“I look at our own behavior, which is we’re kind of slow walking some of that kind of hiring now because we’re using these tools”: Sprecher
By Wolf Richter for WOLF STREET.
Jeffrey Sprecher — Founder, Chairman, and CEO of Intercontinental Exchange (ICE) — was interviewed at the Goldman Sachs 2025 U.S. Financial Services Conference on December 9. The interviewer introduced ICE as a “global network across trading, data, and mortgage services with lots of technological investment in the space,” and said about Sprecher, “You have a long history of building traded markets, really starting with electronification of global energy and expanding them to fixed income data and obviously trying to digitize the mortgage industry.”
The interview swerved across a number of topics, but here two topics that hit the bull’s eye of what we’ve been discussing on WOLF STREET: The issues around making mortgages “portable” and/or “assumable” in the era of mortgage-backed securities (MBS) when lenders don’t keep mortgages on their balance sheet; and the issues around AI at companies like ICE, and AI’s impact on hiring especially for entry-level jobs (transcript via Seeking Alpha). This is Sprecher talking:
On “portable” and/or “assumable” mortgages.
“But I do think this current administration and a lot of lenders are working with us on two kinds of loans:
“One is, can I sell my house and go to a new house and have my loan be portable?
“Or secondly, can I sell my house and keep the mortgage that’s there and have it be assumable?
“Those things are very difficult to do right now because mortgages get sold into capital markets. There are all kinds of rules about who can know the actual owner of the mortgage. It’s in a mortgage-backed security and what happens if there’s a default, and who gets rights, and it’s very complicated. It’s all designed for consumer protection.
“But with a token [on the blockchain], you could theoretically keep track of everything without necessarily giving up identity. And might allow for these more innovative kinds of loans.
“Those kinds of loans [portable and assumable mortgages] exist in other countries where they don’t have mortgage-backed securities, where the loan stays on the balance sheet of the lender.
“We’re trying to figure out with the industry, can we keep the MBS market, which is a very robust market, but maybe find ways of facilitating some of this other activity.”
On ICE’s use of AI and its impact on hiring at ICE.
Sprecher was asked to discuss how ICE is using AI internally to improve operational efficiencies.
“What we found is… where there is a language-oriented task, the AI model can help streamline that half. So language being code writing, so all of our people now have copilots…
“I think if you mark the market today, I would tell you our good people are better and more efficient. And that we haven’t necessarily eliminated any positions or what have you. We have slowed down just naturally … we sort of slowed down these kinds of entry-level jobs. They have been getting automated in many cases, where somebody might have had a junior person doing something.
“And so I have a lot of friends that have children that are graduated from college – good colleges with good degrees – that are having problems and their friends are having problems entering the workplace.
“I kind of see that because I look at our own behavior, which is we’re kind of slow walking some of that kind of hiring now because we’re using these tools.
“So I think for your model, Alex, it kind of slows the growth of expenses as opposed to being some revolutionized thing. But that’s today. I mean, as we know, these models get better every day. And someday, they may be — you may be interviewing one up here.”
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Where he talks about the good people still being better and more efficient, and AI replacing the junior people: what happens when those better people eventually retire and there is no pipeline of next gen to replace them? Is AI going to be another slow-moving gutting of a company, like financialization? This would imply as a society we are slow landing into a morass of stupidity. I guess the movie Idiocracy was really a documentary.
Welcome to Costco, I love you.
so we’d like to downsize but have 10 years left on 3.35% mortgage
if we sell, we’d be buying same price home and would have to take out new 6% 30 year mortgage(new term = no principal paydown)
so WE’RE NOT SELLING – until we pay it off and then it just might be to late
fine with 3.35% – no way taking 6% with new term
we’d love to walk it into new home(with 60-70% down)
It doesn’t look to be a slow roll. Trump sending Nvidia’s latest chips to China while previously gutting all science and research outside of DOD: health, social science, advanced manufacturing and materials, clean energy, etc. – good luck to all those not already in the top 10%.
Jared Kaplan, Chief Scientist and co-founder of Anthropic, warns that humanity is approaching a critical “decision point” between 2027 and 2030. By this time, we must decide whether to allow AI systems to recursively self-improve—a step he calls “the ultimate risk.” Concurrently, he predicts that AI will be capable of handling most white-collar work within just two to three years.
Key Points
• Rapid Displacement of Work: Kaplan predicts AI will handle “most white-collar work” within 2–3 years. Anthropic’s own engineers already use AI for ~60% of their tasks, reportedly achieving 50% productivity gains.
• Human Obsolescence in Academics: Kaplan states his six-year-old son will “never be better than an AI” at fundamental academic tasks like writing essays or math.
• Claude Opus 4.5: The article notes that Anthropic’s latest model (released November 2025) scored higher than any human candidate on the company’s internal engineering exam.
• The 2030 Decision Point: The most critical risk is recursive self-improvement. Humanity has until roughly 2030 to decide if AI should be allowed to design its own successors. Kaplan warns this leads to a loss of control, as we have not figured out how to align AI created by AI.
• The “Prisoner’s Dilemma”: Despite these warnings, companies like Anthropic, OpenAI, Google DeepMind, and Meta are locked in a race. If one slows down for safety, they risk ceding dominance to others or rival nations, pushing development speed over caution.
Key Takeaways
• The “Existential Gamble”: We are racing toward a point where AI might design systems smarter than itself, potentially without human safeguards remaining intact.
• Societal Unpreparedness: The article argues that society lacks the social safety nets, retraining programs, or international coordination needed to handle the massive economic disruption expected in the next few years.
• The Alignment Paradox: While current AI is aligned with human values, there is no guarantee that AI-designed successors will maintain that alignment.
LLM AI is not ever going to get that good within the next few years. They are selling the product as being better than it is. They are merely advertising by saying it is so good that it’s dangerous. Other kinds of AI are a different matter.
The real problem is all the Boomers in the trades and education retiring and no one to replace them.
By the time the Millennials and Gen Z are ready to retire, the business landscape will look radically different. Yes, AI will be a gutting of the economy – already slowly happening. Any young person need to have AI skills on their resume, middle workers need to skill up and make themselves more valuable as company needs shift. AI won’t replace them, but they’ll lose their job to someone who can use AI to be more productive.
Think of like the transition to office software, you can’t get hired in business today without being able to use documents and spreadsheets. Within 5 years, you won’t get hired in the business world without being function with AI.
I don’t know that society is slow landing into a morass of stupidity – we’re not that bright to begin with. The smart people invented ways to keep more of us alive (modern medicine) and employed (industrialization/information). We’re going to have radically improved medicine soon, but the world population growth is slowing at exactly the time it needs to be, since everyone will need fewer workers.
Aren’t you aware that LLM AIs are a bubble? Worse than that, it consumes copious resources, and people who use LLM AIs tend to become less intelligent as they outsource their thinking to the AI.
Other kinds of AI, such as machine learning, are not a bubble, however.
I think that makes the ecomony suck?
“other countries where they don’t have mortgage-backed securities”
Curious about two questions.
1. Who benefits from us having an MBS market?
2. Who pays higher costs because of it?
What most of these other markets do not have are 30-year fixed-rate mortgages that are guaranteed by the government and that can be paid off at any time without penalty.
Hi Wolf! THE best investment idea is to have a 30-year fixed-rate mortgage. With the existing and future profligate fiscal policies and our President insisting on a Fed Chairman who will lower rates, we are likely to see high inflation soon. Wolf: When was the last time we had a series of rate cuts when markets are at their all-time highs? Add in the BRICS starting a new currency, commodities being traded in non-US currencies, the end of Saudi Arabia’s 50-year petrodollar agreement, and the decline of the American Empire. Yikes!
10 or 15 year mortgages are a far less costly and better concept than 30 year mortgages where you pay a vastly higher amount of interest. No mortgages are an even better idea. Simply pay cash when you buy a residence.
@Edward: The answer to your question may surprise you!
The Fed has done “a series of rate cuts when (stock) markets are at their all-time highs” repeatedly over the years:
(1) Rates were being cut in late 2019 and early 2020 with markets at all-time highs. (Note: the first cut was in August 2019, well before COVID.)
(2) Rates were also being cut in 2007 as markets were reaching all-time highs. The first cut was in September and the market peaked in October. The cuts continued despite high inflation (which peaked in mid-2008).
(3) 2000-2001 was a partial exception. The Fed didn’t cut rates until January 2001, technically after the market had peaked, though before it was obvious that it had peaked.
(4) The Fed was cutting rates in 1989-1990 as the market reached a series of new highs.
One might be better off asking the question “when was the last time we did NOT have a series of rate cuts as markets were making all-time-highs”?
The answer over the past 25 years is that when the market is making new all-time highs and the Fed is NOT cutting rates, the bull market is likely to continue.
Fed rate cuts are often a de facto signal that a bull market is on its last legs.
I personally think the only good reason to have a 30y fixed mortgage is to pay for a house you are certain to live in for at least 7-10 years.
If you want to be “long inflation” or “short interest rates” (thinking rates will go up due to inflation), there are better choices, more flexible and less expensive. Also note that a 30y fixed mortgage requires a “long real estate” leg on the trade … which would lose value if rates do go up.
The homeowners benefit because they must pay lower interest rates. The MBS mortgages are conforming and, thereby, guaranteed by Freddie Mac, Fannie Mae, and Ginnie Mae. One could say that America benefits from more construction jobs, more happy (good-citizen) homeowners, healthier banks, healthier investors, less crime (wealthier homeowners), and fewer people who need government assistance (wealthier homeowners).
Higher costs: Good question! One such group might be non-conforming borrowers, as many mortgage lenders are doing so by buying MBS.
As if family connections and education weren’t already a critical determinant of success; AI appears set to take it to new levels of labor market bifurcation. Where a smart, middle-class kid today might get an Ivy League scholarship and parlay that into a lucrative position on Wall Street, I can see a future where Daddy says I’ll give you my $100 million account to manage, but only if you hire my kid. AI may allow the very wealthy to pull up the ladder behind them. My hope is that AI can democratize knowledge to the extent that enterprising young folks can create new products at a pace that overwhelms the masters of the old world.
The very wealthy have already pulled the ladder up behind them.
The only thing on the horizon that might help bring down home prices is the end date of the 15 yr mortgages that were set below 3%
People cant afford to give up those “gifted” rates and thus are locked in to where they currently live. This keeps supply off the market and makes real estate even a more illiquid environment.
Curious that the CEO of ICE, an exchange, would seek MORE govt fiddling with markets.
Those mortgages are a very small percentage of overall mortgages.
The idea of a borrower holding on to a 3% mortgage because it confers some huge financial benefit doesn’t really hold water.
A few key points to consider:
1. In many markets, home prices are declining. It does not make financial sense to pay any amount of interest for the right to hold an asset that is declining in value.
2. If people have savings, it might make financial sense for them to pay down or pay off that low-rate mortgage, which provides a 100% guaranteed return on your investment equal to your mortgage interest rate. There are few safe investments out there that can provide the same risk/reward profile. To find a better return, you’d likely have to assume significant downside risk.
3. The rent v. buy analysis heavily favors renting in most markets.
Fortunately there will not be a general portfolio of assumable mortgages based on the 1970s abundant debates. There are simply many folks with all kinds of bad credit, income sources etc. that the bank wants to thoroughly review. Finally, if interest rates go up, the bank will want that money. Relax, the general rule of capitalism is that wealth flows up; occasionally, wealth might “trickle down” like President Reagan and apologists like William Buckley said, but I haven’t seen it. Don’t want to see it as “trickle down” was decisively called “tinkle down” at the time.
Portable & assumable mortgages might make the market more liquid but will not increase the total amount of housing, thus the housing shortage and high prices will remain until housing demand drops. They keep working around the problem but do not address the core cause of the problem other than to make it worse by deporting construction workers….
There’s a lot of unoccupied housing sitting empty while owners watch valuations increase. You can see plenty of it on any RE platform.
Increasing the overall supply of housing is a local problem, not a federal one. Each local government is beholden to the existing residents who don’t want more housing because it lowers the value on the house they already own.
Those local governments are also between a rock and hard place on infrastructure. In order to have to increase their budgets, they pushed all expenses of new developments off onto the builders (roads, maintenance, schools, off-ramps). This pushed development costs up to so much that the only thing it makes sense to build is luxury housing.
This is the “market sorting it out”. Everything at this point is optimized for people with comfortable amounts of money and willing to spend. If that’s not you….
@Sandy When you say “There’s a lot of unoccupied housing sitting empty while owners watch valuations increase. You can see plenty of it on any RE platform.”
What are the “platforms” that show “unoccupied housing sitting empty while owners watch valuations increase”? Due to high carry costs few people (not desparate to get cash out of China or park drug money) just let a house sit empty hoping that it will go up in value more than the cost to insure it, maintain it and cover the peoperty taxes.
“electronification of global energy and expanding them to fixed income data and obviously trying to digitize the mortgage industry.” I am as dumb as a bag of hammers…huh?
If you let “those 2 letters” take over and you don’t hire young folks….who the fuck is going to run the business in 30 years?
If you let “those 2 letters” take over and you don’t hire young folks….who the #uck is going to run the business in 30 years?
The final paragraph, “…slows the growth of expenses”, caught my eye. From that I infer that junior staff are treated as an expense, rather than an investment in the future.
This seems short sighted. Have we learned nothing?
Hello, de-industrialization of the 80s and 90s for short term profit.
ALL payroll is an expense. And for many companies, the biggest one.
Portable mortgages would be a nightmare. The house is collateral and is the basis for the original loan. What would happen to someone upgrading and needing to borrow more money? Two loans? Housing prices just need to drop more for them to be affordable. We don’t need some scheme to stimulate demand.