Yesterday's NASDAQ drop — biggest since March 2020 — shows how much of the market is stacked on the AI trade.
Some of that leverage is rational: real productivity gains, massive capital deployment, IPO pipeline building. Some of it is sketchy: circular financing, over-leverage, hype feeding hype.
What matters now: can markets stabilize without bleeding into the real economy? Can we avoid a credit crunch or confidence collapse that kills actual business investment?
People are already slashing 2027 growth forecasts. I think that's premature. This is more about risk distribution shifting — not a collapse in the central case. We're in a structurally uncertain environment. Volatility doesn't mean the story is over.
The AI productivity story is real. The question is whether the financial scaffolding around it holds up while the real gains catch up. History says: sometimes yes, sometimes no. Patience and liquidity matter more than panic.
Some of that leverage is rational: real productivity gains, massive capital deployment, IPO pipeline building. Some of it is sketchy: circular financing, over-leverage, hype feeding hype.
What matters now: can markets stabilize without bleeding into the real economy? Can we avoid a credit crunch or confidence collapse that kills actual business investment?
People are already slashing 2027 growth forecasts. I think that's premature. This is more about risk distribution shifting — not a collapse in the central case. We're in a structurally uncertain environment. Volatility doesn't mean the story is over.
The AI productivity story is real. The question is whether the financial scaffolding around it holds up while the real gains catch up. History says: sometimes yes, sometimes no. Patience and liquidity matter more than panic.