Dean Baker takes a Substack “Groundbreaker” parallel: AI firms’ data-center leases that kick in when sites open (2027–28) look like 2006–08 subprime rate resets. He finds the analogy useful but incomplete.

Subprime walls were visible earlier (2004–05); people refinanced teaser loans until house prices stopped rising. The crash was the belief that prices only go up dying—not a calendar date.

Likewise, he says AI lease walls need not lock in a crash on a fixed date. If hyperscalers and markets still buy the profit story, refinancing can continue; if they don’t, they will try to rework deals before more money is spent. No P/E figures were in the pasted text.

I read this Substack column last week comparing the timing of subprime resets in 2006-08 to the payments that the AI companies will soon have to make for data centers as they open. (Sorry, I would credit the author, but I don’t know who Mr. or Ms. Groundbreaker is.) Most data centers are being constructed with contracts with the AI producers where they first start having to pay lease obligations when the data centers become operational.

Anyhow, I was first taken by the argument, which is essentially that the timing of the collapse of the housing bubble was an entirely predictable event, because we knew that the teaser rates on hundreds of billions of dollars in subprime loans were due to reset to much higher rates starting in 2006, with the volume rising in 2007 and 2008. Since millions of homeowners would be unable to pay the higher reset rate, their mortgages would soon........

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