TLC Weekly Update January 14, 2023


The US stock market made a powerful comeback by Friday close even after the nothing burger of CPI and disappointing earning result from one of the major banks. Could this be the start of much higher prices for the indices? Well, that all depends on the line up of earnings coming out these two weeks.

My best guess is that earnings will be bad for majority of the big techs and large banks. For the never making money companies in the S&P500, which are majority of the components now, they will disappoint further because they will easily go bankrupt as raising money through cheap junk bonds is no longer possible. Does that implies the indices will go much lower? Not necessary either as idiots will continue to buy with the expectations that free money from the Fed will return soon.

In short, I think the US stock market is stuck and have very limited upside for the year unless something dramatic hits the world like sudden world peace … However, there are so many potential disruptive developments around the world that just one of them materializes and we can forget about the current financial system. It is existential risk of the whole financial system that we should pay attention to. As long as the disruptive events do not happen, the downside will also be limited.

A very powerful speech by Konstanin Kisin at the Oxford Union. If you like the message he is giving about what really has to be done if the so-called climate change issues is true. What he said is effectively what Jordan Peterson explained for years but obviously a comedian delivering the message has a better chance to reach the woke communities.

The talk of the town lately must be OpenAI’s ChatGPT. From Ryan Reynolds’ funny video to speculations that it can be something dangerous to many people if the technology is used for exploitation by evil people.

I won’t speculate on where AI will take us. I just want to point out that if you have proprietary / secret knowledge of any kind in any field, you would not allow any internet connected AI platform near your work in a thousand miles. The moment you put your stuff into the platform, it is taken and it will no longer be your secret.

For those of you concerns about your portfolio, Jeff Gundlach’s latest webcast is now made available to everyone. Great summary of year 2022 with discussion of developing trends going into year 2023.

For those of you do not pay attention much about Asian culture, coming January 22nd is Chinese New Year. Many Asian countries celebrate Chinese New Year for many days. Thus, Asian financial markets will go into holiday mode in coming weeks and will not return to normal liquidity until early February.

Here is a tidbit on Chinese solar-lunar calendar. The regular Chinese New Year always happens on new moon. However, Chinese New Year is not the day that marks the turn from one Chinese zodiac year to the next. Currently, we are in the year of the tiger and by February 4, 2023 it will change to the year of the rabbit.

Have a great weekend all!

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