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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 10:34 PM

    @mcc @mmcknett @vathpela @jcoglan now, VC has run out of places to deploy, "risk/reward" isn't a fixed ratio where you can get higher and higher EV by giving your money to larger and larger numbers of progressively more deranged scammers, it's a factor of the underlying technology and economic environment (hello, ZIRPs). they're literally incinerating their wealth on all these doomed datacenter projects. now, they have a LOT to incinerate; it will take a while. but there won't be much left

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Replies

  • mccmcc@mastodon.social
    Nov 4, 2026, 10:46 PM

    @glyph Maybe… I do think the demand for high-return investments will continue to exist and someone will try to build supply for that demand even if they have to resort to scams and hoaxes to do so. Maybe *tech* will no longer be the "9 investments fail, one makes back 20x investment" area and maybe that money will go chasing returns somewhere *else*, somewhere they believe the 20x investment can still be had. The possibility I really dislike is that the area they settle on will be weapons

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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 10:51 PM

    @mcc the *general* idea of a high risk/reward business venture is not totally crazy. I really don't want to veer into the idea that capital markets are a morally valorous technology, that would be like saying we should shove random stuff into a blast furnace because blast furnaces are cool, but there *is* a non-nightmare version of this, where this sort of investment goes towards creative projects. You could argue that movie studios and haute cuisine restaurants look like this.

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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 10:52 PM

    @mcc weapons can be extremely profitable but there's a real ceiling on growth; if you're looking for big subsidies, weapons and agribusiness are close to their ceilings already. weapons are probably going to see a good few years in the US due to the flagrant irresponsibility with stockpiles in Iran, but that's not the same as "growth"

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  • mccmcc@mastodon.social
    Nov 4, 2026, 11:00 PM

    @glyph Ah well so I think, in this conversation, the main thing I've been aiming for is the risks of "demand creating supply". Investment dollars chase something that doesn't exist, so that *something* is faked or manufactured.

    In the context of weapons, this idea becomes very sinister. There is a ceiling on growth for weapons. But that ceiling can be moved, if someone can convince political leaders to do certain things. Eisenhower warned about this

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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 11:07 PM

    @mcc that is definitely a risk. the bad news is that it is a structural feature of all political systems (Mao did this, as did Stalin; it's not particularly a "capitalism" thing). the other bad news is that we have a cohort of like 9 psychopaths who can do this more or less independently right now.

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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 11:08 PM

    @mcc the good news is that those psychopaths' power is much more precarious than it seems, and quantitatively they've lost about 20% of it in the last 2 days. qualitatively, probably more. and the more good news is that _structurally_ the AI bubble specifically is going to be disproportionately routing the high-risk/high-reward financial structures. it's going to hit everyone but it's going to hit VC *super* hard because all their bets will fail correlated

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  • 01d5501d55@mastodon.social
    Nov 4, 2026, 11:22 PM

    @mcc It is one thing to try to move the ceiling. It's another to plan around the ceiling being moved at a continuously increasing rate. Another source of difficulty: The "serve predatory business" party is also the "fanatical opposition to increased taxes" party.

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  • mccmcc@mastodon.social
    Nov 4, 2026, 10:55 PM

    @glyph so i think the problem is, gambling hacks human decisionmaking. as long as high risk high reward exists, there will be (1) people who take that option when they really shouldn't and (2) people who are looking for ways to repackage it as low risk high reward. Somewhere there's a "firm" or a "portfolio manager" who promises stable 8% returns where 4% is what a reasonable person would expect (made those numbers up) and of course customers go with him, and he's really just laundering gambling

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  • mccmcc@mastodon.social
    Nov 4, 2026, 10:59 PM

    @glyph i think you can build a less pathological investment environment than we've been living within but i don't know if you can get rid of the human tendency to create, and fall for, bernie madoffs

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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 11:16 PM

    @mcc if all we had to worry about were Bernie Madoffs we'd be in reasonably good shape. SBF did some damage, but he's in prison functionally forever, where he should be. the problem is that we have a surfeit of Richard Fulds as well. Rational actors doing allowable things within the rules, never quite doing fraud, but, you know. Are you really "not doing fraud" if you're telling the risk officer to leave the room while you discuss your plans.

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  • Glyphglyph@mastodon.social
    Nov 4, 2026, 11:16 PM

    @mcc anyhow I have some ideas about how to organize financial markets and I should probably write them down

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  • mccmcc@mastodon.social
    Nov 4, 2026, 11:30 PM

    @glyph Bernie Madoff to Elizabeth Holmes to Sam Altman is a smooth continuum

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  • CMPRRSN RTFCTJoshuaACNewman@xeno.glyphpress.com
    Nov 4, 2026, 11:03 PM

    @glyph @mcc
    Movie studios have definitely stopped being like this.

    And this is possible. We should o everything in our priority to make it possible for the culture to be generated by people whose abilities generate culture.

    But also, I’m not expecting it to happen. For one thing, that would be a huge resource flow toward Black Americans, and we know how America feels about that.

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  • mccmcc@mastodon.social
    Nov 4, 2026, 11:31 PM

    @JoshuaACNewman @glyph Movie studios may have stopped being the high-risk high-reward sites, but isn't that just because *streaming services* became the high-risk high-reward sites? Leading to the boom and then bust in the creative industries over the last ten years?

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  • CMPRRSN RTFCTJoshuaACNewman@xeno.glyphpress.com
    Nov 5, 2026, 12:51 AM

    @mcc @glyph
    It’s because movie studios became Chinese-owned by investors, and the Chinese market with its censorship requirements became the primary market.

    Streaming services are definitely a growth over profit market, yes, but I think they’re owned by the same forces.

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