There are people knowingly making false statements and misleading investors. I will not name names or institutions, but this is no different from what happened during the financial crisis, which I saw up close.
Then, the fraud was built around the supposed creditworthiness. Today, it is built around the supposed economic worthiness of AI infrastructure, future demand, utilization, profitability, and sustainability.
Trillions are being committed on the back of claims that are not supported by the economics. Much of the demand is manufactured and subsidized. It is being presented as durable and profitable when it is not.
Calling that innovation, optimism, or a long-term investment thesis does not change what it is. When people knowingly state that the economics work — when they know they do not — they are misleading investors.
Doug Kass is a world-renowned hedge fund manager with decades of experience and success navigating through some of the most turbulent periods in market history. He is known for his time-tested analytical skills and ability to look past the current noise and herd mentality.
On TheStreet Pro, Kass provides frequent market commentary and investing ideas for active investors throughout each trading day in Doug’s Daily Diary. He also serves as president of Seabreeze Partners Management Inc. Previously, he served as a senior manager at Omega Advisors, a $6 billion investment partnership. He co-authored a book with Ralph Nader and the Center for the Study of Responsive Law called “Citibank: The Ralph Nader Report” and can be found as a guest host on CNBC's "Squawk Box."
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