“…if I only had a brAIn…”

The October “bear rally” in the Dow index was credited to algorithmic buying decisions made by the ETF’s controlled by global money management firms like BlackRock and Vanguard. Nobody can explain exactly what that means, though. There is a sort of hand-waving verbiage many people parrot, and general tacit agreement around them, but no real articulation of what algorithms are doing, and why no human being would ever do what they was doing. The implication, however, is that there is no good humane reason to buy in this particular market. But blaming AI is a joke.

Wait, So My Money Is Controlled By Robots?

It should have been alarming for all people involved in public markets, to think that human beings were no longer in control of trading decisions. If that were the case, there is no reason to discuss anything about stock ownership and the entire business of CNBC would collapse overnight. Obviously that’s not the case. AI is a convenient scapegoat, for human beings who don’t want to be blamed. It isn’t about thinking. It is about liability. Blaming “the models,” or the Fed is a great excuse for thieving money managers who want to evade accountability.

From the lowly retail investor that has a fraction share of SNAP, to the multi-trillion dollar money management firms mentioned herein, there should be utter panic if algorithms now control your monetary decisions. Because at this point there are 2 possibilities: either computer-controlled trading platforms are running the show, or people are running the show. While it may be fun to wax philosophic about this, it isn’t really important. Also, what the market knows as “AI” is mostly a lie.

Fortunately, AI Is Still Really Dumb, People

Take Facebook, and Twitter for example. They both have claimed for years that they have content moderation AI which enhances their capacity to keep the platforms free of unlawful or offensive material. Saving the fact that this makes them unequivocally publishers (not protected by Section 230 at all) the only computer learning they developed has to do with the composition of simple banner ads. That’s it.

Everything else is just human reporting, and tens of thousands of people who are forced to consume the worst content imaginable. In fact, Zuckerberg settled a major class action lawsuit with contracted content moderators who suffered PTSD and emotional trauma from their job. His response to their initial complaints was to continually force them to consume more content in less time. Sadistic.

To a user it occurs like Facebook is artificially intelligent, and handles their requests for moderating content using AI that is now accused of having a bias. The truth is there are too many users publishing too much content and not enough actual technology to sort out what should or shouldn’t be there – let alone the political ramifications of suggesting what is or isn’t acceptable speech.

Vision & Courage Is Needed, Not More Data

The truth is, when you talk to money managers, they are just not creative. They have no vision. Theirs is a gift of grifting. Fundamentally a money manager should be a master of fundamentals. A 1% fee on trillions of dollars is astronomical. I don’t envy the decisions that need to get made by an organization which is built on other people’s money like that. However, being that it’s not my cross to bear, I don’t have to care about the emotion state of a person like Larry Fink.

And neither do you. Even if he’s holding all your money.

If these institutions are incapable of acting on what is obvious information, like the market is full of fraud, froth, and dumb investors, they need to be pressured into it. I think it’s a sick kind of irony that BlackRock types convince themselves that the money they manage is theirs. They have also made too much money off of doing too little.

Think about it this way: if BlackRock runs all of their business on AI then their clients need only to invest in developing such a mechanism for themselves. Then there is no need to work with a money manager. Therefore money managers have to either claim their AI is better than any human being (including themselves) but they are valuable because they own the technology. But the technology is not the human being.

Have A Heart To Reclaim Your Guts

Therefore, money managers do not need or want AI to dominate markets. Blaming AI for their poor performance is about as weak of an argument as a chef blaming his knives for being incapable of cooking a steak. They aren’t thinking with their minds. I believe it would be better to say they are thinking with their stomach; not their gut. It is obvious to anybody’s brain, gut, or other intuitive organs, that the stock markets need more deflation. That’s how inflation will come down. Because that’s where it is.

Stop blaming AI as if we have no way to control it. Or freak out wildly because the markets are controlled by algorithms programmed by greedy market manipulators who have lost control of their own monstrosity. My bet is that it’s a bunch of dumb greedy jerks who could easily be taken down a peg by people demanding their money back.

Run on the money managers first, then the gluttonous stocks, then the banks. If it takes that long. Don’t worry about what the Fed says, or does. Regardless of their policy you should not be unnecessarily trying to borrow money just because it’s cheap. Focus on building businesses that actually provide something the world needs or wants. If you can’t do that, then hang out on the sidelines until you get a good idea. But dumping money into these fake AI ETF’s is not a safe investment. Not now. Not ever.