2008: US Banks pump stocks -> market correction -> taxpayer bailout

2026: US AI companies pump stocks -> market correction -> taxpayer bailout

Mark my words. OpenAI will be bailed out by US taxpayers.

I'll take that bet.

Banks get bailed out because if confidence in the banking system disappears and everyone tries to withdraw their money at once, the whole economy seizes up. And whoever is Treasury Secretary (usually an ex Wall Street person) is happy to do it.

I don't see OpenAI having the same argument about systemic risk or the same deep ties into government.

	▲	zozbot234 11 hours ago \| parent [-]
		Even in a bank bailout, the equity holders typically get wiped out. It's really not that different from a bankruptcy proceeding, there's just a whole lot more focus on keeping the business itself going smoothly. I doubt OpenAI want to be in that kind of situation.

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smj-edison 11 hours ago | parent | prev | next [-]

In 2008 the US government ended up making more money then they spent though (at least with the tarp), because they invested a ton of money after everything collapsed, and thus was extremely cheap. Once the markets recovered, they made a hefty sum selling all the derivatives they got at the lowest point. Seems like the epitome of buy when low and sell when high tbh.

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Ekaros 7 hours ago | parent | prev | next [-]

Even if there is a bailout. Will it happen in time? Once the confidence is lost it is lost and valuations have dropped. Bailout would just mean that who ever gave money would end up as bag holder of something now worth lot less.

Banks needed bailout to keep lending money. Auto industry needed one to keep employing lot of people. AI doesn't employ that many.

I just don't believe bailout can happen before it is too late for it to be effective in saving the market.

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senshan 12 hours ago | parent | prev | next [-]

Not really. It was not about stocks. It was the collapse of insurance companies at the core of 2008 crisis.

The same can happen now on the side of private credit that gradually offloads its junk to insurance companies (again):

As a result, private credit is on the rise as an investment option to compensate for this slowdown in traditional LBO (Figure 2, panel 2), and PE companies are actively growing the private credit side of their business by influencing the companies they control to help finance these operations. Life insurers are among these companies. For instance, KKR’s acquisition of 60 percent of Global Atlantic (a US life insurer) in 2020 cost KKR approximately $3billion.

https://www.imf.org/en/Publications/global-financial-stabili...

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throw-12-16 6 hours ago | parent | prev [-]

I don't think so.

Elon owns a competitor and bought the White House.