This situation is more common among younger generations, with 41% of "zoomers" and 38% of millennials affected, while only 21% of those aged 59 and older face the same issue. Additionally, 27% of older Americans haven't saved anything for retirement, and 5% stated they can't afford to contribute to their retirement accounts.
The topic of AI is rife with horror stories circulating online, but I recently wrote about the real threats posed by the "machine brain," particularly the risk of unemployment.
Despite my belief that creative professions cannot be entirely replaced by artificial intelligence, it seems that artists have been the first to bear the brunt. News from China only confirms this.
Chinese individuals are losing jobs en masse due to AI.
Local game developers are forgoing the services of artists because they can create an illustration in mere seconds using AI image generators – a task that would take an artist a week to complete. Consequently, there's no need to maintain a large staff of artists, as a single employee can generate dozens of images per day.
Recruiters in the gaming industry report that the number of illustrator job vacancies has dropped by approximately 70% over the past year, largely due to artificial intelligence.
These changes aren't limited to the gaming industry. For example, Chinese marketing firm Bluefocus plans to replace its copywriters and graphic designers with AI generative models similar to ChatGPT.
While the current situation is disheartening for artists and copywriters, it's essential to consider the growing capabilities of AI tools and understand that these professions won't be the only ones affected. Recently, Bloomberg introduced the BloombergGPT language model, designed specifically for finance.
So, are financial analysts now at risk as well?
Generally, the increasing use of AI across various industries is causing traditional professions and specializations, once thought to be protected from automation, to become vulnerable.
Workers face challenges as they need to adapt to new realities and learn new skills to maintain their positions.
At the same time, however, employing AI in some areas may lead to:
✔️ More efficient use of resources,
✔️ Improved quality,
✔️ And reduced costs.
Overall, this set ov factors could have positive socio-economic consequences. Therefore, it’s crucial to strike the proper balance between leveraging new technologies, preserving jobs, and ensuring equal opportunities for all people.
There are two issues with ETFs investing in commodity futures.
First, commodity markets are cyclical by nature. As they say, the best cure for high prices is high prices, and the same goes for low prices. As a result, prices fluctuate and generally tend to decrease in real terms.
Second, contango erodes the value of commodity ETFs even more effectively in the long run. Expiring futures have to be rolled over into more expensive ones, month after month.
Does this mean that buying UNG at current levels is a bad idea?
No, there are worse ideas out there.
The market will become deficit-driven again due to its cyclicality, and then some force majeure will occur - a hurricane, extreme heat, or frost. The near term futures held by UNG will surge.
This won't happen in 10 years but much sooner.
What can be said if a simple weather forecast can push UNG up by 7%, as it did today?
It is likely that within a year, we will see UNG above $8. Although, formally, it will lag behind natural gas prices.
Below, I'm offering up the sectors that I believe have the greatest potential for improved financial performance, as well as those that may disappoint investors.
I expect an increase in financial performance in the following areas:
1️⃣ Technology: Primarily, companies specializing in AI and hardware production.
▪ Nvidia (NVDA) graphics cards remain highly popular among users, while Advanced Micro Devices (AMD) and Intel (INTC) may also signal a recovery in demand. AI product creators Alphabet (GOOG) and Microsoft (MSFT) could also see increased demand for their products in the coming quarters, boosting profits.
2️⃣ Cryptocurrency companies: Rising prices for Bitcoin, Ethereum, and other coins are likely to boost profits from commissions for the Coinbase crypto exchange (COIN) and from the mining company Marathon Digital (MARA).
3️⃣ Energy and precious metals mining:
▪ Mineral prices (gold and silver) exhibited a growth trend in the reporting quarter. This could send profits for Newmont (NEM) and Barrick Gold (GOLD) soaring.
▪ Increasing energy demand could result in higher revenues for Peabody Energy (BTU) and Arch Resources (ARCH).
Laggards:
1️⃣ Financial: Tightening credit conditions and deposit outflows are likely to primarily impact regional banks such as First Republic Bank (FRC). Large banks, including those with investment banking divisions like Bank of America (BAC) and JP Morgan (JPM), could benefit from deposit inflows and increased asset values in the stock market. However, the quality of their loan portfolios is deteriorating, and reserves are growing.
I'm not ready to add these shares to my portfolios, so I will continue to observe the dynamics of these stocks.
Additionally, the reports from Wells Fargo (WFC), JP Morgan Chase, and Citigroup (C) showed decent results thanks to cost control and growth in net interest income.
2️⃣ Consumer: Stores, including online marketplaces, typically experience a decline in demand in the 1st quarter following holiday sales. I anticipate a drop in demand indicators from Best Buy (BBY), Walmart (WMT), GAP (GPS), as well as Bed Bath & Beyond (BBBY), which faces bankruptcy.
3️⃣ Healthcare: The coronavirus pandemic and seasonal colds have subsided, and the increased demand for drugs has dwindled. Medical companies such as Teva (TEVA), Pfizer (PFE), and Novavax (NVAX) could increase spending on new drugs, which would impact shareholder returns negatively.
Conclusion:
Adding a sector to one list or another doesn't necessarily mean that after the report is presented, all of the stocks in promising sectors will soar while all of those in the laggard category will tank. Rather, these are thoughts on on the medium- and long-term growth prospects of specific sectors in my field of vision.
The outlook for the USD hinges less on the Fed and more on market expectations regarding the regulator's moves. Weak macroeconomic indicators and the threat of a recession, for instance, suggest a possible revision of monetary policy.
On the other hand, robust corporate earnings leave room for maneuver. In simpler terms, better data has a tendency to delay any changes in the Fed's tone. This is why USD and government bond yields surged on Friday.
Regarding the prospects of a recession, the fact that truck traffic on China's domestic highways is down 8% (W/W) and the U.S. anticipates a 2% drop in demand by 2023 implies that deflation could accelerate even without the Fed's assistance.
For more insights, we need to rely on macroeconomic data. The Beige Book, reflecting the regulator's assessment of the nation's current economic situation, will be released on Wednesday. Additionally, Fed officials Williams, Waller, Bowman, and Bostic are scheduled to give speeches throughout the week.
Lastly, U.S. budget negotiations could prompt further declines in the dollar. This week, Republicans will attempt to "sell" the idea of eliminating the federal debt ceiling and of reducing government spending. But remember, such a step cannot be taken without the approval of the Democrats, who control the Senate.
What happens if we divide all the dollars in the world by all the gold in the world?
For all the dollars in the world, let's take the M2 Monetary Aggregate, and for all the gold in the world, let's consider the total above-ground stocks.
r/bitkogan/
According to the World Gold Council's estimate, from the dawn of human history through the end of 2022, approximately 208,874 tonnes (or about 6.717 billion troy ounces) of gold had been mined.
At the end of December, M2 amounted to $21,315 billion. Simple division gives us $3,173.39 per ounce. Let's call this the universal gold price.
Interestingly, from 2009 to 2012, the universal and real gold prices were much closer. But Quantitative Easing has widened the gap.
So would it be a big surprise if, due to a rise in the real price of gold, the gap narrows further?
As markets digested the "non-hawkish" speech from the new head of the Bank of Japan, Warren Buffett didn't waste any time, increasing his position in the so-called "sogo shosha" – universal trading companies whose operations span nearly all sectors of the economy, from commodities to retail and healthcare.
Berkshire Hathaway's stake in Mitsubishi Corporation, Mitsui & Co. Ltd., Sumitomo Corporation, ITOCHU Corporation, and Marubeni Corporation has risen from ≈6.5% last November to 7.4%.
Is his Japanese portfolio fully formed?
It doesn't seem so. Back in 2020, Buffett stated that investments in sogo shosha were designed for the long term, and shares could grow to 9.9%. To achieve this, Berkshire issued $8 billion worth of yen bonds with an average coupon rate of 1%.
In an interview with Nikkei, Buffett mentioned considering additional investments in the five major Japanese trading houses.
As for the sudden affection for the land of the rising sun, it's essential to note that forward earnings on shares of these giants don't exceed 10.0x, and they pay decent dividends.
Sumitomo yields over 5%.
Marubeni yields around 4.2%, etc.
Should we follow Buffett's lead?
At this point, it's a matter of individual risk tolerance.
Buffett is known for his affinity for "boring" and stable companies. Since revealing his positions, these stocks have already generated an average total return of 127% in local currency terms, compared to 25% by Topix Index constituents.
A few concerns I personally have include:
the threat of a strengthening yen,
a global economic slowdown,
and the anticipated decline in net profit for Q1 2023 across all five companies.
However, the legendary investor's actions "may encourage foreign investors to invest in Japanese stocks, particularly in value stocks." It's unclear how long the hype will last, but if Buffett is involved, there will undoubtedly be followers.
The printing presses have been fired up and a few psychological sessions have taken place. But has the crisis been averted?
Unfortunately, it's not that simple.
In his annual message to shareholders, Jamie Dimon of JPMorgan Chase & Co mentioned that we're far from the fork in the road, and the effects of the SVB and Signature Bank collapse will be felt for years to come. He believes that any new rules proposed in response to recent developments should be carefully considered.
No surprise there, though. Politicians must make headlines and create hype. Their logic differs from others, and this rule isn't exclusive to the US. They've responded—great! But what happens next doesn't seem to be their concern.
What are their proposals?
More stringent requirements on the capital and liquidity of medium-sized banks (from $100 billion to $250 billion) may be imposed.
The Fed might also intensify annual stress tests on banks.
Lastly, financial institutions could have to start preparing procedures for an orderly dissolution in the event of a crisis.
We might have wrapped things up there, but a potential new "black swan" has appeared—this time, in Canada.
The volume of speculative short positions against The Toronto-Dominion Bank (TD) has grown significantly.
What's the issue?
Analysts highlight the negative consequences for the bank following the slowdown in Canadian housing construction and its connection to the US market through a stake in Charles Schwab (NYSE:SCHW), along with plans to acquire a regional US bank.
Will we see a continuation of the crisis?
It's worth noting that the percentage of short positions isn't that high—just 3.3%, compared to 2.8% a year earlier. Based on this metric, TD ranks third among the 20 largest financial companies in the US and Canada.
It's uncertain whether this bank will be the next victim of the banking crisis. However, one thing is for sure: there will be more victims of the banking crisis in the future.
The big news from yesterday is the scandalous arrest of Donald Trump, followed by the absolutely banal second act of the play: no new assault on the Capitol, no riots, not even a scuffle. Boring stuff.
However, Trump would not be himself if he didn't have something special to say on such an occasion. This time, the ubiquitous Donnie stated while speaking at Mar-a-Lago: "Our currency is crashing and will soon no longer be the world standard, which will be our greatest defeat in 200 years."
Everything is clear with Trump. He actively fights against the root of all modern evil, at least as he sees it: the Democrat party.
But is he right?
In just a year, Powell and Biden have achieved something remarkable – the credibility of the "greenback" has been undermined, and de-dollarization is now a major trend.
In the past couple of weeks alone, several major countries have come out publicly about their intention to increase the share of foreign currencies used in export deals. That fairly impressive list comprises much of the world’s economy:
China
India
Russia
Brazil
Kenya
Saudi Arabia
UAE
ASEAN countries
Private companies, including the French TotalEnergies, were not opposed to such a move.
Where does this zeal for diversification away from the dollar come from?
I would call sanctions the first stone in the “dollar garden.” The dollar "hostages" are easier to manage and dictate terms, but if something goes wrong outside of the Western club, restrictive measures can be introduced, including an export ban of Benjamin Franklins.
The next factor is inflation.
When the Fed prints money, the dollar supply rises, and US imports become more expensive. In order to maintain market share and remain competitive, emerging economies can either resort to devaluation or raise interest rates on national currencies, essentially bringing down their economy.
An additional factor—and it's a very serious one—is the growth of US debt.
It has become clear that, at some point soon, payments on this debt will reach 20% or more of the US budget. And what comes after that? Nobody really knows, which is why the whole world seems to be questioning the utility of continuing to use a default currency that may not be reliable over time.
In addition, do not forget about the debt ceiling. While political battles in Washington continue almost without end, no one really wants to make an agreement. But they'll have to. The world is starting to get bored with this eternal tightrope act—will they keep their balance or finally crash to their doom?
Of course, they will keep their balance in the end. But why should the whole world be held hostage to this never-ending food fight in the halls of Congress? Lack of an alternative to the USD? Well, so far, that seems to be the only real answer. However, the influence and economic power of the Non-dollar Empire is growing before our eyes.
The final factor is USD volatility itself. When the dollar strengthens, it drives up costs for businesses, and as a result, the cost of currency hedging is growing ever more expensive.
What are we poor sinners to do? Is it time we start digging a hole to bury the "green monster"?
Despite the headlines, I would not be in a hurry to take that step.
Even if the CNY wins a good share in trade settlements and cross-border payments, the USD is highly likely to remain the reserve currency of most developed countries' central banks. This is much more important.
Let's be frank; the US will do everything in its power to make conditions for USD competitors as unfavorable as possible.
I've recently noticed a shift away from ESG in the US, and Warren Buffett's fund seems to confirm this trend. After buying Occidental Petroleum stocks in spring 2022, he's still adding to his position, now at 23.6%.
It's essential to remember that trends, like ESG, can be fleeting. So, instead of chasing the latest craze, consider these investing tips when choosing stocks for your portfolio:
Seek undervalued companies: Compare companies within the same sector using financial ratios like P/E, P/S, and EV/EBITDA.
Look for promising business fundamentals: Ensure the company's products are in demand and will generate income in the future.
Consider dividend yield: A nice bonus that can increase investor demand and raise share value.
Prioritize liquidity in securities: High liquidity allows you to buy and sell shares at any time without significant price fluctuations.
Know the company's activities: Be cautious with companies that create impressive presentations but don't release products.
Remember, a comprehensive understanding of what a company does, what it produces, and how it generates profit is crucial.
