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Comment by credit_guy | Hacker News Reader

I think you are describing quite accurately what happened in 2008, but I don't think the parallel is as strong as you claim it is.

  > Downstream party D has no visibility that the specific uncertainty emanating from party A upstream is 100% correlated with their own risks

I'm not aware of anything like that happening right now. Do you have any examples?

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I have an example. Greater than 90% of knowledge workers in tech now are required and expected to use AI. If they aren't, their job prospects are at high risk.

That's an exposure in the Party A-Party D frame is it not?

I don't think so. If AI gets really expensive and/or proves to be useless, those requirements will go away. And it's not the knowledge workers paying for those tokens either.

It doesn’t seem like it to me. Explain?

The parent was talking specifically about debt instruments, not about knowledge in general. He didn't mention it by name, but he was describing CDO-squared. There's nothing like that happening now, at least not yet.

yeah it's approaching the point where all risk is that AI is a bubble, and everyone is exposed to it. It's not exactly hidden, and it's not easy to escape either.

"Hidden"

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