{"id":9167,"date":"2026-03-04T16:01:52","date_gmt":"2026-03-04T16:01:52","guid":{"rendered":"https:\/\/musictechohio.online\/site\/goldman-sachs-head-financial-crisis-similar-crash\/"},"modified":"2026-03-04T16:01:52","modified_gmt":"2026-03-04T16:01:52","slug":"goldman-sachs-head-financial-crisis-similar-crash","status":"publish","type":"post","link":"https:\/\/musictechohio.online\/site\/goldman-sachs-head-financial-crisis-similar-crash\/","title":{"rendered":"Goldman Sachs Head During Financial Crisis Says He \u201cSmells\u201d a Similar Crash Coming"},"content":{"rendered":"
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For quite some time, investors have been warning<\/a> that the hundreds of billions of dollars being poured into the buildout of enormous AI data centers could trigger a credit crisis. A recent Bank of America survey found<\/a> that over a third of fund managers believe corporations are overinvesting in physical assets.<\/p>\n

Yet all told, AI companies are looking to spend a record-breaking $650 billion<\/a>\u00a0on AI in 2026 alone, an astronomical sum that has investors on edge, especially considering how massively unprofitable AI ventures have been to date.<\/p>\n

To Lloyd Blankfein, who led Goldman Sachs through the 2008 subprime mortgage crisis, it\u2019s entirely reasonable to prepare for an impending jolt to the system, especially considering the tone of investors discussing the enormous accumulation of debt.<\/p>\n

\u201cI wonder where there\u2019s hidden secret leverage,\u201d he told Citadel\u2019s cochief investment officer Pablo Salame during a recent interview, as quoted by The Telegraph<\/em><\/a>. \u201cNow everyone says, \u2018Oh, the world\u2019s not leveraged.’\u201d<\/p>\n

\u201cThat\u2019s exactly what everybody said in the mortgage crisis until you suddenly discover that there was a lot of mortgage risk in Iceland,\u201d he added. (The European nation\u2019s entire banking system collapsed<\/a> within a week in 2008, forcing it to seek emergency aid<\/a> from the International Monetary Fund.)<\/p>\n

\u201cIt sort of smells like that kind of a moment again,\u201d he added, along with a poetically worded metaphor: \u201cI don\u2019t feel the storm, but the horses are starting to whinny in the corral.\u201d<\/p>\n

Blankfein argued that AI companies are looking to open themselves up to public investment at a very precarious time, potentially putting retail investors at risk.<\/p>\n

\u201cOne has to worry about opaque assets where there\u2019s illiquidity,\u201d he told Salame. \u201cWe\u2019re getting close to the end of late stages of cycles on this \u2014 and we\u2019re due for a kind of a reckoning.\u201d<\/p>\n

If the bubble were to pop, potentially taking individuals with it, the consequences for companies could be severe.<\/p>\n

\u201cWhen you lose money for individual consumers \u2014 i.e. taxpayers and citizens \u2014 people in government get very, very upset. Regulators get very, very upset,\u201d Blankfein said.<\/p>\n

Blankfein is far from the first financial heavyweight to warn of impending turmoil. For instance, fund management firm Amundi\u2019s chief investment officer Vincent Mortier told the Financial Times<\/em><\/a> earlier this year that \u201cwhether there are excesses\u2026 in the equity market on AI is no longer questionable.\u201d<\/p>\n

\u201cBut to figure out which exact companies will be the losers and when this reckoning will happen is difficult,\u201d he added at the time.<\/p>\n

Other experts have long compared<\/a> the AI industry boom to the dot-com bubble of the late 1990s, with some going as far as to claim a new crisis could be even worse<\/a>.<\/p>\n

Worse yet, such a \u201creckoning\u201d could send major shockwaves across global markets, potentially leaving taxpayers to pick up the tab. Investors worry that the entire US economy has turned into \u201cone big bet on AI,<\/a>\u201d leaving the possibility that the AI bubble collapse could impact the fortunes of everybody<\/a>.<\/p>\n

Despite the many bold predictions of a financial crisis, the AI industry has held on, successfully convincing investors of the tech\u2019s long-term viability. Companies including OpenAI and Elon Musk\u2019s xAI, which was recently folded into his space company SpaceX, are reportedly preparing for \u201ceye-popping<\/a>\u201d initial public offerings.<\/p>\n

But to Blankfein, the longer we wait, the more severe a collapse.<\/p>\n

\u201cThe longer it takes between reckonings, there is a potential for a more severe reckoning,\u201d he told the Financial Times<\/em><\/a> in a separate interview. \u201cI\u2019m not saying it\u2019s going to happen tomorrow or what direction it comes from. But when something goes off you\u2019re going to find all the assets that have been carried at prices that can\u2019t be realised in the market.\u201d<\/p>\n

More on the AI bubble:<\/strong> Investors Concerned AI Bubble Is Finally Popping<\/em><\/a><\/p>\n

The post Goldman Sachs Head During Financial Crisis Says He \u201cSmells\u201d a Similar Crash Coming<\/a> appeared first on Futurism<\/a>.<\/p>\n<\/div>\n

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