These prophets of economic doom are worried about another collapse

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illuminem summarises for you the essential news of the day. Read the full piece on The Washington Post or enjoy below:

🗞️ Driving the news: A group of economists and investors who correctly warned about past crashes now say today’s AI-driven investment boom shows familiar signs of a bubble that could end in another major market collapse

🔭 The context: Veteran forecasters like Dean Baker and Michael Burry point to soaring AI stocks, aggressive data-center expansion and complex financing structures as echoes of the dot-com boom and the housing bubble before 2008
• While major banks argue fundamentals remain strong, skeptics say optimism itself can be a warning signal

🌍 Why it matters for the planet: The AI boom is driving massive investment into energy-hungry data centers, increasing electricity demand, water use and emissions
• A sudden crash could strand carbon-intensive infrastructure — but it could also slow unsustainable growth and redirect capital toward cleaner, lower-impact sectors

⏭️ What’s next: Markets may continue rising in the short term, but economists warn that if credit, infrastructure spending and valuations keep accelerating together, spillover effects could hit the wider economy — and climate-relevant energy systems — hard

💬 One quote: “When — not if — things collapse, the spillover effects will be much more substantial,” says Andrew Odlyzko, a longtime bubble analyst

📈 One stat: Research cited in the article shows that when credit and asset prices surge together in one sector, there’s roughly a 40% chance of a financial crisis within three years

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