a city data economy, dystopianized (bankrupt, union, expenses, buy)

[gwynedd1]

What if city-data was a nice centrally located space along the river?


In 1693 city-data pioneers register the unique domain city-data.com.

In 1701 city-data population grows slowly to a population of 1000 registered users and 10 separate forum categories.

In 1748 city-data population rises to 100,000 registered users and 1000 separate forum categories. Research shows a $10 per year benefit to each user.

In 1775 city-data issues stock which improves the site. Improvements benefit users and research shows a $100 per year benefit. City-data charges $50 per year to compensate investors. Cost to run is $10 a year. Everyone benefits. Now 1 million users.

In 1783 an investment group buys 25% interest in city-data stock with a 50% equity stake and 50% financing with the fractional reserve system.

1784 Investors improve the site so that users benefit by $150 per year. City-data raises price to $100. Cost of financing is $10 per year.


1795 Another investment group notices city-data.com value and notices the unique cyber-space with now 5 million users. Its 500 million in revenue less 50 million in expenses shows an enterprise value of 450 million per year. Investors try to buy it for 10 billion on leverage with finance costing 400 million per year.

1796 A competing bid for 12 billion with finance costing 450 million from another group purchases city-data. Investment group expects more users.

1800 at 10 million users expense rise to $20 per user due to diminishing margins . However revenue is 1 billion with 800 million in gross profits. After finance profit is 350 million.


1802 Original investors sell out to other investors leveraging up with a 20 billion dollar purchase with finance costing 800 million.

1803 investors spend money improving site but don't attract new users because the local economy is saturated. Cost is now 25 per users with a gross profit of 750 million but interest expense is 800 million.

1805 no change in usage. city-data must charge $125 per user. Users still benefit by about $150 per year on average. Revenue now 1.25 billion less 250 million in expenses and 800 to finance to return to profitability.

1810 city-data sells again to a group that will cost 1 billion in financing. Investors raise price to $150 for a 250 million profit.

1850 unions and regulations raise costs of production to $35 per user. Profits now 100 million.

1851 Attempts to raise prices backfire. Revenue drops by 100 million.


1851-1900 Company runs in a malaise.

1901 New management negotiates with labor to cut costs by $2 per user. Which brings 20 million in profits.

1903. Some users due to wage cuts cannot afford the $150 . Company back in red.

1910 Government trains 100 new workers for city data. 1 position opens due to death.

1930 city-data now has 9 million users costing 35 per user due to training tax but would have been more without wage cuts. Revenue is 1.35 billion. Enterprise gross profits at 1.035 billion less 1 billion in finance charges.


1950 city data sees that users have no where else to go for city-data. To return to profitability city-data charges 175 per user. city-data users and workers are at subsistence.

1960 with 8 million users, 1.4 billion in revenue at the cost of 36 per user due to loss of scale cost is 288 million with 1 billion in finance charges with 112 million in profit.

1965 Upper management gives out profitability bonuses of 100 million for a profit of 12 million.

1970 User investment returns in city data decline and can no long afford to be users. causing city-data to bleed red ink.

2000 city-data losing money finally looks to go bankrupt. Banks are showing non performing assets and it appear they will also go bankrupt. Government bails out city-data to reorganize. This recapitalization saves the banks...


...

I am sure there may be a mistake in the math somewhere but you get the idea.

There is only on city-data.com. You can't produce more of them like widgets. Its a good thing City-data is not a non-expandable leveraged asset everyone needs isn't it? There is only one entity that made any money here just by drawing interest. Buyers will leverage until 0 marginal returns hoping for capital gains until all economic rent goes to finance. All new "capital" from banks just drives up the price of the asset. All from fractional reserves and money from thin air.

Its 2011 in the real world. Could a city-data without being leveraged up with finance compete in China?

[newonecoming2]

Originally Posted by gwynedd1

Its 2011 in the real world. Could a city-data without being leveraged up with finance compete in China?

Yes

[harry chickpea]

Compete with China for what? Would have been a more fun question if instead of city-data (probably a registered trademark now anyway) you had called your place paper plates, thus dredging up the age-old question of "China or paper plates?"

[Hollytree]

Uh oh, does this mean we are going to have to start paying by the word as we post?

If so,