Baldur Bjarnason

“It's Giving Enron - by Dave Karpf”

https://davekarpf.substack.com/p/its-giving-enron

> the AI bubble isn’t predominantly giving off Pets.com or Global Crossing vibes anymore. It’s giving Enron vibes

Been saying this for a while. They're gonna Enron this shit until it explodes all over us

It's Giving Enron

On the AI bubble, and the various echoes of the dotcom crash

The Future, Now and Then
Oct 15 at 10:03amWeb
Show threadDave GriffithsOct 15
@baldur a lot of people are saying this - it's been on the media for weeks now, I can't quite understand this dynamic of everyone knowing it's a scam, but no one divesting - is it simply because they can't?
Show threadRuben Schade  🔰 🇦🇺Oct 15

@nebogeo @baldur

I think it was @davidgerard who said a potential issue is that people think there’s nowhere else for investment funds to go. The bubble is the only game in town.

Show threadDave GriffithsOct 15
@rubenerd @baldur @davidgerard great situation! I'm wondering if there has been a historical precedent for this - most crashes have been fairly unforeseen if I remember correctly (everyone of course says they were obvious in retrospect, naturally)
Show threadBaldur BjarnasonOct 15
@nebogeo @rubenerd @davidgerard Well, I have to disagree. Most major crashes over the past 50 years were thoroughly warned about in advance. Savings and loans crisis. Japanese real estate bubble. Dot-com. 2008. There's tons of records of economists, bankers, even legislators warning about those bubbles, waving concrete evidence of systemic risks. They get a couple of pieces in the news one night and then get drowned out by the constant drumbeat of irrational exuberance.
Show threadDan SugalskiOct 15

@baldur @nebogeo @rubenerd @davidgerard this is so very true — a *lot* of people know, and even more pretend they don’t but really did. I worked at Bloomberg during both the 2008 financial crisis and the Madoff ponzi crash. There was a *lot* of shortsighted strategic looking the other way going on.

Folks did, I think, underestimate how intertwingled everything was, and while they expected a drawdown they didn’t expect catastrophe. Like, y’know… now.

Show threadDeb Nam-KraneOct 15

@baldur

I kid you not, I remember a PBS news special about the coming financial crisis in 2006 or 2007. I remember humorous commercials featuring people talking about how indebted and underwater they were. People who were surprised lived under a rock, or just heard what they wanted to hear.

@nebogeo @rubenerd @davidgerard

Show threadjz.tuskOct 15

@baldur @nebogeo @rubenerd @davidgerard

- Our modern financial system is incredibly interdependent. There aren't many sectors we can just let fail.

- Enough people being reckless can basically take that sector hostage. Too many politicians are willing to sell reckless behavior as "unleashing the genius of the marketplace", and too many Americans are dumbfucks about capitalism.

- In summary, OpenAI delenda est.

Show threadNicole ParsonsOct 17

@baldur @nebogeo @rubenerd @davidgerard

It's called The Greater Fool.
https://en.wikipedia.org/wiki/Greater_fool_theory

Every financial crash is preceded by hype from insiders doing pump & dumps while covertly divesting.

https://www.financestrategists.com/wealth-management/investment-management/greater-fool-theory/

https://abitdodgy.uk/the-ai-ponzi-scheme-and-the-greater-fool-c9d64e31428e?gi=0e3de2c66ba4

https://weissratings.com/en/weiss-ratings-daily/the-greater-fool-pool-will-dry-up

Greater fool theory - Wikipedia

Show threadPassengerOct 17

@baldur

When I was a kid a friend of my father's, an economist, used to always tell the same joke: "Economists have foreseen eight of the last five market crashes."

Which is to say, the problem is not that they aren't foreseen but that there are enough false positives that speculators feel safe in disregarding the warnings.

Show threadDavid Chisnall (*Now with 50% more sarcasm!*)Oct 15

@rubenerd @nebogeo @baldur @davidgerard

There's some of that. There are also a few other issues:

  • It doesn't matter if it will crash as long as you get out first and a lot of people are betting there's at least another six months of growth.
  • If you sell too quickly, you cause the crash (if you're big enough), so you keep talking growth while quietly and slowly selling.
  • There's a lot of FOMO. If there's a crash and you are part of it, everyone around you did the same thing and you don't get blamed. If your find sells and it keeps going up, your investors complain. And you lose your bonus.
Show threadBaldur BjarnasonOct 15
@nebogeo Finance generally doesn't care if it's a scam. What matters is liability and profit. There's money to be made from the bubble and the experience from 2008 has showed them that nobody is likely to be held responsible when things go wrong.
Show threadBen AvelingOct 15

Good question!
Maybe some or all of the following:

- can't see that it's a scam
- too emotionally invested to admit a mistake
- too financially committed to be able to divest without collapsing the whole thing
- making money on the side - so it's worth losing your whole stake if it keeps the bubble intact a bit longer - as opposed to losing most of your stake anyway
- it's someone else's money
- too big to fail - expect the government to bail you out

@nebogeo @baldur

Show threadDan SugalskiOct 15
@baldur frankly it seems to be giving off strong Madoff vibes. Those are the best kind. Or the worst, depends on your perspective I guess.
Show threadLar Van Der JagtOct 15
@baldur I wonder what the AI era version of Enron negotiating with the taliban for oil pipelines will be.
Show threadNicole ParsonsOct 17

@baldur

Recommendation: bring the AI bubble to a swift end by switching to solar & wind. Go off grid.

Starve the fossil fuel industry to starve investment in AI.

It's fossil fuel industry money that's keeping AI afloat,... for now.

Koch Network is doing what they did with rideshare startups, keep the scam going for a decade without expecting revenue or profit.
https://jacobin.com/2019/08/uber-koch-brothers-david-charles-rideshare-public-transit

The higher goal then was thwarting public transit projects & high speed rail.

1/

An Unholy Alliance Against Public Transit

Uber and the Kochs aren't often mentioned in the same sentence. But the rideshare company has joined the far-right billionaire-funded operation on a libertarian crusade to destroy public transit.

Show threadNicole ParsonsOct 17

2/

The fossil fuel industry made $3 billion in profit per day for 50 years, they might make AI last long enough to reach their goals.
https://www.theguardian.com/environment/2022/jul/21/revealed-oil-sectors-staggering-profits-last-50-years

https://www.theguardian.com/environment/2025/apr/03/trump-fossil-fuel-donors-data-centers

The goal this time is thwarting an utterly necessary fossil fuel phase out & ending democracy, IF people subsidize the AI bubble with double-digit electricity rate increases.

Solar panels, heat pumps, wind turbines.

The Saudis appear unperturbed by AI losses
https://www.reuters.com/world/middle-east/saudi-wealth-fund-net-profit-tumbles-60-2024-2025-06-30/

https://timesofindia.indiatimes.com/technology/tech-news/how-chinas-out-and-middle-east-is-in-as-nvidia-and-amd-leave-billions-of-loss-caused-by-deepseek-behind/articleshow/121170745.cms

Revealed: oil sector’s ‘staggering’ $3bn-a-day profits for last 50 years

Vast sums provide power to ‘buy every politician’ and delay action on climate crisis, says expert

The Guardian
Show threadMirppcOct 17
@Npars01 @baldur What happened the last time there was an alliance agisnt public transportation? Los Angeles lost their world class redcar lines and became stiched with multi lane freeways/express ways that divided communities. Things really havent fully recovered.