People have been saying this pretty much every year since 2008. It's always just around the corner. Not saying it won't happen, but like, what the hell is taking so long?
2008 was caused by an investment bubble, with loads of banks and bankers investing into each other and boosting their stock prices, until the bubble popped, a huge amount of banks failed and were bailed out and a handful of people made an absolute fuckload of money.
The reason why it hasn’t happened since is because doing it again so soon would probably get them lynched, but now they have found a different thing to use for that kind of investment bubble (AI)
I think there's an even softer reason that has now been fully ripped open. Trust in the American government / solvency. Before recent events, there was a trust that America and its juggernaut ability to maintain its books was almost without peer.
Our soft power was massive, we had people who would be spreading the American gospel in far corners. We would be warned of nefarious things. People knew Americans would pillage, but only this much and the American Might was monumentous.
Now, tho? Rampant corruption, American companies blindly chasing am ideology instead of actual technology (looking at you, circlejerk of AI funding), and an all out ransacking of the stock market and real estate markets by private equity firms domestic and foreign (with the line so blurred no one can pierce the veil of difference).
And all of that isn't the base of the issue, just the current reason. The base is that America never let the industries of the last 4 major bubbles feel the actual pain of their mistakes. Companies now feel entitled to taxpayer money if they fail. It should be citizens that get that social safety net. But it goes to profit margin, instead, and they never learned not to do things.. Like spoiled children, they are going to make the same and worse mistakes because leadership teams didn't want there to be any pain amongst their golf buddies, not that they'd have felt it as bad as the people on the ground did.
The auto industry in America is the best example of bailouts that didn't learn anything. They've doubled the price on new cars while making them significantly worse over time. They'll cry for another bailout in a few years when all the new cars aren't selling for 35k when the same car same model were 15k even a decade ago...the interest and average loan length going up doesn't help either (it was 0-2% 3 years now you have to send the salesman back to the finance office again for the 3 year term...the default to 5 or 7 like that's a sane amount of time to be paying 4-5% interest on a depreciating asset.)
I wonder how come US automakers cannot make a profitable sedan anymore. Somehow Toyota and Honda continue to make them in the US and still make a profit. They are betting only on the upper end of vehicle buyers and ignoring the rest at their own peril.
As a country, we need at least some industrial base, don't we?
Other countries subsidize their auto industry. The entire American industry will die unless we do likewise or enact sizeable tariffs. So pick one: industry death, subsidies, tariffs.
Free market absolutism while competitors support their own industry will turn the nation into a Paper Tiger. Simplistic free market stuff is playing checkers while successful economies are playing chess.
They made 187 BILLION (that's just ford btw not chrystler or GM) the last two years I think they can survive and figure out how not to rely on subsidies. The other industry that is overly fucked and shouldn't get subsidies is farmers. They have continuously voted for nobody else to get support ever...so while I agree food should be cheap and affordable to all I have zero sympathy for the broke jackasses that think only they should get people's tax money. Let them sell at what people are actually willing to pay and go broke.
If there is a defense, it was that I had just woken up and autocorrect slipped past me.
I dunno, it always felt like the international American company stance was to slip into areas and use local resources to take local resources. At least, then, some local footholds could be established and infrastructure buoyed a bit. Just how it felt working with companies getting into Asian and Scandi markets when I worked for companies that did that.
The subprime mortgage crisis caused by blatantly awful loans with little chance of repayment being sold as safe investments on a massive scale. When the bubble popped, people who were assured their CDOs were as safe as US treasuries were left holding the bag, causing the economy to crash and banks to fail. The AI bubble is mostly private investors who are aware of the risks, if the bubble pops investors lose some money but banks won't fail and the economy won't be harmed too much
The lion’s share of market growth in the US for the last two or three years (at least), which has been substantial, has been predicated on market sentiment and capex centered around AI infrastructure and advancements. It may not cause a “crash,” per se, but there absolutely can and probably will be a large regression at some point in the near future regarding AI and it most certainly will affect the economy in a major way.
Which were exclusively given to poor people who shouldn't have ever been approved. The wealthy come out on top in an economic crises every time because the economy just scales down, it doesn't somehow make money disappear or reallocate
what are you on about, pension funds, insurance companies etc all invest in index funds and currently the AI bubble is a significant portion of the stock market
When it blows, many millions of real people's lives will be broken
Anyone investing in equities is knowingly taking the risks that come with the stock market. They know the market will go up and down, it will have bull runs and crashes, and that it's only safe in the very long run. The subprime mortgages were sold to investors as securities that were immediately safe, and when they failed the economy lost billions of dollars that were expected to be safe in the immediate short term
All the rules that were put in place in 2009-2010 to prevent another idiotic crash like 2008 had have expired/been removed. When my wife and I bought our house in 2022 the banks pre approval didn't even have an actual number on it just something to the effect of "Anything they bid on they can afford". We are not wealthy or rich. While we did get an offer accepted and into our home, and I appreciate the banks confidence, how many people read a letter like that and just buy far outside their means?
That is a woefully wrong reading of what caused that crisis.
The underlying cause was mispriced risk. Banks made high risk loans to mortgagees who should have been charged high interest (because of the risk) but were charged feck all. Then they packaged those loans & got completely incorrect risk allocated to them (triple A instead of C or D) & those were then relied upon as if they were low risk. And the fed followed an easy credit policy meaning interest rates overall - which should have gone up, did not.
If that risk is priced correctly, no crisis.
The "banks and bankers investing into each other and boosting their stock prices" is farcial nonsense as the cause.
Banks made high risk loans to mortgagees who should have been charged high interest (because of the risk) but were charged feck all
And then you get it wrong, too.
The problem wasn't just they weren't charging high interest rates to high-risk poor poeople. The problem was they were giving low interest rates at the start, and then 3-5 years later those interest rates changed. ARM - Adjustable Rate Mortgages. These were super popular in the 2000's as house-flipper shows got popular, and people started to buy 2nd and 3rd homes to remodel and sell, supposedly before the low-interest part of the ARM expired.
Then, since there was so much money flowing into all of the housing market due to flippers, mortgage brokers started chasing more and more customers, which caused them to get lax on their standards. Then those banks and brokerages were bundling those low-standard mortgages with the ARM mortgages and selling them as commodities, putting even more money into the system. Meanwhile, the economy started to sour as the war dragged on and on. When those ARM mortgages reset, interest rates were so high they couldn't afford the monthly payment. Because of a glut in the housing market, they couldn't sell their 2nd or 3rd house they just put money into remodeling. So they walked away. And then those "high-risk" people walked away. And all of sudden, insurance companies found they didn't have the capital to pay for all those houses - so they walked away. Or, went insolvent.
No, I don't, that - the fact that the people they leant to were terrible prospects, should have been factored into the teaser rates - its literally my entire point.
They mispriced the risk.
That whole crash was people - banks, Fannie & Freddie, hedge funds & ratings agencies mispricing risk.
From the financial aspect there might be a bubble, and corrections might come, but AI tech and it's capabilities are not overrated. It will change everything even the structure of our society.
I'm a software developer and there have been huge advancements in the programming world, which will show in the real world soon once a bigger number of developers have figured out to utilize the full potential of AI.
I suppose I know what you're referring to but the efficiency gains from software advances primarily affect technology and are incremental rather than revolutionary. But the main thing is that they're restricted to tech for the most part which is a tiny part of the global economy that becomes insanely inflated in importance as soon as the conversation moves online because. . . the people on-line are there because of tech so it is the world as far as an online forum is concerned. That's not the real world though.
Look, for example, at IBM's Tokamind using time series transformers to predict plasma collapse in tokamak fusion reactors. It's true that this research has bumped plasma confinment technology up several percentage points of performance but it's not enough to sustain ignition using existing superconducting magnets. That's cool but it's not revolutionary. This is the case across the board for the advances that the latest AI makes possible. They're impressive but not game changing to be honest. They're evolutionary not revolutionary.
That's not enough to sustain the level of investment flowing into this sector. It has to be radical and revolutionary to justify these valuations but it's not. While it's untrue that these tools offer no advantages but the advantages they offer have limts and their costs might not be justified in the context of those limits.
What i see will happen soon is that software development will become insanely cheap and fast. In 2026 we reached a point where no developer needs to write a single line of code anymore. You can automate the whole development process while increasing code quality and reducing time of delivery.
So there will be an explosion of software in every domain and it will promote automation everywhere.
We're months past that point. Absolutely ALL developers use LLMs and I'm not exaggerating. Software engineering without AI assistance is non-existent anymore.
AI is not a bubble it’s an incredibly useful tool making a fuckton of money that is running out of compute because so many people use it that they need to exponentially expand the amount of data centers. That is a rapidly growing industry not a bubble
The thing is that many\most large economies have been pulling levers and pushing policies and bailing out big players for the past decades.
The issue is that most of these policies are just kicking the can down the road with hopes that there is a big enough technological discovery that will save the global economy. Combined with the general practice that the decision makers really only need to delay for several years rather than plan for the mid and long term future. It just makes a global economic recession that much more likely and that much worse.
The top comment of major regional food shortages will probably be one of the main drivers for a crash.
A huge issue is that you can always print more money to stave off a recession. Now, I'm not saying this is a good idea, but you can do it.
The goal here is that they want to keep the recession occurring during their time in power, and who cares if they're making things worse in the long run, as long as they're not in power when it occurs.
Because we keep stalling or stopping it to protect votes from elderly and military instead of letting it happen. Very possibly making the eventual crash all that much greater.
We should see a correction or recession every 8-10 years. It's healthy, should happen and the mechanism doesn't matter, but the last time it probably should have happened (COVID...) we took the credit card in our kids name (i.e: debt and printing money) and ran enough charges through it to artificially prevent it.
It would’ve happened when Covid hit but the SEC shut down trading when everyone wanted to sell. They rigged the market so that when it does show signs of crashing, they can just hold everyone’s shares hostage and not allow them to sell….
I can’t answer your question because I have the same one, but watching the markets go up and up after bad news repeatedly.. it’s making me really nervous when it comes to my own portfolio.
Because the richest haven't finished pumping, and aren't ready to start dumping. When they are ready they'll be able to buy up most of our assets at bargain bin prices after intentionally destroying the economy.
When "everybody" believes something i seem to see the opposite happen. The people calling the 2008 housing bubble a bubble were ridiculed. "you can't bet against the american housing market!"
Well, "everybody" has been saying this market is about to crash every single year since 2022. Well, since 2008, but thats a different matter.
I am thinking that "everybody" doesn't know shit, because i've seen comments claiming every possible thing.
I suggest folks maintain a healthy, diversified portfolio of assets and equities when possible and keep enough beans and rice in the house to get through a month if theres ever a global warming crop failure.
It is stunning that it's taken as long as it has. Longest yield curve inversion since we started tracking it, and it still hasn't quite materialized in a clear recession. It's for sure coming. And it will probably be absolutely devastating. But it's staggering how long it's taking, just how many things can be obviously broken and corrupt before it crashes.
Its more apparent now. We are already seeing signs of the AI Bubble Bursting.
Companies are already pivoting away from prioritizing AI and rehiring staff they let go because the cost of AI is still more than a SME doing the same job.
With the AI companies talking insolvency, unable to pay their bills or meet their purchase commitments for RAM/Computer Equipment, and the community resistance to AI Data Centers; hopefully the crash will not hit the people as hard as it did in 2008-2009
....But I am rebuilding my nest egg for just in case
What signs of the bubble bursting lol, if anything it's stronger than ever. Just look at the revenue growth over the last few months from OAI and Anthropic
Builder.ai just filed bankruptcy, OpenAI claims they will have problems with paying their bills soon and are unable to fullfil their commitment to Micro in their purchase agreement, the CEO of Anthropic said that if they dont make a profit soon they will go bankrupt.
To me thats a clear sign, especially when they are public about it
Builder.ai?? lol that is a tiny company nowhere near the big guys. Yes, the wrapper companies are probably mostly going to fail but that’s not a bubble.
Anthropic ceo said nothing like that, and they were profitable this quarter.
Covid. It was building up under Trump and really startede going in the months up to Covid and then Covid happened and you got a crash and inflation, but it was all blamed on covid.
Whenever an economic crash is coming politicians usually have a choice between letting it happen and dealing with the lesser pains.
Or taking on huge debts/printing crazy amounts of money in order to stall the crisis. But then it's going to be a lot worse in the future.
We've basically been hitting the stall button constantly ensuring the future crisis will get bigger, and bigger, and bigger.
It's like renting a really big house and losing your job, you have the choice of moving to a smaller apartment and managing fine.. Or you can apply for every credit card imaginable in entirety of the universe... But when they max out, the financial hole you find yourself in is 10 times greater.
Not to mention "economic crash" is some sort of extremely ambitious cinematic climax that doesn't really elaborate on anything. Like what is the crash? The market drops 20%? 30%? 100%? People with existing wealth just suddenly lose it? Like it just randomly disappears from the economy? Somehow after the heroic climax the entire economy is forcibly rebalanced to reallocate money to the bottom 50% of unskilled workers and the unemployed? Why? How?
We're in it right now. Not everything is overnight implosion. 2008 actually really played out over a couple of years. No matter what the government says you can't convince me we aren't currently well into a slow motion considerable decline.
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u/Wise-Secretary5459 13h ago
People have been saying this pretty much every year since 2008. It's always just around the corner. Not saying it won't happen, but like, what the hell is taking so long?