All ai companies should direct all resources to medical research. I mean we would have to do without ai slop summaries for search engines and ai slop images. Well on second thought I guess slop is worth the human cost so let’s keep it as it is. I bet I get my wish.
The housing bubble encompassed a metric ton of banks and companies that bought and sold shares of subprime mortgages in the billions of dollars and when everyone stopped paying and started defaulting, that caused a entire economic collapse.
Now unless someone can point me to an analysis where we have some tangible proof that banks and tons of companies are invested, not just using, AI, it seems to me the fall out would be limited to tech companies, which yeah would involve some job losses but nothing on the scale of the housing or dotcom bubble.
Now if you’re referring to rich jackasses who are all in and banking on AI taking our jerbs? Sure that bubble will hurt them but they’re not driving forces in the economy, just politics, which I guess could cause a economic crash if they get your idiot politicians more scared of them than the people with France on their minds.
The funny thing about people who say it’s not a bubble because AI has value is that the asset category having value doesn’t prevent valuation bubbles from forming.
Houses have value: you can live in them. Yet there was a housing bubble.
The internet has value: you can watch cat videos on it. Yet there was a dot com bubble.
Tulip bulbs have value: you can grow pretty flowers with them. Yet there was a tulip bulb bubble.
In my experience, whenever you start reading news stories asking if something is a bubble and quoting investment bankers say, “no, it’s not a bubble,” well, usually it’s a bubble.
Hold up everyone. It’s not a bubble.
“So it is true that valuations are high but, in our view, generally not at levels that are as high as are typically seen at the height of a financial bubble,” said Goldman Sachs strategist Peter Oppenheimer.
He’s from GOLDMAN SACHS LOLOLOLO I THINK THEY WOULD RECOGNIZE A BUBBLE LOL ah fuck me our economy is gonna splode
I wonder what the people over at Bear Stearns think oh wait they gone.
this made me chortle into my cereal ty
Goldman Sachs also though NINA mortgages were a good idea, and they also thought it was a good idea to bundle bad mortgages in with good mortgages, and find a rater to mark them AAA investments.
And then we saw how that worked out.
yeah, how could this go wrong?
at least after the crash those houses could be lived in. these datacenters are made for one purpose, AI, and really would have to be completely gutted and refurbed for general purposes… fun.
I mean, what’s he gonna say?
right? I just figured the “it’s not a bubble, guuuuys” crowd could find someone a tiny bit more credible lol
Give me exit liquidity so I can buy the dip?
just short the companies that’ll be the most affected. probably nvidia is a good choice to short right about now.
I wish it were safer to make these sorts of sweeping gambles. Shorting Nvidia right now is like a pretty obvious bet but getting the timing right is the difference between generational wealth and a lifetime of poverty and debt.
I don’t think it’s a bubble, first there is absolutely zero comparison to the housing bubble, which was a financial problem that caused housing prices to inflate, while the inherent value of housing stayed the same. This alleged AI bubble is mostly driven by companies that have lots of money, so it is not credit based, and there are underlying products that actually have increasing value.
The better comparison would be the dot com bubble, which was dominated by companies that didn’t even have a product and didn’t make any money. The frenzy is similar, but the fundamentals are different.
AI investments may cool down because obviously there is a frantic race in an attempt to get ahead.
But the reason I don’t think the AI bubble will burst is because it is driven by companies that actually make money.
They may lose money investing too heavily in this, but the most companies investing in this can afford it.I think the most AI bubbly company isn’t even in the diagram, because that is Tesla. Tesla might actually go down, because Musk is insane.
But in general if it is a bubble, it is a very very long one, Nvidia value has been exploding since 2016 based on their AI product dominance. If this is a bubble, I think it will go down in history as the longest living bubble ever.
Is the market frantic? Yes absolutely.
Is the value of some AI companies extremely high? Yes absolutely.
Is it a bubble that will burst? No if it’s a bubble, this one will be more like deflating to a less frantic level, because ALL the main players have the money to weather losses.
And the main AI companies have actual products that make money for them rolled out already. So it is not like the dot com bubble.I don’t think the AI bubble will burst is because it is driven by companies that actually make money.
Last I looked, the big AI companies are all hemorrhaging money.
And the main AI companies have actual products that make money for them rolled out already. So it is not like the dot com bubble
Citation needed.
the only company making a profit is nvidia. everyone else is losing.
Not true, plenty of AI companies are in the green like Midjourney. Not everyone is hermorhagging money like OpenAi to curb out competition.
I think the biggest difference between this bubble and the ones that pop are whether the valuations were built by debt. In this case - no. So when their products turn out to be less useful than they claim, it will devaluate. But the debt issued to build the bubble wont go through a sudden correction that is amplified and causes an even bigger collapse like in 2008 or the dotcom bubble.
Well argued. Also, even if it is a bubble, it’s arguable that most technology innovations are preceded by necessary bubbles which are important for directing investment into emerging technologies. The railroad mania in the 19th century or the fibre optic rollout in the late 1990s, during the dot com boom, benefited humanity long after the froth and excitement subsidied.
Its not a bubble but most people here dont think for themselves. They dont even seem to understand the connection between what news is put out, which analysts they choose to give attention, and for what purpose.
Imagine living your life and just believing whatever someone says in the news just because he has the title of analyst. And never thinking about who profits from that specific guy being on the news at that specific time. Who picked that guy to say what he does and why? Its not random.
Being able to influence the market is key to making a lot of money. How do people think they influence the market? This is how they do it. How else?
Sometimes they probably lose money too, specially when orange man opens his mouth and says something very stupid, like last Friday. But then they position themselves for the coming uptrend and make their money back, maybe even more then they had before, since they have giant pockets.
Especially your first paragraph is probably spot on. Short attention span.
Sell your stocks, I will buy. :)
Timing is a fools game for sure. Bubble could pop next month, next year, or even later.
If you’re old, make sure you have a good percent in bonds. If you’re young, make sure you have 6-12 months saved in case of layoffs and keep saving - market will look completely different in 20-30 years anyways so it’s not worth worrying about.
NVIDIA really out here selling shovels in the gold Rush
Nvidia are very smart in that regard, ethics aside. Very early on they decided that selling cards to gamers will not give them the infinite growth everyone so desperately desire, so they started looking for what does, and they were consistent at it ever since. Every tech bubble of the recent history is powered by Nvidia cards. How much they contributed to the hype (and damage) is not entirely clear, but that’s not zero for sure
They lucked into it. They made their cards for gamers, and various groups, AI researchers, bitcoin miners and others, discovered that they those gamer GPUs were really good for other tasks too. I think it took a while before Nvidia started making specialised cards for those purposes.
I can’t really blame them for serving that market that they just lucked into. I can and will blame them for their terrible Linux support.
Oh believe me, it wasn’t just luck. They have special labs full of people who’s whole job is to find another unexplored niches that can buy their cards. And they only make specific single purpose cards only when the market is mature enough to justify the spending, which is also smart.
They made gpus long before the gold rush and will not stop after. The usefulness of tensor cores will not dwindle with any market correction. Even before ai boom they were valued astronomically out of reality. Not a single stock is tied to actual selling or owning of anything anymore
Just like shovels existed before the gold rush and will exist after humanity’s death. But we have a saying for a reason
It seems like the wealthy propping up their own bubble.
Well, they now control all the money, so they can decide all the value.
Unpopular opinion but this will not as bad as housing bubble and we’re way past bubbles actually popping in contemporary economy. Even China corrected for its massive ghost city housing bubble just recently and that was actually worse than ai tech overvaluation.
This turned out a little bit long. I wonder if anyone will bother reading it.
A lot of this so-called ‘bubble’ is based on capital expenditure in support of a technology that probably doesn’t have the capability AI company ceo’s claim, but does have fascinating, and in terms of how society is currently arranged possibly extremely harmful, potential.
I know what ai companies have done, and what they are likely to do, in the pursuit of profit is shit; I would say that is a capitalism and fascist billionaire issue, rather than a tech issue but ymmv.
And there is the energy consumption problem. I think ai ceo’s and tech broligarchs would privately say ‘compare the energy consumed by my datacentre to the energy consumed by the workers it has replaced and you will see it is fairly efficient…’ (I am saying what I expect they think, not what I agree with).
The concern that the economy currently has all of its eggs in the ai basket seems reasonable, but I see why capital is betting on it as big as it is. Any concerns regarding the economic disruption of an ai bubble popping is nothing compared to what could happen if 50%+ white collar workers are made redundant. We saw the number of essential workers needed per 1 million people during covid: it wasn’t many. Most jobs exist because the people exist to do them, corralled into the pyramidal structure of capitalism, where money trickles upwards. AI might push us into an era where the people exist but the jobs do not.
Anyway, I see this ‘bubble’ as being like the dotcom bubble, which didn’t kill the web when it popped. The gpu’s this capital expenditure has paid for are going to continue to be used, even as this economic period shakes itself out. They aren’t just going to evaporate. It isn’t like worthless debt being packaged up and resold without a chance of it being recouped, even if the prospect of what can be achieved with AI is currently over-valued.
Comparing to the dotcom bubble is what finally made it make sense in my brain. Though I know the toll it took on that sector’s workers and I don’t envy those in fields that are going to be affected the same way.
I’ve been saying the same thing.
The 2008 housing bubble was predicated on cheap lending. It was all debt. It was massive amounts of toxic debt sold around Wall Street, like using Trump Coin or counterfeit cash used to buy a house.
The vast majority of what’s happening here is not debt. Sure, some, but very little. Even the OpenAI AMD stock swap thing is swapping a gamble on stocks worth real money, not debt.
IMO the first sub-bubble to pop will be all the time and effort wasted on “Startups” that are nothing more than a couple people acting as a wrapper for an AI agent. That’s not really going to impact the economy too much on its face, but suddenly a lot of people are going to go from being “entrepreneurs” to being truly unemployed.
Edit: Also, just saw this gem, and THIS is how you get a supercharged 2008 repeat, bank deregulation and $2.6 trillion in lending. Which is exactly how we got to 2008’s subprime lending.
The vast majority of what’s happening here is not debt.
Most of what is going on in the AI sector is most certainly debt leveraged. Like, I’m looking at the books for several companies deep into AI.
I mean, how much profit is OpenAI turning right now?
Can you explain how we’re beyond bubbles like I’m 5? Is it that there are gentler market corrections now?
Yes, contemporary economy and free markets are so imaginary now that cascading effects and bubble pops like 2008 are very unlikely. American stock market in particular is so far off reality (even before AI boom) that it’s basically a video game with no actual relevancy to true gross product. While China/Russia is a dictatorship with no representation of reality at all and can easily hide the burden of bad economic policies in the obedient peasant class.
So we have dictatorship with imaginary worlds vs “free markets” living in their own imaginary simulation. Economy is all made up now and cascades are basically impossible because that requires rationality.
The problem isn’t the imaginary market, which I agree with the description. Its the leveraging of debt, to gamble in the market, which is what low interest rates enable.
And yes, our interest rates are VERY low still. I’m looking at some ARM packages right now, and their max lifetime interest rates are on par with what a typical mortgage was about a decade ago.
Perfect explanation, also; since 07 thing where the hedge bros were not punished, there stopped existing any incentive to imagine any scenario where anyone lose any money due to bank runs
Idk if ghost city thing was a bubble tho.
China used planned infrastructure and bunch of confused journalists in US were like “what kind of government plans for housing of their citizens”
It was a textbook bubble. They made and gambled on theoretical apartments where nobody involved had any intention of living there or any responsibility or connection to the underlying structure, to the point where building cardboard skyskrapers became a business… the is no point in denying it. Capital housing investment is a plague on humanity.
There are always bad actors in the system (see: hedge funds). But bubble? It can be argued that Ordos (the ghost city) was build too early, but it’s filling in nicely. From 30k in 2009 to 2.000.000+ in 2020.
https://en.wikipedia.org/wiki/Ordos_City
On the other hand noone ever build a damn whole modern city before for the people, so I’m not surprised they jumped the gun.
I mean even if it was planned the amount of excess given falling birthrates, doesn’t check out either.
Ah yes “the stoopit west har har” propaganda lol
I was mostly going for “modern journalism is is sad and biased towards clickbait” ngl. Especially now they have AI edited articles.
But what will be left after it bursts? At least in cause of the housing bubble - the houses existed physically - what will be after the AI crash? Lots of spare gear sold for cheap?
A bunch of brain dead junior Devs who cannot think for themselves
next year’s salary research is going to be a lot of fun!
But what will be left after it bursts?
Affordable GPUs? Less pushy AI commercials?
The wealthy will just move on to the next thing to inflate. Capitalists don’t work. They don’t care about anything other than ROI.
I don’t think they care about ROI for real. If they cared none of that would’ve happened because that’s just not how a real businesses are operating. You can burn the investments into R&D to an extent but if the product’s money flow doesn’t show a positive dynamics long enough - you get ready for some soul searching shit. My guess is that a lot of things contributing to AI bubble have something to do with money laundering.
These valuations cannot be tied to ROI, even using Olympic level mental gymnastics. The market would collapse in a millisecond. They are tied to a fictional dimension 78 years in the future where everyone decided to work overtime without collapsing and being four times as focused while the planet magically starts healing itself and no major disaster happens and all wars escalated without destroying any infrastructure or upsetting any populations and the authoritarian revenge hypercapitalist disasterpiece currently boiling over in the global standard host country suddenly is unanimously accepted as a new way of life without a single adverse reactions or any systematic issues and a spontaneous miraculous salvation from the diseases and famine it has maliciously developed due to the Christian god both existing and subscribing to the polar opposite moral and ethical alignment that the elite privileged promille has hallucinated to fit a reality that also somehow pivoted from a complete mass psychosis into firm truth by way of some unforseen quirk in the laws of physics that every great mind and scientists missed that magically flip childish commercial folly into concrete reality without requiring effort and being the first consciousless entity to achieve autonomy and an ability to replicate exponentially without consuming resources and a renneissance of unity appears around a unilateral decision to kill brown skinned people that agree to live and reproduce in the most efficient manner for the single purpose of feeding that slaughtering machine and producing goods and resources for the machine and for the now sanctioned debauchery that the new religion has prescribed all of our species to perform
Which as you might imagine is more than a little stretch
The s&p 500 tanks a ton and banks call on loans from these AI hyped companies using the price of the stocks as collateral (previously expected to rise). Credit crunch and now companies tighten the belts even further so higher unemployment again. Federal funds rate gets slashed and those that can manage steady good work during the recovery years will be fine. Everyone else will be struggle busing as usual
Can you elaborate on managing “steady good work”?
Being in a non-federal government job, in a non insane state.
If you have a stable job with good pay or good upward mobility in the company potential and don’t have periods of unemployment, if it has a 401k, you’re 401k is being invested while the market is down. When unemployment is high, the Federal Reserve sets the federal funds rate much lower to try and stimulate the economy. That results in lower rates for consumer loans. So people that have stable jobs that pay well enough can take out loans and/or refinance their current loans to do better than they were.
When the market recovers, you’ve had years of experience that you can now use for job hopping at more senior level roles when the job market recovers. Also a lot of late career people end up consulting for companies large and small with inexperienced staff. Those that didn’t fare well in a career during a market downturn, it’s either stagnation or hardship after hardship
It doesn’t necessarily have to be office/lab work. I know people that grinded the past decade+ in restaurants until an owner would trust them to manage a restaurant including all the supplies and payroll and then trust them enough to partner on a another restaurant and then that be their ticket to financial security. Some in their 30s, some 40s, some 50s. It’s a grind but at least they didn’t end up drug addicts and alcoholics like so many others
This is a really odd take.
you’re 401k is being invested while the market is down
Sure but you just lost half your 401k, including half of what was invested while the market was overpriced.
When unemployment is high, […] That results in lower rates for consumer loans. So people that have stable jobs […] can take out loans
Yes, but lenders also tighten their criteria during these times because even a stable job is dramatically less stable during a recession or depression. It’s very difficult to borrow money in an economic downturn.
When the market recovers, you’ve had years of experience
Sure but if the market didn’t collapse you would still have those years of experience. During a collapse fewer people will have consistent employment.
It’s a grind but at least they didn’t end up drug addicts and alcoholics like so many others
Not sure where you were going with this part.
The universal economic truth is, in times of economic uncertainty the working class does the heavy lifting.
There are many fine uses for tensor cores, we will not stop processing data.
There sure are but will there ever be a real chance to attract sober investors to make it work as a real business and not growth hacking extravaganza any time soon?
yes, We can’t prevent the bubble burst. We can hope it happens sooner rather than later but the bubble is baked in. So what companies and individuals can to is basically buy up their detritus at bargain prices. And then use them to make better, more solid companies that do not require $3T investment while showing no fucking profit.
it’s kinda funny how all these massive business are all giant money drains year after year after year. back in the day business people used to pride themselves being in the black.
Used GPUs
Annoyingly the current Gen that’s used for ai is basically useless for gaming
deleted by creator
AI is where former cryptocurrency companies pivoted when mining cryptocurrency stopped being profitable. There’s nothing left to pivot back to. Even those who have drunk the blockchain Koolaid don’t think there’s money in mining. Just gambling by investing with real money and hoping someone will give you more real money than you bought it with.
Lol. I’m sure some new fangled NFT AI Slop wouldn’t be another bubble.
bubbles are only bad if you don’t leave before they pop
I didn’t realize what is good or bad is reducible to what I alone experience and everyone else can fuck off.
don’t invest in the bubble and it won’t hurt you, don’t expect speculative investors either
The gpus will still be used for AI, just not as profitable
Hard to do that when there’s no profit NOW.
Is that because they’re so focussed on growth and advancement though?
Right now there’s no incentive for efficiency. The focus is using venture capital to grab market share by implementing new products.
If suddenly everyone realised that the new iterations are more costly without any new functionality, the focus would switch and it might be worthwhile.
Right now, you can buy a $500 GPU, and run an LLM locally that can help you draft documents or code or transcribe audio. If that were scaled up to a subscription service surely it could be reasonably priced, yet profitable.
If all of that were the case… why aren’t they ALREADY profitable? There are only 2 companies in the actual LLM/AI space, OpenAI and Anthropic, and OpenAI is already so dominant that Anthropic is a noncontender. Since that is the case, why aren’t either of them profitable? If they were, they’d be screaming about it constantly; Altman would be on stage every single goddamn day boasting about it; OpenAI would be posting monthly, if not WEEKLY profit reports, just to show how much money they were making as “”“The Future™️”“”; public investors would be POURING IN like nothing else mattered!!!
So where is it? Where’s the profit? Where are the reports and press conferences, the investor statements and the IPO’s? Where’s the goddamn money, Lebowski???
And don’t say they’re in the “growth stage” or whatever. 4 years in and a TRILLION DOLLARS LATER, there’s no profit to be seen, no remarkable products to use, nothing of substance except billions burned building bespoke data centers and polluting the planet. The whole AI “”“industry”“” is a lie.
They’re in a growth stage.
I don’t agree with them, but venture capitalists believe they are inventing a god, and that the first to achieve it will enjoy never before seen power, control, and ultimately wealth.
I could nitpick many inaccuracies in what you just said, but the main message that they are not profitable is on point.
Because they are still chasing a breakthrough. It’s one thing offering LLMs as a service or selling models, it’s another to develop new and better ones. It’s just a huge research cost. I’m pretty sure if they would stop research on new models and slightly increase their prices, they would be profitable. But they don’t want to fall behind.
What was left after the cryptocurrency crash? A whole lot of GPUs that got repurposed for AI. They’ll just get repurposed for whatever extremely computationally intensive thing some computer engineer comes up with. Until that bubble bursts, rinse and repeat. What’s happening is project managers are selling the next big thing to make a lot of capital really quickly to a board of directors.
They’ll just get repurposed for whatever extremely computationally intensive thing some computer engineer comes up with.
these are for AI, purpose built bespoke solutions to LLM problems. they’ll age like fine piss.
they can probably be repurposed as general purpose matrix math accelerators
large market there
Where does the capital come from though? Someone has to pay for the shovels and if there isn’t a profit now, how will they pay for the next bubble?
The capital comes from the profits from other markets. Which comes from exploiting workers. The original investment didn’t just spontaneously expose itself, people chose to flow money into it. They’ll pay for the next bubble with the profits C-suit executives stole from their workers and the little guy. They will take what should have been yours and bet it away on some fever dream that was doomed to fail from the beginning. All in the hopes that they might make their wealth get more outrageously excessive before this bubble bursts and they try again on the next.
If Lemmy is supposed to be the place where the most tech savvy people in the interest congregate, and everyone in the comments is unsatisfied with AI then we really do have a problem. These companies have all reached a point where they no longer listen to their most informed customer base but instead take 100% of direction from investors who don’t even know what they want except a line going up.
Investments and income have been divorced from reality for a while now, bud.
If Lemmy is supposed to be the place where the most tech savvy people in the interest congregate
Says who? Mostly feels more like sales than R&D here. Which kinda fits with these pitches.
I feel like someone working at the pointy end of R&D in AI isn’t necessarily well placed to predict the future of AI.
Bubble is an econ term. Whether there is an AI bubble has a rather tenuous connection to the future of AI. Not much of a connection between the housing bubble and the future of housing either.
Yes but my point is, a brick layer isn’t the best person to ask about the future of housing.
Feels more like the brick layer is equivalent to someone paid to create training data. You absolutely would want to ask the architects and engineers researching no ways in housing and construction. Not that they know what avenues of research will work out, but they do know the avenues of research.
No one expected the splash that LLMs or image diffusion models would make. Years later, the conversations on Lemmy are still dominated by people who still haven’t looked up how they work.
GPTs completely nuked the whole field of natural language processing (NLP). People had dedicated years of their lives to solving tiny aspects of that. That got solved practically over night. Sentiment analysis? Just ask the chatbot. Some of the seemingly smart people who make seemingly informed criticisms of LLMs are NLP guys, who just can’t let go of their old ideas.
Feel like the internet bubble is an even better comparison, the internet is completely ubiquitous now
Eh. Lemmy has a lot of ignorance surrounding technology and science compared to other sites. Hacker News is what you’re looking for if you want somewhere that is full of the most tech savvy people on the Internet, and most of them are extremely pro AI (with some weird AI cultishness alongside). Myself I think AI is a bubble but there is a lot of promise in the underlying technology once you take away the hype, just like the .com bubble at the turn of the century.
Hacker News is a site full of tech cultists and apologists.
I am not sure if you have discussed AI in a room full of hackers recently, lol. I have. Maybe 1/100 is pro-Generative AI in my estimation:
Too many people equate AI with LLMs only. LLMs are mostly bubbled bullshit, with a few limited use cases. But AI is a much broader topic. The really scary AI is the stuff we hear little to nothing about.
People also forget how dramatically tech can advance over time. Spoiled impatient Americans in particular want a finished product or they quickly write it off as “garbage”. They forget every product we own and use was once “garbage”.
Lobste.rs is probably even more on the “engineers talking to engineers” side of things. I’ve not visited in a while and am not sure what people there think of (the current crop of gen)AI.
I thought it was the place for people who didn’t want their shitposting interrupted by random child porn. Am…am I in the wrong place???
Unfortunately Lemmy is rife with CSAM too, but the larger instances have done a pretty great job eliminating it.
Smaller instances still get dumped on sometimes.
Edit: actually it feels like it’s been a year or so since any CSAM spam events, so good job everyone
I disagree with main post and agree with edit. I’ve only seen abuse material on Lemmy once and it was on an instance that didn’t have an automated moderation tool for image uploads and they promptly added that mitigation step after it happened
Suddenly I’m extremely worried about using lemmy. What’s the right way to respond if something is seen. Call the police? FBI hotline or something? Certainly screenshotting anything to send to authorities is out of the question but as soon as an image is loaded a device downloads it to cache so it’s like a dirty bomb just sitting on your device at that point. I have been blissfully ignorant that anything I use in my day to day would ever share a space with such abhorrent behavior. Kind of not sure I should still use the service, like that has actually been an issue on here before?
You’re fine, they go after the ones sharing it, of course if you want to tell authorities you can, just you’re not going to get in trouble for accidentally stumbling upon some asshat being a pedo. It does very much keep me from wanting to run my own instance though.
Thank you got the comment, I never even considered the risk as someone running an instance.
Yeah, unless you prevent image uploads it’s possible and easy for someone to put that shit on a drive you own which then means you’re technically distributing and harboring it.
Scary stuff
Happy to say I haven’t seen that shit here yet…unlike Reddit and 4chan.
Same, and additionally, no one so far has been randomly extremely misogynist toward me either. I can mostly say completely uncontroversial things like “women fought for their right to vote in the early 1900s” without getting 30 bad faith and whataboutisms in my replies. It’s sooo nice.
As a man, I’m happy to know that about Lemmy.
It’s always interesting to read the experiences of others. The one and only time I stumbled on cp was in the late 90s. Haven’t seen it on reddit or lemmy. Our bubbles keep us isolated.
From the entry for “zaibatsu” on Wikipedia:
Under the Allied occupation after the surrender of Japan, a partially successful attempt was made to dissolve the zaibatsu. Many of the economic advisors accompanying the SCAP administration had experience with the New Deal and were highly suspicious of monopolies and restrictive business practices, which they felt to be both inefficient, and to be a form of corporatocracy (and thus inherently anti-democratic).
The only difference? The zaibatsu actually diversified their operations.
Many of the economic advisors accompanying the SCAP administration had experience with the New Deal and were highly suspicious of monopolies and restrictive business practices
Your country was very different then.
My country? I am from the EU!
Let’s try not to be offensive.
* Puts
redblue glasses on *- Which kind of EU?
The European kind. Not the Extended Universe nor Eastern University.
And that is why Yamaha makes everything from musical instruments to motorcycles
People need housing, no one needs this AI crap. Even in boring engineering jobs using tools that solved problems decades ago, we are getting AI shoveled in left and right in places no one needs or wants it. And calling old features “AI” is also another problem.
And now these stupid “barking bears attacking fat sleeping people” videos are everywhere, and people seem to think they’re real.
We should focus on natural intelligence first, that is to say each other, and education…
Oh and the headline should read “Every day”, “everyday” is an adjective, like an everyday occurence.
Ai will be the best tool to keep the masses stupid since television.
This doesn’t really tell me anything, I’d have to compare it with other charts. E.g. what does the chart for agriculture look like? Airplane manufacturing? Internet in early 2000s?
I think it’s hard to definitely call something a bubble until it pops.
The definition of a bubble goes something along the lines of market prices exceeding the intrinsic value of the investment they represent, which may be true here?
If you want to read more about this the rough name for these companies was “the magnificent seven” a year or so ago when I last looked at this. A quick Google suggests represent about a third of the SNP 500’s value now and have a cape ratio (cyclicly adjusted price to earnings) of ~37 compared to 15-20 being normal.
Edit: the above baseline is incorrect; see sugar_in_tea’s comment for a more accurate baseline and some interesting counterpoints
I can’t find a good numerical source for the correlated risk within this group, and I suspect analyzing it is very difficult. Given they all used to be a lot more diversified in the past but now a large % of their valuation is predicated on AI historical correlation analysis probably fails. But the diagram linked here suggests it’s probably bad to put all your money in these companies. (Or even a 3rd if you are in an s&p 500 index tracker 😶)
Like, none of this definitively says this is a bubble, since if it were possible to divine that the bubble would immediately pop, but it does suggest there is a strong likelihood we are seeing a bubble.
~37 compared to 15-20 being normal.
15-20 was normal for the 100 years ending 40-50 years ago. But of we look at the last 40 years or so, the CAPE has been higher, suggesting that we don’t know how what “normal” looks like going forward. More people are buying stocks than ever before due to retirement plans and poor bond yields, which pushes up the PE.
So whether ~40 is high for a PE going forward isn’t clear. The CAPE hit ~45 in the 2000 crash, and reverted to ~20 after the crash, yet the 2008 crash only hit ~26 and crashed down to ~14 and quickly bounced back to ~20. The 2008 had little to do with CAPE and more to do with corruption in the banking industry, whereas 2000 was almost purely oversized hype in the burgeoning tech market.
So is the normal range 20-30? Idk. Maybe 20 is actually low going forward, it’s unclear. Either way, 40 isn’t as outlandish as it was in the 2000s, and that pushed up to 45 before crashing.
there is a strong likelihood we are seeing a bubble.
Agreed. But if you drop out of the market and invest in other stuff, you would miss whatever the rest of the runup will do before it bursts, which could leave you worse off than someone just investing in the entire market by market cap. Ot could continue to run for 10-20 years, or it could pop this year, it’s impossible to know since it relies heavily on investors continuing to believe the hype and companies continuing to have something to back up that hype.
Valid, I got 15-20 from a Google search, but further research puts your numbers as more reasonable, I will edit the patent post.
I don’t think anyone should trust my numbers either. Here’s the CAPE data, make your own decision as to whether the CAPE ratio makes sense going forward.
CAPE is a weird measure in that it looks at last 10 years of earnings for PE ratio. It is not especially relevant in that a fair expectation for next year’s earnings is this year’s earnings. It is intriguing that there wasn’t significant earnings growth levels in the past, though, which because PE based on this year’s earnings would have high CAPE if high recent growth.
But of we look at the last 40 years or so, the CAPE has been higher, suggesting that we don’t know how what “normal” looks like going forward.
As you listed, crashes lead to sub 20 PEs. Mag7 PEs is not representative of Russel 2000 PEs. High PEs expect high growth for long period. Reality checks usually happen, but PE’s are not universally high. Just with the oligarchs with White House guest passes.
crashes lead to sub 20 PEs
The 2000 crash didn’t though, it was just over 20 at the trough. Jan 2003 was 21. That was almost as high as the peak in the 60s, and higher than the moment before Black Monday. So the market reverted to a mean that would be considered a peak just 20-30 years prior. 15 used to be a good marker for “average,” and now that’s the marker for the Great Recession.
Crashes used to lead to sub-10s, and now they crash to 15-20. The market has fundamentally changed with 401ks and IRAs.
All the economy is a big circle if you draw the circle big enough.
Actually scratch that. There is an economy that is not just one big circle jerk, such as the development of new technologies or the terraforming of deserts into fertile land; as neither of these things ends the way it started; it brought lasting change, and that is true progress.
Actually did you see my presentation that i made about this recently?
The point is to convince the americans to invest in new technologies.
To all those who say that human spaceflight is impossible:
Settling mars is a centuries long undertaking. You basically have to nurture a whole ecosystem from scratch… that would be a brutally difficult and lengthy process in the best of conditions. But of course, these aren’t the best conditions. We aren’t doing particularly well with the ecosystem we’ve already got.
If you want a historical project, then look to balancing modern industry within the planet’s biosphere. It’s a prerequisite to anything happening on mars.
have you considered that throwing more planrts at the problem eliminates the need for sustainability
There is no good economic reason to colonize other planets. We have plenty of space here on earth, with conditions already much more hospitable than that of mars - deserts, for example. The resources needed to turn these into habitable land is so much less than the resources required to make even a tiny part of Mars inhabitable (i.e. establish a colony that relies on life support systems) it’s insane to go for Mars first. The reason colonizing Mars is talked about at all is because a rich white dude wants to go to Mars, since deserts are too boring for his spoiled ass.
I actually agree that it would be cool if we went to Mars, not to colonize it but just to be there. But comparing it to white pillaging of the Americas is just incorrect. Mars is not inhabitable by humans, the Americas very much were. The external resources needed to colonize America were zero, in fact pillaging local lands meant a lot of resources for the Empire. Mars is going to be a much more expensive and much less profitable endeavor.
Actually I replied to you before, pointing out the very same fallacy: https://lemmy.ml/post/33824723/20134917
deserts, for example.
floating ocean platforms as well
Only slightly better than mars, frankly speaking the ocean is about as hostile as you can get without going to space. Maintenance alone would be a fucking nightmare, look at cruise ships or oil rigs for example and you can get a pretty good idea. Unless you are talking about artificial islands since we’ve been doing that for millenia.
Europeans caused massive death in the Americas. I do not think we should replicate that model.
Also, the chance is small, but there might have been a separate biogenesis (beginning of life) on Mars. Sending humans with our dirty microbiome would almost certainly wipe any evidence of that, and possibly cause an extinction of an entirely separate form of life, which would be a crime even more horrible than the extinctions and genocides which we have caused so far.
Let’s just leave Mars alone until we’ve studies it more and are certain there is no life. Colonizing the moon seems challenging enough for a couple centuries…
Great point.
Except it’s 17x larger & will take the entire US GDP with it.
God damn it, if the US collapses who will supply weapons to all its peaceful democratic allies in the world? I’m super fucking pissed off about this.
The GDP issue is not because of the AI bubble, it’s because of tariffs and the complete destruction of US soft power abroad
And I would almost bet the crash will be about the time the Dems take power, just so the Republicans can whine about the situation they created and blame the Democrats for it.
The problem with this theory is that it assumes Republicans will give up power to allow the Democrats to govern.
The part of Republicans blaming Democrats is spot on.
GOP without fail always wrecks the economy, in what gets forecasted as the last time they will ever be trusted with power again. Dems just get 51% of votes anyway.
Is “US soft power” a euphemism for sowing destruction and proxy wars everywhere? Or do you mean things like the awful show NCIS being barely disguised pro-Israel pro-war propaganda? Like that?
I won’t touch the entertainement / Hollywood reference to soft power as that deserves a discussion in its own right.
But as someone who works with … or used to work with US diplomats abroad on a daily basis, I would urge you to educate yourself and people around you about the myriad of activities that US diplomats are engaged in. Contrary to conventional ‘wisdom’, US foreign policy consists of a lot more than bombing the Middle East and supporting Israel. Nobody talks or knows about all of the other things but I can tell you for a fact that American diplomats were (and in some cases still are) helping a lot of people in Eastern Europe. We were helping a lot of people. Shelters for the homeless, schools and museums for kids, whole new campuses for universities, orphanages, adn the list goes on, and on. There’s a reason why over 75% of state department employees working abroad are not republicans. They are not the people most think they are.
We were doing good work with the Americans here. We were helping children, we were exposing corrupt oligarchs. We were in this fight together, not just in Eastern Europe but all over the world. Yes, even the US Marines stationed at Constanza and Novo Selo, ready to fight should the Russkies anything, deserve respect. As one marine told me recently “Don’t worry, come what may, we will stay and fight with you”.
Then everything changed this year. My old American friends were replaced with incompetent political commissars sent by the new idiocratic regime in DC.
The US marines are still here though, and they are still ready to die. I’m just not sure if its worth it anymore.
TLDR: Educate yourself and resist the temptation to parrot oversimplified narratives. Just because you only know about the bad and don’t care to learn about the good, doesn’t mean the latter doesn’t exist.
Edit: in an attempt to preempt incoming windmills: I detest Trump, Netanyahu and imperialism in general. But that does not mean anything American (or whatever nationality) should be presented as black and white. There are 340 million Americans. Each one of them here is proof that America is not black and white, and neither are its citizens.
helping a lot of people in Eastern Europe
to support Israel and war on Russia
Soft power is always more effective than hard threats, because the corrupt CIA stooges pillaging their economies and contributing to destruction of humanity do so with the dignity that threats and bribes are secret and unobvious sycophancy to the US empire. Soft power means that your pawns are not explicitly exposed as your owned pawns.
That your job makes the colonization mission more effective, all glory to hypno Trump, is a cheaper and more direct path to complete capitulation by the colonial “governor generals”.
I think you are just repeating the same old talking points and conspiracy theories that we’re all well-familiar with without actually adding anything of substance or factology to the conversation.
Let me guess though, Russia doing the same things is just pure evil or propaganda. Because guess what? Countries don’t do any of the things you mention out of Christian charity, they do it for power and control.
GTFOH with your soft pedaling of this bullshit.
Russia does not do the same. In fact, it does the exact opposite. It would be fantastic if Russia actually supported human rights and the rule of law instead of bombing children’s hospitals like Israel does.
I’m in eastern europe and the last time Russia did anything around here was when my grandparents were starving
Please let this happen.
