I honestly don't understand how private equity makes money at all. The playbook is:
1. Borrow a ton of money and buy a company on an LBO
2. Load up the company with debt, often complicated, exploding debt, to repay the original loan. Possibly sell off assets like real estate to pay off the original loan; and
3. Here's the kicker: sell off the company for a profit.
But we've seen time and time again that PE is a death sentence. Toys R Us, Red Lobster, numerous others. The company seemingly always explodes under the debt after the original snake oil salesman have cashed out. But my point is: who keeps falling for this and buying a PE hollowed out husk?
You've seen publicized examples (Toys R Us) where it played out like that, but that narrative doesn't generally pass the smell test–no counterparty would keep making bad loans. There are cases where companies are mismanaged, their value is as a real estate holding company, etc. and PE improves operations and creates a more investable business.
The other thing is that like VC, PE has become saturated, so the good opportunities just aren't there anymore.
> Hilton, Safeway, Dell, Nabisco. The list goes on.
For what it's worth, KKR's takeover of RJR Nabisco was actually a flop. KKR bought the company in 1988, and then spent 15+ years trying painfully to exit the position.
It is widely believed that it was the major reason why their 1987 vintage turned out to be disappointing.
I more meant when it was successful for the acquired company, but that’s a good call out that there are outcomes that are break the meme in that direction as well.
I've also wondered how banks get convinced to offer companies the debt in these LBOs. The only explanation I see is that failures (Toys R Us, etc.) become well-known while successful LBOs and sales of companies with long-term profitability are quiet
I used to be very YIMBY. Build, build, build. But what I've come to understand is that this just isn't going to help. Do it anyway, but it's just not going to correct the problem of unaffordable housing.
The entire real estate industry and our government is designed to make housing prices go up over time. Voters are behind it because it gives the impression of increasing wealth but it's an illusion for most people. If the median price is $200k and you buy a house for $200k and the median price and your house goes up to $600k, you still only have one housing unit's worth of wealth and you need to live somewhere.
All increasing real estate prices does is enrich a tiny minority by stealing from the next generation. And the negative externalities are massive. Housing makes everything more expensive.
If you look at NYC, you can see that a lot of apartments get built but almost all of them are for the ultra-wealthy to park money. You aren't increasing the available housing.
In the 1990s the average house price in London was 70k pounds. Now it's over 700k. Are wages 10x? No, no they are not. The whole thing is a giant Ponzi scheme to keep people in debt so they're compliant little workers.
> what I've come to understand is that this just isn't going to help.
This is false though.
Austin, Texas built a lot of apartments and then rents fell 22%. That's a big win for a lot of people seeing lower prices!
NYC is not a place that builds very much in proportion to the population.
I think that the claim that "supply and demand do not apply to housing" is an extraordinary one, and extraordinary claims require extraordinary evidence.
Maybe Austin is an outlier. They have high property taxes. Or people left because of those taxes Most cities that built a lot of housing saw it bought up by investors.
Investors only invest in things with a good return. It's why they don't buy up, say, nails, because the nail makers would just produce a lot more nails to sell to them and they'd be left sitting with a bunch of nails.
They invest in housing because it's scarce because we don't build enough of it.
And if you look at the actual numbers, large-scale institutional investors just aren't that big a factor. It's another bogeyman for people desperate to avoid the solution to not having enough housing: building more housing.
Austin is an example of the market balancing out when allowed to do so.
Recently some socialist lackwit on Twitter was railing that YIMBYs only lowered prices from $600k to $500k. This person apparently did not understand that the difference - $20k up front and $700/mo for 30 years - is the margin between affordable and not affordable for tens of millions of ordinary people.
In case anyone reading thinks otherwise: you can absolutely be a socialist and a YIMBY. Maybe your goal is Vienna style housing. The only thing you need to acknowledge is that cities need 'enough' housing.
Yeah but there's this entire genre of hammer-and-sickle-in-bio online guy who thinks socialism is about ideals, not the material experience of the proletariat. Those guys think we should outlaw home building until after the revolution.
> Austin, Texas built a lot of apartments and then rents fell 22%.
This is false. Just look at the chart [1]. All that's happened is some of the pandemic price gouging, something landlords were being sued over [2].
We simply cannot capitalism our way out of this problem.
> i think that the claim that "supply and demand do not apply to housing"
Where did I say that?
Speaking more generally, the idea of a "free market" is a myth, particularly for housing. It's one of the most manipulated and politicized markets there is.
But supply and demand do apply and it has been a political goal for decades to ensure that supply will be constrained.
Landlords would be happy if rents never fell though. They're not dropping them because "gosh, maybe we charged too much during the pandemic". New housing was built and landlords had to compete for tenants. Dropping prices during a time when inflation is still a thing is a pretty big deal, and very beneficial to thousands of people.
The housing market is, indeed, anything but free. That's a core idea behind the YIMBY movement: make it legal to build more kinds of housing, rather than just meet demand by outward sprawl.
> But supply and demand do apply and it has been a political goal for decades to ensure that supply will be constrained.
That's what YIMBY is about: fighting back against those constraints. They have hugely detrimental consequences for people, the economy and the environment.
In terms of "capitalism", I think most YIMBYs are pragmatic - capitalism is the system we have in the US, so we need to leverage it as much as possible to get the housing we need. If we could get Vienna style social housing, I think a lot of YIMBYs would be happy to sign up. You still need Vienna style zoning and building codes to get that, though.
Check out the story on Block 216 in Portland. A well known local developer sunk a lot of his own money into the development of an upscale hotel/residences. The result? The new, finished development is valued at $415 million, however the loan debt is $510 million. And of course it isn't generating any tax revenue for the city, which has about $100 million budget deficit, recently announced cuts in services.
San Francisco collected $522 million in real estate transfer property tax in 2022. This year will be less than half that.
The inflationary rebound after the pandemic and lower than normal interest rates created an artificial market that otherwise may not have existed.
Unoccupied housing or otherwise housing purely for investment is certainly a problem. If they aren’t renting at least with AirBnB they would actually be better served by holding gold in many cases.
It does help and is helping. Here's an article published this week in Berkeley about how a modest building boom has stabilized and lowered rents in existing buildings, after rents doubled in the 2010s.
If you look at the trend for all Bay Area cities over a similar period [1], you'll see Berkeley is pretty much in line with the overall trend.
Now you can argue that's because of greatly increased development, but I don't think that applies to SF (or SJ) and it doesn't match the Berkeley timeline anyway.
Yeah, the specific contribution here is tracking a stable cohort of existing housing, not the entire market, to show the effect of new construction on the price of older housing.
I mean in the Bay Area where SFH have massively ballooned in price condos have remained steady for a long time. It works. Maybe not everyone gets the SFH but that’s fine and not the point. Everyone can own a home.
Where is the "but her emails" crowd now? There are three main issues here:
1. The Defense Department bans the use of Signal for everybody else. Why is that? Why is the Secretary exempt?
2. As we've seen it's pretty easy to add unauthorized people to what should be secure communication channels where classified information is shared; and
3. There are laws around the preservation of governmental records. Expiring Signal messages seems like it's intentionally meant to circumvent these legal requirements ie it's illegal.
We're only 100 days in. We've got 1200 more days of this.
Re: 1. If a team at work has a long-standing policy implemented by and applying only to that team and I come in as the new team lead, I can change that policy.
NB: I’m not arguing that this change in policy was done after a careful Chesterton’s Fence analysis and weighing of all relevant factors, but it would seem stranger if a new leader couldn’t change any policies than if they can.
The implication is that either he doesnt care, or he does. So I guess he does. I just didn't get the vibe that he wanted Hillary to be held accountable for her emails.
Huh? I am still here and I am still annoyed by both. If anything, people who opposed 'but her emails' crowd to sufficiently penalize Hillary, made the current situation possible to begin with.
edit: To the lazy down voters. Address the 'my side never does anything wrong' issue and I might concede.
> Sounds like locking her up for bypassing the governmental emails would have been a win, now.
Under what basis should one have "locked her up"? All legal experts agree that there was no crime committed which could result in a prison sentence. This is specifically because none of the emails were classified.
She bypassed the requirement to communicate with all her contacts through secure and auditable channels (things people accuse the Trump admin of now doing), including foreign diplomats, by giving them her private email, which was effectively an email server stored under her desk, in simple SMTP, not SMTPS, which means all hostile entities could hack into it. When caught, she deleted the 19,000 emails and wasn’t sued for destruction of evidence.
That “all” of your legal experts (all 100% of them) found that perfectly legal is non sequitur: As a Secretary of State, practically her whole life can be used as ransom to make her do things contrary to state interests; and as a Secretary of State, she’s even responsible for making her subordinates set up the security rules to make it physically impossible to do what she did, if not legally impossible. She should not only have known, but she should have set up the rules for others.
Sounds like 100% of your legal experts may have been accessory to a scheme. Maybe she abided by the letter of the law but not the spirit, maybe the law has a hole, maybe everyone is lying because they’re afraid saying she cheated would benefit Trump, maybe anything else.
I’m genuinely interested in understanding if the story was wrong; But I’m not interested in understanding whether your take on the low importance of just a few emails from just a basic secretary, “nah don’t worry it’s just emails with her friends, she can have a private life”. No she can’t?
Why in the world would she be generally obligated to provide her personal/private emails to the government or public? It seems bizarre to suggest otherwise.
Because she’s at a position where she can be blackmailed and is holding a lot of the US secrets. There is no privacy when you run for high public positions.
You're demanding a standard of radical transparency for government officials that isn't supported by the law and has never been applied before or since.
It seems to be based on a presumption of guilt, which is a pretty severe departure from common principles of law and justice.
If you're sincere, I suppose you've been demanding that current members of the executive in leadership positions make all their personal communications public too?
The laws around this all generally exempt personal communications. You're Presuming people guilty is also not grounded in law.
Assuming I drop all pretense of wanting elected official to be auditable by “We the People”,
They complain about government officials using Telegram or Signal to communicate. Do you agree that they argue on the same line as me, just opposite clan, dismissing their own faults and pointing at others like it’s never been done before?
> Sounds like locking her up for bypassing the governmental emails would have been a win, now.
This is getting stupid to bring up, but at least we've got a canonical long response to that with a proper legal analysis.
https://youtu.be/cw1tNTIEs-o
It seems like bad faith to be rabid about Clinton emails and silent about the use (and overwhelmingly sloppy use at that) of signal. Do you care about following security procedures or not?
It's also weird to see you seem to take so much pleasure in lashing out - how can you feel vindication thinking your opponents should have done something about emails but not have that same feeling now? How do you hold both views (and with such vitriol) at the same time?
The hypocrisy is why folks find it hard to take these complaints at face value since we show time and time again that they appear more "my team should win the game" than anything consistent and built on principles.
I'm struggling to not write more details here but generally I think the whataboutism and completely ignoring degree is absurd. I remember when the big complaints about Obama were wearing the wrong color suit, saluting with a coffee cup, and allowing a military strike on a us citizen actively working with Al queda. If you want to be convincing (you may not want this- if you just want to feel self righteous and vengeful then carry on) then I think a better path would be explaining why this current situation is a good thing (or at least the same level of bad as the things you hate).
> Do you care about following security procedures or not?
I care. Therefore she should have been jailed, and the world comes back to its correct order. Once she is, jail Trump all you want.
But it doesn’t work like that and you know it. It’s always “just do it to the opposite party” and close your eyes on your own.
After you jail Hillary:
- Repel Title IX. It’s an incorrect regulation.
- Revert the 2020 vote,
- Publish the stats about women in STEM and black criminality,
Then all is transparent and we can have a working democracy again. What I’m saying is: You didn’t do it, and now you have a dysfunctional democracy. But you have to suffer it through to understand the evil of manipulating the country, so that you’ll want to do it right the next time.
People need to understand how the pharmacology pipeline works.
The Federal government provides funds for research. That research finds novel compounds and new treatments. The product of that resaerch then gets transferred to private companies who commercialize it and then make massive profits from it.
Generally speaking, drug companies don't research with one exception: patent extension. A given compound will be patented and then the patent owner will have a monopoly over that for a number of years, supposedly because there'd be no investment otherwise, but that patent will ultimately expire. Except... it doesn't really. It's why over a century later we're still dealing with insulin patents. "Patent extension" is the process where you make a small change to a molecule or a delivery system and then get a new patent, refusing to sell the old. And it can be hard for someone else to produce a generic for many reasons.
Now I have a lot of problems with this system:
1. Any form of patent extension should be illegal, basically;
2. The institutions who actually come up with this should share in the profits. After all, it's the government paying for it;
3. We give a monopoly to these companies in the US where it's illegal to import the exact same product from overseas, which leads to something costing $800 in the US and $5 in France.
But given this is the system we're stuck with, cutting off funding makes absolutely no sense. Why?
1. It's going to dramatically impact drug companies negatively in the future as their supply of new products dries up;
2. It's antoerh element of soft power where the US can use the power to produce certain medicines to influence other countries. Think about what happens if China becomes the source for the world's medicines (personally, i'd be a fan but the purveyors of this policy most definitely are not).
Government research has given us things like the Internet and mRNA vaccines. This is so unbelievably shortsighted.
And why are they doing it? Well, the party of Free Speech is punishing institutions because some of their students made factually correct but mean statements about Israel.
1. The administration has absolutely no idea what they're doing. Don't be tempted to think this is part of some grand plan. Don't believe any narrative about how short-term pain was intentional. There's borderline or actual panic in the administration, going so far as to sideline Peter Navarro to get Trump to back down [1]; and
2. All of this is happening so the wealthiest 1000 people, who already pay almost no taxes, can pay slightly less in taxes. They've already started the rhetoric about tax cuts for average people based on the 2017 tax cuts for people below the top bracket expiring this year. The cut in the top bracket and the corporate tax rate cuts were permanent. So another likely temporary tax cut will be sold while giving away trillions to the wealthiest people on the planet.
>The administration has absolutely no idea what they're doing.
In general, I agree with your sentiment, but there are competent people in the administration. However, all of them are paralyzed because Trump can alter any plan or policy at a whim, and he insists being involved in everything. And you can see that in the interviews Bessent or even Lutnick give - where they hedge everything because they know it could change any minute. For example, there was no plan to set 145% tariffs on Chinese imports, Trump just did it out of nowhere on TruthSocial.
That's also true of foreign policy in general. Rubio and State Department have zero power at the moment. Neither the Russia-Ukraine peace plan, nor Iranian nuclear arms control, nor Gaza-Israel negotiations are going through the State Department.
>All of this is happening so the wealthiest 1000 people, who already pay almost no taxes, can pay slightly less in taxes.
I disagree with that. This all happening because Trump is incompetent but also arrogant and highly opinionated. I don't think there is a nefarious plan here. Trump probably really does think that you can replace income tax with tariff revenue.
interviews Bessent or even Lutnick give - where they hedge everything because they know it could change any minute
The problem with this is they quickly realised it's easier to BS and lie than to be honest and noncommittal. In the latter case they'd have to fess up at some point and say 'well no we didn't have a plan for that/see that coming/whatever' or admit that they simply don't know the answers to relevant questions. Instead they say one thing one day, and when Trump reverses the policy they come on TV a day or two later smirking and saying 'well this was always the plan'. Once their public statements are disconnected from consequences they realize that lying is a way to wield power and of course that quickly becomes intoxicating and addictive.
Right now it might seem to them like it's just some white lies for the greater good/to assuage public anxiety, but in my view that sort of behavior is a one-way street. I think they've already shredded whatever professional credibility they had, and when things get economically bad they'll be incapable of offering leadership or reassurance that would calm markets (in contrast to, say, Lewis Powell at the Federal Reserve). If the economic situation gets sufficiently bad, Trump will throw them to the wolves and hire in some new faces to buy time. We saw this in the first administration, every time he replaced someone the meda and Congress would grant them a honeymoon period and talk about how much better and calmer things were getting, even though this was based on desire rather than outcomes.
Trump is the culmination of the 50+ year Republican project, a project intentionally designed to transfer wealth from the poor to the rich. He's not an anomaly. He's the inevitable end product of decades of consistent insitutional destruction and corruption.
I agree that Trump is delusional about tafiffs but think abou tit: income tax is pretty much the only progressive tax left. There's serious momentum in the conservative movement to get rid of it for that reason: it's further wealth transfer to the ultra-wealthy.
It sounds like you're not seeing the bigger picture here: the wealthy view themselves as inherently better. In tech circles (including Elon and Thiel) transhumanism is popular.
What is transhumanism ultimately? it's eugenics. It's why these weirdos fill the world with their IVR fetishes, spreading their "superior" genes. It's co-opted the conservative movement, which itself is rooted in eugenics (ie white supremacy).
He isn't actually, if anything he is an empty suit that yells whatever the last guy in the room told him and that guy tends to be the most extreme dumbass on whatever topic it was.
So when you hear him yell about tarrifs, you are hearing him yell whatever peter navaro last told him (plus or minus trumps misunderstanding of the situation, see also trump screaming at the reporter yesterday about how the maryland guy in the el salvadorian prison has literal MS13 tattooed on his knuckles, where it's very clear that the picture he saw had those letters photoshopped onto the photo)
When you hear him yell about immigration/the border/racistbullshit, he's just yelling whatever stephen miller yelled at him.
He is just the avatar for whatever sychophant that is currently in his good graces (ie whoever bribed him or sucked his dick last (see also laura loomer))
For many goods a 145% tariff is a ban for all intents and purposes and no different to a 100% tariff or a 200% tariff. This is just more evidence (as if we needed it) that the administration has no idea what they're doing.
Certain goods are extremely high mark up. For example, clothing is typically 100-200% markup. So if you buy a $5 t-shirt and sell it for $15, the tariffed price is now ~$12. You may find retailers will sell that at $20, absorbing some of the cost on a temporary basis.
Also, many such retailers have already sought to diversify their supply chains (eg buying clothing from Vietnam and other places).
The "empty shelves" discourse is alarmist and honestly kind of annoying.
Almost all of the food on the shelves is locally produced or, in the very least, not produced in China. Some foods may disappear or become more expensive but there'll really be no disruption in food supply.
This will however affect markets dominated by Chinese goods, particularly clothing. Even here the effects will be somewhat mitigated by existing strategies to avoid China tariffs eg selling through Vietnam.
Certain businesses will be hit hard. And that's really the biggest problem: cascading effects leading to an inevitable recession. Already, truckers who ship goods from ports are sitting around idle. We've cut tens of thousands from the government. More layoffs are to come.
I both agree and have been worried that this is overly reductive.
As far as I can tell, literally nothing that I buy regularly is directly sourced from China. Or anywhere other than the US & neighboring countries. The vast majority of my groceries are locally sourced. And the vast majority of the rest come from expected regions, for instance San Marzano tomatoes from Italy. I do not regularly buy clothes, children's supplies, electronics, etc. Sure, I'll buy them once in a while but not with any regularity. My understanding is that the classic paper products famous from COVID shortages are made in the US.
So with that in mind what you say is 100% true, at least for me. But I'm not so sure. Who makes the containers that my local milk is put into? Who makes the cans that my canned goods are using? What meta-products are being consumed by the local industries, such as the ones making my TP? I have a feeling the answer is scarier than it'd seem on the surface. But I don't know.
Most fertilizer and fuel used in US agriculture is domestically produced. We do import some fertilizer from China. For fertilizers manufactured using natural gas as a feed stock, the US is well positioned to expand production because we have cheaper and more abundant supplies.
In other words, the threat model people should be worrying about isn't "bare shelves due to no goods from China to stock them" but rather "bare shelves because the entities who make the goods to stock them are missing critical components". And that's much harder for someone to predict what impact it'll have.
I imagine that my daily life is very skewed away from direct impact from a Chinese embargo relative to other US citizens. And even still, I'm pretty sure it's going to be a problem.
Daily life is very skewed away from understanding how everything works. Supply chains, power grids, the Internet, large-scale farming - these are all complete mysteries to most people. They see the results but they have no idea how the sausage is made. (Or shipped.)
It's one reason why this is happening at all. People not only don't know what makes a lightbulb turn on, they can't imagine the complexity of a power grid and how it's stabilised.
They don't have the first idea how a phone works, or how much science, engineering, and fundamental research went into making it work.
When they don't know any of this, they can't imagine any of it having a serious problem.
For your specific example though, I'm not so sure. As a counterexample, I buy my eggs direct from a local farm, not in a store. Neither the ease of availability nor the price of the eggs I buy have changed one iota over the last several months. And yet I see local friends posting pictures of empty egg shelves here and there on Facebook. My takeaway has been that the average person has no idea they can buy goods outside of a grocery store.
So back to your point, I buy most of my tomatoes direct from local farmers. Unless people start buying from *them* it is fine.
HOWEVER, if those local farmers can't get parts for their farm equipment or something like that, I'm just as screwed.
> My takeaway has been that the average person has no idea they can buy goods outside of a grocery store.
I’m sorry, but most people live in cities or towns with their only reasonable access to food being via stores. It is one of the wonderful things that civilization has produced and I’m here for it.
I haven't seen anyone saying that there's going to be no food. All reporting I've seen is that Walmart/Target shelves are going to be empty because of the glut of consumer goods they sell that are manufacture in China, ie, clothing, toys, electronics, etc.
Consider that even for food that is produced locally, there are inputs (tin for cans, electricity, etc.) that is being negatively impacted by the tariff circus, unnecessarily.
I buy dish soap on a regular basis. Not sure where the soap is produced, but I would guess the bottles might be from China -- a lot of packaging is. Sure, there are some US companies that make bottles, but can they expand their capacity? Probably not quickly.
I think there will be a lot of unintuitive effects from things like packaging.
Everyone here is worried about it from the American side, but China has motivation to settle this too, so they can continue to sell their enshitified plastic crap. It's not like most other wealthy countries want it, at least not any more than they are already buying.
Cut the bull. Generally you get what you pay for. China does both. You can get crap for a penny but you can also get high quality stuff which costs more. Both made in China.
First, it has a command economy. It's much more equipped to handle this in keeping factories afloat and people employed and housed.
Second, the US is ~15% of China's exports and a lot of those exports will continue even with tariffs. Some by diversified supply chains (eg "laundering" Chinese made goods through Vietnam) or the Chinese goods are so low cost that the tariffs will be paid (eg a milk carton represents a small percentage of the cost of a carton of milk).
Third, the US will feel the inflationary effects. China will not.
Fourth, if China needs to raise funds they can and will sell US treasuries, spiking yields, hitting the ability of the US to issue further debt as well as borrowing costs for homeowners and businesses.
Lastly, the rest of the world is on China's side. This whole tariff fiasco may be the largest self-own in American history. Additionally, it's undoing generations of American soft power globally.
My only two thoughts there are, China needs to fill that 15% gap, and I don’t know where they’ll do it. China also doesn’t want to sell too many treasuries least it upset their own financial stability in terms of purchasing power for their own citizens.
The economic outlook in China isn’t great right now. The US and China are playing a game a chicken, not sure who blinks first.
That 15% is not going to go away overnight. Some of won’t be sent to the US will be sold to the rest of the world instead. Possibly at a discount, so it is not ideal from the point of view of the Chinese government, but they are still well equipped to weather a temporary dip of 7% in their foreign trade.
Nobody said that it would be painless for China. Just that
1- it will be less painful for China than the US
2- China is more resilient against this particular kind of stress because they have a command economy and have more control on the population.
If the US blinks and caves, it does not matter whether China got a scratch, it’s still going to win the war. And Covid taught us that something would need to be quite dire for China to blink.
Also, it got lost in the noise, but right now there is still a blanket 10% tariff on anything that enters the US, and presumably these 10% can turn to much more when Trumps feels like it. It’s not the US against China, it’s the US against the world.
China holds only a few percent of outstanding US treasuries. Selling those won't spike yields, nor will it be a sufficient revenue source for them to wait out a prolonged trade war.
No. The parent was saying that only a portion of China’s 15% would fall off entirely. Meanwhile we have reports that the ports have become ghost towns due to tariffs. Doesn’t that then imply that China’s exports to the US have effectively halted?
China is selling goods to the US because it's good for China. China not selling goods to the US is, therefore, bad for China. China doesn't care about how it affects the US but it does effect them negatively. They are "holding all the cards" except the one that says "The US must buy things from China" which is the one they care about.
> Second, the US is ~15% of China's exports and a lot of those exports will continue even with tariffs. Some by diversified supply chains (eg "laundering" Chinese made goods through Vietnam)
Sure. 15% of their economy either just disappears, gets dramatically more expensive (laundering goods cost money too) or they have to reduce the prices so they can sell their extra 15% of goods to the people that are already buying them.
Keep in mind that China is also only around 15% of US imports too so if 15% is negligible, it's negligible for the US too.
> or the Chinese goods are so low cost that the tariffs will be paid (eg a milk carton represents a small percentage of the cost of a carton of milk).
The tariffs are a percent. Just because the cost of a single item is low doesn't mean the cost of the tariffs paid by the company is going to be low. Low cost goods are profitable because they sell in bulk. It's going to hit their bottom line in the same way it hits everyone else. You've obviously not given much thought into that point.
> Third, the US will feel the inflationary effects. China will not.
China isn't immune to 15% of their economy disappearing. Selling of an extra 15% of the goods in your warehouse at discounted rates while you scale down your factory production 15% is bad.
> Fourth, if China needs to raise funds they can and will sell US treasuries, spiking yields, hitting the ability of the US to issue further debt as well as borrowing costs for homeowners and businesses.
That's a good way to permanently remove 15% of their economy.
> Lastly, the rest of the world is on China's side. This whole tariff fiasco may be the largest self-own in American history. Additionally, it's undoing generations of American soft power globally.
That's not relevant at all. What's relevant is who the American people are on the side of. I'm not saying Trump has unanimous support or anything but he doesn't care at all what Switzerland thinks of tariffs on the Chinese.
Your #4 doomsday scenario is bad for the EU given the role that the US plays in their defense and as trade partners. WTO countries will be urging both sides to come to an agreement.
I see commentary like this frequently in the west, then I read financial analysis like this:
> Goldman Sachs in its latest China forecast, reports China's GDP is about to fall off a cliff: the bank now expects China's Q2 GDP growth to crater to just 0.8% QoQ from 4.9% in Q1.
> China is selling goods to the US because it's good for China. China not selling goods to the US is, therefore, bad for China
In the case of a hypothetical trade embargo or at least punitive tariffs, who would you rather be: the buyer of insulin or the seller of insulin? The seller can be propped up by the government or loans. The buyer? Well, they need insulin. There's a natural imbalance here.
Us not buying Chinese goods has a ton of downstream effects like what if you need parts to repair trucks and those trucks are then out of service so can't haul stuff around?
> China isn't immune to 15% of their economy disappearing.
It won't disappear. It'll diminish. It'll get diverted through third countries. In some cases, the tariffs will be paid. China will have a reduction in exports. The US will have increased inflation, shortages and supply chain issues.
> That's not relevant at all.
It's 100% relevant. Everything is sentiment based. If the world is on China's side, then they'll look the other way when China buys oil and gas from sanctioned countries, for example.
I'd be fine if cheaply made plastic junk is gone from the shelves. Where are the environmentalists now? The ones who warned us to stop overconsuming? Their tribe conflicts with Trump so their refrain goes mute until a more convenient time.
If new cars become much more expensive, used cars will become much more expensive. This isn't even a theoretical idea. The exact thing happend in 2020-2021 when you couldn't buy a new car.
This is what many don't understand about tariffs in general: you put tariffs on foreign goods and anything exempt will simply raise their prices to match.
If you're on the younger side, you may not remember how we've been here before. In the 1990s there was a glut of satellite companies (eg Teledesic, Iridium, Worldsat) [1].
SpaceX's strategy here is quite brilliant: they induce demand for launches and prove Falon 9 reuse while deploying satellites at relatively low cost (because of the reuse) at a price level absolutely nobody can compete with. They're doing well over 100 launches a year at this point.
Bezos seems to want to repeat this with Amazon, Blue Origin and Kuiper but I think they've lost before they've even started. Blue Origin simply doesn't have the orbital launch capability that SpaceX does and certainly not anywhere near the price point. BO has underdelivered on BE-$ and New Glenn. SpaceX did too to be fair but that's in the past (ignoring Starship).
Starlink is a relatively simple design: it's surface-to-surface through a single hop. I think satellite Internet is likely already a saturated market given you're competing with 4G/5G wireless and fixed line. There's only so many remote locations and people on the move to sell to.
What Blue Origin really has going for them is effectively infinite funding for as long as Bezos wants to keep at it. They've already slogged through most of New Glenn's development with hardly any revenue, and that's after skipping over small lift completely.
As for the market being saturated, I think Blue Origin could plenty of business in the "anybody but SpaceX" market. They're up against Rocket Lab (who is still stuck in small lift.)
>What Blue Origin really has going for them is effectively infinite funding for as long as Bezos wants to keep at it.
Infinite capital guarantees absolutely nothing. Bezos has been among the world's wealthiest men for far, far longer than Musk's entry into that group, and Blue Origin was founded before SpaceX. Let me paraphrase an excellent comment I saw on Reddit, in response to one of the usual lies about how the only reason SpaceX is a decade ahead of the rest of the world is that it got zillions in subsidies from the US government:
>If large amounts of funding is the only thing required to succeed, Blue Origin would now have a nuclear-powered spacecraft orbiting Pluto.
But Starlink needs to get the traffic to/from the ground eventually, right? And those ground links having their capacity. So I think it is nice to have laser crosslinks, but they will not eliminate the base stations capacity requirements.
I'm a little surprised that Duolingo is the model someone wants to emulate because, at least for me, it just doesn't work.
Now I'm someone who has always been good at taking tests. It's a skill you can develop. At one point I got 85% in a French test knowing absolutely zero French. There are tricks such as:
- Use of punctuation can give the answer away (eg a trailing "!")
- Other questions can unintentionally give you the answer to a different question (eg it might conjugate a verb you're being asked about elsewhere);
- Questions end up being correlated. So a given question might have 2 plausible answers and that answer will also answer another question. So you can answer if one way in one and another way in the other and you're pretty likely to get one of them right;
- Multiple choice tests tend to evenly distribute answers so if you have 29 Cs in a 4-answer 100 question test already, it's less likely that a further C guess is right. Yes, people can intentionally re-weight the answers to avoid this but almost nobody does.
- For other topics like math you often get marks for each step. Depending on how that marking key works, you can often get marks writing essentially nonsense that leads to a completely wrong answer;
- When in doubt, guess something. This goes for multiple choice and written answers. Don't spend any time on it. Tests that deduct points for wrong answers are rare and you know about it beforehand.
- Apply probability. So in a 100 question 4 answer multiple choice test where you have a 50% chance of knowing the answer, you should really get 75-80% on that test just from eliminating obviously wrong answers and simply guessing the rest.
My point is that you can't really turn this off once you learn it so I can pretty much guess my way through any Duolingo questions and that means I don't learn anything.
Even when you have to assemble words into a sentence, the answer is pretty obvious and it can get even more obvious in other languages (eg nouns in German are capitalized).
I think I did Spanish Duolingo almost every day for a year and remember none of it.
I honestly don't understand how private equity makes money at all. The playbook is:
1. Borrow a ton of money and buy a company on an LBO
2. Load up the company with debt, often complicated, exploding debt, to repay the original loan. Possibly sell off assets like real estate to pay off the original loan; and
3. Here's the kicker: sell off the company for a profit.
But we've seen time and time again that PE is a death sentence. Toys R Us, Red Lobster, numerous others. The company seemingly always explodes under the debt after the original snake oil salesman have cashed out. But my point is: who keeps falling for this and buying a PE hollowed out husk?
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