13 pointsby paulpauper3 hours ago3 comments
  • mapping3653 hours ago
    First domino to fall in the bubble pop. Same thing happened in crypto, same thing in 2008. It always starts in some hedge fund being liquidated.
    • paulpauper2 hours ago
      Nah not necessarily. Long Term Capital Management failed in 1998, but stocks would rally for 2 more years.
      • mapping3652 hours ago
        Yeah, but that was a classic stock bubble. There's a lot of debt in this one. Think of all the debt for the data centers and margin for stocks is at record high. You just lost one the of the biggest buyers of data center stocks at a time they desperately need to keep their stock prices up in order to borrow more.
  • paulpauper2 hours ago
    I guess you can say his awareness of his risk situation was poor. There is no way you can sustainably run 300%+ leverage on stocks , unless you eventually cut back, which he had failed too until he was forced out . This is not like leverage on bonds . It was not a matter of if, but when.
    • mapping3652 hours ago
      This bubble has both, the margin in stocks is keeping share prices of datacenter companies afloat as they try to borrow more. The growth from the borrowing keeps the share price afloat. Now a massive buyer of datacenter company equities is out. There is circularity to how the debt is reinforcing each other. When one part of the cycle stops spinning it could reinforce a drop in the other.