I remember in Summer 2007 feeling that there was an impending implosion coming based on the shady practice of using 2nd mortgages as downpayments - it had become a common practice. Started doing a bit of shorting (not too much), made a little, lost a little and then sort of lost interest in doing it just about the time things fell apart in '08. All that to say that these things can take a lot longer than you'd expect. You can look at the situation (like the circular funding as well as this article) and decide that yes it's not sustainable. But it can sustain longer than you expect.

Oh, I am well aware it's hard to time it. But still getting a general sense of the impending crash can help preparing in different ways. You can park part of your assets, not completely withdraw. Or pay extra for piece of mind by hedging them. Sure, it will cost, maybe won't be needed at all, or still misfired, but I'll sleep better with less anxiety, so that's still a win in my book...

This is the thing about being right too early has the same effect of being wrong.

Which is why I hate when people criticize some obviously overvalued shit, and the response is "why don't you short it".

Sometimes the best way to be safe of something about to explode is to just get away from it.

Yeah. The thing is, we were being told that was a problem in late 2004 (this is when Max Keiser was writing and talking about the risks to Fannie Mae and Freddie Mac; he and others saying this were written off as cranks, even though they laid out a pretty solid scenario that came substantially true.)

So yes, Oracle is likely a canary in the coal mine.

It can only really be seen as an indicator of hidden risks to the banks from exposure to the SPVs.

But how long it will take before the miners start dropping dead from the fumes, who knows. Could be years, could be a few weeks after the Anthropic IPO when people are sitting smoking on the steps to the helipad saying "what the fuck? No I mean, really, really. What the fuck!"

"The market can stay irrational longer than you can stay liquid"

Yep, market can remain irrational for longer than you can stay solvent.