[pcurve]

This article doesn't mention it, but PIMCO is lead lender

"Pacific Investment Management Co. (PIMCO) is the anchor lender on the deal. The debt, which matures in 2049, is fully amortising and has been rated A+ by S&P. The bonds were priced at around 225 basis points over U.S. Treasuries."

https://pe-insights.com/blue-owl-and-meta-close-record-30bn-...

Oof.. I don't know about this one.

[rsynnott]

Oh, we're doing this again, are we?

Ugh. A year ago, I was (a) fairly confident that the AI bubble would burst, but (b) fairly confident that contagion would be limited; a bunch of startups would evaporate, and some VCs would be badly burned or fail, but the broader economy would largely shrug and carry on.

Based on this sort of thing, I'm not sure I still believe (b).

[pcurve]

What I find fascinating is, everyone is making the same exact points:

1. Yes, there is a bubble, but it's not the same. Companies are profitable.

2. It may burst, but this may go on for another 2+ years. No one knows.

3. Even after the burst, we would have valuable AI infrastructure, just like all the excess internet capacities after the Dotcom.

Base on this, I think the bubble will burst sooner. Sentiment can shift real quick.

[lazide]

Pimco - the company that originated all those bonds every pension fund is sitting on.

[consumer451]

I am 99.0% percent sure that the AI bubble burst is coming. I was only 95% sure until very recently.

Does this mean that this investment spreads the bubble burst risk into people's pension funds? (those lucky enough to have such a thing) Or, not necessarily?

[Ekaros]

I would think so. I don't think pension funds are always exactly smart money. They have lot of pressure to make numbers work so they are after anything that sounds reasonably like it will make them work. And that can work until it does not.

[lazide]

Pension funds, banks, etc, are never smart money. They aren’t allowed to be.

They are required to pick based on some defined formula which the various stakeholders signed off on, and hence are prime juicy targets for people trying to game systems.

They also took the ‘08 mortgage crisis right in the shorts, for the same reasons.

[nradov]

This is why all defined benefit pension funds should be eliminated and replaced with defined contribution plans. Pensions are far too systemically risky for employees, employers, and taxpayers alike. The only one who really benefits are the fund managers who get to collect large fees.

[consumer451]

Reading the replies, my next question is: How much of say, CALPERS [0], is invested in "AGI by next 2030" or similar. If it's far less than 1%, that seems like a fair bet. Does anyone have a good read on the real number?

[0] https://www.calpers.ca.gov/

[lazide]

And banks?

[andrewinardeer]

Knowing that an AI bubble bust is coming is not magic.

Knowing when it will burst is.