The market is down today because Michael Burry revealed he’s shorting Palantir and Nvidia.'n'nSure—he was right about the 2008 housing bubble.
-
One should always be careful about speculative investors, because the market doesn't like to play nice. A big win can fuel a dozen minor losses, and timing is everything.
Plus, ultracrepidarianism hits hard, and knowledge about one aspect of the system does not specifically imply perfect knowledge of all aspects.
With that said, I do think this bubble is going to pop and pop hard. I just think that trying to nail down the exact timing is a mug's game: it could be tomorrow, or they could somehow keep it going for another year with federal bailouts, or any number of other means to keep looping the money around and milking the whales.
Jennifer Kayla | Theogrin 🦊 Absolutely—we always have to prepare for a bubble, even when times are good. Real bubbles form when everything’s frothy, everyone’s greedy, people talk about a “new economy,” and even your grandma and cab driver are all in.
That’s why I’m skeptical of bubble talk right now: everyone already expects one. When caution becomes consensus, it stops being contrarian—and markets feed on surprise. People forget that doom can be just as much of a grift as boom.
-
@atomicpoet I think euphoria about "ai" is basically an excellent description of thew past couple years, yes.
Faraiwe Again, most people already believe AI is going to blow up. It could—that’s not impossible.
But because so many investors already think that, they’ve moved into gold, Treasuries, and other “safe” assets. There are more puts than calls. That’s defensive behavior.
Real bubble behavior is the opposite: people borrowing on margin, bragging about gains, and mocking anyone who warns of risk. What we’re seeing now is anxiety and disbelief in a market that keeps grinding higher.
So again, if you’re absolutely certain this is a bubble—are you shorting the market?
-
Faraiwe Again, most people already believe AI is going to blow up. It could—that’s not impossible.
But because so many investors already think that, they’ve moved into gold, Treasuries, and other “safe” assets. There are more puts than calls. That’s defensive behavior.
Real bubble behavior is the opposite: people borrowing on margin, bragging about gains, and mocking anyone who warns of risk. What we’re seeing now is anxiety and disbelief in a market that keeps grinding higher.
So again, if you’re absolutely certain this is a bubble—are you shorting the market?
@atomicpoet I guess we will see, then.
I am old enough to remember the '08 sub prime thing, how it went.
EVERYONE was also saying that subprime loans were baaad, hmmkaaaaay.... and yet, banks kept on dishing them out.
See, there was already enough capital SUNK into those to warrant a bubble, when that money didn't quite come up the other side...
All EXACTLY as the LLM/ai bubble coming.
-
@atomicpoet I guess we will see, then.
I am old enough to remember the '08 sub prime thing, how it went.
EVERYONE was also saying that subprime loans were baaad, hmmkaaaaay.... and yet, banks kept on dishing them out.
See, there was already enough capital SUNK into those to warrant a bubble, when that money didn't quite come up the other side...
All EXACTLY as the LLM/ai bubble coming.
Faraiwe I lived through the Great Recession. Also the dot-bomb, the Asian Financial Crisis, and Black Monday. They all share the same tells: cheap money, rising leverage, a “new economy” story everyone repeats. Pros stay in from career risk. Retail piles in. Skeptics get mocked. Prices go vertical. Then liquidity snaps and forced selling does the rest.
That’s the pattern—and you should always prepare for it. But right now I see hedging, flight to safety, and bearish positioning, not the blow-off behavior that marks a true top.
Which is why I keep asking: if you’re certain this is a bubble, are you shorting? Because if not, you’re not as confident as you sound. And that’s fine—there’s nothing wrong with saying, “This looks bad to me, but I can’t tell the future.” That’s the most honest position anyone can take.
-
Faraiwe I lived through the Great Recession. Also the dot-bomb, the Asian Financial Crisis, and Black Monday. They all share the same tells: cheap money, rising leverage, a “new economy” story everyone repeats. Pros stay in from career risk. Retail piles in. Skeptics get mocked. Prices go vertical. Then liquidity snaps and forced selling does the rest.
That’s the pattern—and you should always prepare for it. But right now I see hedging, flight to safety, and bearish positioning, not the blow-off behavior that marks a true top.
Which is why I keep asking: if you’re certain this is a bubble, are you shorting? Because if not, you’re not as confident as you sound. And that’s fine—there’s nothing wrong with saying, “This looks bad to me, but I can’t tell the future.” That’s the most honest position anyone can take.
@atomicpoet I don't play stocks. Or any games of chance. Or lottery. Studied Game Theory for too long, watched my family lose money in the dotcom, and other people lose much more on other such instances. I worked too hard for my money to burn it away on snake oil, so nah.
LLMs are a bubble. Any self-referential massive investment without links to any other sector of market, in a broad, viable economy is a bust.
We shall see, and can revisit this, perhaps sooner than both of us expect?
-
@atomicpoet I don't play stocks. Or any games of chance. Or lottery. Studied Game Theory for too long, watched my family lose money in the dotcom, and other people lose much more on other such instances. I worked too hard for my money to burn it away on snake oil, so nah.
LLMs are a bubble. Any self-referential massive investment without links to any other sector of market, in a broad, viable economy is a bust.
We shall see, and can revisit this, perhaps sooner than both of us expect?
Faraiwe Interesting—if the market’s all games of chance, then calling a bubble with certainty is a kind of bet too, isn’t it? Odds and inevitability don’t mix.
-
Faraiwe Interesting—if the market’s all games of chance, then calling a bubble with certainty is a kind of bet too, isn’t it? Odds and inevitability don’t mix.
@atomicpoet like I said. Everything is blahblah, until the numbers come crashing down.
You can't use make-believe criminal ("crypto") money to anchor some financial loop and pretend there is a chance it will work out. Techbro billionaires give other techbro billionaires money that was not there and pretend they doubled the total money involved. That is not a healthy, viable, feasible Economy, but can be played in stocks. It's make believe wink wink stuff.
-
The market is down today because Michael Burry revealed he’s shorting Palantir and Nvidia.
Sure—he was right about the 2008 housing bubble. So maybe there’s something to this.
But he’s been wrong plenty of times too. He shorted Tesla in 2020, and that went nowhere. Believe me, I would’ve loved for him to be right. Yet $TSLA is worth far more now than it was five years ago. That pains me to admit—especially since I still think Tesla shouldn’t be worth more than GM or Ford—but I don’t set valuations.
Then in 2021, he warned of “the greatest speculative bubble of all time in all things,” predicting the S&P would crash 50%. In reality, the S&P only dropped 18% in 2022—a correction, not an apocalypse.
His biggest miss, though, was claiming “index funds were a bubble analogous to sub-prime CDOs.” That never happened. Anyone who followed that advice and cashed out would’ve missed massive gains.
I’m not saying he’s wrong this time. He could be right. He did call the Great Recession and made a fortune doing it. But since then, he’s gotten a lot of things wrong.
Right now, the markets are fearful—and I get it. Sentiment moves prices more than fundamentals. But ironically, it’s not fearful markets you should fear. It’s greedy ones.
Michael Burry of 'Big Short' fame discloses bets against Palantir, Nvidia after bubble warning
Trader Michael Burry, famous for calling the 2008 housing crisis, has announced bets against Palantir and Nvidia.
Yahoo Finance (finance.yahoo.com)
Not that I have money to invest:
I predicted in spring a Tesla crash within the next few months, and it hasn't happened.I still believe, the company is grossly overvalued by any metric, and yet: Investors don't seem to care.
-
@atomicpoet like I said. Everything is blahblah, until the numbers come crashing down.
You can't use make-believe criminal ("crypto") money to anchor some financial loop and pretend there is a chance it will work out. Techbro billionaires give other techbro billionaires money that was not there and pretend they doubled the total money involved. That is not a healthy, viable, feasible Economy, but can be played in stocks. It's make believe wink wink stuff.
Faraiwe You’re missing my point. I’m not defending techbros or crypto—I’m talking about probability.
Markets aren’t morality plays. They’re systems of incentives and perception. Even if everything you said is true, it still doesn’t make a crash inevitable. It just makes it possible.
And that’s exactly why calling a bubble with certainty is still a bet—because odds and inevitability are not the same thing.
-
Faraiwe You’re missing my point. I’m not defending techbros or crypto—I’m talking about probability.
Markets aren’t morality plays. They’re systems of incentives and perception. Even if everything you said is true, it still doesn’t make a crash inevitable. It just makes it possible.
And that’s exactly why calling a bubble with certainty is still a bet—because odds and inevitability are not the same thing.
@atomicpoet you're missing mine. I never said anything about probability.
-
@atomicpoet you're missing mine. I never said anything about probability.
Faraiwe You kind of did, though—when you said “a bubble is plain to anyone,” you implied certainty, which is the opposite of probabilistic thinking.
That’s the point I’m making. If something is “plain to anyone,” it’s no longer a matter of analysis, it’s a matter of faith.
-
Not that I have money to invest:
I predicted in spring a Tesla crash within the next few months, and it hasn't happened.I still believe, the company is grossly overvalued by any metric, and yet: Investors don't seem to care.
Mina I know—if there’s any company that should blow up in a bubble, it’s $TSLA. All the fundamentals say overvalued: revenue growth slowing vs the story, autos are capital-intensive and low-margin, repeated price cuts compress gross margin, regulatory credits and incentives muddy true profitability, FSD isn’t Level 4, energy/robotics are tiny next to the market cap, capex needs stay high, competition is fierce and closing the tech gap, and the multiples sit far above peers while free cash flow is volatile.
However, Tesla stays afloat because it’s a cult and a narrative machine—robotaxis, AI, Dojo, Optimus, “everything app” optionality. Heavy retail ownership, index flows, and options-driven squeezes keep the story funded. Cults survive beyond rational interrogation, often longer than skeptics expect.
