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Jim Rickards? Rundown on the AI Craze | Could AI Cause World War III? Asti, Northern Italy Decembe
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Jim Rickards’ Rundown on the AI Craze [Morning Reckoning] December 21, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Could AI Cause World War III? Asti, Northern Italy
December 21, 2023 [Sean Ring] SEAN
RING Good Morning Reader, Yesterday, I had a rousing conversation with Jim Rickards about the rise of Artificial Intelligence (AI). As you probably know by now, AI and its offshoot Generative Pre-Trained Transformers (GPT) are all the rage. There is one camp that whole-heartedly believes this technology will transform the world and be bigger than the invention of the internet. While Jim sees this potential (and as do I) he wants to caution you… There are things that both you — and Wall Street — might be overlooking when it comes to AI. We’re talking potential to take over critical infrastructure systems… open floodgates… shut down electricity… Start World War III. If you haven’t had a chance to watch the interview yet, click below to check it out. Here’s some of Jim’s biggest points in the interview… [ Strange and Powerful AI Project Revealed]( Jim Rickards was recently passed some urgent new intelligence involving a $10 million A.I. project … That could have a massive and direct impact on your life. Everything you need to know is in this 2-minute AI briefing . [Click here to play his urgent message now.]( [LEARN MORE]( How AI Can Destroy Markets There are endless scenarios that can be devised to show how AI can lead to extreme market dysfunctions. Difficulties could arise in foreign exchange markets in addition to stock markets. The Herstatt Bank collapse in 1974 is a good example of that. Market manipulators using AI can reside in the Caribbean, a Mediterranean island or the Congo. The foreign AI attackers could be Iranian, Russian or Chinese. An AI attack on markets could begin in London, New York or the jungles of Asia since they’re all internet-based. A marquee failure could come from a hedge fund or an iconic investment bank. And so on. The point is, it doesn’t matter… Market panics have different triggers, but all end up in the same place. Panic is part of human nature and plays out in the same predictable ways — sell everything, go to cash, move to the sidelines and wait out the storm. A few can profit from that advice, but when everyone makes the same move at the same time the system breaks down rapidly and, in the end, no one can move. Everyone is trapped in the same doom loop. Circuit breakers, trading halts, government happy talk and communication among market participants all help as far as they go. Still, their ability to palliate a panic is dominated by the speed at which panics spread today in the world of AI. The most important thing to remember… AI will grow more powerful in the future and GPT will have more to say… But both are advanced enough today to carry out functions leading to a market crash. What can be done about it? Well… you’ll have to watch our video to find out! Enjoy your weekend and your holiday. All the best, [Sean Ring] Sean Ring
Contributing Editor, The Morning Reckoning
feedback@dailyreckoning.com
X (formerly Twitter): [@seaniechaos]( [The 2 AI investing traps revealed [must read]]( Investor and entrepreneur James Altucher made millions during the crypto boom. Many “experts” are now saying… [Artificial Intelligence opportunities could be even bigger .]( But don’t believe the hype. Before you invest one penny in AI… See James reveal the [2 AI investing TRAPS]( that will doom many investors… Yes, making money from AI SHOULD be easy… But most AI investors will fall flat on their faces. Because they don’t know the 2 AI investing TRAPS. [ See the 2 AI investing traps here now ]( [LEARN MORE]( In Case You Missed It… My 2024 Profit-Making Strategy – Revealed Greg Guenthner, Editor [Greg Guenthner] GREG
GUENTHNER Good Morning Reader, The market is tipping its hand. If you pay close attention, you’ll begin to see the signs of a massive rotation in stocks – a phenomenon most investors will ignore until it’s too late. But I do have some good news… If you catch these moves early, you have the chance to pull in impressive returns. As this rotation rally extends, I’m betting one sector could double up the S&P 500 during the first six months of 2024. Best of all, you can achieve these market-beating gains with a simple buy-and-hold trade. I’ll show you how in just a minute, But first, you need to understand what’s happening under the surface of the major averages. This rotation trade begins with the mega-cap stocks – names like NVIDIA Corp. (NVDA), Microsoft Corp. (MSFT), and Meta Platforms Inc. (META). The Jim Cramer-dubbed Magnificent Seven “finished 2022 down 40%,” The Wall Street Journal reports, “losing $4.7 trillion in combined market value, whereas the remaining stocks in the S&P 500 dropped 12%.” But the Magnificent Seven have once again bubbled back to the top of the market following last year’s brutal performance. Now, analysts and pundits are sounding alarms as these mega-caps are once again dominating the market, wth Goldman Sachs noting the group has grown to a whopping 30% of the S&P 500. For the record, surging mega-caps are not setting off alarm bells for the market at-large. But I don’t think they are going to experience the same level of market domination in 2024. No, it’s not likely market-leading NVDA is going to rally another 250% next year. It probably won’t crash – but I sincerely doubt we'll see a repeat performance of 2023’s historic performance. Instead of an impending crash due to a top-heavy market, we’re seeing the beginning of a rotation away from mega-caps into tech laggards and small-cap stocks – a rotation that has become more pronounced over the past week. A Challenger Appears Last week, the Fed elected to hold rates steady. The market was expecting no action – so that’s not what sparked the rally. Instead, the Fed’s dovish comments started the feeding frenzy. Powell declared that inflation has eased (finally) and market participants can expect it to be less of a problem in 2024. How you personally feel about these comments or the probability of a so-called “soft landing” doesn’t matter. What’s important is how the market interpreted the news, and this is the message stock sent: For starters, hikes are likely done. And it’s becoming very likely that we’ll see some cuts next year, possibly as early as March. More importantly, this Fed meeting was the last real obstacle for the melt-up rally to scale into year-end. I don’t see anything else on the calendar standing in our way as 2024 approaches. The Nasdaq Composite, S&P and Dow all jumped about 1.4% following the release of the Fed minutes. And the good vibes continued through the end of the week. More importantly, small-caps exploded higher as many of the Magnificent Seven stocks failed to keep up. Instead of NVDA hogging the headlines, we watched smaller names and forgotten growth stocks plow higher in dramatic fashion. The Russell 2000 rallied a staggering 3.5% on Fed Day. And it didn’t stop there… By the end of the week, the small-cap index rallied 5.5% to post its fifth green week in a row. This is the same index that was breaking to lows not seen since late 2020 during the final week of October. Seven weeks later, the Russell 2000 is now working on a significant breakout. One more important note about this chart: The Russell 2000 has grossly underperformed the major averages for nearly two years. While the biggest of the big remained stable presences in the market, the Russell was hit hard by the regional banking crisis earlier this year, and failed to rally with the major averages into the summer months. It also experienced a hard reset from August through October that led to a drop of more than 17%. Most mega-caps were stable during this period while smaller names took a beating, acting as a de facto safe haven for investors worried about the potential for a bigger drawdown heading into the fourth quarter. But as more investors piled onto the bearish side of the boat, the market suddenly shot higher. The Russell 2000 abruptly reversed off its lows, and a powerful melt-up move emerged. Despite its incredible 20%-plus rally that began at the start of November, the Russell 2000 is just now attacking the top of its range. A breakout above 200 in IWM would be huge – and would set the stage for a catch-up move that could lead to small-caps quickly outperforming the big boys during the first half of 2024. One Easy Trade You don’t need to employ any complicated strategies to take advantage of a small-cap snapback. Simply snag a few shares of the iShares Russell 2000 ETF (IWM) and you have an excellent chance to double the performance of the S&P 500 during the first half of 2024. Of course, this big market shift is also opening the door to plenty of new short-term trading opportunities. Best, [Greg Guenthner] Greg Guenthner
Contributing Editor, 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) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗
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