merc
@merc@sh.itjust.works
- Comment on The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops 3 days ago:
We may have to wait for another three years.
Which is also a clue that he isn’t short selling.
There are two ways of making money when a stock goes down. One is to sell the stock short. The other is to buy a put option.
A short sale is extremely risky. Say the shares are at $50 and you think they’re going to go down, so you sell 1000 shares you don’t own (short selling) and agree to buy them back by some date in the future. If you’re right and the stock tanks to $20, you can buy the shares and pocket $30,000. But, if the stock doesn’t sink, you might have to buy the shares for $60 each, so you lose $10 per stock, or $10,000. If there are tons of people shorting the stock, you can get a short squeeze, where everybody needs to buy shares to close out their short position, and because everybody needs to buy, the stock price rockets up, so you get people having to buy a stock that used to be $50 for $200, leading to $150,000 in losses for a 1000 share short where the maximum possible gain was only $50,000.
An option is much safer. There you’re buying the option to sell the shares at a certain price at some time in the future. Say you think a stock is going to crash. It’s currently trading at $50/share. You can buy 1000 put options at a strike price of $40 with a date 1 month in the future. It will cost you something to buy those options, say $1 per share, so $1000. If the stock goes up or stays at $50, your bet didn’t work out. You don’t have to sell the shares, you just tear up the options contract. You’re out whatever you paid for the option, say $1000 here. But, say the stock tanks and it’s now at $20/share. Now your bet did pay off. You can buy 1000 shares at $20 each for $20,000, then immediately exercise your option and sell them for $40,000, netting you $20,000. With put options the upside is significantly smaller, but the potential downside is tiny. It’s just the cost of the options.
Someone predicting a crash within 3 years isn’t going to short sell the shares. Between now and then the shares could continue to rise for a while, and they’d be on the hook for a huge payout in that case. If they buy options the down side is much smaller. They may have to re-buy new options a bunch of times. But in the worst case they just have to let the options expire unused and eat whatever cost they paid for them.
For the coming AI crash, I don’t think it will be very soon. I think there will be a crash. But, I think the government will try to keep the bubble from bursting. Too much of the US economy is now invested in AI. So, even under Biden, or Harris, or Obama they’d try to prevent a catastrophic crash by using taxpayer money to prevent the most damaging bubble burst. With Trump, there’s going to be even more government interference in the market. His backers are crypto bros. They’re the ones making him billions on his meme coins. They bankrolled JD Vance’s political career. If they demand that he rescues their failing companies, he’ll do it. And, since the GOP does whatever Trump wants, they’ll just fork over literal trillions in taxpayer dollars to keep things from crashing. But, eventually there will have to be a crash, because there’s just not a sustainable business model in any of this, at least not at anything like the current scale.
- Comment on The Big Short Guy Just Bet $1 Billion That the AI Bubble Pops 4 days ago:
Also, the way short positions work is that the people who are most successful at shorting a stock are the ones who have a megaphone to announce they’ve shorted the stock. They go on as many podcasts, news shows, interviews, etc. as possible to say things are going to crash. Because, the more people who hear about it, the more hesitation there will be to invest, which means the more chances of their prediction coming through.
So, he’s not just some guy who is betting on the bubble bursting, he’s a guy who is now heavily incentivized to cause the bubble to burst so he can make his investors a lot of money.
- Comment on Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter 1 week ago:
Which bubble was that?
- Comment on Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter 1 week ago:
AFAIK none of the previous AI bubbles really had much investment. There was hype, but it was hype within the computer science, or cognitive science fields. But, maybe there’s a financial bubble bit that I’m missing.
- Comment on Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter 1 week ago:
Uber used accounting tricks to hide their true losses for years. They’ve only recently managed to become profitable by squeezing both drivers and passengers at the same time. Is that sustainable? Almost certainly not, but, for the moment, they’re getting away with it.
- Comment on Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter 1 week ago:
That’s the only reason I don’t think it will pop in the next 6 months or so. Even Biden or Obama would have stepped in to try to prevent the economy from crashing. But, there’s the Trump factor. First of all, some of his biggest backers are from the AI “industry”. His VP is tied to Peter Thiel, his biggest donors are Crypto and AI bros. The vast majority of his own personal money is tied up in the current Crypto bubble. In addition, he’s obviously so easily bribed. Even if he he wasn’t interested in intervening otherwise, he could easily be bribed to intervene.
Because of Trump, and the fact that the house, senate and judiciary are all Trump lackeys, I think the bubble will survive until at least the 2026 midterms. If the Democrats take back control of the House and Senate they could take control over spending from Trump, which might mean the bubble is allowed to pop. But, I wouldn’t be surprised to see Trump hand over literal trillions in taxpayer dollars to keep the bubble inflated.
- Comment on Microsoft seemingly just revealed that OpenAI lost $11.5B last quarter 1 week ago:
Comparing the coming crash to the dot com crash is like comparing a rough landing to the various crashes on Sept 11th, 2001.
The dot com crash was mostly isolated in high tech. Because it was lead by the Japanese economy starting to fail, and followed by the Sept 11th attacks, the various combined crashes resulted in the S&P 500 falling by about 50% from its peak to the bottom, but it was already back up to the peak value in 2007, then the global financial crisis hit.
This bubble is much bigger. Some analysts say the AI bubble is 17x the size of the Dot Com bubble, and 4x the size of the 2007/08 real estate bubble. AI stocks were 40% of all US GDP growth in 2025, and 80% of all growth in US stocks.
Nvidia’s stock price has gone up 1700% in just 2 years. OpenAI is planning to go public on a valuation of $1 trillion despite losing vast amounts of money. Just 7 US tech companies make up 36% of the entire US stock market, and they’re all heavily betting on AI.
At least when the dot com bubble popped, it left some useful things behind, like huge amounts of dark fibre. But, the AI processors are so specialized they can’t be used for much of anything else. They also wear out, sometimes within months. The datacenter buildings themselves can maybe be repurposed to being general purpose datacenters, but, a lot of the contents will have to be thrown out.
- Comment on I hear he's homeless too. 1 week ago:
Giuffre agreed to a multi-million pound out-of-court settlement in 2022.
- Comment on I hear he's homeless too. 1 week ago:
It sounds like the king (his brother) is stripping him of his titles and kicking him out of the royal residence. But his brother (as non-king) is letting him stay on a property on an estate he owns as a private citizen, and paying him a kind of allowance out of his own “private” money.
- Comment on I hear he's homeless too. 1 week ago:
Andrew is expected to move to a property on the king’s Sandringham estate near the northeast coast and receive private financial support from his brother.
I wonder if he (Andrew) actually owns anything in his own name. The funding for the royals is complex. The “working royals” get about $100m per year as a percentage of revenues from the Crown Estate as a kind of salary / per-diem to do their “jobs”. The Crown Estate had about £16.5b in assets, so the amount they’re paid is only a tiny fraction of its value. The king also gets money from the Duchy of Lancaster which includes land in Lancashire and Yorkshire as well as properties in London. Whoever’s the Duke of Cornwall gets paid from the Duchy of Cornwall which is land in South-West England. Some things you’d think would be owned by the country are actually privately owned by the monarch, like many of the palaces. They also own estates like Sandringham and Balmoral.
So, the monarch owns a lot of stuff privately, which is passed down to the next monarch. The current Duke of Cornwall (often the crown prince) has a billion pound private estate, which then gets passed to the next Duke when the current duke dies or becomes the monarch.
But, I wonder what the rest of them own. It sounds like the monarch is a multi-billionaire, the Duke of Cornwall is just barely a billionaire, and the rest of the royals get paid huge amounts in a sort-of “salary” if they’re willing to do royal-type work (cut ribbons, make speeches, etc.) but they don’t actually own much of anything.
His ex-wife, Sarah Ferguson, who had been living with him in the 30-room mansion, will have to find a new home.
That’s interesting. I wonder what that situation was like, and what she’ll do.
- Comment on Where is modern Punk? 1 week ago:
Rage Against the Machine aren’t quite punk, but they’re heavily punk-influenced. It’s amazing that they were such a huge commercial success.
As to whether they’re sellouts, that’s really complicated. They did generate a ton of profits for the machine they raged against. OTOH, I never would have heard their music if they hadn’t been signed to a major record label.
- Comment on Ok, boomer 1 week ago:
Who was born in 1961 making him…
- Comment on Fictional 2 weeks ago:
What were digits 10 to 59 like in Babylonian?
- Comment on Fictional 2 weeks ago:
IMO it should be called “base 9+1”. It is a “base 10” system because each order of magnitude is 10x as big as the previous one. But, the key thing is to know which digit is the last one before you roll over.
- Comment on Fictional 2 weeks ago:
Is your issue with metric, or with the fact that everything in life uses a base 10 (which should really be called a base 9+1) system?
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
Wow. My local library mostly has books. No board games. No media stations – there are some (old) computers you can use to browse the web, so I suppose you could watch media there, but it’s set up as a desk, not a couch or something. You can borrow some games, but not game consoles, and there’s definitely not a spot to play the games on-site. Definitely no VR rooms. There’s one branch of the library in the city that has 3d printers. One branch that has a “music editing station” with a music keyboard attached to a computer. One branch has a high quality, large format scanner for scanning historic docs. Definitely no kitchen or playground.
The idea still seems to be that libraries are supposed to be quiet places where you can read books or study. Any media is meant to be consumed with headphones on, so obviously no shared listening of any kind. They do loan music, video games and movies, but they’re meant to be brought home. You can borrow a lot of musical instruments, but again, there’s no place to play them on-site because the library is a quiet place for reading or studying.
I think it would take a major mental shift for people here to consider libraries as places where you might do something non-quiet, and/or non-serious. And something like cooking on-site would be seen as completely non-librarylike.
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
I’ve been to the Y, and at the moment it doesn’t seem overtly christian. But, as long as that “C” is part of the name, and especially as long as “Christian” is part of the mission statement, it can potentially become a lot more unfriendly to non-Christians.
That document you linked to says that some YMCAs are overtly christian, and talk about the problems that causes:
Ys that have a strong Christian identity may find that non-Christians are uncomfortable with explicitly Christian language, imagery, and activities. Proselytism is an especially sensitive issue.
For example, several survey respondents express discomfort with colleagues offering Christian prayers or reading Bible verses during the “mission moments” that begin Y staff meetings
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
I do think there’s a special thing about church that is this bigger than yourself experience
I’m pretty sure that’s only the case if you’re a believer. And, in general, people who aren’t believers don’t go to church, so you’re selecting for a group of people who want to believe in something bigger than themselves.
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
The Y is a nonprofit organization whose mission is to put Christian principles into practice
- Comment on Another WSJ banger about why the poors aren't doing more 2 weeks ago:
IMO in a well run country real estate should not go up in value. If your great-great-great-great-grandfather could have bought a house for 3 years of his wages, you should be able to buy an equivalent house for 3 years of your wages, assuming you’re buying a similar house and have similar wages.
The value of a house should go up only because of overall inflation going up. But, it should slightly lag behind inflation, because older houses need repairs to bring them back up to the standard they were in when they were new.
Basically anything other than a house should be a better investment than a house: a treasury, a savings account, a gold nugget.
I mean, imagine if there was anything else in the world that went up in value in a way similar to stocks, but was also something that you used. Imagine if, instead of depreciating immediately, your car went up in value each year. Or, imagine if your clothes were consistently worth more than when you bought them. It’s ridiculous that houses are both something you use and put wear and tear on, but also something that goes up in value every single year.
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
New Brunswick?
- Comment on xkcd #3159: Continents 2 weeks ago:
I have to believe that as soon as there were accurate maps of South America’s east coast and Africa’s west coast, someone must have looked at them and said – you know, I bet those two were joined at some point in the past.
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
Well, definitely not a Christian association.
- Comment on #environmentalist 2 weeks ago:
The really bad experiences I’ve had with straws is at movie theatres. In that case you’re given a pretty big drink in a flimsy cup, and you’re slowly drinking it over a couple of hours.
There’s no way that the paper straw holds up in those circumstances. You also don’t want to drink without the straw, because the cup is so flimsy that if you try to drink from it like a regular cup/glass it’s likely to collapse. I have permanent metal / rubber straws at home, but of course I never remember to bring them with me when I go to a movie, since I only go a couple of times a year.
The only solution I’ve found is to take 3-4 paper straws with me, and change them out over the course of the movie.
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
In the show Clarkson’s Farm, Jeremy Clarkson is looking around, trying to buy a pub. At one point they talk about wanting to have a pub with a little grocery store attached. Clarkson’s girlfriend explained why that was common at one point in Ireland. It was because in the past men would get paid, go immediately to the pub, and drink until their paycheck was gone. If there was a shop attached to the pub, they could hand in an order at the shop before they started drinking. And then, even if they drank away the rest of their paycheck, they’d still be handed a bag of groceries before they were kicked out and had to stumble home.
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
I like that in the US, New England (NE) is in the North East (NE).
- Comment on Did it really used to be common for guys to go to a bar every night like in Cheers or The Simpsons? 2 weeks ago:
Also, in places with significant winters (including Northern Europe) parks aren’t an option in winter.
Northern Europe seems like the kind of place that would realize this is a problem and invent some kind of community building which was open in the winter and had a shared kitchen, a stock of board games, a court for indoor sports, etc. That’s certainly not going to happen in the US.
- Comment on Another WSJ banger about why the poors aren't doing more 2 weeks ago:
It’s more than just speculation incentives from housing. I agree that needs to be done, but it’s nowhere near enough.
A bigger issue is that with the complete mess things are in, for a lot of people near retirement age, the only asset they own is their home. That means they’re going to desperately fight to keep house prices high, and ideally to keep them going up and up. But, this completely fucks over anybody who doesn’t yet own a home.
As part of their fight to protect the value of their homes, they’ll block any new construction in the neighbourhood because it will lower the value of their homes. As a result, this blocks new, denser housing construction for anybody who needs a house. The only place where NIMBYs aren’t blocking new housing are suburbs in the middle of nowhere. And, construction companies aren’t going to be building condos or small houses out in the middle of nowhere. Those homes are going to be big, suburban homes. So, the only real hope for someone who needs a house is that someone moves out to one of these big new homes in the suburbs. But, retired people aren’t going to do that. They’re looking to downsize, if anything. So, they’re more likely to just stay in their current homes.
Basically, what’s needed is to do whatever it takes to keep houses from appreciating in value, and to go around NIMBYs who try to block densification. But, to do that, you also have to address the problem that these boomers don’t have a real safety net, and their house is the one thing they own of value. Oh, and the boomers vote and lobby effectively… so…
- Comment on Another WSJ banger about why the poors aren't doing more 2 weeks ago:
I can’t afford a house at all unless I go somewhere that I can’t find the kind of work I do
I think this is a key point.
The average house prices in major cities has gone up ridiculous amounts. But, if you look at the average national house prices it isn’t as dramatic. The problem is, that there are a lot of jobs that only exist in those expensive, major cities. It doesn’t much matter if a house in the suburbs of Detroit is dirt cheap if your job doesn’t exist anywhere near Detroit.
So, you have places where the housing prices are reasonable, but nobody earns a really high wage because it isn’t one of the major metro areas in the country. Then you have places where the jobs exist but housing is completely out of reach.
Also, it seems to me like the big issue is that while some goods have become cheaper and cheaper over the years, the ones that have become prohibitively expensive are the important ones. Like, look at Maslow’s hierarchy of needs. Food price inflation and overall price inflation have been about the same since the 80s, but since 2020 that’s not true. Since then food has become much more expensive relative to the inflating dollar. Then there’s housing (a.k.a. “shelter”) that has been outpacing inflation by a massive amount since Reagan’s time, but even worse since 2020. The only thing that has become cheaper in at the bottom of Maslow’s pyramid is clothing. But, the kind of clothing that’s cheap is “fast fashion”. It’s not basic “shelter” type clothing. Maybe that has become cheaper, but enough clothing to survive was never a major expense.
The next tier up in Maslow’s hierarchy is safety needs: personal security, health and wellbeing, financial security, safety nets. This is probably the area that has been hit the hardest. Because of America’s messed up healthcare system healthcare costs are getting more and more expensive. Financial security is also a joke for most non-boomers. The US has no safety net to speak of. And personal security, in the era of Trump, I think a lot of people feel much less secure.
There are things that are part of the consumer price calculation that have been getting cheaper. But, if you can’t meet your basic needs, that really doesn’t matter. Sure, my grandpa would have been absolutely amazed with the entertainment I can get on a screen. Compared to a black and white TV a modern TV is incredibly cheap, amazingly high quality, the selection of things to watch is astounding, etc. But gramps had a steady job, a guaranteed pension, reasonable medical costs, a house that could be bought for a couple of years of salary, etc.
- Comment on AWS crash causes $2,000 Smart Beds to overheat and get stuck upright 2 weeks ago:
It’s true, and there’s nothing IoT that is absolutely essential. But, if they were secure and safe, there are a lot of IoT things I’d like to have.