The program, called COIN, for Contract Intelligence, does the mind-numbing job of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for vacation.
.. After visiting companies including Apple Inc. and Facebook Inc. three years ago to understand how their developers worked, the bank set out to create its own computing cloud called Gaia that went online last year. Machine learning and big-data efforts now reside on the private platform, which effectively has limitless capacity to support their thirst for processing power.
.. JPMorgan will make some of its cloud-backed technology available to institutional clients later this year, allowing firms like BlackRock Inc. to access balances, research and trading tools. The move, which lets clients bypass salespeople and support staff for routine information, is similar to one Goldman Sachs Group Inc. announced in 2015.
JPMorgan’s total technology budget for this year amounts to 9 percent of its projected revenue — double the industry average, according to Morgan Stanley analyst Betsy Graseck. The dollar figure has inched higher as JPMorgan bolsters cyber defenses after a 2014 data breach, which exposed the information of 83 million customers.
.. Another program called X-Connect, which went into use in January, examines e-mails to help employees find colleagues who have the closest relationships with potential prospects and can arrange introductions.
The AI Threat Isn’t Skynet. It’s the End of the Middle Class
At a time when the Trump administration is promising to make America great again by restoring old-school manufacturing jobs, AI researchers aren’t taking him too seriously. They know that these jobs are never coming back, thanks in no small part to their own research, which will eliminate so many other kinds of jobs in the years to come
.. At Asilomar, they looked at the real US economy, the real reasons for the “hollowing out” of the middle class. The problem isn’t immigration—far from it. The problem isn’t offshoring or taxes or regulation. It’s technology.
.. the number of manufacturing jobs peaked in 1979 and has steadily decreased ever since. At the same time, manufacturing has steadily increased, with the US now producing more goods than any other country but China.
.. “I am less concerned with Terminator scenarios,” MIT economist Andrew McAfee said on the first day at Asilomar. “If current trends continue, people are going to rise up well before the machines do.”
.. Also on researchers’ minds was regulation—of AI itself. Some fear that after squeezing immigration—which would put a brake on the kind of entrepreneurship McAfee calls for—the White House will move to bottle up automation and artificial intelligence.
A Quiet Giant of Investing Weighs In on Trump
While Mr. Klarman has long kept a low public profile, he is considered a giant within investment circles. He is often compared to Warren Buffett, and The Economist magazine once described him as “The Oracle of Boston,” where Baupost is based. For good measure, he is one of the very few hedge managers Mr. Buffett has publicly praised.
.. “Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,” he wrote.
.. “President Trump may be able to temporarily hold off the sweep of automation and globalization by cajoling companies to keep jobs at home, but bolstering inefficient and uncompetitive enterprises is likely to only temporarily stave off market forces,” he continued. “While they might be popular, the reason the U.S. long ago abandoned protectionist trade policies is because they not only don’t work, they actually leave society worse off.”
.. “The Trump tax cuts could drive government deficits considerably higher,” Mr. Klarman wrote. “The large 2001 Bush tax cuts, for example, fueled income inequality while triggering huge federal budget deficits. Rising interest rates alone would balloon the federal deficit, because interest payments on the massive outstanding government debt would skyrocket from today’s artificially low levels.”
.. “The erratic tendencies and overconfidence in his own wisdom and judgment that Donald Trump has demonstrated to date are inconsistent with strong leadership and sound decision-making.”
.. Trump is high volatility, and investors generally abhor volatility and shun uncertainty,” he wrote. “Not only is Trump shockingly unpredictable, he’s apparently deliberately so; he says it’s part of his plan.”
.. hedge funds had returned only 23 percent from 2010 to 2015, compared with 108 percent for the Standard & Poor’s index — he blamed the influx of money into the industry.
.. “When money flows into an index fund or index-related E.T.F., the manager generally buys into the securities in an index in proportion to their current market capitalization (often to the capitalization of only their public float, which interestingly adds a layer of distortion, disfavoring companies with large insider, strategic, or state ownership),”
.. To Mr. Klarman, “stocks outside the indices may be cast adrift, no longer attached to the valuation grid but increasingly off of it.”
“This should give long-term value investors a distinct advantage,” he wrote. “The inherent irony of the efficient market theory is that the more people believe in it and correspondingly shun active management, the more inefficient the market is likely to become.”
Trade Is More Powerful Than Donald Trump
Freaking out about the end of TPP and NAFTA? Here’s why you shouldn’t.
.. But it’s worth remembering that even if he does go down the path of disrupting global trade pacts, even if the move toward globalization halts, we still cannot return to some imagined past. A return of some manufacturing to the United States is possible and has already been happening, care of technology that makes the cost of making stuff in our expensive country less of an issue. Factories today, however, are output machines, not job machines. A new factory employs hundreds of skilled workers, adept at robot programming or high-end value-add work; it does not employ thousands of shift workers. The myth of manufacturing today is that jobs will come back, but most of the jobs that disappeared over the past decades can never exist again. Period. American withdrawal from the TPP, or changing the terms of NAFTA will not alter that.
.. For instance, U.S. companies have been selling into China for the past 20 years even as the difficulty of doing so has been significant and the costs have been considerable. China is simply too attractive a market for companies to ignore, even with a government that hardly welcomes foreign competition. The United States is an even larger market, which means that a U.S. that is less welcoming to foreign business is still too desirable a market for foreign companies to forgo simply because Washington raises hurdles.
.. Separate from whether these initial trade moves are wise or foolish, they are not nearly as consequential as the Trump administration would have us believe or as various critics would contend. They are mostly words codifying current trends, rather than actions that set America in a new direction.