AI Bubble - crystal ball time

[ergophobe]

Scott Galloway's predictions for 2026

https://www.profgalloway.com/2026-predictions/

Expect the expected.
 - Cheap Chinese models pop the AI bubble
 - Data center bubble pops with it
 
And relevant for RC's post on Tesla: Waymo eats Tesla

[ergophobe]

"Sellers are pulling homes off the market at the fastest pace in decades." Intro to video about Redfin report

"Massive shift from a sellers' market to a buyers' market." - CEO of Redfin, Glenn Kelman

"Critical mass of sellers are giving up"

He notes that people often take homes off the market for winter so they can relax and celebrate the holidays. That's true for my dad - he didn't want to keep the house showing ready all winter.

Kelman says that houses will come back on the market, generally after the Superbowl. We're likely to see the highest level of supply when houses come back on the market since 2016.

Active listings are at highs and demand is at lows not seen since the Great Recession.

https://www.youtube.com/watch?v=cS5MlkymPPI&list=WL&index=42

[littleman]

On the other end, we should see a gradual rise in unemployment as companies slowly figure out how to cut jobs by using AI.  I suspect it will be slow at first, but become much more of a factor in the economy in the next few years.

I am sure I an not the only one to have had the thought that the global rise in authoritarianism is directly linked to the foreseen fall in the value of labor.  I can't quite see the timing though.  Is this all happening in the next two years or in 15?  In a weird way it could all be accelerated by the AI Bubble as companies scramble to cut costs for surviving the bust.

[rcjordan]

"ChatGPT reached a hundred million users, 'making it the fastest-growing consumer tech product in history'.

This was the point at which everything blew up. The value of the world's top ten companies is $25.6 trillion. Of that, $15.1 trillion has accumulated since 30 November 2022 and is directly linked to the AI boom. Nvidia's technology was the first factor driving the explosion – its most powerful chip, the H200, is a must-have for 'frontier' AI developers. A single H200 retails for between $30,000 and $40,000, depending on the configuration. The company is worth over eleven times more than it was on the day ChatGPT launched.

After Nvidia's chips, the second big factor driving the boom was the hype created by Sam Altman and OpenAI."

John Lanchester · King of Cannibal Island: Will the AI bubble burst?
https://www.lrb.co.uk/the-paper/v47/n23/john-lanchester/king-of-cannibal-island

[ergophobe]

"We are poised for an economic boom the likes of which the world has never seen."
  -- Donald J. Trump in his year-end address.

So there's one opinion on 2026.

[rcjordan]

>getting ready to go cash on a family trust

Orders issued. Ball to start rolling Jan 01. I'm guessing that this'll take some time to cash out but I'm hoping the stocks go pretty quickly (while the oligarchs are pumping up the market). Maybe the bonds will, too.

[ergophobe]

Total employment by small businesses in decline - see attached image

You cannot view this attachment.



via https://paulkrugman.substack.com/p/magas-betrayal-of-small-business

[rcjordan]

>small businesses in decline

I've heard from a couple lately. They say the tariffs have hiked prices on their supplies to nose-bleed levels. They have trouble passing on the increased costs to customers. Sales lost to sticker shock.

[littleman]

>small businesses in decline

I've heard from a couple lately. They say the tariffs have hiked prices on their supplies to nose-bleed levels. They have trouble passing on the increased costs to customers. Sales lost to sticker shock.

Yeah, I am experiencing this too.

[rcjordan]

From this morning's feed...
‬
 ‪@dandouglas.bsky.social‬
my disposable income is dwindling but luckily all of the nice local cafes and delis where i spent that disposable income are closing so i probably won't even notice

<+>

 ‪@petermanseau.bsky.social‬
2026 has a lot to live up to. Can it continue the ten-year streak of every year being the worst year ever?

[ergophobe]

I like Morgan Housel's perspective...

OP: "Billionaire investor Mark Cuban has said that he believes a recession is imminent, per IB Times."

MH: "It  is imminent -- the only thing that's unknown is the timing, location, duration, magnitude, policy response, recovery dynamics, and cultural impact."

https://x.com/morganhousel/status/2021954619795202152

[ergophobe]

If you exclude healthcare and private education, the US has lost jobs for 24 months

https://x.com/Malone_Wealth/status/2021810571365015562/photo/1