In India they know which way the wind is blowing:
Business Insider - India 2013 Here's The Evidence That The Tech Sector Is In A Massive Bubble
link to www.businessinsider.in
It's not just wages that are expensive. Company valuations are rising too.
Supercell, the game company, just raised $1.5 billion in new funding at a valuation of $3 billion. Supercell has real revenue - $178 million in Q1 alone. But you've got to question the logic of the people doing the deal: Investor Masayoshi Son, the founder of Softbank, believes he has a "300-year vision" of the future.
Even the CEO of Supercell thought he was joking when he first heard about it.
Companies with broken business models are highly valued.
Fab.com, the design retailer, recently raised $165 million in new investment this year, for a total of $336 million in all venture funding. It did so despite laying off 440 employees after deciding that the flash sales model - in which customers are asked to suddenly purchase a daily deal - doesn't work. It was Fab's second business model "pivot" - the company started life as a gay community site.
We're not saying Fab is going out of business. We're saying that Fab's backers have been fabulously generous.
Companies without meaningful revenue are highly valued.
Pinterest just raised $225 million in new investment funding, a stake that values the company at $3.8 billion. That valuation is fictional, of course. It's based on the notion that the company could be sold or go public at that price. That price is 10 times what investors have actually plowed into the company.
To be clear, Pinterest is showing every sign of turning into a great company. It has already solidified a role for itself as a key referrer of online retail and e-commerce traffic.
But still, this is a company that currently is rumored to make only between $9 million and $45 million in revenue.
Companies with no revenue at all are highly valued.
Snapchat is rumored to be raising a new round of funding that values the company at $3.6 billion on paper.
This company has zero revenues.
And it's not easy to see how it might make money: It's defining product deletes itself after just a few seconds.
The last time we saw companies with no revenue receiving high valuations from investors was right before the 1999/2000 dot com crash.
We can't really even make aircraft that stay in the air anymore:
Rediff.com July 20, 2013 Airbus rubs salt in 'unreliable' Boeing Dreamliner's wounds
link to www.rediff.com
A senior Airbus executive has reportedly called rival Boeing's Dreamliner as 'not reliable' and lacking mature systems.
According to News 24, Airbus sales chief John Leahy said that Dreamliner is going to cost a lot in maintenance alone as its architecture is not mature and will require a lot of time, money and redesigning of quite a few systems onboard.
The Boeing "Triple Seven" (Boeing 777) just burns up when it crashes:
So the U.S. has now reached "productional flame-out" and we can't produce anything sophisticated anymore. The American technology bubble is about to burst. The awful dystopian India and China will take our place now, since our capitalist heroes have sold our productional facilities down the river to them, and our manufacturing workers have thus become de-skilled. But the 1% made a ton of money from that fire sale.