7/21/2026 at 4:46:26 AM
Well technically they don’t own the debt, the SPVs that own the data centers do. The giants just have long term commitments, but if shit hits the fan, it’s not the tech giants but the banks that lent the money to the SPVs that are at risk. This usually means all of us are on the hook.by darth_avocado
7/21/2026 at 4:48:29 AM
As someone who belongs to “all of us”, i vote to not bail us out if shit hits the fan. No need to ask me when it happens, OK? No really, it’s nice of you but we really dont need to be bailed out. You are welcome :)by AznHisoka
7/21/2026 at 6:41:37 AM
The problem is if large banks fail they take everyone else with them. We should have dealt with this in 2009, but for some reason it didn't happen.But money talks, I guess.
by laughing_man
7/21/2026 at 7:44:02 AM
Iceland let it's banks default, and is now doing rather well.In fact, bank failure and then having the government only guarantee ~$50k of funds per person is a good way to hand wealth to the people and take it from corporations and the super wealthy.
by londons_explore
7/21/2026 at 7:57:08 AM
> good way to hand wealth to the people and take it from corporations and the super wealthyHence the power that be try to prevent it best they can. In some cases, unsuccessfully (Iceland) and in others, a bit more successful (the US). But seemingly, they're only able to delay the inevitable, not completely prevent it.
by embedding-shape
7/21/2026 at 6:53:56 PM
We have similar FDIC insurance in the US. The solution is companies have many, many deposit accounts to still get the insurance, mostly for payroll purposes.by preg_match
7/21/2026 at 10:25:43 AM
The U.S. also let a bank collapse and shit hit the fan across the world.The global economy isn’t pivoting off Icelandic banks the way it is off US ones.
by adjejmxbdjdn
7/21/2026 at 11:21:39 AM
Big corporate borrowed the money already, so it will stay with some (other) big corporate in this scenario. The bankers who did it will see that coming and move their money elsewhere and keep their money as well.What you suggest will hit normal persons.
What we really need is people going to jail that let stuff like that happen. Let them bear actual responsibility for their 1,000k+ salary.
by bulbar
7/21/2026 at 9:13:14 AM
Iceland's banks were full of money from people in the UK. It's a lot easier to default when there only a small political and economic price.by laughing_man
7/21/2026 at 9:14:50 AM
Is everyone just glossing over the fact that the feds make a profit on bailing the banks out? Seems like a win win to take over ownership in the event of a bank failure.by hparadiz
7/21/2026 at 10:24:28 AM
Was this definitely not accounting trickery? Like even the way money is created is intentionally convoluted and approximately 1% of the population even attempts to understand it. Can we really trust the accounting of bank bailouts which stood to be unpopular when the accounting produced a convenient outcome? Has anyone plausible analyzed this to a convincing level of detail?by pfannkuchen
7/21/2026 at 10:43:42 AM
This was explained by Jon Stewart on The Daily Show ad neausum in 2008 and was common discourse for years after. No. It's not accounting trickery. Rather than allow the company aka the bank to go fully bankrupt the government simply forces a sale of the shares of the bank to the government. The original stock owners basically take a cap gains loss (potentially based on their cost basis). The bank then continues to operate as normal. This prevents a run on the bank and keeps it stable. Then 2-3 years later the stock recovers and the government sells its shares. Since they bought low this is highly profitable. Anyway yes and yes. The 2008 bailout ended up making a profit for tax payers. Thanks Obama.by hparadiz
7/21/2026 at 9:18:21 AM
If there was a reliable profit to be made, a third party would do it.I suspect the real profit is made by also being in a position to adjust laws and rules to make sure your investment survives, as well as turning low rated bonds effectively into government bonds. All those things are at the expense of others in the bigger picture.
by londons_explore
7/21/2026 at 9:26:58 AM
3rd parties don't have the capital to front the losses. That's the whole point for the government to do it. The feds get the advantage that they basically get to force the existing creditors to sell at a loss. Presumably that's what everyone here wants. The existing owners to pay a penalty on the failure and for everyone else to remain whole if possible. Well that's exactly how a bank "bail out" works. So what's the actual problem? The only one's "hurt" are the owners who miss managed the business.by hparadiz
7/21/2026 at 9:27:59 AM
The "feds" as we used to know them are going extinct. They are all being replaced by GOP apparatchiks, who care only to look good to the Leader.by actionfromafar
7/21/2026 at 8:01:36 AM
> and is now doing rather wellI was going to write a shitty reply to this, but the more research I did, the more it seems actually this went pretty well for them. UK and NL governments that lost deposits in the Icelandic banks mostly got their cash back (eventually), there was recession and unemployment but not that much worse than other countries, and the country is in good standing again with the markets.
I would note that this is much much easier to do if your investors are foreign, rather than domestic pension funds, so it doesn’t bring down the government, though.
by petesergeant
7/21/2026 at 9:09:01 AM
The issue is that major US banks are systematically important to the US and also everyone else. Practically nobody cares about Icelandic banks - not even their depositors if their deposits were protected by the state (which they were).If a bank like JP Morgan were to fail, the event would be without exaggeration cataclysmic to everyone, even small local banks and credit unions. Even if ultimately the clients of JPM could be made whole, the weeks of uncertainty and frozen funds would single handedly obliterate the financial systems across the globe. It's the age old adage: "if you get margin called and get wiped out, it doesn't matter that you'd have recovered just 2 weeks later". The world as a whole is deeply leveraged. It's that leverage that affords us the ability to supercharge all the growth, from AI to drugs research, insurance, EV... everything. But that leverage comes at a cost, which is that systemically important institutions failing can have disastrous cascading de-leveraging effects.
I'm sure we'd more or less all survive and the world would recover, but it would likely be a 2008 GFC style scenario most likely.
by short_sells_poo
7/21/2026 at 9:14:14 AM
The collapse of Landsbanki was absolutely not a nothingburger. Risked triggering a 21st Century Cod Wars: the UK government was forced to use organised crime laws to freeze its UK assets to protect UK savers in Icesave, to whom the Icelandic government did not clearly intend to extend protection.by dofm
7/21/2026 at 7:17:50 AM
Things have changed since 2009. It would be private credit which fails this time, not the banks.Private credit is not supposed to be systemically important and it's not supposed to need bailing out. Maybe we'll find out how true that is in practice.
by fancyfredbot
7/21/2026 at 4:25:07 PM
Private credit is just some guy skimming 3% while risking your pensions.by darth_avocado
7/21/2026 at 7:31:45 AM
Why would you think that? You think pension funds and governments didn't invest this time? Because that's the problem, governments either investing everyone's money directly (to fund their own loans and expenditures, or should I say fund their own expenses using pension money without admitting that's what they're doing to pensioners) or indirectly force investments (you'll find pension funds worldwide are legally only allowed to invest in loans to the government and specific things the government allows (like politicians' charities). "For safety", of course, no other motivations there)We can check if governments went back to their own tricks or not after 2008. What were the interest rates after 2008? Quick check ... yep, they went back to the old tricks.
When "shit hits the fan". Either governments really cut spending, leave pensioners without income and see their new loan interest spike to 10%+ (if they're lucky) ...
OR they do a massive cash injection saving the banks, and increase spending.
Which would you chose? It doesn't even matter. If you were the government and chose the first option, you would quickly find suddenly everyone across the political spectrum uniting to depose you. A decent chunk of people would literally not have any other choice but to do that.
(of course, as per usual governments aren't behaving "correctly" according to economic theory. If you take the old "government as spender of last resort" governments should have radically cut spending in the last 10 years, because there was no need for extra spending. If you take the new "government invests pensions", then of course government spending needs to be investment. In other words, governments only allowed to spend like a normal investor, expecting and demanding a return. Ie. no social spending increases. In practice governments increased spending at any cost, and so we're in trouble again)
Oh and should I mention that for any other entity investing pension money in loans to yourself is a very unique thing in law. It is THE ONLY financial crime where corporate structures do not protect management. You're the worldwide president of ExxonMobil? Doesn't matter. You do with employee pension money what government does with it? (ie. loan it to yourself, in this case ExxonMobil). You go to jail. Directly and long-term. In America. In Spain. In Japan. In fucking Vatican city.
by spwa4
7/21/2026 at 9:15:22 PM
You should really define “everyone else”.by DANmode
7/21/2026 at 5:07:33 AM
Replace you with AI, and when the AI math falls apart, use your tax money to bail out AIAnd they’ll get away with it too
by spaceman_2020
7/21/2026 at 6:03:43 AM
This the proof that guillotine is useful, if not to be used, to make the elite behave in way that avoid suffering it.by stymaar
7/21/2026 at 6:18:38 AM
They think they’re immune. Even after Luigi, they still think they’re immuneby spaceman_2020
7/21/2026 at 6:51:48 AM
As far-fetched as it sounds, I'd prefer elected officials and the justice system hold people accountable rather than psychotic murderers.by UberFly
7/21/2026 at 7:00:39 AM
Likewise.I think it's a real pity that of the "four boxes of liberty", Musk has interfered with the first three: soap, Twitter; ballot, the lawsuits about million dollar rewards for voting; jury, selecting his jurisdiction, dismantling enforcement institutions via DOGE.
On the plus side, it's only "interfered with" rather than "completely eliminated".
Still, glad I have an ocean between me and the USA.
by ben_w
7/21/2026 at 7:31:30 AM
So would those guys in the boats in the Caribbean and the girls in that Iranian school, but the purpose of a system is what it does.by dofm
7/21/2026 at 7:46:26 AM
basedby thin_carapace
7/21/2026 at 8:22:36 PM
I wish that such systems in the US could be relied on to do that as well. It's pretty clear, though, that they can't.by JohnFen
7/21/2026 at 7:19:02 AM
Obviously that's preferable. What if they don't?by YeahThisIsMe
7/21/2026 at 7:03:31 AM
Well... AGI by next month sounds more likely than what you are hoping for.by cryptonym
7/21/2026 at 9:16:23 AM
Who wouldn't? In the real world, the top elected officials and the justice system are covering up sex trafficking of children among the US elites, and that's only the tip of the iceberg. The system is psychotic and what's strange is there haven't been more people like Luigi.by dns_snek
7/21/2026 at 8:04:05 AM
Speaking hypothetically, that is preferable, yes.And the importance of the justice system working properly is that when it fails constantly and deliberately, many will come to the conclusion that the only option left is murder.
by surgical_fire
7/21/2026 at 12:21:43 PM
[dead]by kishkash
7/21/2026 at 9:20:41 AM
[flagged]by senordevnyc
7/21/2026 at 6:48:22 AM
Well, I really wish that anyone, no matter their income level or job description, is immune against murder; or are we just throwing out civilization now?by ManuelKiessling
7/21/2026 at 7:05:17 AM
It's of topic but, what if our current civilization is failing them? Like, of the system is broken and an individual acts to protect themselves or their family, the individual is still blamed.That's how revolution starts.
And there are many revolutions that we (in USA) claim are good! Our own, from Britain, the French one. Of course others are bad (depending on where your vantage)
It's just that, sometimes the murder is (retrospectively) justified. Like in a war, they're killing us so we kill them.
But class war isn't fought with uniformed combatants.
And, in USA at least, many of our politicians are bought quite blatantly. If they aren't serving the citizens perhaps they have thrown out civilization and the social contracts first?
It's all quite complicated.
In general though, murder bad and government should serve the poorest citizens forst, corporations last.
by edoceo
7/21/2026 at 7:48:27 AM
Being denied medical care is murder as well.by LtWorf
7/21/2026 at 6:06:14 AM
China's doing itby viccis
7/21/2026 at 7:23:52 AM
The guillotine requires being in control of the situation. It can only be used by those with the power to act with impunity.It's not fighting against tyrants, it's a declaration of an intention to be the next tyrants.
by Lerc
7/21/2026 at 7:46:03 AM
[flagged]by thin_carapace
7/21/2026 at 9:14:09 AM
I wrote that comment entirely by myself, on my phone while waiting for a souvlaki. Perhaps the things that you consider AI tells are simply a use of language from someone in country with a different education system.I can't really judge how I might personally benefit from the current direction because I am uncertain what that direction is, and indeed if it will be sustained.
If you are trying to allege that I have some personal affiliation to an organisation where I might benefit more than any average member of the public, then I must disappoint you. I work on my own projects, I sometimes make money from games that I make.
I do not wish for a hypercapitalist dystopia where a company could train a model on work for hire content and then forever churn out content that they assert ownership of. I don't want the suppression of ideas caused by others asserting that because they had an idea, they own it and can dictate who gets to use it.
I also do not wish for another reign of terror.
I don't think violence will make the world better, and I don't think disaffected chique will either. I advocate identifying problems, suggesting solutions to the problems and working with people to reach consensus to apply those solutions. I assume that humans are fundamentally good and in the absence of religion can generally be reasoned with. Even those who do things you disagree with probably are doing what they think is best.
I may be wrong about the goodness of humanity, but it does not matter, If it exists it's worth working with. If it does not exist, it is not worth saving. I choose to assume that it exists on the chance that it might.
by Lerc
7/21/2026 at 9:30:07 PM
>I wrote that comment entirely by myself, on my phone while waiting for a souvlaki. Perhaps the things that you consider AI tells are simply a use of language from someone in country with a different education system.Nah, your writing was perfectly fine and something a native speaker would write also. The poster is just seeing false tells.
by kbelder
7/21/2026 at 10:13:20 AM
believing in the inherent good of humanity does somewhat justify your perspective, may life allow you to continue believing this way and may your pursuits be productive. I would recommend not to marginalize yourself, this action is tantamount to painting targets on your back for bad actors to aim at. corporations and governments are currently acting violently against the populace, a correspondingly heavy handed response is required if the populace does not wish to become soylent green. note that I have not explicitly advocated violent behaviour - rather I suggest that if our intelligence is not used against this tide, it may as well be part of the wave. thanks for your thoughtful responseby thin_carapace
7/21/2026 at 9:16:55 AM
Lol, now every pattern of speech is AI? How about we jusr stop talking then?by weregiraffe
7/21/2026 at 10:04:17 AM
I have noted the employment of a language technique that as per the wikipedia article "signs of AI writing" is commonly used by AI, you can attack facts all you like and that will indeed stop me from talking!by thin_carapace
7/21/2026 at 12:21:17 PM
I think the distinction is that when an AI generates the phrase it chooses to use the negation and then fills in the terms. If it only has one thing to communicate at that point then it is essentially placing a redundant rephrasing on onr side of the negation.My use of it took the form of
A statement on how a guillotine kills people when they are powerless.
The negation then, in the first part compares that to the connotation of the previous post of an underdog battling those in power, and rejects it as inconsistent and the negation provides an alternative framing that is consistent with the action of killing a person who can no longer harm you.
Both sides of the negation make a point.
This is obviously much more common in a dialogue than a monologue, because the first part is used to reference words of the other party. In a monologue, that other party is the past self of the speaker, it suggests a change in position. I think models end up using as a short hand for realisation.
Are there any good collections of negation usage in AI with the surrounding paragraphs? I'd be interested to see what percentage of them are an expression of self realisation.
by Lerc
7/21/2026 at 1:44:27 PM
language models are trained to maximise engagement and maximally convey meaning. binary contrast happens to achieve these goals by optimally translating the manifold. if I come across further research it would be interesting to continue our language related discussion.by thin_carapace
7/21/2026 at 2:30:04 PM
>language models are trained to maximise engagementI have seen no research to that effect.
>and maximally convey meaning
Nobody knows how to measure that
They are trained to complete sequences, then they are trained to engage in conversations, produce what people prefer (with a fairly crude measure of preference, hence the sycophancy). Reasoning models are trained to produce what an observer model think will give you the right answer, the observer model simultaneously learns the likelihood of producing the right answer.
All these things train to improve a property that can be measured at training time. You could build a model to estimate engagement, but I have not seen any evidence that shipping LLMs have used a measure like this.
I can't even imagine how you could tell if a measure of meaning was accurate or not, let alone how you could produce such a measure. You could try to measure information density, but that would also include noise.
by Lerc
7/21/2026 at 10:42:30 AM
It is the overuse of such tells. Please, let's not ban uses of not X, but Y completely. It's a rhetoric technique that is completely fine, with moderation. But real human will use them with moderation.Also, there is the issue of human language taking some 'tells' because they are exposed to LLM output a lot.
I'm still grumpy that LLMs made it nearly impossible to use the words 'delve' or em-dashes without getting called out as an LLM.
by microtonal
7/21/2026 at 9:16:43 AM
[flagged]by senordevnyc
7/21/2026 at 9:58:25 AM
are you looking for a fight? I love fighting but I never said any of that. so I can't really defend the position, it isn't mine.by thin_carapace
7/21/2026 at 10:16:40 AM
[flagged]by senordevnyc
7/21/2026 at 10:54:23 AM
I don't know how to respond to your comment with decorum so I'm going to say goodbye, and pray that you mentor your juniors better than the way you treated me today mr senor devby thin_carapace
7/21/2026 at 12:29:20 PM
I’m not the one here agitating for mass violence.by senordevnyc
7/21/2026 at 7:33:46 AM
How are they going to use my tax money if I stop working and don't pay taxes?by laughing_man
7/21/2026 at 6:41:01 AM
Because AI is "too big to fail".by zkmon
7/21/2026 at 9:54:27 AM
Wild that we all lived exactly the same way before AIReally changed so little in my life. I just use chatgpt instead of Google search now
It's being marketed as some ground breaking revolutionary change when all it is is a better widget
Remove it and the worst that will happen is that I'll go back to writing my emails and my code by hand - something I've done for the last 20 years anyway
by spaceman_2020
7/21/2026 at 11:45:48 AM
> “As someone who belongs to “all of us”, i vote to not bail us out if shit hits the fan.”You have alighted onto an interesting topic: “bail out”. I believe a closely related word on the semiotic chain is “retreat”.
I don’t feel that our culture would wish to “retreat” from AI. I know quite a few managers and programmers who absolutely delight in the fruits of the industry.
No doubt the titans of the AI industry, who stand to lose their shirts, would also like a bailout. As would the workers under their leadership. Finally, if the governments of the world are taking “AI” technologies as seriously as I think they are, then I should expect a bailout in the event of bubble go boom is inevitable.
In which case, Buy Low; Sell High.
by xtiansimon
7/21/2026 at 5:08:52 PM
> You have alighted onto an interesting topic: “bail out”. I believe a closely related word on the semiotic chain is “retreat”.Huh? That's a different meaning of "bail out". In this context its meaning is closer to "rescue" and not retreat.
by gtowey
7/21/2026 at 8:41:54 PM
Literally a "bailout" is a "rescue", yes. Hmmm?Let's call it a "figurative expression" then. You could say it would be a "retreat" to not bailout AI. A turn away. Run. For example if the investment in data centers using borrowed money is not paid back on-time, and the investments fail, and there is no bailout, resulting in a cascade of business failures, then the I would say we "retreated" from AI. Retreat from the Technology. Retreat from the Economics of AI services. Hoo-Haa!
For example, if crypto failed there might be a "retreat" as far as crypto is not a bedrock of the banking industry. But I'm probably wrong in my characterization of crypto. Whatever. Not like Crypto can be compared to Tulip Mania. Now there's a retreat.
by xtiansimon
7/21/2026 at 9:45:39 AM
Money isn't lost per se, it's transferred.ie for every loser there is a winner.
Obvious ones are those who can extract value from this companies now ( high salaries/bonus etc ), swapping worthless paper for real assets, Nvidia and their share holders etc. Investors who hold short positions etc.
by DrScientist
7/21/2026 at 10:10:10 AM
You are trying to define zero sum without saying it. The market is not zero sum, a loan isn't zero sum.There isn't a winner and loser.
by mlrtime
7/21/2026 at 10:16:50 AM
Why not? What am I missing.If you loan me 10 pounds and I simply keep it or spend it but refuse to pay you back - aren't I the winner and you the loser?
Claiming that the market is a positive sum system, because I use that 10 pounds to invent something that changes world productivity is missing the fact that there is a constant stream of huge energy inputs from the sun - that's ultimately what allows the local entropy to decrease - not that you lent me 10 pounds.
by DrScientist
7/21/2026 at 12:14:14 PM
I borrow you 10 money i use to buy my chair-making tools. I make the chair, sell it 20 money, then pay you 12 money back for the service rendered. Basically money is supposed to be a tool that help us creating capital by exchanging goods.by orwin
7/21/2026 at 12:31:49 PM
But aren't you confusing the means of exchange with the creation of value.The creation of value is me taking energy from the sun and converting that into a chair.
You lending me money is you extracting value from artificially being a middleman.
It would have been more efficient to write an IOU to the tool maker, make the chair and pay back the tool maker directly.
Now sure that IOU isn't that fungible - however that highlights one of the absurdities ( if I understand it correctly ) of the current banking system where private banks are able to in effect issue IOU's on their own basis but put mine and your name on it as a guarantor - resulting in the public having to bail out banks when they over extend.
by DrScientist
7/21/2026 at 8:27:09 PM
> The creation of value is me taking energy from the sun and converting that into a chair.Which requires money to do. If you borrow that money to enable using solar to make furniture, then you can repay that money with interest and keep a profit for yourself. Both the borrower and lender come out with more money than they had when they started.
That's not a zero-sum game.
Now, it's 100% true that borrowing and lending can (and often is) done in a way to make it a zero-sum game, but that's just because the world (including the big-time corporate world, and especially including major IT companies) is full of scammers.
by JohnFen
7/21/2026 at 9:17:09 PM
Originally, money is a IOU and basically a tool to trade between communities. The individualization of capital (capitalism basically) made place for private loan and artificial middlemen like i wrote in the previous comment. And yes, you can work without it, but this is the way things works in the west since the 18th century, 17th century in GB.------------
To be clear about how banks work: they don't loan money, they create it via accounting. You go to a bank and ask for 20 money at 10% interest, they will write in their asset column "20 money" and in their liability "20 money", give you the newly created 20 money and create a "coupon" of 2 money (sorry that's the french word, i don't know how englo people call that). If needed (like a liquidity crunch), they can sell the coupon worth 2 money at 1 money, or even your loan worth 20 money 18 to another bank, but they will keep the liability in their own books. If the liability become higher than the assets, bankruptcy. Notice that the money you put in the bank isn't touched.
The money you put in bank, they invest in low risk assets like government bonds, through their investment funds. Since those are locked assets, if too many people want their money back at the same time, the bank enter a liquidity crunch, have to sell the locked assets at a discount, and put the losses on their own funds, in the "liability" column.
Wether it's caused by a credit crunch or because loans aren't being repaid, if a bank "liability" column has a higher value than its "assets" column, they enter bankruptcy. The state auctions customer-linked investment off (i think that's more complex and depends on the local laws, in my country you have a transfer provision where the customer and the bonds linked to some of his bank accounts are transfered to a new bank) where those are slowly sold at a higher value than the failing bank would have gotten, slowly reimbursing the customers. It is _very_ rare that bank customers loose any money in the long run (they do suffer opportunity cost though, their assets are locked and don't earn any interests, so in a way, they loose a little). in the 2007-2008 crisis, the issue is that banks split loans weirdly and did a lot of accounting shenaningans tying each international bank to each others.
by orwin
7/21/2026 at 10:04:13 AM
True but the opportunity cost is truly lost. Entropy comes for everyone. If we spend a lot of money digging holes in the ground then filling them again, maybe no money was lost.by actionfromafar
7/21/2026 at 10:20:02 AM
Sure - but that's a meta question of whether the current economic/political systems are delivering good allocation of resources for whatever target function you favour.And that's complex - even in your simple example you can argue that people have likely improved their capability to dig and fill holes - and the latter skill is particularly valuable in the UK right now.
ie Entropy includes information component :-)
by DrScientist
7/21/2026 at 7:50:43 AM
Is there a party that supports no bail?by dev_l1x_be
7/21/2026 at 7:42:58 AM
Unfortunately, the votes for a regime of permanent bailouts were already in when Ben Barnacke made his famous speech proposing helicopters over cities if deflation reached a crisis level (though the Internet says Milton Friedman thought of this first). Some later observed "the helicopters only seem to go to Wall Street", which isn't surprising.by joe_the_user
7/21/2026 at 7:29:49 AM
Always remember kids. Socialism is bad, it's only good if we bail out banks with billions. While you lose your house, and your job, they get bonuses.by superze
7/21/2026 at 8:47:09 AM
These are relatively contained private credit markets though. We’re not looking at anything 2009 level. For scale, total US mortgage debt peaked at $9.3T ahead of the subprime mortgage crisis, 73% of GDP at the time. We’re talking here about ~5% of GDP.by lemax
7/21/2026 at 9:37:50 PM
We were around ~$11 trillion in debt in 2009. Now we are ~$40 trillion in debt. The FED balance sheet was less than $1 trillion before the crisis in 2008, now it is around ~$7 trillion. Our debt to GDP ratio was ~64% in 2008 and is now at ~120%. Put simply, our ability to absorb any sort of financial shock by taking on massive amounts of (more) debt (which is what we did in 2008) is not remotely similar to what it was during the last crisis. This would be true even if we weren't in the midst of a highly inflationary environment due largely, but not solely, to the ongoing energy crisis being worsened by the wars in Iran and Ukraine.by StanislavPetrov
7/21/2026 at 8:24:44 PM
This is the most relevant comment in this thread.by porridgeraisin
7/21/2026 at 6:05:08 AM
>Well technically they don’t own the debtChannelling the 1980s for off-balance sheet financing 101.
From an economic perspective there is zero difference between borrowing to buy an asset and entering into a non-cancellable long term (equivalent to its economic life) lease for the asset.
The first option causes an asset and a liability on the balance sheet, affecting debt ratios that appear in financing contracts and so on. The second does not appear on the balance sheet.
You pay every month, like it or not. You call it interest or you call it a lease payment. You need it off balance sheet for reasons, investment bankers will structure that to make it happen for a fee.
Technically, from an economic perspective, it's debt.
by harry8
7/21/2026 at 6:18:24 AM
> Technically, from an economic perspective, it's debt.Isn’t the important difference that it doesn’t trigger bankruptcy on default? Economically it might not be that different but it has some significance legally because the courts have some fast tracks that trigger bankruptcies (IANAL but that’s my layman’s understanding).
If they “default” in this case it will lead to lawsuits that they will almost certainly lose but in the mean time they kick the can down the road hoping to recover on general economic headwinds like lower interest rates. IMO the risks are obviously correlated here but I’m betting short term incentives drove this mess.
by throwup238
7/21/2026 at 6:47:07 AM
if you can't meet your obligations as and when they fall due, you're insolvent. Contractual specification from there.by harry8
7/21/2026 at 5:54:46 PM
Paying someone a week late (or not at all) on net 30 terms does not trigger insolvency proceedings. The type of obligation matters.by throwup238
7/21/2026 at 9:17:21 AM
tbh this is only novel for the tech companies because they have never really had these types of product lines or unit cost structures before. a sass and brick and motor retailer scale very differently.by blitzar
7/21/2026 at 6:22:31 AM
This is not true at all, leases appear on balance sheets. It's not the 80s anymoreSee Apple's FY2025 10-K, the leases are in page 42 under "Lease-Related Assets and Liabilities", which shows:
Operating leases
- Other current liabilities: $1,579 million
- Other non-current liabilities: $10,911 million
Finance leases
- Other current liabilities: $538 million
- Other non-current liabilities: $692 million
Total lease liabilities: $13,720 million
https://s2.q4cdn.com/470004039/files/doc_financials/2025/ar/...
by vasco
7/21/2026 at 6:49:32 AM
There's regulation update and work around. The point of channeling the 1980s is because it was simple for the 101 explanation. Investment bakers will structure it for you if you need it, inline with the current regulatory environment. At one time cross border leases were fashionable for tax purposes. I don't keep up with such things to know if they still are.by harry8
7/21/2026 at 9:31:53 AM
How will they structure that for you to not show up on the balance sheet then? I'm not aware of a way, and the way you described wasn't true. All you now offered is "bankers can do it", but how without having to report it?by vasco
7/21/2026 at 6:35:41 PM
According to the article they don't have to declare leases or GPUs until the datacenter becomes operationalby lefty2
7/21/2026 at 5:09:12 AM
If I owe the bank $750,000 and can't pay, it's my problem.If I owe the bank $1,750,000,000 and can't pay, it's the bank's problem.
by walrus01
7/21/2026 at 5:47:46 AM
If you are a collection of 5 companies with annual net income in the hundreds of billions of dollars, the debt is actually still their problem.Everyone likes to repeat this tired cliche but skips all of the steps that would have to happen to get to that point.
by Aurornis
7/21/2026 at 7:56:34 AM
If you have to pay $200k you can afford to spend $2k fighting it and hold it up a few days.if Google had to pay a $2b bill they can spend $20m fighting it.
If they have to pay a $2t bill they can spend $20b fighting it
You can buy a lot more justice with $20b than with $2000
by hdgvhicv
7/21/2026 at 5:13:46 AM
If the bank is owed $1,650,000,000,000 and isn't paid, then it becomes the tax payers problem apparentlyby killingtime74
7/21/2026 at 5:14:22 AM
2008 all over again, but instead of Washington Mutual and Countrywide, we have whatever the heck is going on now.by walrus01
7/21/2026 at 5:21:12 AM
I don’t know if the public would be as accepting of a bailout for AI companies… trillion dollar businesses that pushed technology with the goal of eliminating 50% of white collar workers… that isn’t really mission critical.If they want the reward, they need to accept the risk when the bet doesn’t go their way. If they aren’t willing to accept that, they shouldn’t be making such big bets.
by al_borland
7/21/2026 at 7:05:33 AM
> I don’t know if the public would be as accepting of a bailout for AI companiesIt won't be framed as bailing out the AI companies. It will be sold to the public as bailing out their pensions and investments.
It's all about the marketing...
by ItsBob
7/21/2026 at 6:20:26 AM
The public has been apathetic about every single thing and will just continue scrolling their TikToksPublic anger is a very pre-smartphone thing. You don’t worry about those sort of things when you’ve hyperoptimized the circus and made the bread cheap enough
by spaceman_2020
7/21/2026 at 7:21:06 AM
> Public anger is a very pre-smartphone thing.Public anger has gotten to the point that right-wing groups are pushing US legislation to outlaw it as “terrorism” [1], with the president of the right-wing American Heritage think tank pointing to examples such as “college students who took over campus quads” [2] and town halls with congress members getting shut down [3] - they say new laws are needed because public anger over “political purposes” is disturbing “civil tranquility” in the U.S. so those who are aiming to impact “civil tranquility” need to be “held accountable” under the law.
The legislation being pushed starts with:
> Section 1. Short Title. This Act shall be known and may be cited as the “Combatting Civil Terrorism Act.”
> Section 2. Purpose. To promote civil tranquility by holding those who seek to disrupt it for political purposes accountable.
And aside from that, social media (Reddit) seems awash in “public anger” etc.
[1] https://sapirjournal.org/fixing-america/2026/islam-in-americ...
[2] https://manhattan.institute/article/model-legislation-an-act...
[3] https://www.city-journal.org/article/adam-smith-israel-civil...
by no-name-here
7/21/2026 at 7:34:49 AM
I gotta know, which of those specific points in your second citation do you have a problem with? The only one I can see having a problem with is "d. Subversion...".I expect that most voters welcome efforts that aim to stop other groups using violence and intimidation to suppress their speech or legal religious activities.
The only problem with these proposed laws is the same problem with all existing laws - selective enforcement.
by lelanthran
7/21/2026 at 7:48:29 AM
I was responding to the grandparent commenter’s claims that ‘public anger’ no longer exists - so whether you want to point to one of those examples, right-wing pushes to pass new laws labeling those impacting “civil tranquility” as domestic “civil terrorists”, or public anger seen across social media (Reddit, etc), my point is that the argument that public anger no longer exists seems unsupported.by no-name-here
7/21/2026 at 8:07:46 AM
I understand now, apologies.I agree with you, that public anger still exists[1], but I will not consider that link I mentioned in my response as an example of the suppression of public anger.
A new law that specifically calls out people as criminals when they attempt to limit a person from entering their place of worship, etc is not a law suppressing the expression of public anger.
======================
[1] One can even make the argument that Trump got elected on the back of public anger. The values he espoused are unpalatable, but there is little question that the whole suppression of opinions in the last decade have had much to do with his popularity.
by lelanthran
7/21/2026 at 10:27:35 AM
I dont think anything you wrote in that paragraph has anything to do with actual public anger as it exists. It is just Heritage think tank advancing their authoritarian dictatorship agenda yet again, this time more openly. As far as they are concerned, anyone left to them speaking is a grave danger to the republic, attack on their right to be supported all the time and must be punished. They dont ask for similar laws in relation to far right, despite the fact it is more violent.There is a lot of public anger tho. Facebook and Twitter are working overtime to stroke it. Heritage loves it as long as it ends up being in MAGA colors.
by watwut
7/21/2026 at 7:26:22 AM
> made the bread cheap enoughThe circus is distracting from the price of bread, apparently.
by thwarted
7/21/2026 at 5:35:34 AM
> I don’t know if the public would be as accepting of a bailout for AI companiesThat's putting it mildly, IMO.
An AI bailout would be a poison pill that would electorally doom whichever party was behind it for decades.
by bayarearefugee
7/21/2026 at 6:40:46 AM
After seeing _what_ level of buffoonery, incompetence, and pure idiocy the gerrymandered American electoral system is capable of producing, nope, no, AI bailout won’t matter at all.by jgilias
7/21/2026 at 8:21:19 AM
> After seeing _what_ level of buffoonery, incompetence, and pure idiocy the gerrymandered American electoral system is capable of producingI honestly can't tell if you're talking about the Right pandering (in words only) to the voters or the Left scoring own-goals in the last election?
by lelanthran
7/21/2026 at 8:36:38 AM
Both are part of “the American electoral system”by jgilias
7/21/2026 at 5:40:44 AM
> An AI bailout would be a poison pill that would electorally doom whichever party was behind it for decades.One could only hope. In any case, in the short term, with AI having such a poor public-image story, if the Dems want to get back into power again they'd do everything they can to assure their voters that a bailout is not on the cards.
This is the first single-issue voter concern that has really popular support, and they'd be dumb for chasing identity politics again.
by lelanthran
7/21/2026 at 7:52:22 AM
You are assuming the democrats run on the elections for the purpose of winning them.But the latest election made me doubt that is actually their goal.
by LtWorf
7/21/2026 at 7:33:16 AM
> An AI bailout would be a poison pill that would electorally doom whichever party was behind it for decades.Two concerns:
1. In a duopoly it won't doom either one party, not if the bailout-seekers involved are able to bribe them both equally.
2. A politician in not-so-bad party could let the other party doom itself in a long-term diffuse sense... Or they could accept some generous short-term very concentrated-on-me donations. The interest of the group is not always the interest of the members.
The US desperately needs voting-reform, to reduce the spoiler-effect and winner-take-all mechanics.
by Terr_
7/21/2026 at 5:46:02 AM
What if they are already doomed and just looting?by rapind
7/21/2026 at 6:04:13 AM
"They" bailed out big banks whose gambling resulted in millions of people losing their homes, and the electoral effect was basically zero. Just invoke 'the other side' come election season and all is forgotten. Third parties fail to the same trick - by 'wasting' your vote on them, you're indirectly voting for 'the other side.'It's one of the many reasons that partisanship is foolish - it essentially leaves governments unaccountable. Another is the reason I put "they" in quotes. There will be lots of partisan finger pointing when the bubble pops, but it was both the DNC and GOP that bailed out the banks, and it'll be both of them bailing out big money again.
by somenameforme
7/21/2026 at 6:12:15 AM
> "They" bailed out big banks whose gambling resulted in millions of people losing their homes,That gambling actually led to people getting those homes. The people losing them was the correction.
> the electoral effect was basically zero.
because...
> it was both the DNC and GOP that bailed out the banks
by parineum
7/21/2026 at 12:34:18 PM
> That gambling actually led to people getting those homes. The people losing them was the correction.Well, yes but there is a distinction between "led to" vs "losing them". The first is indirect, the second is not.
You could expand that as "That gambling by banks offering these risky mortgages to unsuspecting people, actually led to people getting those homes. When the banks who did this did not bear the costs of their actions, and passed them on to their customers, the people losing their homes was the correction."
by SideburnsOfDoom
7/21/2026 at 2:31:14 PM
Yes, the issue with too big to fail is that it can equivalently be rephrased as too big to learn. And this just came out: https://www.bloomberg.com/news/features/2026-07-19/how-wall-...Sound familiar?
by somenameforme
7/21/2026 at 7:12:24 AM
I don't hold my breath for long term memory of average joe. Seems like US population was primed for short dopamine kicks for past 20 years with reality shows and similar clown stuff.Look at who got elected, all those scandals, consistent lies, empty talk and fraud yet support is still strong.
by kakacik
7/21/2026 at 7:57:10 AM
Socialise the losses, privatise the profits.by hdgvhicv
7/21/2026 at 6:06:07 AM
The public is not "accepting" if a large number of things that US governments do nevertheless. I don't think that gets even factored in nowadays.by dartharva
7/21/2026 at 6:27:38 AM
Until the public is willing and able to bring immediate consequences at scale to C-suites, boards, and billionaires, what the public accepts doesn't really matter.by GolfPopper
7/21/2026 at 5:46:28 AM
Society is already being rewarded from the investments AI companies have made. These investments have created something so valuable that society is paying billions of dollars for the product they are making. Even without access to the raw weights, the option of being able to pay for access to these models has tremendous value to society that can not be ignored.by charcircuit
7/21/2026 at 8:16:51 AM
How about cheap healthcare? Or affordable housing, water, electricity and food? Is AI improving human quality of life?by sciencejerk
7/21/2026 at 9:46:49 AM
Objectivly. Yes. Not only am seeing it being used to increase farming yields it's also improving healthcare. Both water and electricity are the lowest they have ever been as a percentage of income and only getting lower. People keep looking at flat dollar figures like inflation isn't a thing and it's still 1995 or something. In reality we're accelerating to an abundance economy.https://finance.yahoo.com/economy/articles/most-us-richer-ev...
The pessimistic attitude here is exhausting. In reality it's by far the best time ever to be a human on this planet.
by hparadiz
7/21/2026 at 10:54:36 AM
I must be living in a different universe. Where I am, people under 40 cannot afford to buy a house. This was certainly very different in the 80ies of 90ies.by microtonal
7/21/2026 at 11:26:37 AM
I got mine at 34 and I'm not 40 just yet.by hparadiz
7/21/2026 at 6:05:04 AM
There has always been a magic money tree, but it's not for everyone.by stymaar
7/21/2026 at 7:34:59 AM
I don't know. The guy I bought my house from owed the bank $400k. He didn't make any payments for two years, and then they paid him $20k to go away.by laughing_man
7/21/2026 at 5:38:30 AM
As Australian failed rich guy /scumbag Alan Bond said... if you owe 30k you have problems, if you owe them 30 million they take you to lunch. Or words to that effectby mattoxic
7/21/2026 at 7:29:29 AM
> This usually means all of us are on the hook.And since we are talking about USD (specifically "of" USA), it also means globally a hell lot more of "all of us" are on the hook than we would have been involved (even remotely) had (or would) this endeavour ever ended up in some sort of general success.
I don't know whether it'd be "tails I win, heads you lose" or "I reap the profits alone, you reap the losses alone". Maybe the latter and it becomes magnitudes more interesting when it expands (or rather engulfs) beyond the boundaries of the great nation.
by shelled
7/21/2026 at 12:57:57 PM
We're not on the hook. The systemically important banks are very well capitalized now and have limited exposure to these debts. Even if there are substantial defaults the big banks will be fine.by nradov
7/21/2026 at 8:30:20 AM
But how could it be that the banks have lent the money without a leverage or proper risk assessment? Also what I don't understand is that how come the banks cannot claw back the money they lent if they found out corruption or any other ill intention by the borrowers.by sajithdilshan
7/21/2026 at 7:29:37 AM
The banks aren’t lending the money to these SPVs. It’s mostly private credit.The way banks get involved is that they may be lending senior financing to the private credit funds but that means they have a ton of subordination.
by m101
7/21/2026 at 9:54:57 AM
> It’s mostly private creditI believe that some of the private credit is the banks' own private credit arm! It's absolutely mental: the bank can't lend to them so they have a private credit company/division that can skirt around the rules and still provide the capital!
Also, I bet that the Oracle datacenters aren't for Oracle LLC but Oracle Datacenter No 4 LLC so that if it all goes tits up, Oracle LLC walks away!
by ItsBob
7/21/2026 at 4:48:42 AM
"U.S. energy company Enron, though fundamentally different from tech giants, collapsed in 2001 due to off-balance-sheet debt hidden behind multiple shell companies. Even with proper accounting practices, an increase in joint ventures with low transparency could raise concerns in the market."Remember the vendor financing model which got a lot of technology companies into trouble at the same time? It took some years, almost all those companies disappeared. Motorola, Nortel, Lucent ...
by SanjayMehta
7/21/2026 at 7:21:20 AM
> it’s not the tech giants but the banks that lent the money to the SPVs that are at riskBanks have not been loaning AI money for some time. They hit all their regulatory safeguard limits so they can't keep loaning. Half the money being invested in AI is private capital. There is still systemic risk, because private capital is a shadow banking system and you don't know who will be affected when they go kaput. Your utility company may [read: will] go bankrupt, but the money in your personal bank account is safe. Your retirement account, however...
by 0xbadcafebee
7/21/2026 at 4:32:58 PM
Private capital isn’t some dark box, at least half of it is pension funds, endowment funds, insurance companies and non profits. Then there are private credit arms of banks, sovereign wealth funds and family offices of wealthy individuals.by darth_avocado
7/21/2026 at 11:25:19 AM
That is not accurate according to the article:> By investing in the data center's operating company with a 20% stake and using the facility under a lease agreement, Meta secured computing resources but also increased its hidden debt.
> Meta has a contract guaranteeing investors' losses if the data center becomes unnecessary and the lease is terminated.
The way they are hiding these debts is by having a stake in a data center company. But if shit goes tits up they are contractually liable for 100% of the losses.
It's not the fund that lent the money to the SPV, it is Meta who is offering guarantees here.
by surgical_fire
7/21/2026 at 7:25:13 AM
s/banks/private credit/by fancyfredbot
7/21/2026 at 5:19:26 AM
how are these long term commitments structured? Can the big companies default on them? pay a small penalty? I think that probably makes a large difference.by VirusNewbie
7/21/2026 at 7:19:11 AM
Capitalists love to socialize lossesby blks
7/21/2026 at 9:18:38 AM
Heads I win, tails you lose.by blitzar
7/21/2026 at 7:59:58 AM
*costsPrivatize revenues, socialize costs of business
You're not "competitive" if you have to pay for workers, ink or investments. Workers only get a wage because of communist populists who don't understand business, and (insert place - even the Philippines these days) has the most highest taxes and wages around the world.
by hinata08
7/21/2026 at 5:20:40 AM
>SPVs that own the data centersI mean if AI falls short we might see a collapse in the price of colo but those investments would probably just be paid back over 10x the period.
by protocolture