Why Are Corporations Hoarding Trillions? - <AUTHOR> http://www.nytimes.com/2016/01/24/magazine/why-are-corporations-hoarding-trillions.html?action=click&pgtype=Homepage&version=Moth-Visible&moduleDetail=inside-nyt-region-0&module=inside-nyt-region&region=inside-nyt-region&WT.nav=inside-nyt-region <comment><USER3> Looks like the TL;DR of this article is: "Corporate leadership, being so much smarter than the rest of us dummies, sees something big on the horizon coming. They're saving all their cash so they can later invest because "the next transformative innovation could be just around the corner". Apparently they're smart enough to hoard all this cash, but not smart enough to know exactly what that transformative innovation is so they can get started on it right now.

Let me propose an alternate theory: They're no smarter than the rest of us, and NOBODY knows what to invest in anymore. Corporate leadership is uncreative and can't think of anything else to do with that money that will produce returns in excess of what they're already doing. Shareholders don't want the money back (they'll just turn around and invest it into another company that already has a pile of cash). And they sure as shit won't throw a bone to employees (whose wages have been stagnant for a decade). So, what are they going to do with it all? Who knows? Let it sit in a bank account!

<comment><USER4> As a corporation, the traditional thing to do with cash you don't need is to return it to your owners, either through dividends or through share repurchases: If the owners wanted to own money sitting in a bank account, they could put the money in a bank account themselves. If they wanted to own a company, they'd be better off owning just the business part without a chunk of low-return cash attached. Beyond basic liquidity needs, a pile of cash can only drag a company down.

Naturally, returning money works much better when taxes on dividends are low, or when stock prices are low (so you can give the remaining owners a better bang for the buck). Both taxes and stock prices have risen since the crash, however, and spending a cash horde on taxes or on overpriced company stock are a worse drag on the company than holding it.

<comment><USER5> Tech companies specifically have seen their historical predecessors disappear very quickly - Sun and SGI nearly evaporated, IBM has had 16 quarters of shrinking earnings. So tech company execs hoard cash in the hope that if they get blindsided they'll have time to recover. I'm pretty sure this is Eric Schmidt's explicit strategy.

Also, as someone else noted, a lot of this cash is "trapped" overseas as it would cost 35% to repatriate it to the US. The logical thing to do would be to move more operations out of the US to balance expenses with revenues but I guess there are issues with doing that.

<comment><USER6> _" Nearly Half of So-Called "Offshore" Funds Already in the United States"_

 _" Corporations are able to invest their foreign earnings in U.S. assets without treating them as "repatriated" and subject to taxation, because the federal tax code, specifically Section 956(c)(2), already allows U.S. corporations to use foreign funds to make a wide range of U.S. investments without incurring tax liability."_

[https://www.hsgac.senate.gov/subcommittees/investigations/me...](https://www.hsgac.senate.gov/subcommittees/investigations/media/new- data-show-corporate-offshore-funds-not-trapped-abroad-nearly-half-of-so- called-offshore-funds-already-in-the-united-states)

<comment><USER7> That doesn't change anything. Cash on hand, even outside of the US lowers cost of capital, potentially almost to zero.

Paying the money to shareholders would imply double or triple taxation before the money is with the shareholders. (once, returning the money (corporate tax), once capital gains tax, then income tax or corporate tax again in the case of corporate shareholder). Just so we're clear, that means 35% and then another 35% or 50% tax, or 57% up to 67% tax.

So I think the original argument stands. The company has a choice. Either spend 3x the money on something that will make the stock price go up (like creating an offshore entity buying your own stock if you want to do this rather directly), or give 60% to the US government, 40% to the shareholders. That's why buybacks, which have been proven inefficient to say the least, still happen. They'd have to be 3x as inefficient to break even.

And from the perspective of the management itself : that's either a trillion dollars under their direct control (not quite property, but ...) or 400 billion payout to shareholders, none of it under their control. As long as they can get away with it, they'll keep it. Just look at what Amazon does to it's shareholders.

</comment></comment></comment></comment></comment><comment><USER8> The US is out of demand. Workers are spent out. Thus, there's no need to increase output, because nobody has the money to buy it. The US has huge excess manufacturing capacity, thousands of malls which could handle more traffic ("there's always parking at Sears", a rather pathetic ad), and services which could handle more business. There's a glut of capital, plenty of available unemployed or underemployed workers, no shortage of commercial real estate outside of a few cities, but no way to use it.

The CEO of WalMart has mentioned this. They have a direct view into the spent- out economy - same-store sales data. Sales decline each week after payday, then recover after payday. Sales move to necessities later in the month.

That's why companies aren't investing in capacity.

<comment><USER9> This is the ultimate problem with "trickle down" economics. Capital doesn't drive growth. Lack of capital limits growth, but excess capital doesn't generate additional growth. Demand drives growth and 35 years of stagnant wages (wages are basically where they were in 1981) have put a chokehold on growth.

This is why you have the seemingly incongruous effect of high taxes encouraging growth and low taxes stifling it. Ultimately "high taxes" tend to effect the rich a lot more than the poor, and the money ends up being redistributed somewhat equally, spurring demand as the poor can suddenly afford a lot more good and services.

<comment><USER10> I'm coming around to the opinion that taxes on income are a bad idea. Income flows to people as they're trying to accumulate wealth, trying to climb from lower to middle to upper class. Higher taxes on income, especially highly progressive taxes, make it harder for people to move between social classes.

The focus on income tax creates a situation where the person who makes $200k/yr but has a net worth of $0 gets taxed far more than the person whose investments bring them $100k/yr and they have a net worth of $2,500,000.

Oh, and their lifestyle might be about the same despite the disparity in income, because one of them needs to work for a living so they'll need to live somewhere close to jobs, pay more for transportation, etc.

Higher income tax is great, if you're already wealthy. If I was wealthy, I'd be very happy people if stay focused on that. But I think taxing accumulated wealth is a much better way of leveling the playing field over time and also making sure capital stays in productive use. France already has something like a 0.5-1% "solidarity tax" on wealth, and it's a progressive tax.

According to Piketty, the return on capital has historically been around 5% per year, and returns are better at scale. For multi-billion dollar funds, the rates are around 9-10%. The "Financial Independence/ Retire Early" people who plan for pessimistic scenarios say to expect 4% return. Let's say it's reliable to expect 2-3%.

At $10M a person can expect about $200-300k in income. If we have a wealth tax of 1% their investment income after taxes reduces to $100-200k. If they want to maintain their previous standard of living, they need to make about $100k per year.

At $100M let's say economies of scale start to happen and even in a pessimistic scenario you can expect a 4% return. If we have a 2% wealth tax at this point, the person can still expect an investment-only income of $2M per year.

You can see where this is going. At $1B with a 5% pessimistic return, 3% wealth tax, $20M investment income. At $10B with a 6% pessimistic return, 4% wealth tax, $200M investment income.

The nice side effect of this is that the mere scale of capital doesn't provide competitive advantage. The wealth tax should be designed to even out the advantage of scale so that larger accumulations of capital need to be put to best use.

Putting some numbers on the napkin... The US has an aggregate net worth of $85 trillion dollars. The federal budget is $4 trillion. Assuming a power law distribution of net worth, let's guesstimate an average 2% tax on that $85 trillion, which comes out to $1.7 trillion. We could roughly cut income taxes in half or eliminate them except at very high levels ($1M+) if we used a wealth tax instead.

The important thing to note here is that the wealth tax still leaves about 2% investment income, it doesn't reduce the total over time. I think it's great that people can accumulate wealth and then live on it, or pass it on to the next generation. But it would be great if we can keep the income at around 1-2% so that the nearly guaranteed increase in accumulated wealth is the same or less than the growth rate of the economy, meaning that people who build businesses today have the ability to reach the same heights as those who built businesses yesterday, without extraordinary luck or blunders by those with wealth.

<comment><USER11> One big issue is feasibility: It's much easier to track, meter, and tax income as it changes hands than it is to track/meter/tax accumulated wealth.

<comment><USER10> Feasibility is a valid concern. Here's what I think.

Stocks are traded on public exchanges. Land and buildings stay in one place. Private jets need to land at airports and they each have a tail number. Most things to be sold efficiently are sold in public marketplaces. There are probably some assets that are hard to track, just like there is currently income that is hard to track. Some people are paid in cash and don't report it. A whole multi-billion-dollar black market of drugs, prostitution, etc. exists that is largely not income taxed. It happens. But in general income tax works, and a wealth tax would too.

<comment><USER12> A huge amount of wealth is tied up in land, which is ultra difficult to assess the value of without actually selling it.

<comment><USER13> land is already valued for "tax" purposes as council rates.

</comment></comment></comment></comment></comment></comment></comment><comment><USER14> I'm surprised nobody has mentioned the geopolitical advantages of hoarding cash. A big pile of untaxed, uninvested cash represents a significant political bargaining chip for the corporation in control of it.

Apple can extract more from negotiations with the US government, for example, when it's holding $100b USD offshore. Quite simply, that money is leverage.

Over the next several decades we will see the decline of the nation state as the primary geopolitical powerbroker. Corporations already exert significant control over politics, and this trend will only continue.

Perhaps what the executives see that us plebes do not, is that this geopolitical shift has already begun, and is much further along than anyone realizes.

<comment><USER15> I think it's a liability. The US government can at any time tax that cash, and if Apples execs refuse to pony up then they can have fun in jail.

If the US government decide to do that....

<comment><USER16> >If the US government decide to do that....

And therein lies the rub. Apple can mount a better defense than the US prosecution can, by dint of their bottomless legal fund. Apple can also put forward a united front, whereas you would need to summon an unprecedented level of political will and bridge-building to simply prevent Congress from derailing the DOJ prosecution through infighting.

<comment><USER17> How many divisions does Apple have?

</comment></comment></comment></comment><comment><USER18> According to this Bloomberg article, companies have $2.1 trillion sitting offshore for tax reasons [1]. They're probably waiting for Congress to let them bring home the cash, tax-free. However, the last time that happened (2004), it was done to encourage companies to create jobs. Instead, they spent it buying company stock. [2]

1 - [http://www.bloomberg.com/news/articles/2015-03-04/u-s- compan...](http://www.bloomberg.com/news/articles/2015-03-04/u-s-companies- are-stashing-2-1-trillion-overseas-to-avoid-taxes)

2 - [http://www.theguardian.com/money/us-money- blog/2015/jun/13/r...](http://www.theguardian.com/money/us-money- blog/2015/jun/13/repatriate-profits-encourage-corporate-tax-avoiders)

<comment> ju-st As far as I know the US taxes the income of its citizens even when they live outside the US. So why can't the US just tax the offshore income of the companies?

<comment><USER19> Because the US needs the businesses, not the other way around.

<comment><USER20> Nope. Lobbying dollars.

<comment><USER19> Not really, creating a hostile environment for businesses will obviously drive them away.

Lobbying has nothing to do with preventing a completely unrealistic scenario from happening.

</comment></comment></comment></comment></comment><comment><USER21> _If the companies spent their savings, rather than hoarding them, the economy would instantly grow, and we would most likely see more jobs with better pay._

The article makes it sound like these dollars are somehow being removed from the economy. If they're put in a bank, the bank loans it out to someone else. If they buy treasury bills, the government then takes the money and spends it. Even if all this money was converted to paper notes and stuffed into giant mattresses, the net effect would simply be to deflate the currency and increase the value of everyone else's money.

Hoarding money isn't like hoarding oil or rice or microchips. Maybe GM spending money would grow the economy more than GM loaning it to the federal government so they can spend it, maybe not. Depends on what they spend it on - the return on education is probably higher than the return on fancy pensions or factories for products that nobody buys.

<comment><USER22> > If they're put in a bank, the bank loans it out to someone else. If they buy > treasury bills, the government then takes the money and spends it.

good call, this is Econ 101 stuff that most people just don't know. Saving money in a bank or government bonds is not the same as locking it in a vault or burying it in your backyard. It is still out moving around in the economy.

<comment><USER23> I think difference between savings and investment (or consumption) is in reversibility. Savings are reversible, basically if you "invest" in any liquid enough assets that keep value, then you save. Investment (and consumption) is irreversible, once you made the decision, it's done deal - somebody does the work, energy is spent, entropy is produced and so on.

That's why, contrary to mainstream economic opinion, it is useful to save. Saving lets you react to investment from competitors, by postponing the decision after they made their move. This gives you advantage (power) if you're big enough.

</comment></comment></comment><comment><USER24> This article does a good job of explaining:

[http://www.dailyfinance.com/on/corporations-cash-hoard- trill...](http://www.dailyfinance.com/on/corporations-cash-hoard-trillion- profits/)

Some interesting excerpts:

"Four of the top five holders of cash are tech companies ...who together possess...about 23 percent of all cash owned by corporate America today. Overall, the tech sector controls more than half of such cash"

"about 60 percent of [non-financial corporate] cash piles are offshore and subject to as much as 35 percent tax if brought back to the U.S."

<comment><USER25> The simple answer is that these companies have leveraged the immense economies of scale in their info-tech niches, and are soaking up billions of consumers' money but there's nothing else for them to buy.

This is the sort of purchasing power imbalance that caused the Great Depression. The good news is that even if Depression hits, we still have access to web apps.

<comment><USER26> Another viewpoint might be that if the economy is indeed in for a slow or down period (which is certainly not a guarantee at this point), they will be better equipped to weather the storm and seize opportunities that arise (ex: acquiring competitors who could not survive).

Personally I'd love to see them throw around that cash to bring serious competition to a few specific markets. Cell phones and cable are the big ones (and Google is already getting started there). Looks like they are plans to do similar things with VR, robotics, and automated vehicles.

</comment></comment></comment><comment><USER27> It's the same reason I save my money: for opportunities when prices are low. This is especially relevant now that the stock market is tanking.

Most people with any kind of money think this way.

<comment><USER28> > It's the same reason I save my money: for opportunities when prices are low

The problem is: how do you know if the time is right (i.e. ten years later you can say "I invested in the lowest possible price")?

Possibility A: you invest too early, stock drops further and you can't recover in a reasonably long time frame (e.g. 1 year)

Possibility B: you invest too late, and people who invested before you made more profit in retrospect

Possibility C: you invest at the right time frame and made a nice chunk of cash

Possibility D, especially likely with unicorns: either A, B or C after a year... and two more years pass by, and the company goes bust (Myspace!)

<comment><USER29> The trick is, you don't invest during the downturn, hence all the cash hoarding.

You invest after it bottoms out for a while. Macro economies do not recover like a rocket, the window to invest is very large, so large that if you only recognized the bottoming out a couple years later, you still haven't missed the opportunity.

<comment><USER30> That is a really interesting point. So I've never invested in stocks before (preferring to invest in my own business) but have decided to diversify and am only seeking returns in a 5-15 year bracket (but want to minimize 1-5 year downside so it could potentially work as an _extra_ emergency fund too).

I had assumed being 20%+ off of the highs, it'd be a good idea to start getting involved now, but.. maybe I should wait until a clear "bottom out" is showing?

<comment><USER31> So long as you don't wait forever. The market bottom of any exchange or stock is $0.00. The market, will likely never actually "bottom out". Look into DCA Dollar Cost Averaging. I personally, and professionally, manage DCA strategies with applying additional infusions during obvious lows (example: markets are down 10% in a given period). The bottom of a cycle can undulate "sideways" a bit over a period of weeks, months, years, decades with few discernible entry or exit points. Sometimes after an "event" occurs, the market/stock jumps XX% and opportunities may not occur again in the near future (goes sideways at new level). I note sideways markets/stocks and calculate the risk/reward if I deem it an opportune time. In most markets stocks don't go sideways forever.

</comment></comment></comment></comment></comment><comment><USER32> HN is a terrible place for conversations about complex economic issues. Many comments seem to be both confused about basic concepts and trying to make political arguments. Not a recipe for enlightenment.

<comment><USER33> Yeah, I've noticed the average knowledge standard for programming issues is very high, economics less so. Then again I'm not sure where you do go for exceptional conversations about economics.

<comment><USER34> It's not that hard. This is an entrepreneurs/programmers forum. If you want better economics insights, go to where economists hang out.

A few ideas: Read popular blogs of well-known respected economists, look at their comment's section. You'll find both really good articles, and serious discussions between actual economists.

</comment></comment></comment><comment><USER35> I don't get it. The article does not point out even an attempt to ask the leaders of the said corporations - "Why?".

Its better to ask to get some semblance of their thinking instead of pure speculation.

<comment><USER36> The author seems to have a kind of _old century_ overconfidence in the value of the dollar. I hope he uses only one currency for pratical reasons.

And I would rather read an article that use ratios between liquid/static moneys those corporations got instead of _random_ values.

(I'm one of those that believes static money has no value, had and/or may have, but in reality it's absolute zero).

</comment></comment><comment><USER37> Why would the author substitute the terms 'cash', 'savings' and 'profits' in the article given their entirely different meanings? Corporations could be sitting on trillions of dollars in 'cash' if they wanted, with zero 'savings' and zero 'profits'. The whole article seems somewhat contradictory.

</comment><comment><USER38> I don't think the reasons are that hard to understand. M&A opportunities outside the core business are especially hard to integrate in the software sector. Google and Apple never got social right - social is a field with such extreme network effects that it tends to create natural monopolies. Buying up smaller companies in that field doesn't provide a lot of help in cracking FB's castle.

OTOH, Apple and Google are outcompeting each other in mobile - no other company is currently making big inroads, not even MS, even though they see it as a critical playing field for their future.

And why would one of the big tech giants buy out old-economy companies (eg. in automotive) if they believe disrupting that field with innovation is much more likely to succeed?

In the end, the international financial system let's them get away with hoarding and shuffling around the billions and the companies don't see killer investment opportunities. In a low-inflation period, just stuffing the money under the pillow is probably better than burning it on failed M&A.

</comment><comment><USER39> Summary: Many large corporations in pharma, auto, tech are becoming net savers in order to (1) avoid the taxes associated with purchasing and maintaining new assets; (2) have a warchest of cash for M&A activity as cash deals are generally much cheaper than equity/debt deals, and M&A can be more cost- effective than R&D if done correctly.

Author is unconvinced that this covers the whole picture, and offers this meta-explanation: _Through the 20th century, as we shifted from a horse-and- sun-powered agrarian economy to an electricity-and-motor-powered industrial economy to a silicon-based information economy, it was clear that every company had to invest in the new thing that was coming._

Simplified: there isn't enough promising new tech out there to soak up all of the cash in circulation. This is a common theme that has economists asking: what will be the 4th industrial revolution, and when will we see it? [1]

Is the cash hoarding good or bad? Author thinks good: _If corporate leaders and their investors truly believed that the future were bleak, that innovation and economic growth were irreparably slowing, there would be little reason to hold on to all that cash._ AKA that we are on the cusp of a new wave of innovation.

Personally I don't believe this matches up with leading business cycle indicators, such as the stock market, employment rates, and trends federal spending as a percentage of GDP. [2] But what do I know - there could be an R&D lab somewhere out there that is tantalizingly close to bringing the next paradigm-shifting technology to market. I'd love to know what that could be.

[1] [http://www.nber.org/papers/w18315.pdf](http://www.nber.org/papers/w18315.pdf)

[2] [http://www.usgovernmentspending.com/recent_spending](http://www.usgovernmentspending.com/recent_spending)

<comment><USER40> Seems to be autonomous transportation. Hence auto and tech. Google, Apple, and GM are the only companies named in the article.

Google says they'll be ready in 2020. Apple TV has the biggest share of the streaming TV hardware market [1] and Watch almost brought in $2B last year [2]... but iPhone and iPod sales are sagging [3]. GM just put $500M into Lyft. Ford is pivoting to software and services. And so on.

"Driverless" has the potential to be more like horse shoes or "iron horses" or "horseless carriages" than, say, western saddles or dieselification or automatic transmissions. Historically, dramatic changes in ground transportation seem connected with dramatic changes in how people spend time, where they live, and what they work on and value and eat.

As for pharma, maybe the patent cliff? By 2020, patents on Plavix, Singulair, Diovan, Lipitor, Rituxan, Humira, Novolog, and Avastin will be expired.

1\. [http://advanced-television.com/2015/11/06/apple-tv-31-of- str...](http://advanced-television.com/2015/11/06/apple-tv-31-of-streaming-tv- hardware-market) 2\. [http://www.ibtimes.com/apple-watch-sales- topped-17b-apple-in...](http://www.ibtimes.com/apple-watch-sales- topped-17b-apple-inc-fy-2015-2162403) 3\. [http://www.cnbc.com/2016/01/20/iphone-sales-worse-than- expec...](http://www.cnbc.com/2016/01/20/iphone-sales-worse-than-expected-ubs- analyst.html)

</comment></comment><comment><USER41> The economy grows and you get inflation when interest rates are lowered. It shrinks and you are likely to get deflation when rates are raised. The rate lever was getting reduced over the last 30 years and is not at zero. Anyone can see the only way for rates to go is up, and the value of cash is likely to increase in the near future. I honestly don't see any need for mystery in that.

There's also the notion that a companies stock price should be tied to its dividends, or at the very least it's ability to pay a dividend. If you want to buy low/sell high, you're assuming you are smarter than other people. If you want to buy and get income from dividends/profits you are a more realistic investor and will be interested in the P/E ratio. A hoard of cash is going to help stabilize the stock price - market cap should never fall below the value of the assets.

<comment><USER25> What's the point of stabilizing stock, price, when instead you can just have cash in bank plus an unstable lowe price stock?

<comment><USER42> Keeping the stock price high fends off hostile takeovers and negative feedback loops from nervous sellers.

This is my main theory about why companies are hoarding cash. They're tired of being at the mercy of the traders.

</comment></comment></comment><comment><USER28> > Remarkably, the United States government was able to tax all that productive > corporate behavior so much that it came close to paying off all its debts > for the first time in 160 years.

The current US debt is over 18.900.000.000.000 $ ([http://www.usdebtclock.org/#](http://www.usdebtclock.org/#)). Am I getting the author right that the US managed to put on 18 B $ in 20 years?!

<comment><USER43> No. In the 90s, there was a brief period where the US managed to not have a deficit (ie, it was taking in as much as it was spending). The US has never eliminated its debt, nor should it; that would essentially mean withdrawing the US dollar from circulation.

<comment><USER44> > The US has never eliminated its debt, nor should it; that would essentially > mean withdrawing the US dollar from circulation.

To the best of my knowledge, the standard debt calculations do not include outstanding currency, though they do include outstanding bonds.

</comment></comment></comment><comment><USER45> One theory I'm currently fond of is that the band of growth where unicorns live ($100mil -> $1bil in valuation) used to be accessible to the public markets, but it's recently only become available to private investors.

This creates weird distortions in investment behavior, because it means investments seeking this behavior have to trickle down to VC or acquisition. This could be way this comes about -- by investing in Google or Apple, you're effectively investing in a 10-year VC fund. Sure they're sitting on a lot, but hopefully they make enough acquisitions with it + "raise" enough more during that time that it looks like the cash is going to work.

</comment><comment><USER46> I think my favorite part of this article is realizing how deep we all are in spin ... "disinflation"? What the hell is that?

Do you mean "deflation"?

But for pity's sake, let's not call a spade a spade and use the word "stagflation" which is what Japan went through, and where the US is heading. The Fed can't give banks money fast enough and consumer spending is stagnating. Sounds like a recipe for stagnating inflation to me.

EDIT: My bad ... disinflation refers specifically to a decrease in inflation. Stupid English beating me again with a word for everything ;)

</comment><comment><USER47> Theoretically the value of all that cash should be baked into the share price. If shareholders think they can better invest the money, they can sell their shares take their money elsewhere, and only have to pay capital gains tax.

If the companies repatriate the cash, they have to pay tax right now which eats up a substantial percentage. Then they still have to find something to do with the cash. If they pay it out to shareholders there will be an additional dividend tax at the individual level so most shareholders would receive like 50 cents on the dollar for the dollars abroad.

<comment><USER48> By this logic, every dollar abroad should be worth only 50 cent in the price of a share - after all, that's the real value of that cash after all taxes (contrasted to the _accounting_ value of the dollars on the companies' annual report).

<comment><USER47> You're right that it's probably discounted somehow by some investors, but it's also worth it's full value if they choose to spend it abroad, so it's not necessarily worth exactly what it would be worth if they repatriated it and paid it out as dividends. The discount depends on what the shareholders think will happen to the money, and I don't think anyone is predicting repatriation any time soon.

</comment></comment></comment><comment><USER49> Expenditures and investments by these companies have to be justified on the basis of expected returns. The constraints sequestering the money:

\- Valuations for acquisitions that exceed expected ROI. \- Taxes on repatriated funds. \- Dearth of top-end human talent to manage the acquisitions and investments. \- Pervasive fear in corporate board rooms that the day of reckoning for quantitative easing and US debt is still ahead. \- Changing demographics whereby consumers wealth is held by low spenders (older folks), rather than high spenders (younger folks).

Its a combination of factors.

</comment><comment><USER50> I doubt that the current political climate would allow for this but I wonder what would happen if the U.S. implemented a basic income program and put in place extensive support for building out more knowledge based clusters across the nation. Places like NYC and the Bay are are doing VERY well overall. (That's also where many of the corporations with large balance sheets are based.)

Specific additional things I'm thinking of include free tuition, low cost small business / creative studio financing.

</comment><comment><USER51> There's a saying something along the lines of:

"if somebody owes you a million dollars, they've got a problem. if somebody owes you a billion dollars, then you've got a problem."

I could be totally wrong, I'm not an economist -- but I think you encounter problems when you want to earn, let's say, 10% on $80 billion. To give an _extreme_ example:

If you give me $1 and want a 100% return on your money, then hell yes I can double your money in a day and give you back $2. If you give me $1 million then I'm going to have trouble earning you much more than whatever a savings account offers, like 2%, because I don't have a way to put that much money to work.

Money doesn't magically grow, you give capital to somebody who's going to do something with it like pay some workers to produce a widget and sell them, making more money than they spent building widgets. When retail investors put money in a bank or in the stock market and it grows, it seems like it's just an automatic outcome. But somebody on the other end, after the money changes hands hundreds of thousands of times, has to be able to put that money to work.

Where are corporations collectively just going to dump trillions of dollars and expect it to magically grow?

</comment><comment><USER52> An alternative narrative. This is classical economic group behavior near the top of a bubble. The fed has long goosed its lending programs with cheap money, in an effort to stimulate investment, and to avoid the spectre of spiraling deflation that they were worried would happen after the short deflation of 2009. Capitalists have then, rationally gone out in search of investments to yield a return. However, innovation is a limited resource at any given time, and we're close to tapping out on the amount of possible innovation. Moreover, realizing the full capacity of innovation is limited by the structure of society, wherein identifying entrepreneurs with actual potential is overtaken by identifying artificial 'signals' or 'tropes' of entrepreneurs: lots of false positives, charlatans, people with connections, or people who just got lucky once, are getting money, yields are decreasing.

Accordingly, as capitalists identify that it is becoming difficult to find real investments, their investment behavior decreases, just as the Fed is starting to pay banks to hold cash, to shore up reserves and make banks appear more resilient in the face of their "stress tests". This is artifical disinflation, but the worst type, because normally deflation helps the poor, but by the very mechanism of the current disinflation, it's going to the top. (Austrians: Why is giving money out disinflation? Because in this case it's tied to _not lending_ , and private lending-based monetary expansion has a multiplier effect).

What to expect down the line:

A minor economic crisis as happens occasionally (black swans) will start triggering capitalists to start spending their cash reserves. As this spending hits the market, prices will go up, triggering inflation measures to start accurately reflecting the pent up monetary expansion that the Fed has undergone over the past 8 or so years. As the price of goods goes up, it will no longer make sense to hold onto cash, and moreover, the smart move will be to start investing in goods producers that can take advantage of these increasing prices.

We'll have an inflationary spiral spanning say 2016-2018. Don't worry, it won't be a Wiemar-republic level crisis, but it certainly will not be pleasant for the poorest Americans.

I probably have some details about the macroeconomics wrong, so we shall see whether my prediction comes true. I welcome counter-explanations, and corrections to what I have to say.

<comment><USER52> I should also say the strengthening dollar, partially due to the fed's disinflationary policy, and also due to external effects (OPEC oil activities, which are still priced in dollars) are making the dollar crazy strong relative to foreign currencies. Is disincentivising corporate spending and investment. This can't last. When the relative strength of the dollar starts to erode, take it as a leading indicator. Herding behavior will do the rest.

</comment></comment><comment><USER53> 2 reasons ...

"Economists ... showed in a 2009 article that the increase in the cash-to- assets ratio of firms was related tightly to precautionary motives."

"[a] second motive is present for multinational firms and is due to repatriation taxes. ... firms may have incentives to keep foreign earnings abroad. As a consequence, in times of limited foreign investment opportunities and high profitability, these funds are likely to be held abroad in the form of cash."

from [https://www.stlouisfed.org/Publications/Regional- Economist/J...](https://www.stlouisfed.org/Publications/Regional- Economist/January-2013/Why-Are-Corporations-Holding-So-Much-Cash) : Why Are Corporations Holding So Much Cash?

If I were to venture a third reason, it would be that with rising interest rates looming, the cost of borrowing will go up; which might be a subset of the 1st ("precautionary") explanation above.

</comment><comment><USER54> It seems to me that holding large amounts of cash is only viable when inflation stays low. So a higher level of inflation might cause the release of some of these huge cash reserves in the form of real investment (real in terms of hands doing work instead of moving the cash to some other financial instrument)...

<comment><USER55> I mean, cash doesn't need to literally be a pile of money right? It could be in some kind of ultra short term instrument that has some kind of inflation protection. Normal people could buy t-bonds to exactly match inflation. Not sure what options are out there when you have 100 billion dollars - <USER2> something like interest rate futures could hedge you against inflation risk.

<comment><USER56> Inflation goes hand in hand with growth, you can't hedge away changes in real value. If cash can be put to productive use, people who hoard it will do less well than those who put it to work.

</comment></comment></comment><comment><USER57> I've often said that the key to improving investment is to eliminate corporate taxes, tax foreign currency movements (when money moves out of the country), and to put limits on the amount of unutilized/under-utilized assets a corporation can hold onto, and for how long.

Corporations better serve the public good when they are spending, and beyond that spending domestically. By shifting funds out of the country and/or otherwise sitting on assets, there's a reduction in economic potential as a whole and said corporation is less serving of the public good.

Corporations are meant to serve the public good by encouraging investment and limiting liability of investors not involved in decision making. Corporate behavior today doesn't reflect this.

<comment><USER58> Seems like that's a proposal that's trivial to exploit, I can think of at least a couple of ways off the top of my head: shell companies funds- shuffling, related companies wash buying/selling, etc.

<comment><USER59> Adding in another market distortion isn't going to help matters, you only create opportunities for people to game the system in an ever increasing effort to explore the law of unintended consequences.

Those funds are held (usually) as US Treasury securities, or are at least hedged against any local currency risk, much the same way that any sovereign maintains a certain amount of foreign currency reserve.

The most direct way to solve this issue is simply to say that profits earned in foreign jurisdictions are free from US tax. That's effectively what the British do and it's worked well for them vis a vis tax policy.

The second most direct way to solve this issue is to offer reduced taxes for profits earned overseas. This encourages an export-driven economy because funds earned overseas are taxed less than funds earned here.

The "problem" that everyone seems to be solving is: how do we enable the government to take the money of these evil corporations?

That's the wrong goal.

The best strategy is to align the goals of the country/people and the corporations. We haven't done that for a long time.

<comment><USER57> I'm not suggesting taking money from "evil" corporations... only in that money made in a locality should be taxed in that locality... getting rid of corporate 'income' taxes in favor of tariffs/vat and money exports would allow for that, with less opportunity for subverting the system, so to speak... At the end of the year, a tax refund could be given if you're a person, and transferred less than 100k out of the country.

It could be a much simpler system, with less bureaucracy needed. There are other possibilities as well. Right now, many corporations are holding onto funds, which doesn't help any economy, and worse, shifting those funds to holding companies to avoid taxes... What I'm suggesting would punish holding onto assets and encourage activity domestically... foreign goods will always be needed, and as such taxes would apply. VAT systems happen in lots of countries.

<comment><USER59> What makes you think that taxes aren't already being paid in the foreign jurisdictions?

This is a big part of the disconnect: if you (say, as Apple) sell a phone in Munich, you're paying the VAT tax in that country already.

Generally speaking, when you take the profits from your German sales back to the USA, in many (most, save a few exception) cases, you're going to pay corporate taxes on those profits now that they are repatriated back in the USA. So companies are incentivized to keep those profits in overseas jurisdictions to defer the US tax and reinvest in their overseas operations. Considering how much of their actual sales come from overseas, it's no wonder that they pursue this strategy.

EVEN IF a company wanted to be a "good US corporate citizen" and pay more taxes to the government, they'd be at a financial disadvantage to overseas companies doing business in the USA because THOSE companies DON'T have to pay tax on their overseas profits. That's why you see all of these companies set up in "corporate tax havens" that don't tax a single penny of offshore income. For one thing: it's damn easy to do international business through these companies because you effectively have a neutral ground from the perspective of finance. For another: you save money on taxes, allowing you to offer better terms to your customers and partners.

This kind of stuff only matters to the biggest corporations with multinational operations because the regulatory minefield associated with keeping track of laws and regs in lots of different countries is a nightmare and only a few top accounting firms have the talent to master it. Another reason why the law of unintended consequences shifts the tax burden to the little guy: he's not big enough to care about shifting his income overseas. When you create incentives by way of regulatory/tax arbitrage, you make it worth the while of a big multinational to invest the time and effort structure their deals so they take place in offshore jurisdictions.

<comment><USER57> This isn't money earned over seas, it's money earned in the U.S. then shifted overseas... Results from a few simple searches. Yes, it does only matter to the largest corporations, and investment firms which account for a huge percentage of wealth that further stretches an imbalance in property/wealth where fewer than 100 people have more than half the world's population combined.

I'm all for being able to make insane amounts of money, but there are limits to what is good for greater society and having underutilized holdings overseas for the simple purpose of tax avoidance isn't good for anyone. The money isn't being invested to earn more, and it isn't being spent to improve the economy. It's wasted in a corporate setting.. it should be re-invested, spent or dispersed to the share holders, who should then pay income taxes (baring a VAT/tariff system in place to replace it)

[http://www.nytimes.com/2013/05/21/business/apple-avoided- bil...](http://www.nytimes.com/2013/05/21/business/apple-avoided-billions-in- taxes-congressional-panel-says.html?pagewanted=all&_r=0)

[http://motherboard.vice.com/read/apple-avoids-60-billion- in-...](http://motherboard.vice.com/read/apple-avoids-60-billion-in-taxes-by- keeping-money-overseas-report-says)

[http://arstechnica.com/business/2015/10/apple-google- microso...](http://arstechnica.com/business/2015/10/apple-google-microsoft- hold-more-than-336b-overseas-via-legal-tax-loopholes/)

</comment></comment></comment></comment></comment></comment><comment><USER60> The liabilities side of US corporations balance sheet makes the cash holdings far less significant than they appear. When one imagines a "hoard", we don't assume the fire breathing dragon also has bills that match the equivalent of that hoard or beyond.

The expected EU tax payments for companies like Apple take another large bite out of how much of that cash is really their own.

The word "hoard" is correct ("a supply or accumulation that is hidden or carefully guarded for preservation, future use, etc.") but suggesting that this money can just be unleashed upon investors or the general population in the form of capex or wage increases is silly.

</comment><comment><USER61> I think it's because the Fed's past easy-money policies (QE). The idea of QE is that the Fed puts a ton of cash into the market in order to encourage investment. However investment pushes asset valuations higher. Once asset valuations are high enough, people stop investing because the fundamentals don't support the valuations.

The money injected by the Fed will eventually be absorbed by inflation and the Fed reversing course and raising rates to suck money out of the market. But inflation's been low and the Fed's only done a single, very recent increase in interest rates, so "eventually" hasn't arrived yet.

I think the "big thing" they're waiting for is for the investment market to become less competitive. One way it becomes less competitive is with investors exiting the market (because they have things to spend their cash on, like bonds), another way it becomes less competitive is with more startups to invest in.

So by this analysis, the next couple years will be a great time to own equity/options in a startup -- those balance sheets are just waiting for the right opportunity to make an acquisition.

<comment><USER62> > _The money injected by the Fed will eventually be absorbed by inflation and > the Fed reversing course and raising rates to suck money out of the market. > But inflation 's been low and the Fed's only done a single, very recent > increase in interest rates, so "eventually" hasn't arrived yet._

Do you understand the relationship between interest rates and inflation?

<comment><USER61> My understanding is that if Fed holds IR on bonds low, money exits bonds and goes into the market, causing inflationary effect (more money chasing same amount of goods). If Fed increases IR, money exits the market and goes into bonds, causing deflationary effect (less money chasing same amount of goods).

</comment></comment></comment><comment><USER63> First, corporations are hoarding trillions collectively, not individually...Google, the example cited is banking 80 billion...others I'm guessing, much less...

Maybe "caution" has risen a notch in the CEO/Board investment repertoire...there aren't nearly as many sure things as there used to be...why is that? The chances of making a mistake have never been greater...

A large part of the uncertainty is likely dictated by the plain and simple fact that we Earthlings have now constructed a "global economy"...countries now share many of the same opportunities and risks, even when they're on opposing sides of the planet from one another...good times and hard times can now seep across borders and continents in ways they never could before...

In any economy wages, production, living standards, etc., eventually even out across the spectrum (global), and arrive at a stasis...

When that stasis is fully realized across the globe what will daily life be like for the average American, the Chinese, those in India, etc...?

</comment><comment><USER64> My theory is that when the QE rounds started and trillions of dollars were pumped into the economy (major inflationary red flag), the velocity of money dropped like a rock (major deflationary red flag) as a natural reaction.

EDIT: The reason is likely tied to the fact that interest rates sat on the bottom for the last 5-8 years and holding money was just as valuable as investing it. See the article[1] on the St. Louis Fed's website.

1\. [https://www.stlouisfed.org/On-The- Economy/2014/September/Wha...](https://www.stlouisfed.org/On-The- Economy/2014/September/What-Does-Money-Velocity-Tell-Us-about-Low-Inflation- in-the-US)

<comment><USER65> The increase in excess reserves is not mysterious. The Fed starting paying 0.25% on them in 2008 (now 0.50%) while other interest rates were near zero.

<comment><USER52> Eventually some minor crisis will trigger spending, all this excess cash will hit the system like a floodgate, and we will have an inflation spiral (because suddenly hoarding will be a bad idea). And the irony is that the ethical justification for the fed is that it is supposed to be countercyclical, and thus 'good for society'.

<comment><USER66> [https://www.kreditopferhilfe.net/docs/S_and_P__Repeat_After_...](https://www.kreditopferhilfe.net/docs/S_and_P__Repeat_After_Me_8_14_13.pdf)

</comment></comment></comment></comment><comment><USER67> This is the NYT, and, I was hopeful they'd also include information about the state of company hoarding abroad as well as hoarding by foreign companies in their home nations, bjt they dont, so I don't know if this is uniquely American, or maybe its global, regional, etc.

That said I'd like to see a look into an international tax collection agreement among nations,like they have IP rights agreements, human rights agreements, etc. in order to render foreign holdings loopholes useless.

</comment><comment><USER33> Here's a possible explanation. In the industrial days it made sense for companies to invest in plant and machinery. These days most of the value is intellectual capital and high wage employees. It makes sense to hold a load of cash so you can pay those high wage employees if there's a blip in sales.

(The industrial the mentioned, GM may have $15bn in cash but it also has $73bn in current liabilities so it's not really rolling in vast excesses)

</comment><comment><USER68> Investing money is work. You have to sink resources into it. If you don't, then you will assuredly lose that money.

A guaranteed return is better than an assured loss.

<comment><USER69> Holding cash is essentially an investment in the sovereign government that controls that currency. Simply sitting on cash does not imply little or no risk.

<comment><USER68> It's not risk-less, but it's way less risky than every other alternative.

<comment><USER69> Possibly only if you are operating in a single market. If you have currency/soverign risk because you are selling in 100 countries, it's way more complex. I bet Apple doesn't consider all the rubles they have from their operations in Russia as less risky than parking it in US treasuries. The problem is getting it there...

<comment><USER68> > I bet Apple doesn't consider all the rubles they have from their operations > in Russia as less risky than parking it in US treasuries.

They certainly have somebody looking at it.

There's more than one component to risk. Sure, holding rubles in a Russian bank is risky, but that risk isn't really of losing your whole pile all at once. So you have time to leave your position if it gets more dangerous.

</comment></comment></comment></comment></comment><comment><USER70> What if it's just people (exec) thinking that we are going to see a huge contraction in liquidity in the next 10 years? It could be an early warning that the central banks have injected too much money into the economy and the economy, saturated, instead of surrender to hyperinflation has "decided" to put the money under the pillow before is scarce (higher interest rates again).

</comment><comment><USER71> Investment in hard assets like factories has been in countries with low levels of property rights.

Better to let those countries provide the cash for building via state loans rather than the company investing it's own money. Then if the factory is confiscated or the company is kicked out of the country for whatever reason the loans are defaulted on and the company's money is intact.

</comment><comment><USER72> The short answer is that everyone can see the current system is not sustainable, and that any change will be potentially catastrophic. Holding cash is going long on fear, and being prepared to deal with a massive crunch when it comes.

The solution is to just force them to bring the money back into the US and invest. And not let the fear foment inaction.

</comment><comment><USER73> Very much reads like the paradox of saving, where saving for a downturn, actually causes the downturn.

It would be an interesting experiment to pay out a chunk of it as a bonus to their employees. Basically dump it into the economy that way.

</comment><comment><USER74> > With $80 billion, Google could buy Uber...

No it couldn't, Uber isn't for sale.

</comment><comment><USER75> It might be interesting to see how the rise in this cash hoarding correlates with the tendency to stop paying dividends to stock owners and instead focus on growth in stock price.

</comment><comment><USER76> The hyperbole in the comments here is impressive.

</comment><comment><USER77> What the CEO and upper management of these corporations say about this? Surely, they were asked about this by shareholders?

<comment><USER62> > _Surely, they were asked about this by shareholders?_

Except it's the hot, new Silicon Valley thing to structure your company as to not give your shareholders any power or voting rights.

<comment><USER77> But the worst offender they list is General Motors.

</comment></comment></comment><comment><USER78> Many corporations seem to rather spend their money on share buybacks than on capex lately.

</comment><comment><USER79> I suspect it's a taxation thing.

Better to give back the money as capital gains than as dividends.

</comment><comment><USER80> What else are you going to do with it? Invest in your employees? Ha.</comment>


RubyConf in India : February 2010. Don't miss it guys - <AUTHOR> http://rubyconfindia.org/

<comment><USER2> good to hear it, we at RailsFactory would surely participate in it

</comment><comment><USER3> fantastic! looking forward to it. [OT]the taj mahal in the logo might not have been the best idea. historically, taj mahal represents the muslim occupation of india -- a dark period for the nation

<comment><USER4> > _[OT]the taj mahal in the logo might not have been the best idea. > historically, taj mahal represents the muslim occupation of india -- a dark > period for the nation_

From HN guidelines: Please avoid introducing classic flamewar topics unless you have something genuinely new to say about them.

And this isn't even a classic flamewar, this is some new fangled absurd religious fundamentalism and probably the worst troll I have seen on HN. I am Indian, Hindu and feeling a bit insulted right now. Unfortunately, I don't have enough karma to be able to downvote you.

<comment><USER5> "And this isn't even a classic flamewar, this is some new fangled absurd religious fundamentalism and probably the worst troll I have seen on HN. "

Hey now there's Indian politics on HN vs the usual American politics! Woo hoo! I wonder if this is of "interest to Hackers"</comment></comment></comment>


The iOS devices you should support - <AUTHOR> http://www.empiricalmagic.com/post/26552843860/ios-support-matrix

<comment><USER2> It would be nice to see some justification for this matrix. I did some googling, and though I was surprised at seeing the 3G recommended for 'No Support', the data would seem to back that up: [http://www.14oranges.com/2012/04/ios-version-statistics- apri...](http://www.14oranges.com/2012/04/ios-version-statistics- april-14th-2012/)

<comment><AUTHOR> Great point, I'll start to jot down my reasons. But mainly fall into two categories; features and cost/benefit.

For example every ~6 weeks Apple sell more iPhone 4S than total number of iOS 4 devices still in use.

</comment></comment><comment><USER3> It's easy understand that developers don't really want support older platforms as that might be quite of a burden. But please don't drop support if you can. Not everyone likes updating to newest version of OS on their phone all the time especially if there are no significant changes coming. (IMO There haven't been any killer features in 5.x and 6.x revisions of iOS.)

The thing that annoys me most is Mac applications that don't support 10.6 any more even though that's shoudn't be hard at all as desktop APIs are quite stable and don't change much. Or applications that support full screen only on 10.7. (Seriously, Evernote?)

<comment><USER4> 10.7 brought tons of new UI elements, including NSView-based NSTableView. Before Lion, it required a thousand lines of code (maybe more) to create something simple like this: [http://gentlebytes.com/media/blog/2011/08/LionTableViewTesti...](http://gentlebytes.com/media/blog/2011/08/LionTableViewTesting- Phase4.png)

Now, like on iOS, it's just a few lines of code.

Take a look at these links:

[http://gentlebytes.com/2011/08/view-based-table-views-in- lio...](http://gentlebytes.com/2011/08/view-based-table-views-in-lion- part-1-of-2/)

[http://gentlebytes.com/2011/08/view-based-table-views-in- lio...](http://gentlebytes.com/2011/08/view-based-table-views-in-lion- part-2-of-2/)

\-----

[http://oleb.net/blog/2011/07/whats-new-for-developers-in- lio...](http://oleb.net/blog/2011/07/whats-new-for-developers-in-lion-part-1/)

[http://oleb.net/blog/2011/08/whats-new-for-developers-in- lio...](http://oleb.net/blog/2011/08/whats-new-for-developers-in-lion-part-2/)

[http://oleb.net/blog/2011/08/whats-new-for-developers-in- lio...](http://oleb.net/blog/2011/08/whats-new-for-developers-in-lion-part-3/)

</comment></comment><comment><USER5> This graphic needs more context/metrics. Are these judgments made on past trends? Usage numbers? Something like how MacRumors buying guide averages out past release schedules to determine the next likely update:

<http://buyersguide.macrumors.com/>

<comment><AUTHOR> I'm sourcing some stats to add this, but up-to-date reliable iOS stats are as easy to find as unicorn tears.

</comment></comment><comment><USER6> We're also not supporting the original iPad on some new apps since the hardware is too underpowered to deliver great performance, and we believe it'll quickly become a liability in the future (better to have not supported it from the beginning than having to drop support a few versions down the line).

</comment><comment><USER7> What happened to iPods?

<comment><USER8> iPodTouches go with the generation of phone they are the same generation of.

<http://support.apple.com/kb/HT1353>

I suggest release date to figure that out.</comment></comment>


Golfers More Likely To Make Par Putt than Birdie Putt of Same Length - <AUTHOR> http://www.nytimes.com/2009/06/16/sports/golf/16study.html?_r=1&scp=1&sq=putting%20risk%20aversion&st=cse

<comment><USER2> I golf a lot, and this seems like A "No kidding..." type of statement to me.

Birdie putts are less common, even for great golfers, and so when it comes up everyone tends to put a little bit more pressure on themselves, consciously or unconsciously, to capitalize on the birdie putt.

Even when you have a short one (less than 5 feet) you friends will say "Oh, don't miss..." etc.

<comment><USER3> The point of the article is that great golfers are OK with _not_ capitalizing on the birdie putt, but a bogey is to be avoided.

Edit: Apparently I should clarify. The golfers are putting more pressure on themselves to make par and avoid a bogey score. On the putt for birdie, they are not putting too much pressure on themselves; instead they are OK with settling for a par score so they take shots that aren't as risky. In other words, it's more important to them to avoid a bogey score than it is to capitalize on the birdie putt.

<comment><USER4> you want to avoid a bogey because it starts a vicious cycle. assuming you are at par, a bogey requires a birdie just to get back to par. going for that birdie risks another bogie that would require another birdie to balance, and so on. playing in this highly volatile manner you run a higher risk of having to make great shots in order to end up with an average score. it's more in your favor to wait until you make a great shot (say a great second shot on a par 4 that leaves you two feet from the hole) and then capitalize on the "free" consequence (the two foot birdie putt) that actually takes you above average than to be forced to sink a 50 foot birdie just to stay at average (because you missed par on the previous hole).

</comment></comment></comment><comment><USER5> Maybe I don't understand because I'm bad at golf and don't get a whole lot of birdie putts, but when I do I always go for it because getting a birdie is great, and getting a bogie is pretty average for me. I've never once just hoped to get it close, even for an eagle.

<comment><USER3> I think this can be explained by the different level of competition. It sounds like you're a more casual player, at least when compared to the players mentioned in the article.

</comment></comment><comment><USER3> This article shows a tendency among many of today's economists to make the mistake of thinking they know it all. For all they know, there is some hidden benefit to avoiding bogeys and settling for pars. Maybe even one bogey would hurt your morale far more than a birdie would help it, especially if you're a great player. Maybe there isn't an easy way to avoid that effect, and it affects how well you play. Who knows? That could easily serve as a rational justification for this behavior. But most economists have bought in to the idea that they know exactly what is rational and what isn't.

<comment><USER6> Are you getting this from economists, or news article about economists? The entire foundation of economics is variable preferences, after all. (Well, the sensible, measurable bits, anyhow.)

It's still an observed difference between what the human claims to value and what their actions say they actually value, and that's still a worthy topic of study.

<comment><USER3> _Are you getting this from economists, or news article about economists?_

Both. It's tempting to gloss over uncertainties sometimes.

 _The entire foundation of economics is variable preferences, after all. (Well, the sensible, measurable bits, anyhow.)_

I agree, especially with your parenthetical.

</comment></comment></comment><comment><USER7> Maybe because they're so excited that they might make birdie on the hole that they lose their concentration?

<comment><USER3> If you read the article, this doesn't seem to be the reason. Many golfers admit that they're more interested in avoiding bogey than making birdie.</comment></comment>


Insurance needs tech - <AUTHOR> Just found out that most if not all insurance companies pay out in checks only. For some businesses that is a problem. It was worth me making an account to let you know if anyone is interested <comment><USER2> Why is it a problem?</comment>


Show HN: Chatistics – Turn Telegram, WhatsApp, Messenger Chatlogs to DataFrames - <AUTHOR> https://masterscrat.github.io/Chatistics/ <comment><USER2> Holy cow dude. I was working on the same thing in my limited free time but only for me and my buddies around me. You know the craziest part? I also called it Chatistics. Well, I assume it's not the furthest stretch, but somehow this is super surreal to me right now.

I got the idea when I downloaded a chat history of a 5 year old group chat of my friend group, and kinda just winged it from there.

If you're at all looking to collaborate, shoot me a message. I'll definitely keep an eye on your project.

I haven't started many personal projects (and finished even less), but again, this is a super weird experience for me haha. Good job man!

<comment><USER3> I also did this! Didn't call it Chatistics, though.

</comment></comment><comment><AUTHOR> Direct link to repo: [https://github.com/MasterScrat/Chatistics](https://github.com/MasterScrat/Chatistics)

I started this project years ago just to create word clouds - but it turned out it to be useful for many more things!

If you are interested in support for other platforms (Discord, Slack...), just create or subscribe to the relevant issue, we'll use them as a simple voting system: [https://github.com/MasterScrat/Chatistics/issues](https://github.com/MasterScrat/Chatistics/issues)

</comment><comment><USER4> Cool, great to see people getting their data back from the cloud!

Some related links:

\- [https://github.com/fabianonline/telegram_backup](https://github.com/fabianonline/telegram_backup) : tool for incremental Telegram exports into sqlite database, I've been using it for several years with no issues. From a quick glance, code in chatistics isn't incremental and going to require redownloading everything? Perhaps it makes sense to adapt telegram_backup output database to chatistics and benefit from existing tools.

\- [https://github.com/karlicoss/fbmessengerexport](https://github.com/karlicoss/fbmessengerexport) : my own script for incremental FB Messenger exports, also outputs in an sqlite database

<comment><USER4> Also, I've got a python package that's kind of my personal API [0], so I just tried to demonstrate how would similar analysis look for me using my.fbmessenger module [1]. Not as pretty as in chatistics, but just few lines of code. The hardest bit, of course, is encapsulating all the complexity of message processing in my. package.

[0] [https://github.com/karlicoss/my](https://github.com/karlicoss/my)

[1] [https://beepb00p.xyz/mypkg.html#messenger_stats](https://beepb00p.xyz/mypkg.html#messenger_stats)

</comment></comment><comment><USER5> Something I really want someone to build (if you're interested let me know) is a true personal relationship manager with support for all conversations on all platforms.

Email, sms, WhatsApp, discord, messenger, some obscure website chat platform whathaveyou...

The ability to cross link profiles and truly manage contact lists across all those platforms as a single object. So Emma on Discord is the same contact in the app as Emma on Messenger, and on SMS, etc.

All this can easily be stored in Google contacts as metadata and would allow the user to backup and index their chat conversations, and quickly search through previous messages across all platforms. And backup all photos and files sent through those platforms as a single stream.

<comment><USER6> So, Trillian / Jitsi ?

<comment><USER5> Not quite. Those are write only and aren't contact centric. Also nowadays they look like slack clones, I can't even find the cross chat platform functionality anymore

<comment><USER6> I'm not sure what do you mean, since AFAIK they don't have any "native" chat, _everything_ is cross-chat ? Write only ? Contact-centric would be a nice goal, but the best you can do is probably Android-style "Contacts" ?

</comment></comment></comment></comment><comment><USER7> [https://github.com/MasterScrat/Chatistics](https://github.com/MasterScrat/Chatistics), or using python to find out you text more about poop than you thought. your experience may vary, try it out.

</comment><comment><USER8> I like it. I generated the word cloud for the biggest WhatsApp chat I have and it revealed that interjections prevail in the conversation =)

</comment><comment><USER9> Could anyone explain how to use this for whatsapp chat ? my output always this

      Cannot infer own-name from less than {min_conversations} conversations. Please provide your username manually with the --own-name argument.')
      Exception: Cannot infer own-name from less than 2 conversations. Please provide your username manually with the --own-name argument.

<comment><USER8> I had the same error. Did you try to provide your name as "\--own-name <your- name>"? That fixed it for me.

<comment><USER9> I put like this still same output python parse whatsapp —own-name "myname"

</comment></comment></comment><comment><USER10> Wow! I was working recently with Telegram chat analysis. Thanks for sharing, that looks promising, I'll be happy to contribute as well.

</comment><comment><USER11> Would love something like this for email threads.

</comment><comment><USER12> is there any way to use telegram's own export output

<comment><AUTHOR> I don't understand what you mean?

<comment><USER13> Telegram has an export functionality.

<comment><USER14> It may be helpful if you link to the specific API export you are referencing.

<comment><USER15> I don't think it's possible via the api but _some_ of the desktop clients allow you to export JSON files in a nice format. For macos, you need to download the appstore version as the other (nicer) one does not include this functionality</comment></comment></comment></comment></comment>


A Long-Ago Ancestor: A Little Fish, With Jaws to Come - <AUTHOR> http://www.nytimes.com/2014/06/12/science/a-long-ago-ancestor-a-little-fish-with-incipient-jaws.html?ref=science&_r=0

<comment><AUTHOR> Additional info: [http://phys.org/news/2014-06-fossil-jaws- vertebrates.html](http://phys.org/news/2014-06-fossil-jaws-vertebrates.html)

[http://phys.org/news/2014-06-oldest-fish-world-million- years...](http://phys.org/news/2014-06-oldest-fish-world-million-years.html)</comment>


How to learn hacking - <AUTHOR> http://fsecurify.com/how-to-learn-hacking/ <comment><USER2> If people actually care about this topic, and want to see someone doing a genuinely good job, check out LiveOverflow. Some other posters here will make fun of his dubstep intro music, green on black terminal text intro with the Rabbit, but he admitted in his first QA it was tongue and cheek.

His subreddit:

[https://reddit.com/r/liveoverflow](https://reddit.com/r/liveoverflow)

His YouTube channel:

[https://www.youtube.com/channel/UClcE- kVhqyiHCcjYwcpfj9w](https://www.youtube.com/channel/UClcE-kVhqyiHCcjYwcpfj9w)

I have taken more traditional infosec coursework for $DAYJOB. I must say this stuff, the more novice stuff beneath and the more advanced stuff above my head, is well structured, even if informal, entertaining, and inspiring. I definitely want to give back to the community like him with solid content and a very unassuming attitude. This is exactly the kind of teacher we need in this space!

(This is not to say F Security is assuming or crappy, I just wanted to talk up someone who really is teaching how to hack the way I think it ought to be done!)

<comment><USER3> Thank you so much!

I have also recently started building [https://liveoverflow.com](https://liveoverflow.com), which might have a better structure than a YouTube channel or subreddit.

Also some people may have actually seen a video of mine, because my most popular video so far is the DirtyCow video which got referenced by news sites and on the dirtycow github repository.

My personal recommendation is to checkout the AngularJS Sandbox bypass series: [https://www.youtube.com/playlist?list=PLhixgUqwRTjwJTIkNopKu...](https://www.youtube.com/playlist?list=PLhixgUqwRTjwJTIkNopKuGLk3Pm9Ri1sF)

Criticism and feedback is always welcome.

<comment><USER4> Thank you for the videos. They are such a valuable thing for infosec students. Please keep up the excellent work.

<comment><USER3> If you have feedback from infosec students, or topics that would benefit students, please contact me :)

<comment><USER2> As you wish. I will be more vocal on your subreddit.

More stuff with radare, please! Hopper seems cool, as does Binary Ninja, but I see us like scientists, and I don't like IDA and their ilk with their price tag. Not because I cannot afford it, but how do we as IT professionals not take reproducible research seriously!?

Also, keep up with your slick GDB fu. I watched you Boston Key Party vids last night and they are an education, let me tell you.

</comment></comment></comment></comment></comment><comment><USER5> So what's the business of this company and its CEO? Other than trying to collect subscribers to his blog.

Also really confusing name considering there's the Finnish security company called F-Secure who also have a technical blog: [https://labsblog.f-secure.com/](https://labsblog.f-secure.com/)

And now also run a security course in Helsinki University: [http://mooc.fi/courses/2016/cybersecurity/](http://mooc.fi/courses/2016/cybersecurity/)

<comment><AUTHOR> If you think I am trying to collect subscribers, I have removed the "Subscribe to us" text from the post. F stands for my name and I liked the domain.

There is no business of this company. All I do is learn stuff, try to come up with good articles and post them. I plan to convert it into a proper company once my studies are over. I am just a student at the moment.

Hope everything is good now.

Best Regards.

<comment><USER6> "All I do is learn stuff" sounding phrase dot com would be more inline with your stated objectives.

Currently, name & logo look like something a company would use and are potientally easily confused with other companies using similar names; as mentioned in other comments.

Just to be clear, it is obvious you put a lot of work into this, thanks for sharing. Keep it up!

</comment></comment></comment><comment><USER7> I find it deeply disappointing that this totally skips some very important parts, namely attitude, motivation and ethics. (Except for so-called "Ethical Hacking". On the other hand, what should one expect from the blog of a security company?)

I recommend the all-time classic "How To Become A Hacker" by Eric S. Raymond:

[http://www.catb.org/esr/faqs/hacker- howto.html](http://www.catb.org/esr/faqs/hacker-howto.html)

<comment><USER8> ESR is a racist and a misogynist. And that document might as well be called "how to be ESR".

<comment><USER9> Care to share a source for that?

<comment><USER10> The cites would fill the whole thread. You can take his word for it.

</comment></comment></comment></comment><comment><USER11> As a junior security employee, I am still trying to figure out where to take my career. I have thought about various different paths: pentesting, development (JS, C, python, exploit...), reverse-engineering, web-app hacking, network-engineering and I cannot for the life of me decide where to focus my studies. I have reservations about pentesting because For example, I think a lot of it is unskilled work (e.g., pressing scan on nessus, clicking exploit on Burp) or work which will be automated in the near future. So for those who are more experienced than me, or for those who can share some insight on security-careers, what tech-careers would you choose and what would you study if you were starting right now?

<comment><USER3> > I have reservations about pentesting because For example, I think a lot of > it is unskilled work (e.g., pressing scan on nessus, clicking exploit on > Burp) or work which will be automated in the near future

My job title is "Penetration tester" but I don't fall into that category. That's why I often refer to it as doing "application security analysis/audits". My current job is to do black/white box testing of single applications - and not a huge organisations where you just phish some employees. I have not worked for other companies, but as far as I can tell, many "penetration testing jobs" are actually what I do.

It's fun, challenging and very technical. And obviously no scanners are used - I have never in my career used nessus or any other click2exploit tool.

</comment></comment><comment><USER6> Link is dead and returns this error:

"This Account has been suspended. Contact your hosting provider for more information."

_________

Google's Cache: [http://webcache.googleusercontent.com/search?q=cache:http://...](http://webcache.googleusercontent.com/search?q=cache:http://fsecurify.com/how- to-learn-hacking/)

<comment><USER12> Link works fine for me.

<comment><USER6> Agree, it's back up (right now); it was down for 30-40 minutes though.

</comment></comment></comment><comment><USER13> Unrelated: It's not cool to put all the logos of companies just because you found some low sev bug there, not even saying the name is kinda similar to known security corp F-Secure...

<comment><AUTHOR> I thought it would be a good motivation for others. Also, I did receive a book "Intro to Algorithms" by MIT Press Director on urgent delivery. So I think its okay to show other people what exactly they can achieve by going through the stuff I posted.

Best Regards.

</comment></comment><comment><AUTHOR> In case the website does not work, you can try this link:

[http://webcache.googleusercontent.com/search?q=cache:http://...](http://webcache.googleusercontent.com/search?q=cache:http://fsecurify.com/how- to-learn-hacking/)

</comment><comment><USER14> It is worth studying common weaknesses in code:

[https://cwe.mitre.org/](https://cwe.mitre.org/)

</comment><comment><USER15> It doesn't actually say.

<comment><USER16> I did get the impression he was quite accomplished -- given his acknowledgement from NASA -- so I guess... success?

</comment></comment><comment><USER17> Link to first book is dead.

</comment><comment><USER18> > Account Suspended

It's a dead link

<comment><AUTHOR> Try now.

</comment></comment><comment><USER19> step 0: google "wordpress exploit" or "windows exploit framework".

step 1: figure out how to run it

step 10: deface some useless site or get access to computer of your friend.

step 11: buy t-shirt with words "haxx00r" or "the matrix green failing letters".

<comment><USER20> step 12: ?

step 13: profit

<comment><USER21> You forgot binary.</comment></comment></comment>


Show HN: Curate, best startup resources and readings curated by influencers - <AUTHOR> http://www.getcurate.co

<comment><USER2> interesting!</comment>


Ask HN: How Important is Spelling and Grammar? - <AUTHOR>

How Important is Spelling and Grammar?
I have recently spotted spelling and grammar mistakes on well established websites. One was an error message received when typing in the incorrect username. Another was within the product, describing how to use that part of functionality.
Should we be concerned? Does it matter?
From a customer perspective, it may just damper the user experience but not the end of the world.
From a coding perspective, does this hint of a more serious problem? What tools are available to reduce these mistakes hitting the front/back end?
Edit - Changed title grammar (irony). <comment><USER2> I believe that the context matters, but yes, spelling and grammar are important. Anything that causes your readers and potential customers to trip over your words and have to re-read to try to understand what you meant is bad.

Now re-read that last sentence, and compare with this one:

      It's bad when something causes your reader
      to stumble and have to re-read things.

Moving the "bad" bit to the front means your reader doesn't have to wait for the punch-line in the sentence. Does it matter? Maybe. It reduces the cognitive burden. It also results in fewer "Garden path" sentences.

Copy editing matters - it really does.

There are grammar, style and spelling checkers out there, but natural language is complicated. In the past I've used the link grammar package with some success, but it's very time intensive. TANSTAAFL.

<comment><AUTHOR> Sure context matters. Time and cost are a constraint. You pay a premium to have good code/product however where do you draw the line?

If the Apple OS was full of spelling or grammar errors but looked great would consumers not buy it?

<comment><USER2> Although it's not necessarily authoritative, and isn't necessarily backed by hard research, let me quote from this page about landing pages: [http://blog.kissmetrics.com/landing-page-design- infographic/...](http://blog.kissmetrics.com/landing-page-design- infographic/?wide=1)

Quote:

        3. Impeccable Grammar

        In the example of an online retailer who is
        asking for visitors to purchase and provide
        personal and billing information, the trust
        of the customer will be risked if there are
        spelling errors and sloppy grammar.

</comment></comment></comment><comment><USER3> Are _

</comment><comment><USER4> Yes and no.

I own a tent made in some place like China (i.e. Some place with cheaper labor where English is not the native language) and sold at Walmart. The instructions are full of grammatical and spelling mistakes. I keep buying the same tent anyway because it is the best product for my needs, even though my sons and I crack jokes about it. But I am talented at figuring out how things go together and I have a long history of assembling things without bothering to read the instructions. It is entirely possible these errors are costing Walmart customers, possibly in the form of returns when they can't get it assembled.

You could write them and _nicely_ point out the error(s). If they correct it and thank you, it would concern me a lot less (because typos happen, no matter how good you are). If you are ignored or mistreated, be more concerned, not less.

<comment><AUTHOR> Would you buy a parachute with badly written instructions?

Does good grammar or spelling portray a level of quality?

<comment><USER4> I have never been parachuting. I have difficulty imagining that I would use a parachute for the first time relying solely on written instructions as I did with sleeping in a tent this year because I happen to be homeless. I imagine if I ever went parachuting, my preference would be to get a parachute from a company which required its workers to occassionally use one of their own parachutes which they personally packed. But most products aren't going to kill you if the instructions have a typo so I find your question a bit ridiculous. Obviously for some products the standards need to be quite high.

One of the questions you are asking amounts to "Can I use spelling and grammar quality as a proxy for general product quality?" Many people will but it doesn't necessarily make a good proxy. There are extremely brilliant people who have problems with things like spelling or handwriting. Yes, you should try to get it right but you should also try to find a better, more relevant means to do a quick and dirty inference to measure quality. Many consumers do not themselves spell or write well enough to notice nitpicky errors of that sort. And a lot of very intelligent people who will nitpick things like that spend so much time and energy wrapped around the axle about their perfectionistic tendencies that they can't get much of anything done. You need to seek a realistic balance if you want both quality and accomplishment.

<comment><AUTHOR> Maybe a parachute is a bad example. The questions are:

1) Is good quality associated with good grammar? (ie are these variables correlated?) 2) Does poor grammar signal other deficiencies? (ie where there is smoke, is there fire?)

Yes, poorly written instructions are not vital. However a menu with spelling errors in a high end restaurant may signal poor attention to detail/standards elsewhere.

<comment><USER4> A high end resaurant which presumably charges a lot of money is going to generally be held to a higher standard in all things across the board. I feel I have made my view clear from the outset that a) yes, such things matter and also b) spelling and grammar are not always the best proxy for infering general quality. I do not know what else to say to satisfy you.

Best of luck.</comment></comment></comment></comment></comment>


Gay Marriage Legal in NY - <AUTHOR> http://www.nytimes.com/2011/06/25/nyregion/gay-marriage-approved-by-new-york-senate.html?_r=1&hp

<comment><USER2> One of the things the article doesn't mention is that NY doesn't require you, unlike MA, to be resident there to marry there.

Propose in VA, CA, wherever, hop on a plane to LGA, get married in NYC, have honeymoon, and go back to your home state, where they have to honor your marriage, due to the full faith and credit clause.</comment>


Quantum Supremacy Is Coming: Here's What You Should Know - <AUTHOR> https://www.quantamagazine.org/quantum-supremacy-is-coming-heres-what-you-should-know-20190718/ <comment><USER2> The chances of error correction being realized in my lifetime are still zero. Quantum supremacy is here in the sense that they can make a giant correlated quantum system--too big to simulate, and do reproducible measurements on it.

Is that science? Yes. An achievement of science? Yes? Do you need to know anything about it? No. :P</comment>