To be expected since none of these AI companies are turning profits.
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This seems to be the proximate cause:
The sell-off came after US data on Wednesday showed stateside inflation jumped to a higher-than-expected 3.7% in September, marking the fastest increase in prices since the consumer price index (CPI) rate hit a three-year peak of 4.2% in May.
Fresh data on Thursday showing US producers increased their prices by 6.3% year on year in September – the sharpest rise since December 2022 – added to inflationary jitters.
The figures have rattled investors who are now expecting fresh interest rate increases by the US Federal Reserve, with some punters pricing in another increase as soon as the end of the month.
It seems that investors are worried AI debt will be even more difficult to pay off once the Fed jacks up interest rates
Went to a shitty sales pitch at a bank the other day and the guy mentioned that we should decide and meet before Nov 1. He said there was meeting then.
I asked what meeting (think Fed meeting or some kind of treasury report due out). The guy had no clue, then I realized it was because of the election and laughed at the fucking guy.
On the way out he mentioned that we should move our stocks into cash before November. I think that might be what’s really happening, but it would also be a good excuse to hide the AI bubble burst.
People have been predicting this for a long time. Is anyone buying puts?
The market can stay irrational longer than you can fund a put.
You can be right and still lose everything.
Why speak confidently about options when you clearly don't understand them? You don't put your entire net worth into a 0DTE.
For those that know the bubble is going to pop, you can make a lot of money short-selling stocks. Use only a small portion of your portfolio to buy, choose options with longer expirations, and use spreads instead of naked puts.
Whether you believe the bubble is currently popping, will pop soon, or will eventually pop - there are strategies that will allow you to massively profit from your insight. You don't have to spend your entire net worth on a 0DTE.
I'm an economics idiot. But doesn't general inflation reduce the burden of debt?
If your wages do not rise at the same rate as inflation, your debt burden does not shrink.
Yes, it reduces burden of debt, but it makes taking on new debt a lot more expensive, because interest rates are closely related to inflation.
And if you have to pay back a debt (as you normally have to after a predetermined time), and have to refinance it by taking up new debt, now you might not be able to pay the now higher interest.
So for the one who pays off his credit card debt, inflation is a good thing. For the company that used that credit to invest in something that will only bring revenue at a future point in time, this is a real fucking problem (this is what is happening in Russia currently btw. Bankruptcies are skyrocketing there because of the high inflation and the even higher interest rate - and stalling domestic spending - , and that rate is being artificially kept "low" to boot. There has been an intense power struggle between the russian central bank and the Kremlin this year. Look up Elvira Nabiullina's "disappearance" this June)
if you are the one owing money, yes; if you are the one who is supposed to receive money, it is not so great. i would assume the ones worrying about this are the ones who are supposed to be receiving money? i am also an economics idiot
I sold off all my stocks in tech last month. Bought them a year+ ago and made some good return off it. The risk (and potential) reward are getting too great for me.


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