Aside, why not link the original video instead of a reddit post?
This point about "private equity" being a boogeyman is such a tired take, the vast majority of equity of companies are held privately, and the vulture PE firms do exist but are not as prevalent as people make it seem online. It's a meme that many people seem to have latched on when the vast majority of PE firms and companies work perfectly fine, buying a company, growing it, then selling it for a profit.
Aside, why not link the original video instead of a reddit post?
It's a compilation, but regardless, Reddit seems about as "original" as any other platform. I'd certainly rather see Reddit links here than YouTube links, all else being equal!
the vast majority of equity of companies are held privately
That's an good intuition, but it turns out to be false globally (TIL!): "There are nearly 25x more PE- and VC-backed companies than public markets [globally], but the total capitalization of private equity and venture capital is just 12% of public equity markets." per https://www.harbourvest.com/insights-news/insights/cpm-how-d...
vulture PE firms do exist but are not as prevalent as people make it seem online. It's a meme that many people seem to have latched on when the vast majority of PE firms and companies work perfectly fine
...source? It's certainly possible that I'm suffering from confirmation bias, but "company goes through PE acquisition" headlines seem to be followed by "brand dissolved" headlines in way too many cases. Even if it's not a literal majority, the problem seems A) widespread, and B) behind many of the most harmful symptoms of the rot beneath the American(/global?) economy!
My mistake, I should have said vast majority of companies, not equity in companies, are privately held.
If you're seeing it in the media, of course it's confirmation bias. Do you think it makes a good headline to say that a firm bought a company, grew it over 5 years, then sold it? Yet that's what happens in the majority of cases. Those in the media are the exceptions that prove the rule.
>> "brand dissolved" headlines > If you're seeing it in the media, of course it's confirmation bias.
It's a huge mistake to narrow down the problems of private equity firms (PEFs) to the dissolution of the companies they buy.
> Do you think it makes a good headline to say that a firm bought a company, grew it over 5 years, then sold it?
How is that different from what the video said? They buy all the hardware, grow the price of it by the mere fact of buying it up, hoard it, and then they sell it back to you at even higher prices as cloud services.
They make a profit but you are robbed. It's the strategy of scalping which has been going on in the GPU market for quite some time, but now it's used by corporations on an industrial scale.
The problem is precisely in the normal operation of PEFs, or rather, in the regulations that allow them to operate that way.
It’s like everyone on social media learned about PE in the last ~3 years and now sees it lurking in every shadow
Also not particularly enjoying this new ragey vibe Steve has going but I guess it must be getting clicks because each video seems to have it turned up another notch
One of the former Linus Tech Tips hosts mentioned that Steve was one of the driving forces behind them leaving as Steve's content against LTT drove reduced views.
The current admin wants even cheaper money, which is likely to embolden well connected borrowers to pump up whatever they think will hold a bit of value. It was housing, which hit an equilibrium (can't milk it much more), then stocks, then gold and now silver and memory chips of all things.
I wouldn't limit this to PE, although they are feeding on cheap dollars too, but the general trend of big capital out competing mom and pop for future resources. We're all short on real goods (need to buy food, shelter, ram, etc... in the future) and big capital is putting the squeeze on our short position by bidding up real resources with cheap dollars. Regular folks cover at a loss, or we go bust, and that's the gamble we're being put in.
The cheap money is used for scalping the market on an industrial scale, in this process, inflation feeds on itself and people get robbed. I explained how it works here:
The problem with this argument is that there are players who are incentivized to play on the opposite side of the PE memory hoarders or cloud everything people.
One of the most valuable company namely Apple have been playing around with local everything for a while now.
Housing is a regulation(mostly) problem and govt has 0 incentives against the lobbyists and nimby crowd who support reelection bid vs largely marginalized or non voter crowd of immigrants.
It’s false equivalence in its full glory.
I dislike these sensationalist headlines, but the housing one irks me the most.
PE didn't make housing expensive, your neighbors, grandma and grandpa did by restricting new construction. In cities dumb policy like the rent control did.
Stop blaming Boogeymen and actually look into issues.
The ram thing is unfortunate, but i don't really see a solution to it, for now.
46k up votes for this shit, Jesus Christ everyone's insane these days man
And along with permitting/zoning BS, there is also many other headwinds for real estate: high aggregate income, land scarcity, automation challenges (no prefab houses), and high labor costs.
In the places people want to live, yeah. It would be great if Manhattan were twice as wide, for example. There is the artificial scarcity from the zoning stuff, but then there is also just the geographic boundaries and human preferences for the "cool part of town".
The national average obscures that institutional investors own 1 in 9 rental homes in Charlotte, 1 in 10 in Tampa, and one-fifth of all houses in some Atlanta neighborhoods. It’s likely to get worse too.
Have you tried buying a home recently? It’s very tough to compete against the all-cash offers from investors.
I don't generally agree, i think they should be able to buy them as well. We can't limit how many homes people own, how do you rent then? What do we classify as "too much" house ownership? 10?100?1000?
A mom and pop landlord with 5 rentals doesn't have pricing power. A firm owning 1 in 5 homes in a neighborhood does. That's why antitrust thresholds exist in other industries.
Owning 1 in 9 "rental" homes means they own less than 1% of all homes.
You could make an offer on 40+ houses and will likely never be in a 'bidding war' with a big PE firm or a company backed by one.
PE is a boogeyman used by politicians to obscure the uncomfortable fact that the problem is the policies they themselves have implemented in pretty much every community in the western world (making building new stuff defacto illegal).
"AI" is just the vehicle (the excuse) - it's not the root of the problem nor is it the ultimate goal.
People are investing in AI because they believe the scientists' warnings that the Frame Problem[1] has been solved (or, in other words, "AGI is suddenly within reach").
You can say they're fools if you want - you might even be right! But pretending like hundreds (thousands?) of board members across the world are conspiring to build a buyer's cartel (monopsony?) in order to starve out the PC Gaming market of all things is just myopic.
I hope I'm not too vitriolic, especially if the guy in the video is here -- I certainly share a lot of politics with him, and absolutely share his priors regarding PE. I just think it's extremely clear that this particular subreddit has "lost the plot" as the ~~kids~~ mid-30s nerds say. If anyone's not familiar, I highly recommend a perusal through the top posts of the past week/month...
People are fucking retards. We're seriously voting videos embedded onto fucking reddit that cite other youtube videos as references to the front page of HN?
Fuck the internet. Expect an informational dark age where anybody with half a brain cloisters away into closed communities to protect themselves from idiocy and infocontagion. There's literally no use speaking to drooling idiots, who should simply be held in the utmost contempt.
In this case I believe it is warranted. I fully support OP's emotional take.
HN has been hit with lots of runoff from these reddit-dwelling mouthbreathers lately and it's turned this place into a downvote machine for any comment not towing the populist anti-intellectual party line.
Poisoning the well adjacent behavior rather than actually taking issue with anything said by the content truly illustrates how intellectual a take OP had with his "everyone's a retard and the internet sucks" take.
I feel like everyone online is becoming some anti-capitalist socialist and losing all critical thinking and it's making me crazy.
Firstly, institutional investors own ~3% of single-family homes in the US , even in hot markets, they rarely exceed 10%. The lack of supply is outweighs the private equity problem.
GPUs are manufactured goods where production scales with demand. When AI investment inevitably contracts, that fab capacity will redirect to consumer products. I don't know where this idea comes from that NVIDIA is conspiring with these companies to never sell consumers GPUs. It only takes so many GPUs to build out a streaming service, would they just stop making GPUs entirely? It doesn't make any sense if you think about it for more than 2 seconds.
Devil’s advocate: depending on the ownership turnover rate, the pricing impact of institutional investors could be outsized compared to their current ownership share if their property acquisition ramped up recently.
I think a better metric would be what percent of purchases are made by institutional investors. This is because pricing is based on sales, not on the overall stock including properties that have been sat on for a long time. Have you looked at that metric?
One heuristic that points in the direction of this being meaningful is that a lot of SFHs seem to be owned by old people who have lived there for a long time.
I agree that the comparison is stupid though since computer hardware is much easier to scale with demand. If anything this may show that hardware manufacturers are betting that this demand spike is temporary and they aren’t yet willing to ramp up production since they could end up sitting on unsold inventory after the bubble pops.
What's immensely frustrating is so much of this conspiracy shit, comes from the U.S. as well. A population where the median is living better every year, and better than 90% of the world. It's mind boggling, people don't understand how good they have it.
I'm not against progress, obviously make things better, but the perspective is important.
It is always amusing to me to watch people (gamers, in this case) slowly end up at “capitalism must be destroyed” when the market affects something they care about (PC parts becoming more expensive because of AI).
I think you're conflating executive rhetoric for the markets with what the average developer at any company believes. Do you really think the average Uber dev cares any more than an Uber janitor about summoning taxis on demand?
Aside, why not link the original video instead of a reddit post?
This point about "private equity" being a boogeyman is such a tired take, the vast majority of equity of companies are held privately, and the vulture PE firms do exist but are not as prevalent as people make it seem online. It's a meme that many people seem to have latched on when the vast majority of PE firms and companies work perfectly fine, buying a company, growing it, then selling it for a profit.
The Reddit video is actually 3 different clips stitched together, the sources are in the Reddit OP.
My mistake, I should have said vast majority of companies, not equity in companies, are privately held.
If you're seeing it in the media, of course it's confirmation bias. Do you think it makes a good headline to say that a firm bought a company, grew it over 5 years, then sold it? Yet that's what happens in the majority of cases. Those in the media are the exceptions that prove the rule.
>> "brand dissolved" headlines > If you're seeing it in the media, of course it's confirmation bias.
It's a huge mistake to narrow down the problems of private equity firms (PEFs) to the dissolution of the companies they buy.
> Do you think it makes a good headline to say that a firm bought a company, grew it over 5 years, then sold it?
How is that different from what the video said? They buy all the hardware, grow the price of it by the mere fact of buying it up, hoard it, and then they sell it back to you at even higher prices as cloud services.
They make a profit but you are robbed. It's the strategy of scalping which has been going on in the GPU market for quite some time, but now it's used by corporations on an industrial scale.
The problem is precisely in the normal operation of PEFs, or rather, in the regulations that allow them to operate that way.
It’s like everyone on social media learned about PE in the last ~3 years and now sees it lurking in every shadow
Also not particularly enjoying this new ragey vibe Steve has going but I guess it must be getting clicks because each video seems to have it turned up another notch
One of the former Linus Tech Tips hosts mentioned that Steve was one of the driving forces behind them leaving as Steve's content against LTT drove reduced views.
https://youtu.be/m0GPnA9pW8k
> It’s like everyone on social media learned about PE in the last ~3 years and now sees it lurking in every shadow
What a silly criticism.
Trickle down economics is from the 80s and people are still just starting to wake up to it.
PE has been around a while, but has also intentionally been hiding itself in your "shadows" because it knows its behavior is antisocial.
> enjoying this new ragey vibe Steve has going but I guess it must be getting clicks
Or you know maybe it's because he is front row watching as greedy fucks are destroying his passion that he also turned into his livelihood.
The current admin wants even cheaper money, which is likely to embolden well connected borrowers to pump up whatever they think will hold a bit of value. It was housing, which hit an equilibrium (can't milk it much more), then stocks, then gold and now silver and memory chips of all things.
I wouldn't limit this to PE, although they are feeding on cheap dollars too, but the general trend of big capital out competing mom and pop for future resources. We're all short on real goods (need to buy food, shelter, ram, etc... in the future) and big capital is putting the squeeze on our short position by bidding up real resources with cheap dollars. Regular folks cover at a loss, or we go bust, and that's the gamble we're being put in.
The cheap money is used for scalping the market on an industrial scale, in this process, inflation feeds on itself and people get robbed. I explained how it works here:
https://news.ycombinator.com/item?id=46416934
The problem with this argument is that there are players who are incentivized to play on the opposite side of the PE memory hoarders or cloud everything people. One of the most valuable company namely Apple have been playing around with local everything for a while now. Housing is a regulation(mostly) problem and govt has 0 incentives against the lobbyists and nimby crowd who support reelection bid vs largely marginalized or non voter crowd of immigrants. It’s false equivalence in its full glory.
But but but how am I gonna justify my critical theory phd if I can’t blame all the things I don’t like on the existence of markets???
That's a rather uninformed attempt at sarcasm.
A "market" is just a set of regulations, there can be infinitely many such sets and thus infinitely many different "markets".
Do you think each of these "markets" is perfect and cannot be criticized because the "existence of markets" is beyond criticism?
The internet is so awful right now man. The illiterate, incurious populist rhetoric is getting so tedious. We are beating a dead scapegoat.
I dislike these sensationalist headlines, but the housing one irks me the most. PE didn't make housing expensive, your neighbors, grandma and grandpa did by restricting new construction. In cities dumb policy like the rent control did. Stop blaming Boogeymen and actually look into issues. The ram thing is unfortunate, but i don't really see a solution to it, for now.
46k up votes for this shit, Jesus Christ everyone's insane these days man
And along with permitting/zoning BS, there is also many other headwinds for real estate: high aggregate income, land scarcity, automation challenges (no prefab houses), and high labor costs.
Is land scarcity really an issue? Genuinely asking, cause curious
In the places people want to live, yeah. It would be great if Manhattan were twice as wide, for example. There is the artificial scarcity from the zoning stuff, but then there is also just the geographic boundaries and human preferences for the "cool part of town".
Couldn't we just build higher?
Absolutely you can, and we should! not saying manhattan is maxed out
Dead rich people don't own own anything, their heirs do. Keep that in mind.
Buying memery is surely a future proof investment. It certainly was for my Amiga 500.
PE didn’t kill housing. Private equity owns 2-3% of homes.
The national average obscures that institutional investors own 1 in 9 rental homes in Charlotte, 1 in 10 in Tampa, and one-fifth of all houses in some Atlanta neighborhoods. It’s likely to get worse too.
Have you tried buying a home recently? It’s very tough to compete against the all-cash offers from investors.
Time to build!
Building helps, but without addressing who gets to buy the new stock, you're potentially just building inventory for PE portfolios.
I don't generally agree, i think they should be able to buy them as well. We can't limit how many homes people own, how do you rent then? What do we classify as "too much" house ownership? 10?100?1000?
A mom and pop landlord with 5 rentals doesn't have pricing power. A firm owning 1 in 5 homes in a neighborhood does. That's why antitrust thresholds exist in other industries.
That's fair, we aren't anywhere close to that though right? From research I saw, investors usually push prices down.
Tangent but corporate landlords in my experience are so much better than mom and pops.
Owning 1 in 9 "rental" homes means they own less than 1% of all homes.
You could make an offer on 40+ houses and will likely never be in a 'bidding war' with a big PE firm or a company backed by one.
PE is a boogeyman used by politicians to obscure the uncomfortable fact that the problem is the policies they themselves have implemented in pretty much every community in the western world (making building new stuff defacto illegal).
Wonder what the % of houses are sold that aren't for the owners primary residence. Also what % in cash.
This is just patently absurd:
People are investing in AI because they believe the scientists' warnings that the Frame Problem[1] has been solved (or, in other words, "AGI is suddenly within reach").You can say they're fools if you want - you might even be right! But pretending like hundreds (thousands?) of board members across the world are conspiring to build a buyer's cartel (monopsony?) in order to starve out the PC Gaming market of all things is just myopic.
I hope I'm not too vitriolic, especially if the guy in the video is here -- I certainly share a lot of politics with him, and absolutely share his priors regarding PE. I just think it's extremely clear that this particular subreddit has "lost the plot" as the ~~kids~~ mid-30s nerds say. If anyone's not familiar, I highly recommend a perusal through the top posts of the past week/month...
You seem to have dropped the intended [1] link?
People are fucking retards. We're seriously voting videos embedded onto fucking reddit that cite other youtube videos as references to the front page of HN?
Fuck the internet. Expect an informational dark age where anybody with half a brain cloisters away into closed communities to protect themselves from idiocy and infocontagion. There's literally no use speaking to drooling idiots, who should simply be held in the utmost contempt.
The belligerent name-calling only further degenerates quality of discourse. Consider detonating your emotions in a more responsible blast-radius.
In this case I believe it is warranted. I fully support OP's emotional take.
HN has been hit with lots of runoff from these reddit-dwelling mouthbreathers lately and it's turned this place into a downvote machine for any comment not towing the populist anti-intellectual party line.
Poisoning the well adjacent behavior rather than actually taking issue with anything said by the content truly illustrates how intellectual a take OP had with his "everyone's a retard and the internet sucks" take.
but but but but... engagement!!!
I feel like everyone online is becoming some anti-capitalist socialist and losing all critical thinking and it's making me crazy.
Firstly, institutional investors own ~3% of single-family homes in the US , even in hot markets, they rarely exceed 10%. The lack of supply is outweighs the private equity problem.
GPUs are manufactured goods where production scales with demand. When AI investment inevitably contracts, that fab capacity will redirect to consumer products. I don't know where this idea comes from that NVIDIA is conspiring with these companies to never sell consumers GPUs. It only takes so many GPUs to build out a streaming service, would they just stop making GPUs entirely? It doesn't make any sense if you think about it for more than 2 seconds.
Devil’s advocate: depending on the ownership turnover rate, the pricing impact of institutional investors could be outsized compared to their current ownership share if their property acquisition ramped up recently.
I think a better metric would be what percent of purchases are made by institutional investors. This is because pricing is based on sales, not on the overall stock including properties that have been sat on for a long time. Have you looked at that metric?
One heuristic that points in the direction of this being meaningful is that a lot of SFHs seem to be owned by old people who have lived there for a long time.
I agree that the comparison is stupid though since computer hardware is much easier to scale with demand. If anything this may show that hardware manufacturers are betting that this demand spike is temporary and they aren’t yet willing to ramp up production since they could end up sitting on unsold inventory after the bubble pops.
Becoming? I've been hearing these takes for over a decade.
A decade ago it was the fringe lunatics.
Now it's the only thing that seems to be "surfaced" and "boosted" in any of the infosilos like reddit/youtube/etc.
I don't think it's because there are more people on the fringes, so much as because there's so much more "surfacing" technology in use.
What's immensely frustrating is so much of this conspiracy shit, comes from the U.S. as well. A population where the median is living better every year, and better than 90% of the world. It's mind boggling, people don't understand how good they have it.
I'm not against progress, obviously make things better, but the perspective is important.
It's messed up and should be illegal in a normal functioning society.
Another recent video about it: https://www.youtube.com/watch?v=uvahiVBvn9A
>"normal functioning society"
We are not that at all. But then again for rich it pretty much is, just not 100% yet
We clearly are not if this is happening.
It is always amusing to me to watch people (gamers, in this case) slowly end up at “capitalism must be destroyed” when the market affects something they care about (PC parts becoming more expensive because of AI).
Developers too, as "vibe coding" takes hold, after a couple of decades of cheering on technology "disruption".
I think you're conflating executive rhetoric for the markets with what the average developer at any company believes. Do you really think the average Uber dev cares any more than an Uber janitor about summoning taxis on demand?