Is There a New Dotcom Bubble?

Thoughts on this video?

Economy Likely Headed to Recession,...

 

Elizabeth Holmes, from the now-extinct Theranos, is not in prison yet, despite she has been convicted to 11 years behind bars for fraud. And it is a quite lenient sentence, in my opinion, considering how serious the crime was.

I think that SBF should receive a life sentence like Madoff.

That's why "investors" or, rather, small savers who want a yield on whatever money they own, are retreating from the riskiest options, like crypto, derivatives and NASDAQ as well. They're at the mercy of scammers, con men, and useless supervisors..

And now they are also suffering the interest rate increase, which is totally logical, but is biting people's wallets as mortgage payments are increasing and all the basic items cost twice as much as a year ago. Food prices are through the roof etc.

 

More lay offs:

Twitter lays off 10% of current workforce - NYT | Reuters

And the economic crisis has barely started. Many more years (and more lay offs) to come.

I see the FED taking interest rates to the region of 7%.

The only way of maintaining the value of money, work and savings is raising rates and increasing unemployment. There is no such thing as a "soft landing" and if you look at historical data, there has NEVER been a soft landing.

Interest rates, inflation and unemployment are related, so there's a big economic crisis coming up.

 

Considering households are suffering 20% inflation, interest rates are TOO LOW:

Rising inflation in France and Spain fuels fears of more ECB rate increases

 

Management profiteering while the company goes down the drain:

Klarna’s annual loss widens to $1bn but chief’s pay jumps 35%

 

This means recession. And the FED has to trigger a recession to try to tame inflation. It's likely that inflation will keep going up even if there's a short recession.

So the FED is far from the marginal rate. It should keep raising rates, and increase the pace...

Live news: Yield curve inversion deepens as 2-year Treasury yield hits 16-year high

 

Speaking of recessions; is it me but does the economy seem really unsustainable?

I was watching a channel called DUTCH66 who sometimes makes Google Earth videos of urban decay. He went to some famous rough area in Los Angeles with the date switched to 2007 when it looked clean. Then he turned the date to 2009 (when GFC ended) and there was a dramatic increase in homelessness. It isn't just one area with the same patterns.

He showed it didn't even improve after 2009 either, as it still kept getting worse and worse. Living standards have also gone down in most meaningful metrics too. The conditions are turning more like a war zone as well.

I mean GDP recovered and grew, yet a lot of people aren't feeling the benefits?

I don't know, it just seems like some of us are heading off to not so good times.

 

Basically QE did not filter down to the real economy. This is money printed to bail out countries and some large companies without formally calling it a bail out.

With the excuse of the COVID-19 "pandemic" (I did not vaccinate and, really, in the past I have caught colds and had flu that was much worse than COVID-19), money printing by central banks accelerated and, again, this tremendous amount of money was distributed to politicians to do as they please with it, and to certain companies that they called "strategic".

To give you an idea, in my country, Spain, "strategic" was used by the government to bail out small investment vehicles and funds that are on the orbit of the ruling party. These funds held investments in companies like large discos (for instance discos at Ibiza), gyms, bars, small hotels, a few dental clinics, etc...

I mean those sort of companies are not strategic at all but the money allotted by Europe to Spain as European Funds and the money printed by the ECB has been wasted in a ridiculous manner. It is nearly fraud... as the taxpayer will have to foot the bill and return all this money via taxes and my feeling is next year (after the general election in Spain) there will be another round of tax increases and a deterioration of public services in order to save money.

During the last economic crisis, just to give you an idea, the lights of the road rings surrounding Madrid were turned off at night. So we were driving on big highways and there was no lights anywhere... that was the level of "saving" when things turned ugly. And there were pay cuts in the public sector, civil servants, healthcare deteriorated... it was a disaster.

The country never recovered. This was covered up printing more money, so the ball of debt is getting larger and larger.

 

The bond market is telling the truth...

Yield curve inversion deepening. Higher rates in sight and for a much much longer time. FED rates at 7% or above? VERY LIKELY.

 

I remember from the Google Earth urban decay videos I mentioned, when he switched to 2020/21 (when COVID-19 peaked), there was another dramatic increase in homelessness and collapsed buildings similar to 2009. It's also not getting better from the 2023 photos I saw of the same areas he showed.

Speaking of fraud and financial deterioration, you know about American cities and its unusual urban planning and no high speed trains? I'm on about the suburban sprawl where it's so un-walkable and car dependent, that there's no sidewalks in a lot of them.

It makes 0 sense in a sustainability and financial sense. They're not even ideal for people's health either. It actually makes 100% sense if you're willing to dig deep into it, which I'll explain.

Not Just Bikes has videos about this. Search his videos such as "The growth Ponzi scheme" and "how bankrupt American cities stay alive". They are very interesting to watch.

Basically, the car and oil companies lobbied the government to pass in favorable laws for them which influenced the regulations on urban planning. Yeah, nothing about suburban sprawl makes sense, except it helps increase the profits of the car and oil companies as you need to drive everywhere in suburbia. Short term profits with no long term planning to be sustainable.

I mentioned it being financially unsustainable and Not Just Bikes speaks how the maintenance costs of the suburban infrastructure became so expensive, it just collapsed. Before the financial records were portraying the cities like they were doing so well, not mentioning all of the money was just spent on maintaining the crumbling inefficient infrastructure.

They made it seem like all the infrastructure spending was building new high speed trains, but nope, it was maintaining suburban hell. It contributed to some cities being bankrupt.

It's not just urban planning, but everything else where profits are made with the military industrial complex being the most commonly used example. Basically things that makes 0 sense in a financial sustainability way, will lead to a complete collapse of living standards one day.

That's why I had a sceptical question asking if the economy is even sustainable.

Due to how apathetic the population has gotten, we will just have to deal with what's coming.

 

Recession may actually come?

Below trend growth with a rising unemployment...

 

In its current form, it is not sustainable.

 

The former Fed governor is now saying the risk of recession is "extremely high":

Former Fed Governor: Likelihood of a recession...

 

Maybe this would give an idea of what could happen if things stay the same way. Argentina used to be one of the richest countries in the world based on per capita income (even more than Spain which Argentina used to be a colony of), but now it's described as a neo-liberal hell.

Argentina's Financial Collapse --...

@Juan, this might be of interest as it's in the Spanish language as well.

 

Spain is going downhill... like Argentina did. We have a communist government and yesterday one of the biggest Spanish companies announced publicly they will leave the country to get tax domiciled in other jurisdictions, the Netherlands...

The current government is ruining the country. They're like the Greek party Syriza that made Greece collapse and made all Greeks poorer.

 

The IMF has Argentina on a leash and if you want a loan from them, then you need to deregulate and cut spending to public services. You get put in a situation where you are unable to pay any debt back successfully as Argentina has failed to do so multiple times this century. At this point the country is not even a country anymore, but a colony to Cosmopolitan institutions.

 

I hope Spain does not end up going down the drain like Argentina, although the country is definitely on that track...

Anyway, the leftist trend seems to be taking over everywhere and that's really worrying, as we are seeing extremes, like the political parties ruling in Spain. They are ruining the economy and they are destroying society as well.

Some US media are quite biased too. It's almost a shame to read what Time magazine publishes. It's so distorted and so manipulated. They did a piece on new legislation passed in Spain to tackle sexual assaults and sexual violence on women.

This legislation has backfired and as a result jail terms for offenders who were already in prison have been shortened and around 50 of them have been released from jail earlier than expected under the old legislation.

Well, the "article" run by Time magazine on this mentions this unintended consequences in a tiny paragraph and praises that law, the feminist views and bla bla bla... for pages!

In Spain there is an UPROAR against that law!

 

I feel for you Juan.

 

Things are not going well for Amazon:

Amazon pauses construction on its second headquarters in Virginia

Here in Spain we do not see many Amazon deliveries lately. It seems online sales are quite dead...

 

I live about two kilometers from Amazon HQ. I can almost see the buildings from my window. There is some sense of relief with people around here they are delaying because housing prices keep skyrocketing with no end in sight.

The hope is if Amazon do not bring in as many new employees, it will be a little less demand for housing. And prices will skyrocket a little bit less.

 

I had a look at prices of some other US cities in Zillow and there's a HUGE real estate bubble in the whole country.

Are you concerned with any other impacts on quality of live derived from having Amazon HQ nearby?

There are already real estate funds that do not honor redemptions requested by retail investors. People want to take their money out of bricks and they cant.

And this week Blackstone has also defaulted on payment of bonds linked to real estate.

The FED keeps thinking of higher rates, and it probably will not be enough to target second round inflation:

Fed’s Daly says US rates likely to be higher for longer

 

In this article the journalist says many users consider Alexa a "glorified clock radio".

Personally, I would not introduce another spy at home, on top of the cellphone and the Internet...

Amazon’s big dreams for Alexa fall short

The article is spot on when it highlights how voice assistants like Alexa were sold as the "next big revolution" and have totally disappointed customers.

The very much advertised AI, at user level, will disappoint too.

 

The area where Amazon HQ is located formerly was mostly US military and defense contractors but after the Oklahoma City bombing and the 9-11-2001 attacks the buildings were not deemed secure enough and they became mostly vacated as new locations were found.

As a result the area had low occupancy of the buildings. They tried to find other tenants but could not.

So Amazon was, and is, viewed as a savior. Most people are very glad to have them here. The impacts seem only positive.

I don’t know if it is a bubble or not.

We have a massive housing shortage in the US. And it gets worse every year.

Until they can figure out how to build more housing, I think the prices will keep going up.

 

Is the Bay Area real estate, and particularly San Francisco, suffering from the massive lay offs at Big Tech?

I have read companies are relocating from the Bay Area to Texas and Florida for tax reasons, and many employees have been fired, plus the work from home trend...

 

I have not followed San Francisco closely, I think that real estate prices softened during COVID-19 but have since come back. The bigger issue out there seems to be the escalating crime and homeless encampments.

The housing shortage is the big driver of real estate prices. Cities often are reluctant to approve new housing (neighbors almost always oppose new buildings, which are bigger than the older buildings they replace, blocking sunlight, worsening traffic, etc.), and when it does manage to get built the cost is very high.

So there is just a big nationwide shortage, even in California with some people moving to Texas and Florida. I don't see it going away anytime soon.

 

California might just outright collapse one day, nevermind just the Bay Area. One company had to leave San Francisco because it was getting too dangerous with the random violent attacks on people walking to work. Here:



San Francisco is absolutely ridiculous now.

There's Tenderloin which looks like a third world slum with an open drug market. The BBC have videos about the situation there if you want to know more. The tension between the police and civilian population is soo bad, that the police themselves admit they hesitate in getting involved when they see people smoke crack or inject black tar heroin in public. The BBC clip I mentioned even showed open drug use.

Public defecation is such a big issue there, that they made an app for people to track human feces. It's due to all the homeless people who live in tents in Tenderloin who don't have a toilet.

The city also has the nickname "the city of love" and they like to portray themselves as tolerant, whilst having a 567% increase in racist hate crimes against Asians lately. It's scared some Asians enough to move out.

I just remembered, but a lot of Asian small business owners have been speaking about struggling with the current situation. This reminded me, but right now they have a law in California where you are practically allowed to steal up to $950 worth of stuff and get away with it. If for some reason, you hand yourself in for shoplifting, then it's only a misdemeanor, not a felony. Legal businesses are shutting down, whilst there's thriving illegal businesses selling stolen stuff in Skid Row LA.

Look at how chill the shoplifter is stealing in front of this security guard with a man bun that did little to nothing:

Thief Steals Openly | Petty Theft...

It's not even San Francisco, but Oakland nearby now has actual shanty towns (made out of junk) you see in poor war torn countries. Nick Johnson has some videos on Oakland which looks like it just came out of World War 3.

Now California has experienced a huge population decline like how Detroit did and still are. Detroit is basically a collapsed city, and if you watch channels like Charliebo313, he shows the McDonald's there have bullet proof glass for the employees' safety due to how dangerous it is.

Search "Stockton California Homeless Crisis HoodTime" on YouTube to see how bad it is in California because the thumbnail alone shows the severity. It's more than just the Bay Area and Los Angeles, but the whole state.

 

The US went into a recession in the summer of last year. The government merely changed the definition of what a recession is to keep them out of one. That’s how absurd this situation has become.

 

So that's where communism and the "universal minimum salary" take a city...

In Spain we have shanty towns like that too. The country is going downhill... with no brakes!

I was shocked at seeing how people steal in SF at shops and how that cannot be punished. I would not want to live in that city.

About the District Attorney, isn't that an elected position?

I mean, how is it possible to have a District Attorney who does not try to prosecute and stop crime?

 

The BBC video I mentioned actually has an interview with him. They confronted him about it and instead of being level headed, he acts passive aggressive saying he feels sorry for the BBC staff for watching Fox News. Mind you, I don't think Fox News even likes the BBC either.

Search "a day in crisis: San Francisco BBC" to watch it.

California is seriously just a bizarre place when it comes to the politicians there being too focused on their public image of being compassionate (I think there's a term for this: "Communal narcissism"). Apparently the governor of California even apologized to criminals (maybe he relies on their votes?). The YouTuber in this video even goes on Google Street view to show the parcel boxes were piling up for a while before it got bad enough for the government and media to finally talk about it:

The Strange Case Of The Los Angeles Train Robbery

 

It's surreal what's happening in California, but this must be part of the "global agenda" because the quality of life, poverty, crime etc are worsening everywhere... Particularly Spain is full of illegal immigrants and people who do nothing and live off the "welfare state" and "public subsidies"...

Anyway, I had a look at properties in Stockton, CA, at Zillow and unless the figures are totally inflated, prices seem to be in the region of $350k - $450k for the average home. Crazy prices considering the situation... who would want to live there?

Even in nicer areas in California prices are absolutely crazy. Who would pay $900k - $1M for a small apartment in Santa Monica or Venice, in LA?

Those prices are just surreal. The FED has a LOOOOT of work ahead, raising interest rates by... A LOT!