Dumpster on Fire! Will Trump’s unpredictability send the markets spinning?

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Over the last week, with a belief that Trump and the Republicans can wave magical wands to bring about bounties unlimited, a lot of activity is going on in the markets. So, stocks are up, and bonds are down. Some of this is based on the belief that regulations will be weakened and taxes cut. Some of it, is unabashed, such as increases in private prison stocks, and some of it is tolerably reasonable, as seen in construction stocks.

However, logic and intelligence behoove some of us to look past blind mania. When you do that, a few pricks appear on this balloon. For example, this tax cutting, has not worked too well in states like Kansas or Wisconsin. The GOP has tried to cover this up by simply splashing funding for activities such as education. Someone dripping with sarcasm might claim that this actually helps them preserve their electorate. Well..

And among all these things, I predict, there will be signs to watch for.

Pouring Alcohol Into A Dumpster On Fire

Despite the willful self-blinding that people across the varied electoral college engaged in, to elect Trump, we saw, throughout his campaign that he is quite volatile and quirky. It is very difficult to assign logic to predict his behavior. Some people, of course, perceive this as a novelty, and see it as being helpful.

But, will the stock market survive such intemperance? The President and his words make a difference. What happens when he wakes up on Monday morning, at 3 AM, potentially, and says one thing. Then, his minions spread out to engage in damage control and say something else at 10 AM? And later that day, Trump just overrides all those attempts and either kicks up new dust, or repeats himself?

Give In or Spin In?


Eventually, will the stock market just take Trump’s volatility in stride, and thus take him out of the equation? Or will it go up and down, and eventually just spin down? Of course, I don’t see this in a standalone silo. I think a combination of bad policy, lackluster economic efforts, a disruptive anti-immigration stance, potential war in unexpected places, will join his statements in sending the stock market down several rabbit holes. The choppiness aside, eventually, things will reach a point of no return. Sometime before this happens, the technology, real estate and the stock market bubbles will either crash sequentially or in unison. If the fall is sequential, perhaps we will be able to predict when the others will fall. Whatever the case, this is going to be tough as we are in for a bumpy ride!


  1. Title Image of Fire, Courtesy Picjumbo: https://picjumbo.com/red-burning-live-coals-campfire/
  2. Spin Image, Courtesy Pixabay: https://pixabay.com/en/spinning-top-toy-top-spin-play-1312042/#
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Did the Stock Market Bubble finally get its trigger?

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November 8th brought the ultimate shock and the futility of depending on masses to the surface. Contrary to folklore, democracy and the “wisdom of crowds” appear oddly contradictory. In case that is not clear, yes, electing trump was very odd, if anything. The stock market indices first fell, and then selectively stocks for large banks, private prison firms, defense and other areas have risen.

There is a general sense of belief that the Republicans will come in with sparkling dust and a magic wand to reduce individual and corporate taxes and boost the economy. Yes, in the short term, this is very feasible. Well, this has been tried during the Bush Administration, and in Wisconsin and Kansas. Not once was the result good.

Furthermore, there is some giddiness surrounding expectations of the riddance of Dodd Frank, the CFPB, and oddly enough the ACA as well. Sure, these are all possible, even with all the legal battles that will ensue. But no one seems even a bit bothered that the absence of Dodd Frank is what in most part caused at least some of the problems leading to the crash in 2008.

Then, Realtor.com is worried that Freddie and Fannie Mae are in the gop cross-hairs. This makes it quite odd, if true. I agree with Realtor in that it directly affects the people who supported trump.

There are also some questions as to whether inflation will rise as is being expected as part of this run up, and as to whether if it did, that would be a good thing.

Trigger Point

Well, where does this leave us all? I think this election result is the trigger point. There is true irrational exuberance at play. Stocks are rising when the status quo is about to change, especially in ways that are not good. They are also not taking into account the instability of the president elect. He says and does things which make as little sense as possible. Plus, as someone who also did not believe he was going to win, he never had plans. For example, it has become apparent that besides vague threats to Amazon.com (and Jeff Bezos deserves it for treating his lower level employees like dirt), trump has no plans for the technology industry at all!

All the republicans want is to be rid of the ACA. However, none of them know what to replace it with. Because they wouldn’t. They never knew how to solve the healthcare problem. So, they will do really stupid things. Yes, they will not regulate as the Democrats have, but that is not enough to keep up the healthcare and insurance industry shored up for long.

So, taken in effect, along with trump’s volatility, the stock market is rising now based on nothing. Take this with the technology and real estate bubbles already underway, I think we will finally see rapid growth and the ultimate crash. It is now just a question of time.

Timing the timing

I don’t think we will need to wait long to figure out a way to judge things.

  1. I believe we will see the stocks rise, then plateau and then rise.
  2. When the interest rates are finally increased in December, we should see more activity.
  3. The various crazy laws that the gop plans to implement should start popping up as soon as Congress opens shop in January.
  4. Then will come the various executive orders in third week of January.
  5. Add to that the changes to immigration they want. I don’t know when they want to start doing this, but it should be pretty early on and will be very disruptive to the workforce. Several experiments have been attempted to replace immigrants with natives in hard labor jobs and they have never succeeded.
  6. Finally, given the incredibly crazy territory we are swimming into, there will be other unexpected signs. We just have to wait and watch.

The challenge is simply not in knowing there will be or that we are in a bubble. The challenge is in the timing. This is what I am going to try and track as closely as I can. Keep an eye out.


  1. http://www.realtor.com/news/trends/donald-trump-mean-for-housing/?identityID=552ba5c6edb284622b00002c&MID=2016_1111_WeeklyNL&RID=2925787362&cid=eml-2016-1111-WeeklyNL-blog_1_trumpandhousing-blogs_trends
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Can anything hurt the Bay Area RE Bubble? We are about to find out: The Cisco Edition

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Foreword: It is NEVER good when employees lose their jobs. I am never happy when this happens to anyone.

Cisco, which hasn’t been doing well for the longest time, has decided to layoff 14,000 employees or more, globally. Since they are local, one can assume at least a small, yet significant number of those layoffs will happen here.

So, not all jobs will be lost near Milpitas (or Smellpitas as it is usually called, a quaint local “cultural” fact), where you can bid (not buy, mind you) a dumpster sitting on a lot for about 1 Mil and upwards. Of course, this new level of madness is brought to you with the notion that along with Cisco, Google, Samsung and Apple  and sundry’s employees will be endowed with never ending wealth and therefore should be the only ones able to afford living (if you can call it that) in the area. Throw in a BART station and the dumpster’s asking price went up to 1.5 Mil. If you think, I am joking, go to Realtor.com and search for houses around 95035. Of course, as with all things evil, the real estate bubble just grew from Smelpitas to San Jose, Fremont, Tracy and Stockton, and she hasn’t really stopped yet.

For months now, people have been hoping that this craziness will quiet down eventually. Let’s see…

  1. Well, Yahoo! went boom-boom, and nothing.
  2. As also mentioned before, Twitter, GoPro and a few others have not been doing well, and still nothing.
  3. Dropbox’s supposed 2017 IPO has been met with the loudest snores..
  4. Apple’s stock and outlook are really terrible right now, with vague promises of better crap..

All this, and yet, Real Estate prices have only gone up, up and away. For example, in Hayward, somebody wants $399,000 for this (there’s more, if still on sale, go have a look-see at some of the other pictures). It is so bad, they didn’t even bother taking good photos!



Absolutely nothing has slowed down the madness so far, which begs the question:

What WILL it take for Bay Area Real Estate to meet Reality?

We know, that from greedy developers, to mindnumbingly greedy Santa Clara City Officials and beyond, there is just an absolute sense that reality is for suckers. Unabated construction, most times, absolutely meaningless in terms of actual, future growth (and adjustments, that will come) is rampant. Communist style, ugly, matchbox dwellings go up everywhere with enough idiots who want to buy them, preyed upon on by new and increasingly bizarre lending practices (if you work at Google or Facebook or some of the other cat and ephemeral p0rn sharing sites, you can get a loan for up to to $2mn or so, with zero down, I kid you not!).

This has left out the “rest of us” who have still the desire to work in a world that doesn’t believe in “sharing economies” where we all serve as each others’ taxi drivers du jour. AND it leaves out the rest of us, who have to do real jobs of designing, cooking, delivering and you know, things that are not glamorous enough for Silicon Valley to even recognize, without a heavy priced, newly minted, monthly billing “start up” that does the same thing telling investors there are billions in feeding and fattening software engineers catered lunches.

In all this, of course, we have been trying to see WHAT can actually make a difference. And, I have to wonder if individual failures and downturns like that of Yahoo! or Cisco are enough to even make a measurable dent. It also appears that these occurrences are happening out of sync with each other, that the bubble is still able to grow and feed on itself. For instance, right in Milpitas is a “storage solutions” company whose acquisition completed in May. One has to only wonder if that will also result in “cost savings” and other measures, which could potentially have a cascading effect. However, even that will just be another blip, and people will move on, just tacking another $100,000 or more to their insane bid.

It is becoming nearly impossible to predict the kind of business/finance related disaster that it will take to cause this bubble to burst. It appears that multiple events need to trigger right next to each other on the time scale for a true dent to appear in Bay Area’s housing madness. One of these surely could be the election, leading to an indecisive or absent lead for Democrats in the Senate, or worse, a Donald Trump Presidency.

Thus, I have to conclude that even Cisco’s seemingly massive layoffs  are not enough for Bay Area RE to start its slow descent towards normalcy.

And, that, is just scary.


  1. http://finance.yahoo.com/news/cisco-systems-lay-off-14-012523261.html?utm_content=bufferfe449&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer 
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Palo Alto – an example of just how bad housing is in the Bay Area

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Image, courtesy: picjumbo

I am passing along this Medium Blog Post, recommended, once again, by my friend Vishnu Prasad Ramachandran, , @rvishnuprasad  .

It is not like I haven’t laid out of the case for a never ending tech and real estate bubble that is insanely disconnected from reality. It is not like I haven’t pointed out to hopeful trigger points, only to see them do nothing. Yahoo! went kaput (just look at the site archives for more) and sold for practically nothing – no effect. Twitter is in the sh*tter and, still, nothing (well, rents in SF did drop just ever so little).

I have also now started worrying about the number of people like me waiting for the housing market to cool down, that; should it cool down, everyone will get in again, and it might just heat right back up. I cannot base this on anything but a gut feeling. I would like for this to not happen, but no one can predict anything for sure.

In effect, frustration is high, and things are just going from bad to worse. You should read the blog post for yourself, but I have to tell you, over the past few months, my own desire and determination to leave the Bay Area have gone from distant hypothesizing to reality. I guess we will see.

Meanwhile, here is the interesting, vivid story of someone leaving Palo Alto and the Planning and Transport Commission behind, unable to stomach the idea of paying $6,200 a month in rent:


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Time Travel with GM, back to the Year 2000 and the prevalent foolishness

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Well, for years, GM helped you travel across space. Now, you can travel across time with them. Except, it doesn’t look all that good. Let’s have a look…

The year 2000 was filled with mass stupidity. Many mistakes were made, and we thought people would learn a lesson or two. Then rolled in 2008 with its own crisis and a “bail out” that is STILL the topic of Presidential Debates. Even just taken as averages, that is about one crash a decade, and involves both the players in this story – technology and automakers. And you would think GM would be one of the last companies to engage in such shenanigans as what follows. Yet, they decided to buy “Cruise Automation” with unproven traction for about a whopping $1bn according to reports.

Who needs to do the lesson learning?

Well, you and I are the ones who have to learn a lesson. A publicly traded company means this: “when you run a publicly traded company you are spending other people’s money, so play fast and be loose”. 

I don’t even know how I could criticize Mary T. Barra and the absolute insanity she has unleashed buying and investing in unproven technologies and companies without someone yelling “sexism”, but well, I support Hillary Clinton, so let us leave that behind if you will.

Now on to the topic. While some of the other GM investments such as in Lyft itself are quite questionable, this valuation, at $1bn of a company that has only raised $18mn (and will now give Y Combinator a reason to churn out all kinds of unicornish trash, ugh, and if you will spin-off even more predatory “incubators” – tune in on this later) and is probably not anywhere close to the valuation is absolutely bizarre.

Peer Pressure

This whole notion that instead of doing some ground-up thinking, the big 3 should simply just engage in knee jerk investment trickery seems like good old peer pressure, with all the unwarranted innuendos and snide references.

You may feel certain sympathy towards GM. After all, look at what Ford just did – invest millions of dollars to create some sort of “start up” that will engage, apparently in partnerships, and also its own technological innovations. But, in Palo Alto. Well, while that is very cute, Bosch and BMW beat them to this by decades. And of course, Tesla, Google and Apple are natives here and know what they are doing.  Not only that, with real estate prices in the Bay Area, picking Palo Alto in particular just appears like gold plating on the part of Ford. And yet, what GM has done appears to be the worst of it all.

Now I know that eventually, there will be a stable market for ridesharing, automated travel and all that jazz, but I think the hype cycle is still on an upward trend and investments made now will not equate to their real value.

My Theory

Without the valley’s rose glasses while I still live here, I am like a full grown grizzly bear in a petting zoo. That made it very, very, very, very hard for me to come up with any logical reason behind the valuation, other than the notion that Barra and all her advisors have gone bananas, and they probably have no downside to throw away their investors’ cash.

So, I have theorized this. All Economic Bubbles, are not just cyclic, but they also have repetitive patterns and key inflection points. With all signs of a global economy in disarray, an ailing oil market, and the tech market itself in a very questionable state, this would be the absolute worst time to value a company, what by 10 to a 100X.

And in the year 2000, we were exactly at this point. Investments were being made even as every logical indicator would have stopped companies. Thus, I think if I am not entirely wrong, we have about a year, or even less, before “it” hits the fan. And if I am wrong and it just takes longer for the bubble to burst, the downside is only postponed.

So, mark this point in time. Now let us see what happens…


  1. GM’s “purchase”: http://fortune.com/2016/03/11/gm-buying-self-driving-tech-startup-for-more-than-1-billion/?utm_source=CB+Insights+Newsletter&utm_campaign=9a10fe85ae-FridayNL_03_11_2016&utm_medium=email&utm_term=0_9dc0513989-9a10fe85ae-86415837
  2. Image Credit: https://static.pexels.com/photos/4097/city-cars-traffic-lights.jpeg
  3. Ford’s Investment: http://www.sfgate.com/business/article/Ford-sets-up-Palo-Alto-subsidiary-to-invest-in-6885191.php
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Brief: While we prepare for new tech bubble stories, here are stories on some old ones..

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Bubbles are not to be celebrated, unless you take pleasure from shorting on others’ misfortunes, or, you are a cat (raspy, grooming tongue-in-cheek reference with the image, if you get the next sentence). In any case, today, our friends at O’Reilly shared a link from “Mattermark” which linked stories such as the erstwhile failure of fame, pets.com and others we have heard but forgotten over the years..

No one can be blamed for fading memories, because after all, we have had our own Bear Stearns and Lehman Brothers in 2008 and are preparing for the next round, this time, not with mere cats or dogs, but UNICORNS!  Someone, I forget to remember who, also went on to create “bicorns” and “centicorns” in reference to the currently growing bubble with really expensive cat photo collectives and DIY Taxi cabs…

However, History can teach us a lot, so here is the link. I sampled a few, great read and needs bookmarking: https://mattermark.com/scenes-from-a-bust/?imm_mid=0e1760&cmp=em-iot-na-na-newsltr_20160310

Thanks O’Reilly and Mattermark!

Image Source: https://pixabay.com/en/cat-bubbles-animals-play-1198232/

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Silicon Valley is apparently bleeding talent, mainly due to real estate and cost of living

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The blog post I am about to quote, from WSJ, along with a video from NBC, only talks about US-born talent, but anecdotal evidence that I have shows that even foreign born talent is not going to stay in the area much longer, assuming the trend continues. I mean, I am one. I swore to myself I would never live outside the Bay Area in the US, and after shifting my gaze from a house in the Peninsula to one in San Jose and then Hayward all the while watching prices meaninglessly appreciate, I decided I might just abandon the whole idea and see if there are other places across the country.

The message here is deeper than either the article or the video. I seriously doubt if the traffic or housing prices are the only reason for the move. With Yahoo! going through a meltdown and many VCs developing less warm feet, if not cold feet altogether, the madness may be coming to some sort of a head here and at least few people must have realized it is time to move on.


Well, we all know this is just another bubble and it is going to burst, just that, none of us knows when. However you dissect the type and number of people who are leaving or the reasons for why they are leaving, there is a long term problem here. The “hotness” of the Real Estate market here, the cost of living and the fact that 5AM and 8PM are slowly creeping into the “rush hour” category means only bad news.


You need to think of everything in unison here. It is not just that a handful of tech workers are going to Seattle, which is also relatively bad in terms of real estate, or to a desert location like San Diego. The exodus is causing us to lose professionals from various fields. The ingress is becoming increasingly unpalatable as well. Ask yourself where your kids’ schools will find good teachers? Or any other non-tech related professional services?

Unsustainable mash-up solution: Soviet Style Housing

San Jose for example thinks it has “solved” the low cost housing problem. For every 20 or 25 meaninglessly expensive housing projects, there is one, just announced, like the “Donner Lofts” with just a 102 units that will remind people of the Soviet Union with its ugly, boxy, industrial look and drab colors that some architect is going to try to fool you into believing is “modern”. Also, I am yet to hear what “affordable” means, and how long it will last, and what 102 units are going to do. The problem is not that Ed Lee and Sam Liccardo summarily lack vision, they also just don’t care.

Sooner rather than later, these types of unsustainable band-aid solutions will also fail. Of course, then comes the crash. If it takes another year or two till the bubble bursts, things will only get worse till then. After that of course, real estate will, I predict, going into a rapid, downward spiral. All those “multi-family, high density” adjective-soup units will either have to go empty, or drop rents, forcing this to become a whole another nasty ball game.

Gaming Housing

Almost everyone who lives here or talks about the problem here knows that foreign buyers, and by that I mean, wealthy Chinese individuals, and institutional buyers are deliberately gaming the market in all cash deals, never making housing competitive enough. Imagine housing having gone up 13% in just a year?

I used to track the housing prices when I was “in the market” and I started getting quickly disappointed. Every now and then, for s*s and giggles, I look up housing, only to find a bunch of run down shacks in a high-crime area in San Jose displayed as selling for, wait for it, $600,000 asking prices. Of course, usually people cough up “more” not less than the asking price.

I don’t know what you can do in a market economy to stop this sort of unfair price gouging, but if this trend continues, it spells disaster for the Bay Area. All one can hope for is that these greedy people gaming the prices also take at least some of the hit.

All problems and no solutions?

This is mainly the problem with the Bay Area. From bubble to bubble, we never achieve balance. I don’t know that a solution can be achieved here. The venture capital industry doesn’t care. The “entrepreneurs” want to sell you garbage just so they can become billionaires. What with accommodating lunatics like Marissa Meyer (and the people who thought a 37 year old engineer can save an me-too-also-ran media company) who bought Tumblr, you can’t really blame them.

Silicon Valley doesn’t have good political leadership. The people who get elected here, mostly want to use this as a launchpad for their political agendas. A great example? Chuck Reed, former mayor of San Jose, who not only screwed the city beyond recovery, but also channeled a very ineffective and directionless successor, Sam Liccardo and moved on to weaken unions and pension funds by siding with Republicans. Because, an insecure retirement is a great attraction when hunting for talent I assume?

In a very ironic way, it might take another round or two of bubbles and actual loss of competitiveness to other areas before something changes. Till then, all we can do is, see if we can guess when the next one is coming down and try to duck for cover soon enough.

For more

This particular post was dedicated to real estate, traffic and talent exodus. Here is another WSJ piece on the valley’s slowdown:



  1. The WSJ blog post: http://blogs.wsj.com/digits/2016/03/03/silicon-valley-residents-leave-for-greener-grass-cheaper-housing/
  2. The NBC Bay Area Video: http://www.nbcbayarea.com/news/local/Housing_-Traffic-Spur-People-to-Leave-Silicon-Valley_-Study_Bay-Area-371126301.html
  3. Donner Lofts Announcement: http://www.bizjournals.com/sanjose/news/2015/01/08/midpen-housing-breaks-ground-on-102-unit-donner.html
  4. Image Credit: https://www.pexels.com/photo/city-cars-traffic-lights-6732/
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The Real Estate Bubble and Tech Bubble are in sync again!

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With the economy in a meaningless drift, you would think that commonsense would raise its hand. But no! Per Realtor Mag, 81% of metros saw rises, with 17 of 30, seeing rises in the double digits. Are you kidding me?

Diseased Unicorns and Stock Markets

The irony here is this. The tech bubble is in an amazing swing, with all the Unicorns and their sugar daddies infested from the inside out. The stock markets, across the globe are just meandering in some marshy territories. There is absolutely no reason for this sort of unabated craze.

And when did houses in San Jose, CA started costing $940,000? Falsely advertised as the back yard of Silicon Valley, it is more like the backyard cesspool of the valley. I live there. I know. You simply cannot lie to me.

Who is to blame?

Knowing what is out there, if you paid $940,000 for a house in San Jose, YOU and only YOU are to blame for it. Because, sooner, rather than later, your house is going to become worth less than half of that. I don’t care how many promises Apple, Samsung and Google make of bringing jobs here.


  1. The Realtor Mag Article: http://realtormag.realtor.org/daily-news/2016/02/12/home-prices-are-accelerating-again
  2. Image Courtesy of: http://pexels.com
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Marissa Mayer and her jokes, a grim reminder of the main agents of any bubble

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[Thanks to my dear friend Vishnu Prasad Ramachandran, @rvishnuprasad for recommending the article]


When Marissa Mayer, an engineer with little to no management experience was first picked to lead Yahoo! following the several rounds of fired CEOs, I questioned why Yahoo! was still around and how she was going to be able to help a listless company. Of course, we know when Steve Ballmer made his foolish attempt to buy Yahoo!, Jerry Yang went on a crazed rampage, joining hands with Google to save the company. Save it for what, no one could tell. The Radioshack of Internet Companies, Yahoo! has no meaningful products or services that anyone can remember. It has just been drifting like flotsam, without any point or purpose, besides of course, the only redeeming factor – Alibaba. Their advertising revenues are on a nice steep slide, so that is really not a factor, at least on the plus side.

Expensive Garbage

Instead of focusing on trying to sell Alibaba and pay taxes like they ought to have, and then sell off and wind down the business, the board brought in Marissa Mayer, who wasted time on nonsense such as redoing the logo, and several other acts that kindly put, amount to garbage. And there I was, scratching my head, as I have done standing in bubbles previous, wondering how this was going to save Yahoo! or increase it’s revenues or do any such thing. By then, at least to some of us, it had become clear, the company had no roadmap, and it was just following an instinctive reaction, trying to keep its neck above water for as long as possible, at any expense.

Tumblr – A billion dollar misadventure

This is of course how bubbles are started. All in the name of increasing the user base, and based on inflated valuations, that ought to have been rejected, Marissa went ahead and bought Tumblr for a billion dollars. Instead of raising red flags, people were excited and celebratory of this. I just watched on with shock and disbelief. And more or less, I think she is the one started this whole unicorn business making it commonplace for companies of far less value including Facebook’s buy of WhatsApp, an idiotic act, which will one day most definitely become a topic of a post here. All this has led to bloated valuations, and worthless companies continue to raise money for a LOT longer than they ought to. That is why, no matter what Peter Thiel would like to conjure up into wet dreams, this IS a bubble and it WILL be worse than the last internet bubble. (Link below.)


An Individual Bubble

Of course, nothing really came of the Tumblr purchase, except another 20 something running around the valley, with a bloated ego arising from sheer, dumb luck. Nothing came of several other purchases, some deemed as “acqhires” and others, well whatever Yahoo! spokespersons could conjure up. And yet, just by dangling Alibaba in front of people, this went on and on, the classic way bubbles grow. It is just that it was internal to one company. Then came the “corporate inversions”, where companies went offshore to avoid paying taxes and the eventual panicked response from the Obama Administration that put an end to Yahoo!’s Alibaba shenanigans. And the company was and is still standing!

Staying out-of-touch

And of course, finally, things have started to unravel, much to the pain of the employees. Predictions abound to date, since the ax has not yet fallen, of layoffs, anywhere from 10% to 25% or somewhere in between. Obviously, employees are nervous and worried about their future. Regardless of bravado, no one likes to be laid off. Ask me, I know. And in this atmosphere, per this NY Post article (link below), Marissa Mayer actually joked that “there were no layoffs this week”.

She hasn’t ventured to apologize for this, even though it has been over a week, and, though people comment about how it is spreading like wildfire through the valley, the true effect is null and Marissa herself has suffered no damage whatsoever. That is very telling. In comparison, just look at the Chipotle CEO and his travails.

Of course, in a long list of out of touch CEOs, she is not alone.

However, what is unusual is this. Marissa still has her very cushy and pointless job, and still has people backing her. Neither she nor anyone in the Yahoo! Board is in danger of losing their own jobs. And when she is eventually sent home, she will leave with a HUGE golden parachute, quite unjustified.

The Teaching Moment

It is becoming clear that a thousand or more former Yahoo! employees looking for jobs are going to put pressure on the tech job market, and this may get the ball rolling on the next bubble’s expiration. Or then again, like it happened with SideCar employees, where GM came and scooped up several of them, for what, god only knows (and by that I mean no one), some portions of Yahoo! will get bought by other companies. But at least, for them, continued employment, inflated salaries, perks and such will continue for a while. Does anyone know why AOL exists, or what Verizon is going to be able to do with it? That is one possible way, Yahoo! could go on for a few more years or decades.

Meanwhile, the CEOs remain the main problem. The CEOs of America are power drunk, inept and plentiful. You can take several examples from The Meg (Whitman) to Marissa Mayer, and several in between. (No, I am not a pig, but these two are great current examples of people just plowing their companies into the ground). To appease everyone, on the other sex, we have such lumiaries as Dov Charney of American Apparel.

What is surprising is, with stockholders such as CALPERS (which, truth be told, at least fought Bank of America’s Moynihan), Yahoo! had several opportunities to go on a path of correction. However, it is apparent that once companies get past a size, the boards first get out of control, the people they bring in become all knowing, quite powerful, and cannot be controlled. These are the people who are the worst agents in a bubble, more so than crazy VCs or greedy investors.

And, given the trend, many a bubble will form and burst, while the likes of Mayer take home millions, after laughing at their employees as well as the rest of us. 

The one thing we can do, is watch the CEOs, their jokes and look for that turning point, where at least that company and everything connected to it will start coming down. That may set off a chain reaction.


  1. On Marissa Mayer’s cruel jokes: http://nypost.com/2016/01/18/marissa-mayers-job-safety-joke-doesnt-sit-well-with-workers/
  2. Peter Thiel’s machinations: http://www.bloomberg.com/news/articles/2015-11-03/peter-thiel-says-high-prices-don-t-mean-there-s-a-tech-bubble
  3. Images courtesy of http://pexels.com
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From GoPro to GoneBroke? And what about the camera industry?

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The title may mislead some to think I wish to derive morbid pleasure from the lay-offs, but I don’t. My sympathy always goes to those who lose jobs themselves – I was laid off twice within a 12 month period and I know how hard it is. I am also a photographer, so I am generally unhappy about the trend in the industry.

But first, I also have some other things to focus on.

Is GoPro a blue chip or even a good bubble indicator? 

Once upon a time, the tech bubble more or less meant a bunch of internet companies, or software companies and the associated PC industry etc. Gone are those days. Having lost a sense of focus or purpose, companies all the way from Google or Apple and everyone in between want to make everything from cars to dildos (maybe not, and this would be particularly ill advised as there are some really well established “players” in this line of work), in an apparent attempt to make sure their software, OS and apps etc. get on everything, from your mop to your refrigerator.

And, so GoPro would easily belong. Plus, when did they go IPO (which surprised me, as that is not the exit strategy I would have picked and it appears this is now telling), they were celebrated as some sort of a tech wiz, which Mashable (link below) also pointed out today.

Thus, you could claim that their descent is a good indicator. I am however going to try to present a counter argument as well.

Why is GoPro falling?

Last year, for Memorial Holiday, I rented out the GoPro. I had become fascinated with the pending arrival of the Hero 4, and I always wondered if there is a clear way for someone very used to classic SLRs/DSLRs to do something with the camera. A coworker of mine owned a GoPro 2, and I tried playing with it to not much avail. Still, I wanted to try the thing anyway. In the three days, it became hard enough to figure out how to turn the damn thing on – this with my brother, an uber-geek compared to me also chiming in. Eventually, the camera stayed in its bag and was returned almost as-is to BorrowLenses. So, lets take a look.

  1. User Base: I think the GoPro was and is certainly well marketed to sports and adventure folks. Plus, there are some very creative ways in which they are used around nature. Yet, look at me. I have been shooting for nigh on 22+ years and I just missed the cut for being called a “Millenial”. I am an engineer, I am quite comfortable with cameras and this thing should have been dead easy to figure out. So, problem 1: usability, customer training, marketing and on and on she goes.
  2. Diversification: Related to 1, I think a widened customer base was not considered and that would explain the drop in interest. Is there a way this can be used for street photography besides nature? Or, could you do technical engineering/science work with it?
  3. Product Release Strategy: When Hero 4 came out, the timing did not appear suspicious. In hindsight however, that should have been released by Dec. 2014 at the latest and then efforts should have been made to release Hero 5 by the holiday season in 2015. Even the magazine site that broke the rumors about the delay in launch made it clear that this was going to be bad news. And, the thing is STILL not released!! Hello?
  4. Accessories: Then, relating back to 1 and 2 one more time, because I think this is the order in which the seriousness of the issues goes down, the camera does not have any cousins, or accessories/attachments or anything that can bring in some floating cash. I mean there are all these tiny trinkets they supply, but those things are usually just “bundled” into one price. This I believe is a major weakness for the organization.
  5. One Trick Pony: This doesn’t go back to accessories or inspiring other uses for the GoPro, but this goes back to the organization’s ability to actually release OTHER products. This is clearly why I was shocked when they went IPO with what I thought was a sports/bike enthusiasts toy. The crazy rise in the stock price didn’t make sense either. And I still honestly believe, they should have sold themselves to a larger organization. Of course, remember Flip? The acquisition could have made things worse too, but, this doesn’t seem a great strategy either – a much delayed, haphazard release schedule for a product with a very narrow market.
  6. Content issues:  One of the things I had looked into was to access some of the user generated GoPro content (like I use Pexels in my work for example). For one, the sources appear few and far apart and simply quite expensive. This might be another reason why GoPro is seeing lackluster growth. I believe, if they made it easier for people to find content, publish content and be able to use it (this would take training, but can and should be done), then there would be an avenue for them to grow the user base.
  7. Organizational Leadership: I got to see the founder on Stephen Colbert’s new show (can’t remember the name, don’t care, especially since Colbert himself has sunk to 3 by trying to accommodate political guests whom his viewers do not prefer at all), and I got the sense of a very friendly guy who probably likes to do Yoga and eat Tofu, which most of us in the valley do. The thing is, harsh as my statement might seem, I didn’t envision a leader able to see a multi-billion dollar company through sustained growth. I don’t know if there is a different term besides the Halo Effect, but founders don’t make great leaders always. This one seems like an issue where a strong leader with vision and strategy for business success, and not just a good surf ride or two has been missing for a while.

Also, I am finding it hard to understand why the company had to grow more than 50% to about 1,500 employees. For one camera, even 750 seems like a lot! So, clearly, there are some                  issues at hand that need careful examination. I am also not buying the content of this tweet below:


7. Awareness of Industry Issues: Related to all this, is the general state of the camera industry itself. Big brothers Canon and Nikon are themselves finding it harder and harder to make sales          and have to fend off competition not only from smartphones with heavily megapixelated lenses and their own huge after-market accessories business, but also from camera equipped drones          and all other new threats. The less said of the Radioshacks of the industry such as Sony, Ricoh and Olympus (though they have a good medical arm despite questionable activities that                landed them in hot soup), the better.

So, if you look at all of the above reasons, it makes you wonder if GoPro’s problems really reflect the tech bubble, or just lackluster strategy and poor management. I am going with the latter. For more proof, I am going to detail some of the camera industry’s own problems, which are not very different from what GoPro is facing but not really addressing.


The Camera Industry

I am not exactly what is called a “gear head”, but I am also a bit primitive in that I hold camera equipment in very high regard. But, most people don’t care so much and this was further egged on my smartphones, which made it easy for people to carry one less thing and get a lot more functionality out of the phones. This started the descent for the camera industry in general, and they still appear to randomly wander around without a strategy. This extends to all camera related companies. Remember Kodak? Also SanDisk is about to be swallowed…

  1. Smartphones: I have already said enough, but this is factor number 1, and the phones are going to go nowhere, so this is the main existential threat to the camera industry. For anyone who used to shell out a few hundred dollars or more to get a point and shoot, that cost is now easily eliminated, and most will never look back again. Now, the camera manufacturers are slowly trying to integrate the phones with cameras through apps and such, and that is good, but it only makes things worse for them in the long run.
  2. “Pound of flesh” features: If you remember your Shakespeare,  you can relate to this. In a response to competition and in an effort to try and recuperate losses, many camera companies came up with really stupid ideas. They’d add WiFi to a 5MP camera and want $1,000 for it. Maybe (and probably) Leica can pull that off, but the rest of you aren’t Leica. So no matter how exciting Popular Photography writers would like to make it sound, a $50 smartphone, in 2016, probably has WiFi and a 5+MP camera. So, to repeat, that is just stupid. And if you looked closely, you have no idea how many of them are engaged in this nonsense.
  3. Cannibals don’t like mirrors: I am speaking of mirrorless cameras of course. Now, the idea of expanding to a new type of product, reducing the noise from a falling mirror and the size of the camera all sound good, but when you see an ad that says “Look world famous photographer X uses our mirrorless camera”, what do you think the customer is going to do with your next desperate advertisement asking them to buy the new, new DSLR? Plus, the mirrorless bodies in most cases don’t take DSLR lenses. So, this is a one-way street, and most people won’t make a roundabout effort to come back up. ILC cameras just confuse me, so I am not going to go there.
  4. Dead PixelsWhen I finally made the shift from majority film to majority digital, I expected to be upgrading every 2 years or so, imagining a world in which camera companies took Moore’s law by the horns and gave us larger and larger pixel chips. Except, both Canon and Nikon still offer circa 20MP chips, and so, I still shoot with my Canon T2i. Please don’t faint. Maybe, I should have said that earlier. And it is a distant dream of mine to shell out the 7K or so it will take to buy the Canon D, but I am not too thrilled about having to use the tripod just to photograph a docile slot. So somewhere down the line, the pixel wars just ended and today’s cameras are almost  just as bad as cameras from 6+ years ago. This is truly sad. Yes, Sony has a 36MP sensor, but given that companies now historic instability, I am not going to make the switch. You get the point – a lot of room for improvement, a lot of room for strategy and it was all just chucked, by EVERYONE!
  5. Death by Lens Purchase: You can’t blame the smartphones for everything. Camera companies have embarked on a slow path to suicide. In a world of smartphones, GoPros, their knock-offs, mirrorless cameras, ILCs, drones carrying cameras and what not, they decided to screw the ones buying DSLRs. They first moved image stabilization from the camera to the lens pretending that was the “best thing to do”. Well, why didn’t they do that from the start then? The real reason is, if you buy the new cameras, you have to buy the new lenses. Plus, my friends and I went through a nasty experience. Through firmware updates and such, Canon made sure that slightly older Sigma lenses simply did not work with newer Canons! Can you believe that? How is being disloyal to your customer going to help you?

In any case, these are at least the major camera industry problems as I see them. Nikon is suffering. Samsung is rumored to shut down its camera division (which as of my last look-see, Samsung vehemently denied), and now we have GoPro. And besides a few innovation spurts, like the recently announced 120MP 35mm chip by Canon, not much is happening to stem this blood bath.


I guess in a round about way, I am saying this. this particular post is just about the camera/photography industry and GoPro. I believe it is possible for GoPro’s problems to indirectly reflect a down trend in the tech industry, but I doubt it. Yes, at least 105 jobs will be lost, people will have to find other jobs, relocate, etc, but I think, as stated earlier, those are not direct metrics or effects.

It would appear that every problem GoPro has currently, as is also the case with the problems of the camera/photography industry can be solved, needless to say, without layoffs. Whether there is leadership present to solve this or not, is a different story that only time will unravel.In the case of GoPro, as many people already surmise, they could become an acquisition target, which even now, will provide the pony with a stable and the shareholders with some returns..


  1. A Mashable Write Up on GoPro: http://mashable.com/2016/01/13/gopro-layoffs/#4e0oFpsObkqU 
  2. Images courtesy of: https://www.pexels.com/
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