Never have market narratives been more narrative

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Some days, it’s the numbers. Others, it’s the words:

Investors have recently seized on social media rumours and incremental developments by small AI companies to justify further selling, with a widely circulated blog post by Citrini Research over the weekend describing how AI could hypothetically push the US unemployment rate above 10 per cent by 2028, proving the latest catalyst.

That quote’s from MainFT’s reporting on today’s market sell-off, in which the latest wave of AI-pocalypse fears took the S&P 500 down, uh, 1 per cent.

Other big financial outlets have laid the blame even more at Citrini’s door. Here’s part of the second par of the Wall Street Journal’s market wrap:

Software companies took another hit, after a report by Citrini Research sparked new worries about the economic fallout from AI. AppLovin fell 9.1%, while Intuit lost 5.5%.

And here’s the same part of the Borg’s:

DoorDash Inc. and American Express Co. tumbled after Citrini Research published an article detailing a hypothetical scenario on the impact AI could have on markets and the global economy.

We’ve written recently about some of the interesting accepted narratives behind recently sell-offs. This is a classic: provocative and unprovable.

The blog in question is ‘The 2028 Intelligence Crisis’, published yesterday by Citrini Research, one of Substack’s biggest finance accounts:

Citrini was founded and mostly written by James van Geelen, a former healthcare entrepreneur, who started publishing research in 2023. Its about page says:

Unequivocally, Citrini Research has been at the top of the thematic equity investment game since it began – highlighting the promise of companies like Nvidia (NVDA), Eli Lily [sic] (LLY), Eaton (ETN), Credo (CRDO), and many, many more since we began publishing in early 2023.

There’s probably a lot of interesting things to say about how (or whether) publications like this have supplanted traditional research outlets, as well as the markedly different economics they have versus classic sell-side research — including how the economics of newsletters incentivise trying to draw an emotional response from audiences in a way classic equity research never really needed to. We‘re not going to do that.

There’s also probably something interesting to say about the post itself. We’re also not going to do that.

Sunday’s post opens:

What follows is a scenario, not a prediction. This isn’t bear porn or AI doomer fan-fiction.

We’d dispute this. It’s a pretty fundamental tenet of all writing that the author doesn’t get to choose how their output is interpreted, and we’d argue that “bear porn or AI doomer fan-fiction” is exactly what this is. And it’s pretty successful!

To tl;dr the post, it follows the premise of 2028 scenario in which AI productivity gains have massively pushed up unemployment, causing acute economic damage as consumer spending wilts and, most importantly, the money keeps moving and almost nobody does anything in response. Or, as a diagram:

It says various things, like:

Agents went looking for faster and cheaper options than cards. Most settled on using stablecoins via Solana or Ethereum L2s, where settlement was near-instant and the transaction cost was measured in fractions of a penny.

Which seems somewhat unlikely, and:

Synchrony (SYF US), Capital One (COF US) and Discover (DFS US) all fell more than 10% over the following weeks, as well.

Which seems very unlikely given Discover delisted last year.

In their conclusion, its authors write:

Human intelligence derived its inherent premium from its scarcity. Every institution in our economy, from the labor market to the mortgage market to the tax code, was designed for a world in which that assumption held.

We are now experiencing the unwind of that premium. Machine intelligence is now a competent and rapidly improving substitute for human intelligence across a growing range of tasks. The financial system, optimized over decades for a world of scarce human minds, is repricing. That repricing is painful, disorderly, and far from complete.

Citrini’s original tweet has about 6.4mn views at the time of publication, but any attempt to quantify is impossible: no analysis is going to correctly capture all the bot engagement, high-quality quote-tweeting, high-quality subtweeting, off-platform ripostes and suchlike.

One thing we can safely say is that it has reached a lot of people. Fintwit is not notable for its ability to pay attention to several things at the same time, and Citrini has clearly won the day. Our learnèd colleagues over on the FT markets desk say it’s been coming up without prompting in conversations with investors today.

So, when historians look back at the not-so-great sell-off of February 23rd 2026, we guess they’ll just have to credit Citrini. Fair play to them, but it leaves us with three unappetising conclusions:

1. It’s true, and we should probably be extremely worried that a piece of provocative speculative fiction can cause a market sell-off.

2. It’s somewhat true, and we have a way to go in understanding how emotion-driven retail dynamics may be either a) driving parts of the market or b) increasingly reflected in the behaviour of professional investors.

3. Everything works like this.

Further reading:
— What the truck just happened to transport stocks?