Artificial Intelligence can’t be Regulated without being understood. The cost of Deposit is going up for banks. China’s economic growth may spark inflation worldwide. Tulare Lake crisis now.

April 19, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler face the sting of preparation for changes coming from Artificial Intelligence and call out a disaster is in the making now.  AI is a knowing and learning entity with the power of never forgetting.  Snow pack melting and heavy rains resurface Tulare Lake, and put valuable farmland under water.  Inflation battle expected to worsen with China’s economic gain.

Key Points from Rey:

  • Regulation is always behind.  Things are happening faster and faster and the legislative process is too slow.
  • Something big is going to blow up with AI.  Personal information and confidential information is at risk.
  • The debt ceiling and the tax filing season have a big connection with each other.
  • California relief for tax depositing will create a shortfall in Federal deposits available.
  • As the rains fell, FEMA gave more relief to California tax filers and their deposit requirements.
  • Go buy a six month CD if you are in California and earn interest until you need to make a payment.
  • The debt ceiling issue is going to come to roost in the next several months.
  • This is going to be a showdown, and it is going to happen faster than people think.
  • This is a push to recessionary impacts.  Layoffs are coming, funding is difficult. Tighten the belt.
  • Lock in 10 or 20 year fixed now and refinance later if interest rates fall.
  • If banks can hold bonds to maturity and not sell off their underwater investments, the depositors may return to the regional banks.  However interest rates going up again may make things work.
  • Inflation in UK going up is a concern, and now we may see interest rates going up in the US in the inflation battle.  To get inflation under control will there will be pain.
  • Wheat and grain production declines from the conflict with UK and Russia is impacting food prices.
  • Social media is a tool and how they are used is an issue.  Flash mobs are a risk.  Behaviors have to have consequences.
  • We tried lifting the limits for classifying felonies.  We tried it and it didn’t work, so get rid of it.
  • California is going to have some disasters from the melting of snow and the river flows.
  • Tulare Lake has appeared again in the San Joaquin valley.  Mother Nature is going to win here.
  • Huge amount of farmland is underwater now.  Tulare Lake is a crisis now.
  • Will be inviting a geology expert to be on the show.
  • California capitol used to be in San Jose, but was moved to Sacramento due to flooding.

Key Points from Allen:

  • In the middle of a crisis there is always an unknown, a new piece of information.  We need to be doing our homework and think about the fallout from the banking crisis and SVB and how this impacts our economy and lives.
  • False narratives from AI are a big risk.  What are the guardrails to know the truth of identity?
  • There is a legal crisis coming in copyright law from AI.
  • The debt ceiling is going to be a big issue.  We have heard it too many times.  Is it like the Boy that Cried Wolf?
  • For the first time ever there is the possibility the US may end up defaulting on its debt.
  • The Government can’t pay its obligations with a receivable of tax payments.
  • Make sure you have backstops.  Get lending lines or other sources of cash as credit contraction is coming.
  • Western Alliance earnings report showed deposits stabilized and they saw deposits moving in.
  • First Republic Bank reports after the close next Monday.  Short squeeze could happen.
  • Did the government backstop of guaranteeing the uninsured deposits at SVB and Signature Bank help stem the contagion of the current banking crisis.
  • SVB management could have done a better job and people need to be held accountable.  We will learn more as the SEC provides more information.
  • China coming out of Covid restrictions and growth in economy may cause inflation pressures worldwide.
  • There is a contraction in jobs available in the US now.  It may represent a contraction in spending.
  • Food prices continue to rise.  If transportation cost is going down, what is driving this?
  • Crime is rising in a lot of areas, and social media is often used in instigating crowd action.
  • Recession is not going to make things easier and the distance between the wealthy and the poor is growing.
  • What happens when law enforcement starts using AI?  More to discuss on that.
  • We have a large snowpack now in the mountains.  Where is all the water going to go when it melts?
  • Reservoirs are filling up, and that is good news, but a lot of water is going to be flowing as the snow melts. 

Creators and Guests

Allen Plyler, CPA, MPM
Allen Plyler, CPA, MPM
Allen Plyler, CPA, MPM is an experienced CFO in Technology, Start-ups and Financial Services with focus on large scale accounting implementations, evaluating emerging accounting Standards and SEC external reporting for publicly held companies. He is experienced in structuring capital markets and equity deals while also providing consulting to CEO and CFOs for business strategy.
Reynaldo E. Arellano, CPA PFS CGMA
Reynaldo E. Arellano, CPA PFS CGMA
Reynaldo E. Arellano, CPA PFS CGMA is a Certified Public Accountant (CPA) with professional designations as a Personal Financial Specialist (PFS) and Certified Global Management Accounant (CGMA). In addition to providing traditional CPA services such as bookkeeping, accounting, and taxes (planning, compliance, and representation) his Firm also offers tactical CFO services and strategic business advisory services. Mr. Arellano started in the financial profession as a Big 8 auditor, then an accounting software consultant, then a Controller eventually becoming a CFO, and held NASD and life insurance licenses (presently inactive). Mr. Arellano has consistently proven to have the highest levels of integrity, intelligence and innovation. He has held numerous managerial (C-suite) and leadership (board of directors) positions within corporations and non-profit organizations.
Artificial Intelligence can’t be Regulated without being understood. The cost of Deposit is going up for banks. China’s economic growth may spark inflation worldwide. Tulare Lake crisis now.
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