Keep pulling the thread on Carson Block.
The current generation of AI models is actively coding and testing its own successor generation, leading to an exponential rate of improvement.
Carson Block predicts that within the next 2 to 5 years, approximately 15% of knowledge workers in the US could be displaced from their jobs due to AI.
Businesses that fail to adopt AI to reduce their cost and pricing structures will face an existential threat from competitors who can massively underprice them.
Carson Block believes a reversal in passive investment flows, triggered by mass layoffs of knowledge workers, will cause a market crash comparable to the Global Financial Crisis.
The dominance of passive investing has created significant fragility in the equity market by removing stock supply and causing parabolic price increases for the largest index components.
Carson Block predicts that in a future crisis, central banks will implement "QE forever" and buy the entire yield curve to keep long-end rates low.
An AI-driven recession will cause a fiscal crisis for states like California, Illinois, New York, New Jersey, and Connecticut due to their reliance on income taxes and large debt issuance.
Carson Block believes the societal disruption from AI will force a massive expansion of the state, with governments becoming major employers and consumers, and much of the private sector resembling Chinese state-owned enterprises.
Carson Block believes the principle of Jevons' paradox, where new technologies create new jobs, will not apply to the AI revolution because the rate of technological change will be too fast for human adaptation.
The AI model Claude is currently capable of handling many discovery tasks in litigation that are typically performed by junior associates at law firms.
Carson Block predicts the legal profession will shrink significantly in the coming several years due to the adoption of AI for tasks currently done by lawyers.
Since the release of ChatGPT, the number of white-collar workers in the US and Europe has increased.