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Thursday’s Forum
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26 responses to “Thursday’s Forum”
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In 2000, the dot.com bubble burst sending markets and economy down.
In 2008, the real estate bubble burst sending us into the Great Recession.
Today, the AI/data center bubble seems to be about to burst also.
Is the AI infrastructure build-out a bubble? Here’s what the data actually shows.
There is a lot of debate about whether the artificial intelligence (AI) infrastructure build-out is a bubble. The amount of money being spent building out AI data centers is astronomical, with the four largest hyperscalers — Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Meta Platforms (NASDAQ: META) — alone set to spend more than $700 billion this year. That’s more than the gross domestic product (GDP) of all but two dozen countries last year.
Meanwhile, AI spending as a percentage of global GDP is nearing bubble levels of past cycles. Goldman Sachs projects total AI capital expenditures at around $765 billion in 2026, while U.S. GDP is expected to be around $32.4 trillion. That would be 2.4% of U.S. GDP, which is above levels seen in past innovation cycles, such as the dot-com bubble.
The irony is that the pushback by ordinary Americans against massive data centers in their backyards and the upward cycle of electricity prices may slow this down and prevent a bubble burst.
I say, be on the defense, the fabulously wealthy don’t care if you lose your retirement.
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If the bubble bursts soon, and the economy is a mess by November, the only upshot would be, if we’re lucky, large Democratic majorities in both houses.
I’m not entirely certain it would be too high a price.
I am certain as El Taco bumbled and blundered about trying the stupidest solutions to the economic mess he made, he’d blame it all on the Democrat Congress.
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Obscene amounts of money are being poured into data centers with the overriding objective of getting them online quickly. A gigawatt scale data center uses as much electricity as a power plant, but a power plant may take 5 to 10 years to bring on line. So data center planners have been scooping up available generation with power purchase agreements and thereby increasing demand, which increases rates.
In some cases, massive data centers have been installing their own onsite generation. Projects with obnoxious names like Stargate and Colossus have their own off-grid power that is noisy, inefficient, and costly, but high cost is apparently an acceptable trade-off for getting on line quickly. Dozens of modular gas turbine generators have been installed at each site quickly, equalling the output of a utility scale power plant, but without all of the regulatory requirements. These simple, quickly-installed gas turbines tend to use about 50 percent more natural gas per kW than a typical combined cycle gas power plant, but efficiency and cost are not the main criteria for data center planners.
Despite the vast sums of money being thrown at these projects, most states provide tax breaks for data centers. In Pennsylvania, for example, the legislature just declined to remove/reduce the data center tax exemption.
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And Mortgage rates:
The average 30-year fixed-rate mortgage rate rose to 6.58% through Wednesday, according to Freddie Mac data, up from 6.55% a week earlier. Fifteen-year mortgage rates jumped to 5.96%, from 5.93%.
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They are petty and corrupt all the way down to the most meager opportunities to be total creeps.
Suspicion And Doubt At The National Civics Competition
Because whiteness and fealty matter more than anything.
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So, there’s another cyclosporiasis outbreak. No word on how they identified it was a separate outbreak, nor any information on where it is located.
But wait, there’s more!
The F.D.A. is currently investigating an unusually large number of food-borne outbreaks — not just those caused by cyclospora, but also salmonella, listeria, E. coli and clostridium botulinum. The agency has 16 active outbreak investigations listed on its website, which may be a record for the number of ongoing investigations at the same time, said Susan Mayne, who led the agency’s Center for Food Safety and Nutrition from 2015 to 2023.
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El Taco now says the nuclear “deal” with the Magic Kingdom is contingent on its joining the Abraham Accords and recognizing Israel.
I wonder if the Saudis were aware of it when they negotiated the agreement. You’d think it would be a done deal, and pretty big news that would have been announced along with the Taco deal.
BTW, the Saudis will totally build their own nukes.
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To anyone who has Netflix, the series on which I’m a Co-Producer, launched today.
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@EddieInCA We’ll add it to our watch list!
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Interesting CNN claims Americans are losing faith in capitalism, with poll numbers to back it up.
Well, capitalism’s epitaph has been written prematurely a number of times. Two I recall were the dot com crash, and, by coincidence, the 2008 crash that brought us the great recession.
One can draw the inference that bad times under capitalism make people lose faith in it.
Capitalism has proven to be the best economic system (so far). But it’s also not an unchanging monolith. The capitalism practiced by America between the 1930s and late 1970s is widely different from today’s. The earlier one was regulated, welfare state capitalism. Today’s is oligarchical capitalism.
The piece notes rising numbers in the polls who think the economy is rigged for the wealthy. They’re not wrong. But I’d make a subtle distinction: it’s rigged to favor capital and equity. The wealthy not only have more of it than most people, they have boatloads more.
This might be a good time to tar oligarchs with the responsibility for economic woes most of the population experiences, which happens to be true.
And on good news today Texla stock fell 13.5% today. That’s about 27% down for the year.
Apparently it’s not due to poor swastikar sales, which seem to actually have improved, btu rather the money Adolf is burning on AI, robotaxis, and Optimus robots.
I can totally see lots of investors thinking, “Mother of God! He actually meant it!”
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I suppose retail secret tribunals are less worse than wholesale secret tribunals.
TL;DR: proceedings before the Alien Terrorist Removal Court don’t require the defendant be informed of all the evidence against them.
I must say I’m surprised such a court exists in the US, even if it has gone unused for decades. It shouldn’t even exist. the mere idea of it is morally disgusting.
IMO, neither El Taco nor most in his so-called administration understand or care what the long game is. But those behind project 1939 just might. So this may be a play for the Fixer court to declare this court proceeding more constitutional than the constitution, clearing the way for its expansion. Not for mass deportations, necessarily, though that is the stated purpose, but for similar secret courts where dissidents can be dealt with.
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