The Meb Faber Show
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Muddy Waters’ Carson Block on How AI Could Unwind the S&P 500 | #640
My guest today is Carson Block, founder of Muddy Waters Research & Muddy Waters Capital and one of the last short sellers still standing. In today’s episode, Carson Block explains why he thinks AI could displace 15% of knowledge workers and unwind the market’s biggest stocks. He breaks down his short of SoFi’s aggressive loan accounting, why record-tight credit spreads worry him, and how he trades that risk with put spreads. To close, Carson explains why he still calls China uninvestable and recounts his hardest battles.
Key Points
- The fair value accounting methods used by SoFi to inflate the value of its loans raise significant concerns about the accuracy and legality of its financial reporting.
- AI's potential to displace a significant proportion of knowledge workers could lead to a deflationary environment and a dramatic shift in economic and social structures.
- The scarcity of reliable information and the capricious nature of Chinese regulatory policies make the Chinese market fundamentally uninvestable.
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Transcript
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