Hacker News

My favorite was the following:

- I still have a mortgage on a property but don't live there so the mortgage bill gets sent to a different address (b/c rental property)

- Company A originated the mortgage and sells it to Company B

- Company B completely ignores the mailing address and starts sending bills to the original property address

- only through blind luck did I realize that the mortgage bill was being unpaid

This seems like basic, basic bookkeeping but I guess it's also a reminder that "reality has more detail than people realize" and that there are plenty of opportunities for improving systems.

Is there a way that you can track this yourself? I've had three different mortgages [1] in my lifetime and as far as I know it was all completely opaque who/what was ultimately holding the underlying debt.

[1]: First was a decade ago with RMG (a Canadian monoline lender) and the other two with Scotia, the first of which was a fixed mortgage at purchase, and the second was a refinancing.

After being chopped up and bundled with safe loans being mixed with non safe loans so nobody has any idea what’s being bought.

Where have I heard this before.

> My mortgage has been sold almost a half dozen times already.

Sure that could be true, but that has nothing to do with the public debt we're talking about.

Completely different markets.

That's like me saying the condo Market in Miami is hot and you rebutting that single family homes in HOA's in Phoenix are not hot right now.

Both can be true at the same time as they are completely different market that are only very tangentially relate.

Well I'd agree the size of these deals are far larger than any debt deals I can remember in the past 10 years.

But that has nothing to do with the scare tactic headline that says banks are trying tot offload debt. As I said this is exactly how banks work and how they treat all debt they underwrite.

Isn't that just because corporate bond issuance is at a all time high?

https://www.economist.com/content-assets/images/20260711_EPC...

Which of course is a valid point to raise, but you should just say "corporate bond issuance is at a all time high", rather than some clickbait headline about how "Banks are now trying to offload the AI data center debt" and it's "out of scale to anything we've thought about, ever."

The trigger in Margin Call was not that they could not assess the risk, it was that they were improperly assessing the risk, had taken too much risk onboard, and the downside of the risk was more than the value of the firm.

Yes this is basically the Margin Call situation.

Everyone knows these loans are dogshit but if anyone moves first to say so then everyone else’s loans basically are screwed too. So everyone is incentivized to pretend like there’s no problem even though everyone knows there’s a problem.

Listening to Ed Zitron on various podcasts, there are several issues with Oracle stocks:

1. they are one place above junk;

2. they are being treated as effectively junk;

3. if they get classified as junk, any pension portfolios holding Oracle stock must sell as they can't hold junk stocks.

If that happens then there will be a cascade of effects. Not just in the AI/datacentre sector but elsewhere, as Larry Ellison holds a stake in Paramount/helped finance the Paramount/WB merger.

[1] https://www.youtube.com/watch?v=rHaPfdnRoZ4 -- Mostly Economics Podcast #55: Who pays when the AI bubble bursts with Ed Zitron (12:36 - 23:53)

But if Oracle crashes and burns, is that going to tank the whole industry, or is it more likely that the bigger players just eat it up and take its customer?

Massively not an expert, but at that level, things are not a binary "good/bad investment". Financial institutions have policies regarding finely sliced debt types, ratios, risks, lengths, sectors, etc.

I personally think it's all hugely overcomplicating things but that's the way modern world works.

(until it every now and then, on regular intervals, doesn't:)

The short answer is to free up money to make other investments.

The longer answer is that banks generally have policies about how concentrated they can be in individual borrowers, industry sectors, geographies, etc. That is why you rarely see a single bank take all of a very large corporate loan. They syndicate it out.

They make money as middlemen, not the ultimate holders of debt.

Banks like good investments, but they like being paid fees more

Found it: head of JP Morgan asset management calling "once in a lifetime opportunity to invest in high quality company debt" https://www.cnbc.com/2026/10/10/jpmorgan-sees-once-in-a-gene...

The problem with private credit is that most of the valuations are not publicly tested.

what do I mean by that? oracle is publicly traded, which means they (should) report profit loss and other key metrics in a standardised way. This means that one company's metrics should be comparable to others. Their value is assessed by the second on a public market. This means that anything that affects thier value (real or imagined) is reflected almost instantly. (same goes for debt)

Private credit, and the stuff its invested in, is much murkier. THey do not have the same public reporting rules. There is no testing of value. Its in the interest of the owner of that debt to talk up the value of the assets they hold.

This means that a fund might invest in 10 companies. Those companies might be doing well, or they might not. Because information is limited, and there are no public trades, the value of those companies are only ever tested at sale, or in a crisis. (ie they fold, or do something so public that they can't avoid the consequences.)

THe problem then is that because information is limited (was it a one off, did the owner hide the problem, did they use the wrong investment strategey, is the rest of the portfolio also over valued by 10x?) causes people to panic, and withdraw money.

Because private credit is not that liquid, it means that if people withdraw too much money, they either have to say "no we have no free cash" (lehman brothers insolvancy), they have to take out bridging loans (expensive and very short term) or sell assets (fire sales rarely get good value and shrink the credit supply)

All of which causes a panic, and people look at places like softbank, see the leverage and think "oh fuck thats not worth anything" and the bubble pops.

Had temporary acronym overload, unpacking for anyone else:

There was a cringe-named Republican bill from the beginning of Trump's term, it somehow(?) relaxed the Enhanced Supplementary Leverage Ratio, and the eSLR is one of several related rules on very big banks that deter them taking on "too much" risk.

Yes, and sometimes they turn Tulips[0] into value stores. Or GPUs for that matter[1].

[0] https://en.wikipedia.org/wiki/Tulip_mania [1] https://nvidianews.nvidia.com/news/nvidia-partners-with-apol...

No but like this is how money supply works.

Loans are sold off, which means that they can raise more money to make loans. Each time you do that, you create more money out of thin air, which is profit.

The problem is, it only works if everyone believes.

THe problem with 2008 is that people stopped believing and demanded banks settle immediately. which then meant that they needed to raise cash, which meant looking at their assets, which meant looking at the risks of those assets, and then it went to shit.

You might as well say that banks giving mortgages caused that. Sure it happened as part of the process but that wasn't the thing that caused the problem.

The next sentence in that article is:

> They sell down debt when they are worried about concentration, which is exactly what "approaching internal limits" means in plain English: too much of this bank's balance sheet is now one bet on one sector holding up.

Which is correct, but kind of weird because being confident in a credit and being worried about concentration are not really mutually exclusive things. You can be pretty confident in an investment but not want it to constitute a majority of your portfolio. (Bankers know that even very strong credits are never 100% guaranteed to pay out.)

Let's say I offered you the chance to pay $100 to get $120 back if at least one coin toss in five came up heads. That's a pretty good bet, right? But would you bet your house on it?

Oh, I am well aware it's hard to time it. But still getting a general sense of the impending crash can help preparing in different ways. You can park part of your assets, not completely withdraw. Or pay extra for piece of mind by hedging them. Sure, it will cost, maybe won't be needed at all, or still misfired, but I'll sleep better with less anxiety, so that's still a win in my book...

Yeah. The thing is, we were being told that was a problem in late 2004 (this is when Max Keiser was writing and talking about the risks to Fannie Mae and Freddie Mac; he and others saying this were written off as cranks, even though they laid out a pretty solid scenario that came substantially true.)

So yes, Oracle is likely a canary in the coal mine.

It can only really be seen as an indicator of hidden risks to the banks from exposure to the SPVs.

But how long it will take before the miners start dropping dead from the fumes, who knows. Could be years, could be a few weeks after the Anthropic IPO when people are sitting smoking on the steps to the helipad saying "what the fuck? No I mean, really, really. What the fuck!"

This is the thing about being right too early has the same effect of being wrong.

Which is why I hate when people criticize some obviously overvalued shit, and the response is "why don't you short it".

Sometimes the best way to be safe of something about to explode is to just get away from it.

Yep, market can remain irrational for longer than you can stay solvent.

The big two AI labs are still not listed on the stock market, and SPCX is still above it's listing price. Unless you can remain liquid more than the market remains irrational better find some other use for your investment funds. No?

Not sure I agree. The credit default swaps have been extremely expensive lately, meaning that someone is already thinking about an AI bubble popping that will take private credit down which will make banks take a serious hit (11% of their outstanding loans are to linked to AI). On top of that we are in a time where the economy is propped up basically by AI spending and delinquencies on all sort of debt are at historically high rates.

I am panicking a bit TBH

It can run a financial crysis

I don't mind running private deepseek instances on server rack that I have bought for cents on the dollar.

Aren't they PCIe like everything else or am I missing something? I know they have some fast interconnects. If not, is an adapter to PCIe possible?

Cooling is usually what kills you with server gear at home. I don't have a cold aisle, or a case that flows that much air. Can I water cool it enough?

No video outputs would probably be my biggest annoyance. It should be fine at headlessly rendering games for streaming though, as well as AI.

If there's a will, there's usually a way.

Why not use them to host AI models? There is a ton of demand for AI that shadows consumer Pc usage. There is a compute shortage right now for AI.

There have been some examples of folks ripping off the SMX interface and rewiring the card for PCI-E but I'm not sure how efficient that would really be or what kind of market there could be

But it's creating new problems, and when the damage those new problems outweighs the value created, then that's when the bubble starts (or started) to form and we live in a delusion until the damage massively outweigh the benefits, is when the bubble popping starts being considered, and then when there's irreversible damage is when the bubble popping is marked for formal revision and then when ...

I run free local models on my A4500. I wouldn't mind a little upgrade... if I could afford it.

You sound exactly like the people who didn't understand personal computers because mainframes existed.