One of the best parts of writing the Afternoon Edition each day is that I get to explore all kinds of interesting topics.
These topics do materially affect markets, although their effect may not be as acute as, say, a monthly employment report.
And speaking of which, we got a new monthly employment report this morning, as February saw 235,000 new non-farm payroll jobs created.
That’s good economic news; however, I wonder how many more jobs would have been created if there weren’t as many advancements in the field of automation.
Perhaps the number would be the same. Or, maybe there are more jobs created on balance in fields such as automation, computers, robotics, etc.
That issue is up for debate and economic study … as it’s definitely an issue that will influence the economy and the markets in the years to come.
Maybe that’s why AI is such a fascinating topic. Especially lately, when there is always something new to discover.
This week, I read another story on the AI front in the Wall Street Journal that caught my attention. This one had the eye-catching headline, "How Artificial Intelligence Will Change Everything."
The article was basically a Q-and-A with the WSJ and two leading AI experts: Andrew Ng, chief scientist at Chinese internet giant Baidu Inc. (BIDU), and Neil Jacobstein, chair of the artificial intelligence and robotics department at Silicon Valley think tank Singularity University.
Ng thinks that AI is creating a lot of new opportunities, and that:
Just as about 100 years ago, electrification changed every single major industry, I think we’re in the phase where AI will change pretty much every major industry.
The Baidu scientist also made the following ominous prediction on the jobs and automation front:
Things may change in the future, but one rule of thumb today is that almost anything that a typical person can do with less than one second of mental thought we can either now or in the very near future automate with AI.
Jacobstein went on to amplify that answer, saying:
I think people are going to be surprised at how fast machine learning is going to displace routine jobs … We’re talking about a transition that’s going to occur over the next 10 to 15 years that is really significant.
I remain skeptical about a transition that takes place that quickly.
However, as rapid as change has been with computers, the internet, smart devices and the Internet of Things, we simply must be aware of the disruptive potential of this kind of technology in our lives — and in the economy.
Jacobstein did wrap up the interview with a very encouraging prediction on the AI front, saying:
The good news is that AI and robotics are going to generate massive amounts of new wealth. Our responsibility is to make sure that in addition to having our companies be successful, people who get displaced have a reasonable quality of life … But the real question is, "What’s the ratio of jobs destroyed to new jobs?" I think at least in the short term, that could be an unfavorable ratio.
An unfavorable ratio isn’t something we like in society, but it is something we’ll likely be forced to grapple with in the years and decades to come.
Fortunately, that transition will also offer up plenty of investable opportunities for us to profit from.
What’s your take on AI and jobs? Do you think progress here will mean greater wealth, or the likelihood of an "unfavorable ratio" persisting? I’d love to know what you think about this, or any of the recent issues we’ve covered in the Afternoon Edition. And, letting me know is easy. All you have to do is leave me a comment on our website or send me an e-mail.
Stocks rose after another solid jobs report. Today’s government data showed that the economy added 235,000 jobs in February, largely in education, healthcare, mining and manufacturing. Wages rose 6 cents to $26.09, and gained 2.8% year-over-year. The Dow gained 0.2% but remains about 100 points below 21,000.
• 1.2-billion-barrel oil reserve found in Alaska: Spain’s Repsol and Denver’s Armstrong Energy made the discovery that could result in daily production of 120,000 barrels starting in the year 2021. Repsol noted that this is the largest onshore discovery in the U.S. in three decades.
• For the week, oil fell almost 9% as traders digested the glut of news that U.S. stockpiles rose more than expected. Meanwhile, JR Crooks’ subscribers had the opportunity to go for two rounds of gains — +77.8% and +101% — on their short-oil bets. See how you can get in on the action here.
• Big week ahead: First, we had the 10-year anniversary of the financial crisis. Then the bull market’s 8th birthday. Next up is a possible 25-basis-point Fed rate hike on Wednesday. But then on Thursday, March 16, the debt ceiling is set to be reinstated. It was suspended in 2014, and that suspension was extended twice. Will we see the new administration extend it again? (CBO)
• Expect some software updates soon: WikiLeaks founder Julian Assange said he would give tech companies access to the tools the CIA uses to hack phones, computers, TVs, tablets and more, so they can address holes in their cybersecurity.
• Space tubers: NASA and the International Potato Center in Peru have a "Potatoes on Mars" project. Scientists recently said they were successful in growing potatoes in extreme "Mars-like conditions." Next up: experimenting to see which potato varieties would grow best there. (If you don’t plan to farm on Mars during its minus-200-degree winters someday, we have better ideas for out-of-this-world escapes.)
Good luck and happy investing,
Uncommon Wisdom Daily