Read this Tuesday’s edition of the FolhaMercado newsletter (14) – 03/14/2023 – Market

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The first impacts of the SVB crisis

Among the effects of the debacle of the SVB and the Signature Bank around the world, one of the most immediate ones could happen in the decisions of central banks on interest rates.

Understand: depending on the size of the contamination of the American financial system from the crisis – which is still being monitored, but should not come close to that of 2008 – the Fed (American BC) may choose not to raise interest rates at next week’s meeting.

• The bet gained strength this Monday in the futures interest market and was reinforced by an analysis by Goldman Sachs.

What does one thing have to do with the other? The monetary tightening process is one of the factors responsible for the startup bank crisis (as we explain here).

• To avoid a widespread crash in smaller banks, the Fed could go into damage containment mode and keep interest rates at a standstill at the next meeting, which would help calm investors.

• On Monday, shares of First Republic Bank, another Silicon Valley bank, plunged 60%. The fall came even after the institution assured customers that it was up to date with liquidity after obtaining financing from the Fed and JPMorgan.

Is here? The same movement was observed in Brazilian interest rate futures contracts, which closed sharply – a sign that the market expects an early cut in the Selic rate.

• If the Fed stops raising interest rates, it will be yet another argument for the Selic rate to drop here – in Brazil, the effects of monetary tightening also appear, as in the crisis of retailers trying to renegotiate their debts.

More on the SVB debacle

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The government’s plan for cheap tickets

The federal government intends to close an agreement with airlines to sell tickets at BRL 200 a stretch to retirees, students and civil servants, said Minister Márcio França (Ports and Airports).

• The benefit would be limited to those with a salary below BRL 6,800 and two return tickets per person per year, França said in an interview this Sunday (12) to Correio Braziliense.

How would it be: the minister’s idea is to use the occupation of seats that remain vacant on aircraft. In the accounts cited by him, 20% of airplane seats travel without a passenger.

• He said that it would be possible to offer 14 million to 15 million tickets for R$ 200 per year. Each beneficiary could take a companion on the trip.

Yes but…The plan still depends on acceptance by national airlines.

• The minister said that one of the government’s arguments to convince the airlines is that the R$6,800 income limit would prevent regular customers of commercial flights from taking advantage of the program and jeopardizing the companies’ sales.

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OpenAI knew the risks of chatbots

OpenAI, creators of ChatGPT, were aware that its artificial intelligence could get out of hand. This statement was made by Greg Brockman, co-founder and president of OpenAI, a startup that created the chatbot, at the SXSW (South by Southwest) technology conference.

• He defended, however, that releasing it to the public was worth it – the more than 100 million users in less than two months are there to prove it.

Understand: for Brockman, this was a way to help evolve the AI ​​(artificial intelligence) tool.

• General use allows developers to receive comments from those who access the platform, and the robots undergo incremental training to make less mistakes —the so-called reinforcement learning.

Tool potential: Brockman also said he agrees with the opinion of another co-founder of OpenAI, Sam Altman, that robots will be able to automate some procedures done today only by doctors.

• He said, however, that this would be a product with more risk than current AIs.

• Other AI capabilities cited by the executive are improvements in writing, programming and entertainment. “Imagine if it were possible to make an alternate ending to Game of Thrones or even place yourself as a character within the story.”

SXSW: is one of the world’s leading festivals of innovation and creativity, held annually in Austin, Texas.

• In addition to conferences on the hottest topics in technology, SXSW hosts film, television and even a music festival.

• Traditionally, the event features the release of futurist Amy Webb’s annual forecast report. This year’s text says that the decade will be marked by the use of generative artificial intelligence – such as ChatGPT.

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FTX takes the ‘blame’ for player damage

Players Gustavo Scarpa and Mayke filed a lawsuit against a consultancy by colleague Willian Bigode and the company Xland, linked to financial advisory, alleging losses of around BRL 11 million for investments made with the group.

The three players were teammates at Palmeiras. On Friday (10), Justice blocked R$ 13 million from Xland and the company WLCJ Consultoria, which has Willian Bigode as a partner. The case was revealed in a report by Fantástico, on TV Globo, on Sunday (13).

Understand: Mayke says he invested BRL 4.5 million, and should have a return of BRL 3.2 million. Scarpa, in turn, invested BRL 6.3 million in Xland. Neither of them, however, managed to get the sums back when they tried to recover the investments.

The two say that Bigode made the recommendation for them to invest in XLend, a company that claimed to operate with cryptocurrencies and deliver a return of up to 5% per month – a level far above the yield of the most traditional applications on the market.

• “I’m sad, brother, really. I’m sad because it’s my heritage”, said Gustavo Scarpa in conversation with striker Willian Bigode, obtained by Fantástico.

• “Scarpinha, now you don’t even have a question of trust, brother. A question that now is praying. Doing what I know. Now it’s waiting on the Lord”, replied Bigode.

The audios and the case generated memes on social networks, such as the montage of Bigode in the figure of Jordan Belfort, in the film “O Lobo de Wall Street” – in this case, “O Lobo da Barra Funda”, the neighborhood in São Paulo where the headquarters of the Palm trees (see the memes here).

Other side: in a note sent to UOL, Willian Bigode and the company WLJC said they were victims of Xland, having made investments of BRL 17.5 million which, even though the ransom request was made in November last year, have not yet been returned.

• To Fantástico, Gabriel Nascimento, owner of Xland, also said he was a victim, in this case of FTX, a crypto brokerage that went bankrupt in November last year. He said that customer funds were allocated in the company and could not be redeemed after bankruptcy.

• The report showed, however, that Scarpa had already unsuccessfully tried to rescue part of his investments in August, months before FTX went bankrupt.