Activity Lesson 4

Bitcoin Monetary Revolution
#1292

Research an investment (could be a public company, private company, government agency, infrastructure project, etc) that you believe meets the definition of a malinvestment (past or present) and argue why you think it’s a misallocation of capital (3-5 sentences).

The overinvestment & overdevelopment of luxury condo buildings in Manhattan. Built with the expectation that a tiny sliver of the population that could afford these multi-million dollar condos (not just Americans, but also foreign) would purchase them. But the economy slowed - and many of these high rises are still empty.

Why Manhattan Skyscrapers are empty

#1293

If a malinvestment is based on artificial credit conditions and investments are made that later fail because interest rates return to ‘normal’, then I submit that the entire US economy is a malinvestment. It is akin to a ‘Potemkin village’. We have a Potemkin economy. (If you are not familiar with the term, here is where you can see a definition: https://www.dictionary.com/browse/potemkin-village) But Grigory Potemkin was also a real guy from Russia in the 1700’s who the term is derived from… At any rate, the US has hosted several bubbles in the last 20-years; the tech bubble, the subprime housing debacle, and our latest mis-step; a 1.9 trillion dollar ‘COVID relief package’.

#1294

Research an investment (could be a public company, private company, government agency, infrastructure project, etc) that you believe meets the definition of a malinvestment (past or present) and argue why you think it’s a misallocation of capital (3-5 sentences).

An example of a possible malinvestments could be tech stocks in the current stock market. Although impossible to know for sure, many of the most popular stocks, Tesla, GOOG, FB or UBER have been purchased specifically for being popular companies that are easily recognizable and that have apparently continued to only go up in value. The ease of entry to the stock market has caused many to enter with very little knowledge of the companies that they are investing into. Ease of entry fueled with free money from stimulus checks provided by the government has allowed/encouraged many to buy overvalued stocks without thinking it twice. Not financial advice but at times it may be best to wait for a pull back and simply buy the dip instead of the FOMO.

#1295

Student loans. Govt backed loans that are available to all students regardless of the students creditworthiness or selected majors. These loans artificially drive up the cost of the product (education) by making access to these loans essentially universal. Without access to these government backed loans, students would be more conscientious on the amount of money that they were spending and the universities would be forced to lower their education costs to attract students

#1296

Research an investment (could be a public company, private company, government agency, infrastructure project, etc) that you believe meets the definition of a malinvestment (past or present) and argue why you think it’s a misallocation of capital (3-5 sentences).

Memecoins like Dogecoin or Shiba inu.

They are purely for speculating but don’t have a usecase as an investment as there are other cryptocurrencies that have way better fundamentals.

#1297

Greensill Capital: A proposed fintech company, promising to revolutionise supply chain finaning, but in reality that turned out to be a deceitful financial engineered loss maker, fuelled with hype from its links to the UK government.

#1298

I’ll be back to this

#1299

In my opinion the bigges malinvestments have been by the government agencies of the US in that money is continually pumpped into systems that are all good causes such as food stamps, govt housing, and other subsidies for low income individuals, that it has created a society that relies on handout for everything. By doing this it has caused a sense of entitlement where people dont even try to do anything to help themselves, and have been able to play the system in their favor because they know the government will take care of them, and if the govenment doesnt they just throw temper tantrums until they get their way.

#1300

My home town decided to build a walking bridge crossing over a railroad. Budget was 5 million and the build was to be final I believe it was 2015. Last time I checked we live in 2021 and the budget was at 21 million. Talk about a malinvestment!

#1301

I believe a malinvestment in today’s time would be people FOMOing into meme tokens. Since Elon Musk tweeted about Doge, the explosion and exposure of the token has a lot of new crypto investors putting in a lot of money just to watch the price fall sharply. Now a lot of meme tokens are being developed to get people to think that this project is the next Doge. Many of these tokens are rug pulls (scams). There was this one project that a lot of people put money into when it was low. When the price rose drastically, the investors couldn’t take their money out.

#1302

The malinvestment I want to analyze is VikingSwap, a yield farming dapp that I initially thought would give great returns, but turned out to be a big flop.

VikingSwap was a clone of Goose finance. You stake Coins and earn Viking tokens, which you could also stake to earn more Viking tokens.

The amount of Viking Tokens in circulation steadily increased and no profound usecases were introduced. At some point the demand for these token was gone, and the price began to fall.

VikingSwap was the first Yield Farm I invested my currency into. I learned from my mistake.
Vikingswap was a malinvestment because it lacked usecases and was highly inflationary.

#1303

Some examples of malinvestments are dot-com companies in the late-1990s tech bubble, failed housing developments during the mid-2000s U.S. housing bubble, and unfinished skyscrapers in Dubai and other emerging markets after the global financial crisis.

#1304

the dot com bubble in the late 90s is an example of malinvestment. 2 people could start a company have a website asnd literally no product and still get a loan from the bank due to the greed at the time around the dot com craze

#1305

Let’s face it, we are all here learning about crypto to work in the crypto industry because we believe in the future and value of crypto. In this volatile time, I feel as if the investments into certain altcoins are malinvestments. If you go to CoinGecko and look up meme coins you will see some of the coins I am referring to. As of the time of this writing, the top 15 meme coins combined hold a 49 Billion USD market cap. That’s investments into projects that have very little to offer the world other than the “get rich quick” hope.

#1306

A great example of a malinvestment is the parent PLUS loan program that allows parents of college students to take out an unlimited amount of money for their child’s education. This creates an incentive for colleges and universities to increase tuition charges. Tuition may keep rising, creating a bubble that will eventually burst similarly to the mortgage housing bubble of 2008.

#1307

‘Norwegian Air’ in my opinion, meets the definition of a malinvestment at this present time. Being on the verge of bankruptcy for many months now, desperately looking for bail-outs alongside thousands of ex-employee’s seeking legal action against the company due to unpaid salaries, holiday pay, instant dismissal etc.
They’ll need to raise 711 million in fresh capital before emerging from bankruptcy protection, until(and if!) that happens I’d stay way clear of holding any shares…

#1308

General Motors was able to borrow money to build cars to sell that they had not customers to buy those cars but because they were able to borrow money they were able to do so then ended up going into bankruptcy in the 2008 financial crisis and got money from the federal government and paid little to no interest

#1309

The story of WeWork fits the category of a malinvestment. In 2018, the company lost $1.9 billion on $1.8 billion in revenue. The CEO was very charismatic and won over deep pocketed investors, but the company always lacked real value. They snuck their way into the tech startup boom by only providing office space, which should have raised concerns.

#1310

I am choosing a US Government agency. NASA is given billions of USD a year, to explore space projects. These projects are actually done on Green screen and are totally a hoax against all of mankind. Rockets that never reach the intended destination. Communication that never makes sense for the era of time. Space shuttles that do not perform the way that they are explained. If they went to the moon, why did they not save every bit of data in order to return any time they wanted. Instead this data was “lost”. That is a huge Malinvestment.

#1311

The 2016 Olympics which was held in Rio de Janeiro was a $12 billion investment mostly funded by tax payers, where it was promoted that the return on investment would be certain. It was argued that the abundance of facilities which were built would be used for all sorts of events and generate revenue. Unfortunately, this has not occurred, where there are unpaid bills and has created vast amounts of debt spanning from corruption, bribes, lack of planning and political will.