Comment by mschuster91
18 days ago
I've said it before, I will say it again: all that circular investment, all the IOUs, all the billions of dollars of money that are floating around in the entire AI web... it will seriously wreck the US economy, the volume is orders of magnitude worse than what caused the 2007ff global financial crisis. But if OpenAI and Anthropic both manage to enter the fray as well and automatically get made part of the NASDAQ and MSCI World like SpaceX already did... yeah, then it will fry the US pension system alive as well.
>> the volume is orders of magnitude worse than what caused the 2007ff global financial crisis.
Nobody lives in GPUs and what was the ratio of equity/debt for the toxic assets in 2007?
It looks more similar to the 1929 crash to me, where "too big to fail" blue chip stocks were overinvested and overvalued, and the value adjustments rippled through the rest of the economy. If NVIDIA does get a meaningful value adjustment downwards, it'll probably survive, but it'll impact the S&P500. People will need to sell off other stocks to cover the losses, etc. etc.
> It looks more similar to the 1929 crash to me, where "too big to fail" blue chip stocks were overinvested and overvalued, and the value adjustments rippled through the rest of the economy.
Yup. Add to that the decade worth of ZIRP following the 2007ff crash and Covid... all that money has to exit the system again eventually.
nvidia's forward p/e is 24. walmart's is 39.
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