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Because it is deliberately extracting cash from Mom and Pop into the robber baron's wallets?

by tomrod 4mo ago

dragontamer 4mo ago
Why would that pop the bubble? Robber Barrons existed from like 1860 through 1915 and extracted the wealth of many people, including Native American tribe lands. Like this shit can keep going until we decide enough is enough and actually change our society.
- tmp10423288442 4mo ago
  Not related - many robber barons went bankrupt in the severe economic crashes of the time, such as the Panics of 1873 and 1893. The Gilded Age continued despite bubbles popping.
JumpCrisscross 4mo ago
Okay? Why does that mean a devastating pop?
- vermilingua 4mo ago
  Where were you in 2008?
  - JumpCrisscross 4mo ago
    It would be karmic if fleecing led to financial crises. It doesn’t. You’ve taken N = 1 and extrapolated it wildly.
- michaelmrose 4mo ago
  Because traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties. Whether this works or not at some point it becomes an inevitable and self reenforcing feedback loop. Just investing less in risky things on the run up means you personally perform worse so even in known bubbles you don't see reasonable slow downs instead of disastrous pops.
  - JumpCrisscross 4mo ago
    > traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties What? Source? Plenty of investment bubbles pop before the bag is passed. This thread involves a lot of people looking at something they don't like and presuming karmic forces will give them what they deserve. There is no reason these companies, even if massively overvalued, have to "pop." That's fundamentally different from e.g. the financial crisis, or the 2023 bank collapses, or even the dot-com bubble. Those did not have the ability to self correct. There was no slow deflation other than through a bailout.
    - marcus_holmes 4mo ago
      I'm genuinely curious why you say this is different from the dot-com bubble? As I see it, this is the exact same situation - wildly overvalued companies based on investor exuberance, the underlying business is not capable of supporting this kind of valuation. IPO tends to be the crunch point at which this overvaluation is exposed. Once exposed, the valuation correction spreads to other similar businesses quickly and the bubble pops. What's the self-correction ability that AI companies have?
      - JumpCrisscross 4mo ago
        > genuinely curious why you say this is different from the dot-com bubble? A lot more revenue. Dot coms were going public pre revenue. And Anthropic is profitable. Both it and SpaceX wouldn’t be dependent on further stock sales to stay alive—that lets them weather a downturn.
        marcus_holmes 4mo ago
        As I understand the situation, Anthropic is revenue-positive but not profitable. As usual, Ed Zitron covers this well [0]. As with the dot-com bubble, there is a lot of voodoo accountancy (and flat-out lies) about the actual situation here. As I understand it, the basic problem is that the big three can't charge enough per token to cover costs because they're in competition with each other (and one of those is Google that can afford to buy market share using its other operating revenues), and the OSS/cheap Chinese models. And this situation is unlikely to get better in the short term because building cheaper per-token capacity is very expensive and time-consuming. [0] https://www.wheresyoured.at/anthropics-profitability-swindle/ https://www.wheresyoured.at/anthropics-profitability-swindle...
- csomar 4mo ago
  Once the liquidity is transferred, that's it? There is nothing there (datacenter in space, that dude is really smoking some serious stuff), so the money will be spent/transferred and then there is no revenue/new sources of money. It's the same scenario of a ponzi scheme. Everything looks fresh and fine until everyone realizes there is nothing in there.

Because it is deliberately extracting cash from Mom and Pop into the robber baron's wallets?

by tomrod 4mo ago

Because it is deliberately extracting cash from Mom and Pop into the robber baron's wallets?

Why would that pop the bubble? Robber Barrons existed from like 1860 through 1915 and extracted the wealth of many people, including Native American tribe lands. Like this shit can keep going until we decide enough is enough and actually change our society.

tmp10423288442 4mo ago
Not related - many robber barons went bankrupt in the severe economic crashes of the time, such as the Panics of 1873 and 1893. The Gilded Age continued despite bubbles popping.

JumpCrisscross 4mo ago

Okay? Why does that mean a devastating pop?

vermilingua 4mo ago
Where were you in 2008?
- JumpCrisscross 4mo ago
  It would be karmic if fleecing led to financial crises. It doesn’t. You’ve taken N = 1 and extrapolated it wildly.
michaelmrose 4mo ago
Because traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties. Whether this works or not at some point it becomes an inevitable and self reenforcing feedback loop. Just investing less in risky things on the run up means you personally perform worse so even in known bubbles you don't see reasonable slow downs instead of disastrous pops.
- JumpCrisscross 4mo ago
  > traditionally the pop is delayed while those who realized most of the gains attempt to offload the risk to other parties What? Source? Plenty of investment bubbles pop before the bag is passed. This thread involves a lot of people looking at something they don't like and presuming karmic forces will give them what they deserve. There is no reason these companies, even if massively overvalued, have to "pop." That's fundamentally different from e.g. the financial crisis, or the 2023 bank collapses, or even the dot-com bubble. Those did not have the ability to self correct. There was no slow deflation other than through a bailout.
  - marcus_holmes 4mo ago
    I'm genuinely curious why you say this is different from the dot-com bubble? As I see it, this is the exact same situation - wildly overvalued companies based on investor exuberance, the underlying business is not capable of supporting this kind of valuation. IPO tends to be the crunch point at which this overvaluation is exposed. Once exposed, the valuation correction spreads to other similar businesses quickly and the bubble pops. What's the self-correction ability that AI companies have?
    - JumpCrisscross 4mo ago
      > genuinely curious why you say this is different from the dot-com bubble? A lot more revenue. Dot coms were going public pre revenue. And Anthropic is profitable. Both it and SpaceX wouldn’t be dependent on further stock sales to stay alive—that lets them weather a downturn.
      - marcus_holmes 4mo ago
        As I understand the situation, Anthropic is revenue-positive but not profitable. As usual, Ed Zitron covers this well [0]. As with the dot-com bubble, there is a lot of voodoo accountancy (and flat-out lies) about the actual situation here. As I understand it, the basic problem is that the big three can't charge enough per token to cover costs because they're in competition with each other (and one of those is Google that can afford to buy market share using its other operating revenues), and the OSS/cheap Chinese models. And this situation is unlikely to get better in the short term because building cheaper per-token capacity is very expensive and time-consuming. [0] https://www.wheresyoured.at/anthropics-profitability-swindle/ https://www.wheresyoured.at/anthropics-profitability-swindle...
csomar 4mo ago
Once the liquidity is transferred, that's it? There is nothing there (datacenter in space, that dude is really smoking some serious stuff), so the money will be spent/transferred and then there is no revenue/new sources of money. It's the same scenario of a ponzi scheme. Everything looks fresh and fine until everyone realizes there is nothing in there.