The guy who predicted the 2008 crash just called out two massive...
Felix Prehn 🐶@felixprehn
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Oct 25, 2025
~2 min read
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The guy who predicted the 2008 crash just called out two massive bubbles about to implode: real estate and cash-burning tech companies.
Nassim Taleb warns these industries are severely over-valued after years of free money.
His explanation on how it'll happen:
Thread
Nassim Taleb warns these industries are severely over-valued after years of free money.
His explanation on how it'll happen:
Thread
1:05
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BUBBLE #1: REAL ESTATE
Taleb's exact words: "If real estate doesn't go down by half or three quarters, there'll be something wrong."
He's talking about a 50-75% collapse in property values.
Not a correction. A bloodbath.
Taleb's exact words: "If real estate doesn't go down by half or three quarters, there'll be something wrong."
He's talking about a 50-75% collapse in property values.
Not a correction. A bloodbath.
0:40
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The math is brutal:
"$1-3 trillion created in fake valuation. You can't carry a house if your income is $30k a year."
At 7% mortgage rates instead of 3%, the affordability equation completely breaks down.
"$1-3 trillion created in fake valuation. You can't carry a house if your income is $30k a year."
At 7% mortgage rates instead of 3%, the affordability equation completely breaks down.
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BUBBLE #2: NEGATIVE CASH FLOW TECH
These companies aren't even pretending they'll be profitable anymore.
Taleb: "They're saying 'we're going to get someone to fund us.'"
It's not a business model. It's a Ponzi scheme.
These companies aren't even pretending they'll be profitable anymore.
Taleb: "They're saying 'we're going to get someone to fund us.'"
It's not a business model. It's a Ponzi scheme.
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What connects both bubbles?
The end of free money.
For years we lived in an artificial world where interest rates were zero.
Taleb: "We're going to live like our grandparents did - where rates aren't zero.”
The end of free money.
For years we lived in an artificial world where interest rates were zero.
Taleb: "We're going to live like our grandparents did - where rates aren't zero.”
0:59
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The Fed's "novocaine policy" created fake market conditions.
Taleb warned about this in 2008: "Now the novocaine is gone. You may pay the price."
Higher rates are coming regardless of inflation or deflation.
Taleb warned about this in 2008: "Now the novocaine is gone. You may pay the price."
Higher rates are coming regardless of inflation or deflation.
0:45
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Markets follow "gravity rules" as Taleb puts it.
When rates normalize, asset prices must adjust.
This isn't temporary - it's a fundamental revaluation.
Painful for those who've never seen normal rates.
When rates normalize, asset prices must adjust.
This isn't temporary - it's a fundamental revaluation.
Painful for those who've never seen normal rates.
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The core problem: "Your oxygen is cash flow."
Without real cash flow, businesses survive on funding that eventually runs out.
When rates rise, funding dries up.
Companies without oxygen will suffocate.
Without real cash flow, businesses survive on funding that eventually runs out.
When rates rise, funding dries up.
Companies without oxygen will suffocate.
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Even Swiss banks fell for this trap.
The most conservative institutions on earth abandoned their model to chase returns.
Now Credit Suisse is gone.
If they can't survive the transition, who can?
The most conservative institutions on earth abandoned their model to chase returns.
Now Credit Suisse is gone.
If they can't survive the transition, who can?
1:31
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Here's what Taleb believes will happen:
1. Real estate must adjust to higher rates - with potentially dramatic price drops
2. Tech companies without cash flow will struggle
3. The Fed's ability to use monetary policy to fix structural problems is limited
1. Real estate must adjust to higher rates - with potentially dramatic price drops
2. Tech companies without cash flow will struggle
3. The Fed's ability to use monetary policy to fix structural problems is limited
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Taleb's advice for professionals:
"If you're a butcher, focus on making money selling meat."
Stop trying to make money from your money through speculation.
Generate real cash flow from real work.
"If you're a butcher, focus on making money selling meat."
Stop trying to make money from your money through speculation.
Generate real cash flow from real work.
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