Several times in the last couple of days, I've heard some people in tech trot out "post-ZIRP" as a handwaving explanation for why things are going the way they're going.
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Several times in the last couple of days, I've heard some people in tech trot out "post-ZIRP" as a handwaving explanation for why things are going the way they're going. So, consider this your occasional reminder that computing companies have spent at least 600 billion dollars on AI since the US federal interest rate was raised from zero in 2021. To say nothing of stock buybacks.
The state of the job market has much more to do with the ongoing capital strike than with interest rates.
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Matthew Lyonreplied to Jenniferplusplus last edited by
@jenniferplusplus I’ve been describing it as “the post innovation capital profit-tuning jubilee”
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Jamie Lawrencereplied to Jenniferplusplus last edited by
@jenniferplusplus aren’t those kinda separate things? The $600bn is mostly being spent by the big cos, the ZIRP has mostly affected the lower end that still needed capital. Not sure any of the BigCo layoffs were really because of ZIRP but just a thing they could announce to make the stock price go up (arguably, spending money on AI for the same reason)
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Jenniferplusplusreplied to Jamie Lawrence last edited by
@jamie first, those big cos are some of the largest venture investors. Second, PPP loans injected about $800bn of free money into the equity market, which shows up immediately in venture funds. "Post zirp" is just the end of that one time gift, and funding levels are near but still above 2019 levels. The money is still there, it's just being spent on GPUs instead of salaries.
