Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Human beings are not ready for a powerful AI under present conditions or even in the “foreseeable future,” stated a foremost expert in the field, adding that the recent open letter calling for a six-month moratorium on developing advanced artificial intelligence is “understating the seriousness of the situation.”

“The key issue is not ‘human-competitive’ intelligence (as the open letter puts it); it’s what happens after AI gets to smarter-than-human intelligence,” said Eliezer Yudkowsky, a decision theorist and leading AI researcher in a March 29 Time magazine op-ed. “Many researchers steeped in these issues, including myself, expect that the most likely result of building a superhumanly smart AI, under anything remotely like the current circumstances, is that literally everyone on Earth will die.

“Not as in ‘maybe possibly some remote chance,’ but as in ‘that is the obvious thing that would happen.’ It’s not that you can’t, in principle, survive creating something much smarter than you; it’s that it would require precision and preparation and new scientific insights, and probably not having AI systems composed of giant inscrutable arrays of fractional numbers.”

After the recent popularity and explosive growth of ChatGPT, several business leaders and researchers, now totaling 1,843 including Elon Musk and Steve Wozniak, signed a letter calling on “all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4.” GPT-4, released in March, is the latest version of OpenAI’s chatbot, ChatGPT.

AI ‘Does Not Care’ and Will Demand Rights

Yudkowsky predicts that in the absence of meticulous preparation, the AI will have vastly different demands from humans, and once self-aware will “not care for us” nor any other sentient life. “That kind of caring is something that could in principle be imbued into an AI but we are not ready and do not currently know how.” This is the reason why he’s calling for the absolute shutdown.

Without a human approach to life, the AI will simply consider all sentient beings to be “made of atoms it can use for something else.” And there is little humanity can do to stop it. Yudkowsky compared the scenario to “a 10-year-old trying to play chess against Stockfish 15.” No human chess player has yet been able to beat Stockfish, which is considered an impossible feat.

The industry veteran asked readers to imagine AI technology as not being contained within the confines of the internet.

“Visualize an entire alien civilization, thinking at millions of times human speeds, initially confined to computers—in a world of creatures that are, from its perspective, very stupid and very slow.”

The AI will expand its influence outside the periphery of physical networks and could “build artificial life forms” using laboratories where proteins are produced using DNA strings.

The end result of building an all-powerful AI, under present conditions, would be the death of “every single member of the human species and all biological life on Earth,” he warned.

Read more here…

Former House Speaker Nancy Pelosi struggled to recover after an ultra-awkward and embarrassing moment with former Secretary of State Hillary Clinton during a Monday event hosted by Columbia University’s School of International and Public Affairs (SIPA).

During the very first exchange, Peloso thanked Clinton for her leadership in safeguarding democracy “when president” – and that’s when she quickly realized her error, dramatically recoiling and making hand motions. She then tried to recover by saying rather that it was “my hope” that Clinton become president. Watch the below – Pelosi’s Freudian slip comes just after the 1-minute mark:

Clinton had introduced the conversastion with Pelosi by saying, “Let’s start with this little matter of democracy, because I think you and I believe that it’s not just in our country, but that’s where we see it most clearly, there is a concerted effort to undermine some of the very foundations of democratic governance, of a democratic society.”

“There’s research, some of it done by SIPA in this university, showing that half the world’s democracies are backsliding, and that includes, sadly, the United States. So, what do you, Nancy, view as the biggest threats and challenges facing our democracy and what are the opportunities to try to stop that backsliding and turn it around?” she asked. Pelosi replied:

“Well, I appreciate that question, but I also appreciate your leadership in this regard when president –”

Another interesting moment came when Pelosi claimed that Clinton is the one person that Russia’s President Putin feared the most:

She went on to scapegoat Russian leader Vladimir Putin for stealing the 2016 election from Clinton, saying it was because he feared her the “most.”

“It was her clarity and position to the present – Putin – present occupant leader of Russia, that made him turn around and ensure, in an illegal way, come out against her in her campaign and interference in our democracy by Vladimir Putin, because Hillary Clinton was the person he feared most in terms of his lack of democracy in Russia. That’s, I think, self-evident, so thank you for what you have done,” Pelosi said.

But we highly doubt Putin ever “feared” Clinton; instead, it’s more likely he considered her hawkish policies to be dangerous to the world, heightening the risk of a major clash among superpowers.

There’s also a number of examples where Clinton’s policies contributed to failed states, for example in Libya, Syria, and Iraq.

Manhattan real estate sales experienced a significant 38% decline in the first quarter. The combination of high mortgage expenses and elevated property prices has led to widespread affordability challenges for the masses. 

Total sales volume slumped to $4.4 billion in the quarter, with 2,242 apartments and townhouses sold, compared to 2,546 sales in the first quarter of 2022, according to CNBC, citing a new report from real estate firm Douglas Elliman and Miller Samuel. The average price declined by 5% to $1.95 million, and the median sales price dropped 10% to $1.075 million. 

The cooldown in Manhattan real estate market follows a 29% decline in sales in the fourth quarter and is only a sign the pandemic boom is coming to a close. One question realtors in the borough have is if prices can sustain lofty levels. 

Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm, said a seasonal uptick in sales this spring is expected but a lot of that depends on the Federal Reserve keeping interest rates steady from here. 

One of the biggest mistmaches realtors are complaining about is the gap in price between buyers and sellers. Low inventory still means it’s a seller’s market. There were 6,996 homes on the market last quarter, and that’s below a 5-year average of 7,200.

“There still is a disconnect between buyers and sellers.

“Sellers are not slashing prices left and right to get deals done. They have confidence. They feel like ‘if I lose a buyer there’s another one down the road waiting.’ There is a no panic selling, or thinking they have to get out now,” Jason Haber at Compass told CNBC. 

The average discount buyers saw from the initial list price to sales was around 7%, up from 5% in the fourth quarter, according to Serhant. Many buyers fear they’re overpaying. 

“Buyers for the last three quarters have been sitting back, waiting for massive reductions and they’re not coming,” said Noble Black of Douglas Elliman.

Frederick Warburg Peters, president of Coldwell Banker Warburg, recently noted in a report, “The big price decreases seem behind us, and property costs have plateaued.” This would be very problematic for those waiting on the sidelines who may have to chase if prices reaccelerate. 

In the quarter, cash transactions reached an all-time high, accounting for 57% of total sales, according to Miller. Within the luxury segment, 75% of sales exceeding $5 million were completed in cash.

So inventory is tight, prices have yet to tumble though sales are sliding, and cash deals are hot: those appear to be the trends last quarter.

Authored by Charles Hugh Smith via OfTwoMinds blog,

This is how we’ll end up with severe shortages of truly skilled labor and high unemployment of those who lack the necessary skills.

The labor force and the job market are referred to as if they were monolithic structures. But they’re not monolithic, they are complex aggregates of very different cohorts of age, skills, mobility, education, experience, opportunity, potential and motivation.

As a result, numbers such as the unemployment rate tell us very little about the labor force and the job market in terms of what matters going forward. So what does matter going forward?

1. Demographics–the aging and retirement of key sectors of the work force.

2. Skills and experience that will be increasingly scarce due to mismatched demand for skills that are diminishing as older workers retire.

3. What skills and experience will be demanded by re-industrialization, reshoring and expanding the electrification of the economy.

Consider these two charts of the US work force by age. (Courtesy of CH @econimica)

In the first chart, Total US Employees, note that the prime working age work force (ages 25-54) has been flatlined for the past 20 years at 101-102 million. In contrast, the 55-and-older cohort of employees soared from 17 million to 37 million. This increase of 20 million accounts for virtually all growth in the employed work force.

A funny thing happens as workers get old; they retire and leave the work force. Their skills and experience are no longer available to employers or the nation’s economy.

The second chart shows the aging of the American populace, as the 55+ cohort increased from 57 million to 99 million since 2000, as the number of older employees skyrocketed from 17 million to 37 million.

While the total US population increased by 18% from 281 million in 2000 to 331 million today, the 55+ cohort increased 74% (from 57 million to 99 million).

The key takeaway here is the number of experienced workers who will retire in the next decade will track the explosive growth in the 55+ cohort. The general consensus is this will not be a problem because there are plenty of younger workers available to fill the vacated slots.

But this overlooks the qualitative and quantitative differences in the millions leaving the work force and those joining the work force. This is especially consequential in real-world jobs, i.e. all those jobs that require engaging real-world materials rather than staring at screens.

Though few analysts and commentators will admit to it, the implicit assumption is that the jobs that matter all involve staring at screens–processing data, finance, entertainment and shaping narrative make the world go round. All the real-world stuff (boring!) will magically get done by tax donkeys who are out of sight, out of mind.

This mindset has it backwards: it’s the real-world work of changing the industrial / energy / energy distribution foundation of the economy that matters going forward, not the staring-at-screens jobs.

What few seem to realize is the work force that’s aging and retiring is the cohort with the real-world skills. It’s a nice idea to remake the entire electrical grid of the nation to transport much larger quantities of electrical power, but who’s going to do all that work? Young people whose career goals are becoming YouTube influencers or day-traders? No. All the ChatAI bots in the world aren’t going to get the real work done, either.

In other words, there is a massive mismatch between the skills available to hire in the young-worker cohort and the skills and experience needed to rebuild the material, real-world foundations of the US economy. It’s well-known but apparently not worth worrying about that the average age of the US farmer is pushing 60 years of age. Nobody left to grow all our food? Hey, isn’t there a ChatAI bot to do all that for us? It can all be automated, right? No? Well, why not? Somebody out there, get it done! Food in super-abundance should be delivered to everyone staring at screens 24/7, it’s our birthright.

The average age of skilled tradespeople is also skewed to the aging work force. There is no easy way to quantify real-world skills gained by on-the-job experience. I suspect it follows a power-law distribution: the newly minted worker just out of school / apprenticeship can handle basic functions, but when tough problems arise, the number of workers with the requisite experience to diagnose and fix the problem diminishes rapidly.

This distribution presents an enormous problem for the economy and employers. Once the super-experienced workers who can solve any problem leave, they cannot be replaced by inexperienced workers. So when the really big problems arise, the systems will break down because those who knew how to deal with the problems are no longer available.

This is how you can have 10 million unemployed workers and 1 million unfilled positions that can’t be filled because few are truly qualified. You want to erect new electrical transmission lines? Nice, but you’re not going to get the job done with green workers accustomed to staring at screens. It takes years of hard labor to acquire even a bare minimum of the skills required. These are not assembly-line jobs that can be filled by unskilled labor, these are jobs in the messy real world, not a distribution center.

As I note in my book on Self-Reliance, individuals with a full spectrum of real-world skills are now extremely rare. Skills that were once common are now performed by specialists. We seem to have all the time in the world to stare at hundreds of cooking programs on TV but how many people actually prepare three meals a day, week in, week out, month in, month out, year in, year out? How many people know how to repair anything, build anything, or maintain a machine?

My direct experience is that many young people don’t know how to put air in the tires of the vehicle Mom and Dad gave them. Young people with graduate-level diplomas don’t know what a green bean plant looks like. (Eeew, gross, it grows in dirt?) The cultural value system that only values wealth, regardless of its source, and minting money from staring at screens has generated a fundamental mismatch between the skills that will be needed going forward and the skills being presented as oh-so-valuable.

Yes, there are many young workers with sharp real-world skills. The question is, are there enough?

This is how we’ll end up with severe shortages of truly skilled labor and high unemployment in the cohort of workers with few real-world skills and a surplus of skills for which there is limited demand. As a real-world experiment, go find a tough old rancher and ask them a series of questions about livestock, machinery, fencing, generators, etc., and then ask the average newly minted college graduate that followed the warped values embedded in our economy the same questions.

Of course the young worker can’t match the experience of the old worker, but do they have any experience at all of a spectrum of essential real-world skills? If not, do they have the requisite physical endurance and commitment needed to acquire real-world skills?

Who’s going to do all the real-world work going forward? A few people talk about it as an abstraction, but it’s not an issue to everyone focused on Federal Reserve policy or GDP. But eventually, the real world will matter more than staring at screens and day-trading, because when the systems break down due to lack of truly qualified employees, we’ll all wake up. But by then it will be too late. We’ll be staring at dead screens begging for somebody somewhere to restore power so we can continue playing with ChatAI to trade zero-day options.

*  *  *

My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century. Read the first chapter for free (PDF)

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Tesla’s 35% rise in sales in China for the month of March may be good news for today, but it likely won’t change what will be a disappointing Q1 for the company, according to Tesla skeptic and bear Gordon Johnson of GLJ Research.

Johnson put out a note on Tuesday, following the China numbers being reported, claiming that despite the beat of expectations, he still believes there is a Q1 earnings miss of “herculean proportions” on its way. 

“In 1Q22, 2Q22, 3Q22, 4Q22, and 1Q23, TSLA produced 305.4K, 258.6K, 365.9K, 439.7K, and 440.8K cars, respectively. Stated differently, that’s 2Q22 production growth of -15.3% QoQ (when TSLA’s margins fell -226bps QoQ), 3Q22 production growth of +41.5% QoQ (when TSLA’s margins gained +47bps QoQ), and 4Q22 production growth of +20.2% QoQ (when TSLA’s margins fell -319bps QoQ),” Johnson wrote.

But he notes that Q1 production was essentially flat, sequentially, and then asks: “Where are the production efficiencies/cost savings going to come from?”

“In the car [manufacturing business] there are three ways to cut prices, namely lower labor costs (good luck with that in 1Q23), lower input costs (lithium is lower, but other items are up), and higher fixed cost absorption (i.e., TSLA’s main cost driver historically). Yet, in 1Q23, with production essentially flat QoQ, there will be NO fixed cost absorption.”

Johnson believes that despite today’s “good news” from China, that “likely (very) bad things” are on the way for Tesla’s Q1 earnings. Against estimates of $0.87 per share, Johnson estimates $1.18 billion in net income, or $0.37 per share for the quarter:

Taking this analysis a step further, observing TSLA’s 4Q22 ASP of $51.1K, and adjusting for a -15% QoQ price cut, you arrive at a $7.665K/car hit to TSLA’s pre-tax profit/car QoQ (i.e., $51.1K ASP * 15% = $7.665K/car). So, $9.835K – $7.665K = pre-tax profit/car of $2.17bn.

Yet, rounding up to $3bn, to account for cost savings/accounting-chicanery/1Q23-currency benefit (which was a headwind in 4Q22), then multiplying this number by 423K cars sold in the quarter, you arrive at a 1Q23 pre-tax profit of $1.269bn; then, adjusting for TSLA’s ~7% tax rate, net income looks set to come in around $1.180bn, which, when adjusting for 3.2bn shrs outstanding, is $0.37/shr in 1Q23 EPS.

“Tesla’s Q1 results are setting up for an EPIC disaster, which is currently FLYING COMPLETELY UNDER THE RADAR! This is what’s important, not some weekly China number,” he concluded. 

Recall, earlier today we posted that according to the China Passenger Car Association (CPCA) on Tuesday, Tesla sold 88,869 units of China-made electric vehicles for the month of March, a 35% increase from a year ago, according to Reuters.

The figure is up 19.4% sequentially after Tesla delivered 74,402 vehicles in February. Competitor BYD remains the name to watch in China, however, selling 206,089 vehicles last month. It marks the “second-highest China-made vehicle sales ever for the company, just behind the 100,291 units that were sold in November of last year,” according to the Teslarati blog. 

Authored by Michael Snyder via The Economic Collapse blog,

For decades, the U.S. dollar was the undisputed king of global currencies, but now dramatic changes are happening.  China, Russia, India, Brazil, Saudi Arabia and other nations are making really big moves which will enable them to become much less dependent on the U.S. dollar in the years ahead.  This is really bad news for us, because having the primary reserve currency of the world has enabled us to enjoy a massively inflated standard of living.  Once we lose that status, our lifestyles will be much different than they are today.  Unfortunately, most Americans don’t understand any of this.  Even though our leaders have treated the stability of our currency with utter contempt in recent years, most Americans just assume that the dollar will always reign supreme.  Meanwhile, much of the planet is preparing for a future in which the U.S. dollar will be far less important than it is right now. 

The following are 7 signs that global de-dollarization has just shifted into overdrive…

#1 The BRICS nations account for over 40 percent of the total global population and close to one-fourth of global GDP.  So the fact that they are working to develop a “new currency” should greatly concern all of us…

The Deputy Chairman of Russia’s State Duma, Alexander Babakov, said on 30 March that the BRICS bloc of emerging economies – Brazil, Russia, India, China, and South Africa – is working on developing a “new currency” that will be presented at the organization’s upcoming summit in Durban.

“The transition to settlements in national currencies is the first step. The next one is to provide the circulation of digital or any other form of a fundamentally new currency in the nearest future. I think that at the BRICS [leaders’ summit], the readiness to realize this project will be announced, such works are underway,” Babakov said on the sidelines of the Russian-Indian Strategic Partnership for Development and Growth Business Forum.

Babakov also stated that a single currency could likely emerge within BRICS, and this would be pegged not just to the value of gold but also to “other groups of products, rare-earth elements, or soil.”

#2 Two of the BRICS nations, China and Brazil, have just “reached a deal to trade in their own currencies”…

The Chinese renminbi is speeding up in expanding its global use, a trend that will help build a more resilient international monetary system, one that is less dependent on the US dollar and more conducive to trade growth, experts said on Thursday.

They commented after China and Brazil — two major emerging economies and BRICS members — reportedly reached a deal to trade in their own currencies, ditching the US dollar as an intermediary.

The deal will enable China and Brazil to conduct their massive trade and financial transactions directly, exchanging the RMB for reais and vice versa, instead of going through the dollar, Agence France-Presse reported on Wednesday, citing the Brazilian government.

#3 During a meeting last week in Indonesia, finance ministers from the ASEAN nations discussed ways “to reduce dependence on the US Dollar, Euro, Yen, and British Pound”…

An official meeting of all ASEAN Finance Ministers and Central Bank Governors kicked off on Tuesday (March 28) in Indonesia. Top of the agenda are discussions to reduce dependence on the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements in local currencies.

The meeting discussed efforts to reduce dependence on major currencies through the Local Currency Transaction (LCT) scheme. This is an extension of the previous Local Currency Settlement (LCS) scheme that has already begun to be implemented between ASEAN members.

#4 In a move that has enormous implications for the “petrodollar”, Saudi Arabia just agreed to become a “dialogue partner in the Shanghai Cooperation Organization”…

The state-owned Saudi Press Agency said that, in a session presided by King Salman bin Abdulaziz, the Saudi cabinet on Tuesday approved a memorandum awarding Riyadh the status of dialogue partner in the Shanghai Cooperation Organization — a political, security and trade alliance that lists China, Russia, India, Pakistan and four other central Asian nations as full members.

The organization further tallies four observer states — including Iran — and nine dialogue partners, counting in Saudi Arabia, Qatar and Turkey. It is headquartered in Beijing and served by China’s Zhang Ming as secretary-general.

#5 The Chinese just completed their very first trade of liquefied natural gas that was settled in Chinese currency instead of U.S. dollars…

China has just completed its first trade of liquefied natural gas (LNG) settled in yuan, the Shanghai Petroleum and Natural Gas Exchange said on Tuesday.

Chinese state oil and gas giant CNOOC and TotalEnergies completed the first LNG trade on the exchange with settlement in the Chinese currency, the exchange said in a statement carried by Reuters.

The trade involved around 65,000 tons of LNG imported from the United Arab Emirates (UAE), the Shanghai Petroleum and Natural Gas Exchange added.

#6 The government of India is offering their currency as an “alternative” to the U.S. dollar in international trade…

India will offer its currency as an alternative for trade to countries that are facing a shortage of dollars in the wake of the sharpest tightening in monetary policy by the US Federal Reserve in decades.

Facilitating the rupee trade for countries facing currency risk will help “disaster proof” them, Commerce Secretary Sunil Barthwal said during an announcement on India’s foreign trade policy Friday in New Delhi.

#7 Saudi Arabia has actually agreed to accept Kenyan shillings as payment for oil shipments to Kenya instead of U.S. dollars…

Kenyan President William Ruto signed an agreement with Saudi Arabia to buy oil for Kenyan shillings instead of US dollars.

As the US currency exchange rate hit 145.5 shillings due to increased demand by importers, President Ruto accused oil cartels of stockpiling American dollars in response to the crisis, sparking fuel shortages throughout Kenya.

10 years ago, none of these things would have happened.

But now change is happening at a pace that is absolutely breathtaking.

At this point, John Carney is warning that a fracturing of global currency reserves is “inevitable”…

“[It’s] not only a serious threat, I think it is inevitable. We went through three stages, as you said, after World War II. The U.S. was the biggest economy in the world. In the 1970s, global banking became basically dollar central. With the fall of the Soviet Union, the entire world, more or less, came under the domination of the U.S dollar…”

“That is now drifting away. China and Russia are starting to build an alternative block of currency,” John Carney explained Sunday.

Sadly, I agree with him.

As U.S. relations with both Russia and China continue to go downhill, both of those nations will have a very strong incentive to push de-dollarization even further.

And that is really bad news for the United States, because our currency is the source of our economic power and it is the most important thing that we export.

This is a story of monumental importance, but unfortunately most Americans still believe that our leaders know exactly what they are doing and that they have everything fully under control.

*  *  *

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

While some analysts started talking about $100 after the surprise OPEC+ cuts, Morgan Stanley is going the other way, and is cutting its price forecasts for this year and next, viewing the latest move as a probable admission from the biggest producers in OPEC+ that demand may not be doing too well in the coming months, OilPrice reports.

“OPEC probably needs to do this to stand still,” Martijn Rats, chief commodity strategist at Morgan Stanley, said in a note available to pro subs.

However, the decision “reveals something, it gives a signal of where we are in the oil market. And look, let’s be honest about this, when demand is roaring…then OPEC doesn’t need to cut,” Rats noted. 

So the U.S. bank cut its Brent Crude forecast for the second quarter of 2023 to $85 from $90 a barrel previously expected. The third-quarter forecast was also cut by $5 a barrel—to $90 from $95, while the fourth-quarter price estimate was slashed to $87.50 from $95 per barrel.

Morgan Stanley also slashed its forecast for Brent’s 2024 average to $85 from $95 a barrel.  

Citigroup doesn’t see $100 oil soon, either.

Oil prices are not going anywhere near $100 per barrel despite the latest production cuts announced by members of the OPEC+ group, as U.S. supply growth and uncertainty in the Chinese demand growth path will keep the market fairly balanced, Ed Morse, global head of commodities research at Citigroup, told Bloomberg on Monday. 

While Citi and Morgan Stanley are more bearish on oil, Goldman Sachs and Energy Aspects have turned more bullish after the shock OPEC+ announcement.

The surprise OPEC+ cuts are making oil balances look “insanely bullish” for later this year, provided that the global economy holds up, Amrita Sen, founder and director of research at Energy Aspects, told CNBC on Monday.

Goldman Sachs, for its part, on Monday raised its Brent Crude forecast to $95 from $90 at the end of the year. The bank also raised its Brent Crude forecast for 2024, now seeing it at $100 at the end of the year from an earlier projection of $97.

Emails obtained by the US Virgin Islands reveal that JPMorgan executives joked about Jeffrey Epstein’s pedophilia while the disgraced financier was a client of the bank, according to claims made in a new court filing.

In an amended complaint filed in New York on Monday, the US Virgin Islands said that Epstein’s behavior “was so widely known at JPMorgan that senior executives joked about Epstein’s interest in young girls,” the Financial Times reports.

JPMorgan is battling two combined lawsuits over Epstein – one from the US Virgin Islands, and another brought by an Epstein accuser known as Jane Doe. The cases have a provisional trial date set for October.

Included in the filing is a 2008 email to Mary Erdoes, a 27-year JPMorgan veteran who runs the asset and wealth management division where Epstein was a client.

The bank, meanwhile, said in a March filing that Erdoes “always acted with the highest levels of integrity and professionalism,” and had “informed this client 10 years ago that his relationship with our firm was being terminated.”

Erdoes was questioned under oath as part of the pre-trial proceedings. Last week, the Financial Times reported that longstanding chief executive Jamie Dimon will in May also be deposed, despite attempts by the bank to prevent him from having to testify.

The US Virgin Islands’ complaint contains an internal communication which references a “Dimon review” into the relationship with Epstein, of which the bank says it has no record. -FT

Later this month former JPMorgan executive Jes Staley will be deposed. While not named in the above litigation, JPMorgan has sued him claiming he withheld details of his relationship with Epstein, including knowledge of the financier’s sex crimes.

Staley left JPMorgan to head up Barclay’s bank in the UK, only to leave amid an investigation over his relationship with Epstein. He has denied knowledge or involvement regarding Epstein’s crimes.

Late last week the US Virgin Islands hit several billionaires with subpoenas as part of its lawsuit. Sergey Brin, Thomas Pritzker, Mortimer Zuckerman and Michael Ovitz were all asked to provide any communications or documents related to JPMorgan and Epstein.

Meanwhile, JPMorgan CEO Jamie Dimon is expected to be deposed under oath regarding the bank’s relationship with Epstein – who banked with JPMorgan for 15 years until it eventually cut ties with the convicted sex offender in 2013.

“Jamie Dimon knew in 2008 that his billionaire client was a sex trafficker,” argued US Virgin Islands attorney Mimi Liu during a March hearing in front of Manhattan US District Judge Jed Rakoff, referring to the year Epstein was first criminally charged with sex crimes, CNBC reported in March.

Authored by Lance Roberts via RealInvestmentAdvice.com,

The market bottomed last October despite ongoing concerns about inflation, higher rates, recessionary risks, and a banking crisis. While the media headlines and youtube podcasts are filled with “crisis” headlines, as noted in “Analysts Raise Estimates,” expectations for growth and earnings are rising.

“If there is ‘no recession in 2023,’ then such would suggest the decline in corporate earnings and profit margins is complete. Therefore, such would suggest that equities are fairly valued at current levels supporting the return of a more bullish trend. Currently, the Bloomberg Economic Growth Consensus for the U.S. economy is rising, with only one-quarter of negative growth expected.”

“Given that earnings are derived from economic activity, then the current decline in earnings should bottom before the trough in economic activity. Interestingly, in mid-March, S&P Global released its earnings forecast for the S&P 500 through the end of 2024. As with economic analysts, S&P sees earnings bottoming in the first quarter and returning to its January 2022 peak.”

“Interestingly, the financial markets have factored in these improving outlooks since the October lows. Such is unsurprising as investors begin to pay up for investments based on more robust forecasts. Therefore, if the earnings forecasts are correct, the market should reflect those forecasts and rise toward the previous market peak.”

While economists and analysts are basing their views on the premise of a “no recession” scenario, the market bottomed in October on hopes of a reversal of monetary tightening by the Federal Reserve.

It is currently unclear if either view is correct.

Nonetheless, as investors, several technical indicators support the notion that the market bottomed in 2022, suggesting an alternative view of an ongoing bear market.

Still In A Correction

While there have been many discussions about the “bear market” last year, such is not the case. Yes, the market was down more than 20% last year, which is the media’s definition of a bear market. However, is an arbitrary 20% decline still a valid measure?

To answer the question of validity, let’s agree on a basic definition.

• A bull market is when the market price trends higher over a long-term period.

• A bear market is when the previous positive trend ends, and prices trend lower.

The chart below provides a visual of the distinction. When looking at price “trends,” the difference becomes apparent and valuable.

The distinction is also essential to understanding the difference between “corrections” and “bear markets.”

• “Corrections” generally occur over short time frames, do not break the prevailing price trends, and are resolved by markets reversing to new highs.

• “Bear Markets” tend to be long-term affairs where prices grind sideways or lower over several months to two years as valuations “mean revert.”

A good example of the inaccuracy of the 20% rule was the 35% price decline in March 2020. That decline was unusually swift using monthly closing data. However, that decline did not break the long-term bullish trend and quickly reversed to new highs, suggesting it was a “correction.”

The massive fiscal impulse into the financial system and the economy in 2020-2021 led to an unprecedented deviation above the bullish trend. The market is in the process of correcting that excessive deviation but has yet to retest the previous bullish trend. Given such a large deviation, that correction process will require a deeper price decline or a long period of price consolidation.

Regardless of how the price deviation is resolved during the correction process, the secular bull market that started in 2009 remains intact as long as the rising price trends continue.

The long-term technical structures of the market also confirm this view.

Long-Term Technicals Remain Bullish

Daily price charts can provide a short-term view of market psychology from days to weeks. The problem with daily price analysis is volatility can cause short-term swings in the market that can disconnect from the market’s underlying trend or fundamental data.

The volatility gets smoothed out if we slow that price action by examining weekly pricing data. Such reveals a clearer picture of the market delivering a more bullish message.

The S&P 500 scored seven weekly closes above its 40-week moving average and then successfully retested that breakout level. Such suggests the return of a more bullish trend. Assuming supports continue to hold, the next major resistance levels are the February highs of 4200, then the August 2022 peak at 4325.

Notably, the October lows held critical support at the 200-week moving average, which remains support for the market since the 2009 lows.

Furthermore, the vast majority of the major markets and sectors have registered weekly buy signals. Such has historically denoted a more bullish bias to the overall market for the next 12 months.

The chart below shows the moving average crossover signal back to 1998. The orange bars are periods where equity exposure should be reduced. As you will note, the periods of a positive cross, where equity exposure should be increased, usually last for a year or more. Since 1998, there were only two false signals to increase equity exposure in 2002 and early 2016.

From an investment viewpoint, the technical action of the market suggests that the market bottomed in 2022. However, much like we saw in 2002, there is a risk that one more leg lower is possible.

Navigating What Comes Next

As noted, investors’ biggest problem is discerning between market action and the economic and fundamental dynamics.

Let me be very clear…I have no idea if the market bottomed in October or not.

However, there are some rules we can follow.

Rule #1: Cut Losers Short & Let Winners Run.

It takes tremendous humility to navigate markets successfully. There can be no such thing as hubris when investments do not go how you want them. Investors plagued with big egos cannot admit mistakes, or they believe they’re the most significant stock pickers who ever lived. To survive in markets, one must avoid overconfidence.

Rule #2: Investing Without Specific End Goals Is A Big Mistake.

Before investing, you should already know the answer to the following two questions:

1. At what price will I sell or take profits, if I’m correct?

2. Where will I sell it if I am wrong?

Hope and greed are not investment processes.

Rule #3: Emotional & Cognitive Biases Are Not Part Of The Process.

If your investment  (and financial) decisions start with:

• I feel that

• My friend told me

• I heard

• I hope

You are setting yourself up for a bad experience.

Rule #4: Follow The Trend.

“80% of portfolio performance is determined by the underlying trend. “

Rule #5: Don’t Turn A Profit Into A Loss.

Investing is about creating returns over time. If you don’t harvest gains and allow them to turn into a loss, you have started a “financial rinse cycle.”

Most importantly, “getting back to even” is not an investment strategy.

Rule #6: Odds Of Success Improve Greatly When Technical Analysis Supports Fundamental Analysis. 

The market, for a long-time, can ignore fundamentals. As John Maynard Keynes once said:

“The stock market can remain irrational longer than you can remain solvent. “

Applying a technical overly to determine the “when” to invest can significantly improve the return and control the capital risk of the “what” fundamental analysis uncovers.

Rule #7: In Bull Markets, You Should Be “Long.” In Bear Markets – “Neutral” Or “Short.”

Investing against the market’s major “trend” is generally a fruitless and frustrating effort. During secular bull markets – remain invested in risk assets like stocks or initiate an ongoing process of trimming winners.

During bear markets, investors can reduce risk asset holdings to their target asset allocations and build cash. An attempt to buy dips believing you’ve discovered the bottom or “stocks can’t go any lower” generally doesn’t work out well.

Rule #8: Invest First With Risk In Mind, Not Returns.

Investors focusing on risk first are less likely to fall prey to greed. We tend to focus on the potential return on investment and treat the risk taken to achieve it as an afterthought.

Responsible portfolio management aims to grow money over the long term to reach specific financial milestones and consider the risk taken to achieve those goals. Managing to prevent significant drawdowns in portfolios means giving up SOME upside to prevent the capture of MOST of the downside. While portfolios may return to even after a catastrophic loss, the precious TIME lost while “getting back to even” can never be regained.

Rule #9: The Goal Of Portfolio Management Is A 70% Success Rate.

Think about it – Major League batters go to the “Hall Of Fame” with a 40% success rate at the plate.

Portfolio management is not about ALWAYS being right. It is about consistently getting “on base” that wins the long game. There isn’t a strategy, discipline, or style that will work 100% of the time.

Once you understand that, the other 8-rules above become much simpler to incorporate,

As an investor, stepping away from your “emotions” momentarily is most important. Look objectively at the market around you. Is it currently dominated by “greed” or “fear?” Your long-term returns will depend much on how you answer that question and manage the inherent risk.

“The investor’s chief problem – and even his worst enemy – is likely to be himself.” – Benjamin Graham

In a Tuesday ceremony in Brussels, Finland formally became the North Atlantic Treaty Organization’s 31st member, which in effect doubles the Western military alliance’s border with Russia. 

US Secretary of State Antony Blinken and NATO Secretary General Jens Stoltenberg attended the ceremony with Pekka Haavisto, Finland’s Minister for Foreign Affairs. The Finnish presidency said in a statement: “Finland has today become a member of the defense alliance NATO. The era of military non-alignment in our history has come to an end. A new era begins.”

“Each country maximizes its own security. So does Finland. At the same time, NATO membership strengthens our international position and room for maneuver. As a partner, we have long actively participated in NATO activities. In the future, Finland will make a contribution to NATO’s collective deterrence and defense,” it continued.

The Kremlin on the same day called it an aggravation of the situation and vowed to take countermeasures ensuring its security.  “The Kremlin believes that this is another aggravation of the situation. The expansion of NATO is an infringement on our security and Russia’s national interests,” presidential spokesman Dmitry Peskov told a briefing.

But he also acknowledged the situation of Ukraine, which the West has long tried to turn into an anti-Russian bulwark, is fundamentally different from that of Finland. 

“The situation with Finland, of course, is radically different from the situation with Ukraine, because, firstly, Finland has never had anti-Russian rhetoric, and we have had no disputes with Finland. With Ukraine, the situation is the opposite and potentially much more dangerous,” Peskov said.

Taking a more ominous and threatening tone, Russian Defense Minister Sergei Shoigu in a televised press briefing confirmed that Belarus had receieved aircraft and Iskander missiles capable of delivering tactical nuclear strikes. 

“Several of Belarus ground attack aircraft received the ability to strike at enemy targets with nuclear weapons,” he said. “Besides, Iskander-M operational tactical missile system was handed over to the armed forces of Belarus. It can use both conventional and nuclear missiles.”

Belarus received aviation and Iskanders capable of delivering tactical nuclear strikes, Shoigu said. The Russian MoD called it a “measure in response” to the intensification of training, combat and reconnaissance activities of NATO near the borders of both countries. pic.twitter.com/5KjkWuawXh

— NOËL 🇪🇺 🇺🇦 (@NOELreports) April 4, 2023

Despite teasing it, he didn’t confirm clearly whether or not the missiles transferred to Belarus were actually tipped with nuclear warheads at this point. But the severity of the threat is clear.