On My Mind / One Asset & Worth Noting
Citrini Research released a compelling piece of research on February 22nd that triggered an overwhelming media response, sparking intense debates and criticism:
Citrini Founder Shocked His AI Prediction Spurred Stocks Selloff (Bloomberg)
White House Economist Calls Citrini AI Report “Science Fiction” (Bloomberg)
Markets were down the following day, with SaaS, payment networks, wealth management, and a few other industries being hit. The Macro Memo illustrates a quite bearish AI scenario for 2028. Without diving into too much details (I recommend reading the memo) it paints a trajectory: Companies realize they can replace white collar workers. Layoffs start, which leads to less consumer spending, hurts the economy, and incentivizes companies to focus even more on the bottom line and introduce more cost efficiency programs. It is a vicious cycle. From the memo:
It was a negative feedback loop with no natural brake. The humanintelligence displacement spiral. White-collar workers saw their earnings power (and, rationally, their spending) structurally impaired. Their incomes were the bedrock of the $13 trillion mortgage market - forcing underwriters to reassess whether prime mortgages are still money good.
I find the memo extremely valuable, it is a great starting point for scenario planning. The timeline may be ambitious, and I do not expect something like this before 2030. What is truly entertaining is the fact that reactions were so mixed. Neither governments, nor investors like the idea that AI may initially, in a period of transition, not be net positive for society / humanity / economies. Industrial revolutions were always part of our history, and personally I do believe we will live in a better world in 20 years, but I think that we cannot rule out the possibility that near-term impact (say 5-10 years) will be rough, bearish, and marked with job losses, and corresponding financial market reactions. Remember that economies are driven by consumer spending. Are we prepared for that?
One Asset
Gold and oil posted solid gains in expectations of the events currently happening in the Middle East over the last 4 weeks. The scale of what is currently happening and the timeline is completely unknown, and I wonder what the market has already priced in, and what may be priced in over the next few days. Any involvement of ground troops in Iran is unlikely with a population of over 90 million people and a landmass that is roughly 2.4 times as large as Texas, so I am keen to see what the mid-term plan is.
Worth Noting
The Wigmore Association released its 2026 Capital Markets Outlook.
Wigmore is a group of five global family offices, including HQ Trust, a multi-family office with its roots in the Quandt family (BMW).
It is a quick five-minute read and well worth your time.
Thank you for reading.