It’s almost as if there’s an entire class of people who do this purposely, and walk away billions of dollars richer.
Gotta siphon up all the wealth and resources from the proles once every decade or so.
https://www.wheresyoured.at/the-case-against-generative-ai/
A good read for anyone who wants to read in detail on how fucked it is.
rivals
I don’t remember spending $1.5T destroying 200,000 acres of farmland to build data centers for pets.com and GeoCities.
I want to everyone to think about this, because I am very old. I have lived through many bubble bursts, I have lived through the recession. I think the most adept comparison to AI is when companies got this idea to do outsourcing. They outsourced EVERYTHING. Call centers, data development, manufacturing. It didn’t work after a few years of the hype it came back to the US. We found equilibrium. Yes there is still some outsourcing but it’s more globalization. AI will have the same thing. It will probably hang on a few more years then things will shuffle back to humanity. The difference then is there were still minimum wage increases on a federal level and it does concern me that there hasn’t been since my youth. It was a regular normal thing in my youth.
Guys but a very smart person on LinkedIn said they discovered the formula E = MC² + AI
How could it be a bubble if the universe depends on it?
I think that was satire. I hope. It’s honestly impossible to tell anymore.
You must’ve dropped this: /s
If I need to explicitly state that I do not believe the universe depends on “E = MC² + AI” I might as well stop using this website, there’s no way any reasonable person would read this as anything but sarcasm.
I don’t think it was necessary, seemed pretty clear to me
Isn’t it bigger than the subprime mortgage bubble by this point?
Substantially bigger, but that’s not the whole story. Subprime mortgages were interconnected to everything banks did. The AI bubble isn’t quite so connected in the same way.
Compare this to the Chinese property sector bubble. Around 2020/2021, there were a lot of stories about how China had created a huge bubble and was going to take down everyone when it popped. Instead, it just sorta fizzled out, at least from an outsiders perspective. China has usually kept away foreign investment in their real estate market (along with pretty much all their big companies). There just wasn’t that much fallout to be had outside of China. Tons of doom headlines popped up in Western media, but it was a nothingburger unless you were somehow embedded in the Chinese real estate market.
Let me be clear: the AI bubble popping will hurt. At this point, there’s no way out of it, and it needs to pop sooner rather than later. However, comparisons to the 2008 financial crisis don’t tell the whole story.
What I’m really curious is how far the bubble bursting will spread beyond the US, as America seems to be the nation which, by far, went more all-in on this, plus, ironically, Trump’s aggressive and chaotic trade policy has pushed other nations to try and isolate themselves from dependency on the US.
Also the weakenning of the Reserve Currency status of the USD (which was already happening and has been accelerated by Trump’s actions) also reduces that as a pathway for transmission of any Economic Collapse in the US - the USD value crashing is less bad for other nations the smaller their reserves in USD and USD-denominated assets are.
This will almost certainly be an Earth-Shattering Kaboom in the US, but might just be Really Bad for the rest of the World, plus it will probably be worse the closer a nation is to the US as a partner, so there might be interesting results in terms of for example Canada not being quite as badly hit now than they would be a year before whilst for the UK it will be the other way around.
Everything is so interlocked it will fuck things up everywhere. The sub-prime crisis was sparked by American companies packaging up American mortgages to sell as assets, but it still was a global crisis.
Oh yeah, I think the 2008 Crash proved it’s not a question of if an Economic Collapse in the US will harm the rest, it’s a question of how much.
I mean, last time around Landesbanken in Germany were going down because of buying CDO-squared derivatives backed by US Realestate Assets and plenty of large banks in Europe had to be saved because of similar malinvestements or simply their counterparties on the derivatives which were supposed to offset certain risks were other financial instituations which went bankrupt.
It’s when the tide goes down that we see how many were swimming whilst wearing no shorts, and like in the US most Central Banks around the World never fully rolled-back the “temporary” ultra low interest rates thus having far less “dry powder” this time around to soften the Economic blow so this crash might very well be even worse than the last one, even with reduced financial interconnectivity between countries.
I expect that, once again, we will all be living the curse of “interesting times”.
It’s gonna at least fuck over Taiwan’s semiconductor industry and Softbank which has been lighting money on fire so that the smoke pleases the AI gods.
This should not come as a surprise to anybody. Not because of AI specifically, but because this is how tech hype always works. The more hype the bigger the crash.
Has no one here ever heard of the business cycle? This is literally econ 101.
When there are 4 or 5 companies worth over a trillion dollars each, and those companies combine for 60% of the volume and value of the S&P and NASDAQ, and they are all in on ai, well…
Buy ammo, I guess.
It’s not quite right to say those companies are “all in on AI” when their core businesses are still based on physical products and established services. These were already highly successful companies long before the AI boom. If their valuations are inflated because of the hype, a correction wouldn’t send them to zero - it would just bring their prices back in line with their actual underlying value.
Fair.
But, nvidia (the largest by weight/volume/value on each of the indexes) would be almost nothing without the ai hype, and the loss of Chinese contracts will see it plunge regardless of a bubble.
Google, ms, and apple have added nothing of worth to their products while pumping billions to their ai surveillance bots.
All told, the value of the indexes will plummet like Wile E. Coyote when cartoon reality kicks in.
The bottom, however, will hit much harder than he ever felt.
No, buy puts.
“The market can stay irrational longer than you can stay solvent”
At the same time, the further things get pulled away from the historical trend, the harder the rebouce (and overshooting) when whatever was doing the pulling finally cracks.
(Mind, you, having been in Gold since 2010 following the last Crash - mainly because that was the second Crash I was right smack in the middle of due to working in the Industry most affected, so I became very conservative as an investor and weary about the current Economic structure - I am oh so intimatelly familiar with that saying, having been expecting for a decade and a half what I saw as an innevitable broad economic collapse due to unresolved causes of the last crash and by how sticking to ultra-low interest rates, Central Banks did not have those tools available this time around with anywhere the same power as back in 2008.
Judging by how Gold has moved since 2023, there seem to be more and more people expecting the same as me).
Can you get money from a non existent economy?
Every market ever has crashed, but the world trudges on.
Remember the Dark Ages?
Things can actually go back, A LOT, if a collapse spreads to a broader society which is weakened by massive inequality and incompetent power elites fully in pillaging mode, were it becomes structural.
And don’t get me started on what happens to a nation that’s the dominant nation of an era, at the end of their Imperial period, which is where the US is at the moment.
It’s just very unlikely to happen in the lifetime of anybody (so people are prone to the falacy of thinking “this will never happen”), but definitelly happens as History shows us.
Will it get that bad? No idea.
Can it? Absolutelly.
the “Dark Ages” was a term coined by a guy from Tuscany who was a big fan of classical antiquity about the fall of Rome 600 years before he was born and is an incredibly biased term from that perspective, and was coined because Petrach believed Rome’s collapse meant the death of classical Latin as a lingua franca and thus the world is bad.
It’s literally just “phone bad, wife bad, oldey timey malt sodas and rollerrinks good, make America great again” hokum but from a guy in the 12th century talking about the 5th century
From any other perspective the idea of that being the shame of mankind is kinda silly.
This idea was then co-opted by the Protestants in the 16th C as a way to say “See?! The Catholics fucked us! We need to un-catholicize the church with a schism!”
You’re criticizing the expression but not disproving the fact that Europe went back in Economics and Technological terms (to the point that formula for cement from the Romans was lost until the XXth century and the proven knowledge that the Earth was round dating from all the way back in the Ancient Greek time was forgotten, also for centuries) to the point that by the 12th Century the Arabs were more culturally and economically developed than Europe (and, curiously, it was the irrigation techniques brough to Europe by the Arabs during the Moorish Occupation of the Iberian Peninsula which, after spreading through Europe, created the Economic conditions for cities to grow and the Renaissance).
This wasn’t a regression of mankind, it was a regression of Europe - it weren’t the Arabs who burned down the Great Library Of Alexandry.
Roman ruled areas went back. The Byzantine empires and middle eastern caliphates did not - as you say. Greece, England, western France, Nordic countries all developed intra-connected Monastic libraries that were attacked by raiders for their books.
Yes, it was bad for Italy, but so was Berlusconi, and we don’t say that caused the decline of the entire world.
I don’t think the bottom dropping out on the AI boom will end society.
Two points:
- I agree that such a deep regression is unlikely. We almost always regress at least Economically with a Crash, but it’s years or maybe a decade, almost never a century or two. Mind you, in broad scope of History, it’s normal for societies to collapse, though never all societies at once. Somewhere in the World people will be fine, just not necessarily were we live.
- The Dark Ages was not the end of society, only a regression in Technologic and Economic terms for Europe alone and eventually Europe recovered and surpassed the technological and economic peak of the Roman Empire.
I’m just pointing out that sometimes the World doesn’t merelly “trudge on”: at least in some places it actually regresses a lot, sometimes the equivalent of centuries-worth of social and technological development, before going back to “trudging on”.
Every market ever has crashed, but the world trudges on
is a statement disproven by History.
(PS: Actually, thinking about it, you are correct in at least that part of the World does trudge on. Just not necessarily the bit we’re on)
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Personally I’m more of the Mycenaean, let their places burn and make them taste bronze!
What to do with the casts when the molten bronze is poured down their throats?
I just want to jam a sword down their throats like the weird cousin of Vlad Types of Wallachia. What your describing is more Persian IMO.
Every market ever has crashed, but the world trudges on.
Ancient dinosaurian proverb
As if “this time is different” isn’t.
By the way, the book “This Time Is Different” is a great read for those curious about the History of Economic Crashes.
Everyone look out, the banks have made their money so it’s time to dump on the poors again.
Time for the yellow trickle down.
the banks only make money after the crash, when people can’t pay their loans.
then they have to find baggers for the property they seize, only if they cant flip those in time do they come out ahead
Investment banks and the primary equity market. They’ve already traded their long positions for shorts
Of course, if that’s like in the last Crash, it relies on the Government saving their counterparties so that they can pay them, like the Obama Administration saved AGI so that Goldman Sachs could make lots of money from the Crash as that company was their main counterparty.
do you have any sources of information/history on this whole fucked up game you’d recommend reading?
trying to learn everything I can about this fucked up system we’ve built for ourselves here, so I can use it against itself in the hopes of trying to break this cycle.
ever since learning the (real) fundamentals of how the stock market works I’v been making a killing, don’t plan on playing it any longer than I absolutely have to…but sadly for someone in my position it is the only way for me to get the capital I need to move on some of these greedy assholes who think their exploitive “positions” are unshakable.
Try the books “This Time Is Different” and “The Black Swan”, they’re both high level views on things, the former being about the History of Economic Crashes (and the common folly of thinking that this time is different), so mainly an Economics take, whilst the latter is a Finance Industry point of view about how the 2008 Crash ended up happening and the reactions to, it from a guy who made a lot of money from predicting it.
Might also want to read “Freaknomics” (a book from the Behavioural Economics area, which is maybe the only part of Economics that actually follows the Scientific Method) for a view of how humans actually behave in Economics/Financial domains which thoroughly disproves (not by trying it but simply because it’s what logically follows from the experiments they conducted on human economics behaviours) the complete total bollocks which is Homo Economicus that’s used as foundation of most of the mathematical building which justifies the Free Market Theories so beloved of Neoliberals.
The rest I mainly know it from living through it and following the more Finance specialist news and following a forum (whose name totally evades me) which had a lot of Finance Industry members (so a lot of the posts there were clearly from the kind of person who knows concepts like “discounted value of money” rather than opinionated non-experts) and was towards the Libertarian and Goldbugs side, before it got swamped by Preppers and other such far-right American sub-culture members.
I’ve been outside the Industry for almost a decade now, so I bet that beyond awareness of the (real) fundamentals of Markets and how the Industry operates, I’m less well informed about what’s going on right now than you are.
“It’s a ‘good bubble’” - Bezos
All bubbles are good bubbles if you have the liquidity to survive the burst.
Or better: buy the dip.
Wasn’t there some report that this is 17 times bigger than that?
that 100bn recently invested its going to have to be repaid somewhere. and nvidia doesnt want to hold the bag.
Nvidia has a lot more to lose than $100bil if this all goes tits up
this is definitely gonna be a big one, always is when there’s blatant fraud making front page news regularly. and the wolves are running the show for the forseeable future so it’ll probably keep on going…
Can’t wait until we bail out most of silicon valley because they’re too big to fail.
And just like how online e-commerce went away when the speculative companies went broke, surely when this market corrects AI will vanish and everything will go back to exactly how it was before.
What? Who gives a shit if AI vanishes or not. The greedy turds manipulating markets and raking in the money now won’t be the ones facing the consequences; that will fall on the rest of us peasants.
If you’re confident that a given company is overvalued by existing investors, you can sell it short, make money off that assessment.
That being said, if you’re wrong, you can lose money doing the same.
