Citrini Research: The Talk of Wall Street. Stock Talk Update, Friday February 27, 2026

Every few years, Wall Street writes a research piece so provocative that everyone reads it.

This week, we got such a piece from James van Geelen of Citrini Research and Alap Shah.

Here’s a link to their very well written “thought piece”.  https://open.substack.com/pub/citrini/p/2028gic?utm_campaign=post-expanded-share&utm_medium=web

Their question:

If AI continues exceeding expectations…Could that be very, very bearish for the economy?

First off, this is not OHFG current view of the AI world and how it progresses through the economy, but this article has gotten so much attention with institutional investors, we wanted to share it with our followers.

Please remember, Geelen explicitly says that this was a scenario analysis and not their prediction of where abundant AI compute could lead the USA economy into a spiral of:

• Accelerated White-collar unemployment
• Higher Mortgage default rates
• Increased consumer credit and credit card strain
• Political pressures in DC to fix the problems
• And potentially a 2027–2028 recession

With trading desks in NYC thinly staffed for the blizzard, computers took over, and markets reacted immediately Monday morning. Several stocks mentioned in the piece dropped more than -10% Monday.

Let’s walk through some of the piece. But the whole thing is worth reading if only to get you thinking.

The Core Thesis: Abundant Intelligence

The piece starts out in late 2026 when everything looked perfect:

• S&P500 near 8000
• Nasdaq above 30,000
• Unemployment was low and AI investment accelerated throughout the year

Before I move on, investors think of this, the S&P500 at 8000 is +16% higher than here, and NASDAQ 30000 is over 31% higher! But guess what, this part of the author’s piece wasn’t focused on. No one I saw even mentioned it.  They all jumped right to the doom of 2.5 years out. As if that were a forecast set in stone.

So, the core of the piece projects out 2.5 years and imagines the economy in June 2028.

Unemployment hits 10.2%. The S&P 500 is down -38% from its October 2026 highs as frequent followers of Oak Harvest content know, is a recessionary move down in stocks.

Early layoffs in the 2h2026 boosted earnings. Stocks rallied. Productivity surged like it did during the 90’s. However, wage growth peaked and then collapsed in 2027.

The owners of compute benefited. Labor did not.

The authors call this “Ghost GDP”, output that appears in national data but doesn’t circulate through households. AI exceeded expectations.

The financial markets rewarded AI.  The USA economy didn’t.

The authors postulated a Negative Feedback Loop and labor spiral

AI improves. Companies cut employees. Workers spend less.
Since we are over 70% consumer economy. Margins compress. Companies then invest more in AI to protect margins and layoff more bodies. AI improves again.

And this matters because white-collar incomes are the anchor of the $13 trillion U.S. housing and mortgage market.

How It Begins: Software

Of course, looking back in time, this all started in late 2025, as agentic coding tools took a step-function leap with software developers using Claude Code replicating software as service models in weeks.

Software companies faced pricing pressure after hiring thousands of developers post Covid reopening.

When their customers initially cut staff, they cancelled software seats.

AI-driven efficiency at one company reduces revenue at another.

When Friction Goes to Zero

With compute growing exponentially, by early 2027, AI agents could optimize consumer decisions automatically, 24hrs a day, 7-days a week, 365 days a year.

The median American consumes 400,000 tokens per day — 10x growth in one year.

Agents could shop for insurance, cancel subscriptions, price-match every purchase, squash commission-based industries, or route transactions almost for free.

Computers and machines don’t have brand loyalty. They compute, optimize, and transact.

Citrini hypothesis is business models built on friction compress.  Remember Jeff Bezos famous quote from 30 years ago?  Your margin is our sales? Imagine that exponentially.

By 2027, white-collar job openings were collapsing. While white-collar workers represent about 50% of employment, they drive about 75% of discretionary spending.

Remember that in the US, the top 10% of earners account for over 50% of all U.S. consumption. That’s the top of the K-shaped economy.

So if white collar workers lose jobs, can’t find a replacement job and have to take 50% pay cuts, economic spending falls disproportionately. By mid-2027, recession with 2 negative GDP prints hits.

Credit Exposure

Citrini goes into a great discuss on private markets that have experienced massive growth in the last 10 years as well as the potential for mortgage default contagion.

Delinquencies would rise in tech-heavy ZIP codes because of structural income impairment. If prime mortgages are less serviceable due to high white-collar job loses, that’s bad.

The Policy Constraint

Because of layoffs and automation, labor’s share of GDP falls from 56% to 46% in four years.  Robots don’t pay taxes and work 24/7/365 without benefits.

Payroll tax receipts decline. Income tax receipts decline. Productivity gains would accrue to capital, not labor or workers so the federal government would need to step in while collecting less.

The Intelligence Premium

Prior to AI and this massive compute boom, human intelligence was scarce. Now machine intelligence can substitute for basic human intelligence.

Repricing the abundance of brainpower is not collapsing. But it is change and it could be painful.

The Key Reminder

But the funny thing is this, this was written in February 2026 with the S&P500 -2% from all-time highs and a projection of 8000 on the S&P500 in the next 6-9 months that no one seemed to pay attention to.

Investors, the negative feedback loops the Citrini postulates have not yet begun. In fact an interview done with the Van Galeen 2 days later  said Citrini historically has been criticized for being too bullish. He said, and I quote, “We’re definitely not allocated for a financial crisis,”.

Investors, most of these scenarios won’t likely happen. But AI will continue to accelerate and change many businesses over the next 3-5 years, or less.

As investors, we still have time to assess our financial plans and investment portfolios and make changes if we need to over the coming months and quarters.

Closing Thoughts

For now, 2026 has been a sloppy, choppy mess for the S&P 500.

We’ve are navigating slower growth, factor rotations, and higher base Volatility in markets

Oak Harvests’ guidance remains consistent:

Stay disciplined. Stay diversified. Stay focused on long-term objectives.

We’ll continue monitoring these structural risks — and positioning accordingly.

Whether your priority is growth, income, or a combination of both, our team is here to help you plan for your family’s financial future — no matter where you are in your career or retirement journey.