> A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy.

Yeah that's a more accurate framing, basically just saying that in '08 we put out the fire and rehabbed the old growth rather than seeding the fresh ground.

> Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch

I disagree, I think they're artifacts of the rehab environment (the ZIRP policy sphere). I think in a world where we fully ate the loss of '08 and started in a new direction you might get Tesla, but definitely not TSLA, and the version we got is really (Tesla+TSLA) IMO. Bitcoin to me is even less of a break with the pre-08 world; blockchain is cool tech but Bitcoin looks very much "Financial Derivatives, Online". I think an honest correction to '08 would have been far more of a focus on "hard tech and value finance", rather than inventing new financial instruments even further distanced from the value-generation chain.

> Goldman Sachs and GM et al. should not currently exist.

Hard agree here

I would say yes and no on Tesla. Entities that survived becaue of the rehab environment actually expected it to fail, and shorted it heavily. TSLA as it currently exists is a result of the short squeeze on the stock that ensued when it became clear that the company was likely to become profitable. Its current, ridiculous valuation isn't a product of its projected earnings, but recoil from those large shorts blowing up.

In our hypothetical alternate timeline, I imagine that there would have still been capital eager to fill the hole left by GM, and possibly Ford. Perhaps Tesla would have thrived in that vacuum, alongside the likes of Fisker, Mullen, and others, who instead faced incumbent headwinds that sunk their ventures.

Bitcoin, likewise, was warped by the survival of incumbents. IIUC, those interests influenced governance in the early 2010s, resulting in a fork of the project's original intent from a transactional medium that would scale as its use grew, to a store of value, as controlled by them as traditional currencies. In our hypothetical, traditional banks collapsed, and even survivors lost all trust. The trustless nature of Bitcoin, or some other cryptocurrency, maybe would have allowed it to supercede them. Deprived of both retail and institutional deposits, they simply did not have the capital to warp the crypto space as they did in the actual 2010s.

I call them "ghosts" because, yes, whatever they might have been, they're clearly now just further extensions of that pre-2008 world, enabled by the our post-2008 environment (including ZIRP).