#Economy & #Stocks Review - Is AI In A Bubble?

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

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Is AI In A Bubble?

Companies are inflating earnings by extending the useful lives of assets, a common modern accounting manipulation. Despite massive capital spending on short-cycle Nvidia chips and servers, hyperscalers have lengthened depreciation schedules, understating depreciation by an estimated $176 billion from 2026 to 2028. By 2028, Oracle’s earnings may be overstated by 26.9%, Meta’s by 20.8%, and others similarly affected. More analysis will be released on November 25.

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Understating depreciation by extending useful life of assets artificially boosts earnings -one of the more common frauds of the modern era.

Massively ramping capex through purchase of Nvidia chips/servers on a 2-3 yr product cycle should not result in the extension of useful… pic.twitter.com/h0QkktMeUB

— Cassandra Unchained (@michaeljburry) November 10, 2025

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