No more depression posts, solve it instead

[schtog]

Do we have to litter the frontpage with articles about how the american economy is going to hell?

You get the impression the world is going under.

Sure this is a startup-forum so it effects funding etc but still.

We are the guys and girls that solve this, not the people that whine about it, right?

[tibix]

Sorry to disagree with you. All the articles concerning this crisis I have read linked from here were really interesting, unlike those other sites (you know, digg/slashdot/reddit/etc) where half the posts are crap.

[steveplace]

2 Newsfeeds to get

calculatedrisk.blogspot.com

bigpicture.typepad.com

Should keep you filled.

[stevedekorte]

There is no solution to resources which were already misallocated. The best we can do is to 1) not missallocate more resources (via a ballout) and 2) end the system that credited the debt bubble. Here's how to do that:

End Fractional Reserve Banking

Allow banks only to lend their deposits. This also eliminates the need for central banks - let people use 100% deposit banks when they want deposit security. This will prevent large debt bubbles (speculative investment bubbles) and the resulting massive misallocation of resources. End Inflationary Monetary Policies

Never print more money. Period. Use smaller denominations as slow deflation occurs due to an increasing population. This will keep prices in line with value and allow people to save without making high risk investments.

[alecco]

> Allow banks only to lend their deposits.

That doesn't work in a bank run. Central banks or some similar mechanism is needed to fix the asymmetry of time for deposits (e.g. savings) and loans (e.g. mortgages.)

Due to our behavior set on risk aversion most of us wouldn't take bonds matching the times of a mortgage. No matter how good the deal is. That's what the bankers exploit.

[tptacek]

Do we have to litter the frontpage with articles about what kind of articles we should have on the front page?

You get the impression the site is going under.

Sure this is a forum so we're interested in what's on the front page etc but still.

We are the guys and girls that vote on which articles are good, not the people that whine about it, right?

[mkn]

It affects funding, revenue, and side-employment (relevant if you're self-funding), IPO share price, and a host of other startup-related things. In addition, this is a news event of immense scale. The global economy is probably melting down.

We are the guys and girls that solve this...

That depends, I guess, on if we're the kind of people who keep others in houses, lend to banks, evaluate debtor's credit rating, produce the things people need in order to live, or have the intellect and authority to make the right policy decisions in this frankly harrowing time.

If a meltdown really happens, starting up will be a whole different ball game. Changing currency valuations will strongly influence things like who gets to be an industrial economy vs. who gets to be a service economy, who gets to have functioning infrastructure and who doesn't, and who can afford food and energy.

Though we are all a little disaster-fatigued, the global financial freeze-up that could wreak havoc on our abilities to make a living surely warrants attention on the front page.

[swombat]

It might change who gets to be an industrial economy versus who gets to be a services economy, but start-ups can sprout up just as well in one as in the other - although they're obviously going to be different start-ups focusing on different sets of opportunities.

[sabat]

We pump money into the economy when we succeed in innovating, or at least in creating wealth. That's what he means.

[m0nty]

"Sure this is a startup-forum so it effects funding etc but still."

It affects just about everything. I remember during the last big downturn, there was a piece on the BBC about a couple who had lost everything they had, in part because she had been a Herbalife [v. big in the 80s] sales person, and (as she put it) "when people are feeling the pinch the first thing they can do without is a herbal dietary supplement." Her business died almost overnight.

Now, maybe your startup idea is about something which gives real value and reduces costs of some vital business process. But if it's not, this will bite you very hard indeed. And even if it is, you might still find your potential customers are very cost-averse.

Personally, I see this downturn as a big opportunity, but it will be accompanied by plenty of pain first.

[schtog]

Herbalife is a pyramid-scam so I guess she got what she deserved.

[Prrometheus]

We haven't had a single quarter of negative growth, unemployment is at 6%, and people are calling it a "depression". +1 point for the sensationalist media.

[jhancock]

+50 points for people starting to pay attention to something whose dangers was clearly written about for 5 to 8 years. No, it didn't make the front page of mass consumer papers, but there has been solid information that the economic structure of at least the last 20 years could become unstable and was being abused.

Economic systems do end. Currencies do die or lose their leadership position. Has America's time come? Maybe. I think its close enough to it that its wise to think about basic things like where and how to live safe and comfortable. If we are in for 10 years of depression, it is wise to not live in large urban areas that will see crime rate soar.

[alecco]

Sure, this is only a recession so far and on Monday a recovery of the stock is expected after a worldwide coordinated plan is coming. Even if that works, the problem is far from over as the IMF, World Bank, and major players state the risk.

But back to calling names...

From http://en.wikipedia.org/wiki/Depression_(economics)

"There is no official definition for a depression." "a depression is characterized by 'unusual' increases"

[ ] "unusual" increases in unemployment [ X ] restriction of credit [ X ] shrinking output and investment [ X ] price deflation or hyperinflation [ X ] numerous bankruptcies [ X ] reduced amounts of trade and commerce [ X ] volatile/erratic relative currency value fluctuations

Many of those are just starting but coming strong. For example all the announcements on mass layoffs (eBay, HP, and Virginia state.)

[trevelyan]

Long term unemployed and discouraged workers puts the unemployment rate around 11%. If you're going to call numbers, please either know what they mean, or explain why your 6% figure is somehow more relevant than the figure that... uh.... measures the total number of unemployed who'd rather be working.

[alecco]

> We are the guys and girls that solve this, not the people that whine about it, right?

I don't know about you but I don't have a trillion dollars. And I bet most readers here have debt due to funding their startups and not having a safe job.

This is a case of renegotiating the best you can and trying not to pass forward whatever pain you get. If you do so, you'll be as good as dead in startup-land when this recession is over.

[poppysan]

My Solution to the financial crisis -

I read an article on diamond synthesis posted here recently. Now as the president, I would order a silent meeting with the head of the companies leading the diamond sysnthesis industry - Gemisis and apollo. Their work is synthesizing the gemstone into identical physical makeup as natural diamonds. The benefits for superconductors and microprocessors are tremendous as well as the impact of the diamond as a commodity trade. Some think it could well replace steel.

That being said, I would murder the ceo's replace them with body doubles, close their companies and destroy any evidence of their technologies.

Then make the find of the century....the largest diamond mine in the world located right under alaska. build a mine, staff it, then back the dollar with diamonds.

The dollar would be worth substance again and the significance would be huge around the world...

[gills]

We are definitely the people who will dig out of the hole. Well, at least the people who will design better shovels :)

Even so, it's good to know what you might be facing.

[qaexl]

http://www.sciam.com/podcast/episode.cfm?id=learning-to-stay...

[quasimojo]

no, we are not the ones to "solve" it, because there is no button to push, method to be invented, or novel approach to making everyone solvent with web technology.

what we are, we're the people who will live with reduced wealth for decades to come. debt must be unwound and asset prices reverted to the mean. there is no shortcut. regimes that have taken shortcuts have ended violently. for example, monarchist france and weimar germany.

we are, ONCE AGAIN (like 2002), attempting to put off (inevitable) deflation with hyperinflation. or do you think pumping like $3 trillion globally into markets will have no impact on currencies? the dollar will not make it to 2025

[sabat]

Thank you. God bless you for posting this. We either give in or we FIGHT. I say: let's fight.

[fnazeeri]

+1