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Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
11–20 of 192 posts
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#12this is how capitalism does things. no one wants to overinvest but no one wants to be left behind and everyone is sure that either there's not gonna be a pop or they can sell before it pops. it has been educational to see how quickly the financier class has moved when they saw an opportunity to abandon labor entirely, though. that's worth remembering when they talk about how this system is the best one for everyone.
Zero labor cost is the dream!
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#13Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.
Why is that obvious? Even with effectively complete stagnation and just existing technology + limited RLVR, I can see how this could be trillion-dollars level useful.
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#14AI is a risk. The thing we know is going to bite us in the butt is our continued massive sovereign debt burden and lack of any political will whatsoever to either increase taxes or reduce spending. The dollar is not going to do well this century and creditors confidence is already starting to decline.
In fact, the further we go into debt - the more we are implicitly betting our society on an AI hail mary.
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#15A lot investment is banking on agi. There’s no sign agi is going to happen this decade.
That's what people have said about technologies in every decade, Sam
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#16Also reported in the Guardian. https://www.theguardian.com/business/2025/oct/08/bank-of-eng... For non-brits, Bank of England the UKs central bank and is a lot like the US Fed. Their comments carry a lot of weight and do impact government policy. Not enough central banks were making comments about the sub-prime bubble that led to the 2008 crisis. Getting warnings about a possible AI bubble by a central bank is both s…
The mistake central banks made in 2007-2009* was keeping monetary policy far too tight for far too long, for no real discernable reason.
Offering commentary on which particular sectors they feel are a 'bubble' is outside their purview and not particularly productive IMO, the state is not very good at picking winners.
*edited to 2007
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#17A lot investment is banking on agi. There’s no sign agi is going to happen this decade.
What's a sign it's going to happen ever?
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#18AI is a risk. The thing we know is going to bite us in the butt is our continued massive sovereign debt burden and lack of any political will whatsoever to either increase taxes or reduce spending. The dollar is not going to do well this century and creditors confidence is already starting to decline. In fact, the further we go into debt - the more we are implicitly betting our society on an AI hail mary.
There is only 1 solution to the global debt crisis and thats inflating the currency. They did it after WW2 and they will have to do it now. There is no other option. They can do it sneaky through fake measures of inflation, keeping a lid on cost of living adjustments, but ultimately they soak bond holders and standard of living.
You see it everywhere in things they can’t inflate. The price of houses and gold most obviously, but you see it in commodities that can’t expand production quickly as well. The solution is to buy assets of course.
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#19this is how capitalism does things. no one wants to overinvest but no one wants to be left behind and everyone is sure that either there's not gonna be a pop or they can sell before it pops. it has been educational to see how quickly the financier class has moved when they saw an opportunity to abandon labor entirely, though. that's worth remembering when they talk about how this system is the best one for everyone.
Leaving large portions of the population jobless surely can't be good for business and political stability.
Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI
#20Seems obvious. AI is useful. But it's not trillion-dollars useful, and it probably won't be.
Why is that obvious? Even with effectively complete stagnation and just existing technology + limited RLVR, I can see how this could be trillion-dollars level useful.
It is the financial risk that is obvious. The big players are struggling to show meaningful revenue from the investment. Because the investment is so high, the revenue numbers need to be equally high, and growing fast. The 'correction' is when (ok, if) the markets realise that the returns aren't there. The worldwide risk is that AI-led growth has been a large chunk of the US stock market growth. If it 'corrects' US growth disappears overnight and takes everyone down with it. It is not an issue about the usefulness of AI, but the returns on investment and the market shocks caused by such large sums of money sloshing around one market.