It is ‘nearly unavoidable’ that AI will cause a financial crash within a decade, SEC head says::undefined
And then we finally eat the rich, right?
Sorry, the best we can do is a small marginal tax increase on income over $1M and a 50¢ bump to the minimum wage.
Well if we can’t tax 'em we could always literally eat them, and if we can’t afford food thanks to them killing the good paying jobs then maybe we will just have to eat them literally if we can’t tax them properly.
Better spread out that wage increase over a reasonable period of time, like 10-25 years. Wouldn’t want to burden the precious job creators out there.
/s
But, you know, after the economy revives by state simping for the private banks, maybe we’ll discuss it then
50¢? Whoa now you arent trying to send us down the road of commies now are ya?
Better cut that raise in half at least
Weird shaped head.
Lmao yeah. They need someone to blame for upcoming crash lol.
My thoughts exactly.
I mean, a few communities I’m a part of have been warning about this since c. 2014, so I think he’s actually correct in his prediction. I haven’t read the article, but I don’t think any solution he’d propose would be good regardless, so I think I’ll just save my time. TLDR: failing a real leftist paradigm shift, we need global welfare like 5 to 10 years ago and UBI.
We need ubi. But that funding for a ubi program needs future predictions of economics.
So do I collect my economic Bingo winnings after the 4th or 5th major crash of my adult lifetime?
You win the chance to afford to eat human or expired cat food you found on the body of someone you shot over a pair of worn boots.
Sounds like playing Zomboid.
I’m afraid your bingo winnings are going to be confiscated by the government in order to pay for more golden parachutes for the CEOs whose decisions led us here.
Good, let it all collapse. I want to see the 1% shit themselves before climate change kills them.
That’s not who suffers most in financial collapse.
So, how do we engineer a situation in which the richest suffer most? End of capitalism?
Historically riots, mobs, and terror have been the answer. See the origins of the luddites, saboteurs, the French revolution(s), the socialist movement, etc.
The luddites failed and the French revolutions ended poorly for everyone. Not exactly the best examples to draw from if you are trying to encourage violent rebellion.
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I was thinking more along the lines of mad max.
Greatly increasing taxes for the super wealthy and closing tax loopholes would be a good start.
If they haven’t done all this until now, what makes you think they’ll do it then?
The rich will get off unscathed with a blank canvas to work on, and the poor will pay the price, just like with every other market crash.
Invent a system of money in which they are no longer in control of it.
I need to get off lemmy. Too many teenagers on here with their "burn it all down"s and "trust me, I have a super easy solution to a giant complex problem that has been plaguing humanity for generarions"s and "the bad guys are actually good guys, lol I’m so edgy"s
Is this suddenly a teenager platform whenever you want to infantilize the ones you disagree with?
No? It’s…just always a teenager platform? It’s not like the users change age from day to day.
Except for the fact that people literally do change age from day to day. Another day older.
Holy fuck, the level of immaturity and pedantry was even greater than I could have anticipated. Well done, you have out-teenagered yourself.
The only immaturity I see is the person throwing around ageist ad hominems in response to someone making a joke.
now now, no need to be dismissive of other age groups in this matter. I’m sure there’s plenty of non-teenager people that think the same way too. on the internet, nobody knows you’re a 74 yr old extremist
Spot on, I’ve noticed this as well. So much black and white thinking and poorly developed and thought through political opinions infest this site.
Fuck cars, eat the rich, Bernie is the only decent politician, ACAB. It’s all populist low effort bullshit.
Bingo. The super-rich love a financial collapse, it gives them a golden opportunity to turn disaster capitalist. All those foreclosed homes & businesses available at a knockdown price, nom nom nom.
Yay
This is the best summary I could come up with:
The chair of the SEC has warned that AI could trigger a financial crisis, as Wall Street rushes to adopt the new technology.
Gary Gensler told the Financial Times that it was “nearly unavoidable” that AI would cause a financial crash as soon as the late 2020s or early 2030s, and said that reliance on models developed by tech companies could lead to economic chaos.
Wall Street banks have been enthusiastic adopters of generative AI since the splashy launch of ChatGPT last year.
Morgan Stanley launched an AI assistant based on OpenAI’s GPT4 model to help employees access market information last month.
Rival JPMorgan, meanwhile, has reportedly filed a patent for an AI model known as ‘IndexGPT’ that would help traders choose securities to invest in.
The SEC did not immediately respond to a request for comment from Insider, made outside normal working hours.
The original article contains 326 words, the summary contains 144 words. Saved 56%. I’m a bot and I’m open source!
Is it because replacing employees with AI results in a never-ending cascade where your stupid system doesn’t keep consuming because AI don’t consume and won’t get paid?
Or is it because using AI will result in the climate to continually become more inhospitable?
Maybe it will be because AI will be used to create more and more believable misinformation that results in WW3?
Currently, I would rather guess it’s the usual bubble popping. AI has attracted billions of investments and will likely pull in even more, but it’s already foreseeable, that hardly any of the investments will turn a profit. So we’ll end up with a third dotcom bubble.
AI isn’t a bubble. The futurist/Rationalist/transhumanist communities were saying what’s happening now would happen in a few years about a decade ago, and our predictions are that the next phase is AI taking over all labor through sophisticated automation. We’ve been trying to warn everyone about this since the advent of Google Deep Dream, but sure stick your head in the sand again and let the world burn around you; it’s worked so well so far.
This comment will probably get bombed, but w/e. 🤷♂️ Go ahead and be ignorant and angry at me, I’m used to it.
Edit: yes I am bitter. I’ve had a bad day, and I’m annoyed.
How many times has that been predicted already? Three, four? Look at the history of AI, it happens every few years.
Anyway, you’re implying a dichotomy here. World domination or pipedream, but that’s not the case. The dotcom bubble was without a doubt a bubble, but much of the underlying technology was used a few years later, just without the hype and fanfare.
AI will probably find its uses, and has the potential to eliminate a lot of jobs, but the current iteration of AI businesses is utter garbage. Even something as comparatively simple as Microsoft’s Copilot is currently losing money - roughly as much as it costs to use. Yet, there are billions upon billions being poured into useless start-ups that will never produce anything of value in a profitable manner.
What exactly happened to self driving cars BTW? Weren’t those totally on track of what experts predicted?
They’re on the streets in San Francisco, I see them all the time
Yes. Definitely one of those or something else entirely.
That’s an economist level reply right there
I’m thinking yes, plus AI margin trading running into a tragedy of the commons where they collectively run the stock market into the ground and there’s no reset button on that.
OK, it is addressed in the article…
He’s specifically talking about the use of AI in finance, and that an algorithm that runs amok in a particular sector:
in the after action reports people will say ‘Aha! There was either one data aggregator or one model . . . we’ve relied on.’ Maybe it’s in the mortgage market. Maybe it’s in some sector of the equity market
I’ll throw out a microeconomic example. About a year into the pandemic, the price of used cars started going up… a LOT… in a short time. One of the reasons for the sudden changes in used car prices was that major used car resellers were using algorithms to set buying and selling prices for cars. While supply chain pressure on the new car market was unprecedented, and it trickled down to used cars, a facilitating cause is that the used car price-setting algorithms didn’t really have any humans in the chain checking to see if the numbers they were kicking out made a lick of sense.
So you had companies like Carmax and Carvana buying used cars for $X, and then a month later 5X, then a month later 10X, because they were programmed to just up the offering price until they reached target stock levels. Sometimes they were buying 3+ year old used cars for more than the current price of NEW cars of similar trim level. Carvana’s numbers got so whacked that it nearly sunk the company.
Now imagine that kind of a runaway algorithm in stocks, bonds, real estate, etc. It’s 2008 all over again.
My 2013 Prius got totaled around the peak of this. I wanted to just replace it with the exact same model, because it’s a good car. It would have been cheaper to buy brand new one at the time. I got a new electric car instead and with the $7k tax rebate ended up spending less than I would have to buy a 9 year old Prius.
Honestly hoping something like this happens in residential real estate, if it isn’t happening already. Housing is well overdue for a correction.
You can’t tell me that most people can afford a $400,000-$700,000 mortgage. Median incomes don’t support that price point. Median household incomes might support the lower end…barely. So I am starting to wonder just who is buying/selling all these houses. When I see a $600,000 “average” house last 3 days on the market and then sell for $760,000…I have questions.
I’ve been reading that nobody can afforrd to buy houses for at least a decade now and the price just keeps going up so clearly people can afford it.
In my blue collar, median wage earning workplace the vast majority are homeowners and having an investment property is seen as normal and expected., it’s the new baseline for doing ok. They have dual incomes, two cars, and overseas holidays every year. They are migrants who had no bank of mom and dad and they prefer to send their kids to private or carholic schools.
They are not poor, but if you believe what you read on the internet they should have zero kids and be living paycheck to paycheck.
I bet every single one of them bought prior to the bubble and rate increase that started during the pandemic.
You are outta your mind if you think they are dropping $100,000-$300,000 for a down payment on a house, only to turn around and pay $3,000-$6,000/mo for a mortgage.
Those properties you see being sold are wealthy folks using them as investment vehicles.
Those numbers are very regional, though. $100K down payment is 20% for a $500K purchase, and lots of homes are under $500K. I just bought a new home (as in, literally just built & never lived in) here in California for less than that.
Not sure why people are downvoting your lived experience.
Investor purchases of single-family homes have spiked to 28% of home sales, and well above 30% in many high-demand localities. Market prices reflect that competition, so when one says, “the price just keeps going up so clearly people can afford it”, one must also concede that many of those people are investors who are displacing buyers with less money. Those lower end buyers – who could have afforded a house if an investor wasn’t ready & waiting to flip houses or turn them into rentals – have been frozen out of a home purchase.
Median incomes don’t support that price point. Median household incomes might support the lower end…barely.
I swear if I ever marry it will just be to combine finances so we can actually buy a house and stuff
I am married with a household income in the 200,000-300,000 range and we can’t afford anything here.
He has a good point as this monoculture of systems and models would very greatly amplify any market imbalance and defects, at a speed human bank managers would only realize when getting notified of their impending bankruptcy
It was pretty bananas for a minute. The Mazda dealership offered us 5,000 more than we paid brand new for my wife’s Mazda 3 in 2018. I told the salesperson that it makes no fucking sense and he couldn’t explain it either. Didn’t go for it for a bunch of reasons but it was really odd.
While that’s really interesting, there was a lot more at play than a pricing algorithm. It was a culmination of a lot of things, starting with Cash for Clunkers that had a huge impact on the used car market. Then there were a ton of supply chain issues during COVID that squeezed the new car market. Probably some other factors I’m not aware of, too.
Right, my point is that relying on pricing algorithms when faced with novel “black swan” conditions nearly drove major used car dealers out of business. Obviously, the algorithm didn’t cause the novel conditions, but neither did they buffer the effects. Instead, they accelerated the financial effects.
If you go back and read about Carvana before the pandemic, their big selling point to investors was that their algorithms were “smarter” than the competition and would realize more consistent profits for the company and their investors. When it became clear that these “smart” algorithms went insane, investors abandoned the company and their valuation dropped from $60 billion to $7.5 billion between 2021 and 2023. Carvana has narrowly avoided bankruptcy.
I traded in a 2014 Toyota hatchback to Carmax and got an Audi A3 when the algorithms went haywire. It didn’t cover the whole cost but it was a silly enough trade that I thought for sure someone would call me and say it was a computer error.
Wow, what a deal! Did they say anything about how crazy that was?
No, they actually called and paid me $100 to make the swap at a lot about an hour away. I wasn’t gonna argue my way out of an upgrade so I was like, “Oh, yeah, I can drop it off wherever.” The dude who details the cars after you drop them off definitely wasn’t worried about it. He thought it was funny his bosses fucked up.
My mom’s 2020 Fit at the top trim level sold new for roughly 20k. Her lease buyout price was 1/2 the cost of an entry Fit in the same year with 30k miles (going for 25k at the time)
Gosh, maybe legalized gambling is not a good way to run an economy?
What are talking about? Did you read any of this conversation.
What are talking about? Did you read any of this conversation.
I have more questions than answers.
Heavy doubt on this one.
There is still so much misunderstanding on the state of AI and its potential based on current technology (spoiler: reduce your expectations significantly). How can you expect anyone to make predictions with such misunderstanding.
That said it kinda seems like a financial crash is already happening, regardless of AI.
I think it’s tech illiterate people being amazed by chat gpt and shit, not realizing just how janky and limited it’s actual "artificial intelligence"actually is.
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I’m not dismissing its usefulness for those scenario’s (see my response to Veltoss below). But people tend to way over-estimate what it is capable of.
Generating an office layout? Yeah absolutely, because that’s largely based on prior art, no real innovation required. Though as you noted you’ll almost certainly need to “steer” the AI because there’s so many variables and permutations that it cannot realistically come up with a perfect solution without real intelligence. It’ll require iteration from “someone” no matter how advanced it gets.
But AI as it exists right now won’t replace let’s say your office manager, who would probably be given the responsibility of planning the office layout. Because their job entails making lots of intelligence based judgment calls. That said; given they will get more AI powered tools to do their job there may be fewer jobs available overall because now your office manager at some big office won’t need an assistant anymore.
Note I am not saying that AI affecting our economy isn’t happening or won’t happen. I’m merely saying that any predictions people are making should be met with a heavy amount of doubt, because there is so much misunderstanding out there.
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But that’s plain fantasy at this point. The current form of AI is fundamentally not intelligent. Advancement of the current form of AI won’t change that.
The current form of AI is like the speech center of your brain. On its own it does not constitute a brain, nor will it ever “evolve” to be its own brain.
So the current form of AI may end up forming a small part of the whole, but that whole is as of yet still a fantasy.
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I’m not sure you fully appreciate what “advancement” means.
In this context I’d imagine you meant what the technology could evolve into. But what I’m saying is the technology is fundamentally incapable of being intelligent.
I imagine you think of “the technology” as just artificial intelligence in general. I’m talking about the actual technology in todays “ai”. The inner workings.
I don’t know why everybody keeps downplaying where AI is already at and the speed at which it is improving. It can already disrupt multiple industries with where image, voice, and LMM AI is at right now.
For me personally it’s not that I want to downplay it, it’s that I want to balance the scales. I see far more over-estimating of AI happening than downplaying.
The current form of AI is great as a tool and sadly there are definitely jobs out there that are nearly completely replaced by this tool. But that scope isn’t about to change much based on where we are currently at. Many jobs require actual intelligence to make judgment calls, and the current form of AI just isn’t going to cut it here as it has no real intelligence.
Of course, that won’t stop dumb business leaders from still trying to use AI here, but that’s an error in judgment that imo will correct itself over time.
Pretty sure that crash is more the fault of the greedy shits who think it’s normal for 4 folks to own 50% of the country while 50% owns 2% of the country. Don’t need AI to tell you that system isn’t sustainable.
Financial expert predicts that (what is already) the longest bull market in world history will end within the next 10 years? And the thing that the world’s largest companies are investing the most in might play a roll in that?
Bold.
Shock, awe, hysteria. More “AI” fear mongering headlines to boost the stock prices of tech giants. Yawn.
And? Is it something this person thinks we would avoid without AI? You would need a lot of faith that ‘the market’ won’t dunk on itself some other way. What a non-statement…
They’ve been fucking with automated trading for decades though, unless you’re going to try to convince me that there’s a human investing in a trillionth of a company for a hundredth of a second at a time.
It’s already caused “flash crashes” before. https://en.wikipedia.org/wiki/2010_flash_crash
The idea of investing in companies because you believe in them and want a share of their profits is sound enough I guess, but what it’s morphed into is nonsense. The result is a system where you have trillion dollar companies that never actually turn a profit in favour of “growth”.
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I love how they always mention the autism, as if being a mathematical genius is a common symptom, rather than just being able to remember every episode of Naruto.
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Hey did you know the specific heat of water is 4.184 j/g°c because i learned that once in a physics class more than a decade ago and i still remember.
I am not a physicist and the memorization of that fact does not help me. Thanks brain.
what doesn’t cause a financial crash?
