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Posted on April 15, 2026
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REFLECTIONS ON CRISIS & THE RISE OF AMATEURISM

Foreword

One of the first things that an investment analyst learns is that professional clients need more than simply your opinions or hunches. Presentations need to be based on data, and the only way to provide worthwhile forward projections is to model the security, commodity or economic issue in question.

You (and your organisation) either have this information or you don’t.

If you don’t, you might be tempted to resort to extrapolation, which means assuming that past rates of change continue indefinitely into the future. If, say, an economy has grown at an annual average rate of 3% over the past ten years, it’s assumed that this rate of growth carries on.

This, of course, is when a pandemic breaks the sequence, or America bombs Iran.

And this is when we remember that a youngster who is five feet tall at his or her ninth birthday isn’t likely to be ten feet in height when entering college, or 36ft tall at pensionable age.

This is why extrapolation has been called “the fool’s guideline”. But it’s remarkable how often narratives are buttressed with the words “at the current rate….”.

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And then there’s artificial intelligence.

There are bluffers in any profession, of course, but the only thing that anyone trying to bluff a presentation to an expert investor using AI output is likely to achieve is to crank up the volume of laughter as he or she is ushered from the room.

This is one pertinent example of the difference between gentlemen and players, a Victorian phrase that distinguishes professionals from amateurs.

As Cory Doctorow explained last month, “If you’ve read something you disagree with but don’t understand well enough to rebut, and you ask an AI to generate a rebuttal for you, you still don’t understand it well enough to rebut it.” This is why, as Doctorow puts it, “No one wants to read your AI slop”.

Let’s take an instance of what basing analysis on artificial intelligence involves.

The user of AI poses a question about the economy, and the answer is likely to include sources of original information. If the user follows these leads, he finds himself looking at data from, for instance, the IMF, the World Bank, the BIS, the FSB or some national statistical agency. This data can be downloaded, though knowing what to download can sometimes, in itself, require professional knowledge.

So far, so good. But what do the statisticians mean by the GDP deflator, the primary fiscal balance or PPP-equivalent numbers? What are NBFIs and PNFCs? Does it matter whether we use market amounts, nominal equivalents or percentages of GDP, and how do we choose between current and real data?

Turning to GDP deflators, what is the base year used for the deflator, and what happens if the base year (or period) differs between national economies or data series? How can we even calculate the deflator, if this series is not included in the data that we have?

How, for that matter, do we handle historic dollar-equivalent numbers when we’re looking at countries with very high rates of inflation over time? Do any of the dollar exchange rates for, say, Argentina in 2005 have any contemporary relevance, or do we (and how?) have to recalculate everything for comparative rates of inflation over time?

In short, information is of little value unless the user knows how to handle it, and having AI do the organising for us does nothing to enhance our professional skills.

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April is one of those months of the year – and there are several – in which anyone analysing energy or the economy has to handle sizeable quantities of newly-released information. But the aim here isn’t to lament the hard work involved in analysis, or, for that matter, to discuss the skill-sets needed to access this data and put it to use.

Rather, what matters now is the difference between gentlemen and players – amateurs and professionals – in world events.

As you probably know, the world economy was in a pretty bad way even before hostilities broke out in the Persian Gulf. Aside from the pandemic and the war in Eastern Europe, we’ve been trying to cope with runaway debts and quasi-debts, an “everything bubble” in asset prices, structural rises in the costs of necessities, severe fiscal strains and extremely high levels of wealth and income inequalities. The IEA has warned about accelerating rates of decline in the supply of oil and natural gas, and renewables have yet to be proven as profitable technologies.

The point is that these and other challenges need to be managed professionally, when what’s actually been happening has been the relentless rise of amateurism.

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In one of his timeless sketches, Bob Newhart pondered what might happen if, instead of sending out “an expert, courageous team of men”, someone despatched “a team of non-experts” to deal with an unexploded bomb. (You can imagine the outcome, or you can enjoy it on line).

In some circumstances, amateurishness can kill. We wouldn’t ask non-experts to conduct surgery, or to repair broken powerlines or fix a ruptured gas main. The Royal Navy once built a warship designed by an amateur, and she capsized at the first real gust of wind, killing nearly 500 sailors.

Even in fiction, readers have become aware over the years that crimes are solved by policemen, not by the little old ladies and the eccentric Belgians popular in the ‘golden age’ of detective novels.

We know that, in democratic societies, senior government posts are often held by non-specialists. But we assume that these people have access to abundant counsel from career professionals. The head of an investment bank needn’t be an expert in bond mathematics, but he or she will surely employ someone who is.

And this is what makes the current amateur hour in global affairs so disconcerting. Professional advice, where it exists, seems increasingly to be disregarded – or to be outright inadequate – in decision-making circles.

Although we must start with the war in Iran, the rise of the amateur is to be seen right across the gamut of policy, commentary, business and finance.

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Whatever we think of the competence of the American armed forces, these professionals must have been able to warn their political masters in advance about the dangers of asymmetric warfare, and about the munitions depletion consequences of the adverse rate of exchange involved in using pairs of highly expensive interceptors to take out individual cheap drones and even cheaper decoys.

The administration must surely have been told, too, about the consequences of a closure of the Straits of Hormuz, and of retaliatory Iranian strikes on the energy assets of the GCC countries, both of which could surely have been anticipated.

Decision-makers might also have paused to wonder about why no previous president, however hawkish on foreign affairs more generally, has seen fit to go to war with the Islamic Republic.

This site takes no sides on this conflict, but White House leadership in this war has turned into a clown-show, with professional advice seemingly ignored, and policy made on the hoof. Mr Trump has oscillated wildly between blood-curdling (and sometimes expletive-laden) threats and subsequent climb-downs.

The United States might or might not have had clearly-stated war aims, but seems to have had no really workable strategy – no “plan B” – if initial kinetic strikes and assassinations failed to take down Iran. Since then, the government has been flip-flopping like a stranded porpoise.

It might, of course, turn out to be “all right on the night” for America in the Gulf. But evidence of professionalism and planning might, if nothing else, have given other decision-makers a great deal of reassurance.

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Not that Team Trump have been alone in their amateurism, though.

In the financial markets, oil prices have soared and equities have slumped at every bit of bad news, only for these moves to reverse dramatically at the slightest hint of conciliation. Bond markets have been conflicted about whether to expect counter-inflationary rate hikes or stimulative cuts in the aftermath of the war.

Nobody, in short, seems to have been looking through current vicissitudes to the critical underlying trends.

Many business leaders, too, seem to have wandered off into the assumption of economic conditions that do not and cannot exist. Essentially, the conflict in the Gulf has been treated as some kind of “little local difficulty” that does not require planning responses.

This is consistent with how businesses have addressed rises in the costs of living, regarding these, wholly wrongly, as some kind of temporary “crisis” that has no bearing on the future affordability of discretionary (non-essential) products and services.

In Europe, the media has continued publishing travel guides – and resorts have been preparing for an as-normal summer influx of visitors – even as consumers have been getting poorer, and supplies of jet fuel have been draining away.

In general, too many businesses around the world have assumed that consumers have bottomless pockets, and will pay up for any price hikes, irrespective of relentless rises in their living costs.

This is even before, of course, we consider the preferred business model for AI, which assumes energy and other resources that do not even exist at the requisite scale.

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But the amateur hour prize must go to anyone who asserts that economies can find energy security simply by switching from imported oil and gas to ‘home produced’ renewable energy, as though this was some quick and easy ‘fix’ for the consequences of closure of the Straits.

For one thing, the flip answer to the energy question might be “renewables”, but investors haven’t actually backed this assumption by putting serious money into these technologies. In stark contrast to the times of Henry Ford and John D. Rockefeller, there are no renewable energy giants which can power – and profit from – the contemporary industrial equivalent of the early days of the automobile industry.

Investors are, then, extraordinarily conflicted between a technology about which they enthuse and its need for energy, which they disregard.

Finally, it’s worth remembering that, whilst Iran can shut off roughly a fifth of world oil and gas supply by closing the Straits, China controls 31% of the global supply of nickel, 44% of copper, 70% of lithium, 71% of battery-grade purified phosphoric acid, 78% of cobalt, 91% of manganese, 91% of rare earth minerals and 95% of graphite. Moreover, these concentrations can be expected to increase, not decrease, for at least the next ten years.

Two conclusions can be reached from this data. The first is a reminder that freedom of trade is, second only to abundant low-cost energy, the critical precondition for the industrial economy.

Patriotism might or might not be “the last refuge of the scoundrel”, but protectionism is the first and instinctive resort of the idiot.

The second conclusion is that, whilst the real fundamentals of economics should be clear and straightforward, their application is complex. We really don’t need amateur nostrums about finding national energy security through the simple expedient of replacing oil and gas with ‘home produced’ renewables.

It’s just a little bit more complicated than that………