believes this story.

In a recent article entitled "Netflix and Deal," I illustrated that Netflix (NFLX), Tesla (TSLA), and some additional tech heavyweights are among the companies with the highest market capitalizations in the Bloomberg Barclays U.S. Corporate High Yield Index (HYG, JNK). Equity markets are giving these companies large valuations, but rating agencies rate their debt as junk and investors assign meaningful credit risk premia to their bonds. In Tesla's CDS, I extrapolated this credit default swap premium into a healthy probability of default for the topical Silicon Valley automaker.

Perhaps the leading edge of this tech bubble is Bitcoin.

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26 users have voted.

Comments

detroitmechworks's picture

Nobody can afford their new toys any more, even with the mandatory upgrades to use the new software.

More and more folks are turning to "Out of Date" technology, because if it does the job, and is a quarter of the price, why would you BOTHER? (Maybe that's just my generation, but honestly, I try to stay at least one tech Generation behind. Right now, I'm 3 generations behind, but spend considerably less time fixing my computer and more time USING the damn thing...)

Now that the technology is not leaping forwards anymore, people are seeing it for what it is. In many cases Tech actually INCREASES the amount of work that needs to be done, rather than labor saving. (Medical industry in particular.)

Course, doesn't help the tech industry that its lead guys sound like this...

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14 users have voted.

I do not pretend I know what I do not know.

The Aspie Corner's picture

@detroitmechworks unless you have years of experience, certifications, degrees AND a driver's license...at least, that's how it is where I live. Flawer'Duh gets away with it because most of the state doesn't have the public transit of, say, Orlando or Miami.

As for tech increasing the workload? Yeah, we're as productive as ever but the money those assholes pocket will never, ever be enough.

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14 users have voted.

@detroitmechworks
A friend was getting out of gaming, so he gave me his box. I told him to install Windows 10, not because I wanted "the latest", but because I wanted it to last as long as possible before having to upgrade the OS (my primary computer is an OS 10.7 Mac, an OS so old it can no longer reliably comply with the security protocols of some web sites, for example my email provider was no longer accepting my password)
Win 10 BTW, is a constant annoyance. I am irregularly having to wait for some annoyingly long time while it while it "updates", just to add some unwanted "apps" (used to be called "bloatware")that are really just spyware in disguise. It does not do some things that were normal for previous OSs, and published "fixes" are hard to find, impossible to understand without an advanced degree, and don't work anyway. Plus it has all the usual Windows annoyances. I use this clunker only for the internet.
I can still remember the joy I felt when I discovered that I could increase the mpg on my 1970 Buick just by removing the pcv valve. (today of course all my friends drive Priuses)
OTOH I'm still using Win XP for a couple of programs.

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13 users have voted.

A PROUD Hillary hater since 1993

thanatokephaloides's picture

@doh1304

Win 10 BTW, is a constant annoyance. I am irregularly having to wait for some annoyingly long time while it while it "updates", just to add some unwanted "apps" (used to be called "bloatware")that are really just spyware in disguise. It does not do some things that were normal for previous OSs, and published "fixes" are hard to find, impossible to understand without an advanced degree, and don't work anyway. Plus it has all the usual Windows annoyances. I use this clunker only for the internet.
I can still remember the joy I felt when I discovered that I could increase the mpg on my 1970 Buick just by removing the pcv valve.

The corresponding "remove the pcv valve" action on this machine is: remove Windows. Put a POSIX (Linux, BSD) operating system on it. Available for free, updates reasonable, free, and "to the point"; it's just a better deal all around. If the machine will run WinDOZE 10 at all, loading a POSIX OS will almost certainly turn it from a clunker into a Ferrari! (Yes, WinDOZE is that inefficient!)

If you do decide to put Linux on this machine, I recommend the "Maté" desktop environment/windowing system.

I also strongly recommend Ubuntu Studio as the Linux distribution. This Ubuntu fork comes with all the audio-visual bells and whistles, as well as the LibreOffice suite, Firefox web browser, and a complete set of Internet applications. And there are many more applications available for free, too.

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14 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

detroitmechworks's picture

@thanatokephaloides I do a lot of game modding, however, and Windows 7 works better for me as most stuff isn't Linux compatible.

Hell, I don't think I've bought a new game for almost a year. Nothing appeals, and there's tons of fun open source projects I can not only enjoy, but help with.

Yes, I do believe I've become a Digital Communist.

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8 users have voted.

I do not pretend I know what I do not know.

thanatokephaloides's picture

@detroitmechworks

Yes, I do believe I've become a Digital Communist.

Anarchist, amice. You've become a Digital Anarchist!

What I find even more amazing is that Linux, "The School Project That Will Never Die", has evolved under almost entirely unpaid volunteers to not just be as efficient and effective an OS as the payware ones, but more efficient and effective than they are! And all this while making fewer demands on the native system hardware, too!

The system I'm using to type this message is a case in point. It was sold by the OEM with Windows 7 on it. I inherited it when Windows 7 was abandoned and -- surprise, surprise -- it won't run newer versions of Windows. But it runs Ubuntu Studio like a freakin' champion! And the few times it didn't, finding out how to fix the problem was quite easy, too.

Smile

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6 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

mimi's picture

@thanatokephaloides
still needed some IT guy's advice remotely to run my own server from a home office. Found that dependency still too much to go on with it for the next three years and finally closed down all of it.

I don't have the nerves anymore to run my own server on Linux, but it certainly beats still any Windows operating system.

I think the IT new start-ups won't make that much money, because the original excitement of the early years is gone about what the online digital world can offer. You can eat only that much chocoloate, porn and news, data analysis and chats with ghost folks. At some point it just makes you sick and people turn away.

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8 users have voted.
Hawkfish's picture

@thanatokephaloides

“Linux is only free if your time has no value.”

I work in tech and have a Mac, a Dell running windows and an Ubuntu 16 box on my desk. The most opaque and difficult to keep running is the Ubuntu box - and that’s with an IT department. OSX is basically BSD Unix but it’s pricey. Still I’ve had Macs that were seven years old and I barely noticed. But it sucks for gaming.

So linux is doable (and it is getting better) but don’t expect it to be low maintenance.

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5 users have voted.

We may find that we’re all alone
In the dream of the proud.
- Pink Floyd, On the Turning Away

thanatokephaloides's picture

@Hawkfish

So linux is doable (and it is getting better) but don’t expect it to be low maintenance.

For the most part, I've found Ubuntu Studio to be just that. Quite low maintenance. In fairness, however, Studio is maintained to be far better than "vanilla Ubuntu" in that regard, as it's intended for a non-IT audience (artists and their consumers). Also, you're right: it is getting better, rapidly.

You might want to consider migrating your Ubuntu box from vanilla to Studio, for just that reason.

And I spent 11 years of my life working to support Windows with the same kinds of high maintenance problems Linux was claimed to have. When the fixes were known, they were hard to find, and harder still to implement over the phone to a non-privileged, non-IT end user.

Give me the Linux set of difficulties any day of the week and twice on Sunday!

My own humble opinions, of course.

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3 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides

because it's as idiot-proof as Linux has so far managed, and (ideally) all I have to do is to download what's sent.

The only thing I don't like about it is that if you leave it for any length of time, it shuts the screen down and you have to sign in to get it going again, which is a particular pain if you're trying to keep music going while off doing something.

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3 users have voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

thanatokephaloides's picture

@Ellen North

The only thing I don't like about it is that if you leave it for any length of time, it shuts the screen down and you have to sign in to get it going again, which is a particular pain if you're trying to keep music going while off doing something.

I've never worked with Linux Mint (of which Sylvia is a version); but I can tell you that this is a screensaver setting which can be changed. To tell you how to do that, I'd need to know what desktop environment (i.e., MATE, Cinnamon, Gnome, KDE, XFCE, etc.) you're using as the places these controls are stashed vary from one desktop environment to another. Under MATE with a traditional Main Menu, for example, the pathway is:

Main Menu -- System -- Look and Feel -- Screensaver

with the screen locking settings at that resultant location.

Please drop me a private message if I can be of assistance here.

Smile

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3 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides @thanatokephaloides

speaking as a utterly complete computer illiterate, whose brother downloaded this.

Edit: lol, found 'screensaver' right up front on the menu after a bit of scrolling. It let me reset delay wait for screensaver to the max of 1 hour, could shut off 'lock the computer after screensaver starts', but that also includes not locking after shutting down the computer and an hour's not bad. Hopefully I haven't just set off the Doomsday Machine or anything, ROFLMAO.

Whoa, cool, just noticed that one can actually see the comment one's responding to now!

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3 users have voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

thanatokephaloides's picture

@Ellen North

Lol, thanks, but I have no idea what it is, speaking as a utterly complete computer illiterate, whose brother downloaded this.

Ask your brother, then! Smile

Seriously, if I recall correctly, the default desktop environment in Mint Sylvia -- the desktop environment you get unless you choose otherwise and command accordingly -- is Cinnamon.

And my offer of help still stands. Wink

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3 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides

Actually, while this was in reference to the previous incarnation of Sylvia, my brother had previously said that there was no option to shut off the lock, although there seems to be one on this version. I think the longer delay (if you've seen the edit on my previous comment?) will do, though.

There was a Cinnamon involved, but - sorry - I had no idea what 'the environment' referred to... I did warn you that I was a complete computer illiterate...

Drat, now I'm back to no longer seeing the comment I'm addressing? Was that a fluke last time, when I answered your previous in an edit?

In any event, thanks and hugs! I'm nervous about doing anything at all while this tired and stupid and hadn't even looked; wouldn't have at all, if not for your kind offer of help and suggestion of what to look for.

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3 users have voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

@thanatokephaloides
I'm just lazy. And dispite my complaining (and the every half hour chime reminding me that my gmail settings are out of date (I don't use gmail) for its limited use Win 10 is acceptable. Someday that will change.

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4 users have voted.

A PROUD Hillary hater since 1993

thanatokephaloides's picture

@doh1304

you're right I'm just lazy. And dispite my complaining (and the every half hour chime reminding me that my gmail settings are out of date (I don't use gmail) for its limited use Win 10 is acceptable. Someday that will change.

I don't think you're lazy. After all, it was you who was talking about tinkering with pcv valves et al......

Wink

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3 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@doh1304 @doh1304

https://www.networkworld.com/article/2956574/microsoft-subnet/windows-10...

Data Center Explorer

By Andy Patrizio, Network World | Aug 4, 2015 7:58 AM PT

Windows 10 is possibly the worst spyware ever made
Buried in the service agreement is permission to poke through everything on your PC.

The usual bumps of an OS launch are understandable and forgivable, but some of the terms of the end user service agreement for Windows 10 put the NSA to shame.

Microsoft is already getting heat after it was found that Windows 10 was being auto-downloaded to user PCs without warning, and more seriously, that it was using the Internet connections of Windows 10 users to deliver Windows 10 and updates to others.

But there are worse offenders. Microsoft's service agreement is a monstrous 12,000 words in length, about the size of a novella. And who reads those, right? Well, here's one excerpt from Microsoft's terms of use that you might want to read:

We will access, disclose and preserve personal data, including your content (such as the content of your emails, other private communications or files in private folders), when we have a good faith belief that doing so is necessary to.

EFF, where are you?

The good news is you can opt out of that feature, but the bad news is it defaults to on. You have to go to the Settings and then open the Privacy applet, where you are greeted with 13 different screens to weed through. Most of the offenders are on the General tab, but you really should go through all tabs, such as what types of data each app on your system can access. ...

...There is other potential for exploitation. A Microsoft account is mandatory for many services, including Skype. This gives Microsoft more potential to collect info on you that you have to turn off.

Plus, Wi-Fi sharing defaults to on. That means you will be sharing your Internet connection with your neighbors if you leave it in its default state. So you have to open the settings and turn that off, too. ...

(And I have a notice over my Outlook inbox, which just appeared, that Microsoft is updating its Services Agreement...)

https://www.thenewamerican.com/tech/computers/item/21400-windows-10-is-s...

Thursday, 13 August 2015
Windows 10 Is Spyware
Written by C. Mitchell Shaw

If you are currently a Microsoft user running either Windows 7 or 8, you are eligible for a free upgrade to the "new and improved" Windows 10. But before you upgrade, be aware that it's free as in price, not as in liberty. Many of the new features and settings of Windows 10 have been deemed spyware by computer security experts. It's one thing to have programs and applications spying on you. It's another thing altogether to have your operating system designed to do it.

When Microsoft announced the "free" upgrade, many were left wondering why the Redmond giant would give away licenses to use the new operating system. Now it appears that the reason is simple: greater data-mining opportunities. Windows operating systems have long included security weaknesses that leave users vulnerable to spying and data-mining from others. What is different with the newest iteration of Windows is that Microsoft is directly involved in that spying and data-mining and has built the entire operating system in such a way as to allow it. ...

...Since all these policies apply to all Microsoft products and services — including Windows 7 and 8 — what makes Windows 10 different? When Windows 10 is installed, the default settings will allow all data to be collected and shared with Microsoft. Because users agree to this by simply clicking a button when they install the operating system, and because it is all turned on by default, most of the millions of Windows users will have no idea that they have given Microsoft nearly unlimited access to everything they do on their computers.

Because Windows 10 is set up to allow all this data collection by default, disabling data collection (where it is even possible to do so) will also disable most of the features that are the main selling points of the operating system. In addition, it is an arduous and time-consuming process involving going through at least 13 different screens in the privacy settings. ...

Obviously, I can't speak for this and it was said at the time that removing all of the removable spyware from Windows 10 was a hellish ordeal for Those Who Know What They're Doing but, in case you're interested and for whatever it's worth:

https://www.youtube.com/watch?v=u1kGMCfb2xw

Prevent Windows 10 Spying On You, Privacy & Security Matter!
Barnacules Nerdgasm

Published on 20 Nov 2015

In this version episode of #TechTip I show you how to disable all of the spying features of Windows 10 and get your privacy back. I think Windows 10 is a great operating system once you disable all the data gathering mechanisms and return it back to a pure operating system.

Edit: regarding this new Microsoft Agreement:

.... h. Outlook.com. The Outlook.com (or @msn, @hotmail or @live) email address that you use to create your Microsoft account will be unique to you for as long as your Outlook.com inbox or Microsoft account is still active. In the event your Outlook.com inbox or Microsoft account is closed either by you or by Microsoft pursuant to these Terms, the email address or username may be recycled into our system and assigned to another user. ...

Does this sound as though somebody else will start getting your email/could use your identity?

Not that anyone has any choice about not signing whatever to keep Microsoft, due to the monopoly situation...

When I'm running the universe, Things Will Be Completely Different!

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2 users have voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

@detroitmechworks @detroitmechworks
An obsession with privacy, law suits, and insurance requirements drives that, not electronic record keeping.

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3 users have voted.
thanatokephaloides's picture

@The Voice In the Wilderness

Tech does not increase Medical costs.

An obsession with privacy, law suits, and insurance requirements drives that, not electronic record keeping.

I don't think DMW was talking about electronic record-keeping; I think he was talking about the direct applications of technology to the medical care itself.

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6 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

detroitmechworks's picture

@thanatokephaloides OTOH, having the technology does tend to amplify the amount of work that "Administrators" think is mandatory, and in fields like Academia have resulted in situations where we have entire support staffs whose entire purpose is simply to calculate and create the paperwork.

Deans who create reports on the possibility of forming a committee to address the issue of too many committees.

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10 users have voted.

I do not pretend I know what I do not know.

@The Voice In the Wilderness

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4 users have voted.

Sigh

thanatokephaloides's picture

@UntimelyRippd

he said it increases the work, not the costs.

To increase the workload is to increase the costs. Workload is a cost. Increasing it should increase the costs.

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7 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides
by the bean counters and economists.

there are a few different mechanisms by which, "economically", more work does not equal more cost. for example, if it means that a salaried worker needs 44 hours/week to do a job that used to require 40 hours/week, and we just allow that to happen as a cultural shift without increasing the worker's salary or hiring more workers, then from the perspective of the bean counters, the tech hasn't cost a nickel more.

similarly, if a particular task used to require 1 hour of work by an underpaid, undervalued part-time worker plus 1 hour of work by a better-compensated professional, but now requires 2 hours of work by an underpaid, undervalued part-time worker, and 30 minutes of work by a better-compensated professional ... well, given that the professional probably costs the company about 5 to 10 times as much per hour as the part-time worker, to the bean-counter that looks like a win in the cost category.

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5 users have voted.

Sigh

thanatokephaloides's picture

@UntimelyRippd

there are a few different mechanisms by which, "economically", more work does not equal more cost. for example, if it means that a salaried worker needs 44 hours/week to do a job that used to require 40 hours/week, and we just allow that to happen as a cultural shift without increasing the worker's salary or hiring more workers, then from the perspective of the bean counters, the tech hasn't cost a nickel more.

Whereas what's really happening is that the salaried worker is getting ripped off to make the bean counters happy.

That additional 4 hours' work should be recognized as a cost increase -- regardless of who bears it.

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5 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides

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4 users have voted.

Sigh

@detroitmechworks I hear you. Late adoption is pretty economical, and mostly the stuff keeps working. I got out of desktops except for recent stuff, but have a collection of laptops going back to 3.1. Takes up way less space.

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3 users have voted.
k9disc's picture

Seems like a "long term" kind of endeavor.

Disrupt & Dump until you have the marketshare to enforce your demands.

It's a good gig, but it ain't business.

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18 users have voted.

“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

@k9disc
Just predatory.

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18 users have voted.
k9disc's picture

in Fed Ex and UPS, has convinced the Post Office to deliver on Sundays, has bought the WaPo, and is serving data to the DoD, CIA, and some ungodly percentage of the corporate cloud.

Bezos is worth $120B. Sounds pretty efficient to me, right?

Look at Uber vs Taxis. In a zero sum game, profits are not nearly important as marketshare.
@gjohnsit

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16 users have voted.

“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

@k9disc

Bezos is worth $120B. Sounds pretty efficient to me, right?

If Bezos took out a knife and stabbed a bunch of people for their money, and got away with it, it still wouldn't be efficiency.
It's just predatory.

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13 users have voted.
gulfgal98's picture

@k9disc This one line describes the way business is done nowadays. It is also the way oligarchs see the world. Hammer hit nail!

In a zero sum game, profits are not nearly important as marketshare.

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14 users have voted.

"I don't want to run the empire, I want to bring it down!" ~Dr. Cornel West "...isn't the problem here that the government takes on, arbitrarily and without justification, an adversarial attitude towards its citizenry?" ~CantStoptheMacedonianSignal

@k9disc me.

And ultimate slavery.

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9 users have voted.

dfarrah

k9disc's picture

Yea, Bezos is gross and so is a system that lets a predatory strategy not only work and be successful, but to be viewed as the "smart" methodology for modern corporate.

The business press disagrees with you, gjohnsit. It's not predatory, it's just modern business. No different from money in politics. Money in politics is not a death sentence, it's the life-blood of Democracy.

Aping Amazon is simply good business, and not even the EU will protect us.

@dfarrah

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13 users have voted.

“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

QMS's picture

@k9disc but the lies hurt worse

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10 users have voted.
k9disc's picture

@QMS Highlighting the zero sum game of modern corporate economics.

The hundred million teets Social Security, "that's where the money is".

Healthcare for profit: Are you sure curing diseases is the best route towards a profitable business?

War for profit: your rights should diminish so my profits can jump.

Over and over again, corporate is eating the planet and acting as if economics is a zero sum game.

gj and Pluto may recall my struggle to put corporate mercantilism together as a framework for understanding our dysfunctional economic system that confuses predatory behavior with terms like successful business and efficiency.

This corporate protectionist racket: nice public transit system you got there... shame for something to disrupt it. Strikes me as another lurching step towards corporate mercantilism - protectionism via a stateless, super-sovereign State that trades only amongst itself and for itself to maintain the ledger.

That is mercantilism, is it not?

@QMS

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9 users have voted.

“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

@k9disc sometimes I think economics is just religious gobbledygook for capitalists. That's why we can't understand it. That's why every financial publication couldn't see 2007 coming.

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5 users have voted.
QMS's picture

@k9disc economic indicators of our failed future, as long as we go along with their scheme.

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3 users have voted.
mimi's picture

@k9disc
or of having success?

My lord, your values suck then. Sorry, I wouldn't have thought you would say something like that. Won't forget that one. For sure. I don't want to say anything more than that.

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2 users have voted.
gulfgal98's picture

@mimi When k9disc stated that Jeff Bezos was "efficient," that does not necessarily mean that being efficient is a good thing in the context nor does it necessarily relfect k9disc's personal values.

In other words, "efficient" can be applied to both good things and bad things. I read it to mean that Jeff Bezos has perfected wringing every last buck out of the capitalistic system. And the capitalistic system is a predatory system. So how I read this comment to mean is that it is efficient and beneficial to Jeff Bezos making tons of money, but Jeff Bezos being efficient at making money does not benefit the rest of us. I hope I have explained how I read this comment clearly.

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23 users have voted.

"I don't want to run the empire, I want to bring it down!" ~Dr. Cornel West "...isn't the problem here that the government takes on, arbitrarily and without justification, an adversarial attitude towards its citizenry?" ~CantStoptheMacedonianSignal

QMS's picture

@gulfgal98 vultures are efficient, not so much of other value.

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8 users have voted.
mimi's picture

@gulfgal98
I am having an aching personal wound when it comes to Mr. Bezos. But I give you that he was very efficient in destroying hundreds, if not thousands of independent little brick and mortar booksellers in the nineties. And very successful and efficient in that. Indeed. Bravo - not.

I take back my words I had for k9disc. For some reason I associate with the word being successful and efficient something positive, not something destructive.

My fault. Sorry.

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11 users have voted.

@mimi
All those little bookstores had the same two dozen best sellers and that was it. Amazon offered variety and was much easier to order from than finding a publishers order form and mailing it. Not to mention that many publishers would not sell direct to the public.
He did offer an easier way to find and buy books. Barnes and Noble also had a website but after waiting two months for a book then being told it was out of stock... That was the last straw and I switched to Amazon who deducts from inventory right away.

BTW, I ordered from B&N even though prices were slightly higher than Amazon. Small price discounts are not my primary motivator and I prefer to deal with merchants who have a physical presence.

IMHO, the US book market suicided by listening to MBA's instead of customers.
Both Sears and AT&T are dieing from having money6 men as CEO's. Chrysler and GM also faltered by having finance guys instead of car guys at the helm. Engineers will give you a good product. Manufacturing gurus will give you quality at low cost. Financial engineers will give you Wall Street scams and eventually destroy your company. The old saying applies "One who knows the cost of everything but the value of nothing."

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3 users have voted.
CS in AZ's picture

@The Voice In the Wilderness

Interesting discussion. I worked in bookstores during that era. My memory is that first was Barnes & Nobel, and then Borders, coming into town with their relatively huge “big box” bookstores and their ability to undersell us due to huge volume discounts, that was what put a lot of indies under.

By the time Amazon got into online books, many of the local independent bookstores were already gone. We book people hated B&N, they were the Walmart of bookstores. They also followed Amazon by two years getting into online sales, and they never came close to catching up, despite being a much larger established corporation with deep pockets. I never set foot in a big-box bookstore now. We do still have several independent bookstores here that have survived which I enjoy and shop occasionally. One of them was recently sold to some of the long-time employees, because the original owner wanted to retire. So now it’s employee owned, sweet.

I’ll agree that Amazon succeeded initially by having an incredible selection that no physical bookstore can even get close to (although we certainly had more than the top 20 best sellers), and they pioneered not only ordering online but also having online customer reviews — which was actually huge at the time, publishers hated it but Amazon did it anyway. That was a good call.

As a reader, I loved the reviews and it was very helpful in choosing what to buy. I felt I was making more informed choices. When they started getting into ebooks, I strongly resisted for a long time. I love real books! Print and paper! But, ultimately, I tried an ebook and found they are so convenient, and excellent especially for those of us with bad eyesight which was the driving factor in trying it.

The ability to make the type larger, chose the font, and use white text on Black for night reading (with no lights on), was a dream come true. And it has search and highlight options, notes, and keeping your whole library in hand, and private from prying eyes who look to see what you’re reading, haha. Darn, but it’s true, the benefits of ebooks are too good to give up. For some types of reading.

For some books I still want the real thing, in my hands. I still like browsing at interesting independent book shops and used bookstores. And a search today was revealing, there’s a ton of articles about physical book stores coming back.

Here’s a good compilation of a few dozen such stories from within the past year or two:

Independent Bookstores are Thriving

I’m actually inspired by this. I used to dream of opening a book shop of my own. Who knows, maybe it can still happen. Books and book people are incredibly resilient.

Amazon is even venturing into physical bookstores now. They realize people still want the experience of a book shop and holding a book in your hands before you buy it. And as a gathering place. They are the big guns with the deep pockets now, but I’m encouraged that indy shops are making a comeback.

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5 users have voted.

@CS in AZ

I used to subscribe to a Mom and Pop specialty bookstore in Duluth. I bought all of my SF there. Eventually they retired. I visited another specialty shop in L.A. when I was on a business trip. It was amazing, as big or bigger than Kroch and Brentano's Chicago Loop home store. But that kind of shop was few and far between. I used to patronize a used book store in Oak Park IL. They had a rich variety of titles at bargain prices. One day they closed. I read in a newspaper that they had been a front for drug sales. Another store in Addison IL was a favorite. I chatted with the owner often. He was a Conservative, a former Addison cop. One day the shop was closed and someone had taped newspaper sheets over the windows. It seemed that he and his wife were bank robbers using the store to launder their take. He was captured and his wife killed a robbery. During his trial he got a gun somewhere (speculation was a cop buddy) and tried to shoot his way out. Probably suicide by cop as the papers said he was deeply depressed by his wife's death.

Despite those aberrations, used book stores are great and I love rummaging in them. However, for new books a small shop can't compete with big box and on-line stores. It's like the independent hardware store. They can't compete with the chains. You only find them, along with the general store, in rural areas. And in many rural areas, the local general store is Walmart.

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3 users have voted.

@CS in AZ
I have a few on my computer's desktop. That's a great place for a technical reference. I don't have to balance a book on my lap while typing. My daughter loves e-books because she can carry her whole library on her cell phone and read on the bus, waiting rooms and such places. Being a curmudgeon, I prefer to relax on my bed (don't have an arm chair any more) and turn the pages like when I was a kid.

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2 users have voted.
Hawkfish's picture

@gulfgal98

There was an “Economic View” column in the NYT last year musing whether the average person wants efficiency as much as the average economist. I think people are more concerned about things like agency (not to mention survival...). Which is another neoliberal disconnect.

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7 users have voted.

We may find that we’re all alone
In the dream of the proud.
- Pink Floyd, On the Turning Away

gulfgal98's picture

@Hawkfish could probably care less about "efficient" except when it comes to customer service, particularly from their local providers such as government, utilities, etc. People are most concerned about those things that affect their every day lives.

Corporations and oligarchs are concerned about maximizing profits. Efficiency is one way to do so. Robots are very efficient for maximizing production and profits. Humans less so. Guess which wins in the corporate mindset?

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4 users have voted.

"I don't want to run the empire, I want to bring it down!" ~Dr. Cornel West "...isn't the problem here that the government takes on, arbitrarily and without justification, an adversarial attitude towards its citizenry?" ~CantStoptheMacedonianSignal

CS in AZ's picture

@gulfgal98

The comparison of what is actually produced or performed with what can be achieved with the same consumption of resources (money, time, labor, etc.). It is an important factor in determination of productivity. See also effectiveness.

Unfortunately, due to my job, I have to know these definitions and how businesses use them.

In business language, efficiency has absolutely nothing to do with “morality” or right and wrong, being efficient simply means making the most money possible. It’s basically what every for-profit business strives for, with some obviously more ruthless than others. But efficiency (as they define it) is considered a core principle of sound business practice.

And you’re so right GG, how business uses these words has no connection to what they mean to anyone else. Hence the confusion no doubt.

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4 users have voted.
thanatokephaloides's picture

@mimi

oh, jeez, you defend Besoz as efficient? or of having success?

My lord, your values suck then.

Not so.

One can be efficient and successful indeed at doing evil!

And I think that's the point here.....

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10 users have voted.

"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

@thanatokephaloides
The big Nazi conference (saw a special about it once on PBS) where they hammered out the most efficient way to commit mass murder.

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3 users have voted.
ggersh's picture

@k9disc screw everything/one else.

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9 users have voted.

“We now live in a nation where doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals, and our banks destroy the economy”
Chris Hedges

k9disc's picture

http://archive.is/ONFRp

The king of money-losers, of course, is Amazon, which went years without turning a profit. Instead, it plowed billions of dollars back into its business, building out its e-commerce infrastructure and jump-starting side efforts like Amazon Web Services and Amazon Prime Video. Those years of investments paid off, and Amazon is now the second most valuable company in the world, with $1.6 billion in profit last quarter alone.

Not every company can repeat Amazon’s success. Just ask any of the dozens of “Uber for X” start-ups that raised millions of dollars to disrupt industries like laundry, parking and grocery delivery by offering cut-rate promotional deals, only to run out of capital before customers latched on. Or consider crash-and-burn cases like Beepi, a used car marketplace that blew through nearly $150 million in venture capital before shutting down in 2016. (Happily, not before I bought a car through the service for thousands of dollars less than its market value. Thanks, venture capitalists!)

@k9disc

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6 users have voted.

“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

Hawkfish's picture

@k9disc

It is a casino after all. The only way Uber can be profitable is to completely destroy all other forms of urban transport (including public) and replace it with autonomous vehicles on public roads. Then jack up the prices. This is an open secret in the investment world.

My company has been running at break even for several years while we grow, but we do things that are useful imho. But when you see someone burning through huge amounts of.l cash up front, the goal is likely to be a monopoly.

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7 users have voted.

We may find that we’re all alone
In the dream of the proud.
- Pink Floyd, On the Turning Away

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12 users have voted.

@gjohnsit @gjohnsit going to quit asking 'why'?

Then Nader and the commenter say that the dem should adopt the agendas of the more left. LOL, as if that would ever happen. Then the commenter talks about how the dems need to get smarter. Then the commenter suggests maybe the dem party is just incompetent.

OMG- I can't believe so many people don't get the fundamental fact that dems don't want to represent anyone.

Well, finally toward the end, the commenter acknowledges that the dems are owned by corporate cash. Wow, no shit Sherlock.

The commentary is worthless.

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15 users have voted.

dfarrah

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7 users have voted.
QMS's picture

pretty much exposes the financial market as a manipulated market of leveraged risk. Cheating, in other words. Negative value only works when bettors control the game. No value, just extortion within the allowed rules. Thanks wall street, why can't some of that wealth transfer help the public?

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11 users have voted.
edg's picture

FedEx - Founder Fred Smith took his personal wealth of $4 million, along with another $90 million from investors, to found his delivery company in 1971. However, Federal Express failed to take off initially and was on the verge of bankruptcy. Smith took the company's last $5,000, flew to Vegas, and played blackjack. The gamble paid off. Smith made $24,000, which was enough to cover the cost of fuel and keep the company afloat for another week. Smith raised another $11 million to keep Federal Express running. The company didn't make its first profit until July 1975.

Turner Broadcasting System - In 1979, Turner changed the name of his company from Turner Communications Group to Turner Broadcasting System Inc. and launched CNN on June 1, 1980. In 1982, Turner launched CNN2 and merged with MGM Entertainment after a $1.5 billion deal. Unfortunately, the merger put Turner Broadcasting in financial strain, and the company wouldn't record an annual net profit until 1991.

ESPN - A father-and-son team, Bill and Scott Rasmussen, teamed up with Aetna insurance agent Ed Eagan to create an all-sports network in 1978. The network lost money. To help keep ESPN going, Michael Roarty of Anheuser-Busch persuaded the brewing company to financially support the struggling network. In 1994, Roarty told the St. Louis Post-Dispatch, "We gave them $1 million that first year. And if we hadn't, they'd have gone under." The following year, Anheuser-Busch gave ESPN an additional $5 million. By the mid-1980s, ESPN was able to turn a profit thanks to the support of Anheuser-Busch.

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11 users have voted.

hard at work. This is privatization at work. Taking cold hard cash and putting it in their pocket.And now they are trying to get at SS. To them, it is a massive unnecessary "revenue stream" for their gaping maw.

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5 users have voted.

@Blueslide
They have a huge contract with Amazon to store ALL DOD data. Why don't they build their own computer farm and run it with vetted civilian and military employees? Why that would be "Socialism". So part of this cost goes to private profit raising the cost to the government and raising the risk of data breach as well.

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3 users have voted.

@The Voice In the Wilderness

The protection of US national security involves the public not knowing what public business private industry has a hand in and not knowing where their public funds are going, so it makes sense that private industry would be paid by the public to spy on the public as well.

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1 user has voted.

Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

@Ellen North This is storage. All the DoD files, not just contracts. Classified info, detailed contingency plans, launch codes, readiness reports. Extremely sensitive. I question some of being "cloud". Some should not be on a computer with access to the internet.

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1 user has voted.