God I hope so.

It’ll only hurt us. The rich will profit heavily.

Yeah, but if the bubble lasts longer it’ll hurt us more when it does collapse.

Plus we’ll have to deal with more clanker bullshit in more of our daily lives for longer if it takes a long time for it to collapse.

Are you talking about the collapse of the AI bubble hurting us? I mean, sure, but what’s the alternative? There isn’t one. The sooner it pops, the more money that will be available to develop businesses that can grow the economy. Right AI is gobbling up investment capital and driving up the interest rates and inflation of the price of tech hw is stunting consumer and business tech, contributing to overall inflation, and making actual products people want to buy more expensive, ie less sold…

I’d like to say that this economic collapse could not have come at a worse time, but I think bubbles like this are only possible when markets are no longer competitive, everyone is broke as shit, and people have to invent fantasies to make investors think line will go up.

Edit: Oh, and I just thought of a REALLY big benefit of an early pop: people’s retirements will be less exposed to AI-first and AI-only companies which are almost guaranteed to fail. If OpenAI raises 2 trillion, it’s going to be getting a lot of that from institutional investors investing other people’s money.

Same, Michael Burry. Same

I’d probably have better luck shorting stocks if I could trigger a (rightful) panic like this guy can.

I’ve come to realize that I was assuming that there was a limit somewhere to “the market staying irrational”. I’m not so sure anymore

You could argue that a heavily debt-based business that requires years and years of more debt before becoming profitable would respond to rising interest rates quite negatively, but, yeah, the whole thing is already enitrely irrational.

I’m keeping some popcorn in reserve for OpenAI’s IPO.

I don’t get why they haven’t gone already.

If they don’t get their IPO off before the bubble pops, they might be losing out on a trillion with a capital T

1. They are true believers
2. They know they’ll get a bail out because they are too big to fail

3. When everyone sees their S-1, it’s gonna make WeWork look like fucking Amazon

Well that ship has SAILED, either way

But the question is whether or not they’re actively holding debt or just letting themselves get diluted through investments.

There’s more supply than demand for compute at the moment, so Microsoft is more than happy to buy ownership through Azure credits - Likewise Amazon is with AWS credits

Oh, they’re definitely holding debt in addition to whatever else the hell is going on with their shell games.

It’s less about fundamentals and more about what investors believe about the market. That’s why Musk is so good at manipulating the market, he’s convincing enough for many investors.

The market has never been rational.

the market is irrational

🧑‍🚀🔫🧑‍🚀

always been this way

Tesla is all you need to look at regarding that.

One can only hope…

I had a boomer normie ask me how to use AI to develop his new “business” website telling me that he didn’t want to hire a developer if the developer would just use AI anyway.

This guy doesn’t know what a router is, and was asking me for help trying to understand what the AI was telling him, and it was the most basic shit.

When the normies are trying to invest in AI, they’re the last to invest and know to throw money at it. That was a big signal to me that the bubble is about to pop. Money is running out and the boomers are trying to get in on it.

When the normies are trying to invest in AI, they’re the last to invest and know to throw money at it

They are also the largest group by far. Doesn’t really mean much aside from the fact that adoption is now widespread.

I don’t think it’s going to add up to a trillion dollars a year though, lol.

AI and the Enshittification Era w/ Cory Doctorow www.youtube.com/watch?v=-dAIJRjb-Bw

I don’t think it’s going to add up to a trillion dollars a year though, lol.

It will. The real question is - what will be the price of a loaf of bread in the multi-trillion dollar economy?

nope. their capex alone is going to destroy them, then their investors will realize they’re all fucked and the real fun will begin

Ahh, good to see irrational exuberance is not dead.

The CEO of SoftBank says they need five trillion a year.

…yahoo.com/…/softbank-groups-ceo-says-5-112543307…

…to “meet demand.” …

He’s saying “there is no bubble.”

You’d think he would know better…

Full disclosure, I did not read that. But I did see the headline.

Now that I have read that, I feel like it is a cry for help.

“Those who refuse to evolve are closing down their world. Those who condemn AI are themselves spitting upward,” Son added.

“If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”

J. Paul Getty

how much skin does Softbank have in this game.

Didn’t they just start a partnership with one of the big US tech companies like 6 months ago or something?

Sam Altman or someone like that has probably got their tendrils in this guy’s head…

They are the ones, Oracle will soon not be paying anymore, because of Force Majeure (techcrunch.com) …

Eh, they’re an evil company and all that, but the force majeure seems like a non-issue:

Instead, the notice would allow the company to delay payments should the facility miss its 2028 target to come online.

It just means if the development misses the contractual deadline, they don’t have to pay until it comes on line. Seems reasonable to be honest, why should you be held to your end of the contract if the other party doesn’t meet theirs?

The real problem here is a combination of: the environmental and ecological impacts of the data center, the impacts on the local communities, the ethics (or lackthereof) of AI and lack of regulatory oversight, and the surveillance state that they’re using it to build.

Focusing your critique on the force majeure just kind of misses the point

It wasn’t meant as a critique, sorry it sounded like that! I meant it more like idiotic statements like all of the tech morons are making right now.

The real critique with “AI” is elsewhere, as you rightly put it in your reply.

Ah, I see. I guess I didn’t know where you were going with it then

Well it is SoftBank.

Guess I’m going with AU then 🤷

I can tell you how to use AI… for money.

Oh, great, thanks! You’re a real lifesaver. [Proceeds to pay more than he would have paid for the real developer, to spend more time to create vibe-coded tech-illiterate trash.]

That’s the great AI grift, by the time you realize it’s not working, you already spent your money.

All you got is some half baked product that kind of works maybe. But how do you deploy and support it especially when it goes wrong?

How do you recover the system? And get AI to patch the system and do the next release? And guarantee it all works because now your customers are angry and demanding it just work tomorrow.

That’s the real truth. Run like hell when luckless chumps show up looking all enthusiastic

Exactly this. If you hear people talking about investments around the Thanksgiving table, its time to bail. All the smart people got in months ago and have left, they are just looking for bag holders now.

Lmao, I think all the smart people avoided investing in AI in the first place 😂

there was major money to be made if you had the money to start with

What about every other darn day, at lunch, from your higher ups at work

If AI is so good they should try asking it that. See where that ends up.

That’s the right strategy. They want to use ai, so let them. No need to speak to professionals who will use ai anyway.

Why would someone ask a person to explain an AI response they didn’t understand? Like, you’ve already offloaded the most important part from a human brain (getting a fucking answer)… Why wouldn’t you at least then ASK THE AI TO REPHRASE AND SUMMARIZE the response you didn’t understand? That’s the thing it’s actually good at doing ffs.

Maybe, maybe not. Bitcoin circa 2017 underwent a similar transformation and if you avoided that investment you would have missed a big opportunity. Time will tell but mass awareness isn’t the predictor.

I have no AI investments outside of shit my pension probably buys

I am looking forward to investor focus moving to stocks I do buy though

I am not a financial advisor, and this is not financial advice.

Maybe you should check how much of your pension is invested where.

It can shock you how much of your money is invested in just 5 stocks.

Then talk to an advisor

You can ask your pension find if they’re aware of the bubble. They might have an option with low-AI investment

SCHD FTW

What is that?

It’s a fund which invests in the highest-dividend stocks which, coincidentally, has almost no “ai” exposure. Basically old blue chips that are more tried and tested. Of course nothing is immune from the coming implosion, but it hopefully mitigates the risk.

We had a meeting with my mom’s broker and my brother and I brought up the AI bubble. The broker responded with the most ridiculous nonsense. He basically said that corporate CEOs are smart people with a legal responsibility to keep their companies financially healthy and so they wouldn’t be using AI if it weren’t viable. It sounded like something handed down to him from Raymond James HQ which I’m sure it was, and it was surely written by AI in the first place.

should definitely find someone else…at best they’re actively fucking you, worst case they’re wildly ignorant about how US financial markets operate.

Yeah… Ask him what advice he would have given out around 2007

Is he called a broker because he will make you go broke?

Good.

He may not be far off.

These bubbles usually last approximately five years. (Or at least that’s been the case historically.) We’re in year four. I’m actually keeping a portion of my portfolio in cash so when the crash comes I can take advantage, though I may move my whole retirement account into bonds and money market funds after the new year.

The AI bubble is propping up the American bond market too (countering all of the other crap Trump had been doing to undermine the economy). When the bubble pops, the bond market is going to suffer massively as well.

Do you mean long term bonds or do you think short term will be affected as well? If it is a rising rate environment then t-bills or MMFs probably have more to gain from the rising rates than risks from a drop in value of held bonds

T-bills and MMFs sound like something from different communities…

I guess that depends how much real damage Trump has done to the underlying economic come B-day.

You’re not wrong. I’m thinking of buying in post-bubble potentially, but I’m not 100% sure what I’ll do yet. I do know that, by the day, it feels more and more like a good time to take the profit that’s there and wait.

Trump just said in a response to a question about our $40 trillion debt (jesus, that’s a lot of zeroes), “You know, inflation, certain levels of inflation, will also pay off that debt very rapidly. Very rapidly.” www.msn.com/en-us/news/other/…/ar-AA2dpocG

So I hope that cash isn’t USD. Honestly, all currencies look pretty bad right now. And if Trump triggers Iran into destroying the Middle East (and maybe triggering Israel to nuke, if Trump hasn’t already), the only thing that’s going to be worth a damn is cigarettes and penicillin.

Apparently this was covered in an article in Fortune magazine. in it they state trump called it a ‘soft default’ on usa debt.

This is basically not paying debts. it’s consistent with trump practices. Afterall, didnt he bankrupt 40 companies including 6 casinos? he’s just moving on to bigger fish by bankrupting the usa now.

Tech billionaires were late to the party showering trump with money to get him elected.

Cryptobros were there first. They want the dollar at zero.

Who could have possibly seen this coming??

Astonishing really.

This is the guy running the US like a business.

Don’t worry about debt, just stoke up inflation so it does t seem like so much money.

Nothing could possibly go wrong with this plan.

The “he’s a businessman and he’s going to run the government like he runs a business” argument is as stupid as it was prescient.

The alternative is to put brakes on the economy by cutting government spending but he just started a war with Iran so…

Is there something I can do with my work 401k?

You could reallocate into bonds if you believe that it will tank the equity market as a whole. Most available options to allocate into a pretty broad so it’s not totally exposed, just expect lower returns in the mean time and be prepared to reallocate into more growth exposure if/when the broader crash happens. Difficult to time so beware.

Bonds are a bad call as well, as the US government is screwed on interest and will be inflating.

Gold is a better call, this looks like stagflation coming.

Not sure if I can do that with restrictions

I own a beer bar, and we work with some friends who have a catering business that does pop ups on our patio. They’ve been using AI to generate flyers and then tag us to have us share them to our larger audience. I stopped doing it because they look like trash, get low engagement, and are off brand for our art-inspired space. They got upset with me that we weren’t helping promote, and I explained my position on their AI flyers, and they sent a very lengthy email back about how AI is being utilized by small businesses in ways that we’re still scratching the surface to understand its value. I popped the email into chatgpt and asked if it wrote that email and it said it did, lol. Now I have more work on my hands to design their flyers for them, but it’s worth it.

it’s so bizarre to me that people who work with food don’t realize that the ai trash is producing images that are REVOLTING, do not look like food, and actively deter people from their products.

you’d be better off with a half lit shitty polaroid of actual food than putting that trash on your branding, so much of it is nightmare fuel

You’re definitely right, the food looks so phony. The thing that’s wild is half the time they make a flyer, there’s only bricks of yellow text on a black background that’s too much info to read. I’m visiting San Francisco right now and saw a pizza shop last night that their entire menu was AI garbage and was so shocked how prevalent it’s become.

I used to work in a wine store. Customers would always joke “hahaha i just pick them by the label 😂” and I would always say. That’s not stupid, wine is about aesthetics. Someone who makes good wine will appreciate the value of a good label. And the inverse is true, people with poor taste won’t care about their label, but they won’t be able to make good wine, either.

I’m saying judge a book by its cover. How else are you gonna know what’s in the book without looking at its cover??

. . . You’re supposed to open the book . . .

big fan of Our Daily Red because it doesn’t give my wife migraines lol.

valid points all over.

I had a friend in Uni who studied food science. She went on to work in marketing a a sculptor for advertisements. They sculptures were hand crafted to look delicious but would have been completely inedible, if anyone was stupid enough to eat them.

It is an art form and unfortunately a lot of people fail to appreciate art.

/me tries to eat the chiseled from marble pie… ooh, this tastes like owies

It’s always an “it’s inevitable” argument.

It’s also inevitable their pop-up gets replaced by humanoid robots next year, using the same logic.

A usual ramen spot I’ve been going to for the past few years for some reason replaced the old images of the food on their menu with AI-gen ones and it looked so weird. I saw it last time I went for my usual, but I kept looking at the art and like a Lovecraftian horror the longer I looked at it the worse the details appeared. It literally affected my appetite because psychologically I couldn’t help but think I was ordering some freak-ass food as depicted in the new ai-gen pictures, and the ramen just didn’t taste as good to me that day. And I don’t think I’ll go back anymore :(

You should tell them

I popped the email into chatgpt and asked if it wrote that email and it said it did, lol

It doesn’t work that way tho

I mean, it literally does though. The email sounded phony AF, especially knowing that the person’s first language isn’t English and it was overly proper sounding. I copy and pasted it into chatgpt and said “did you write this email?“ and it’s response was” yes, based on the writing style and phrasing, I wrote this content."

Someone put in the intro to the book Frankenstein into an ai checker and it confirmed it to be 100 percent written by an LLM. It’s not deterministic.

It’s not deterministic.

This is the first thing about LLMs always, and what most people can’t seem to understand.

LLMs are a thing where you give an input and get an output, and it happens to correspond to reality much of the time. But there’s no actual understanding there.

Exactly why it needs code to enforce repetitive results.

I’ve been using ChatGPT a bit at work lately, since they’ve already paid for the subscription for everyone. I’ve learned that it is a bad idea to ask it any leading question, because it is likely to just give you the answer you want to hear.

Doesn’t work that way. Only if they programmed LLMs to sign the work like using a hash you would be able to confirm or deny with 100% accuracy

It does not remember things it made, so no. It doesn’t work that way.

It doesn’t remember but that won’t keep it from answering a question as to whether it thinks an email was AI generated. It’ll also be happy to confidently answer a question with a wrong answer to.

I recently read a decent article (in Danish mind you), focused on the positions some volunteers had from getting more fans to their local football club… Because they now posted stuff on Facebook.

Then followed up by an expert on engagement, and statistics on about half the population felt AI image generations to be off putting - And a fair chunk of the remainder not really caring, and a small minority finding it cool/useful.

That experts main position, was the human touch was lost and the volunteer of the local football club would most likely get more people to stadium if they asked a bunch of 2nd graders to draw match day posts.

Because it would genuinely connect to people. So yeah, a lot of smaller businesses and volunteers are currently having a feeling all of this AI gen is giving them more traffic and attention, but in reality they’re getting more attention because they went from doing nothing to doing something

Isn’t a beer bar just a bar?

Typically, one expects a “bar” to have beer and liquor and the ability to make at least basic mixed drinks (rum and Coke, gin and tonic, etc.).

A “beer bar” usually has a wider variety of beers on draft and no liquor or mixed drinks.

Damn you could just have a lot of beers and liquor as well, sounds gimmicky

Some places have different licensing costs and requirements for places that serve beer and wine only vs also serving spirits.

Upvoting this obviously human response

Never heard of this shit, ngl. In Pittsburgh you can still smoke in bars, even ones that serve food

Nah, it’s a poncy pub.

A bar retains the ponce but lacks beer.

The amount of food menus with it on is ridiculous. If you sell food you want it to look good, appetizing etc, so making it look like plastic tat is counter effective.

Second I immediately think they either don’t care or are uninterested in their product. That makes me question how much they care about their food, safety quality taste etc. It’s an immediate no for me.

AI is being utilized by small businesses in ways that we’re still scratching the surface to understand its value

Exactly, that’s the point! Google and Microsoft can burn their billions of dollars scratching that surface to understand it better. For small businesses, it’s NOT ready as you saw through real business results.

If it does, it needs to pop so hard that EVERYONE involved with it can’t even afford to be heard of anymore.

Is he related to Too $Short or Big Balls?

The big short.

www.imdb.com/title/tt1596363/

OpenAI had their little failure of a presentation recently, and they’re introducing a “fast response” tier for 6x the current subscription cost. This is their attempt to get people used to higher pricing. They are bleeding money, and they will need to raise prices sooner than later to start attempting to make it back.

Once they do, a good chunk of their customers will simply stop paying, forcing the AI companies to further raise prices, causing more customers to leave, etc.

AI companies are trying (and failing) to be indispensable, and they need that to have any hope of survival. It’s only a matter of time before they collapse, and only then might we see what’s actually beneficial about machine learning.

I saw a meme recently- WinRAR is more profitable than OpenAI. Kind of funny to think about

I’m a WinRAR license owner and I’m not paying OpenAI

I certainly hope so as I may have sold all of my (meagre) investments in anticipation.

AI works. But China already won the race. These prices are absolute peak and from now one will only be falling and that’s not what openai and anthropic expected.
I can just use glm 5.3or depseek 4.1 and 20$ will go the distance.

Even running Qwen 3.8 locally can do 90% of what I want.

I have been using the Strata backend with Next-Flash. It has been putting together a Vampire Survivors golden egg manager for me, and I do the QA testing. I am looking forward to Qwen4-Flash, it should open up more possibilities and take off some rough edges. Maybe I can finally do a recompilation of Stars!, and other obscure games?

I literally just learned about Strata. Between that and FreeToken the LLM serving side has become so much better.

Yeah, I use 3.8 27B and it’s like Sonnet 5 for a lot of tasks. If they’re keeping up with Sonnet, 5.5 is similar to Fable, and it would be pretty nuts if Qwen 4 27B kept pace.

How does one get to use deepseek? Alibaba Cloud is always out if subscriptions.

I use deepseek via openrouter and deepseek direct. many american providers offer deepseek.
also from deepseek directly - works great with opencode / openchamber

Isn’t that kinda expensive as fck? I tend to use all the weekly usage of ChatGPT 20x within 1-2 days, and I already work with different gpt models, with different reasoning levels. So I am not sure if I can afford OpenRouter to be honest.

Not expensive with those models. Glm and deepseek. Problem with chatgpt they train you your data, basically siphon what you have and someone else could build your product faster than you. There is a recent case theybstole some scientific breakthrough.

Openrouter has zero data retention and zero training. Which is why I use it.

Chatgpt can’t be used by companies

Will give it a go. Thanks for sharing your experiences.

So do I. We had our financial person take steps to limit our exposure. Still, I expect we’ll take a major hit regardless. Hopefully, we can ride it out with no major financial emergency forcing us to sell while the market is down.

So I saw a few relevant newspieces:

~ Companies are now ceasing their mandate to workers to use AI to do things that used to be done without AI. They’re now saying don’t use AI just to use AI. They’re trying to reduce their token purchases.

~ The estimation now for AI use cases is to reconsider if tokens cost ten times their current price. If the use case is still worth it, then that use case will likely survive the bubble. If it’s not worth it, it’s time to hire back employees.

~ The hyperscale AI industry will have to make $6 trillion annually to break even. Amazon makes $2 trillion by selling people material stuff. Walmart is similar. There may not be a market for $6 trillion in tokens every year, even from government projects. Also, it’s a bad sign if government projects are propping up the whole stock market.

~ China is mostly turning to a software AI model which does home and small business AI tasks fairly well without buying compute from a hyperscaler. You get a gaming machine, get open source AI software and a dozen terabytes of training data, and you should be able to create slop, vibe code or fix the grammar and style of your report. Also, hyperscale models are opinionated and don’t like certain topics. Home-grown AI doesn’t have those objections.

Also, hyperscale models are opinionated and don’t like certain topics. Home-grown AI doesn’t have those objections.

Unless you create or review the training data and train your model yourself, home grown AI models do have those objections.

Some companies already run Chairman Xi’s big models on-prem and do not limit token usage on those.

I think for small to medium sized businesses, those who are using cloud providers already, they will continue to purchase ai compute just like they do any other cloud service. For larger enterprises that have the manpower to maintain physical infra, it will be cheaper to self host inference.

For regular users, I suspect most people will use a provider, but are not nearly as willing to pay for it (at least not that much more than a typical streaming service). Power users (especially younger ones with more time in their hands to spare) will use local inference.

How much of Amazons $2T in earnings is AWS earnings? If that already includes AWS spend, then $6T isn’t gonna happen any time soon.

This is posted once every few months for the past few years btw

And not just about AI. Ever since the movie, I keep seeing posts about what this guy is betting on. I think some of it is news companies preying on poor people for clicks.

Yeah but how do we PROFIT off of it?! Fuck capitalism because this is a valid question

An investment that would pay off if the tech industry went to hell would be Put options on QQQ (an ETF that tracks the NASDAQ-100). You have to get both the timing and the drop correct, and better funded groups with much faster computers AND the ability to make trades to prop up the market while they unload their shit will be competing against you (every options trade has an opposite side and most of them expire worthless). Watch the movies Margin Call and The Big Short for research as much as playing the lottery can be researched (they’re good movies so it’s time well spent anyway). Make a movie night out of it and watch The Other Guys which was directed by the same guy who directed The Big Short. Watch through the end credits.

I didn’t read the article because gizmodo, but as other people here have said, Dr. Burry (he’s played by Christian Bale in The Big Short) often thinks things are going to go south, and there’s usually reason to think so, but in general as Warren Buffett could easily have said, “stonks only go up.” NVDA, AAPL, and MSFT make around 15% or so of the entire world stock market and around 20% of the US market. Nobody’s going to let them collapse and even without the AI craze they still have all the other stuff to fall back on. Thumbs will go on the scale to an extent even greater than the 2008 collapse.

It’s too complicated to try to figure out which stocks to short and when. Rather, the play is to invest in solid companies that produce non-bubble goods and services and will still be producing that after AI economy crashes. UPS, Kraft-Heinz, Edison International, etc. These companies pay out 5%+ dividend yield and sell massive amounts of real world services and goods that will still be necessary to households and businesses no matter how badly the AI economy craters.

The AI bubble will “burst” as soon as they figure out how to inflict all the damage onto regular working people. The housing bubble bursting is what enabled the ownership class to kick a bunch of working people out of their homes and then buy up all the recently vacated real estate for cheap. Nothing about the damage that the rich did to our economy caused any of them to face any actual consequences.

The promise of AI was that it would replace all the workers, but it’s not doing that fast enough and it’s beginning to look like it never will. We’ve been hearing that the AI bubble will “burst any day now” for years at this point, but if it happened right now, the ownership class are the ones who would be left holding the bag, and that can’t be allowed to happen. When they find a way to take it out of our hides, we’ll see that suddenly the “invisible hand of the free market” will present a scenario such that the floodgates open and the bloodbath is finally allowed to proceed. I imagine that’s why they started wrapping up so many pension funds and the like in AI investments.

The “invisible hand of the market” is such a fascinating myth, because it frames the results of capitalist endeavors as inevitable and almost holy - but as soon as the sufficiently wealthy and well-connected suffer a setback, then “government bailouts” are granted.

The invisible hand is actually very visible of you dare to look close enough.

The basic supply & demand, “invisible hand of the market” stuff applies at like. A farmer’s market. This is the context Adam Smith was talking about when he made up the invisible hand phrase. If one farmer has cheaper produce than another, he’ll probably get more customers. Anything more complicated than a local farmer’s market is… more complicated.

It’s not invisible though (despite them wanting it to be). The hand is the culture of the investment banks. They set who the winners and losers are, and if there was one thing The Big Short showed very well, it’s that anyone going against that culture is exiled.

The problem is this time American national debt is too big for the size of bailout needed for AI.

Housing is already maxed out so where is the next thing to prop up the market?

It’ll have to be robotic automation.

It’ll have to be robotic automation

Factories are already robotic. Replacing humans is just more tech bro bullshit, like how AI will fix your toilet.

I noticed the pension fund thing and I’m scared.

ownership class

pension funds

Same thing. Pension funds ARE the ownership class.

I’ve been commenting that people over 55 own 52% of the US and baby boomers as a generation own ~8x more than billionaires as a class, but I re-checked and I’d quoted the wrong number in a bunch of my comments. 52% is for baby boomers only. All over 55s added together are actually over 70%. Let that sink in.

The entire goal of the economy is to let old people enjoy the spoils of the young’s work. Even billionaires are just a symptom of a larger, systemic issue.

They own, but they don’t control that ownership. Their savings are used as investment funds, but very few actually know what they are invested in. That control is in the hands of the indexes. S&P, NASDAQ and the like. Just because NASDAQ blessed SpaceX with being part of their index, millions of pensions bought the stock.

They don’t control, yes - the control (on the level of the individual companies) is being handled for their benefit though. Line must go up for the shareholders - aka old people.

…handled for their benefit though.

Theoretically, yes. In reality they’re a long way down the food chain.

So shareholders are now a long way down the food chain? If that’s the case, maybe publicly traded companies aren’t as evil as we once thought.

People investing to try to have a pension at the end of their working life are a long way down the food chain.

i.e. every working person.

On an individual level: Yes. Even a thousand (median) retirees don’t own as much as one billionaire. But in total: All the old people together own an order of magnitude more assets than all the billionaires put together. Because there are so many old people. A large part of it will be their homes of course, but there’s still a metric fuckton of stock in there via retirement funds.

Go look at Amazon for a particularly egregious example of a corporation that abuses its workers. One would think Jeff Bezos owns a huge part of it, but actually he owns about 8% of it, being the biggest individual shareholder. 75% of float and 68% of all shares are owned by institutions. Then look at the biggest institutional holders: They’re all companies providing ETFs and mutual funds. Most of that (obviously not all) is retail investors and retirement funds, as a lot of rich people find such fund investments boring (average ~10% annual growth long term is not enough when line must always go up). Thus a large proportion of the wage theft by Amazon benefits people investing for retirement, or that have already retired.

Some economic systems fix this by giving every worker and every retiree an amount of money every month and not allowing anyone (retired OR working) to have any investments at all. This puts an upper limit on how much any individual person can own and spend. It affects retirees more than workers because retirees are the ones who have had time to amass wealth in their working years. There’s less inequality, but the downside is that no matter how hard you work, your retirement will be exactly the same as everyone else, including those who barely work.

There’s no perfect answer. Under capitalism, workers will naturally feel that the ownership class (mostly old people who were smart and prosperous enough to invest, or lucked into a job with a real pension) own too much. Under communism, retirees are likely going to feel they aren’t being rewarded enough for the hard work they put in throughout the years. But crucially, neither extreme, nor really anything in between, addresses the fact that most countries’ populations are aging, and the lives we’ve gotten used to, have been based on there being fewer old people than working people.

I feel like we’ve gone a long way down the the rabbit hole from the point I was trying to make.

These idea of an “owner class” at fault is wrong, because it’s really the pension investment funds of normal people who don’t control their investments directly. Those funds are legally required to buy stocks which are listed on indexes, and all other decisions of what to buy are the fund managers.

It’s the investment banking and finance industry that control where the money goes.

Over 55 isn’t babyboomers anymore that’s gen x.

I think this kind of data is exactly what you’d expect to see in a somewhat equal society: you work your whole life, saving, of course you’ve got more savings then people who haven’t been working their whole lives.

Really I suspect averaging here is skewing your perception, that 70% can hide a few super wealthy and many more poor (which is what you’d expect given 1% of the population own more than the combined bottom 95% ).

Over 55 isn’t babyboomers anymore that’s gen x.

And silent. But notice how little the percent goes up when you add both silent and much of gen x to it. Most of it is still baby boomers.

I think this kind of data is exactly what you’d expect to see in a somewhat equal society: you work your whole life, saving, of course you’ve got more savings then people who haven’t been working their whole lives.

Yes. So why are people whining that their paychecks aren’t rising, that they can’t afford property, etc? All that goes to old people who, via retirement funds mostly, own the companies that young people work for. The housing is owned by old people and companies belonging to old people. If the US suddenly had a 50 dollar an hour minimum wage, old people would be fucked and have to go back to work because their holdings would no longer be worth shit.

Really I suspect averaging here is skewing your perception, that 70% can hide a few super wealthy and many more poor (which is what you’d expect given 1% of the population own more than the combined bottom 95% ).

Median baby boomer is worth like 400k, average is near 2 mill, so of course it’s still skewed, 10% of baby boomers own 70% of their wealth. But what I’m trying to argue is that you can’t have both a great working life and a great retirement life at the same time unless the amount of retired people is small. Baby boomers enjoyed a great working life and now they’re enjoying a great retirement life, but they can only enjoy the latter because everyone else’s wages stagnated. No other generation has ever been as rich as the baby boomers, no other generation’s wealth outclassed the preceding generation as early as theirs. They’re enjoying more time at the top than anyone before them. Gen X and millennials on the other hand are getting there much later in life and I don’t know if Gen Z will ever be the wealthiest generation before most millennials are dead.

People just aren’t having enough children for this whole retirement thing to work much longer. Millennials might never retire, Gen Z will definitely not retire (and this isn’t specific to the capitalist system). But we get to pay baby boomers to retire.

Eventually we need to start talking about getting rid of retirement altogether. We can’t have 5 retirees living off the back of one working person, that’s absurd.

Ironically the AI everyone’s fighting against, combined with a better economic system of course, is the only thing that can change things. When there are truly very few jobs that need a human, we can finally consider having so many non-working people for so few working people, without outright straddling all the working people with debt. Maybe not AI as it is now, but AI that can truly replace knowledge workers to the point that it can design automation for physical jobs on its own. As it is now, even supposedly “communist” countries need people working well into the 50s and 60s, and it’ll get worse when their demographics crises hit.

If the US suddenly had a 50 dollar an hour minimum wage, old people would be fucked and have to go back to work because their holdings would no longer be worth shit.

This is a counter factual, I think it’d be really hard to prove what would have happened to current people over 55’s savings if wages had kept pace.

I don’t actually think that people need to work forever otherwise the old prey upon the young. I think this is more of an inequality issue, that is remedied with taxes on wealth (i’m mostly basing that opinion on “capital in the 21st century”).

Eventually we need to start talking about getting rid of retirement altogether

Yes yes, make the old’s work again! WTF dude. You know this will happen to you if your lucky right? Personally i want my old age or my parents to not be plagued by want. I see it as part of my duty to support my parents, on account of them supporting me. It seems like you’ve consumed too much zero sum game.

I also think AI has way too many negative externalities (more propping up the ultra wealthy, contributing to climate change) to counter it’s positive effects.

This is a counter factual, I think it’d be really hard to prove what would have happened to current people over 55’s savings if wages had kept pace.

Well they’d certainly own less, that’s for sure. Corporate profits would’ve gone down, and corporate profits are where most old people’s wealth comes from (401k, pensions, etc).

Yes yes, make the old’s work again! WTF dude. You know this will happen to you if your lucky right? Personally i want my old age or my parents to not be plagued by want. I see it as part of my duty to support my parents, on account of them supporting me.

The boomers had to support their parents. We have to support our parents and some of their childless friends. Our children will have to support more like 10-15 people each. Unless we raise our retirement ages enough that we aren’t a burden on our children. In general, if you’re under 40 and thinking of retiring one day, you’re selfish as fuck. Personally I at least acknowledge to myself that my desire to retire one day, is extremely selfish, as it requires me to accumulate resources that other people could use.

It seems like you’ve consumed too much zero sum game.

While there are places in economic where zero sum game does not apply (e.g you get more out of education than the money invested into it), resources are largely a zero sum game, as is time (labour). Once an apple has been grown and harvested, only one person can eat it. Once a house is built, only one family can live in it at a time. Etc. When there are fewer people working, less work can get done, unless those people work more hours. To have enough resources for everyone, a big enough share of people has to work. As we have more old people, we need people working longer, unless we figure out a way to replace human labor. As you’re against AI, there’s little real way to do that.

The whole retirement thing is predicated on growth. There’s enough growth that you can tax young people, either via corporations underpaying them (corporations owned by old people), or via direct taxation and a national pension (where the old people benefitting at least benefit a bit more evenly), without it weighing down on them too badly. This worked great for a while because the population kept growing, but that has pretty much stopped in the developed world.

Which is why I keep telling people: If you don’t want retirement ages to rise, you better be making babies and tons of them.

Well they’d certainly own less, that’s for sure. Corporate profits would’ve gone down

There is no way you could say this with certainty. Why would corp profits go down… I could as easily say they’d go up (people have more money because their wages are keeping up so they spend more blah blah. Your taking at least 40 years and suggesting you could predict what would happen if they were fundamentally different.

Once an apple has been grown and harvested, only one person can eat it. Once a house is built, only one family can live in it at a time

Sure, but we don’t have a lack of food problem, or a lack of housing problem. We have distribution problems. It doesn’t take one person to farm all day to feed a family anymore, we can feed thousands with one persons labour now. We have the houses, the ownership is concentrated.

The whole retirement thing is predicated on growth

Right, we don’t have 0.01% holding 10% of total wealth, we couldn’t possibly be spreading that out more evenly. We don’t ask children to go down to the mine, we put them in school. We work together to make more than we need and those growing up and those in old age reap either the benefits of learning and practising, or having earned it through their lifes work resting.

It baffles my mind that you ignore the work retired people did before they retired.

Which is why I keep telling people: If you don’t want retirement ages to rise, you better be making babies and tons of them

You should stop telling them that.

They already have. Public Banks are huge investors in the private credit companies that underpin a good amount of the AI bubble.

The Magnificent 7 have been driving the stock markets gains for the last few years. They have also created independent companies to build out the data centers. The debt for these companies is off their books and funded primarily by private credit markets and is underpinned by contracts with the big 7 for data processing once the data center is built.

Projections by the Mag 7 have driven their share increase. So what happens if one or two of the magnificent 7 miss their projections? Well look at Oracle, its stock is tanking because it missed projections.

If the Mag. 7 stock tanks so will your 401ks. When their stock is worth less they will stop plowing money into AI. Suddenly all of the companies with contracts to build the data centers will loose their source of revenue. No revenue and they can’t pay off the loans to private credit. Private credit companies will start to go under and begin to take down the public banking companies that invested in them…

Its a house of cards ready to fall if any of the Mag 7 start to flounder.

It’s a good time to learn about what investments are in your 401k if you have any. You can look at the data sheets on the investments to see what stocks the index funds are made of. I’m moving mine to International index funds that are not tech heavy. I’m no expert in investing but I have heard that it’s sound to invest in companies that make basic things that people need.

Healthcare, consumer staples and utilities are considered to be defensive stocks because they are always needed regardless of economic situation.

I am minimising my exposure to US stock market as well. There is the perception that the European stock market doesn’t have the explosive growth the way that US stocks does but it is at least safer.

Japan could also be considered safe and their stock market have been on the rise after 30 years of stagnation.

Morningstar is a decent source in breaking down the holdings of nearly every ETF and Mutual Fund.

SPCX is the model all AI companies plan follow. IP0 valuation of 2K X forward Earnings.

Your retirement fund will be the exit liquidity forced to buy through indexes as the stocks crash and flat line.

Exactly, as long as it’s billionaire buddies with trump, they can always print more money to keep the bubble going. When they realize they need to print the money to keep the rest of us afloat, that’s when they’ll let it crash.

Too big to fail!

AI is obviously a bubble.

That said, Burry has also predicted 6 of the last 2 crashes.

He got Tesla wrong. Very hard to underestimate meme stocks.

Does anyone expect a large business to not fail when theyve been as poorly run as Tesla?

Also can we talk about how Musk seemingly is propping up all his companies with the values of his other investments? And that most of that money is government contracts?

Just like this “bubble” has supposedly been about to pop for years.

More along the lines of - it’s been a bubble for years, and we’ve been hoping it’s about to pop. But, sadly, the longer it goes, the worse the pop will be.

Burry is going by hard numbers and making a rational call. The markets are not rational, which is why it is hard to predict the timing of a crash. There are no good reasons why TSLA should be over $30.

He’s a good person to heed for safe, longer term investment.

Calling a bubble is easy.

Calling the top of the bubble or the bottom of the crash is the more or less impossible part.

It could very well be a bubble, and come crashing down to a low point that is still higher than it is today.

I agree in principle. It’s getting harder to believe that is possible at this point.

A combination of 1) companies maturing their AI policy and ending the “infinite play time” model most have had since 2021 e.g. cutting spending and 2) open source and open parameter models becoming better and better and cheaper. Data centers will still be in demand for #2 but the ai providers will hurt.

I don’t follow this extremely closely, but didn’t most companies end number 1 at least 6+ months ago?

Some have, most haven’t. And those that have had mostly adopted the philosophy of “Every token spent is a a token spent well; except the ~10% of staff that abuse/misuse them”.

And with that philosophy, you naturally want to set the per-person budget at around the 90th highest spender. Which is what most did (some version of it).

So very few companies have actually set a truly restrictive policy. Just a “don’t abuse this” policy. But that will change IMO.

More like 20. Besides, most of these articles are just reporters misunderstanding Burry’s trades. Guy is a trader, in and out. By time you know his positions, he’s sold and moved on.

They’ve been saying the “bubble is going to burst” for a while now. If they keep saying it eventually they might be right. Then everyone will jump up and down trying to claim they were the ones who rightly predicted it. A quick search by date shows plenty of articles discussing the AI bubble from 2025, 2024, and even a rare few from 2023. Three years of doomsayers waters it down to meaninglessnes even if they‘re eventually right.

Id like to think that people are more aware of the circumstances that lead up to a bubble forming and popping.

it has all the markers, unless the corporations drastically restructure their debt or the product suddenly finds an actual demonstrable use, then it’s going to continue being a bubble. all that requires for it to burst is a large swath of people vested in the bubble to get itchy enough to pull enough money out for the value to be questioned or need to be proved, and AI currently is wildly expensive incuring huge amounts of debt, which is being passed around in a very quick and difficult to account for manner, and has no proven value that can be demonstrated as of yet. to be clear, by demonstrated value I mean you can pull out the paperwork and show where is currently profitable. so here’s the ad revenue, or here’s the government contracts, here the subscription payments, something. they are all operating at a loss and betting their entire companies that those avenues will be profitable eventually, but they aren’t currently and that’s with a VERY heavy hand on the scale, we already have the cost of data center power and water being charged to average people, total failure in providing value to military and police efforts, and people rejecting AI content as acceptable entertainment, it’s all a bust no matter how much they insist, and the application as a digital creative tool is unlikely, it’s jarring and can’t be consistent from one shot to the next causing the exact problems you train to avoid in serial art and animation. digital creative tools generally require a large effort and testing from actual artists in development to be even marginally useful in a production pipeline and AI tried to be useful without any input also with the hope it could simply bypass the people who do the creating, the problem is, it can’t, it can only look at what it sees, fail to identify basic fundamental art principals, and try and remix the art it can look at. look at any AI attempt to recreate cubism, it can’t, it’s totally confused by the concept of incorporating movement and primitive shapes into complex work.

I bought a house in 2016 from a couple moving to Texas saying the housing market was going to crash. I sold it for a 400k profit 5 years later. Everyone says it and they’ll be right when it happens but when you keep saying for many years, you will be right eventually

A broken clock is right once a decade.

The thing is the collapse is like a random chance every week/day. At some point some human being will decide fuckem im not working all weekend to bail them out again and that’s when the crash will happen. That’s literally what happened in 2008, bear sterns and Lehman brothers for decades just rolled over their debt until one day the banks were just like yeah nah we had enough go ask the govt for help and that was the crash. It easily could have happened months earlier or months later, some bank execs were just in a room and finally decided they wanted to get off the ride one and that was the day it crashed. Just human emotion at that point if it would have happened the prior month or following month instead.

Exactly this. The entire market is held together by people who are willing to bend over backwards to keep it working. And all it takes is two or three of those to decide “enough is enough” at the same time, and suddenly all of the market’s sins are laid bare. And at that point, the investors panic and everything snowballs.

just hope the crash and burn doesnt singe the rest of us

Oh boy, its going to fuck us especially hard.

Tax payers paid for 2008, their going to indebt our kids once again.

He’s been saying this for 4 years

But he’ll be right everyday after it happens

And it’s somehow a surprise to you that the worlds richest corporations collectively can keep up an investment bubble for four years?

They’ll not be able to do it indefinitely, and profitability of any LLM business is not on the horizon so far.

I’m saying Burry’s opinion on the timing is irrelevant.

He calls a crash basically every quarter since the '08 crash recovered. If you shorted every time he suggested something was going to burst “sooner than later”, you would already be bankrupt.

Just like the housing bubble, right?

Right??? <while wearing big titties>

Soapy* tiddies

It’s a safe bet.

The bubble will burst, that’s our boom-bust cycle. I think we’re at the point where it is always a few bad decisions away.

I’m actually impressed that it’s still going

Coincidentally, The FED was made to stop boom-bust cycles before WWI. It’s never, ever worked, and it will never start working.

Can you tell us what the FED is? The Federal Reserve?

Yeah, that’s another term for the Federal Reserve.

Yeah the fed did a great job preventing the Great Depression lmao. You know what really stops boom/bust ? Taxing the wealthy and holding them accountable for their crimes. Also all those pesky monopoly regulations, post Great Depression regulations like glass stegal and other regulations that have been systematically dismantled in the last 40 years.

“the market cam remain irrational longer than you can remain solvent”

Unemployment benefits in the USA? LOL! It’s gonna be a real shitshow when the bubble bursts.

Unemployment benefits in California are $450/week max. The average rent for a one bedroom apartment in California ranges between $2,100 and $2,460 per month, depending on the source and specific metro market.

He’s predicted around sixteen market crashes so far by my count. The dude got lucky once and has been riding the fame ever since. I’m not necessarily disagreeing that this whole thing will crash, but timing is the important part and he keeps missing it. I’ll not be making any financial decisions on his recommended timeline anytime soon. He may as well be Dave Ramsay imo.

Trump will make sure it doesn’t crash by avoiding all regulations and anything that would make shareholders sweat.

“AI investment” is the reason why we’re not in a full blown “official” recession. He doesn’t want a recession for “his” economy while he is president. When the AI bubble bursts the GOP will be blaming the Democrats and will ask to be put back on power again

The question is can he float the problem for that long, the current pace of AI investment simply requires more returns than are possible, something like 1/5 of the entire GDP of the united states at a minimum yearly. At some point the emperors lack of clothes will become impossible to hide no matter how much they try.

Not to mention US debt is currently in a precarious position right now. I don’t understand how one can even possibly bailout these companies while the USA is sitting on a dicey position itself.

I once saw an old political gadfly (Lyndon LaRouche) described as having predicted 15 of the last 3 economic downturns. Sounds like this guy.

Mr. Money Mustache’s latest post is about this and I hope is right. Basically he thinks it will not destroy retirement, viewing market panic as a recurring historical pattern driven by fear rather than fundamental economic ruin. Instead of reacting to macroeconomic anxiety, he emphasizes that true wealth stems from human productivity and resilience, suggesting individuals ignore the news cycle and focus on personal financial habits. Also recaps the basics so a great reatd. We can do it one step at a time to increase freedom!

Big short investor who has been wrong about every prediction.

Which one was he again? Was he the Michael Scott or the Patrick Bateman??