Month: February 2024

Impact of Artificial Intelligence

The world definitely feels that this year is a leap year 

Andrey Syrchin, along with the entire Cresco Capital team, is closely monitoring the events in the finance sector. He has analyzed the events affecting the market and shared his insights!

The market began to grow on the “hype of artificial intelligence” (highlighted in the chart), accounting for 40% of the growth. To put it into perspective, with 50 trillion dollars, AI has generated 15-20 trillion, comparable to China’s GDP.

The situation resembles a “bubble,” which is typical for technological breakthroughs—initially inflated by admiration, then deflates when the same AI is applied in life, turning the extraordinary into the ordinary.

All this occurs during a formal liquidity crunch in the markets. The US is “taking money out of the market with one hand and giving it to its banks with the other,” effectively creating a new repo and QE instrument for banks to prevent the system from collapsing.

Andrey asserts: “The first sign of a bubble is when insiders (company owners and top managers) offload large shares of their own companies into the market during this movement. J. Bezos, the founder of Amazon, has already sold 8 billion dollars of his shares, and the same is happening with E. Musk, M. Zuckerberg, and others.”

The market loses logic, showing no fear, a consequence of trading automation. This will be the next significant “black swan” in the global financial system, as robots lack the sense of fear and predictability, operating on clear algorithms. However, how did “2008 happen”?

Something is off in the market: AI hasn’t created 20 trillion dollars of added value, and such efficiency doesn’t exist yet. This euphoria will end badly for most investors (for example, NVIDIA and others like Tesla which dropped from 410 to 110 after Musk sold a large package of his shares at 300+ levels).

Look for solid stocks or funds that will protect your investments!

CNBC Daily Open has prepared an extended report on banking activities

Four major Wall Street banks reported earnings.
— JPMorgan Chase started the season with lower fourth-quarter profits due to a $2.9 billion fee paid last year.
— Citigroup reported a quarterly loss of $1.8 billion and announced a 10% workforce reduction.
— Bank of America’s net profit in the fourth quarter fell by more than 50% compared to last year, while Wells Fargo reported higher quarterly revenues but warned of lower interest income this year.

The Labor Department’s producer price index fell by 0.1% in December, contrary to the 0.1% increase economists expected.

Goldman Sachs stated that there were no significant changes in the European utilities sector over the last three years, but a potential shift could occur.

The report also includes information on the elections in Taiwan, manufacturers in the USA, and inflation risks. The information in the report will be useful for investors worldwide. 

Key points:
– 69% of global wealth belongs to developed countries, while less than a third to the developing world.
– Women and minorities disproportionately suffer from rising income inequality.
– The WEF’s future growth report for 2024 suggests a new set of indicators for growth assessment focusing on inclusivity and sustainability.

Oxfam reports that global inequality has risen for the first time in 25 years, with the richest people and their wealth concentrated in developed countries. Currently, 1% of the wealthiest own 43% of all global financial assets.

According to Oxfam, only 0.4% of the world’s largest and most influential companies commit to paying a living wage, allowing people “to afford a decent standard of living”.

Oxfam’s document calls for governments to play an active role in shaping their economies to promote equality, achievable through a comprehensive set of measures:

Guaranteeing public services: healthcare, education, etc.
Investing in public infrastructure and services.
Improving public sector management for operational transparency.
Strengthening laws on gender and racial justice.
Enhancing business management.
Limiting CEO salaries while ensuring a living wage.
Creating more efficient corporate tax regimes.

With such measures, it’s expected that the poorest 40% will have an income roughly equal to the richest 10%.

What do you think about this report?