Special thanks to this month’s donor, who wishes to remain anonymous. We agreed in concert that this splendid clip of a remarkably self-aware Golden Retriever was a good way to start these threads: https://www.youtube.com/shorts/fZBVUJE4CuY
“The Big Crash: Are we really heading for another 1929? As central banks sound the alarm over an AI bubble, parallels with previous market manias cannot be ignored…
“Valuations are stretched to breaking point, with the so-called “Shiller Cyclically Adjusted Price Earnings Ratio” …close to the all-time high it recorded during the dot.com bubble and slightly higher than it was before the great crash of 1929.”
https://www.telegraph.co.uk/news/2025/10/11/big-crash-are-we-really-heading-another-1929/
“Yes It’s an AI Bubble. Here’s Why…
“Albert Edwards warns corporate earnings may look robust, but they may prove just as fragile once borrowing costs bite… “All bubbles come with a brilliantly plausible narrative,” says the Société Générale global strategist, who has seen his share of market manias.”
“How this tech bro [Sam Altman] could trigger world financial armageddon…
“OpenAI has never even turned a profit. According to its own projections, its losses will triple next year to $14billion. Even that daunting figure could be over-optimistic… Meanwhile, OpenAI seems increasingly desperate to find new revenue streams. It already offers erotic chatbots and – as Altman announced last month – will soon add pornography for ‘verified adults’.”
https://www.dailymail.co.uk/news/article-15270577/tech-bro-armageddon-ChatGPT-Sam-Altman.html
“The US economy is not real; it’s just a big billionaire Ponzi scheme.
“75% of Tesla shareholders approved a $1 TRILLION pay package for Elon Musk. $1,000,000,000,000. Tesla only made $7.13 billion in net income in 2024. This is so stupid it defies basic math and reality itself.” [Ben Norton]
https://x.com/BenjaminNorton/status/1987001773253701640
“The median value of US consumers’ stock market investments has surpassed $300,000 for the first time in history.
“Investments include single stocks, mutual funds, and retirement accounts such as 401(k)s or IRAs. This amount has more than TRIPLED since April 2020… Americans are more invested in equities than ever before.” [Kobeissi Letter]
https://x.com/KobeissiLetter/status/1987722909687681195
“Trump stimulus package ‘to pump stock market higher’…
“Donald Trump has vowed to pay a $2,000 (£1,520) “tariff dividend” to American households in a radical stimulus package that could trigger a stock market boom. A “dividend of at least $2,000” will be paid to every US citizen, Mr Trump declared on Sunday, excluding those classed as “high-income”.”
https://www.telegraph.co.uk/business/2025/11/09/trump-stimulus-package-to-pump-stock-market-higher/
“Trump’s dollar delusion: how trade war risks ending the US’s ‘exorbitant privilege’…
“…will Trump knock the dollar off its perch? Its supremacy has been eroding. These days it accounts for 58% of global foreign exchange reserves, down from 74% at the turn of the century. The interest rate advantage Treasury bonds have over the debt of corporations or other countries has shrunk over time.”
https://www.theguardian.com/business/2025/nov/09/trump-trade-war-dollar-value
“Gold Edges Higher With Weakening US Economy Aiding Haven Demand…
“Bullion traded near $4,017 an ounce after finishing last week little changed. The precious metal advanced on Friday as a measure of US consumer sentiment fell to near the lowest on record, with the shutdown and rising prices souring the outlook.”
“‘Not in this economy’: Guangdong’s huge subsidy scheme falls flat with consumers.
“In early November, China’s most populous province launched its biggest ever consumer subsidy programme, with the government pledging to commit 3.5 billion yuan (US$492 million) to offer discounts on a slew of products: from smartphones to snowboards… But on the ground, the huge new programme has received a tepid response.”
“The Grim Reality Is That the RBA Is Done Cutting Rates…
“The grim realization that is now settling over Australian money markets and the many millions of home buyers battling enormous mortgage debts, is that the Reserve Bank of Australia is almost assuredly done lowering interest rates, bringing to an end an exceedingly shallow easing cycle of just 75 basis points.”
https://www.wsj.com/articles/the-grim-reality-is-that-the-rba-is-done-cutting-rates-9c14516d
“Brussels knifes privacy to feed the AI boom.
“European Union officials are ready to sacrifice some of their most prized privacy rules for the sake of AI, as they seek to turbocharge business in Europe by slashing red tape. The European Commission will unveil a “digital omnibus” package later this month to simplify many of its tech laws.”
https://www.politico.eu/article/brussels-knifes-privacy-to-feed-the-ai-boom-gdpr-digital-omnibus/
“Greek Farmers Mobilize Nationwide for Major Demonstration…
“The farming community is protesting delays in all forms of payments and compensations, as well as the worsening crisis in livestock farming due to the recent outbreak of foot-and-mouth disease.”
https://greekcitytimes.com/2025/11/10/greek-farmers-mobilize-nationwide-for-major-demonstration/
“Trump hotel to be built on site of Nato bombing…
“Jared Kushner, the son-in-law of US president Donald Trump, has pushed to turn the site into a luxury $500m (£370m) hotel with his Miami-based investment firm Affinity Partners. A special law was voted through the Serbian parliament on Friday, classifying the redevelopment as urgent, by 130 votes to 40.”
https://www.telegraph.co.uk/world-news/2025/11/09/trump-hotel-built-site-nato-bombing/
“The Nord Stream Investigation That’s Splintering Europe Over Ukraine…
“German detectives have spent three years building their case. A Ukrainian veteran could soon be in the dock… Poland already has refused to extradite one of the suspects to stand trial in Germany. It instead views him a hero for destroying a vital source of revenue for Russian President Vladimir Putin’s war machine.”
“Ukraine and Russia trade overnight strikes on energy facilities.
“Ukrainian energy companies reported a complete power outage after two thermal power plants supplying the Kyiv and Kharkiv were struck overnight by Russia. Officials in Kyiv also shared that their forces carried out strikes targeting the Kremlin’s energy sector, which it says funds the invasion.”
https://www.euronews.com/2025/11/09/ukraine-and-russia-trade-overnight-strikes-on-energy-facilities
“Lavrov ‘ready’ to meet Rubio after reported breakdown in communication and rift with Putin.
“Russian foreign minister Sergei Lavrov says he is ready to meet US secretary of state Marco Rubio amid reports that he was responsible for a summit being cancelled. The US was said to be put off by Lavrov, leading to reports of a rift between him and Vladimir Putin.”
“South Korea’s ousted leader Yoon indicted for flying drones over North Korea.
“South Korea’s ousted conservative President Yoon Suk Yeol faces additional criminal charges as prosecutors allege that he flew drones over North Korea to deliberately create tensions and justify his plans to declare martial law.”
“Japan protests China diplomat’s violent threat over Takaichi Taiwan remark…
“According to a Japanese government source, an X post by Chinese Consul General in Osaka Xue Jian on Saturday threatened to “cut off a dirty neck without a moment of hesitation” while citing a news article on Takaichi’s remarks in parliament. “Are you ready for that?” the post read.”
https://english.kyodonews.net/articles/-/64579
“Philippines’ corruption crisis sends peso to all-time low.
“Aggressive monetary easing also weighs on currency… The peso’s fall is a measure of market participants’ faltering trust in Philippine stability. It marks a sharp reversal for an economy which, just a few years ago, showed a measure of resilience against global shocks…”
“Eleven dead, hundreds missing after refugee boat sinks off Malaysian coast.
“A boat carrying Rohingya people fleeing Myanmar has capsized near the Thai-Malaysian maritime border, killing at least 11 people and leaving hundreds missing. Malaysian authorities recovered seven bodies on Sunday, including five women and a girl.”
“Bangladesh Police stages drill amid fears of unrest…
“Several newspapers quoting unidentified sources in the Dhaka Metropolitan Police said some 7,000 policemen took part in a drill at 142 locations. Witnesses reported increased police presence across Dhaka, which enhanced concerns among residents of the capital about the law and order situation on November 13.”
https://www.dailypioneer.com/2025/world/bangladesh-police-stages-drill-amid-fears-of-unrest.html
“Rupee, bonds to rely on central bank to protect record low, key yield level.
“The Indian rupee and government bonds will yet again count on market interventions by the Reserve Bank of India this week, to help keep the currency above its record low and protect the benchmark bond from falling sharply.”
“Another crisis brewing? Pakistan on brink of food supply collapse as flour shortage deepens; prices hit the roof.
“Pakistan’s twin cities face a severe flour shortage as wheat supplies to mills halt, sparking panic and raising food security concerns. Prices have doubled, impacting bakers and consumers. Compounding the crisis are transport blockades and dwindling water levels, creating a dire situation for millions.”
“Afghanistan And Pakistan Talks Collapse As Border Tensions Rise…
“Pakistani Defense Minister Khawaja Asif bluntly declared, “the talks are over,” with Islamabad’s team heading home and “no plans for future meetings.” Afghanistan’s government spokesperson Zabiullah Mujahid, meanwhile, pointed the finger at Pakistan, calling its demands “unreasonable” and saying the negotiations “have reached a standstill for now.””
https://evrimagaci.org/gpt/afghanistan-and-pakistan-talks-collapse-as-border-tensions-rise-515849
“Water levels below 3% in dam reservoirs for Iran’s second city, say reports.
““The water storage in Mashhad’s dams has now fallen to less than 3%,” Hossein Esmaeilian, the chief executive of the water company in Iran’s second largest city by population, told the ISNA news agency. He added: “The current situation shows that managing water use is no longer merely a recommendation – it has become a necessity.””
“Live: Israeli air raids hit Gaza City, southern Lebanon.
“As the ceasefire enters a second month, Israeli attacks have continued across Gaza. Wafa news agency is reporting that the Israeli army is continuing to demolish homes in the Zeitoun neighbourhood. Israeli military vehicles are firing heavily in the east of Gaza City and various types of drones are flying over the western part of the city.”
“Israeli settlers attacked Palestinian villagers, activists and journalists on November 8 during an olive harvest near a settler outpost in the West Bank.
“A journalist and her security advisor were among those injured by settlers wielding sticks, clubs and rocks near Beita. Israeli rights groups say such incidents are rarely investigated…”
“Tanzania police arrest opposition party official after deadly election protests…
“More than 1,000 people were killed by security forces during the demonstrations, according to Chadema and human rights bodies. The Tanzanian government has said these figures were exaggerated but did not give its own figures.”
“Tales of horror emerge from Darfur after rebels take control of key city. The IRC says Sudan is facing the world’s largest ever humanitarian crisis…
“There are some 500,000 displaced people in the Tawila camp… But despite the violence, only around 6,000 people have arrived in Tawila since the RSF entered El Fasher, meaning many thousands more remain unaccounted for.”
“African Union calls for international response as Mali security crisis deepens.
“The African Union issued an urgent appeal Sunday for coordinated international action as Mali faces mounting security threats from terrorist groups that have blocked supply routes and worsened conditions for civilians caught in the crossfire.”
“Senate blocks Democrats’ bid to check Trump power over Venezuela strikes…
“In recent weeks, the Trump administration has ramped up its military campaign against drug cartels – and to destabilize the Venezuelan government – deploying the United States’ most advanced aircraft carrier to the Caribbean, just days after Trump announced the US would next hit land-based targets.”
https://www.theguardian.com/us-news/2025/nov/06/senate-trump-venezuela
“Paz sworn in as Bolivia’s president, promises ‘capitalism for all’…
“Paz will have to address Bolivia’s worst economic crisis in 40 years, with year-on-year inflation at more than 20 percent and a chronic shortage of fuel and dollars. The outgoing government of Luis Arce exhausted almost all of Bolivia’s hard currency reserves to prop up a policy of petrol and diesel subsidies.”
“Geopolitical tensions loom over UN climate talks in Brazil.
“…difficult geopolitics — especially as Trump piles pressure on countries around the world to roll back climate efforts — have overshadowed much of the preparations and raised questions about how much progress can be made as leaders from almost 200 countries meet to negotiate global climate action.”
https://www.ft.com/content/56eff37a-2ae2-498a-850f-f0a4b9d2c07d
“I saw the Davos world order up close. Now it’s age of the predator…
““Our public sphere,” Da Empoli tells me as we sit in the office of Gallimard, his venerable Parisian publisher, “has turned into a place where you basically have no rules, no responsibility and where the most aggressive warlord wins. In the UK, in Italy, in Brazil, in South Korea, everywhere.””
I rely on donations and tips from my readers to to keep the site running. Every little bit helps. Can you chip in even a dollar? Buy me a coffee or become a Patreon supporter. A huge thank you to those who do subscribe or donate.
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
So stupid defies reality…
Davos is predator world..
Tech bro bail outs..
What a wonderful world!
It is all getting a bit silly, Truth Wizard.
A not insignificant contributor to the AI bubble has been the public’s willingness to believe the mix of dystopian and utopian fantasies which were put out by every media outlet whining about insane valuations now, when it’s too late.
Not that I expected otherwise. In our age, grand narratives are just as relevant to social control as they were a century prior. The difference is that the narratives must become self-critical but only juuuust enough so potential investors/consumers can identify their anxiety about the future in the people trying to sell them a better one. What there can be no doubt about is that the problematically glorious, and gloriously problematic, future will definitely happen. Even the most radical skepticism is accepted and often assimilated, so long as it’s directed at the content of the narrative and not it’s premises.
Jupiviv, these seductive dystopian-utopian narratives of human technological brilliance are keeping the system pushing forwards even in the face of aggressively encroaching limits to growth.
However, when too much biophysical reality intrudes and finds financial expression, our faith in these narratives could evaporate very quickly indeed.
“The Age of the Predator”
Seems accurate.
God help us all!
(It’s just a common figure of speech. Insert preferred deity or non-deity.)
Dog help us works for me!
“The scale of the potential payout has drawn criticism, but the Tesla board argued that Musk might leave the company if it was not approved – and that it could not afford to lose him.”
“If you have a reckless CEO who can’t be fired because it would hurt the company, then you don’t really have a company; you have a cult.”
Survivalist, this $1 trillion package apparently consists mostly of stock grants that Musk earns only if Tesla reaches an $8.5 trillion market cap (and hits various operational milestones). The current market cap is around $1.4 trillion, so they’ve got a way to go.
But your point is well taken. This shows a surprising level of faith on behalf of the shareholders in a ketamine-addled, socially polarising loose canon.
Why the AI Bubble Must Not Burst
The comparison with the dot-com bubble of the early 2000s seems obvious, but it misses one crucial point. The dot-com era was a financial bubble. Capital evaporated, not energy. When companies like World Online, Pets.com, and Yahoo! collapsed, the physical world remained intact. Servers were switched off, but the lights stayed on.
The current AI boom is of a completely different nature. It is not virtual but thermodynamically embedded. Every dollar invested in artificial intelligence translates directly into energy consumption and material depletion. The value on paper is literally converted into physical expenditure. This bubble burns fuel. It does not float above the world, as the dot-com boom once did; it drags it downward like an energetic field of gravity.
The great problem with AI is that, in a very short time, it has become structurally indispensable. AI is now intertwined with everything that functions: banks calculating risks, companies managing production, hospitals diagnosing patients, transport networks distributing goods, governments processing files, and even wars being fought. A collapse of this infrastructure would not affect one sector but the entire fabric of society — a society defenseless because it no longer has a backup.
The AI bubble cannot burst without triggering a systemic crisis. If the servers go silent, logistics grind to a halt, transactions freeze, medical data disappears, and energy management stops. Within hours, payment systems would falter; within days, supply chains would seize up; within weeks, decision-making itself would collapse. The digital brain on which the global economy now depends cannot be replaced without the rest of the body falling apart.
The wall that will stop this ship is not financial panic but a physical limit: too little power, too little water, too few raw materials to feed exponential growth.
The dot-com bubble was only hot air.
When the AI bubble implodes, the systems that believed they controlled it will go down with it.
“The great problem with AI is that, in a very short time, it has become structurally indispensable. AI is now intertwined with everything that functions: banks calculating risks, companies managing production, hospitals diagnosing patients, transport networks distributing goods, governments processing files, and even wars being fought.”
Gotta disagree here. Where is the data infrastructure for those use cases, without which “AI” is a meaningless buzzword? Moreover difficulty and scale of setting that up will vary not only across sectors but probably also based on regional factors. Even the companies that are seriously pursuing are keeping conventional data stacks firmly in place. AI will never achieve reasonable fidelity. What is going to happen is a few people losing their jobs here and there will be blown up to fuel hype or blamed on AI to obfuscate creeping structural unemployment.
The assumption that “AI” is merely an optional software layer on top of existing data infrastructure misses the deeper transformation that has occurred since 2022.
The dependency is not primarily functional but structural and physical.
The core of the AI economy lies not in algorithms themselves but in the infrastructure they require: hyperscale data centers, GPU clusters, fiber-optic networks, and continuous power and cooling systems.
This infrastructure cannot simply be repurposed for conventional computing without enormous cost; it is engineered for parallelized computation and sustained data throughput.
Even when companies “retain conventional stacks,” those stacks now operate inside cloud environments scaled up to serve AI workloads.
The dependency, therefore, is not cognitive but thermodynamic.
Once such compute capacity becomes structurally embedded in a society’s energy and communication flows, the option of reverting safely disappears.
It is similar to transport electrification: even if production stops tomorrow, the network that powers it remains, consuming energy and resources.
The issue is not whether AI works, but that it works as infrastructure — and infrastructures do not collapse neatly by sector; they fail systemically.
Thank you for your thoughts on this, Zip.
I wonder if, as a result of the dependencies you describe, some of the major AI firms have now joined the G-SIBs and major semiconductor manufacturers like TSMC as too systemically critical to fail.
“This infrastructure cannot simply be repurposed for conventional computing without enormous cost; it is engineered for parallelized computation and sustained data throughput.”
Or at least enough cost that it does not pay for itself on top of already not paying. My point was very few institutions are committed to modernizing extant data infrastructures to begin with. Riding the vendor financing circle unto death while figuring out what they can do to justify slapping the AI brand on themselves without having to actually change anything. XD
https://youtu.be/W4TqJhQsEAQ?si=cU2LMydUC4BgCO5T
I do believe that mr altman is lying like a whole lot of silcon valley bastards. Time to get your ed on time to get back to reality of this bs tgat you need water, power and chips good luck as the colorado basin dries up with techno insanity life they want us to live.
Heather, the Zitron fellow featured in your YouTube video sounds interesting:
“Alex Kirshner writing for Slate has described Zitron as “one of the most pugnacious critics of Big Tech”. Zitron has been described as an “AI skeptic” or “AI critic”, and has criticized both technology companies and the media for contributing to what he views as unwarranted hype around large language models. He has called the 2020s AI boom a bubble, and predicts it will pop.”
https://en.wikipedia.org/wiki/Ed_Zitron
https://youtu.be/jmhx5b1tscE?si=YqLnn2lnnv5Gm8Wm
Ai cant program jack or shit!
https://w.media/thermal-event-at-microsoft-azure-data-center-causes-an-outage-in-west-europe/
Data center meltdown in Europe caused by a thermal event
Heather, you reminded me of the recent Amazon cloud outage:
“Recent Amazon Web Services outage illustrates how reliant we are on the cloud… A recent widespread Amazon Web Services (AWS) outage disrupted popular apps and sites – including Snapchat, Reddit, and some banking and streaming services – before service steadied.
““You really realize early on how integrated cloud communications is to our everyday lives,” said Stephen Hilt, a senior threat researcher at Trend Micro.”
https://www.wbrc.com/2025/11/07/recent-amazon-web-services-outage-illustrates-how-reliant-we-are-cloud/
“The AI bubble’s parallels with previous market manias cannot be ignored…”
They aren’t being ignored, they’re being used to repeat the process. Perhaps the public has forgotten: no one, not a single person, went to jail for the fraud perpetrated on the entire globe… au contraire, capital was only further concentrated into the hands of fewer people … the entire point of the financial swindle in the first place. What that means is that the economy worked the way it’s supposed to, as Bush pere declared, the money was directed to “the right people”, The mores and the have mores who have none (mores, that is).
AI and crypto are the UN Climate unclimate juggernauts: no matter how much smaller economies make and fulfill climate pledges, growth in renewables will continue to fall behind the growth in energy usage, as it has become completely unhinged from reality … ie, Zip’s argument above is closer to the reality of how bubble dynamics work: creative destruction destroys first (think of a plowed field in a rainforest where everything is destroyed before the first seed is planted). Like Bolivia, in Pan’s listing above, all the investment funds have been sunk into physical albatrosses that were supposedly going to generate returns, but instead become a sucking void into which trillions more get vacuumed in a vain attempt to make malinvestments productive.
If AI & crypto were to actually work as advertised, the financial system: banking, the stock market, and the fed, would be entirely unnecessary, as you would no longer need any mechanism for price discovery, The AI Wizard of Awes, the black box hidden behind the black curtain; cryptically speaking, AI is “Sister Mary Ignatius explains it all for you”. And the first thing it would “explain” is that trillion dollar payouts to billionaires who first dream up a clunky cyber truck no one wants and then destroys his company’s ascendancy by taking a wrecking ball to the government without which he’d be trailer park trash are boondoggles a climate-wrecking capitalist agenda cannot survive.
Like The Furore in Washington, the very system that enables AI will be its first victim. In medical parlance, “The operation was a success; unfortunately the patient died”.
“…capital was only further concentrated into the hands of fewer people … the entire point of the financial swindle in the first place.”
Rob, when the entire paradigm relies on mass consumption, you wonder how many more shocks that redistribute wealth away from the masses it can take.
What a delusion. Gold valued at $4,000/oz. of unbacked fiat currency. It’s a Conundrum of “A Riddle Wrapped in a Mystery Inside an Enigma”. Some critical thinkers see that some are stupid, others are fools. I enjoy some talking up gold when they can’t tell me how many grams of gold it takes to buy a case of canned beans at one’s grocery store.
Learn to enjoy inflation or devaluation of fiat. Value based on a delusion is not a great financial strategy, but some gamblers can win at the cost of many losers. How much fun can the collapse of bail-out, bail-in, manipulated interest rates capitalism?
https://www.exchange-rates.org/precious-metals/gold-price/united-states/2025