The failure of Silicon Valley Bank is an acute reminder that banks can and do fail. For investors and even bank customers it’s important to understand what happened, what is the potential fallout might be longer term and what could potentially break next.

The Federal Reserve may pause interest rate increases to let the dust settle and not create more of a crisis. A pause will likely result in a brief rally for stocks. We do have to fully rein in inflation and that will take time. Until we see significant improvement in inflation data, rates will have to go higher, and the Fed may break more things.

Trying to time a market top or bottom is a fool’s mission but recognizing that pessimism has already been substantially priced into a market provides an excellent opportunity to make money. There are many positives in our current economic picture which belie a severe economic recession in 2023. A moderate downturn has been priced into the stock market. The strength of the financial system, corporations and individuals along with very low unemployment and solid wage growth will prevent a mild downturn in economic growth from becoming a severe recession.

We take a quick look at ChatGPT and investing opportunities in artificial intelligence.