The AI Bailout Could Be Baked into the AI Bubble
prospect.orgI'd be more concerned about private credit socializing losses and being bailed out, than bad AI loans leading to private credit problems which then lead to the bailout.
Private credit has a million other problems right now, like bad loans to auto parts dealers[1], iron traders[2], and so many more.
The issue is lack of due process in private credit. THAT is the huge @#$%ing problem.
[1] https://www.bloomberg.com/news/articles/2026-07-28/first-bra...
[2] https://www.bloomberg.com/news/articles/2026-07-31/vitol-car...
> I'd be more concerned about private credit socializing losses and being bailed out, than bad AI loans leading to private credit problems which then lead to the bailout.
A distinction without a difference. Insurance is the back door for socializing losses and bailing out private credit. That was the case with AIG, the media paved the way with headlines like "without AIG, the world will have no insurance", and the crooks got paid.
They learned the lesson well, just BS about some vaguely specified "other problems" that take forever to sort out, so we can be bled dry in the meantime - through the back door. Ergo, closing the back door is the first order of business.
Thanks to deregulation. If we have another 2008-like crisis, will the people demand that their reps make serious reforms?
Why would anyone imagine that the folks that brought you Epstein island would do anything remotely useful?