And I’m Never Wrong About This Stuff
February 24, 2026
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–The main driver of markets yesterday was a report by Citrini Research, a thought experiment as if written a couple of years into the future, describing economic carnage wrought on workers by the onslaught of AI agents.
It should have been clear all along that a single GPU cluster in North Dakota generating the output previously attributed to 10,000 white-collar workers in midtown Manhattan is more economic pandemic than economic panacea.
https://www.citriniresearch.com/p/2028gic
The report may have seemed fanciful to some, but IBM was crushed by 13% (Anthropic can do the coding). American Express, another stock mentioned in the report slid by 7.2%. Hard to blithely dismiss losses of that magnitude.
–I can’t help but recall Larry David’s 2022 ad for FTX (a now defunct crypto company) in which he disparages every technological advance. To Thomas Edison with his lightbulb: “Does your wife know what you’re doing? You’re wasting your time. It’s sad.” And, on the political front: “Everyone gets a vote? Even the stupid people??”
“Ehhh, I don’t think so. And I’m never wrong about this stuff. Never.”
–Rates fell due to perceived deflationary impact of job losses. Tens fell 6.1 bps to 4.027%. Fives led, down 7.3bps, within spitting distance of the triple bottom low in yield at 3.562, 3.548 and 3.57. There will surely be downside follow-thru If 3.55 is breached. As mentioned in yesterday’s note, near SOFR calendars have been in utter freefall. For example, SFRM6/M7 sank another 6 bps yesterday to -48 (9651.5, +1.0 and 9699.5, +7.0). To start the month on 2-Feb, the spread was -20. There’s a lot of focus on SFRZ6/Z7 which settled -7 (9690.0 +4.0 and 9697.0 +8.5). This spread was +13.5 on 2-Feb. Easing prospects are being pushed farther out the curve which seems at odds with the Citrini piece, though we don’t know how long things might take to play out. The critical point in my mind is that the economic architecture is supported by equity prices. Does a shift to AI simply mean that the spoils accrue to capital, or will a surge in unemployment and corresponding collapse in consumption take down everything? If stocks cascade, the playbook is rapid rate cuts…and I’m never wrong about this stuff.
–Heavy trade in treasury calendars, with 10y easing from 2.0 to a low print of 1.25. (Spread was pressured all day as futures rallied, as June has more duration)
TU roll is 57% complete, all other contracts are 49 to 52% complete.
–State of the Union address tonight. NVDA reports tomorrow. Also of interest today, Consumer Confidence. Last at 84.5 which is the lowest since early 2014 (I guess everyone intuited the conclusions of Citrini well before the report). Expected to bounce to 87.1.
