Capitalism 2.0

No Treasury Bailout ... For Now

Now that House Republicans have thrown the Paulson bailout plan into total disarray, and Washington Mutual marks the largest bank failure in US History, and global credit markets are basically offline -- should we brace for Great Depression 2.0?

While I can't say 'no' with any authority, I tend to think not.  Certainly bank failures and the mother of all credit crunches does no good for the economy.  And by economy I mean both Wall Street and Main Street.  But just because this particular $700bn (really estimated to be more on the order of closer to $2,000bn all told) bailout of primarily Wall Street investment bankers and their compatriots has stalled does't automatically spell the end of capital markets as we know them.

Welcome Rational Discussions about Real Estate and Economics

I'm pulling out the paddles and shocking this blog back to life.  I have been distracted with real work and other blogs to which I've contributed heavily.  Well, now those blogs have become either cesspools of racism and bigotry or decomposed into industry shill tools.

I'm hoping that at least a few of the reasonable folks I enjoyed conversing with take some time to come here occasionally and discuss the same issues we've always discussed:  real estate, economics, and living life through these increasingly interesting times.

If anyone is interested in authoring blog threads of your own, please email me.  Link is on the side (I forget which, it's been so long, lol).

I'll also be cleaning up the layout of this blog when I get time over the next week.

--Randy H

PS: When you comment, it will prompt you for your email address.  I (for now) still allow anonymity, so your address is never revealed unless you chose to do it yourself.

The challenge of abundance

by Michel Bauwens

I'm a little of an outsider in this crowd, but I reacted to Randolph's invitation and thought I would have a go at challenging not just capitalism 1.0, but capitalism as such. And not from a capitalism 2.0 point of view, but from a capitalism 3.0 point of view, as outlined by Peter Barnes in the book of the same name.

What I would like to do in the next few weeks is to point to a few 'challenges' that current technological affordances are creating for the system as is, such as the challenge of abundance, of openness, of the demands for participation, and from commons-oriented approaches.

Let's start with the challenge of abundance.

Every Breath Ben Bernanke Takes

By Randolph

Ironically, this video spoof is even more relevant today than when the kids at Columbia Business School put it together over a year ago.

We can only dream of what the Fed would have been like under Dean Hubbard, sadly.

Housing Market Fiction

By Randolph

Fact or Fiction: The US Housing Market is "gently correcting".  In fact, "now is a great time to buy!".

...and here's some carefully staged, professionally smoothed, and attractively presented data from the NAR et. al. to prove it...

But wait a minute, someone has actually taken the time to go get the same source data sets and draw the same graphs.  But they've come to a very different conclusion...

Linden dollars, Terrorism and Crime

In "The Linden Dollar Game", commenter, Matt Beam, near the end of the discussion raised a very interesting question which hasn't been discussed very widely.

Just a question:

If anyone around the world can play 'Second Life' and exchange his currency into Linden-Dollars and back, so can two users fake a deal like followed and transfer real money for a real threat:

Sleeper in US builds trivia in SL and offers financier in Middle East for a fantastic prize. Financier exchanges amount into LDs, pays sleeper in LDs, who exchanges them into USDs, commits the crime and no one can prevent this transaction.

Am I right ?

Regards
Matt

Posted by: Matt Beam | Saturday, March 17, 2007 at 02:47

SF Bay Area Housing Bubble Battle

As the yen carry trade unwinds, the DOW vacillates wildly, market volatility continues to rise, and the idea of risk returns to the minds of investors world over, we are left with one, stubborn enigma:  The price of houses in the San Francisco Bay Area.

At this point, there is no denying that real estate prices are in a full on correction, nation wide.  Anyone with an ounce of honesty now fully recognizes the existence of a bubble.  The few who doubted the bubble have now seen their stake in the bet that the subprime loan game would last forever vaporize.  All you need to do is Google subprime meltdown for a current counting of the carnage.

The Linden dollar Game

On Schemes Resembling Objects of Intersecting Trilateral Sides upon a Polygonal Base

In a previous article I asked some very tough questions about the Second Life virtual economy.  That article provocatively proposed a case as to why I believe Second Life's much hyped economy resembles a pyramid Ponzi, or more accurately a type of high yield investment program (HYIP) scheme.  After posting that article I was partially convinced by many respondents that Second Life probably is not a Ponzi scheme as a precise legal definition -- at least probably not in most jurisdictions.  Indeed, after learning more about HYIPs, and in particular HYIP Games, Second Life and the game's system of "virtual currency" satisfy many of the attributes of such schemes.  More about HYIPs later.  First, some background:

One Bubble of a Ride

[Randolph Harrison]

A typical house, in typical suburban San Francisco neighborhood. You could call it "upper middle class". A good grade school, a not so good high school, friendly neighbors, beautiful parks, and everyone seems to forever labor to keep their picket fences white and flowerbeds planted.

This is the tale of a home, purchased in 1996, sold in 2002, and now for sale again in 2007. This is a true story of the real estate bubble, with a real house, real data, real people, and real fortunes to be won and lost.

Are Second Life “Businesses” Worth Anything? Willing to Prove It?

[Comments Closed]

After writing a highly controversial analysis of the Second Life economy, asserting that it resembles a ponzi pyramid scheme in structure, I received any number of testimonials from apparently profitable Second Life business operators.

This started me thinking. Perhaps media hype aside, these virtual ventures really do have quantifiable value, a claim which can be tested. Second Life ventures should be measurable by widely accepted, standard methods, if they are indeed legitimate. This is a critical issue. The media is trumpeting the virtues of Second Life, with the passive and sometimes more active support of the game’s maker, Linden Research (Privately held, “Linden Labs”, “LL”). A brief sampling of news links from the official Second Life website operated by LL in support of Second Life include:

• Second Life: It's not a game Fortune's David Kirkpatrick reports on why IBM's Sam Palmisano and other tech leaders think Second Life could be a gold mine.
• I got my job through Second Life Looking for work? Your best bet may be an interview in virtual reality. Fortune's Katie Benner explores the cutting edge of corporate recruitment.
• Starting a Second Life Business Find out what entrepreneurial opportunities the virtual world of Second Life has to offer.