GoKawiilAnalysts Draw Parallel Between 2006 Subprime 'Reset Wall' and Today's AI Boom
A new analysis revisits the 2006-2007 subprime mortgage crisis, showing how millions of borrowers held two-year adjustable-rate mortgages with teaser rates that were contractually set to reset 30-50% higher. Credit Suisse and the IMF had already charted this trillion-dollar 'reset wall' months before the crisis hit, yet markets kept buying because everyone assumed they could exit in time. The piece uses this history as a lens to question whether today's AI investment boom is similarly built on temporary, favorable conditions that are due to expire.