2rafa
1d ago
Peak oil was wrong in terms of supply because of fracking (which people thought would make a negligible contribution to overall production), wrong on timing because of miscalculations about China and wrong on demand because of the speed of the electric car revolution, especially in Europe and China. Obviously the original argument that fossil fuels are a finite resource (in the timeframe of human civilization) is factually true, but it’s also kind of meaningless.
2rafa
1d ago
I agree, it’s a bad model. Cashback gambling for the purchase price of a random thing isn’t a big incentive because (a) the total amount you can make - even if you use your spin only on, say, your largest credit card purchase every month - is never life changing, and (b) because the comparison to the other rewards you mention will be unfavorable. The big premium cards also ensure the annual fee (which is like $800 for the American Express card now) covers the ‘rewards’ so that it doesn’t matter if people only put a few purchases on it. A database and captive audience of gambling addicts could be very valuable, but having that because your business is lending to them is, as you say, less valuable.
2rafa
1d ago
I think the market is less friendly to the Ellisons on WBD. Netflix was willing to pay so much, and to offer much more in a hostile scenario they’ll need to find more lenders willing to lend against Oracle. Oracle is the single most exposed business to the data center (I won’t say AI) bubble, colossally indebted, CDS spreads are insane given its profile, it has $100bn in debt (the largest non-bank issuer in the US), and the share price is down 50% in three months.
2rafa
1d ago
Peak Oil was a relatively dumb theory that was only taken seriously because of the unusual 2004 to 2014 spike in oil prices, which was speculative and driven by short-medium term bullish views on Chinese and other EM consumption, and then prolonged abnormally after 2011 by fears of Arab instability. Weird ZeroHedge types seized on this market dynamic as proof that oil prices would never fall and that actually 100/barrel was just the start and justified it with outdated peak oil fearmongering from the 1970s. In 2014 it became clear that Chinese demand would be lower than predicted, global growth was low, and US shale production was higher than forecast.
2rafa
2d ago
Creditors did approve over the summer, as (of course) they have to.
Why did they approve? The debt was junk rated, with a negative outlook, trading well below par. Absent a spinoff there would have been further painful restructuring anyway. Some (about 25%) would end up with the profitable streaming business now being acquired by Netflix. And, most importantly, WBD agreed as part of the plan to a major debt buyback plan that made creditors happy.
In the end, approving was the least bad option for them.
All-time win for David Zaslav. Sold the company at triple the market’s valuation a few months ago. Saddle the cable TV assets with impossible debt, spin them out for almost nothing, ride off into the sunset. Even Patrick Drahi would struggle to be this smart.
Will AI replace all human-created media? I doubt it. I think there will still be a market for camera-filmed media, albeit a smaller one. People watch thousands of hours really bad reality TV where the sole attraction is that it’s real people involved, for example. Maybe movies will die out and it’ll just be the stage left, or hobbyists. Either way, this would have been a bad deal even without generative AI, and it’s an especially bad one with it.
Some funny comments about a Warner buyout spelling the end of a big tech bubble for the second time, too.
2rafa
3d ago
I suspect that the widespread advent of AI has (even if these aren’t transformer models, although they could be) significantly increased the utility and usage of things like transaction modelling tools over the past couple of years. Before you would maybe check transactions at local stores for specific ingredients or review the purchase history of suspects. Now you can do much more complex and computationally expensive ML on the whole national or regional body of credit card data that can actually find that needle in a haystack.
2rafa
3d ago
A combination of non-public information like CCTV footage, plate tracking, cell tracking, physical and digital forensics (including, as the below reply suggests, credit card data which they can run models on to pull relevant and unusual patterns literally trained on previous cases) make the FBI far more powerful than 4chan. The timing is what’s more convenient. It could be this is someone the last administration didn’t want to arrest on the chance they lost the case.
2rafa
4d ago
Call it cucked, but I would rather live in a civilized country that’s a little more hostile to me than another third world shithole. Not that we’ll have the choice, and not that I’d gladly take President Groyper, but I could make my peace with a President Carlson.
2rafa
6d ago
Dressing like a slob is universal though, there isn’t some mythic respectable well-dressed middle class these people are countersignalling the way there might still have been (to an extent) 50 years ago.
2rafa
6d ago
No, that’s a bien-pensant take, but there are plenty of ways to countersignal the middle classes (who dress just as badly today) without doing that. Sweatpants are just more comfortable, and a more broadly permissive society standards just declined, that’s why it just so happened to happen at the same time as more permissive divorce, the sexual revolution, declining religiosity etc.
2rafa
6d ago
If everyone has the time and money to visit some beautiful beach on a tropical island paradise, how pleasant will that beach end up being?
The nice neighborhood isn’t just pleasant because the people there are rich, it’s pleasant because pleasant, low time preference, civilized people who have something to lose and adhere to social decorum are more likely to be rich. This is the “bail reform” debate, it turns out that no matter how unfair cash bail seems, people who can afford to raise $10,000 overnight are, broadly speaking, more likely not to commit crimes on bail than those who can’t.
Whenever I go to a restaurant where (rich, high earning, often at least moderately intelligent) clientele are dressed like disgusting slobs, which is almost all of them, the reason for their slovenliness is because of a decline in standards. It’s the same reason Elon Musk wore a t shirt to the Oval Office. These standards don’t depend on a high trust society, they depend on strict enforcement. The permissive society began before mass immigration. In America, 120 years ago, the predominantly white and black population dressed consistently in formal clothes when they went outside (outside of work hours, when they wore workwear, if blue collar) , they dressed up for church etc. You can see this in mundane street photography from the era.
You can actually enforce this stuff, too. You can make people dress well or have them harassed by the police. You can ruin people’s lives for leaving trash outside. You can have people whipped for chewing gum. You can take people’s children away from them if they’re bad at raising them (including bad at disciplining them). This is all possible and people have done it before.
2rafa
6d ago
One thing that has really stuck in my craw in the modern era are TSA agents stealing items from luggage.
In 1987, 40 Heathrow baggage handlers were arrested in a single week for stealing from checked bags. There were also major problems in France and Italy through the 70s and 80s with this, back when their handlers would have been mostly indigenous.
But change is important in an interesting way. Technological advancement papers over the cracks in a failing society. So gang violence and drug crime increase, but huge advancements in emergency medicine mean that the homicide rate still falls. Ubiquitous CCTV, plate detection and cellphone tracking slightly reduce residential burglaries, even though the neighborhood as a whole seems shadier and less welcoming. The numbers on paper look good, but everything feels worse.
True, but that’s because 1960 was at the trough of a 150 year housing cycle. Maids and cooks weren’t actually much cheaper (the big pay rises for them happened between about 1915 and 1945, and mass immigration, especially illegal, means maids in NYC are still quite inexpensive) relatively, but prime real estate was probably 1/6th to 1/10th the price. In the 1950s you could buy gilded age mansions at a quarter of what they cost to make, in not-inflation-adjusted dollars, in the 1880s!
It seems unlikely. Cultures that are truly face-driven have very high rates of violent crime, especially homicide (we can argue about whether it’s sanctioned or unsanctioned, so let’s call it ‘killing’ instead). Two major examples are Central America and urban black America.
India has low homicide rates, and while there is some dubious recordkeeping in some rural districts, it’s not bad enough to obscure hundreds of thousands or millions of honor killings a year. In a society of one and a half billion people where (as the KF OP claims) even an argument about garden ornaments quickly takes on life and death stakes, you would expect a lot more deaths.
2rafa
9d ago
Immigrants don’t mean great food (don’t they say Tokyo has some of the best French food in the world?). But most American restaurant food in 1959 would indeed by pretty bad compared to what we’re used to today!
2rafa
9d ago
£120k? Even junior commerical barristers in their first year post pupillage earn multiples of that each year. From the website of One Essex Court (top Commercial Chambers), bolding mine:
They’re the very very highest tier and in the most lucrative corner of commercial law, the average new commercial barrister makes nothing close to that, and for those in crime, chancery, family they make much less still, often even at the height of their career. It reminds me of that funny story going round a few weeks ago about Oxbridge grads laughing Goldman Sachs out the door because they were getting offers at quant firms for £500k or whatever out of the gate, but of course it wasn’t “Oxford grads”, it was a tiny handful of senior researcher PhDs at the tiny quant finance institute moving into industry after a decade plus of academia, a handful a year of them. The base graduate salary in front office in the City is probably still like £50k, and at the Bar it’s similar too. Even so, a mid career highest tier commercial barrister (even at OEC) is making perhaps a million, 1.5 a year; even a top commercial KC tops out at 2.5/3 unless he’s uniquely lucky or mercenary, the cap at top American law firms for a partner is much higher.
But yes, while we can quibble about exact comp it’s extremely good per hour and better than almost anything in finance on an hourly basis unless you’re extremely good, senior or lucky.
Almost makes me question my life choices... I think I'd be good enough to get pupillage and then tenancy, maybe not at OEC but very likely at one of the other similar caliber sets, I know how to turn up the charm when necessary and while I don't speak in RP I think you could safely describe my accent as "exotic" in the good way.
Maybe, I tend to think it’s all connections really, although of course they say otherwise. It’s a cartel and they do very well for themselves, but it’s important to say that they are an extractive profession of the kind that was largely abolished with the end of the guild system (again, notable exceptions like the AMA notwithstanding). If I had been born in Britain I would probably try to have become a barrister, it seems to be what all the relatively smart people with good verbal ability from reasonable backgrounds do. I’d probably do something a little more exciting, like crime or divorce, though. Still, one can’t complain too much.
2rafa
9d ago
I know places like Jane Street etc. are expanding out into more traditional type banking and trying to eat the lunch of these dinosaurs billing $100m on something that can be done faster and better by smarter people running a leaner operation but providing a more complete service for under $10 million (while the employees still work something resembling a 9-5).
Jane Street, Point72, Citadel etc are massively scaling up their hiring. It’s like back in the dotcom era or early 2000s when people were saying Google would become one of the biggest companies on earth with only 5000 employees since you dont need that many people to maintain a search engine. Now they have almost 200,000 employees, mostly unnecessary, because everyone wants their fiefdom and when you start making money everybody wants a cut. As the big funds and quant shops start expanding into traditional banking territory they will hire bankers (as they already are) and they will bring headcount, because that is what humans do when there’s money. Jane Street is growing headcount at like 50% a year; revenue is growing faster, but my suspicion is that much of that isn’t due to the headcount.
Similarly in the legal world I know there are now barristers who with their junior bill around £700-£800 an hour but as a one two team coupled with a very hands off instructing solicitor produce more robust documents with a faster turnaround than the overcharging magic circle firms but the MC firms still get a ton of business from clueless corporate charging more to produce worse results just because clients want to communicate with people that have "Clifford Chance" on their letterhead rather than "4 Stone Buildings" even though your average junior at 4SB is higher human capital than a partner at Clifford Chance.
I take a rather dim view of barristering as a profession. Many barristers are great people, but it’s always seemed like a job for the Oxbridge debate types who don’t like to work very hard and who get paid insane hourly rates to re-enact the Oxford Union in court, RP accent and all. Top solicitor partners make more but they really do seem to work much more too. Maybe I just don’t understand it as a foreigner, but my barrister friends barely seem to work and get paid big time hourly or daily (not sure which it is) to regurgitate the same arguments, cadence and so on for new clients. Plus it’s the clearest example of an AMA-type employment cartel in the UK, because they deliberately restrict training places to a trickle so that fees remain extremely high. The UK decided that lazy people with high verbal IQ and the right accent who read literature or languages at Oxbridge ‘deserve’ a comfortable £120k a year and so they have this process of the conversion course and bar school and then the pupillage bottleneck to give them the job.
2rafa
9d ago
Even reading this makes me go "yuck" at the whole business model of these places. Prop shops etc. manage to produce more value per employee by only working them 40-50 hours a week (notable exceptions excepted) than investment banks manage. All that talent which could be put to good use elsewhere to benefit humanity gets wasted in IB make work.
Investment banking isn’t really an 80/100 hour a week job. No job is, there is research about productivity dropping off a cliff after 50/55 hours anyway. Investment banking is more like one of those jobs where the gap between personal time and work time is dictated by the role (like the army, or working on a ship) rather than a regular 40 or 50 hour a week professional office job.
For example, your investment banker friend says he works 9am to 1am every day. OK. Firstly, he’s not in at 9. You could walk through any bulge bracket investment banking floor at 9.05am and not even 20% of juniors would be in. The usual start time is maybe 9.45am, often 10 if it’s been a late night in the office. So your friend comes in at 10am. He drops his stuff off, then makes a coffee, checks his emails, all the rest of it. There’s usually no last minute work to do unless it’s the literal day of a pitch because the MD (who works from home 2 days a week, sees clients 2 days a week, and comes in from 8-4pm the other day) started reviewing changes to the deck at 8am over his breakfast in Surrey anyway. The junior reads the news, halfheartedly sends a few emails to the lawyers / client / whatever, attends an internal meeting and does some ‘research’ (a YouTube video and ChatGPT) for a couple of long shot rfps that the global vertical head wants to say the bank pitched for.
Then it’s lunch, quick trip to Farmer J, then a coffee, then a walk around outside, then he picks up some dry cleaning. Catches up with a colleague from another team over another long coffee. Then comes back to the office and sends a few more emails, MD comes back with a few small adjustments, maybe some light modelling, pull a few news articles to lazily include in a daily sector market recap summary he will send to some clients that they never read alongside the similar email from every bank and brokerage and research provider and newspaper. Then it’s 4pm. Your friend goes to the gym for a relaxed 90 minutes. Comes back at 6pm after a shower. The day really begins as the MD / director comes back with comments. VPs start getting more demanding. He orders dinner at 7 for 8. He eats, has another coffee, then gets down to real work while “chill beats to work/study to” plays in the background. He works through to 1am then goes home.
If you compare it your archetypal hardworking 45 hour a week PMC, the banker still has time to get his dry cleaning, have a long lunch if he wants to, go to the gym for a long time every day (there are others who sit in the lobby or a cafe and read, take a nap, go for a swim, go shopping, etc), do any “life admin” he needs to (he can go home briefly at 2pm to let in the plumber if he wants, as long as he’s back later), he doesn’t need to make dinner or clean up because it’s paid for every day etc. He actually has a lot of leisure time, my first staffer would play video games for like three hours a day in the afternoon and nobody cared. He doesn’t even necessarily have less sleep than the average worker (company car has him home on empty night roads by 1.30, he showers and sleeps, wakes up at 9, he can easily get 7 hours of sleep). He just needs to technically show his face in the office by 10 and then do his actual work between 7pm and 1am, so the MD can review it over breakfast.
2rafa
9d ago
DoorDash without immigration would perhaps be slightly more expensive (immigration has depressed prices for low wage labor, but welfare has increased them, and we don’t know what policy decisions were made in this alternate universe) without immigration. If the US just adopted a Gulf-style kafala system then prices would probably be the same, Americans could just be safe in the knowledge that everyone goes home at the end of their stint rather than getting the vote.
Investment bankers work long hours because they want to. Well, not the individual analyst, but it’s not a demand issue. The client (ie the CFO, possibly an few less lazy directors and a few corporate development or treasury depending on what it is guys who actually halfheartedly read (skim) the pitchbooks) doesn’t care whether that pitchbook is 20 slides or 300 slides. The modelling is bullshit anyway because it’s designed to produce a specific output that the client wants, and again everybody knows it. Everybody also knows that all the banks are interchangeable and that for any big normal M&A or E/DCM every major player is capable of achieving exactly the same result, and that in the end they will pick Goldman because nobody got fired for hiring them or Citi because the CFO plays golf with the vertical head or JPM because the CEO and the respective vice chairman went to boarding school together or whatever it is.
The reality is that investment banking is and has long been (probably since the late 1980s and the arrival of spreadsheets and digital data providers) hugely overstaffed. Analysts and associates shouldn’t even exist, they have a role in equity research and on the buy side, and maybe as job titles in sales and trading, but in actual advisory it’s a fake job. In 1975 the analyst was the guy who physically walked seven floors down to the corporate library and spent three hours finding the 1962 annual report for Philip Morris with the archivist so he could underline some figures and bring them upstairs and then spend four days building the most basic valuation model on paper spreadsheets that is vastly more simple and with more assumptions that whatever FactSet has already pre-generated today. The job is fake.
But everyone knows that clients have money and that you can’t bill $100m on a mega M&A deal if even the client knows you literally have a 5 man team on the job (that privilege is reserved for the Robey Warshaws of the world) , so it serves the industry to let juniors into the game in exchange for creating a hierarchy of fake-work make-work where cascading levels of VPs, associates and analysts invent pointless tasks to do.
2rafa
9d ago
Food was good in 1959 (though I haven't personally tried it).
Almost all modern gastronomy (I’m not just talking about Michelin starred fine dining, but like basic techniques) is downstream of French cooking, including the techniques a 21st century upper-middle tier restaurant in Indianapolis or Salt Lake City might use.
In 1959, what a normal PMC American today would consider “good [western] restaurant food” (again, with no pretensions to ‘fine dining’, just the kind of thing you get in the decent restaurant of a four star hotel), existed in maybe 20 restaurants in NYC and a dozen each in Los Angeles, DC and Chicago. A few others scattered around the country in various other cities, maybe a few in Boston, that kind of thing. The food that The Four Seasons in NYC, probably at that time the best restaurant in the country (and which itself only opened in 1959), was on a level below what you could find at thousands, probably tens of thousands, of restaurants across America today.
2rafa
9d ago
They have easy app food delivery even in countries without mass immigration, and (get this) they also have it in countries with mass immigration where that immigration is temporary, limited, of economic value and NEVER leads to even the hope of any pathway to citizenship (like the gulf countries).
I agree that it’s good to voice these things, publicly. But I’m not sure it matters. Remigration from Europe would be the largest or second-largest major population transfer in human history. It would require unfathomable state capacity and run roughshod over the constitution of every major Western European country (that has a constitution), that kind of action would itself require consistent supermajority governments over many years, when many are ruled only by unstable coalitions with nobody capable of getting even a simple majority. Even the National Rally, Meloni’s party, the Austrians are all moderating rapidly, only the AfD is still ‘hard right’ and there is every chance they get shut down if they start doing better than they are (my guess is the BfV wants to spin out a softer, more libertarian, Bardella-esque wing).
In many cases (I know you might disagree) the same forces - lethargy, ambivalence to the grand forces that shape civilization, a prioritization of the comfort of retired voters above all else, firm allegiance to the shibboleths of the vaguely post-Catholic social democracy upon which the EU was founded - that created the present economic calamity also created the immigration one. A lack of action is built into the system.
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