US Treasury bonds are a malinvestment for almost everyone.
The interest is so low, that the opportunity cost of making money somewhere else is high, and probably inflation is eating up whatever you are earning.
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Solyndra was a solar panel manufacturing company that was on it’s last legs financially. The federal government came in with a $535 million loan, and then soon after it filed for bankruptcy and layed off 1,100 workers.
This was a situation where there was too much trust involved, and shortcomings in the Department of Energy.
The Inspector General’s Office, after a 4 year investigation, concluded that Solyndra mislead the DOE in it’s loan application, and the DOE’s process of managing and approving the loan had shortcomings.
This was a bad investment because, from the beginning of the loan process, Solyndra was providing inaccurate and false data to the DOE. The DOE failed miserably to validate the data that was giving to them.
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Green energy. Resourcing, demolishing old buildings, and creating new infrastructure will be very costly. Some of the resources are expensive, cause pollution to get, and are not easily degradable. Im thinking of rare earth metals for batteries and solar panels. Its a great idea, but not very practical.
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The Real Estate Bubble in USA
In the years before Lehman Bros happens, citizens in the US take mortgages , kreditloan and also Big Hedgefonds “buy” worthless Real Estates and take them into high worthy Investments. After this bubble is bursting all of this high quoted Investments was worthless and many people lost there money. With cheap money and lowest interest rates it was possible that also people and firms who had no money can get money nearly for free!
The same is happening right now with States like Greeck, Spain,Italy Japan and Companys like that have no good cashflow !
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Whatever the Fed’s motivations, their core belief that the decade of “funny money” was beneficial for the economy is mistaken. It has destroyed productivity growth, in the U.S. and around the world. It has also left us with a massive overhang of investment that was encouraged by the endlessly available cheap money, but is hopelessly uneconomic once interest rates return to a market level. Thus, even though the Fed cynics are wrong about what higher interest rates will do to the economy, they have left us a gigantic booby-trap of malinvestment that will collapse in value once interest rates are restored, inevitably causing economic disruption as it does so.
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https://www.thestreet.com/video/ron-paul-were-fed-chairman-resign?jwsource=cl
https://www.thestreet.com/video/ron-paul-were-fed-chairman-resign
Both are great links and articulate how the stimulus money is a malinvestment by the government.
Pets.com invested huge amounts of money into multiple lines of marketing and infrastructure, without ever doing much market research beforehand. The also bought out their biggest competitor, which was like buying more malinvestiment?
I am curios to know if some people are choosing Bitcoin as store of value there in Argentina.
Do people at least discuss the Bitcoin option?
Thanks for sharing 
Dani
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What do you think about the possibility to use atomic energy instead?
This is an idea that is popping up sometimes, have you hard about TerraPower?
If you’re interested give it a look, it uses depleted uranium to power new reactors.
Cheers,
Dani
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In 2000, the Arizona State speaker of the house, Jeff Groscost (Rep), used a series of parliamentary maneuvers to ramrod through an Alternative Fuel Vehicle (AFV) bill in the closing hours of the legislative session. This poorly designed bill offered incentives of up to half the cost of a new 2000-lb vehicle to owners who bought AFVs or converted their vehicles to electricity or propane.
Overnight savvy fleet owners and consumers bought up all the supply of new AFVs and then began buying gas-guzzling trucks and SUVs that could be modifed with cheap conversion kits. These conversions still qualified for the incentive even if they only ran on the alternative fuel a small part of the time. Within days, thousands of applications flooded the statehouse and it was estimated that this program was going to cost Arizona nearly one fifth of the state budget at the time. Governor Hull called an emergency session of the State legislature to “scrap the program” and, in the end, Arizona only paid out $160 million.
Groscost (his real name) was defeated in the next election and went to work as a lobbyist for the Alternative Fuel industry. He died of a heart attack in 2006.
The Speaker rushed the bill through without the normal legislative steps. No committee considered the effect that the bill would have on the marketplace or made estimates on what it would cost the State budget. There were no caps put on spending in the bill. There was no penalty in the bill for converting a vehicle back to gas after accepting the incentive so, in the end, the Clean-Air AFV bill actually had the effect of putting more gas-guzzling, polluting vehicles out on the road.
In my opinion, buying high end bottles of bourbon would be a poor choice for investing one’s income, at least if you live in the US. While in 2014 bourbon would’ve been a fine investment, by 2017 the market leveled off, but you still have those investing and promoting the idea of investing in bourbon. While the prospect of buying bottles to hold onto sounds more fun than many other investments, it is likely that most bottles will not appreciate in value to the extent one would hope for in a solid investment. Also being that the country of origin is the US, being a US resident myself, it would be a malinvestment on my part in addition to everything above since it’s so readily available here.
Well i still tell people i know to do so, but people are really skeptical about Bitcoin, like in the rest of the world i guess, there is a really established culture of saving in dollars, so a lot of people do that, but recently some restrictions where put on place to do so, yes, people are not allowed to buy more than 200 usd a month. So given this circumstances, i believe Bitcoin will rise up, hopefully.
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If I understand this correctly, advertising 0% interest rate on buying a new car (commercials like that run on croatian tv all the time) while at the same time people are losing their jobs and will probably not be able to pay for those cars in the future (especially with the pandemic), would be a good example? We are already seeing people losing their apartments now because they can not pay their loans anymore, and at the time they bought it their financial plan to pay it off seemed perfect.
Malinvestments are not a new phenomena. And I believe they will continue to be readily available to those who rely on trust to any degree in the practice of business. That said, I found this great article where an almost 20 year run of “junk bonds” were revealed in the late 1980s involving Michael Milken who was facilitating all this at the time.
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One of the worst government investments that comes to mind is the infamous Big Dig in Boston. It was a project to build a tunnel under the city 1.5-mile (2.4 km) long with few adjoining adjustments and improvements.
It was started in 1982 and it was estimated to cost 2.8 billion and completion date 1998.
The project was fully completed in 2007 with a price tag of 8 billion.
On top of that, a concrete ceiling piece weighing 24 tons fell on a passing car killing a passenger.
Multiple other flaws and problems resulted in paying off a settlement of over 50 million.
https://en.wikipedia.org/wiki/Big_Dig
https://www.city-journal.org/html/lessons-boston%E2%80%99s-big-dig-13049.html
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I would argue that most banks are malinvestments. Most of the time they take insane risks - if it works out great, if not they get a bail out. Especially Deutsche Bank is one of the companies I personally would never invest in. Their stock chart looks more like a ponzi scheme after it blew up rather than a legit company.
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1/ saving money on a bank account, losing purchasing power everyday 2/ take courses to work on a private company for their product, where you learn something that cannot be used anywhere else
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Baseball cards in the 80’s were a malinvestment. they printed so many cards in that era, similar to the money printing today. Companies at the time wanted to get in on the hype when cards started to become valuable assets. to this day cards from that era are still worthless no matter how good the player is, whether it is a rookie card, etc. this is not a current event, but it is something different than what i have seen on the thread, and something i can relate to. i went through a phase of buying and selling cards.
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In the Irish property bubble, around 2006, more than a fifth of the Irish workforce was employed building houses. The Irish construction industry had swollen to become nearly a quarter of the country’s G.D.P.—compared with less than 10 percent in a normal economy—and Ireland was building half as many new houses a year as the United Kingdom, which had almost 15 times as many people to house. Since 1994 the average price for a Dublin home had risen more than 500 percent. By 2007, Irish banks were lending 40 percent more to property developers than they had to the entire Irish population seven years earlier. Morgan Kelly, a professor of economics at University College Dublin, predicted the Irish real-estate prices could fall relative to income—by 40 to 50 per cent, and they did.
Many of housing developments are called “ghost estates” because they’re empty. According to the audit of Ireland’s Department of the Environment published in October, 2010, of the nearly 180,000 units that had been granted planning permission, only 78,195 were completed and occupied. Others are occupied but remain unfinished. Virtually all construction has ceased. There were never enough people in Ireland to fill the new houses
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Green energy, at least at this point in time is a great example. As much as I’m sure we all love the idea of eliminating fossil fuels, we are not currently in a place to do so. I live in California where the taxes are sky high, and only increasing. The cost of electricity is some of the highest in the country per kw hr.
The worst part is that wind, and solar alone can’t even keep the lights on and we have consistent blackouts. To make matters worse the process of manufacturing some of the components of the wind mills is toxic, and damaging to the environment, which seems counterproductive and disposal of the solar panels has not yet been figured out.
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