Animal Spirits Podcast (EP. 453): "Everyone Hates AI"

Date: February 25, 2026
Hosts: Michael Batnick & Ben Carlson

Episode Overview

In "Everyone Hates AI," Michael Batnick and Ben Carlson dive into the mounting anxiety, market reactions, and existential questions surrounding the latest wave of AI pessimism. Using a viral research piece as a springboard, they examine how fears about AI-induced white-collar job losses and economic disruption are affecting sentiment and the stock market. The duo weighs doom-and-gloom scenarios, practical investment strategies, and the enduring role of the human element, while exploring how headlines, narratives, and Twitter are feeding a real-time market feedback loop. As always, they spice up market discussion with personal experiences, cultural references, and their hallmark banter.

Key Discussion Points & Insights

1. Viral AI ‘Doom’ Research and Host Reactions

[01:48–07:36]

• Citrini Research Piece: The hosts discuss a widely-read bearish AI scenario that painted a 2028 world with 10% unemployment and a 40% market drop, sparked by rapid wide-collar job displacement.
• Emotional Responses:
  • Michael admits: “The human element of it breaks my heart a little bit.” (02:28)
  • Ben tries for optimism, calling it “all science fiction still... None of this stuff has happened yet. The unemployment rate is at 4.3%. Come on.” (03:46)
• The Power of Narrative: Michael acknowledges, “Morgan always says best story wins. This is a really well done story ... I don't know enough about each of the industries to say 'that can’t happen'." (10:45)

2. AI Anxiety, Markets, and Human Nature

[07:36–15:14]

• Friction vs. Relationships:
  • Michael quotes the piece: “Turns out that a lot of what people called relationships was simply friction with a friendly face. And that is some real talk." (07:10)
  • Ben firmly disagrees: “That's the most wrong thing in the whole article." (07:36)
• Network Effects & Human Behavior: Ben: “The human element ... there's no way you can take away the human nature out of this. That's the part, Pete. I absolutely say throw that in the garbage.” (08:35)
• Barriers to AI Proliferation: Technical, economic, and behavioral limits are discussed (e.g., high compute costs, “these agents are very expensive” [09:54]).

3. Market Reaction – Are Investors Getting Ahead of Themselves?

[11:10–16:19]

• Beauty Contests and Meme Stocks: Ben compares the panic response to prior bubbles, saying: “Investors are trying to think about what other investors are going to do next.” (11:10)
• Pricing Information vs. Overreaction:
  • Michael: “I do think there's information in American Express and Capital One falling 8% of the day. But, but I also think it's an overreaction...” (12:22)
  • He describes his approach: “I'm going to buy Microsoft today. I am running into the fire. That's the only thing I know how to do when I'm scared." (12:54)
• Buying Amid Panic: Michael lists his recent buys – Blackstone, Salesforce, ServiceNow, Netflix, CrowdStrike, and Microsoft – noting significant drawdowns: “I know this is a bad strategy... I'm not trying to make you feel better. I'm trying to make me feel better.” (13:12)

4. AI, Productivity, and the Nature of Work

[17:04–21:34]

• Using AI at Work: Both hosts agree that AI makes them more productive, not less busy.
  • Michael: "Every time I open these things up... I feel like I'm getting so much smarter, so much more effective." (19:44)
  • Ben: "Are you working any less because of this?" Michael: "No, no, no." Ben: "Same for me. I'm working more. I'm doing more stuff because of AI." (20:14)
• Transition Turbulence: Both recognize the disruption for some workers will be “very painful,” but Ben takes heart in historical precedent: “What did they do before? ... The transition period... is going to be very painful.” (20:33)

5. Social, Political, and Human Backlash to AI

[21:48–25:44]

• Hostility to the Boom: Ben shares a quote: “I can't remember a boom with such active hostility to it. People used to find new technology exciting ... AI is notable, perhaps unique, for the lack of enthusiasm.” (22:25)
• Communication Failures: The tech industry is failing to explain why the public should want AI. Ben: “Tech people have done a horrible job of telling people why they should want this technology.” (22:34)
• Societal/Political Risk: Jamie Dimon is quoted questioning whether mass white-collar automation is “good for society.” (23:36)

6. Market Structure, Rotation, and Breadth

[27:30–35:43]

• Broad Market Health: Though many tech names are in a correction, global market breadth is robust.
  • Ben: “66% of index constituents are outperforming the S&P itself, which is nuts.” (27:45)
• Cautious on Tech Drag: Michael is wary: “If the Mag 7 keeps getting killed, like the market can only take so much... the Mag 7 as a group can't fall 20% without ... bringing the market down.” (29:32)

7. Individual Stock Picking vs. Systematic Investing

[28:42–45:04]

• The Pain of Owning Losers: Michael and Ben discuss abandoning single stocks for systematic strategies.
  • Ben: “Do you know how much less brain damage I have now that I don't have to, like, check my app every day to see how my individual stocks are Doing?” (44:53)
  • Michael: “Why would you ever buy another individual stock ever again? I say to myself as I'm buying another individual stock at the open.” (44:08)

8. AI and Labor Markets: Signals and Noise

[45:35–48:03]

• AI-Exposed Industries: Charts show negative job growth in industries exposed to AI (Management Consulting, Graphic Design, etc.), but Ben attributes this to post-2021 overhiring, not AI itself. (45:59–46:07)
• Tech’s Place in Employment: Tech is still a tiny fraction of total US jobs (“tech employment accounts for only 2.3% of overall payrolls in software publishing for just 0.4%”). (47:12)

9. Financial Sector Woes: Blue Owl and Private Credit

[57:06–64:49]

• Private Credit Issues: Michael provides a nuanced breakdown of turmoil in BDCs/private credit and why some of the panic may be overdone despite real problems—especially the lack of communication and transparency from Blue Owl.
• Valuation Gaps: Markets are discounting portfolios as if a global financial crisis were imminent: “If you take OBDC's discount literally as a pure credit loss forecast, the market is pricing something like a GFC level or worse." (63:13)

Notable Quotes & Memorable Moments

• On Market vs. Narrative:

  • Michael: “Watch what people do more than what they say and you'll learn a lot more.” (48:44)

• On Human Element in Transactions:

  • Ben: “You don't need a human to buy a house right now because all the information is there for you to see. It already happened. And we still require humans..." (07:44)

• On Why People Hate AI:

  • Ben: “The tech people have done a horrible job of telling people why they should want this technology.” (22:34)

• On Investing During Fear:

  • Michael: "If you've ever said buy when there's blood in the streets, if you're selling here, you're a clown. ... If you are selling right now, you don't get to quote Warren Buffett ever again." (31:13)

• On AI Disrupting White Collar Jobs:

  • Michael: “It's coming for white collar workers, because for blue collar workers that took place over 30 or 40 years... That's why it's so scary.” (52:00)

Highlighted Timestamps

• AI Doom Piece and Human Impact: 01:48–03:46
• Debating Human Value vs. Automation: 07:10–09:16
• Buy/Sell Decisions Amid Panic: 13:12–15:16
• Psychology of Market Rotation: 28:05–29:59
• Political/Societal Reaction to AI: 21:48–23:55
• Stock Market Breadth and Rotation: 27:45–29:32
• Blue Owl/Private Credit Crisis: 57:06–64:49

Episode Tone & Style

Staying true to Animal Spirits tradition, the conversation is candid and self-aware, balancing anxiety with humor, and bears and bulls alike with humility. The hosts openly share doubt, confusion, and changing minds, all while reminding listeners that sentiment, story, and stats are as tangled in investing as ever.

Closing Thoughts

Despite the prevailing AI “doom porn,” Michael and Ben ultimately argue that, while disruptive technology causes dislocation and pain, panic can create buying opportunities for long-term investors. The human element, adaptive markets, and the cyclical nature of narratives are recurring themes. As for the rest? The story isn’t written yet.

Culture, Recs & Lighter Moments

• TV & Movies: Game of Thrones spinoffs, revisiting The Sopranos, classic action movies (Terminator 2!), and the increasing length of modern films.
• Comic Relief: "I'm buying Microsoft right now. Bear with me. First time, long time I've done this on the show. Locked in." (36:01)
• Personal Reflections: Michael on his dump runs being “AI-proof,” and why Netflix, despite being a category winner, has underperformed benchmarks.

For full show notes and disclosures: The Compound – Animal Spirits