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comment on: What happened when a venture capitalist told the truth about a Mark Zuckerberg-backed start-up · link
by: kleinbl00 · 1060 days ago

No. You know what? No. Calling bullshit on this. The dude was "chastened" for arguing against an entire approach to technology:

    $174M lessons here. We passed on Altschool multiple times, mainly because disrupting school was a terrible strategy, but also b/c founders didn’t understand #edtech is all about partnering w/existing districts, schools and educators (not just “product”)

He wasn't "bragging about not investing in a company that failed" he was celebrating the death of a bad idea that had been backed by big fucking money. goobster's comparison to Hollywood is apt - there are all sorts of abominably bad projects drifting around where the first thing you do is look and see what rich, powerful asshole is backing it - I mean obviously a movie in which a father and son speak babytalk to each other for two hours while communicating psionically to avoid a space bear is never gonna get made except when it is. And of course big backers can't steal all the good ideas from one idea to prop up another except when they do.

You know why Hollywood makes nothing but fucking superhero movies now? Because in order to get anything done you need some asshole with $150m and the only thing he's going to make is sure things so now we've got Disney which bought Marvel which will stack 27 fucking movies together to drag your ass to Avengers Endgame. Meanwhile, every decent idea anyone has ever had eats shit.

So here's Mark Zuckerberg and Peter Fucking Thiel and they've decided they're going to AynRand fucking primary school and somebody - the guy who was at the fucking Gates foundation for ten years - calls bullshit on it and you are BENDING OVER BACKWARDS to figure out a way for the blowback to be his fault.

I'ma drag thenewgreen into this because I love how offended he gets whenever I mention Theranos but you know what? Theranos happened because Elizabeth Smart grew up next door to, and played with the daughter of, Tim Draper. So she bats her eyes at Tim Draper, says that her magical bullshit patent doesn't violate the space-time continuum, and inside ten years, $700m are up in smoke. Because nobody is gonna call bullshit on Tim Draper or else they'll be punished for it and now, the entire medical technology space smells like poison.

No. The dude's future was existentially threatened for calling a spade a spade. In a space where WeWork has gone from a $57b valuation to a $10b valuation in six months only because the financial press has started going what the fuck softbank.

Sure - saying you're smart because you passed is inane. But saying certain business models deserve to fail is the sort of thing investors should be allowed to hear.

comment on: WeWork Skips Some Rent Payments as Coronavirus Undermines Revenue  · link
by: kleinbl00 · 847 days ago

Yeah - but what I'm saying is liquidating WeWork is going to be a grindingly unsatisfying exercise. Even their S1 lists $27b in assets and $24b in liabilities and that doesn't include their $47b in leases due. They go Tango Uniform and there's $47b in leases looking for $3b in remedy of which the big stuff has already been sold off.

The fact that their core is well-protected is fundamentally irrelevant if their bank vault is empty anyway.

comment on: WeWork Skips Some Rent Payments as Coronavirus Undermines Revenue  · link
by: kleinbl00 · 847 days ago

...which matters little as WeWork's core assets are a hole in the ground at this point.

They've even knocked $10m off the jet.

comment on: The dam breaks: Twitter Will Allow Employees To Work At Home Forever · link
by: goobster · 816 days ago

Yeah, my post reads like I don't see the WFH situation as a win/win. But I do; the company cuts costs, but the employee gets/makes more to offset their increased costs.

Shit, I took a $10k pay cut to work for a company that was a 15-minute commute away, rather than one that was an hour away. And I don't regret that decision AT ALL.

I also suspect that this could be either the beginning of a revival for WeWork, or that coworking spaces (like Office Nomads ) will finally reach their full potential.... because people will quickly need to draw a line in their lives defining their work/life balance, and the easiest way to do that is get a membership at a local coworking space. Gets you out of the house, gives you the infrastructure of printing/shipping/mail/conference rooms, and can literally be anywhere you can fit a few desks. I worked in one that was a converted barn, once, and had a membership at Office Nomads for 5 years during my entrepreneurial days.

comment on: WeWork Files for I.P.O., Joining Wave of Cash-Burning Start-Ups in Going Public · link
by: kleinbl00 · 1196 days ago

My wife had an office in eOffices which is basically WeWork but local and profitable. They charged more for the extras and turned a profit as a consequence.

They also owned their real estate.

And nobody thinks they're worth $80b.

comment on: WeWork Files for I.P.O., Joining Wave of Cash-Burning Start-Ups in Going Public · link
by: veen · 1195 days ago

It's so weird to me that a middle man's value-add can be to subtract value, yet still be valued positively.

Somehow the two words "WeWork IPO" have an ominous ring to them. What do the finance moon howlers have to say about it?

comment on: Random quotes of the week · link
by: kleinbl00 · 1458 days ago

Whelp, WeWork raised another billion dollars.

https://www.wsj.com/articles/wework-raises-1-billion-in-debt-from-softbank-as-revenue-doubles-1533849008

Also, they've lost $723m this year. This raises Softbank's investment to over $5b in a company that loses more than a billion dollars a year.

comment on: WeWork Files for I.P.O., Joining Wave of Cash-Burning Start-Ups in Going Public · link
by: kleinbl00 · 1195 days ago

The filing was in December; since that article linked above, the velocity on WeWork is largely down not up.

I suspect the moon-howlers will have plenty to say as soon as the IPO actually happens, regardless of what the market does. To me it looks like everyone who has an IPO is trying to find a greater fool as fast as they can.

comment on: Random quotes of the week · link
by: b_b · 1458 days ago

It's a good thing that WeWork exists, because it makes literally every other overvalued tech company look reasonable by comparison.

comment on: Saudi Arabia Stuns World With Massive Discount In Oil Sold To Asia, Europe And U.S. · link
by: kleinbl00 · 881 days ago

https://www.mauldineconomics.com/frontlinethoughts/the-growing-economic-sandpile

You will likely read a lot about "black swan events" in the coming weeks and months. This phrase was coined by Nassim Taleb to explain how we can't predict what bad shit will happen. Nassim Taleb is a fucking dumbass however because he goes on to jump from "we can't predict what bad shit will happen" to "we can't predict THAT bad shit will happen. Literally four pages into Black Swan he argues that nobody predicted Hitler therefore nobody could have predicted WWII.

The problem with this thinking is that one of the fundamental arguments at the Treaty of Versailles was that excess punishment of Germany would lead to recriminations and that harsh economic conditions would likely lead to a resumption of hostilities. Both Churchill and Wilson argued that bad shit was likely to come out of Germany and launch the war again. They argued at length, they argued publicly. Taleb's right - nobody predicted "Hitler". But that doesn't matter because half the people paying attention predicted "a phenomenon like Hitler" and does it really matter what his moustache looks like? German encirclement was a theme going back to the fall of the Hapsburgs. German antisemitism was a theme going back to the Crusades. German nationalism was a theme going back to Napoleon. Populist racism leading to apocalyptic war? It was on a lot of bingo cards.

It's been unpopular to argue that all isn't well just because the stock market goes up. There hasn't been a lot of press for everything that's wrong in the market. It's all there - the data's right where you can see it. This whole repo mess that nobody is still talking about is fundamentally the central banks losing control over the market but why talk about that if the Dow is up?

So yeah - Saudi Arabia needs money because Aramco is now under IPO and there's convincing evidence that they hit peak oil in about 2001. Russia needs money because their population is aging and they've got a $300b budget shortfall (how quaint). They're in a three-way snit with Turkey over Syria right now - Saudi Arabia and Russia could make an agreement but Turkey is putting up drilling rigs in contested waters around Cyprus so it's pretty clear to anyone paying attention that an agreement between the two of them would be short-lived.

But nobody is paying attention because this is a "black swan."

John Maynard Keynes argued there are two ways to assess what something is work: "Firm Foundation Theory" and "Castle in the Air Theory." Firm Foundation Theory posits that something is worth the amount of money it will make you, adjusted for the risk you take on buying it, minus the amount of money you can make risk free. "Money it will make you" is a basic thing to approximate. "risk you take on" can be approximated a whole buncha ways. You end up with a number, or a spectrum of numbers, but fundamentally you end up with a reasonable model of value.

Castle in the Air theory posits that something is worth what you can sell it for.

Firm Foundation Theory has had no place in economics since 2008. Ever since central banks pumped all their money into the financial sector, there's been no good way to determine what something's worth because the central banks are maybe/maybe not guaranteeing some portion of that risk. Bear Stearns? No backup. Washington Mutual? No backup. Chase Manhattan? The Fed will pay JP Morgan to buy it. What's a bank worth? Who knows. Comes down to what kind of mood Bernanke was in. Pissed a lot of people off. But you still gotta make money.

So you value everything on what you can sell it for, not what it's advantage over risk-free return is (it helps that your risk-free return has been "under inflation" for twelve years). "I'ma buy into WeWork at $40 billion because some dumb asshole will buy it off of me for $80 billion." "I'ma buy into Tesla at $700 a share because some dumb asshole will buy it off of me for $900 a share." "I'ma buy into Amazon at $1000 a share because some dumb asshole will buy it off me for $1500 a share."

Amazon is allowing profiteers to gouge Purell at a thousand percent and this populist government is failing miserably. Suppose Bernie Sanders wins the election and decides to break up Amazon? Is it still gonna be worth $1500 a share? Because Amazon has never paid a dividend in their life. their business model is literally destroy everything, become the one store in the universe, profit.

So. Did a whole bunch of prognosticators have "pandemic" on their bingo cards? doesn't matter:

    1. Economic dysfunction will be the main driver of the international system in 2020. Economic stress does not simply flow from whether the economy grows or declines by a percent; it arises from shifts in the pattern of economic behavior. This in turn affects social realities and leads to political instability. Growth may continue, but a dramatic slowdown in growth can have significant consequences. We forecast a slowing global economy.

    2. The most important dimension of the slowdown will be the increase in social instability, which was triggered by the 2008 financial crisis and ameliorated in recent years but will now accelerate. Internal tensions in many countries are already underway and will become more intense and less manageable in 2020.

    3. Nations most vulnerable to the slowdown will be exporting nations. The countries that will be most destabilizing to the global system will be major economies that are dependent on exports. Germany and China are the most vulnerable and will have the greatest impact globally.

It's like a forest fire - it doesn't matter all that much if it's a stray cigarette or a badly-grounded hot tub that sparked it. When the whole place is dry tinder, it's gonna burn eventually.