Finding perspective in a week filled with scary stories, market jitters and reminders of our shared resilience.
After a slow start, I am now fully enthralled by the Olympics, cheering on the men’s and women’s USA hockey teams (Let’s go my fellow BC alum Megan Keller!) and amazing performances by figure skater Alysa Liu, speed skater Jordan Stolz, alpine skier Mikaela Shiffrin and veteran bobsledder Elana Meyers Taylor. The team’s triumphs and tribulations take your breath away, on a stage larger than life, with hope and heartbreak knitted together in moments with the whole world watching.
I was especially struck by how, in these times of AI everything, we are all transfixed by a spectacle that showcases the pinnacle of human capability.
Many of you shared with me the essay, “Something big is happening in AI” by Matt Shumer, co-founder and CEO of OthersideAI, which, to oversimplify, is the company that brought you autocomplete when you are typing. Within the essay, Shumer describes eloquently his own shock at the amazing power and accuracy of new agentic AI tools and issues a dire warning about massive impending white-collar job losses that will be brought on by its widespread use.
No more than a week ago, Mustafa Suleyman, the CEO of Microsoft AI, predicted in a Financial Times article that most tasks in white-collar professions—such as those performed by lawyers, accountants, project managers and others working at computers—will be fully automated by AI within the next 12 to 18 months. Anthropic CEO Dario Amodei proclaimed a year ago that AI could wipe out half of all entry-level white-collar jobs. And OpenAI CEO Sam Altman echoed that the tech is poised to destroy entire categories of work.
The fear these crisis narratives are creating is palpable and of course making it hard to feel confident in investing your life savings. I do not know if Suleyman, Shumer, Amodei and Altman’s predictions will be right. I do know that if before actual job losses occur, people believe those predictions and change their behavior (i.e., stop spending money, pull back on investing and hunker down in bunkers), we will be facing trouble. Maybe that trouble is inevitable, but I think it is important in a crisis to slow down rather than speed up and consider all the possibilities.
I will also wryly note that in each and every one of those CEO’s crisis narratives there was a pitch to buy more AI—the kind you pay for, not the free stuff. Interesting timing when your stocks are off their all-time highs and you are spending billions on can’t-turn-back infrastructure builds.
I would like to think we can make AI, like many other technological advances, a net benefit to humankind and not a self-made extinction event. I may be a Pollyanna, but when I am watching Olympic Games that started in 776 B.C.E., I feel like humanity will figure it out.
Of course, one way we slowed other threats down in the past was government regulation, governance and institutional safeguards. It should not be lost on all of us that this week also featured the testimony of Meta CEO Mark Zuckerberg during a landmark trial in Los Angeles Superior Court over the question of social media and the safety of our children. The case argues that early use of social media caused the plaintiff to become addicted to technology that exacerbated depression and suicidal thoughts. It was noteworthy that, when pressed under questioning by the plaintiff’s attorney about what a company should do with its users, Zuckerberg said, “I think a reasonable company should try to help the people that use its services.” Now is the time for us, through laws and the power of our purse, to demand accountability to that standard.
Not surprisingly, the market is uneasy about all these narratives after a huge run-up in stock prices, and by the new worry of a doom loop of fear causing a recessionary slowdown even when one might not otherwise be forming. Therefore, markets continued to slide modestly this week, despite decent economic data and strong earnings reports. One other dynamic not helping matters was the news that a key private credit fund manager Blue Owl announced it would restrict withdrawals from its retail private credit fund, prompting worries of a “canary in the coal mine” systemic problem in the large and important $3 trillion private credit market.
Just as markets were digesting AI fears, the breaking news at the time of this writing was the Supreme Court dropping a major ruling: in a 6–3 decision, it struck down Trump’s sweeping tariffs imposed under the 1977 emergency powers law (IEEPA), saying only Congress can levy taxes. That means the most aggressive duties on Canada, China, Mexico and other countries are now invalid, though tariffs under other laws remain intact. Markets reacted quickly and initially jumped on the news, but were volatile thereafter as traders digested the web of implications tied to the decision. For businesses and consumers, the relief could be real with some analysts estimating refunds could reach $150 billion and noting that tariffs had pushed import costs to their highest since the 1930s. But don’t expect a clean break because the ruling doesn’t block other tariff routes and the refund process could get messy. And our wall of worries would not be complete without geopolitics, and we had it in spades, when news broke that the U.S. had sent the USS Ford Carrier Strike Group, as well as dozens of fighter jets and support aircraft to the Middle East, assembling the greatest amount of air power in the region since the 2003 invasion of Iraq. President Trump indicated he will decide whether to launch military strikes against Iran in the next 10 days assuming they are not able to come to some agreement on its nuclear program. Brent crude oil prices spiked to over $70 a barrel in response, particularly following reports that Iran’s Revolutionary Guard held military exercises in the Strait of Hormuz, a key chokepoint for the global oil trade.
Will human capability see us through these crisis narratives and the many other challenges we face? And even if we falter, will we come back and try again like the athletes we so admire? I like to think so. In the meantime, as we brace for these ebbs and flows in market conditions and economic cycles, our training tells us the best way to manage is by being prepared. Now is the time to be thoughtful about your cash and liquidity needs, and to make sure those are invested in a thoughtful manner to earn real return in this period of falling interest rates. It is also a good time to take stock of the balance of your portfolio. With us as your guide, let’s consider taking some profits in your winners and seek out opportunities in other segments and sectors less expensive and with more room to grow. Perhaps most important of all, maintain composure even as crisis narratives of all kinds hit the press and rattle your nerves. We are here to listen, consider the risks with you, and guide you along the path of your financial life toward the achievement of your goals.
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Written by a human.