If/when the bubble pops, a couple of other data points to consider that could exacerbate the fallout are 1) margin debt, which reached a new all-time high in August (the latest month for which FINRA has data) and 2) the continued frothiness of all things crypto (which is due for another correction).
Interesting piece, but I’d also be very interested in your thoughts on what it would mean if the bubble doesn’t pop. Given historical bubbles, what would you expect valuations would need to be and in what timeframe for the bubble to not pop? To justify these valuations, what would you estimate improvements in productivity might need to be? And what are the implications to the job market if we have this level of productivity increase in this timeframe?
I think you meant "allude to" rather than "elude to" in the fourth paragraph.
AIG’s credit default swaps ended up
bringing down counterparties that were all interconnected. If / when the AI bubble bursts- what kind of ripple effect can you imagine?
When Wall Street got sick - they got bailed out . When Main Street got clobbered - “ better luck next time “.
The AI bubble shows how typical stock market analysts metrics, like the Price-Earnings ratio, has been abandoned.
If/when the bubble pops, a couple of other data points to consider that could exacerbate the fallout are 1) margin debt, which reached a new all-time high in August (the latest month for which FINRA has data) and 2) the continued frothiness of all things crypto (which is due for another correction).
Interesting piece, but I’d also be very interested in your thoughts on what it would mean if the bubble doesn’t pop. Given historical bubbles, what would you expect valuations would need to be and in what timeframe for the bubble to not pop? To justify these valuations, what would you estimate improvements in productivity might need to be? And what are the implications to the job market if we have this level of productivity increase in this timeframe?
https://substack.com/@lindamacdonaldglenn/note/c-167086136?r=2q3n69&utm_medium=ios&utm_source=notes-share-action