Oracle's credit rating is hovering just above junk bond level. I think the capital agreements are similar to an Adjustable Rate Mortgage and monthly so if there's another rate increase from the Fed and Oracle can't find anyone to buy their bonds and/or their free cash flow continues to be negative then maybe that is a pin-prick in the stock bubble? Its sort of like if you keep bouncing around from 0% credit card offer for 12 months to another and then you stop getting 0% offers, then its time to face the music (those usually have a 3% transaction fee, at least a long time ago they did).
"Buy the index" isn't a solution for human influence and corruption, there are people in control of what goes into the index too.
If enough people try profiting by stealling pennies, the cumulative losses are significant; and can threaten confidence in and the strenght of the market.
I'm not sure if I can express how different the dot com boom era was to someone who didn't live through it. America Online kindasorta brought the Web to everyday people's homes around about the beginning of 1995, except that at that time everyday people didn't necessarily even have computers at home. Four years later we were almost living in a different world. Darn near every college student had a computer connected to the Internet in their dorm room. Every office worker had a computer on their desk and conducted at least some of their work in a Web browser. My grandmother was trying to chat me up on instant messages so many times per day that it was starting to get annoying.
It really was quite remarkable. Compared to it, the AI "boom" has been more like a wet diaper fart.
And the population at large really resents it. I have not talked to a person under the age of 30 and outside of tech who has anything good to say about AI. That's a group that doesn't vote very reliably but if AI concerns motivate them to do so, they could have an overwhelming impact.
I don’t know if/when AI will ever become indispensable to normies but it’s clearly making a difference in fields that are highly technical.
The elephant in the room here is that these discussions are still happening at all. In 1999 there was no question of whether the web was going to completely reshape the world, because it already had.
Posting this nice list of his failed predictions and bad analysis someone put together: https://danluu.com/zitron/
I think he's a broken clock that's right twice a day.
What Dan Luu is doing with that post is an act of misdirection (if not clumsy attempt at character assassination): avoiding the entirety of Zitron’s numbers and analysis (which can’t be refuted) and instead narrowly focusing on “predictions” that one can spin a hundred different ways.
If that’s convincing to the extent that you are dismissing Zitron’s numbers and analysis, you have a major critical thinking problem.
Not only is he not a shareholder, but based on his opinions, he clearly isn't a user of modern models either. Somehow he still thinks they are party tricks and that "They will never be AGI," with no elaboration on _why_ they _can't_ be AGI, and why that actually matters for these companies (hint: it doesn't really matter much. As it turns out, you could replace a lot of humans with a modern LLM and have a reasonable comparative advantage in doing so, even though the models are ostensibly not "AGI.").
His predictions have also historically just been bad (https://danluu.com/zitron/). Even AI 2027, which is basically semi-fictional, is more accurate and worth paying more attention to than this guy. And the superforecaseters which actually made AI 2027 and actual futurists are generally higher signal.
There's other avenues which are probably needed to make the cohesive AGI picture come true, such as World Models. Simply learning from text and being able to generate language is not, in my mind, the end-all-be-all for intelligence.
There are a bunch of ways that AI the technology could be massivly successful, while AI the industry crashes.
So I don't understand why there's fear and disagreement over a correction. Both sides should welcome it as there is some benefit to everyone. Well, most of everyone.
I suspect there people who are betting they can arbitrage them, such as getting an allotment of them and renting them out. (I'm not talking about the scale of a single card in your house, but in DC operators or those who have racks leased already)
Probably related, china banned imports of the 5090d in may.
- https://videocardz.com/newz/heres-why-rtx-5090-costs-5000-ai...
- https://videocardz.com/newz/inside-chinas-mass-conversion-of...
But also, it is. You can resell them.
I find it mind boggling that either AI is a bubble or AI is the next industrial revolution and no other options can be considered because reasons(tm).
Token costs are dropping, yes they are, but how much of that is better software and algorithms vs better hardware and that's too galaxy brain for the simpletons trying to predict what's next.
So what's next? IMO more tokens and lots of disappointment that more tokens alone neither cures cancer nor brings the apocalypse and further waves of innovation. AI continues apace.
Short term, AI is overrated. Long term, you ain't seen nuthin' yet... Now vote down that positivity, we're doomed! DOOMED!
Roughly speaking Paying $2T for even $65Bn _profit_ is a bad deal, historically speaking. (~30x P/E)
But also, ~20*$65B is ~1.3 billion and a healthy PE ratio just like Cisco. but that's not good for your narrative, is it?
Oh no! all those early founders who thought they'd be worth $3.8B will only be worth $2.6B! Whatever shall they do?
My narrative? What narrative is that?
and 30x 65 = 1950 which is pretty close to 2T.
I'm not sure what you're on about or if you're just taking the piss?
You guys never stop.
But 20 is a classical and fundamentally healthy PE ratio for a healthy business and that would value Anthropic at ~$1.3T if that's what you're getting at and the early employees would all still be billionaires.
Mind you, I hate both Anthropic and OpenAI for their conduct in this space, but I wouldn't argue with the numbers. I'd argue with the blatant fearmongering towards regulatory capture but that's galaxy brain nonsense I know.
But the tech industry PE ratio is about 28. Since 30 is crazy, what's a reasonable PE ratio and when are you going to short the NASDAQ on margin and make your first billion, you market genius you?
Rest assured that it did not, in fact, disabuse me of my belief that I’m at least partially successful in retaining a level head.
But it wouldn't be good for podcast culture, now would it?
But those data centers? Craters. Wouldn't be surprised if China buys them up for cents on the dollar and run expensive, polluting ops out of them instead of in China.
US Producer Prices Up Most Since 2022 as Energy Pain Worsens - https://www.bloomberg.com/news/articles/2026-10-15/us-produc... - October 15th, 2026
CoreWeave Credit Risk Hits Record, Pricing 60% Odds of Default - https://www.bloomberg.com/news/articles/2026-10-15/coreweave... - October 15th, 2026
- The cost of protecting CoreWeave’s debt against default for five years rose by as much as 74.5 basis points to 1194.5 basis points, according to ICE Data Services. That’s the highest intraday level on record with swaps pricing in a more than 60% chance of default within the next five years.
- Meanwhile, some of the company’s bonds declined in the US junk market. Its 9% notes maturing in 2031 fell by about 2.5 cents on the dollar to 80.75 cents as of 11:00 a.m., pushing the yield on the debt to 15.3%, according to Trace. Its 9.25% bonds due 2030 dropped by about 0.75 cents to about 86 cents, pushing the yield to 14.3%. At the same time, some notes edged higher, with its 9.75% notes due 2031 rising 0.125 cents to 80.625 cents.
- “Debt investors are freaked out about CoreWeave’s cost of equity and equity investors are freaked out about its cost of debt,” said Bill Zox, portfolio manager at Franklin Templeton Fixed Income.
CoreWeave's Bonds Turn Distressed, Drawing 'Yikes' from Musk - https://news.ycombinator.com/item?id=50090791 - October 2026
- However, D.A. Davidson analyst Gil Luria, who has referred to CoreWeave as “the subprime tranche” of AI, warned on a podcast that the stock could go to zero if the AI funding boom falters and the company becomes unable to pay its expensive debt obligations.
- Luria told Bloomberg Television on Wednesday that CoreWeave was “destroying value at every turn” by borrowing at such elevated rates.
- “If CoreWeave is borrowing at 9% and the best return they can get off of that is a 5% return, it doesn’t matter how much they scale,” he said.
- “Borrowing at very high interest rates in order to build data centers that are increasingly commoditized outside of the hyperscalers may not end up being a good investment,” he continued. “The more leverage we use to build data centers, the more risk we’re bringing into the system.”
Monitor CoreWeave equity and debt pricing to understand where we are in the AI capital bubble cycle.
Similar stuff happened with the unsustainable computer-leasing mania of the late 1960s. The president had to get involved so that they would stop borrowing more and more cash. I don’t think they really can stop borrowing if other competitors keep throwing cash on the AI build out. No one wants to be left behind and therefore will continue borrowing - even with the rising rates.
It’s a tough situation for the FED to maneuver.
That market is far bigger than the entire ad market put together, because its upper boundary is every dollar the world spends on white-collar payroll.
The value is the user data that collects overtime and using that to become sticky for customers
In this context, debt load and interest costs continue to increase due to bond market fundamentals while earnings are not.
Bloomberg: It Won’t Take Much to Burst the Stock Market Bubble - https://www.bloomberg.com/opinion/articles/2026-08-20/us-sto... | https://archive.today/O9sQE - August 20th, 2026
> First, the favorable impact of the artificial intelligence investment boom on economic activity and earnings will likely diminish significantly in 2027. That’s because what’s relevant for growth is how much investment is increasing, not its level. The increase in investment in 2026 will almost certainly be the peak. There aren’t sufficient resources — construction workers, electrical generation capacity, or chip manufacturing capacity - to increase investment by the same magnitude in 2027. Nor are the dominant hyperscalers likely to have the free cash flow and balance sheet capacity to sustain a bigger increase in investment in 2027 compared with 2026.
> Second, as the growth of investment spending slows, the growth in earnings of hyperscaler suppliers will falter, profit expectations will diminish and price-earnings ratios will shrink. The “picks and shovels” providers will suffer a double whammy - slower demand growth and profit margin compression. On the way up, higher demand leads to wider profit margins that sustain equity market valuations. On the way down, the outlook for earnings deteriorates quickly as the shortfall of demand relative to expectations is exacerbated by a collapse in profit margins.
> Third, as the investment cycle matures, the focus will shift to the returns that the hyperscalers are expected to earn on their massive investments. I suspect it will be difficult for the AI hyperscalers to generate sufficient revenue ($2 trillion or more per year) to generate the returns needed to justify an AI capital base that is likely to reach $5 trillion.
(I'd encourage you to read the entire piece, it was written by Bill Dudley, a former president of the Federal Reserve Bank of New York, and is too much to quote in its entirety)
Most of the drivers right now of inflation are in-elastic demand. Raising the cost of borrowing, will not deter that spend.
What it will do, is actually drive up the cost of all business, and worsen employment simultaneously. You can typically see a rise in prices (inflation) following a rate hike. Even when it's needed to combat regular elastic demand side inflation, it takes time to have a positive effect. If the main driver of the inflation is inelastic, or rate insensitive as much of the driving force right now is, hiking rates will actually increase inflation.
The AI boom doesn't care what rate it has to pay, it will pay it, and keep driving things up.
What's needed is a significant policy shift, to make room in the markets again for things society needs financing for (ex. building homes, productive revenue generating businesses)
That's the point of raising interest rates. It's demand destruction. If raising interest rates didn't raise the cost of doing business, it wouldn't work.
>You can typically see a rise in prices (inflation) following a rate hike. Even when it's needed to combat regular elastic demand side inflation, it takes time to have a positive effect.
Are you sure it's not just reverse causation? eg. inflation has gotten so out of hand that bankers are raising interest rates to counteract it? After all, inflation isn't a random walk. If it's bad one month, it's likely to get worse the next, especially when central banks haven't raised interest rates yet.
Now, I don't expect them to hike too much beyond what the markets price 1-2yr bonds at, that would, like you say do nothing as a lot of inflation comes from the oil disruption.
https://www.ustreasuryyieldcurve.com/
From a Savings Glut to a Savings Shortage - https://www.apollo.com/wealth/insights-news/insights/daily-s... - September 12th, 2026
Not investing advice, but you're potentially better off paying more towards the principal with excess cashflow versus waiting for lower rates that are unlikely to arrive.
and then the finance paying workload never materializes?
so they just declare bankruptcy and what society just absorbs it?
Plus loan rates are high meaning rational people either pay less for, or completely avoid buying houses, cars, and all the things that go with (furniture, yard maintenance tools etc)
I was talking to a realtor I bumped into last month, he said that houses are staying on the market longer because sellers don't want to accept the offers they are getting. In some cases people are upside down or close to it.
It has been a long time since people have had to deal with the idea that their house will do anything other than increase in value. He said he thought up to a 50% "adjustment" in home prices is coming.
But if people start losing their jobs and cant/wont make the payments like in 2008 , could drop hard.
The big question then becomes: what is the market value of these things? Is it even positive? Creditors will eat the difference between that number and whatever they actually lent (less what they've been paid back so far, if anything).
If you had to redo one of the most expensive parts of laying all that track in order to use it, yeah.
Hardware that's specialized for building LLMs or for running LLMs isn't same sort of hardware you'd use to -say- serve up newegg.com.
What, exactly, are you just sayin'? Cause I'm having a stroke trying to parse your comment lol