Carson Block

has a healthy economy, we have a healthy job market because we've added all these health care jobs.

I think that's a misinterpretation.

So look, does that really go to whether AI or LLMs are going to make a meaningful dent in employment going forward?

No, because as I said, we're really at that point now where you're starting to see how these can replace employees in certain situations or at least prevent the hiring of employees.

And the next generation will be even more powerful.

Yeah.

And so, again, this has been a U-turn for me because there was actually a podcast I did in January where I was talking about how we had developed this systematic momentum strategy in-house at Muddy Waters.

And, you know, it's been compounding for us at north of 70.

I mean, even I think most recently about 90% per year.

And I was completely sanguine about the outlook for the market and the idea that momentum, as much as it shouldn't, as much as the fact that the stock has gone up shouldn't determine that it'll continue to go up.

especially these days.

And a lot of it relates to market structure.

And so this is where what I'm saying about job displacement due to AI becomes a problem.

So in January, I'm completely sanguine.

Question, Carson, well, when does it become a bad idea to invest in momentum within the S&P 500 index?

When unemployment rises materially.

Well, when do you see that happening?

Eh, not anytime soon.

Well, OK, here's the issue.

I now do see unemployment, particularly for high wage earners, rising significantly in the next several years.