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Ripple Effect

AI’s Infinite Money Glitch

Loading ...Addison Wiggin

September 24, 2025 • 1 minute, 7 second read


AIAI bubble

AI’s Infinite Money Glitch

Late into the dotcom era, companies realized they could create profits without having to actually have cash change hands.

Rather, they could announce a massive deal that would take years to play out. And rather than spread out the costs, it could be booked as revenues in the quarter of the announcement.

Not profits, but revenue all the same. That accounting trend was a hallmark of the boom… and the bust… of tech shares 1998-2000.

Today, we’re seeing the beginnings of that trend in AI – this time at scale.

On Monday, Nvidia shares popped nearly 4% on news that they would invest up to $100 billion in OpenAI.

That’s just part of the bizarre trend where large-cap AI names are now announcing deals with each other – and seeing an immediate boost to their company’s valuation – well before any money changes hands.

Turn Your Images On

Today’s major AI players are essentially a closed-loop economy (Source: Kakashii via X)

We know Nvidia’s need to sell chips is crucial for keeping its earnings engine going. The “investment” in OpenAI will allow OpenAI to buy Nvidia chips. And Oracle software and services – which in turn increases demand from Nvidia’s chips.

Round and round it goes.

You’re free to draw your conclusions. Just keep mind, in 2000 the jig ended badly for a whole class of  “dotcom” stocks.

~ Addison


The Hollow Class, Part II

November 12, 2025 • Addison Wiggin

As interest rates fell, investors swarmed into real estate, lured by yields and the illusion that home prices never fell. Wall Street’s private-label securitizers were soon packaging everything from pristine mortgages to what were effectively loans scribbled on napkins, thus turning them into bonds that glowed like gold — until you looked too closely.

For their part, the regulators and ratings agencies conveniently looked away and allowed the bubble to grow. Fannie Mae watched the frenzy from the sidelines at first.

The company’s mandate — written in law — was not to chase profits but to promote affordable housing. That is to say, to make sure that teachers, nurses, and other first-time buyers could own their own homes and unlock the American Dream.

But as Wall Street flooded the market with high-risk mortgage products, political pressure mounted. Congress demanded that Fannie “do its part” for low and moderate-income families.

The Hollow Class, Part II
The Debt of Intelligence

November 12, 2025 • Addison Wiggin

SoftBank offloaded its entire $5.83 billion Nvidia stake to bankroll an even bigger gamble: tens of billions in OpenAI.

Son insists this is his next Vision Fund moment.

OpenAI’s swelling valuation doubled SoftBank’s profit last quarter. He may have sold the pickaxe factory, but he’s betting the mine still goes deeper.

The Debt of Intelligence
Consumers Got the Memo

November 12, 2025 • Addison Wiggin

Although consumer debt is at an all-time high, consumers themselves got the message during the last crisis: Pay down debt, own more assets.

That’s taken the U.S. household debt-to-asset ratio to levels last seen in the 1970s, around the time the U.S. went off the gold standard.

Consumers Got the Memo
Dan Denning: The Hollow Class, Part I

November 11, 2025 • Addison Wiggin

A 50-year mortgage doesn’t make housing cheaper. But by stretching the repayment period over time, it DOES lower the monthly payment on your principal. That lowers the percentage of your total income you’re spending on repayment. And in a strange way, it makes sense.

With a fixed rate mortgage and inflation running in the high upper digits, the real value you of your total debt goes down over time (inflation pays off your loan, as long as your income rises faster in nominal terms). Of course you pay off a lot more interest over 50 years than 30 years. And it takes a lot longer to build up equity (assuming also that house prices don’t fall).

Dan Denning: The Hollow Class, Part I