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Comment by dragontamer | Hacker News Reader

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dragontamer·

> If there wasn't a major downturn

There was no downturn when Theranos collapsed. These schemes all eventually break down and tumble upon their lies.

Worldcom also collapsed in 2002. I don't think it was related to the Tech Bubble if I'm remembering history correctly.

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Many investment style schemes will continue on until a recession exposes everything. Much like the Madoff ponzi. It went on for decades until a once in a lifetime financial industry blow up exposed it.

Things that cannot go on for ever don't. The end will likely be occur during some sort of a downturn as that's when there's an increase in the number of people needing to make use of their assets, but the end is inevitable regardless.

A rising tide floats all boats….. only when the tide goes out do you discover who's been swimming naked." This is Warren Buffett's addendum to the famous 'rising tide' quote.

Worldcom was 100% related to Tech Bubble. It was the quintessential poster boy (along with pets.com and Webvan).

Parent is referring to the "collapse," which was post-tech bubble bursting and due to accounting fraud (not a bubble pop).

The accounting fraud was a response to vanishing profitability brought on by the Dot Com bust [0].

[0] https://harbert.auburn.edu/binaries/documents/center-for-eth...

Your source doesn't make that connection clear at all. I'm not seeing any connection to the bubble, just overlapping years and "technology" keywords.

Can you please quote the paragraph(s) from your source tying vanishing profitability to the "Dot Com bust".

I've actually known a few people involved (as employees) in these kind of frauds, and whistleblowers or some kind of stupid mistake can expose them certainly.

But the business cycle is what really clears even the most clever ones out.

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