| ▲ | Xunjin 3 hours ago |
| If this is a bubble... The pop stage will be devastating... |
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| ▲ | nelox an hour ago | parent | next [-] |
| Listen to the author of “A Brief History of Financial Bubbles” argue why it probably isn’t a bubble: https://api.substack.com/feed/podcast/260347/s/233172.rss https://podcasts.apple.com/us/podcast/conversations-with-col... https://open.spotify.com/show/0Cj2lIpGxkrw1RFVIPTa6a?si=f41c... |
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| ▲ | deaux a minute ago | parent | next [-] | | You mean "Listen to [someone who started on Wall Street at Lehman Brothers, joined PayPal in its earliest days and worked alongside Peter Thiel and Elon Musk, and eventually became a venture capitalist in Silicon Valley] argue why AI probably isn't a bubble". | |
| ▲ | OccamsMirror 2 minutes ago | parent | prev [-] | | Can you please summarize his argument? |
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| ▲ | 01100011 2 hours ago | parent | prev | next [-] |
| We don't let bubbles pop anymore. We print money and borrow from the future so that no one loses money on their homes and retirement accounts. The GFC changed the rules. |
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| ▲ | freakynit an hour ago | parent | next [-] | | [flagged] | |
| ▲ | calvinmorrison 2 hours ago | parent | prev [-] | | except the last bubble pop hit fast and hard with post covid inflation. | | |
| ▲ | BobbyJo an hour ago | parent [-] | | It worked. The only people upset about it are young people who don't vote. If young people don't want a continual wealth transfer from them to the old, they need to start voting. That's been the case since 2008, and here we are a generation later. |
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| ▲ | IAmGraydon 2 hours ago | parent | prev | next [-] |
| It’s never going to happen because too many people want it to happen. |
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| ▲ | JumpCrisscross 2 hours ago | parent | prev | next [-] |
| > If this is a bubble... The pop stage will be devastating... Why? It could be sudden. It could be slow and gradual. I've seen no reason it needs to be one versus the other. |
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| ▲ | burnte 2 hours ago | parent | next [-] | | Irrational exuberance rarely transitions to a rational drawn down. The minute the first selfish-actor flood-liquidates, everyone else will too. That's now runs work. | | | |
| ▲ | bawolff 31 minutes ago | parent | prev | next [-] | | I mean, isn't the definition of a bubble that it pops quickly? If it slowly loses value over time, its not really a bubble. | | |
| ▲ | JumpCrisscross 28 minutes ago | parent [-] | | > isn't the definition of a bubble that it pops quickly? There is no consistent definition of a bubble. We have no fundamental reason current valuations have to collapse suddenly. | | |
| ▲ | bawolff 22 minutes ago | parent [-] | | Is there any definition of bubble that doesn't involve popping? That's literally the metaphor. > We have no fundamental reason current valuations have to collapse suddenly. I would agree, but i think that is just saying that the current situation is potentially not a bubble. Which may be true. We will only find out after the fact. |
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| ▲ | tomrod 2 hours ago | parent | prev [-] | | Because it is deliberately extracting cash from Mom and Pop into the robber baron's wallets? | | |
| ▲ | JumpCrisscross 2 hours ago | parent | next [-] | | Okay? Why does that mean a devastating pop? | | |
| ▲ | vermilingua 2 hours ago | parent | next [-] | | Where were you in 2008? | | |
| ▲ | JumpCrisscross 2 hours ago | parent [-] | | It would be karmic if fleecing led to financial crises. It doesn’t. You’ve taken N = 1 and extrapolated it wildly. |
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| ▲ | michaelmrose 2 hours ago | parent | prev [-] | | Because traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties. Whether this works or not at some point it becomes an inevitable and self reenforcing feedback loop. Just investing less in risky things on the run up means you personally perform worse so even in known bubbles you don't see reasonable slow downs instead of disastrous pops. | | |
| ▲ | JumpCrisscross an hour ago | parent [-] | | > traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties What? Source? Plenty of investment bubbles pop before the bag is passed. This thread involves a lot of people looking at something they don't like and presuming karmic forces will give them what they deserve. There is no reason these companies, even if massively overvalued, have to "pop." That's fundamentally different from e.g. the financial crisis, or the 2023 bank collapses, or even the dot-com bubble. Those did not have the ability to self correct. There was no slow deflation other than through a bailout. | | |
| ▲ | overfeed 9 minutes ago | parent | next [-] | | > There is no reason these companies, even if massively overvalued, have to "pop." This is a wild thing say without any qualification. | |
| ▲ | marcus_holmes an hour ago | parent | prev [-] | | I'm genuinely curious why you say this is different from the dot-com bubble? As I see it, this is the exact same situation - wildly overvalued companies based on investor exuberance, the underlying business is not capable of supporting this kind of valuation. IPO tends to be the crunch point at which this overvaluation is exposed. Once exposed, the valuation correction spreads to other similar businesses quickly and the bubble pops. What's the self-correction ability that AI companies have? | | |
| ▲ | JumpCrisscross 29 minutes ago | parent [-] | | > genuinely curious why you say this is different from the dot-com bubble? A lot more revenue. Dot coms were going public pre revenue. And Anthropic is profitable. Both it and SpaceX wouldn’t be dependent on further stock sales to stay alive—that lets them weather a downturn. | | |
| ▲ | marcus_holmes 10 minutes ago | parent [-] | | As I understand the situation, Anthropic is revenue-positive but not profitable. As usual, Ed Zitron covers this well [0]. As with the dot-com bubble, there is a lot of voodoo accountancy (and flat-out lies) about the actual situation here. As I understand it, the basic problem is that the big three can't charge enough per token to cover costs because they're in competition with each other (and one of those is Google that can afford to buy market share using its other operating revenues), and the OSS/cheap Chinese models. And this situation is unlikely to get better in the short term because building cheaper per-token capacity is very expensive and time-consuming. [0] https://www.wheresyoured.at/anthropics-profitability-swindle... |
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| ▲ | dragontamer 2 hours ago | parent | prev [-] | | Why would that pop the bubble? Robber Barrons existed from like 1860 through 1915 and extracted the wealth of many people, including Native American tribe lands. Like this shit can keep going until we decide enough is enough and actually change our society. | | |
| ▲ | tmp10423288442 2 hours ago | parent [-] | | Not related - many robber barons went bankrupt in the severe economic crashes of the time, such as the Panics of 1873 and 1893. The Gilded Age continued despite bubbles popping. |
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| ▲ | HerbManic 2 hours ago | parent | prev | next [-] |
| I mean if the blow back wasn't so horrible for a lot of people, I kind of respect just how creative the pump is on this one. |
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| ▲ | applfanboysbgon 2 hours ago | parent [-] | | There is literally nothing creative about circumventing existing regulations. By definition of there already being rules in place to prevent them, the pump methods being used are already a known quantity. That those safeguards are being bypassed is just boring old corruption. |
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| ▲ | deadbabe 2 hours ago | parent | prev [-] |
| One thing I have come to realize, is that worrying about bubbles will keep you poor. If everyone is in the bubble and it pops, everyone is in the same boat, so you’re not really going to be poorer than your peers by comparison. If it’s not a bubble and you are wrong, you will fall way behind everyone else and just watch people get richer and richer doing the exact same thing you should have done. Also, just because something is a bubble doesn’t mean it has to end in a devastating pop. Sometimes bubbles expand and then just get diffused. The exponential rise stops and prices plateau, but it just becomes a new normal and things stagnate for a while before resuming normal upward growth. |
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| ▲ | coliveira 2 hours ago | parent | next [-] | | Ask Warren Buffet how concerned he was of "missing" on bubbles... He got richer than pretty much everybody else by just avoiding bubbles and then buying assets at fire sale prices when they inevitably popped. | |
| ▲ | 2 hours ago | parent | prev [-] | | [deleted] |
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