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How Big Tech is dragging us towards the next financial crash

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  1. skybrian
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    This article seems to consist of a bunch of briefly described, scattershot accusations. I'm not a financial analyst but it looks awfully fishy to me. Startups are not "winners" (they mostly fail)...

    This article seems to consist of a bunch of briefly described, scattershot accusations. I'm not a financial analyst but it looks awfully fishy to me.

    But according to Haskel and Westlake, it also seems to reduce investment across the economy as a whole. This is not only because banks are reluctant to lend to businesses whose intangible assets may simply disappear if they go belly-up, but also because of the winner-takes-all effect that a handful of companies, including Apple (and Amazon and Google), enjoy.

    This is likely a key reason for the dearth of startups, declining job creation, falling demand and other disturbing trends in our bifurcated economy.

    Startups are not "winners" (they mostly fail) and they rarely raise funding from banks. Their investors know they're high-risk (this is how venture capitalism works), and it doesn't seem like there's a dearth of them?

    Maybe the book is better.

    According to Pozsar’s calculations, most of that money was held not in cash but in bonds – half of it in corporate bonds.

    I think that might be from this report: https://plus.credit-suisse.com/rpc4/ravDocView?docid=V7bFUL2AD-WEpBrM

    Silicon Valley giants had also become systemically crucial within the marketplace, holding assets that – if sold or downgraded – could topple the markets themselves.

    But, for example, Apple has $50 billion in U.S. treasuries, and they're making $50 billion a year. So it seems like they wouldn't need to sell any of the corporate bonds they own to pay off their entire debt in a single year? And their debt isn't due right away - they have to pay it off gradually over 30 years. (example)

    Banks are much more leveraged than this. That's why they're regulated.

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