Why Income Inequality is Bound to Worsen
Thursday, March 18th (60 Second Read)
Nasdaq Falls 3% in Worst Session of the Month
Dow: -0.46% | Nasdaq: -3.02% | S&P: -1.48%
Catch Up Quick
FedEx earnings beat estimates on “unprecedented” holiday shipping season (a possibility we noted in November)
The Fed sharply increased its economic growth expectations while affirming that it doesn't plan to raise interest rates until 2023
The IRS plans to push back the tax filing deadline to May 17, pointing to a backlog of 24M filings from 2019
Biden agrees to send 4M AstraZeneca vaccine doses to Canada & Mexico
Short bets against the S&P rose 10.2% from the end of 2020 to mid-March 2021, touching a recent high of > $521B (S3's data)
For the first time in 14 months, inflation replaced the coronavirus as the top market risk (BofA survey of global asset managers)
Global demand for gasoline has likely peaked per The International Energy Agency in its latest five-year outlook
Goldman Sachs, Citigroup, JPMorgan, BofA and Morgan Stanley had $77.8B in exposure to Chinese assets last year → up 10% from 2019
Biden called Vladimir Putin a "killer" during an interview with ABC and promised he will "pay a price" for interfering in the 2020 U.S. elections
The Biden administration is reportedly targeting mid-May to begin relaxing pandemic travel restrictions
Thought of the Day
From the late 18th — early 19th century, the increasing use of new energy sources (such as coal) and developments in machinery made possible the shift of an economy based on agriculture and crafts to scaled industry and mechanized manufacturing (the industrial revolution)
Today, A.I. + the increasing amount of businesses and organizations becoming encoded in software are bound to drive a shift in the way we both obtain and interpret data
At first glance, both societal metamorphoses seem vastly different, however a deeper look reveals a common underlying theme
Whether it be factory workers replaced by machines, or data collection via form-based software replaced by machine learning that can analyze behavior, both “revolutions” involve automation
This aspect of the industrial revolution benefitted the select owners of machinery much more than workers / operators
This concept created the backbone for both capitalism and it’s opposition, as wealth concentration increased
And while the past isn’t always indicative of the future, the above is likely to happen with A.I., though the scale could be unrivaled
Sam Altman of OpenAI has posited that artificial intelligence will generate enough wealth to pay each adult $13,500 a year, though this illustratively assumes a society wide benefit, which is ultimately unrealistic (click on the below to read full article)


The Bottom Line
Among the evident wealth creation incoming from the A.I. revolution and the resulting societal implications, there exists a reasonable argument for the regulation of technology, given how the industrial revolution contributed to income inequality at a relatively less severe scale
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