"1929 Stock Market Crash on the Horizon Again"
by David Haggith
Excerpt: "One article for the headlines on Tuesday, since The Daily Doom doesn’t have holiday editions, asks if we are heading for a 1929-style stock market crash. If you’ve read me for long, you know I lean strongly that way. I think we are moving into the popping of the everything bubble, which the article just mentioned refers to as the “multicrisis.” We even have the same scale tariff situation today that played such a huge role in deepening The Great Depression. It may even be at a worse scale, depending on how it all settles out, as the rules are still changing:
To put an exclamation point on that, Trump just doubled down on the most significant of all of his tariffs on Friday, saying he was going to add another 100% to the constantly in-flux tariffs the US places on Chinese goods. That caused a quick one-day crash of sorts in stocks. So, there is never any stable ground with the Trump Tariff Wars because he constantly changes the terms. In many cases that has proven true even after he has struck a deal.
The artificial-intelligence stock supercharger: With that said, this will be a different kind of crash. In ‘29, the key driver for the total economic collapse was a stock market crash. It looked like that would be the case this year, too, as the market fell precipitously due to the tariff wars in March and April. It may still be the case, which was one of the big events I predicted for this year, anticipating Trump’s tariffs; but I increasingly think the market is now likely fully operated by competing AIs. As rapidly as artificial intelligence has advanced and data centers have sprung up this year, it’s hard for me the believe the billionaires who own AI companies are not using their massive new data factories to rig or manipulate the stock market, especially their own stocks.
Why wouldn’t they? There are scarcely any laws to regulate AI from doing what algorithms already do (albeit on a more attenuated scale than what AI will add to the equation). AI easily has the capacity to see what all market analysts have tried for decades to see - whether or not there are any patterns of what works and how to play them, whether or not there are any signs others are not seeing for what is to come, and also how to play those.
The market has been largely determined by algorithms for several years now. What is better suited for AI control/domination/manipulation than algorithms that speak AI’s native language and that were designed to be self-refining. If AI is kept from those connections by firewalls that prevent it from hacking the stock-market algos, it can still easily figure out how to play those algos. I mean what are they but tiny versions of understated AI anyway, given their self-modifying capabilities? For AI, teasing the existing market algos to do whatever AI wants is like playing with children.
That means something I warned about years ago under algorithms is more plausible today than ever, and may already be happening via AI hacking the algos or playing the algos in ways that even the AI owners don’t know about. So long as their AI’s are smart enough to keep putting money in the owners’ pockets, why wouldn’t the AIs do that; and why would the owners worry about how they are doing that, other than as a curiosity they want to understand in order to exploit further?
What I had warned about a few years ago, was that algo trading could take the stock market completely beyond natural economic limits or even usual market sentiment, making individual corporations mere chips in the casino that could trade at any value, even if the company is known to be destined for destruction, by an entity that knew how to use the chip to make a bet that would pay out. It wouldn’t even matter if the company was going bankrupt so long as its stock still existed as a place holder for laying bets on the roulette wheel of fortune.
That would complete the market’s ultimate transition on a path long in the making where the casino function is all that’s left where companies with no capacity ever to make money could be bid up to the stratosphere, and the smartest algo or AI is the one that knows when and how to reverse the bet and let it crash to capture the most gains, as the stock gets buried into less than a penny stock. The machines will be so much smarter than us before the end of this year that they will even be able to game collective human sentiment."
Full article is here:
No comments:
Post a Comment