PDA

View Full Version : Bubbles are Good!



FRED
07-06-07, 10:56 PM
The difference between this position and iTulip's is...


<embed src="http://www.metacafe.com/fplayer/572605/wallstrip_chat_daniel_gross.swf" width="400" height="345" wmode="transparent" pluginspage="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash"></embed><br><font size = 1>

trex
07-07-07, 11:22 AM
Per this video, it will be interesting to see what new businesses spring to life from the excess supply of houses from the housing bubble!

Uncle Jack
07-07-07, 03:25 PM
The difference between this position and iTulip's is...


In the long and short discussion he said he's short the Wii because "he's too old." My 73 yr old father in law plays the Wii with his grandkids. Too old? Wow.

But getting to his interview, he did mention something that iTulip has stated as the next potential bubble, alternative energy due to government intervention, i.e. - subsidies, incentives, etc.

bill
07-07-07, 06:52 PM
Per this video, it will be interesting to see what new businesses spring to life from the excess supply of houses from the housing bubble!


With the recent run up in housing prices so has the assessed home values resulting in high property taxes.http://www.itulip.com/forums/showthread.php?p=9494#poststop
Now that home prices are coming down and will continue down over the next few years you will have a opportunity to appeal your tax assessed value of your home to the assessor and reduce your property tax if appraised values in your neighborhood support the same.
One opportunity would be to sign a 5 yr+- contract with home owners giving you the powers to represent and appeal the assessed value of the home at the assessors office. The contract you sign with the home owner would pay you 50% of the tax savings amount you received from the appeal hearing. For example if the assessor reduced the homes annual tax by $1,000.00 per year your cut for the appeal service would be $500.00 and every year until assessed values bottom out or your contract expired. The home owner gets a substantial saving over 5years and at the end of your contract the homes property taxes are reduced.
You can do the appraisal work yourself or hire one.
By the way appraisers are a dime a dozen and should have a lot of time on their hands if their not tied up in court.

<!-- toctype = X-unknown --><!-- toctype = text --><!-- text -->

EJ
07-07-07, 07:27 PM
In the long and short discussion he said he's short the Wii because "he's too old." My 73 yr old father in law plays the Wii with his grandkids. Too old? Wow.

But getting to his interview, he did mention something that iTulip has stated as the next potential bubble, alternative energy due to government intervention, i.e. - subsidies, incentives, etc.

We've heard this "Bubbles are Good" argument for years. If anyone thinks bubbles are good, look what they do to the IRR (Internal Rate of Return) of VC and buy-out firms. This is from a July analysis by Thompson we'll review in iTulip Select.


http://www.itulip.com/images/thompsonPE.gif



The VCs got killed. The buy-out firms' trend ain't so, either.

metalman
07-07-07, 11:26 PM
wow! vc is friggin' dead. why is buy-out down in '05 and '06 when all these huge deals we read about are happening? don't make sense.

Darin
07-08-07, 01:08 PM
"We like to think of bubbles as American entrepreneurial spirit running amok."

/cringe

Here are some inferences that I would be willing to bet on

1) He's never been a sole proprietor of a business.
Business don't succeed because owners run amok. Successful business don't want to buy the trash left over from the failed business that ran amok.

2) He's never read Joseph Schumpeter. I might even bet that he's read only a handful of any history of political philosophy or economic books.

3) He's making money off the bubbles without doing much work i.e. gets in when they are frothy and finds a bigger loser.

Bubbles may be good for his business, but they are not good for the welfare of the American, the health of business, and show the rest of the world that we need a government to pick up our dirty laundry.

tree
07-08-07, 05:48 PM
He refers to humans just once, as "cheap" workers. And nothing about the human carnage in the housing bubble. No surprise here: Slate is an arm of the Washington Post. (Bill Gates sold it to the WaPo some years ago.)

EJ
07-08-07, 07:14 PM
"We like to think of bubbles as American entrepreneurial spirit running amok."

/cringe

Here are some inferences that I would be willing to bet on

1) He's never been a sole proprietor of a business.
Business don't succeed because owners run amok. Successful business don't want to buy the trash left over from the failed business that ran amok.

2) He's never read Joseph Schumpeter. I might even bet that he's read only a handful of any history of political philosophy or economic books.

3) He's making money off the bubbles without doing much work i.e. gets in when they are frothy and finds a bigger loser.

Bubbles may be good for his business, but they are not good for the welfare of the American, the health of business, and show the rest of the world that we need a government to pick up our dirty laundry.

Exactly. Bubbles only appear to be good from a distance. As one who was an investor sitting on several boards during the stock market bubble and who ran two companies after, it's clear this Slate reporter has no idea what he's talking about. Agree also with the excellent point about how too many housing and buildings can be put to use after the housing bubble like too much fiber was after the tech bubble.

Also, over-built fiber is one of the few aspects of the telco bubble that supports his point. I recall meeting with Softbank Chief Executive Masayoshi Son in Tokyo in 2001. He was convinced that they were going to put NTT out of business with their bubble leftover fiber network. I'd also met with NTT group hand KDDI and came away thinking worst case the competition was going to be good for Japanese consumers. What he does not mention is how melting down over $1 trillion dollars of unneeded telco gear, as reported by The Economist in 2002, can be good for the economy.

Here's our iTulip Wikipedia position on bubbles (http://itulip.com/wiki/index.php?OurPositionOnBubbles), for anyone who'd like to add to or edit it.

tree
07-09-07, 11:22 AM
[QUOTE=Fred;12029]The difference between this position and iTulip's is...

Having thought about this overnight, I realize that the difference between this position and iTulip's is that Gross says proudly that government (federal) is largely responsible for creating each bubble--as if it's a good thing, and that any sane person must agree!

iTulip's position is that this government intervention in markets is bad for most Americans. Federal government politicians and highly-compensated bureaucrats act on behalf of multinational corporations and the wealthiest of inside investors, a ruling class that circulates through top positions in Washington and Wall Street firms. These rulers care nothing for the economic well-being of entrepreneurs, middle-class worker-investors, working-class poor.

These rulers feel insulated through their control of the mainstream media and two-party political system, which offers Pepsi or Coke. Corporations and Washington hypnotizing kids as YouTube-, iPod-crazed consumers, funneling them into global warming as a "cause" (and potentially a coming investment bubble), distracts the kids from how they and their parents are getting financially raped by the system represented by propagandists such as Gross.

Nothing changes until the kids understand what's going going and protest--and every effort, including not instituting a universal draft, is being made to make sure they don't.