Viral "AI Doom Report" Research paper sparks market panic
Visa, Mastercard, and American Express fell 4-7%,
Hello Capitalists,
Here is everything you should be watching today:
Today’s markets + assets:
✅ DOW: 49226.28 (⬆️ 0.87%)
✅ S&P: 6888.48 (⬆️ 0.74%)
✅ NASDAQ: 22847.80 (⬆️ 0.96%)
⚠️🔴 CBOE VIX Volatility Index: 20.63 (⬇️ 8.07%)
🔴 Gold: $5182.90 (⬇️ 0.82%)
✅ Silver:$86.84 (⬆️ 5.47%)
✅ Bitcoin: $64,318.20 (⬆️ 0.12%)
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AI Doom Report crushes stocks across the board
A provocative Citrini Research scenario envisioning AI-driven economic chaos by 2028 sparked a sharp sell-off Monday, sending IBM plunging 13%—its worst drop in 25 years—while dragging delivery, payments, and software shares lower amid fears of massive disruption.
AI Scenario Ignites Panic: Citrini’s weekend report paints a dire 2028 picture of mass white-collar unemployment, slashed consumer spending, and widespread defaults, fueling an “AI scare trade” across vulnerable sectors.
IBM Suffers Historic Plunge: Shares of International Business Machines tumbled 13% on Monday, marking the biggest one-day decline since 2000, as legacy tech faces hypothetical obsolescence from advanced AI tools.
Payments Giants Hit Hard: Visa, Mastercard, and American Express fell 4-7%, with the report warning of cascading defaults in software-backed loans and shifts to alternative payment methods like stablecoins.
Broader Sector Sell-Off Ensues: DoorDash, Uber, Blackstone, and others dropped 4-7% or more, highlighting interconnected risks from AI disrupting labor markets, private credit, and traditional business models.
Gold & Silver Cross Critical Threshold
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$10,000 Gold?
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$200 Silver?
Rickards also sees “silver potentially surging to $200 per ounce or higher”, noting that silver often outperforms gold on a percentage basis during major market cycles.
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IBM stock craters 13% on Anthropic COBOL AI threat
IBM shares plunged nearly 13% Monday—the company’s steepest single-day drop in over 25 years—after Anthropic announced its Claude Code AI tool can automate complex modernization of legacy COBOL systems, threatening a core mainframe business that powers critical finance, airline, and government operations.
Anthropic targets legacy code: Claude Code maps dependencies, documents workflows, and flags risks in massive COBOL codebases, tasks that once took human analysts months and made modernization too expensive.
COBOL remains dominant: Hundreds of billions of lines of COBOL run daily in production, handling 95% of U.S. ATM transactions and key systems in finance, airlines, and government despite shrinking expert pool.
AI flips modernization economics: Anthropic claims AI streamlines understanding legacy code, making it cheaper than full rewrites and disrupting stalled digital transformation efforts bogged down by technical debt.
Broader market fallout: The news fueled volatility in legacy tech stocks, with IBM down over 24% year-to-date and related IT services firms facing pressure from accelerating AI disruption fears.
New Claude AI Tool crushes cybersecurity stocks
Cybersecurity stocks plunged for a second straight day as Anthropic’s new Claude Code Security tool sparked fears of AI disrupting the industry, sending shares of CrowdStrike, Zscaler and others down sharply amid broader concerns over AI’s threat to traditional security platforms.
Anthropic Launches Tool: Anthropic introduced Claude Code Security on Friday in limited preview, enabling the AI to scan codebases for vulnerabilities and recommend fixes, intensifying investor worries about automation replacing specialized cybersecurity services.
Major Stock Declines: CrowdStrike and Zscaler each fell around 10%, while Netskope and Tenable dropped about 12%, dragging cybersecurity ETFs like Global X BUG to lows not seen since late 2023.
CEO Defenses Emerge: CrowdStrike’s George Kurtz pushed back on LinkedIn, insisting AI code scanning cannot replace comprehensive platforms like Falcon, while Palo Alto’s Nikesh Arora called market fears overblown and highlighted demand for more AI in security.
Analyst Perspective: Bank of America noted AI may boost efficiency in targeted areas like code scanning but lacks the visibility and reliability to fully supplant end-to-end security solutions, suggesting the sell-off could create buying opportunities.
Amazon unleashes $12 billion AI data center blitz in Louisiana
Amazon announced a $12 billion investment Monday to build multiple AI-powered data center campuses in northwest Louisiana’s Caddo and Bossier Parishes, marking its first such facilities in the state and promising 540 high-paying jobs amid the intensifying race to expand cloud and artificial intelligence infrastructure.
Massive economic boost: The $12 billion project, partnering with Stack Infrastructure, will create 540 direct full-time jobs at the campuses plus support 1,700 additional roles in construction and operations like electricians and technicians.
Infrastructure commitments: Amazon pledges to fully cover electricity costs via Southwestern Electric Power Company and invest up to $400 million in public water infrastructure while using surplus water and natural air cooling to minimize local resource strain.
Strategic AI expansion: This forms part of Amazon’s projected $200 billion AI-related spending in 2026, outpacing other hyperscalers as demand surges for cloud computing and AI model training capabilities.
Regional competition heats up: Louisiana attracts major tech investments including Meta’s ongoing project and Anthropic’s $10 billion plan, positioning the state as a key hub for next-generation data centers.
Trump Tariff flip shocks allies, stuns foes
President Trump imposed a 10% global tariff Tuesday—set to rise to 15%—after the Supreme Court struck down his targeted levies, sparking trade chaos. Countries like China, Brazil, and Canada gain relief with lower rates, while allies such as the UK, Japan, Australia, and Italy face hikes despite past concessions.
Allies Face Hikes: Nations that negotiated lower rates like the UK, Japan, Australia, and Italy now confront increases to the uniform global levy, prompting immediate protests and accusations of betrayal.
Adversaries Get Reprieve: China, Brazil, Canada, and others repeatedly targeted in Trump’s first 13 months see significant rate reductions under the non-discriminatory 15% cap for 150 days.
Overall Rate Decline: The US weighted average tariff falls, benefiting most trading partners broadly, though country-specific impacts vary dramatically in this hasty regime shift.
Future Probes Loom: The White House plans Section 232 national security investigations into imports like batteries, telecom gear, and chemicals, signaling more aggressive tariffs ahead.
Paramount escalates Warner Bros bid war with Netflix
Paramount Skydance submitted a sweetened takeover offer for Warner Bros Discovery on Monday, aiming to top Netflix’s $82.7 billion deal for the studio and streaming assets while blocking the rival bid and acquiring the entire company including cable networks.
Higher Bid Details: Paramount improved its prior $108.4 billion ($30/share) offer to address financing concerns after Warner Bros rejected earlier terms including a Netflix termination fee payment.
Strategic Deadline Pressure: Warner Bros gave Paramount a seven-day window ending February 23 to present a “best and final” proposal following rejection of a sweetened but insufficient bid.
Netflix Matching Rights: Under the existing agreement Netflix can match any superior Paramount offer within four days if Warner deems it better than the current $27.75/share cash deal.
Asset Split Dispute: Warner plans to spin off cable assets like CNN and HGTV into Discovery Global potentially worth $1.33-$6.86 per share while Paramount seeks full acquisition to dominate streaming.
AI already has people not knowing what to believe. After the Chief's loss in the SuperBowl last year there was an AI generated video of Patrick Mahomes tearing down his teammates and coaches. Blaming them all for the loss. The video appeared to be authentic. I wondered all year if that video had any affect on how the Chiefs played this year and all of the dissention among the team. A few weeks ago I read that stockbrokers - who originally wanted to sell us shares of AI and get in on the boom are now against it. What changed? AI is generating investment strategies and stock choices - essentially replacing those same stockbrokers. When you watch a damned football game you are constatnly hearing a new term - The analytics. The anaylitics say you should do this in this situation - that's AI taking over the games play calling. There are an awful lot of people out there in jobs that can easily be replaced by AI.