Yup. In the short term markets are about as rational as that bearded guy in a bathrobe shuffling around in his slippers under the freeway underpass shouting at imaginary greebles.
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@badtux The Market Can Remain Irrational Longer Than You Can Remain Solvent -- A. Gary Shilling
(source attribution from https://quoteinvestigator.com/2011/08/09/remain-solvent/)
@djfiander Not only can the market remain irrational longer than you can remain solvent (in fact, insolvency is one of the things that rationalizes markets), BUT markets always seem to be developing *new* irrationalities so it's never a case that the market as a whole is "perfectly" rational. #economics
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Yup. In the short term markets are about as rational as that bearded guy in a bathrobe shuffling around in his slippers under the freeway underpass shouting at imaginary greebles. Reminder: In the long run irrational stuff ends up getting washed out of markets as it gets out-competed, thus the "rational markets hypothesis". But in the long run we're all dead. #economics
@badtux apparently RAM, flash and hard drive makers are demanding 5-year commitments, cash up front. The entire DRAM market is $120B or so, though, largely attainable using all the dumb money the AI companies have raised from investors.
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Yup. In the short term markets are about as rational as that bearded guy in a bathrobe shuffling around in his slippers under the freeway underpass shouting at imaginary greebles. Reminder: In the long run irrational stuff ends up getting washed out of markets as it gets out-competed, thus the "rational markets hypothesis". But in the long run we're all dead. #economics
<straps self in; possibly unpopular opinion>
This came up in a discussion the other day, and I only half-jokingly mused about futures and commodities exchanges for RAM and vector compute. Yes, exchanges can and do lead to speculation, but the timing is tight, delivery _is_ taken, and there's no floating contracts for weeks or months on end.
Yup, there are plenty of opportunities for corruption and manipulation (I'm looking at you, paper silver exchanges and traders) , but the mechanism for transparency and efficiency at and regulation at least _do_ exist alongside the asset, which I think would probably shake out far better than where we are now... speculation on the port of large corporate market makers that happens in secret with little to no accountability, alongside an administration I don't anticipate enforcing antitrust meaningfully anytime soon.
The current system is blatantly inefficient and counterproductive, and invites corruption and wild price swings, and those who are doing actually interesting work, or just the gamer, suffer for it. An actual exchange for these wouldn't be perfect but, but I think less bad. The only alternative would be price fixing (something TFG floated right after "Liberation Day") and rationing, which, like other interventional schemes like tariffs, would invite wider nominal-real price splits and a huge black market that would be flocked to by down-on-their-luck cryptogrifters.
Not a frothy free marketer here, but damn if we couldn't use some more transparency, accountability, and skin in the game for these things.
Not a professional economist here. I'm sure there is a counterargument, but I am past entertaining arguments predicated administrative intervention.
I think P≈0.0 that this would ever happen, for the record, but it's an interesting thought experiment.
<keeps buckle fastened>
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<straps self in; possibly unpopular opinion>
This came up in a discussion the other day, and I only half-jokingly mused about futures and commodities exchanges for RAM and vector compute. Yes, exchanges can and do lead to speculation, but the timing is tight, delivery _is_ taken, and there's no floating contracts for weeks or months on end.
Yup, there are plenty of opportunities for corruption and manipulation (I'm looking at you, paper silver exchanges and traders) , but the mechanism for transparency and efficiency at and regulation at least _do_ exist alongside the asset, which I think would probably shake out far better than where we are now... speculation on the port of large corporate market makers that happens in secret with little to no accountability, alongside an administration I don't anticipate enforcing antitrust meaningfully anytime soon.
The current system is blatantly inefficient and counterproductive, and invites corruption and wild price swings, and those who are doing actually interesting work, or just the gamer, suffer for it. An actual exchange for these wouldn't be perfect but, but I think less bad. The only alternative would be price fixing (something TFG floated right after "Liberation Day") and rationing, which, like other interventional schemes like tariffs, would invite wider nominal-real price splits and a huge black market that would be flocked to by down-on-their-luck cryptogrifters.
Not a frothy free marketer here, but damn if we couldn't use some more transparency, accountability, and skin in the game for these things.
Not a professional economist here. I'm sure there is a counterargument, but I am past entertaining arguments predicated administrative intervention.
I think P≈0.0 that this would ever happen, for the record, but it's an interesting thought experiment.
<keeps buckle fastened>
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@badtux The Market Can Remain Irrational Longer Than You Can Remain Solvent -- A. Gary Shilling
(source attribution from https://quoteinvestigator.com/2011/08/09/remain-solvent/)
In this case, RAM prices can remain irrational longer than your PC parts budget can remain solvent.
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@cstross @badtux Like I said, seatbelt attached. And I tend to infodumping and in-buttery. I just find it an interesting topic is all.
I would love a Marxist or otherwise heterodox take—maybe there is a mechanism that sucks less? I just don't know of one. Marx was pretty smart, and Postone did really interesting work abstracting Marx's in a way that may apply.
But yeah sorry to reply-girl on this one, and for killing the bit. This wasn't that kind of thread.
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@cstross @cora Capitalism is the worst form of economic organization, except for all others that have previously been tried. The ability to pay for future production with the proceeds of future production is the basis of capitalism (which is *not* the same as a market economy though it includes markets for valuing production) and is the cornerstone of a modern economy. Economies which never devised such a scheme never advanced to mass production. #economics
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In this case, RAM prices can remain irrational longer than your PC parts budget can remain solvent.
@alessandro @djfiander Given that a) the average tech refresh cycle is 5 years, and b) the AI companies have purchased basically all RAM manufactured for the next five years, you are totally correct. Even pushing our hardware refresh budget out, this AI bubble is going to fsck us bad. #economics.
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@cstross @cora Capitalism is the worst form of economic organization, except for all others that have previously been tried. The ability to pay for future production with the proceeds of future production is the basis of capitalism (which is *not* the same as a market economy though it includes markets for valuing production) and is the cornerstone of a modern economy. Economies which never devised such a scheme never advanced to mass production. #economics
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@cstross @cora China did not advance to mass production until they essentially abandoned Communism as the fundamental basis of their economy. I have managed teams in China and talked to a lot of Chinese people over the past 20 years or so. It's very dog-eat-dog capitalist at its basis these days, with a big heaping spoonfull of cronyism heaped on top of course.
Karl Marx was an astute observer of the fundamental issues with capitalism. His solutions to those issues, however, sucked.
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@cstross @cora Capitalism is the worst form of economic organization, except for all others that have previously been tried. The ability to pay for future production with the proceeds of future production is the basis of capitalism (which is *not* the same as a market economy though it includes markets for valuing production) and is the cornerstone of a modern economy. Economies which never devised such a scheme never advanced to mass production. #economics
@badtux @cstross I feel like i'm being herded into a bit of a kill box here.
I didn't really assert that capitalism === a market economy, I don't think; in any case I wouldn't argue that generally as it's a weak claim. I just brought up the mechanism I understand best for dealing with a situation like this. Securitized optionality _does_, however, long precede anything that we call capitalism or a "market" economy.
China absolutely _does_ have securitized optionality; I'm less familiar with it outside of metals and perhaps it is far less extensive than that in the US or Europe. It is more strictly regulated. Nevertheless they tend to be pretty good at it, and in many ways they may be more trustworthy in their dynamics (except when they do say, wait, wait, not that kind of market, we need to have a discussion).
But I really, really didn't bring this up to start an argument. And yeah, there are holes in my knowledge for sure.
Apologies for butting in on this; wasn't my place.
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@alessandro @djfiander Given that a) the average tech refresh cycle is 5 years, and b) the AI companies have purchased basically all RAM manufactured for the next five years, you are totally correct. Even pushing our hardware refresh budget out, this AI bubble is going to fsck us bad. #economics.
On the bright side, maybe there'll be great deals on eBay when the bubble pops and data centres close?
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