The Canadian Investor - The AI Boom That Could Crash Markets and the Economy: Fact or Fiction?

Episode Date: March 2, 2026

In this news-style episode, Simon and Dan break down Citrini Research’s The 2028 Global Intelligence Crisis—a “note from the future” dated June 30, 2028 that frames the most bullish AI adoption path as a surprisingly bearish outcome for the real economy. They walk through the core feedback loop: companies deploy AI to boost productivity and margins, layoffs rise (especially in white-collar roles), consumer spending weakens, and the cycle reinforces itself—creating what the piece calls “ghost GDP,” where productivity climbs but wages and demand don’t keep up. From there, the duo digs into the sectors Citrini argues get hit first and hardest: SaaS (seat contraction + customers using AI as renewal leverage), the intermediation layer (agents shopping travel, subscriptions, insurance, delivery, and more), and even payment rails as AI agents chase lower-cost settlement via stablecoins. They also connect the dots to private credit and insurance flywheels—where mark-to-model portfolios can look stable until forced selling and capital needs expose stress—and what rising unemployment could mean for housing in once “prime” white-collar markets.   Tickers discussed: V, MA, AXP, DFS, PYPL, AMZN, WMT, EXPE, UBER, DASH, SHOP, GOOGL, PLTR, TRI, OWL, APO, BN, KKR, CRM, ADBE, AIG   Citrini research report Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Welcome to the Canadian Investor Podcast. I'm Simone Berengen. I'm back with Dan Kent. And today we have a mix of news slash regular episode, I would say. I think we're going to go over the 2028 Global Intelligence Crisis piece by Citrini Research, which is written on a note from a future self, I guess, would be the best way to put it. So it's written from June 20, June 30 at 2028. So it is kind of interesting the way they did it. But essentially it looks back at the last, from that standpoint, at the last two years. So essentially from now until then and looks back at to what exactly happened in the world of investing and AI.

Yeah, it's kind of like, it's difficult to explain, but it's like the most bullish case for AI three years from now, which actually ends up being bearish. Yeah, it's actually a really, really good read. I found it very interesting. I got through probably like 75% of it and it took probably an hour to do that. Like how long, this is probably like a 10,000 plus word article, but it's a long one. It's a monster, but it's definitely, it's definitely worth a read. It's a, it's a really cool, cool piece. No, exactly. So I'll get started. I'll do a summary so you don't have to read it if you don't feel like it. I will be adding a link to the show notes for those who want to read the whole piece, which I definitely encourage people to do so. It is worth reading. I'll give

some examples here as I get through this summary. Keep in mind, some may not be the exact examples just because it was such a long piece, but it gets the essence of it. So essentially, it starts, like I said, between now in 2028, June 2028, looking back at the time period in between them, AI becomes so abundant and cheap that intelligence premium on the human brain, on the human brain power drops significantly because there is a much cheaper alternative, something that we have not seen in the past. For example, why pay a project manager $100,000 when you can have that same word done by an AI agent? And that's essentially the starting point of this piece.

And the vicious cycle starts. So companies start laying off more and more people and replace them with AI to boost. profits. This leads to the consumer spending less because of income loss or fear of income loss. Of course, consumers will not be spending if they think they might lose her job. Demand for product and services, which used to be 70% of the U.S. economy drops. Companies are pressured by shareholders to keep profits elevated, so they cut further by using AI and more layoffs. That leads to more layoff, which leads to less spending and so on and so on. It's this vicious cycle where there's less spending from consumer, which it's businesses, and then they want to be more profitable. So they

cut expenses. They cut headcount and replace it by AI. But then there's also less spending being done. So you see that vicious cycle happen. Yeah, I think the most interesting thing is you have, like these companies will invest in AI and ultimately that AI replaces workers. so they can lay off those workers, which generates more profits for the company. And the company then takes those profits, reinvest them back into more AI projects, which effectively just lines up the next slate of people who are going to lose their job. And it's just, yeah, it's just going to revolve. I mean, again, this is like this is a hypothetical situation.

They're just kind of going forward in the future, but they're kind of going from worst-case scenario, and this would be one of the things that happens is effectively, like these companies just trim massive amounts of jobs because AI can run it. And as they trim jobs, they can spend more money on AI, which causes them to trim more jobs. And yeah, just doomsday for sure in terms of human capital employment. Yeah. And unemployment rises, I believe in the P's day state that it goes up to around 10%. And what is happening is this is mostly affecting white collar jobs.

So you start seeing more and more job losses for white collar. And those who keep their jobs oftentimes have to put in even more hours to make sure that they don't lose their job and they have little to no hope of advancement in the company. Their only hope is to keep their job at the current salary or very little salary increases. So you can see what kind of impact it has on the economy. And he talks about ghost GDP. and GDP and productivity in this scenario keep increasing. In the past, that money would have flowed through household because they're hired the GDP,

higher to productivity, men that firms or companies were hiring, paying workers, and that money was flowing through the economy. And that's how you got to 70% of the economy being reliant on consumer spending. This time it's different. There is strong productivity growth, but wage growth is weakening and the consumer is simply getting weak. So that's the general idea behind it. Now, they kind of go through several sectors that are severely impacted by this rise of AI. Anything you want to add before we continue?

I mean, I guess on the on the ghost GDP front, they made a really good comment in that article about how like previous, obviously, these firms were hiring people to do the work. People then take the money by discretionary items, whatever it may be. But you've replaced them with machines. It says in there like machines don't spend money. Humans spend money. So that's where you get the higher productivity. But really in certain areas, it's devastating really because, yeah, the machines don't get paid and they don't need to spend the money. Exactly.

Thanks for clarifying. So essentially, yeah, that's what that's a part I forgot to mention there. So the first industry that really gets it is surprise, surprise. And that's why this piece is proff is so interesting because it's built on some of the things we're already seeing happening right now. And SaaS in their piece is one of the things. So software has a surface that gets it first. By mid-20206, companies start waking up about SaaS they currently pay for. So the software that a business will use on for their day-to-day operation, even if they don't actually.

want to replace that software with something in-house that was created by, say, Claude Code, something we've talked about quite a bit. They can still now use it as leverage to lower their costs. And this is interesting because this is where I think something, when Braden and I came on to discuss where we actually disagreed a little bit, that was one of the things I was mentioning is that companies may start using this as leverage. And the other problem is that they mentioned in the piece is the seat problem, something that you've talked about. The more companies lay off employees, if you lay off 15%, well, you're going to need maybe not 15% less seat.

Maybe not all of them were using that specific software, but maybe some were. So you'll need a lot less seed that you're paying to those SaaS companies. So SaaS companies see this and they have to hope that they can keep their customers. They might lower prices in order to keep those customers. but they're also, they also try to be ahead of the curve and they start aggressively adopting AI themselves, which accelerates this whole vicious cycle because themselves, they become more efficient. They require less and less employees. They are also getting less and revenue from legacy customers because those customers are

negotiating harder or just doing their own in-house thing. So less employees, less spending, less people. spending and the vicious cycle kind of continues and SaaS gets hit in a very, very hard way. Yeah, I think like a lot of the time with a lot of this SaaS for, you know, a very long time is they had leverage in terms of kind of the integration from a lot of these companies. Like they could come back to them on renewal day with price increases almost always. Historical data too. Like, you'll be your, your practices or your old business is kind of tied around that one system and it has a whole lot of, you. you know, company information that would be hard to replicate to a new system.

Yeah. So I think when they, when they would come renewal time and say, hey, we're going to increase your prices five or 10 percent. It was like a, yeah, whatever type situation. Like there's nothing they can really do. And I think that's why a lot of these companies traded for very, very high multiples for a very long time, like renewal rates, like price and power, all that type of stuff.

And now, you know, as you had mentioned, even if they're not going to build it out themselves, when that salesman comes for renewal, and there's even a chance that you could. I mean, now you have all the power to negotiate lower prices. And I know this is anecdotal, but I do know of a company,

just because I know somebody who worked for them, they're a multi-seven-figure revenue-generating company, and they completely replace their CRM with an in-house solution. like they they don't use it anymore so like a lot of people are i know there's a lot of stuff online that says you know people are using clod code and they're like okay well what are they building what are they actually building or are they just talking about it people are building stuff they definitely is like this is happening would it happen at like a multi-billion dollar company right now no not

really but i mean we're if you think about it we're we're pretty early here so this is definitely a risk, especially on the seat front. I think like the SaaS companies that will survive will be those who change the pricing model, in my opinion, from, you know, like a seat base. Let's leave it at there for now. We'll get back to that at the end. Let's just, let's continue doing like just going over what they're talking about. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones, trying to catch every top and bottom. They're the ones who spend the most time in the market.

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it would be the intermediation layer. So this gets dismantled by agents. So what they mean by this is these like sides that act as the middle person between you in a transaction. So, for example, an easy one would be an Expedia, right? So you're booking a trip

on Expedia, flight, or whatever it is. I mean, you could, if you can get a good price and the same convenience, why wouldn't you book it somewhere else,

use another site like that or book it directly through the airline, through the tour company, and whatever it is. So sites that act as a third party like this get hit hard because consumers can now use AI agents to do the shopping for them.

The agent costs almost nothing. So all day, what the agent can do is basically scan for the best prices for whatever you want to buy. So that trip you're looking to book, they book it for you. They plan everything for the best possible price. Their main thing is to look for the best possible price, which we could do today, right? But who has the time to do that? They do. They do.

And it does not come as a big cost. So travel booking insurance companies, for example, that will get 10, 15% insurance increase. That automatically renews because people don't shop. They just let it renew automatically. You get an AI agent to just be on the lookout for that and making sure you get the best prices. That subscription you've been paying for six months at $20 a month because you forgot about it that you're not using. The agent will also monitor that and make sure that you're not paying for it if it notices. you're not using it. Developers start creating competitors to deliver app for delivery apps like

Uber using things like Claude code and people might say, well, how can you Uber as such a strong mode? Well, what they argue here is that good developers can probably create apps that are as good or pretty similar within just a span of a few weeks with coding agents that we've seen right now. And what they say is that these platforms offer drivers, oftentimes better incentives. They get them to keep more of the money from the delivery fees and things like that. So they are able to steal the drivers. And then someone else creates an app that aggregates all these apps together. So it allows drivers to deliver multiple application all at once and pick whichever one gives them the better deal or the most revenue.

for a delivery. And what they end up saying is essentially it becomes a commodity. And the moat around businesses like Uber, DoorDash, I guess skip the dishes here in Canada, Lyft starts eroding because there's tons of competition and it just becomes a commodity. And that friction that used to be the mode because you have the Uber app on your phone, it's easy. You just kind of click it. Well, now with the AI agent, you can ask it to say, look,

I want to eat fruit from this restaurant. You find the best price for me to get it the cheapest and the fastest. As long as it comes from that restaurant, I don't care. You don't waste any time. You just tell it what to do. And it's as easy if not easier than what you would do right now with Uber Eats. Right. So that's how these third-party application start slowly but then rapidly see their Mozart.

Yeah, because I think, if you had people who could develop the apps, obviously for cheaper, you could probably give more money to the drivers. And then, yeah, they would just hop around to effectively the drivers or the delivery drivers would just hop around

to whoever passes through the most money to them. So, I mean, I think on the Uber vehicle side of things, like the actual ride chair, I think the network is more so the most, but like, I mean,

for a company like DoorDash or something, First off, consumers are just going to go the cheapest route and the drivers are just going to go the route that gives them the most money. So I could see this quite easily. Yeah. Let's move on to the next one. We'll give a bit more commentary after the fact. So the payments, payment rails get disrupted. So AI agents in their pursuit of ever lower costs for the consumer, for the people who use them, start looking at the most obvious cost reduction payments, MasterCard visa.

Amex discovered all start facing pressure as AI agent look to make payments via stable coins which bypass the middle person. I have trouble with that word on the blockchain. And for those not familiar with stable coin, just to explain a little bit how it works. So instead of buying something using a PayPal or using a Visa or MasterCard, so you're using their network to go. So there's always going to be a middle person, right? You use the MasterCard or Visa Network.

You make a payment, then your bank will have a transfer to the other person's bank. It's usually settled later on. But that's essentially how it works, so that money goes that way. Well, with Stablecoin, if I buy something from Dan, it would go from my wallet to Dan's wallet. There's no middle person there. So that's the efficiency of Stablecoin. And it's much more cost efficient than a Visa or MasterCard. And yeah, I'll leave it at that for now.

I have some a bit more commentary, but that's why the blockchain technology is so powerful. And this is the same thing Bitcoin is built on. And stable coins, the reason they're called stablecoin is they're tied to the US dollar. So one USDC, for example, USDT, there are two types of stable coin is equal as one US dollar. So they have a one for one value. So that's why they're mentioning that this could be. a very obvious way of disrupting payments. The next one here, and we'll comment on those,

just trying to get into the summary first, because it is that we could go probably an hour or so and give our thoughts on it. The next one, again, kind of building on what's happening right now. So the private credit tailspin. So private credit starts taking losses because loans giving to SaaS companies and white collar exposed sectors start souring.

This starts to spill. over into the insurance businesses that are owned by large private credit firms, like we talked on the last episode. Blue Owl is the first one to take the hit, but then Apollo, Brookfield, KKR, all follow suit. The issue is that these asset manager invests funds from their insurance company into the asset management business. It's a great flywheel when times are good. They invest the funds.

They get the fee. The capital grows. and they pay obligations owed by the insurance company and pocket the profit and the fees. But when things start going the other way, it means they start taking losses and insurers that are owned by asset manager must now have more capital injected into them to cover the risk, which forces the mothership or the parent company to either raise equity or sell assets at a discounted price from the assets that it owns from the parent company. Yeah, I mean, the whole private credit thing, I would argue that this is kind of starting to unravel already. Yeah. I mean, it's not even like a 2027, 2028 thing.

I can't remember the year that they said this started to unravel in the company, or sorry, in the, you know, kind of the letter from the future. I think it was 2026. Yeah. I can't remember exactly because, again, it's, it's a long article. So I tried to get the biggest points to get a sense to people. Yeah, I mean, we went over this. I think this is happening earlier rather than later. And yeah, I don't think this is a hypothetical situation.

I mean, we're seeing it with Blue Owl kind of halting redemptions and, you know, a lot of private credit companies, a lot of software companies underneath the surface there being in a bit of trouble in terms of paying off the loans. And yeah. Yeah. And I guess here the ending point. So a lot of this starts spilling over to the housing market. The unemployment rises sharply because of all. the reasons mentioned. This mean that home values across the country go down, but especially in those white-collar area that are seen as previously seen as top credit. So the highest credit score,

people that would put 20% down on jobs, sorry, on homes, while these people are starting to lose those high-income jobs that are no longer present. There's less and less of them. household cut back on their spending, could keep their homes, but at some point they have to sell. There's also a lack of buyers because the unemployment rate has jumped. I think they mentioned around 10% in the article,

starts putting pressure on mortgage bonds that were previously in as high quality because, yes, they were originally issued as high quality because they had high quality borers, but now that these borers, a large swath of them actually has laws or jobs, it's no longer the case. and it continues for so long until that the housing market is in the middle of its biggest drawdown since the great financial crisis.

To midly, all of this what's happening, and this is where they're, it finishes in a way that they essentially just want to bring discussion around this. They seem to think that there's just not, governments are just kind of waiting on the sidelines and not doing too much. But ultimately, they say that all of this leads to government realizing they have to, intervene. It considers a tax on AI compute and also payments to household. So universal basic income or kind of a bridge payment until the situation revolves because the current employment insurance that they have in the U.S. doesn't really fit the needs. The needs is usually you have those employment benefits or unemployment benefits to kind of bridge the time between one job and another. but the problem is this is more structural

and needs a more revamp of, I guess, the economy, society, or who knows, but essentially you can also see that as helicopter money. But they finished a piece with yes, that this is just an kind of futuristic scenario. Like I don't remember the exact wording, but they really wanted to publish that to just kind of raise their discussion around it. Now, they are, they've been short and I think they are short some software companies

right now, right? I read a few articles that said there was no like confirmed positions that they're short. But a lot of people had mentioned they've routinely gone short these software stocks and they figure they're short now. So. But at the same time, I mean, software stocks have been crushed way before this article came out. So I don't think even if they are short, it would have a big impact. They are long, short, you know, a research firm. So they do have long bets. It's not only shorts, but I listened to an interview with the guy that co-haap shot from Citrini.

And it was really interesting because they didn't expect to have this kind of market reaction. And a lot. And I think the markets were down last Monday because of in big part because of this article. and just making realize that, okay, maybe this is a bit grim, but can you really read this article or listen to the summary I just said and say that it's out of, like, out of whack or really out there that maybe 50% of this could happen? I don't think so. Yeah.

This is pretty, as I mentioned, like kind of dystopian, like, I mean, depressing, really. if you were to read this article, it's somewhat depressing, but like, yeah, this is not outlandish from like a realistic situation. I, I kind of mentioned this, I haven't mentioned on the podcast, but I've mentioned it to other people. I would not be surprised if they need to find a way to tax these companies who are providing the AI computing or like they, some sort of UVI because realistic. like if it does replace a lot of white collar jobs, I mean,

and you know, you can run a lot of this stuff through artificial intelligence. It's, there's going to be a lot of unemployed people with no, like you said, EI, like typically it's just a stop gap. Well,

there might no income, right? So they can be taxed and the government needs that revenue. So where do they get that revenue? And that's one thing to get into the, the article. With the March 2nd, RSP deadline approaching, there's only a narrow window left to secure that tax deduction for the

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tends to be overlooked by SAS Bowl right now. It's just a negotiating power. It doesn't matter whether you go ahead and build something or not. The threat of being able to do it, I think will have a pretty big impact. The next one here, I'd like to hear what you think about the kind of intermediary platforms, middle person. So thinking here about Unabid, Uber, XP, could also be platforms like PayPal, like all of these kind of platforms. Like what do you think about it? Or even an Amazon, Walmart. You know, why are you automatically go to Amazon because it's so convenient.

You have Amazon Prime. But now if you have an agent kind of shopping and scouring, will you be using Amazon as much just because it'll get you the best deal. You don't really care where it's from. Just buy it for me, look, and you know, whatever is cheapest. The only thing I think with Amazon is I think there's, are often the best price. You know what I mean?

Like you're still, these agents are still going to need to go. Like, let's just say somebody's selling stuff on Amazon. They have no storefront other than Amazon. So you really can't buy it outside of Amazon. So, but I think the one thing it's going to be able to do,

I guess they have apps for this like coupon tracing and all that type of stuff to get the best deals. I mean, companies like Expedia, stuff like that, I would be very worried about those because I haven't tried this, but I would imagine you'd be able to get even like a Gemini or a GDP right now to just kind of put together a package for you.

The only thing, I don't really know all these travel. GPT has become pretty good. They have like even a shopping now like option that you can use that seat. That's pretty decent. Yeah. Well, and there's no question like the, who was it? Shopify. Sorry, Shopify and Alphabet are working together to effectively put, you know,

you won't even have to leave Gemini to buy stuff. And at this point in time, it'll be kind of Shopify fueling the, the back end of it. But yeah, I mean, a lot of these intermediary companies who, you know, kind of provide, I don't know what you would even call it, convenience. Like Expedia is just convenience, really. And now that they've made shopping for the package, you know, it could be instant on some like GDP or on chat GDP. I don't know, you know, the moat is effectively gone there. But yeah, I don't know. Some of them will survive.

Like I said, like Uber, I think on the vehicle side of things is more like the network. Like no matter how, you know, if you vibe code a ride share app, how do you get it to as many people as Uber does, right? So like sure, if you promise to pass through more money to the drivers, that still doesn't get you the people, I guess you could say. Yeah. So, I mean, it's highly dependent on. the argument against that would be like it wouldn't matter because the AI agent you would just ask it to get me the ride from point A to point B and I don't care you figure it out as long as like you figure it out I want to go point A to point B and I want the ride to be like safe and all that you figure it out you get me the right yeah that's true I mean I'm not saying I'm just that's what they're arguing right that is what they're yeah and I mean like a lot of people have we go back to the to the to the SaaS portion or even this portion in general like I do see a lot of people kind of making fun of like the vibe coding thing like they they still think that the disruption

in software is the vibe coding like it's far beyond that like way beyond that like the reason software stocks are down like 50% is not because somebody could open up clod and replicate the platform no it's because first off the seat the agent I think the agents are the real issue like if you can get somebody if you can get a single AI agent who can replace 80% of a marketing team

like think of your seats like you won't out they won't need to buy as many subscriptions they won't need to hold as many seats or in this situation like if the agent can find you the best ride that's going to get you there safely is is the moat still there

yeah I mean again they really didn't address that but there's always the potential usage option, right? So you could always charge more on usage versus... That's how it has to be, I think. Yeah, but again... Like I think for like a Salesforce, it'll go...

Yeah. It'll go to like, you no longer pay us per seat. You pay us for how many customer service things you finish. Yeah, or combo of like, you know, you have a certain amount of seats minimum plus usage. If you go above that, then you pay like a surcharge or something. But yeah, so I mean, to me, it's definitely interesting whether it'll happen or not. Maybe some are more approved than others. The payments one is super interesting.

I know it's not as much your world in terms of like crypto and stable coin. But one thing I encourage people to do. So pick one or two LLMs that you use and ask it as an AI, strictly as an AI or even say as an AI agent, what would you be your preferred form of payments? So for the lowest fees, like you can usually ask it like, you know, a few different variables if you like doesn't matter.

When I asked it, it was always the same two that came up. It was either stable coins or Bitcoin. Yeah, those were the two because it removes the interim, or the middle person. Yeah. It removes the middle person,

less fees. There is no censorship. I mean, stable coins, I guess there could technically be because with the Genius Act in the U.S. that put a regulatory framework for stable coins into law last year. Obviously, the U.S. government will probably have some oversights over that, but at least a Bitcoin, you remove that censorship possibility. And AI seems to definitely favor those in terms of speed, efficiency, and cost, which other forms of payments, you know, we can talk about how great the networks of Visa and MasterCards are,

but they're not, the cost is high. That's what it is compared to Stablecoin. The cost is high because they can make it high. There's really nowhere else you can go. And I mean, I guess like my question here, and I think Visa is actually kind of positioning themselves right now to kind of combat this, but like security wise, like fraud, in terms of stable coin payments. Like,

do you not need some sort of system set up in terms of payments? Well, the blockchain essentially prevents. Well, yeah, I mean, that's the biggest issue is, yeah,

if there is fraud, you can't really reverse payment. So that is one of the things that is some of the downside. But does it, is it enough of a downside? I don't know. I mean, it is really interesting that,

Yes, it could happen. And I guess the other, the counterpoint to this would be network effects. And people might say, well, you know, all merchants except Visa MasterCard. So is that going to go away soon? But with the Genius Act that went into law in the U.S., I wouldn't be surprised of seeing more and more merchants starting to accept stable coins because they're paying less fees. Yeah. They have an incentive. And if you're getting more and more people using stable coins, and especially if they sell to customers outside the U.S., that will probably grow pretty quickly because a lot of countries make it difficult to hold U.S. dollars.

So stable coins is a very good option if you live in countries where the currency is not good and you want U.S. dollars and your government won't let you open U.S. bank accounts while you can bypass that with a phone and use stable coins. Yeah, I mean, I guess I'm not as bullish on this regard, I guess, but I also don't really know a lot of what I'm talking about in this space. But I mean, that's fair. For me, like, and obviously, as you had mentioned, the merchants will want to use it because Visa and MasterCard get away with like highway robbery. Like, say if you, the higher reward, and a lot of people don't know this, but if you have a very like high reward credit card, like Visa or MasterCard, They just turn around and charge merchant. So, like, they charge higher fees for, you know, higher reward credit cards, things like that, because they can. But, like, I don't know if there's no, like, reversal of payment or, or no security or anything.

Like, am I really going to buy something with a stable coin, like, knowing that, you know, like, if you buy something from a merchant or visa or master card, you're protected. Like, if you get a bad item or, like, it's faulty or, like, it never shows up. Like, you get your money back. what happens in this case? I think it's like an element of trust, I guess. But how often does that happen though? Rarely happens. I mean, on tying your purchases, he probably wouldn't care about, but. So if you save 2% on every transaction, would you be okay with once in a while just, you know? Well, the thing, well, that depends. Well, prices go debt because it's a merchant saving money.

Yeah, the merchant saving money. But maybe now they're, they're saving 2%, so they're, they're, they're basically dropping their price by 1% and pocketing the difference. Yeah. That's the thing. Like it has to come down on the actual consumer end because the consumer doesn't care if the merchant is saving 2%. I don't know. You can always as the AI agent to make sure that the merchant is reputable, right?

Like, yeah. It can always, like whenever I buy something, I always double check. Like I bought stuff on sites I wasn't familiar with and I just make sure there's reviews and there's, you know, it looks legit. I think there is way to, I've never had any issues. Like I can't remember last time I've had an issue with that. So to me, I mean, I get it, but I guess it's more the exception to the rule. Yeah.

Yeah. And I mean, I don't know, Visa. I own Visa. Like I've owned it for a while. I own them too. They're doing a lot of stuff with stable points. Like a lot of the stuff I can't even comprehend. I know they're doing like a direct platform where like if you're buying something,

you pay in dollars. but like the the recipient gets stable coin. Okay. So it's yeah, like it kind of keeps people on the visa network because they're still paying at Fia and then the receipt. Like I don't know. Probably I don't know what it is exactly,

but it might be really useful for merchants that are outside the U.S. and don't want to open a U.S. bank account. Yeah. So they can still take U.S. dollar, get U.S. dollars, but they can just have it through their stable. and wallet. Yeah. I know like this is definitely a threat.

You don't see a company like Visa investing as much as they are into stablecoin tech without this being a threat. I just coming from a person who's completely naive about all of this type of stuff, I don't see it as a big issue, but it might be. Yeah, I guess so to move on here and wrap this up, private credit, that is where it really gets scary for me. This is the one that I think, you know, some of this stuff here, you can. can make a case that maybe it's too, too pessimistic, too bearish, like, it won't go that far.

But private credit, the problem is you don't know fully how big it is private credit. You don't fully know how intertwined it is, the systemic risk and the dominoes that could happen. If we remember, the whole insurance thing, like one of the big drivers of the great financial crisis was when AIG was essentially like it had really bad insurance contract and was basically blowing up, right? That was one of the big catalysts of the great financial crisis. And I never realized how intermingled the private credit companies, the large companies were with their insurance companies. And yes, I don't think they're doing anything wrong per se.

but if some of the assets that they have these private assets that are not marked to market, they're marked to model. Very big difference. Mark to market is the market telling you what price it is. And a model is you put a price based on a model. And you can, obviously the models, they have to be reasonable. But again, oftentimes they end up being a bit too optimistic in terms of what they are. And I do worry that if we start seeing businesses being a roe,

by AI and then their business models that are threatened that that could really spill over pretty significantly into private credit and private equity. And then you can get some of these behemots into a lot of trouble. And then you don't know how much tangled up they are with other financial companies. Yeah. I mean, we've already kind of seen it where people are like rushing to the exit. I mean, it's this area, especially on like, the software side of things is already getting kind of scary.

And obviously, yeah, like you said, there's very little transparency now. I mean, I know they're kind of, you know, making data platforms. And I think, I can't remember. I think it was TMX that bought like a private credit kind of data type company to give, you know, a bit more transparency on this.

But I mean, most of the people who own this type of stuff have like on the retail side of things, I have no idea what they actually own. And that's mostly because, you know, it's not for a lack of trying. There's just not a lot of available information on it. And I mean, a lot of these companies dishing out a ton of money at crazy high multiples. I mean, for some of these software companies, like they were probably paying 3040X sales for a lot of these companies.

And what are they worth now? You don't know because you know what have publicly traded companies, multiple has come down to, but you have no idea on the private credit or private equity side of things. Yeah, until they start trying to sell them and then they can't really get the value or they do like Blue Owl did and they try to get their insurance arm to buy those for for book value. But there's just a lot of questions. And then you also think about the rise of private equity and private credit, how much bigger it's gotten. So you can make a case that was working great 15, 20 years ago because the market was smaller. There was better deals to be had.

but as it grew and grew and grew and grew, you don't have to look very far to see people that know these instruments pretty well and just say like, look, there is a lot of private credit and private equity that even before all of this, they were buying like really bad debt and they were buying like really bad businesses because they started a fun and they had to put the money to work to be able to really get. Yeah, they had to deploy to get their fees. Yeah.

And the incentive was out of whack. So they didn't really care as long as they deployed, they got their fees. And then you end up in this situation like hopefully we're not in right now, but that we might potentially be in. But at the end of the day, I think any kind of real world impacts, anything else that we then talk about that you wanted to mention. I mean, I guess this would be more so on the side of like disruption. I mean, in terms of, I guess it would be more. that white collar job type situation like a lot of i think a lot of jobs that rely on you know going through data or like you know documents the one thing i can think about would be

like something like a paralegal yeah like a lot of that stuff and like i've i've done it myself like the one thing a i is very very good at is just going through monumental amounts of data and kind of the one that the one thing i think a lot of people will say is it does tend to hallucinate. And there is an element of trust here, but I think down that like people, obviously law firms or whatever it may be law firms, accountants, whatever it may be, have to eventually trust platforms like this to put out, you know, the right amount of information. But I think the one thing that this highlights that article is like the potential real world impact on jobs. And, you know, in four or five years, are we going to have a massive amount of people

unemployed looking to get back into the market. And like the only industries that I can think of, and this, the article mentions it as well, like construction, maybe like real world economy type jobs. Yeah, real world. I think we talked about it by, remember the one I did industries that shouldn't get disrupted.

So these type of jobs that are in environments that are never standard. So you're never going to get the exact same kind of environment, which is very difficult for AI to work off because it can't go off a model, but it has a lot of trouble adapting where you're renovating a house or something like that, even if somehow you could make robots that could do renovation, while they get into something that's not standard, and then they don't really know what to do. So those are the kind of jobs that should be a lot more,

Which is pretty much every renovation job you do. Pretty much guarantee. But then, like, you have to ask if you have a lot of these white collar jobs that go away and you have a lot of people who head to construction or something like that, like what happens to wages, what happens to the demand for a lot of these jobs? Because it's going to flood so many people to that side of the market. Like, I don't know. Well, that's one of the things they mentioned their article is you get these white collar. workers that were making 100, 150K,000, 200k a year, and they lose their jobs. And then they said they have to become Uber drivers or whatever because they can make 50K,

but there's no other option. So that's what they do. But the ironic part in their whole scenario is that that too gets replaced by AI eventually via autonomous vehicles. So it's, I mean, again, it's really interesting. I think for me, the biggest takeaway, and I was already a little bit paranoid, but on that, but it's just having a backup plan. Yeah.

You know, the podcast is doing well, and I think this should be pretty a, AI resistant because I think hopefully you are listeners like that we're humans and not AI. And, you know, you like her quirks. You like my accent. You like our lack of hair, all that stuff. And can't really be replicated by AI. But my own backup plan, and we were talking about that, is you know what it is,

but I've always done well at poker. And online poker is one thing, but playing poker in person, I think, I know this sounds crazy, but it's pretty damn AI resilient because people will always want to gamble. And a lot of people prefer going in person. And as much as you can use AI tools and solvers, these are kind of brute force calculation, you still need to be able to apply them in person. And you also still need to be able to adapt to the emotions of your opponents to the tendencies, which AI cannot do.

It won't. And, you know, unless you have yet, but even then, right, it should be, if it comes to the point that it can't do or you can have something in your, a lens in your eye that's AI or something, maybe, maybe at some point in the future, but I, yeah, contact. But I see that as being pretty AI resistant. And I would not recommend this to 99% of people. It's not easy and you have to put the work in, but it's something I'm pretty good at and I have put the work in.

So for me, that's, it's not conventional, but a lot of stuff that we're going to see in the next two years is not going to be conventional. No. And I think, I mean, even for me, like before this, I worked in Fort Mac, mostly paper pusher, I guess you could say. like I plan turnarounds and stuff and there was a lot of meetings, a lot of scheduling,

a lot of like work that even on that side of things, I can think would have been, can be easily replaced. If not now, like down the line, it's hard to know, like obviously, again,

this is like, it's a doomsday type, like dystopian type scenario, but I don't, I don't really think it's all that unrealistic to happen. Obviously, nobody knows if it's going to happen

because the tech is so young, but I used to kind of brush it off, but I kind of went down the rabbit hole and like, man, the things it can do, and I'm doing it as like just a solo guy on my computer. And the things I can do is just,

it's crazy. The stuff that I'm building, I can't imagine would have cost me less than 50, thousand dollars like pre-LM to get you know somebody to to develop it and that's just on the coding side of things like it's it's costing you what 300 bucks a month or whatever yeah yeah it's like a quad subscription at my own time which i guess you know if you account for the fact that you know i'm a i own the company i have to pay myself sure it still costs the company money but it's nowhere near what it was and i mean we had that i did that palenteer over the earnings

overview where they cut that time for the U.S. submarine maker from like 250 hours to 15 minutes in terms of like scheduling, you know, material or whatever maybe plans. Like all those hours are gone. You have employees who no longer need to work those hours because the AI platform can do it in 15 minutes. And now you probably have one person confirming that the AI has done it right and that's it. So a lot of this stuff is already happening. Yeah. And it's like every month there's a new piece of tech that's coming up.

But it's also like Anthropic today kind of praise Thompson Reuters legal like their co-counsel like their AI agent. Thompson Reuters is up like 15% today. So like there's so much like one headline just drives a company. It's crazy. It's a very, I'd say this is one of the craziest times to invest in a very long time. No, exactly. And I think for me, like, I try to, you know, you just have to, I think it's important. Like, just try to control what you can. Try to bring value in other ways, value in ways that, you know, I think those relationships, it's really important because those are things that AI can't replicate, make sure that you know how to use AI. You just don't necessarily resist the change. These are all things that I think will help you, especially if you have white color johns. And again, I know you have a Red Seal electrician, so that's kind of your backup plan for me. I've said it like earlier.

I know it's weird for a lot of people, but poker. And you've seen my results. You know I do extremely well. Like I'm not. But I think it's good to have those kind of backup plans in case something like this does happen and you have to find income because you don't want to be in a situation where you're really like stuck and you need to like scratch and cloth or like tiny amounts of income. It's good to have a backup plan.

At least for me, maybe people are different. Maybe they're closer to retirement. Obviously everyone's situation is different. But for me, I like to have that margin of safety in mentally. It helps me sleep at night. It does help. Yes. And I mean, on the investing side, I would suggest just having a very, very open mind.

Yeah. I mean, don't, don't get caught up in the idea that, you know, like this is just an example. There's a ton of companies that are down for a wide variety of reasons, but don't sit there and think, like, oh, you know, the market's selling software stocks because people are going to vibe code these platforms. Like, it goes much deeper than that. Yeah. And I think there's, you know, there's a wide variety of industries that are getting hit very hard for, you know, not completely invalid reasons. Like maybe something that might not come true. but the market is forward-looking.

And yeah, just tunnel vision, I guess, for a lot of investments. It's opened my eyes for a lot of things for sure. That's a good way to wrap it up. I think it's important. If you're looking at any of the companies that were the buckets that were mentioned in this article that we talked, there might be some amazing value to be found there. But I think the things I would recommend to people is you need to make sure you do, your homework on that before you just start putting money in a company that's being like smashed

by 50 or 60%. Do your homework. Stay on top of it. This is now the time to buy a company and set it and forget it, especially not in those sectors. You have to stay on top. You have to listen to every single earnings call. I wouldn't have said that two, three years ago, but I think now you have to do that.

And if you do that, you might be able to get some fantastic buying opportunities, but you have to be careful because you might, if you don't do it correctly, you could also see your investment be cut in half. And I think it's real important to just allocation, make sure that if you do make some, take some positions, you make them so if the bet goes wrong, you're not destroyed. And the way I look at this as well is just I'm trying to think more and more at investment that will be AI resistant and investment that will be seeing tailwinds from AI. And we've talked about that. We've talked about industries in the past. I mean, energy in general, I think we'll see some big tailwinds. I think the market's starting to slowly wake up to that. But that's how I view my portfolio is that I'm trying to position myself where it could be some AI.

tail wins, but I don't have much directly invested in AI. Like, you know, my portfolio. Like, it's mostly kind of a byproduct of AI. That's kind of how I'm seeing things. Yeah, same with me. I mean, most of the companies that I have, that have exposure to it are kind of, you know, at the front end, like the picks and shovels, I guess you could say. But yeah, I mean, if you're buying software stocks, like, again, I'm just using software

as an example, but you're buying them because they're down 50% and their results haven't been impacted. Like the market is pricing, it's just re-rating the multiple based on what could potentially happen in the future. But market doesn't care, you know, what Adobe is earned over the last year. They care what they're going to earn over the next two years. So I mean, a lot of people are saying, oh, you know, this hasn't been impacted. Well, it could. And that's what the market is pricing in. And I'm just saying, this is kind of what I mean by just keep an open mind to, to the potential possibilities. I find a lot of people are, it's just a all or nothing thing.

And it used to be for me, it's not really anymore now that I've kind of, you know, dug in a bit deeper. No, well put, I think that's a good, good place to end it on.

Hopefully you enjoy the discussion. Really encourage you to read the piece. I will have a link in the show notes because we did our best to try and summarize it and then have a discussion around it. We just skimmed over a lot of the piece because it's very detail. It's like an hour plus, depending how quickly or slowly you read. So if you want to go into more detail,

they have some pretty solid reasoning, I think, behind it. I highly recommend that you read it. Thanks again for the support listening. Just as a reminder, if you're listening to this on March 2nd, we will be having a live YouTube earnings and news tomorrow at noon Eastern time. So make sure you subscribe to our YouTube channel.

I'll be sending that up. It'll be set up by the time you listen to this. So just make sure you go on our YouTube. I'm sure Dan will try to do something with stock trades. Maybe do it simultaneously. I don't know. You can collaborate it. Yeah.

Collaborate or something. Anyways, we'll figure it out. It's our first time setting it up, but we'll try to set it up in advance. So you get notified when it starts. So thanks again. And we will be back tomorrow for the YouTube Live. If you miss it, you can listen to us on audio on Thursday. The Canadian Investor Podcast should not be construed as Investors.

or financial advice. The host and guest featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.