Keith Hoodlet 
Baldur Bjarnason“Opinion | I Predicted the 2008 Financial Crisis. What Is Coming May Be Worse. - The New York Times”
If anything, this downplays the risks as it seems to assume that there has to be something to "AI" to warrant calling it a "boom".
Not a financial analyst or professional predictor of things but it strikes me that there are quite a few things lining up to potentially make up a Very Bad Time™ for all of us:
- Energy crisis
- Gas crisis
- Fertiliser crisis
- Semiconductor shortage (because of the energy and Helium shortages)
- Plastics shortage
- Food price inflation
- Drugs shortage
- Private debt crisis
- "AI" stock market bubble
- Housing bubble leading to crisis
...
...
- Too Big to Fail institutions collapsing due to above crises
- Weather phenomena caused by the global climate crisis (heatwaves and hurricanes)
- Shortage of all sorts of important goods due to energy, gas, plastics, semiconductor, or food shortages
- Tungsten and rare earths shortage (China likes to cut exports of resources when other crises happen)
- Rise of authoritarianism pretty everywhere. Escalates because of other crises
...
- Too Big to Fail institutions collapsing due to above crises
- Weather phenomena caused by the global climate crisis (heatwaves and hurricanes)
- Shortage of all sorts of important goods due to energy, gas, plastics, semiconductor, or food shortages
- Tungsten and rare earths shortage (China likes to cut exports of resources when other crises happen)
- Rise of authoritarianism pretty everywhere. Escalates because of other crises
...
...
- US munitions depletion leading to all sorts of actors trying their luck.
- The deterioration of the reliability and security of the software holding the world together because the industry went all in on YOLO vibe coding.
- Ongoing tariff war (that's still a thing)
- Ongoing Cuba crisis
- A recurrence of the Greenland crisis
- Taiwan
- The entire middle east is a mess that's getting messier
...
- US munitions depletion leading to all sorts of actors trying their luck.
- The deterioration of the reliability and security of the software holding the world together because the industry went all in on YOLO vibe coding.
- Ongoing tariff war (that's still a thing)
- Ongoing Cuba crisis
- A recurrence of the Greenland crisis
- Taiwan
- The entire middle east is a mess that's getting messier
...
...
- The Ukraine war is still a thing. If Ukraine wins, that means Russia has collapsed or is about to and a bunch of nukes come into play. If Russia wins, they're emboldened to continue.
All of that is just off the top of my head. If even half of these things come to a head over the next year or so, we're in for an extraordinary bad time
Like, worst in decades. So bad that we pretty much have to hope that we simply get lucky and things dissipate safely somehow.
And I haven't even outlined any of the actual worst case scenarios – nuclear escalation in the middle east, a new global pandemic, a heatwave with sustained high (35°C) wet-bulb temps – because there's no real point in scaring yourself with shit you can't do anything about
(Forgot to put a content warning when I first posted this. Apologies.)
Saupreiss #Präparat500 🗽So which of those you can change anything substantial about? 🫤
@Saupreiss I mean, you can prepare for shortages, cut down consumption, and bolster your ability to weather a long economic crisis. You can do stuff to maximise your odds of coming out of many of these crises safely, even if you can't prevent it or avoid it entirely. But there isn't much you can do to increase your odds of surviving nuclear war or a lethal heatwave except to have fled before it happened and hope that you fled far enough.
@baldur (and early enough before the place is considered „Full“). When we‘re with pessimisms, thats one of the things that kills me morally: That destruction of human habitats is going to require „defending“ these places.
I dont care about myself, I had my life. But it kills, kills, kills, kills me what this does to children and means for their adult lives if there is even going to be one.
Andrew Radev@baldur The way I cope is by considering some possibilities for good outcomes. For instance, I regularly see posts that wind and solar have been much more effective than previously estimated. Electrification of cars is happening surprisingly rapidly in my home country of Bulgaria, which I wouldn't have expected. A friend recently told me that his hybrid car is shockingly cheap to drive in the city. (Electric cars have their own baggage re: rare minerals, but that's another topic to unpack).
None of this is to say we won't have a Bad Time re: climate change, some of that is already happening, just that we might be going in the right direction. War and oil shortages might be another nudge to European lawmakers at least that renewables are the way forward. In case gas-related pressure from Russia was not indicator enough.
Economy crashes connected to oil and AI in the US could be another blow to the lobbies in the EU. The narrative right now is the EU needs to be "competitive" with the US, because look at how good their markets are doing. That narrative is not going to survive the bubble(s) popping.
Re: Russia and nukes, I've always believed that Putin will eventually be assassinated by someone in his inner circle when and if the war with Ukraine turns into a loss. The propaganda machine would turn on him as the sole reason for the loss(es) and whoever takes power would run back and consolidate and frame it as something other than a loss. Nukes means the leaders in charge are retaliated against and these people want to live forever, not die in glory.
I don't know how likely any of these outcomes are, not arguing with your fears -- I agree that all of what you describe is real risks. Just that I do still hold out some hope that certain things end up not as bad as they could go.
@AndrewRadev "The way I cope is by considering some possibilities for good outcomes."
That's really good advice.
Peter@baldur The curse* of being able to perceive and think the world systematically, eh?
*I actually think it's great, but my brain just works that way naturally, sooo. It sometimes leads to very frustrating conversations with people who can't do it, though. Or worse, refuse. Especially on climate and the rise of fascism!
SeanBurlington 🌈 🕊️@baldur but nobody knows what will happen
It sure isn't goin the way Trump expects
Maybe it all backfires, and accelerates the energy transition
These are times of desperately high risk
We have truly opened Pandora's box, but never forget that it contained hope
Jonas@baldur
Add to all of this also the transnational retreat from U.S. Treasury Bonds. If big countries pull out of these investments (many of the bonds are due to be renewed over the coming two–three years), that spells trouble for the U.S., to put it mildly. It would renege the supremacy of the dollar that has basically been the global default for decades.
Add to all of this also the transnational retreat from U.S. Treasury Bonds. If big countries pull out of these investments (many of the bonds are due to be renewed over the coming two–three years), that spells trouble for the U.S., to put it mildly. It would renege the supremacy of the dollar that has basically been the global default for decades.
Sören Meyer-Eppler@baldur oof. Can you do a happy path scenario off the top of your head as well?
@BuschnicK Renewable energy should get a massive boost worldwide from all of this.
Open Risk@baldur He mentions the extreme market concentration in US bigtech but doesn't seem to specify some causal chain that could precipitate a financial crisis as a result. The link to private credit has been examined in some depth (I believe it was FT's Alphaville) and was not deemed sizeable enough to become a systemic risk.
One scenario that could bring the house of cards down is changing political winds. Bigtech enjoys total monopoly valuations. Outside the US this status may not persist forever
The private credit discussion
https://www.ft.com/content/742edb09-a856-41ad-aea6-207862cfd952
@openrisk Big tech has other risks than private credit. The “AI” promise is largely bullshit. Costs are much too high. Much of their business comes from their own investment (I.e. they invest in cos that then buy cloud services/hosting). Their stocks are overvalued. Much of their income are monopoly/oligopoly rents dependent on government inaction worldwide. Code quality is in a decline.
Etc etc.
@baldur all true, but they have incredible staying power due to monopoly status. E.g., Meta burned vast billions on VR with nothing to show for it, would have bankrupted a normal company but they simply shrugged and moved on to spending billions on "AI". Their insane valuations also reflect this extraordinary chokehold on basically a large fraction of the world economy.
@openrisk The big tech cos were heading towards a stock price correction before they inflated the "AI" bubble with false promises and nonsense.
And much of their revenue comes from other tech cos. So if the sector is hit hard by a bubble pop, their cloud services will get hit hard as well.
Add to that current politics giving the entire world massive incentives towards getting off US software.
Basically, they probably won't go bankrupt, but their stock price and finances might take a big hit
@baldur the weak link for a bankruptcy was Twitter but with all manners of financial engineering shenanigans, first shoving it into xAI, then both of them into SpaceX (considered too critical for the US to let it fail), that fate seems to have been averted.
It's a grotesque timeline, but how it all will unfold is anybody's guess. Imho the world should seriously commit building alternatives. Banish the TINA argument...
@baldur they are of course more than aware of the extraordinary political cover they enjoy. That's why they hire politicians like Nick Clegg to maintain it, that's why they cozied up en masse to the Trump admin etc.
In this respect, current EU "regulation" is toothless, the real pushbacks would be outright bans, break-ups, forced open standards etc. Aggressive, even hostile action, effectively countries saying: we don't like your take on how digital society should be shaped, be gone now.
@openrisk It's not just a question of regulation. I keep hearing from tech people in the EU about a quiet but broad push to hire people to help large companies and institutions minimise their exposure to US software
A big threat IMO to big US tech isn't regulation but an global bottom-up move away from US dependence and a widespread animosity from the public.
But their biggest threat is their political cover. Authoritarians historically often turn on their corporate allies.
@baldur There is mutual dependency of bigtech and the Trump admin. The booming markets narrative is essential for the midterm elections. Americans are more sensitive to stock markets via their retirement vehicles etc. So if they could help it, nothing will happen till then.
But yes, the decoupling from US software seems now on an irreversible path, though with the extreme current dependency, it will be years before the situation flips.
ChookMother 🇦🇺🦘@baldur The "something" is hope of making a fortune. It doesn't take much else. See "tulip mania" of the 17th century.