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Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

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Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#161

Post by munksbeer »

bakeshop wrote: post #159
whimsicalism wrote: post #14

AI 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.

A country that issues its own currency cannot run out of money or be forced into default in that currency. What we call the national debt is the total of money the government has created and not yet taxed back. Those dollars are private savings in another form, not a burden that must one day be repaid. Creditors do not fund government spending; they hold safe interest-bearing assets created by it. The real risks to s…

> A country that issues its own currency cannot run out of money or be forced into default in that currency. What we call the national debt is the total of money the government has created and not yet taxed back. Those dollars are private savings in another form, not a burden that must one day be repaid.

Richard Murphy is that you?

Snark aside, this is just straight up MMT which you're presenting as gospel, but absolutely isn't.

The very shortest way to debunk MMT is that every single government would be printing their way to prosperity if it was possible. Their ultimate desire is to be in power, and a happy prosperous population will keep electing them. No government has ever follow MMT to it's natural conclusion.

It is simplistic and wrong.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#162

Post by Ekaros »

rchaud wrote: post #145
whimsicalism wrote: post #13

Earlier quoted context omitted.

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.

Complete stagnation would mean that hundreds of billions earmarked for datacenter and chip production in the next few years would have to be cancelled. The promise of this future demand is what is driving the inflation of the stock market, with investors happy to ignore the deep losses accruing to every AI software player...for now. Pulling the plug on the capacity-building deals is effectively an admission that dema…

At least Nvidia is making money now. Just look at Tesla, also over a trillion doing exactly what and promising exactly what again? Wait for time of them not delivering coinciding at same time as AI and it is even deeper hole...

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#163

Post by octo888 »

marak830 wrote: post #150
octo888 wrote: post #118

Wow position 140 on HN after about about 3 hours. Brutal lol

I use https://hckrnews.com/ so I can see the stories in chronological order. Makes the "front page" effect basically disappear.

Interesting. Thanks!

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#164

Post by ratelimitsteve »

nobleach wrote: post #73
rkomorn wrote: post #12

Earlier quoted context omitted.

Zero labor cost is the dream!

To whom does one sell when they've deleted their workforce? Seeing company after company add to unemployed workers shows they have no forward-thinking ecomonomists advising them. Further, AI for all of its positive potential is NOT going to be free... or even "cheap" once the investors dry up.

Why would one need to sell anything to anyone after one acquires the first machine that can automatically build the others? Capitalist economies kinda suffer from Goodhart's law: money is a better metric for success in a capitalist economy than most metrics are but it's important to remember that money is only a token to stand in for work and materials (I'd argue that the value of materials themselves are really just the work of retrieving them but that's a different argument). Having money in reality is just having work and materials in potentia. So what happens when the materials can do all the labor? Workers are cut out from the loop of owners gathering more things to own, and this does not hamper the owners at all. Adding AGI to capitalism isn't going to bring about capitalism with AGI in it like adding salt to water. Adding AGI to capitalism is going to act much more like adding sodium to water. I don't see it happening this generation, which is I guess nice, but I'm not looking forward to the transition between what we're doing now and Star Trek post-scarcity because I have the oddest feeling that if you look closely at any society that has done that transition there's likely to be an extreme genetic bottleneck, if I may be vague about it for pleasantries' sake.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#165

Post by whitehexagon »

marak830 wrote: post #149
whitehexagon wrote: post #93

For me the question is who is going to subscribe who hasnt already. And that is before we consider the next gen hardware that can run this stuff locally. But from what I see of the economy around me here, people just dont have the spare funds for LLM luxuries. It feels like 15+ years of wage deflation, and company streamlining, has removed what little spare spending power people had here. Not forgetting the inflation…

"...who is going to subscribe who hasnt already." I think there will be an increase in subscribers as people get more used to them. But there's probably also people like me who just dropped 2k on a new system to self host my own to customise the pipeline, and integrate it into my house without sending data offsite.

Nice, what did you settle on?

I'm playing with qwen3:32b on an Asahi M1 currently, and it does more than enough for me, but might be tempted if there is a bigger model within reach.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#166

Post by deaux »

marak830 wrote: post #149
whitehexagon wrote: post #93

For me the question is who is going to subscribe who hasnt already. And that is before we consider the next gen hardware that can run this stuff locally. But from what I see of the economy around me here, people just dont have the spare funds for LLM luxuries. It feels like 15+ years of wage deflation, and company streamlining, has removed what little spare spending power people had here. Not forgetting the inflation…

"...who is going to subscribe who hasnt already." I think there will be an increase in subscribers as people get more used to them. But there's probably also people like me who just dropped 2k on a new system to self host my own to customise the pipeline, and integrate it into my house without sending data offsite.

> But there's probably also people like me who just dropped 2k on a new system to self host my own to customise the pipeline, and integrate it into my house without sending data offsite

There's dozens of us I tell you! We're entirely irrelevant in this story. The only thing that would change this is if Apple at some point makes it turnkey to run good models on their hardware. That's it.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#167

Post by deaux »

Ekaros wrote: post #162
rchaud wrote: post #145

Earlier quoted context omitted.

Complete stagnation would mean that hundreds of billions earmarked for datacenter and chip production in the next few years would have to be cancelled. The promise of this future demand is what is driving the inflation of the stock market, with investors happy to ignore the deep losses accruing to every AI software player...for now. Pulling the plug on the capacity-building deals is effectively an admission that dema…

At least Nvidia is making money now. Just look at Tesla, also over a trillion doing exactly what and promising exactly what again? Wait for time of them not delivering coinciding at same time as AI and it is even deeper hole...

Considering the market cap of Tesla in light of what the company produces is the same mistake as anthropomorphizing Larry Ellison. It's like how the price of Dogecoin isn't related to how in vogue doge memes are.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#168

Post by deaux »

Pxtl wrote: post #52
whimsicalism wrote: post #13

Earlier quoted context omitted.

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.

I can't think of any tech with this kind of crazy yearly investment in infrastructure with no success stories. Maybe it's because I find writing easy, but I find the text generation broadly useless except for scamming. The search capabilities are interesting but the falsehoods that come from LLM questions undermine it. The programming and visual art capabilities are most impressive to me... but where's the companies…

> Where's the animation studio cranking out Pixar-quality movies as weekly episodes?

Check out Neural Viz. Unthinkable for one guy without AI. And we're still in the Geocities stage of this stuff.

A non-Pixar animation studio, with presumably a >10x lower budget than Pixar itself, cranking out weekly Pixar movies would be like >1000x acceleration. And indeed, that's not a thing yet for animated movies. The example I gave shows that it's already quite a big X, though.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#169

Post by deaux »

Pxtl wrote: post #49
Esophagus4 wrote: post #28

Earlier quoted context omitted.

> But it's not trillion-dollars useful, and it probably won't be. The market disagrees. But if you are sure of this, please show your positions. Then we can see how deeply you believe it. My guess is you’re short the most AI-exposed companies if you think they’re overvalued? Hedged maybe? You’ve found a clever way to invest in bankruptcy law firms that handle tech liquidations?

I generally buy index funds but I put some into AMD a while back as the "less-AI-part-of-tech". Will probably get out of that as they've been sucked into that vortex and shift more into global indexes instead of CAN/USA. I'll leave shorting to the pros. The whole "double-your-money-or-infinite-losses" aspect of shorting is not a game I'm into.

You could just buy put options.

Re: Bank of England flags risk of 'sudden correction' in tech stocks inflated by AI

#170

Post by nickff »

array_key_first wrote: post #154
alphazard wrote: post #50

Earlier quoted context omitted.

The most important thing is eliminating the annual deficit. That sends more of a signal about the future of the country and it's currency than the total amount of debt. How it gets done is separate from that. Given that the only demographic that can comfortably weather a recession is also starting to collect social security, paid for by younger generations who would be meaningfully affected by a recession, "old peopl…

Social Security is not really relevant to the deficit, that's just a thing some politicians say because they want to dismantle the pie to take their piece. Every time someone points to SS as the source of our fiscal woes, we should be immediately skeptical.

Social Security is 22% of the budget, how is that not relevant to the deficit? It's the largest single category of spending, and spending more than the government takes in is the source of the deficit.

https://fiscaldata.treasury.gov/americas-finance-guide/feder...

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