Godfather of AI Issues a Warning

How to invest despite dangers… [Morning Reckoning] May 16, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Godfather of AI Issues a Warning - Godfather of AI calls for a six-month moratorium - Is this overblown? Let’s break down the price action… - AI was all the rage last quarter… what happened? [Has World War III Just Begun?]( NATO sends tanks to Ukraine… Russia prepares for a winter offensive… [Is the beginning of World War III?]( [Click here to learn more]( I’ve just released an urgent message with my thoughts. But more importantly, I’m offering to send you an [exact playbook]( on what I see playing out in the world and what you need to do to prepare. [Simply click here now to watch my short message and to see how to claim a copy completely free of charge.]( [LEARN MORE]( Baltimore, Maryland May 16, 2023 [Greg Guenthner] GREG GUENTHNER Hi Reader, The hype surrounding artificial intelligence is getting out of control. I figured choppy market conditions would put a lid on some of the crazier AI discourse pundits have tossed around since these stocks first started running earlier this year. But it’s only getting worse. Every day, I stumble across a new hot take on the market’s latest fad. AI will improve our efficiency, destroy menial office tasks, and make millions of jobs obsolete. It will write music, make movies, and solve complex scientific and medical problems. It will be the best — and worst – technological development to ever happen to humankind. That’s probably why former Googler and media-proclaimed “godfather of AI” Geoffrey Hinton is calling for a six-month moratorium on artificial intelligence research in order to better learn to contain it and avoid its negative consequences… Is this a bit extreme? Perhaps. But when it comes to AI, I just assume that no one knows what the heck they’re talking about. That’s why it’s so important to break down the price action of the mega-cap players and the pure-play stocks to determine where we are in this bubble cycle — and what to look for next. [Warning: Will “Bidenflation” Destroy Your Retirement?]( [Click here to learn more]( If you’re like most Americans, you’ve worked hard for decades to build your financial legacy. And now, as a result of Biden’s disastrous money printing policies, that’s all at risk. According to one top retirement expert, “Bidenflation” threatens to destroy your retirement and make your hard-earned savings worthless. That’s why you must take action right away to protect yourself… [Click here now to get the simple, step-by-step actions to survive “Bidenflation.”]( [LEARN MORE]( Google Joins the Party Tech growth stocks attracted renewed interest during the January snapback rally, which helped kick off the artificial intelligence bull that has quickly become the go-to micro-bubble of 2023. The AI bubble was so powerful during its January explosion into the mainstream that it even tore down tech giant Alphabet Inc. (GOOG). You probably recall the hubbub surrounding Bing’s partnership with ChatGPT, which some tech analysts were quick to declare a Google killer. Investors took the bait, and GOOG shares fell nearly 20% from their pre-earnings highs in February before finding a floor. Meanwhile, Microsoft (MSFT) and NVIDIA (NVDA) shares blasted off as management hyped their involvement in the AI space. [We discussed two important points as this story emerged during the first quarter:]( - GOOG’s quick fall from grace was likely a knee-jerk reaction to the AI hype cycle. - The stock should be viewed as a bounce candidate if and when it finds support above its year-to-date lows. Google crashing to new lows just didn’t make sense barring a broader market move to the downside. Sure enough, the stock carved out a bottom by early March and rallied back to its February highs by the beginning of the second quarter. Following a 30%-plus rally off those recent lows, GOOG is posting an even bigger breakout. [chart] GOOG has managed to survive earnings season and play a little catch-up with its AI competitors. Last week, CEO Sundar Pichai unleashed a laundry list of AI advancements coming to its platforms at the company’s developer conference. The financial media ate it up, declaring that Google is no longer playing AI defense to Microsoft. The positive reception sparked a massive rally, prompting the stock to jump more than 10% last week to new eight-month highs. More importantly, GOOG has finally cleared a base the stock has been building since late last year. GOOG lost as much as 45% of its value since topping out in late 2021, spending the entire next calendar year locked in a vicious downtrend. That’s now in the rearview as shares vault higher – and not a moment too soon. GOOG was lagging its mega-cap counterparts up until last week’s breakout. Apple Inc. (AAPL), MSFT, and NVDA have all locked into strong uptrends this calendar year. Even Tesla Inc. (TSLA), which topped out in February, has bested the averages by a wide margin. GOOG was the final piece of the FANG+ puzzle. For better or worse, We’re currently seeing mega-caps dominating the market right now — whether they’re playing the AI hype game or not. What About the AI Bubble Basket? The AI pure plays were all the rage during the first quarter. What happened? C3.ai Inc. (AI) is the poster child with the perfect ticker. We’ve closely tracked the stock as it shot up more than 200% at the beginning of the year. But it has yet to perform in the second quarter. In fact, it showed signs of trouble as it failed a big test at $20 last week. [chart] AI was hit hard in April by an analyst short report that raised some serious questions about the company’s accounting practices. That decline continued until a brief bounce earlier this month, which appears to be running into some trouble back at $20. That’s an important pivot where the stock consistently found support as it consolidated its January rally. The bulls are getting a little reprieve early this week thanks to AI announcing it will beat top-line estimates. The stock is back above $20 for now, but will need to extend beyond the lower end of its Feb. - April consolidation zone if it’s going to make another run. It’s possible we’re simply dealing with some sloppy trading action due to choppier conditions in the broad market. But I wouldn’t rule out a bigger move lower, either — especially if the major averages lose their footing. We’re also not seeing a ton of action down the cap scale. The smallest artificial intelligence names aren’t playing nice. Most are caught in wide, sideways ranges. The best hands off approach to AI is to stick with the major players until frothier conditions resurface. The Global X Robotics & Artificial Intelligence ETF (BOTZ) we discussed earlier this year continues to look constructive. It’s a much better bet than most of these broken speculative plays. What do you think? Will the AI bubble continue to inflate? Or is it destined to burst before it even gets off the ground? Let me know what you think by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com ‘Secrets of Jekyll Island’ A LIVESTREAM Broadcast with Jim Rickards & Danielle DiMartino Booth [Jekyll Island] On Wednesday May 17th at 1pm EDT you can watch live, exclusively through your access link from the comfort of your own home, as two of the world’s foremost thought leaders deliver world class economic insight. [Click Here Now to Reserve Your Seat]( Clicking the button above automatically registers you for ‘Secrets of Jekyll Island’ but does not obligate you in any way to attend the event. By reserving your spot, you will receive event updates. We will not share your email address with anyone. And you can opt out at any time. [Privacy Policy](. [Shocking Backdoor Crypto Play – LIVE on Camera!]( Crypto millionaire James Altucher just received a strange box that could COMPLETELY change how you look at cryptos: [Click here to learn more]( [CLICK HERE to See What’s In the Box]( He opens it live on camera, and shares details on the strange device that’s delivered everyday Americans over $1,170 per month in passive crypto income. [Click here to discover it for yourself now](. [LEARN MORE]( In Case You Missed It… A New America Needs Old Hickory Sean Ring, Editor [Sean Ring] SEAN RING Dear Reader, Good morning from il bello Piemonte! I’ve got some great news brought to you by Paradigm Press. Next week, I’ll be in Jekyll Island, Georgia, with the inestimable Jim Rickards, Danielle DiMartino Booth, Matt Insley, Zach Scheidt, Dan Amoss and Daily Reckoning Editor Brian Maher. Believe it or not, I’ve never met my colleagues face to face, so I’m thrilled. But here’s where it gets great for you, too! On Wednesday, May 17th, at 1 pm ET, Jim and Danielle take the stage live from Jekyll Island — a place where one of the most important (and secret) meetings in history took place. Clicking the link above automatically registers you for The Secret of Jekyll Island Livestream Broadcast, but does not obligate you in any way to attend the event. By reserving your spot, you will receive event updates. We will not share your email address with anyone. And you can opt out at any time. [Privacy Policy.]( We return to the scene of the secret meeting. Some might even call it “the scene of the crime.” I sure do. The exact spot where the idea of the Federal Reserve was born. With the past 14 months entirely focused on the Federal Reserve’s historic rate hikes, now’s the time for bold new insight and forecasts of what’s to come. We want you to join us, free of charge, gratuito, so to speak, as a thank you for being such amazing subscribers. Feel free to pass this around to as many people as you like. There’s no limit to the number of people who can sit in on this fantastic discussion. You’ll have Jim and Danielle - a former Fed insider herself - all to yourselves for two hours. I can’t wait to listen to myself. Again, this livestream is free, with no hard sell at the end. We’re grateful and want to do something we thought you’d enjoy and profit from. If you can take a two-hour lunch on Wednesday, do it. And bring some friends along. That’s just fine with us. >>Click Here to Reserve Your Spot<< Clicking the link above automatically registers you for The Secret of Jekyll Island Livestream Broadcast, but does not obligate you in any way to attend the event. By reserving your spot, you will receive event updates. We will not share your email address with anyone. And you can opt out at any time. [Privacy Policy.]( I can’t wait to see you there! Just thinking about heading to Georgia this time of year takes me back… The Music of 1997 In the summer of 1997, three songs were played over and over and over again on the radio. They were Building a Mystery by Sarah McLaughlin, Sunny Came Home by Shawn Colvin, and Where Have All the Cowboys Gone? by Paula Cole. All day. Every day. On every radio station, it seemed. And good songs, they are. Colvin’s Sunny Came Home is about renewal, while McLaughlin’s Building a Mystery is a love song. But Paula Cole’s song seemed the neediest. I used to drive around after work - my career had just begun - and listen to these songs all the time. My goodness, America was amazing back then. The long twilight, the windows down, the breeze blowing through what little hair I still had… it was glorious. It’s hard to believe it was over a quarter of a century ago. Colvin and McLaughlin would take the Grammys by storm in 1998. Cole was runner-up to them in three categories. But here in 2023, I find myself wondering, “Where have all the cowboys gone?” [Biden Caught Red-Handed!]( [Click here to learn more]( Biden, AOC and all of their Democratic cronies were just caught RED-HANDED… Selling YOU and every American patriot despicable LIES about [so-called “green energy”](. This is the biggest “SCAM” in the history of this great country. Not only is “green energy” unreliable and inefficient… It’s also [DANGEROUS in ways you didn’t even KNOW](. Today, one man is daring to speak the truth… And revealing the secret to profiting from Biden’s ultimate blunder. [Click here to discover the TRUTH about Biden’s “Green New Scam”…]( And learn how YOU can profit from its spectacular failure. [LEARN MORE]( Fascism! How Dare You? I’m convinced America just sleepwalked into it. Everything was going so perfectly back then. Greenspan was a cool, loose hand on the monetary spigot. Clinton made welfare into “workfare” and controlled the fiscal spigot. Cry foul all you like, but the simple fact is Bill Clinton’s last four budgets were surpluses. [chart] Credit: [FactCheck.org]( Yes, surpluses. Forgive me. Whippersnappers out there may not know what that is. A surplus is when government receipts from taxation exceed government spending. Yes, I know it’s nearly impossible to believe, but it can happen. In fact, it was so true the US Treasury stopped issuing 30-year bonds in October 2001. (Of course, the UST started to reissue them in 2006… oh well!) In the 90s, the Clinton administration and Wall Street were so damn cozy that Secretary of the Treasury and alleged genius Larry Summers helped tear down the Glass-Steagall Act that separated commercial and investment banks. That act alone should’ve put him in front of a firing squad. “But Sean, you’re a libertarian, I thought?” Sure, you can tear down that wall, if you let the banks fail. We didn’t. And we never will. Later, Summers also threw his support behind the Commodities Futures Modernization Act of 2000. That effectively deregulated the global market in over-the-counter (OTC) derivatives and was Summers's crowning achievement (his word, not mine). Those two mistakes essentially caused the Great Financial Crisis of 2008. But this isn’t about Summers. This is about the marriage of corporate interests and government. He’s merely the poster boy of a revolving door system of government and private sector workers wrecking the country. No, we need someone in Washington who wants government and business to go to their neutral corners for a few years so we can sort out this insidious nouveau fascism. And I know just the man for it. His name is Andrew Jackson. Unfortunately, he’s been dead for nearly two hundred years. Old Hickory Andrew Jackson, the Seventh President of the United States, was nicknamed "Old Hickory" because of his strong and resilient personality. One of the primary reasons for the nickname "Old Hickory" was Jackson's leadership during the Battle of New Orleans in the War of 1812. He commanded American forces against the British and achieved a decisive victory. His troops described him as stern and unyielding, comparing his resoluteness to hickory wood, known for its strength and durability. Jackson was known for his strong-willed and stubborn personality. He was steadfast and resilient. He exhibited a determined and unwavering approach to pursuing his goals and defending his beliefs. Jackson was a tall, wiry man with a weathered face, and his robust physique further contributed to the comparison. His nickname "Old Hickory" also influenced his populist appeal. It reflected his image as a man of the people who was relatable and represented the common folk. He seemed familiar and approachable. Do any of the frontrunners on either side bear an even passing resemblance to this man? [BREAKING: Elon Musk Bets Big On One Crypto. Click Here Now For The Details.]( [LEARN MORE]( The Second Bank of the United States (But Not Last, Unfortunately) But my favorite reason for admiring Jackson is his destruction of the Hamiltonian monstrosity known as the Second Bank of the United States. He did this for five reasons, which I’ll list below. I warn you: these may all sound eerily familiar. Concentration of Power: Jackson disliked the concentration of economic and political power in the hands of a few wealthy elites. He believed that the Second Bank of the United States, as a central bank, was controlled by a small group of individuals who had undue influence over the nation's financial system. He saw it as a threat to the democratic principles and equal opportunities he championed. Lack of Accountability: Jackson viewed the Bank as an unaccountable institution. It operated with little transparency, and its decision-making processes needed to be subject to sufficient scrutiny. He rightly argued that such an institution, wielding significant power over the economy, should be subject to democratic control and oversight. Suspicions of Corruption: Jackson thought the Bank was corrupt. He believed the bank's president, Nicholas Biddle, and his associates used their power and influence for personal gain. Economic Concerns: Jackson believed the Bank favored the interests of the wealthy and privileged classes and saw it as an impediment to economic growth and opportunity for ordinary citizens. He thought the bank's policies, such as restricting credit to specific regions or industries, hindered economic development and favored the elite. States' Rights: Jackson was a strong proponent of states' rights, believing states should have more control over their affairs. He saw the Bank as an extension of federal power and believed its existence encroached on the states' rights to regulate their economies. As Roger Daltrey once sang, “Meet the new boss/same as the old boss.” But luckily, Jackson prevailed in the Bank War of 1832. The Bank War of 1832 In 1832, the Bank's president, Nicholas Biddle, sought an early recharter of the Bank, hoping to secure support from Congress and force Jackson into a politically dangerous position. The bank's charter was not due to expire until 1836. Jackson used his presidential veto power to reject the recharter bill. His veto message resonated with the public, and he won the 1832 presidential election with significant popular support. His victory encouraged him to go for the Bank’s jugular. Jackson initiated the removal of federal deposits from the Bank, transferring them to state banks, which he considered more democratic and accountable. These state banks became known as Jackson’s "pet banks." The transfer of funds to pet banks led to a surge in lending, fueling economic growth, inflationary pressures, and speculation. The Second Bank's charter expired in 1836, and Jackson's opposition effectively prevented its rechartering. Although the Bank continued to operate as a private institution for a few more years, it lost significant influence and power over the nation's financial system. It was finally liquidated in 1841. And that, my friend, is today’s feel-good story! Wrap Up Yes, it can happen. The “Creature From Jekyll Island” can be returned from whence it came. But who’ll do it? RFK Jr.? Trump? De Santis? Nikki Haley? Joke Biden? Come on! None of them got the Mott’s. If only we could get Old Hickory back! Or maybe we should’ve just listened to Ron Paul. Have a great weekend! All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](