Garrison Fathom

Jamie Dimon’s annual JPMorgan letter has a section on AI and here 5 key quotes: ▫️ “I do not think it is an exaggeration to say that AI will cure some cancers, create new composites and reduce accidental deaths. It will eventually reduce the workweek in the developed world. And people will live longer and safer." ▫️ “There will be a wide variety of AI models — open and closed, large and small — and no single tool will dominate." ▫️ “AI will also introduce serious new risks — from deepfakes and misinformation to cybersecurity vulnerabilities. These risks are real, but they are manageable if companies, regulators and governments prepare.” ▫️ “AI will definitely eliminate some jobs, while it enhances others…AI will create many jobs — some we can see today in cybersecurity and AI itself, and some we can't see. But we do know that there is a huge workforce shortage for many well-paying white- and blue-collar jobs.” ▫️ “huge technological shifts like AI always have second- and third-order effects as well that can deeply impact society. Some of these are, for example, cars bringing about the development of suburbs and shopping malls; agriculture enabling cities; and the original internet (invented back in 1969) leading to mobile phones, apps and social media. We should be monitoring for this kind of transformation, too.”

While about two-thirds of executives reported using AI, that usage amounted to only about 1.5 hours per week, and 25% of respondents reported not using AI in the workplace at all. Nearly 90% of firms said AI has had no impact on employment or productivity over the last three years, per National Bureau of Economic Research

US technology employment is contracting: The tech sector lost -43,000 jobs over the last year, the biggest YoY drop since early 2024. This exceeds the declines seen during the 2020 pandemic and the 2008 Financial Crisis. Technology employment has fallen for over 2 years straight now. Since the November 2022 peak, information technology jobs have declined -330,000, to 2.79 million, the lowest since mid-2021. This is now below pre-pandemic levels, returning to levels last seen in 2016. Tech sector employment is dropping sharply.

JUST IN 🚨: Private Credit losses will be larger than previously feared warns Jamie Dimon 🚨🤯👀🫂

Mortgage rates continue to rise while homebuyers looking to buy continue to collapse. There are only an estimated 1.36 million homebuyers in the market with an estimated 1.99 million home sellers. The largest gap and the best buyers market since they began tracking back this data in 2013. The reason? Homes are 36% overpriced at 6.5% mortgage rates assuming a strong economy and good jobs. Your house that was worth $462,107.54 at 2.70% mortgage rates. Is worth $295,760.60 at 6.5% mortgage rates

⚠️ The US labor market is EXTREMELY weak under the surface: Since December 2024, healthcare and social assistance has added ~855,000 jobs, while the rest of the private sector has lost -322,000, according to Labor Department data. That means a single sector is masking a broad-based CONTRACTION across the rest of the world's largest economy. Excluding healthcare, private-sector job growth has been NEGATIVE for over a year. Healthcare and social assistance now represents NEARLY ALL net private-sector job creation since the end of 2024. Remove one sector and the labor market is already in a RECESSION.

Jerome Powell: “The thing that we are concerned about is that there is zero net job creation in the private sector.” 🤯👀

Financial stress among US consumers is intensifying: The delinquency rate on subprime loans is up to 10% of total outstanding debt, the highest in 11 years. Subprime loans are those made to borrowers with a credit score below 660, meaning they were already considered higher-risk at the time of borrowing. The delinquency rate has more than TRIPLED since 2021, when pandemic-era forbearance programs temporarily allowed borrowers to delay payments without being marked as delinquent. By comparison, the delinquency rate peaked at ~19% during the 2008 Financial Crisis, when subprime debt was $3.5 trillion and made up ~30% of total household debt. Today, subprime debt stands at $2.7 trillion, or ~15% of the total, still a significant proportion. An increasing number of Americans are falling behind on their debt.

Goldman Sachs on AI Agents stealing jobs from humans: "Our analysis implies that AI substitution has reduced monthly payroll growth by roughly 25k and raised the unemployment rate by 0.16 percentage points over the past year, while augmentation has added about 9k to monthly payroll growth and lowered the unemployment rate by 0.06pp.[3] This implies a net drag of 16k per month on payroll growth and a 0.1pp boost to the unemployment rate. These negative effects fall largely on less experienced workers, widening the entry-level-to-experienced wage gap by 1.3% and the unemployment rate gap by 0.6pp from their pre-pandemic averages."

It's starting to look like a rough spring and summer housing market. Homebuyer inertia is at record levels, and 83% of my YouTube followers are either not buying this year or only buying if prices drop 20-40%. Confirming why home sales are still dropping YoY and at record lows. Only 8% said they are definitely buying this year. Back in January, 14% said they were definitely buying. Things are getting worse in terms of demand. Sample: 7.9k votes

Powell: "We don't have to pay the debt down, we just need to have primary balance and begin to have the economy actually growing better... It will not end well if we don't do something fairly soon."

One of the most important macro analyst alive was asked what she fears most in markets right now. Her answer wasn't inflation or private credit but it was about the Iran war. As of late February 2026, the strait of hormuz effectively closed. Tanker traffic collapsed more than 90%, Gulf oil exports fell 60% and a historical daily average of 138 ships became one in a single week. The IEA called it the largest supply disruption in the history of the global oil market and brent crude crossed $100 a barrel. This is not just an oil crisis. The strait carries 30% of globally traded fertilizers, 34% of global urea trade, natural gas is 80% of nitrogen fertilizer production costs. When LNG stops flowing, food production starts breaking. Fertilizer supply chains have already contracted 33% and annual Gulf urea exports of 22 million tons have halted. US farmers are seeing fertilizer prices up 25% going into planting season. The Fed cannot print fertilizer. Qatar's Ras Laffan LNG terminal was struck, Taiwan sources one-third of its electricity from Middle Eastern energy. That directly threatens global semiconductor productiom, the same supply chain the world spent four years rebuilding. Helium, sulfur, aluminum, petrochemicals, plastics are all disrupted. Alden described the global economy as an upside-down pyramid. The wide top is finance, services, and technology and the tiny point at the bottom is raw materials, energy. A financial crisis hits the top of the pyramid but this hits the bottom.

Powell: "There's downside risk to the labor market, which suggest to keep rates low, but there's upside risk to inflation, which suggests maybe don't keep rates low. You've got tension between the two objectives."