“You wanna know what the mother of all bubbles was? Us. The human race.”
That’s Gordon Gekko in the distinctly-mediocre Wall Street: Money Never Sleeps.
This weekend brought a rush of stories about a “bubble” that may or may not be re-inflating in Silicon Valley. The New York Times kicked it off, venture capitalist Fred Wilson (who is featured prominently in the story) quickly responded, and then Newsweek weighed in just to make sure the “Bubble 2.0″ moniker was secure. Uh oh, right? Not so fast.
One giant nugget of information in the NYT piece (co-written by TechCrunch alum Evelyn Rusli) is a bit buried:
For starters, this is not a stock market bubble. None of the companies are publicly traded.
In other words, if this “bubble” were to pop, it wouldn’t be the mothers and fathers of the world hoping to put their children through school who would be getting screwed. It would be the private investors. It would be a handful of (mostly) rich people who would be out of some of their money.
I suppose the employees of the collapsing startups could also be screwed somewhat. But they’d undoubtedly find work again quickly. And the founders would start new companies. Just like after the first bubble.
Business Insider has a good rundown of the actually public tech companies — you know, the kind mom and pop can and do actually invest in. The consensus there? Pretty wonderful, actually. Not over-the-top outrageous, just very solid for the most part.
Now, that doesn’t mean a “Bubble 2.0″ couldn’t pop and adversely affect the overall ecosystem. In fact, I’m sure it would to some extent, mainly because less money coming in would mean less innovation across the board. But it wouldn’t cause everything to collapse.
We all just lived through a very real bubble. The housing bubble. The results of it popping almost completely brought down not only our own economy, but much of the world’s economy as well. Real people lost their life savings. People went to jail. More people should have been locked up forever. It’s almost insulting to mention this supposed new web bubble in the same breath as that.
Again, this “Bubble 2.0″, if it does exist, is mainly just troublesome for investors. Smaller angel investors, in particular, are getting squeezed out of deals because early stage valuations are getting ridiculously high in some cases.
Undoubtedly it’s true that some of those startups should not be accepting so much money at such valuations, but that’s on them. If they fail, it will be a lesson to other startups. Maybe the motto is: go big or go home (at least in the early stage).
Another underlying current here is that many private investors aren’t comfortable with the state of the startup ecosystem. And yet many of them continue to do deals that they may not be comfortable with. Again, that’s on them. They’re all doing due diligence. If they don’t think a deal is worth it, they obviously shouldn’t do it. But some don’t seem to be able to turn down their name being attached to a high-profile investment — even if projections have it panning out to be a 2x exit. (The horror!)
Maybe some of them would actually be more comfortable investing in what Wilson calls “The Mess“. That is, startups in their awkward years. They’re neither new and sexy nor mature and money-making. Not surprisingly, no one seems to want to invest in those, besides current investors. But maybe those are where some deals are to be found.
In the press, there are two kinds of sexy stories to write: over-exuberance and death. We just got done with a week’s worth of over–exuberance surrounding the Google/Groupon deal. Holy shit, $6 billion dollars for a company that has only really been at it for a little over a year? That’s awesome! Let the good times roll.
The deal ultimately fell apart and in came the death stories. There needs to be balance in the world, after all. We know this just as well as anyone. The $6 billion Groupon deal made web investing as hot as the sun for a few days. And now it’s a bubble.
But wait. “Bubble 2.0″ has existed before. Here it is in 2005 — with Wilson worrying about some of the same things he’s still worried about. And here it is again in 2007 — with John Dvorak worrying that social media among other things would pop the bubble. And wasn’t it for sure a bubble later that year when Microsoft invested in Facebook at a $15 billion valuation? I was sure I heard that over and over and over again. Turns out, that was a pretty damn awesome investment, strategic or not.
There are dozens of other examples as well.
So maybe this is actually “Bubble 4.0″ or “Bubble 5.0″. Or maybe it’s not a big bubble at all. After all, if it pops and gum gets over only a few faces, will anyone do anything other than point and laugh, then go on with their lives?
[image: 20th Century Fox]
Deficit Commission Co-Chair Erskine Bowles Falsely Claims Social Security ‘Runs Out Of Money In 2037′
Last week, Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit reduction commission, released a report outlining their recommendations for reducing the federal budget deficit. One of their most contentious proposals is to gradually raise the retirement age to 69, a move the co-chairs claim is meant to maintain the system’s solvency.
This morning, Simpson and Bowles appeared on MSNBC’s Morning Joe to discuss their proposals. At one point, Simpson explained his view that balancing the budget would require going “to where the meat is. And the meat is health care, Medicare, Medicaid, Social Security.” Host Joe Scarborough then complained that while AFL-CIO president Richard Trumka attacked the proposals for cutting Social Security, Scarborough said he doesn’t think the co-chairs went far enough (co-host Mika Brzezinski agreed). Bowles then defended their proposal, saying, “What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law”:
SIMPSON: You’ve gotta go where the meat is. And the meat is health care, Medicare, Medicaid, Social Security. Not balancing the books on the backs of poor old staggering seniors to make the damn thing solvent for 75 years.
SCARBOROUGH: We were stunned, Erskine, by some of the things that were said after the commission report came out, saying, “Seniors are going to be thrown out on the street!” I looked at the numbers to be really honest with you, and I didn’t think you moved fast enough on Social Security and Medicare. We calculated that I guess, it was Trumka, who I like very much, Trumka said that this throws old people out. My two year old son Jack will get Social Security at 69. People in their 20′s and 30′s will be just fine.
BRZEZINSKI: In fact, I think you could’ve gone further.
SIMPSON: I know Rich very well. He’s a good egg. He has to say for what he has to say for his membership. But he knows I’m right.
BOWLES: What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law.
Watch it:
Social Security is currently projected to be fully solvent until the year 2037. After that, it is expected to be able to pay out 75 percent of benefits until 2084, which basically equals full benefits, once inflation is accounted for. There is no threat of the program running out of money any time soon — certainly not in 2037. That does not mean that there aren’t positive and progressive changes that could possibly be made to the system.
However, the hike in retirement age that the MSNBC co-hosts and deficit commission co-chairmen are praising would be a very punitive way to ensure further solvency. As a Government Accountability Office report recently obtained by the AP found, “Raising the retirement age for Social Security would disproportionately hurt low-income workers and minorities, and increase disability claims by older people unable to work.”
Scaborough may not be entirely wrong to shrug off the possibility of his son Jack retiring at 69, if his son ends up being in the same socioeconomic class as him. Almost all of the gains in life expectancy over the past few decades have been among upper income earners. If current trends continue, middle and lower class Americans will see very little gain in life expectancy by the time the co-chairs plan to hike the retirement age. And “nearly half of workers over the age of 58 work at jobs that are either physically demanding or involve difficult work conditions,” meaning that if those trends continue, blue-collar workers will be hurt particularly hard by raising the retirement age.
Unfortunately, most Americans are not highly-paid TV hosts like Brzezinski and Scarborough.
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Desayuno Lujiazui: <b> Noticias </ b> & puntos de vista sobre las existencias de China (06 de diciembre <b> ...</ b> Inversores y comerciantes en el principal distrito financiero de China se trata de lo siguiente antes de el inicio de hoy el comercio: Con las expectativas sobre la inflación y la política monetaria cada vez más claro, los inversores están tomando las señales desde el extranjero ...
Apple ahora vende paquetes de tarjetas de regalo IPAD | iLounge <b> Noticias </ b> iLounge noticias discutir el Apple . IPAD vendiendo paquetes de regalo Tarjeta Más noticias de Apple iPod de los principales independientes, el iPhone, y el sitio IPAD
<b> Noticias </ b> Aviso:. gran crecimiento para los anuncios de Internet a través de 2014: Tecnología <b> Noticias < / «b> eMarketer, una firma de investigación de Nueva York, estima el gasto en anuncios de Internet en EE.UU., crecerá un 13,9 por ciento a 25,8 mil millones dólares para todo el año se espera un aumento del 10,5 por ciento en el gasto de EE.UU. de publicidad en línea en 2011, ....
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
“You wanna know what the mother of all bubbles was? Us. The human race.”
That’s Gordon Gekko in the distinctly-mediocre Wall Street: Money Never Sleeps.
This weekend brought a rush of stories about a “bubble” that may or may not be re-inflating in Silicon Valley. The New York Times kicked it off, venture capitalist Fred Wilson (who is featured prominently in the story) quickly responded, and then Newsweek weighed in just to make sure the “Bubble 2.0″ moniker was secure. Uh oh, right? Not so fast.
One giant nugget of information in the NYT piece (co-written by TechCrunch alum Evelyn Rusli) is a bit buried:
For starters, this is not a stock market bubble. None of the companies are publicly traded.
In other words, if this “bubble” were to pop, it wouldn’t be the mothers and fathers of the world hoping to put their children through school who would be getting screwed. It would be the private investors. It would be a handful of (mostly) rich people who would be out of some of their money.
I suppose the employees of the collapsing startups could also be screwed somewhat. But they’d undoubtedly find work again quickly. And the founders would start new companies. Just like after the first bubble.
Business Insider has a good rundown of the actually public tech companies — you know, the kind mom and pop can and do actually invest in. The consensus there? Pretty wonderful, actually. Not over-the-top outrageous, just very solid for the most part.
Now, that doesn’t mean a “Bubble 2.0″ couldn’t pop and adversely affect the overall ecosystem. In fact, I’m sure it would to some extent, mainly because less money coming in would mean less innovation across the board. But it wouldn’t cause everything to collapse.
We all just lived through a very real bubble. The housing bubble. The results of it popping almost completely brought down not only our own economy, but much of the world’s economy as well. Real people lost their life savings. People went to jail. More people should have been locked up forever. It’s almost insulting to mention this supposed new web bubble in the same breath as that.
Again, this “Bubble 2.0″, if it does exist, is mainly just troublesome for investors. Smaller angel investors, in particular, are getting squeezed out of deals because early stage valuations are getting ridiculously high in some cases.
Undoubtedly it’s true that some of those startups should not be accepting so much money at such valuations, but that’s on them. If they fail, it will be a lesson to other startups. Maybe the motto is: go big or go home (at least in the early stage).
Another underlying current here is that many private investors aren’t comfortable with the state of the startup ecosystem. And yet many of them continue to do deals that they may not be comfortable with. Again, that’s on them. They’re all doing due diligence. If they don’t think a deal is worth it, they obviously shouldn’t do it. But some don’t seem to be able to turn down their name being attached to a high-profile investment — even if projections have it panning out to be a 2x exit. (The horror!)
Maybe some of them would actually be more comfortable investing in what Wilson calls “The Mess“. That is, startups in their awkward years. They’re neither new and sexy nor mature and money-making. Not surprisingly, no one seems to want to invest in those, besides current investors. But maybe those are where some deals are to be found.
In the press, there are two kinds of sexy stories to write: over-exuberance and death. We just got done with a week’s worth of over–exuberance surrounding the Google/Groupon deal. Holy shit, $6 billion dollars for a company that has only really been at it for a little over a year? That’s awesome! Let the good times roll.
The deal ultimately fell apart and in came the death stories. There needs to be balance in the world, after all. We know this just as well as anyone. The $6 billion Groupon deal made web investing as hot as the sun for a few days. And now it’s a bubble.
But wait. “Bubble 2.0″ has existed before. Here it is in 2005 — with Wilson worrying about some of the same things he’s still worried about. And here it is again in 2007 — with John Dvorak worrying that social media among other things would pop the bubble. And wasn’t it for sure a bubble later that year when Microsoft invested in Facebook at a $15 billion valuation? I was sure I heard that over and over and over again. Turns out, that was a pretty damn awesome investment, strategic or not.
There are dozens of other examples as well.
So maybe this is actually “Bubble 4.0″ or “Bubble 5.0″. Or maybe it’s not a big bubble at all. After all, if it pops and gum gets over only a few faces, will anyone do anything other than point and laugh, then go on with their lives?
[image: 20th Century Fox]
Deficit Commission Co-Chair Erskine Bowles Falsely Claims Social Security ‘Runs Out Of Money In 2037′
Last week, Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit reduction commission, released a report outlining their recommendations for reducing the federal budget deficit. One of their most contentious proposals is to gradually raise the retirement age to 69, a move the co-chairs claim is meant to maintain the system’s solvency.
This morning, Simpson and Bowles appeared on MSNBC’s Morning Joe to discuss their proposals. At one point, Simpson explained his view that balancing the budget would require going “to where the meat is. And the meat is health care, Medicare, Medicaid, Social Security.” Host Joe Scarborough then complained that while AFL-CIO president Richard Trumka attacked the proposals for cutting Social Security, Scarborough said he doesn’t think the co-chairs went far enough (co-host Mika Brzezinski agreed). Bowles then defended their proposal, saying, “What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law”:
SIMPSON: You’ve gotta go where the meat is. And the meat is health care, Medicare, Medicaid, Social Security. Not balancing the books on the backs of poor old staggering seniors to make the damn thing solvent for 75 years.
SCARBOROUGH: We were stunned, Erskine, by some of the things that were said after the commission report came out, saying, “Seniors are going to be thrown out on the street!” I looked at the numbers to be really honest with you, and I didn’t think you moved fast enough on Social Security and Medicare. We calculated that I guess, it was Trumka, who I like very much, Trumka said that this throws old people out. My two year old son Jack will get Social Security at 69. People in their 20′s and 30′s will be just fine.
BRZEZINSKI: In fact, I think you could’ve gone further.
SIMPSON: I know Rich very well. He’s a good egg. He has to say for what he has to say for his membership. But he knows I’m right.
BOWLES: What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law.
Watch it:
Social Security is currently projected to be fully solvent until the year 2037. After that, it is expected to be able to pay out 75 percent of benefits until 2084, which basically equals full benefits, once inflation is accounted for. There is no threat of the program running out of money any time soon — certainly not in 2037. That does not mean that there aren’t positive and progressive changes that could possibly be made to the system.
However, the hike in retirement age that the MSNBC co-hosts and deficit commission co-chairmen are praising would be a very punitive way to ensure further solvency. As a Government Accountability Office report recently obtained by the AP found, “Raising the retirement age for Social Security would disproportionately hurt low-income workers and minorities, and increase disability claims by older people unable to work.”
Scaborough may not be entirely wrong to shrug off the possibility of his son Jack retiring at 69, if his son ends up being in the same socioeconomic class as him. Almost all of the gains in life expectancy over the past few decades have been among upper income earners. If current trends continue, middle and lower class Americans will see very little gain in life expectancy by the time the co-chairs plan to hike the retirement age. And “nearly half of workers over the age of 58 work at jobs that are either physically demanding or involve difficult work conditions,” meaning that if those trends continue, blue-collar workers will be hurt particularly hard by raising the retirement age.
Unfortunately, most Americans are not highly-paid TV hosts like Brzezinski and Scarborough.
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
Lujiazui Breakfast: <b>News</b> & Views About China Stocks (Dec. 6 <b>...</b>
Investors and traders in China's main financial district are talking about the following before the start of trade today: With expectations about inflation and monetary policy becoming clearer, investors are taking cues from overseas ...
Apple now selling iPad Gift Card packages | iLounge <b>News</b>
iLounge news discussing the Apple now selling iPad Gift Card packages. Find more Apple news from leading independent iPod, iPhone, and iPad site.
<b>News</b> Alert: Big Growth for Internet Ads Through 2014: Tech <b>News</b> «
eMarketer, a New York-based research firm estimates spending on US internet advertisements, will grow 13.9 percent to $25.8 billion for the full year. It expects a 10.5 percent increase in US online ad spending in 2011, ...
bench craft company rip off
“You wanna know what the mother of all bubbles was? Us. The human race.”
That’s Gordon Gekko in the distinctly-mediocre Wall Street: Money Never Sleeps.
This weekend brought a rush of stories about a “bubble” that may or may not be re-inflating in Silicon Valley. The New York Times kicked it off, venture capitalist Fred Wilson (who is featured prominently in the story) quickly responded, and then Newsweek weighed in just to make sure the “Bubble 2.0″ moniker was secure. Uh oh, right? Not so fast.
One giant nugget of information in the NYT piece (co-written by TechCrunch alum Evelyn Rusli) is a bit buried:
For starters, this is not a stock market bubble. None of the companies are publicly traded.
In other words, if this “bubble” were to pop, it wouldn’t be the mothers and fathers of the world hoping to put their children through school who would be getting screwed. It would be the private investors. It would be a handful of (mostly) rich people who would be out of some of their money.
I suppose the employees of the collapsing startups could also be screwed somewhat. But they’d undoubtedly find work again quickly. And the founders would start new companies. Just like after the first bubble.
Business Insider has a good rundown of the actually public tech companies — you know, the kind mom and pop can and do actually invest in. The consensus there? Pretty wonderful, actually. Not over-the-top outrageous, just very solid for the most part.
Now, that doesn’t mean a “Bubble 2.0″ couldn’t pop and adversely affect the overall ecosystem. In fact, I’m sure it would to some extent, mainly because less money coming in would mean less innovation across the board. But it wouldn’t cause everything to collapse.
We all just lived through a very real bubble. The housing bubble. The results of it popping almost completely brought down not only our own economy, but much of the world’s economy as well. Real people lost their life savings. People went to jail. More people should have been locked up forever. It’s almost insulting to mention this supposed new web bubble in the same breath as that.
Again, this “Bubble 2.0″, if it does exist, is mainly just troublesome for investors. Smaller angel investors, in particular, are getting squeezed out of deals because early stage valuations are getting ridiculously high in some cases.
Undoubtedly it’s true that some of those startups should not be accepting so much money at such valuations, but that’s on them. If they fail, it will be a lesson to other startups. Maybe the motto is: go big or go home (at least in the early stage).
Another underlying current here is that many private investors aren’t comfortable with the state of the startup ecosystem. And yet many of them continue to do deals that they may not be comfortable with. Again, that’s on them. They’re all doing due diligence. If they don’t think a deal is worth it, they obviously shouldn’t do it. But some don’t seem to be able to turn down their name being attached to a high-profile investment — even if projections have it panning out to be a 2x exit. (The horror!)
Maybe some of them would actually be more comfortable investing in what Wilson calls “The Mess“. That is, startups in their awkward years. They’re neither new and sexy nor mature and money-making. Not surprisingly, no one seems to want to invest in those, besides current investors. But maybe those are where some deals are to be found.
In the press, there are two kinds of sexy stories to write: over-exuberance and death. We just got done with a week’s worth of over–exuberance surrounding the Google/Groupon deal. Holy shit, $6 billion dollars for a company that has only really been at it for a little over a year? That’s awesome! Let the good times roll.
The deal ultimately fell apart and in came the death stories. There needs to be balance in the world, after all. We know this just as well as anyone. The $6 billion Groupon deal made web investing as hot as the sun for a few days. And now it’s a bubble.
But wait. “Bubble 2.0″ has existed before. Here it is in 2005 — with Wilson worrying about some of the same things he’s still worried about. And here it is again in 2007 — with John Dvorak worrying that social media among other things would pop the bubble. And wasn’t it for sure a bubble later that year when Microsoft invested in Facebook at a $15 billion valuation? I was sure I heard that over and over and over again. Turns out, that was a pretty damn awesome investment, strategic or not.
There are dozens of other examples as well.
So maybe this is actually “Bubble 4.0″ or “Bubble 5.0″. Or maybe it’s not a big bubble at all. After all, if it pops and gum gets over only a few faces, will anyone do anything other than point and laugh, then go on with their lives?
[image: 20th Century Fox]
Deficit Commission Co-Chair Erskine Bowles Falsely Claims Social Security ‘Runs Out Of Money In 2037′
Last week, Alan Simpson and Erskine Bowles, the co-chairs of President Obama’s deficit reduction commission, released a report outlining their recommendations for reducing the federal budget deficit. One of their most contentious proposals is to gradually raise the retirement age to 69, a move the co-chairs claim is meant to maintain the system’s solvency.
This morning, Simpson and Bowles appeared on MSNBC’s Morning Joe to discuss their proposals. At one point, Simpson explained his view that balancing the budget would require going “to where the meat is. And the meat is health care, Medicare, Medicaid, Social Security.” Host Joe Scarborough then complained that while AFL-CIO president Richard Trumka attacked the proposals for cutting Social Security, Scarborough said he doesn’t think the co-chairs went far enough (co-host Mika Brzezinski agreed). Bowles then defended their proposal, saying, “What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law”:
SIMPSON: You’ve gotta go where the meat is. And the meat is health care, Medicare, Medicaid, Social Security. Not balancing the books on the backs of poor old staggering seniors to make the damn thing solvent for 75 years.
SCARBOROUGH: We were stunned, Erskine, by some of the things that were said after the commission report came out, saying, “Seniors are going to be thrown out on the street!” I looked at the numbers to be really honest with you, and I didn’t think you moved fast enough on Social Security and Medicare. We calculated that I guess, it was Trumka, who I like very much, Trumka said that this throws old people out. My two year old son Jack will get Social Security at 69. People in their 20′s and 30′s will be just fine.
BRZEZINSKI: In fact, I think you could’ve gone further.
SIMPSON: I know Rich very well. He’s a good egg. He has to say for what he has to say for his membership. But he knows I’m right.
BOWLES: What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law.
Watch it:
Social Security is currently projected to be fully solvent until the year 2037. After that, it is expected to be able to pay out 75 percent of benefits until 2084, which basically equals full benefits, once inflation is accounted for. There is no threat of the program running out of money any time soon — certainly not in 2037. That does not mean that there aren’t positive and progressive changes that could possibly be made to the system.
However, the hike in retirement age that the MSNBC co-hosts and deficit commission co-chairmen are praising would be a very punitive way to ensure further solvency. As a Government Accountability Office report recently obtained by the AP found, “Raising the retirement age for Social Security would disproportionately hurt low-income workers and minorities, and increase disability claims by older people unable to work.”
Scaborough may not be entirely wrong to shrug off the possibility of his son Jack retiring at 69, if his son ends up being in the same socioeconomic class as him. Almost all of the gains in life expectancy over the past few decades have been among upper income earners. If current trends continue, middle and lower class Americans will see very little gain in life expectancy by the time the co-chairs plan to hike the retirement age. And “nearly half of workers over the age of 58 work at jobs that are either physically demanding or involve difficult work conditions,” meaning that if those trends continue, blue-collar workers will be hurt particularly hard by raising the retirement age.
Unfortunately, most Americans are not highly-paid TV hosts like Brzezinski and Scarborough.
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