With respect to our earlier conversation, besides the circular investment, is there any other reporting on the use of derivatives?
They never went away despite being a cornerstone of 2008; derivative were based off of the futures market. I think that’s been around for a long time for crops for instance. What started out? It is a very niche form of financing is what was bastardized into the products that caused GFC.
They haven’t quite gone away
How is this for fresh off the press?
This arXiv preprint is only 4 days old.
"AI Token Futures Market: Commoditization of Compute and Derivatives Contract Design"
https://arxiv.org/html/2603.21690
Analysts projects that applying conservative multipliers of 10-15x observed in other commodities markets to a compute market reaching $350-500 billion by 2027-2028 could support over $5 trillion in derivatives trading Compute.
This is why #finance and #fintech in general are falling over themselves to invest in #Ai, far from being a bubble, its a 'solid' investment vehicle like all the other CDOs...
Here is one of my favourite scenes from "The big short" explaining #CDO.
https://www.youtube.com/watch?v=xbiDrzTd8fE
Hopefully sometime I will get to reading this today, but I am a little curious if the multiples here are quoted numbers for other types of derivatives.
The basis of most of my understanding of the kinds of derivatives that led to 2008 was that so much of them were opaque, including how much banks were made making off of them that the only rough idea of a number was quoted from somebody who said they make significantly more off of derivatives than they do off of IPO’s
I’m just reading through the abstract and already I’m beginning to worry about gobbledygook statements
An unfortunate state of affairs in current academia is that nearly everyone runs papers through the engines... We know this because authors were sprung hacking #peerreview ("thus paper is supergood")
For me the main carry away is;
"Token futures can reduce compute costs violatility by 60%"
Here us a link to the pre-chewed paper with a top model.
https://claude.ai/share/5f72c37a-bad5-4ca0-9c29-abf49ff2c432
Since so much of the demand for these tokens is so much vaporware, and the infrastructure cost to perform the computations is also so much paperware now subject to increased energy cost plus the very real time pre-existing pressures for energy and water, now compounded with an energy and raw material crisis that will affect the entire economy and especially technology
As we discussed.
The entire clownshow has gone off the rails in 2008...
.... Literally nothing matters anymore.
The big end of town knows this.
This is why they dug hidey holes in the ground and are looting everything before we go "Fury Road" on each other.
Yeah, I think the only saving grace about the derivatives thing is that this looks like a paper, it’s not something in the system yet although I would have to imagine there are those who are feverishly working on it because hey, you can make some money saying that you’re building this thing.
GhostOnTheHalfShell
Wulfy—Speaker to the machines