War, Banking News

 - "War! h'uh What is it good for? Absolutely nothin'!                                                                                     It ain't nothin' but a heartbreaker! Friend only to the undertaker...                                                           

   They say we must fight to keep our freedom. But Lord, knows there's got                                                   to be a better way...                                                       

   War! What is it good for?                                                                                                                               Stand up and shout it. Nothin'!

- War by Edwin Starr

Society is still a work in progress. With the Age of Enlightenment our so-called civilized society began settling vigorous deputes by dueling. In early American history Burr shot Hamilton. Today, the Israeli prime minister, Netanyahu slapped Iran in the face which was the historical approach for a dispute to reach the point of one's life. Israel is already in conflict with Palestine. To do a bombing mission in another nation (Syria) to show a vigorous dispute with Iran by destroying their embassy which by protocol is a nuetral site, is blantantly war-mongering. We stated in previous pieces that peace cannot come with this man in charge. He is no different than Kim in North Korea who pushes buttons because he believes that China will back him up like in the Korean War. Netanyahu bullies, pressures and commits war crimes because he believes the US will back him. We should cut him off with all aid. This will tell the good people of Israel to vote him out of office. War! What's it good for? Absolutly nothin'!

Banking

Historically, banking was needed to finance wars. Today, branch banking is a service for citizens and an aid to the economy. Central banking is the realm for war machines and their undertakings. Fiat makes it easy to which is another reason for the gold standard. Gold means that you have the money in hand. Fiat means that you can print as much as you need. With that said, the banking that we are looking at is our branch system. The results were good, but the market has underlining issues. High interest rates by the central bank has resulted in unseen losses by all banks. The banks are putting money in reserve for a possible rainy day. They will not sell these losses because then, they will have to put that in their financial statement. Banks are also losing depositors who are closing accounts to seek other financial instruments with higher yields. We start with the earnings of the big boy.

JP Morgan Chase (JPM): earnings was good, but the market wanted more. Stock fell 6%.                      Wells Fargo (WFC): great results, but the bank still has internal problems and big loss of depositors.    Citigroup (C): beat, but complained about the loss of depositors.                                                              Bank of America (BAC): beat, but stock fell due to more money being placed in reserve.                      State Street (STT): positive, continues uptrend.                                                                                          XLF: (banking etf) Shows an uptrend from last November. It pulled back with the market, but at highs.

In similar vein smaller, but still a large banks like Truist Bank announced the closing of 72 branch outlets. They will save $750 million to which they will probably need to cover some future losses like in commercial real estate.  They are not alone. Barclays is preparing pink slips to use the money for similar reasons.  We, at Evolution believe branch banking should be regulated like utilities. They are necessary, but the evil in man like greed needs to be controlled. We cannot afford more problems of too big to fail. Peace.                                                                                                                

New Tune, Same Beat

- Datadog is a new tune while Google plays a familiar beat. Politicians promise, lie and swipe. Powell has nightmares of a 70s flick. The status hold their breath, while holding the game as Ukraine goes dry without saving rain. Palestine knows that song but Israel forgot the line. Can anyone help?

- (rhyming) JFL

Last week...

we told you that the Bulls went from a meme of Dow 40K to please, hold 38,000. It didn't. However, the recent rally will provide incentive to push up the indexes again. We look at the volume. Which ever has the strongest action, they will control the market in the near-term. 

Long Term

We noticed many noted CEOs and Executives throwing out their views. Dimon of Morgan Chase worries about persistant inflation. Payne says the unexpected rise in gold is telling the market something. We, at Evolution do not have access to mainstream media. We just have you. Thank you, Lord. If we did have a large media outlet, we would say the same things that we write on a weekly basis. 

Latest Signs

Biden calls the economy strong, but Trump says it is a cesspool. We disagree. Todays results came from yesterdays actions which were effected by previous data. Neither candidate expresses the truth. If a miner discovers a bonanza, it will take ten years to see the rewards. Inflation is from printing for years. One thing that I admire about the Chinese is their patience to view long-term. We need that in America. Look no further than Boeing. How about the governor of California who is trying to fix problems that started 40-years ago? After a series of patchwork of government responses, now has their citizens paying $5.27 for a gallon of gas versus $3.54 national average.  For example, take the point in the new minimum raise of $20 per hour? Do you remember the past protest of low-paid workers with the tune, What time is it? Time for $10. Then, it was $15, which brings us to today. The real culprit is the Federal Reserve which destroys the purchasing power of the dollar. This is why we say, "End the Fed!" 

Meanwhile, other signs of the Fed's failure come to light as more and more firms go bust.

Closings

Macy's: 13 more locations to the now yearly annoucement by the shrinking giant that will be missed.    Dollar Tree & Family Dollar: 1000 stores are closing and multiply that by each store worker.                99 Cents Only: Inflation wiped out the entire franshise. You lose 371 stores and 14,000 jobs.                  Walmart: They closed 24 stores in 2023 with 6 more on the schedule for this year.                                  Barnes & Noble: You can blame Amazon or people don'r read enough. 34 dead in 23' with 6 coming.    REI: Outdoor stuff. Cites theft (hearing this more and more). Moving to new locations.                          Gap: 350 going, going, gone. Includes some sister outlet, Banana Republic.                                            Best Buy: Still deciding if 10 or 15?                                                                                                          CVS: 900 got pink slips and some outlets in Target stores.                                                                        Rite Aid: Originally 154 stores to which climbed to 231 locations.                                                            Walgreens: 100 going along with 500 jobs.                                                                                                  Party City: Declared bankruptcy! Could 850 stores be lost?                                                                      Mod Pizza: Never heard of it. I go to Toto's in SF or the Castle Hill Station in the Bronx for a corner slice.  Anyway, they had 500 spots and now, 27 less.                          

In a related aspect, Apple is laying off 600 workers in California. McKinsey cites a slowdown in demand for cutting jobs. Conagra is closing its Birds Eye facility in Wisconsin and BS the reason. Nike is dropping 1600 shoemakers. Tesla is laying off 10% of its employees. In viewing the above list, Dollar Tree no longer has one dollar items. They rased their basic price to $1.25 and some items as high as $7-bucks. In San Francisco a new ordinance is being considered. It will allow customers of grocery stores to be sued if they do not give their customers a six-month notice of closing. You call this a strong economy?  Peace.

Eclipse of the Market

- Things do not change; we change.

- Henry David Thoreau

For the past two weeks, news of the solar eclipse dominated the media. In the stock market there was another eclipse. Fed members gave forecasts that maybe the Federal Reserve will only have one rate cut instead of three and late into the year?

The solar eclipse lasted less then five minutes; the Fed market eclipse will last a lot longer. The Bulls had pushed the recent market rally with a meme of 40,000 Dow. Now, they secretly hope that support holds at 38,000. They cannot find help in the SPY. We believe it will test 497. We have already told you, Dear Reader, that this is not a true rally according to Dow Theory. The Transports have not participated. The index is still in consolidation. The bottom of the range is 1,000 points below the last high. Unlike Elon Musk who said in 2022 that we will have robo or driverless taxi's in one year, our forecasts are a little more accurate.  

Interest Rates and the Dollar

By keeping interest rates at a higher level, the Fed is playing a dangerous cat and mouse game. At the end of every month commercial real estate loans are closer to be refinanced. At present rates, many will bust like we have seen with Evergrande in China.  Once liquidation happens, there is a danger of  contagion within the commercial real estate sector. This will cause Trump to suffer economically, but his ego could use the disaster to win in November. However, a lot can happen between now and the election. Biden can benefit by saying that he kept the economy going in the face of strong inflation, higher rates by the Fed and all his legislation and efforts to keep the economic boat on an even keel. If he keeps his help to the Baltimore bridge in the news, this will be a plus. Again, too early for election predictions and we dislike both candidates. However, since we mentioned the Francis Scott Key bridge, we will throw out the BDI or shipping index. It has not budged from its low-level range. 

King $Dollar

It has rallied. Even the retrace did not reach the 103.5 level. This has kept inflation at bay, but the danger of inflation in a second wave is never far away. If the dollar falters, inflation will return. At the moment, we are seeing a strong rally in commodities. We predicted this. Truth be told. We believed a falling dollar would be the catalyst. This belief still holds. This is our point. If gold, oil and copper are all climbing in this upper level interest rate structure, how high will they fly when the US debt causes King Dollar to decline?   

Doctor Copper

It reached $4.24 last Friday. The next leg up is $4.40. Then, resistance at $4.60. If this momentum continues, it could pierce the last high at $5.00.  Here's hoping everyone had a pleasant holiday and did not pick up any virus because a doctor's visit can be expensive. Peace. 

Spring, the Rebirth

 - Let us not look back in anger, nor forward in fear, but around us in awareness.

- James Thurber

Presidential Year

In this election year we hear the Democrats with "Bidenomics." An economic plan to revitalize our nation. We hear the Republicans, "MAGA (Make America Great Again)." Talk is cheap. Actions speak louder than words. Neither party has real action, only words. How can you say that, you ask?

It was both the democrats and republicans who allowed the Taft-Hartley Act to pass. Neither of the two parties fought to impose tariffs to protect American industry and workers. It is only the realization from COVID-19 that we do not make anything in America. We couldn't even produce masks! This knowledge turned to defense. How can we protect ourselves in war, if we cannot make anything? Biden passed the chip act, but little or nothing else. In a show of understanding he is pushing the government to help Baltimore with rebuilding the Francis Scott Key bridge. We applaud! This is what the founding fathers meant to promote the general welfare. The problem is this will be a one and done, a campaign item to be exploited. In Trump's term in office, he only passed token tariffs to appease his voters. He is an ego, phony with no economic plan. The real question is how did we get here? Why don't we protect our companies and working class? Why is there so much division?

Flash Back

The first retaliation by producers came after WWII with the Taft-Hartley Bill. It allowed firms to hire new workers if their workers went on strike. The Pentagon influenced the second blow with the Korean War. The military brass saved Toyota. It purchased vehicles from the company with logistics to Korea. Nothing seriously changed in America until 1970. Japan started to export cars to our nation. JFL was in LA at the time. He rented a Corolla because it was the cheapest to rent. He says, "It could not exceed 70-miles per hour." Cars passed him left and right on the highway. It felt dangerous to be in that vehicle. However, Toyota constantly refined the car. It is now a very reliable, quality brand. During this period, OPEC started their oil embargo for two reasons. One, they were anti-Isreal. The second was due to the low price in currency exchange for their oil. The politicians only mentioned the first reason. Rising oil prices made small cars that got great mileage very sttractive. Imports found a markt niche.

While this was the news of the day, something else was happening in board rooms behind the scenes. Greed! Executives began seeking greater profits. The first was labor costs. The second was quality control. Taft-Hartley allowed them to circumnavigate unions. Now, they came up with the poison, planned obsolescence. The person who came up with this disease should be shot. We mean this figuratively. The idea was to develop parts that will only last until the warranty experation. Then, the consumer will have to buy parts from us. We will have a continuous cash cow. Can you see the difference between Japan and our poor leadership? They seek to make their product better and our executives seek to plunder the consumer. No wonder we lost market niche to competition. Sadly, outsourcing and plan obsolence took hold in our board rooms.

Present Time

Look no further than Boeing. The founders sought to make a quality aircraft that was safe. They developed the best areo-company on earth. They were rewarded well for their efforts until greed entered the equation. Now, the company shows contempt for its labor. The prior CEO, Mullenberg make claims that Boeing was developing a new plane and the Seattle workers would benefit if they voted to accept the companies economic offer. They did. Mullenberg lied. He moved the work South to a non-union state. Those workers will be happy until they get screwed like the union laborers.

Meanwhile, the executives sought greater riches that rewards stockholders and options. They outsourced work. They chose the cheapest offers. They were planting the seed to make the new plane unsafe. It had not one, but two crashes of death and suffering. Mullenberg out. Calhoun in. The word is the new man will work tirelessly to rebuild the company like spring with rebirth. His tireless efforts can be seen in the video of a United Airline Boeing aircraft taking off and the wheel falling off, tireless. His efforts can be seen with plug doors shooting off Boeing planes. Was his efforts behind the Boeing whistleblower, John Barnett who was suppose to give his testimony in court when he was found dead in a parking lot in his car? How can anyone justify giving Calhoun a departing $45.5 million severance package? This is what is really wrong with America. Boeing needs to install a man who recognizes workers contributions and seek to make the best, safest airplane. Stockholders will be rewarded by returning the firm to be the nimber one in flight. We fear not. 

This is the SIN!

Recent history shows company-after-company cutting corners, seeking riches and screwing workers and citizens. It took real tireless efforts with real pain and angony to expose, the Love Canal, Hinkley, CA with PG&E, the water in Pound River, New Jersey and on-and-on. The disease of greed is in all of our corporations from Big Pharma to clothes, to retail to utilities, everywhere. It is the gospel of Wall Street. It is why so many students seek to be lawyers or in finance when we need doctors and engineers. Sadly, it is killing sports. We do not watch the Olympics because it is no longer amateur atheletes that promotes good will among nations. They are all professionals. It is killing our favorite, American (NFL) football. The schedule in 2024 will play on Christmas Day. This is distasteful spiritually and because the holiday falls on Wednesday, it is dangerous for the players in the shortened week. The game is physical. The players need rest. The disease of greed is effecting everything. 

If one receives a position of power and influence, be thankful. You will live a life without economic worries. Seek to leave a legacy of doing well for all and your family. In this environment we do not see the door to this view. This is why we at Evolution, advocate a new third political party, the Liberty Party. It will have a platform that protects American companies that provides work in the US and that follows the founding fathers idea to promote the general welfare. Peace.

Odds and Ends: March 2024

 - Things do not change; we change.

- Henry David Thoreau

The Bear Goes On...

The market has no fear as the Dow seems to hit new record highs every week. The industrials have gone straight up since last November at 33,961. Last Friday, it loomed at a new record at 39,475. The SPX copies the move. Last April the price was 385 and last week, a record close of 521. Friday was a down day, the SPX was even higher the day before at 522.

However, we remind you, Dear Reader that beside all the huff and puff of the Bulls, this is not a true rally according to Dow Theory. The transports are still in consolidation. Both indexes need to be in conjunction for a true rally. Big money does not see anything, but cheaper money coming with the Fed offering three rate drops sometime this year. We heard this song before from Sonny and Cher, "The Beat Goes On."

What We See...

Biden signed a revenue package last Friday to keep the government solvent. Throw another $1.2 trillion to the problem. We ask, Did we make $1.2 trillion to cover this debt? Folks, the interest alone for January 2024 from our debt was $184 billion. These idiots have no sense of value. They display no responsibility, character and leadership. By the way, tax revenue dropped by 93% for January. Debt makes our currency cheaper to which gives us inflation.

Then, we read this...

Companies laid off 82,037 employees in January 2024. Unemployment is spreading as we hear that Barclays bank is forming a list of pink slips. Nike is laying off 1600. They see something, but they are not saying what they see. Someone knows. It shows in the charts. Last May, Nike (NKE) was $126 and then fell to $88. It bounced to $123 and last Friday fell to $101 on strong volume. How about another big boy, Apple? It rose to $198 and last week fell to $172. One more? How about the high flyer, Lululemon? This meme stock hit $519 in January 2024, only to bury investors last Friday at $403. Ouch!

Same old, same old

When a merger comes, the buyer always says, "This is good and no jobs will be lost." Then, cost cutting comes and jobs lead the list. We saw this again as Ben & Jerry's announced a merger. Now, they plan to release 7,500 workers. Back to Biden...

He will push his electric vehicle charging stations as part of his reelection campaign. However, Tesla (TSLA) continues to dive lower and lower. We feel $101 is coming. The electric vehicle stock was $300 last July. The #3 carmaker, Stellantis (Dodge) is laying off 400. Mostly from the electric division.

If all of the above does not deter the Bulls, how about this tidbit? US bankruptcies hit a 13-year high in 2023 and the expectation for 2024 is even higher. We add that vacancies in commercial real estate rose 19.6% in the fourth quarter of 2023. The CAPE sits at record highs of 34 and yet, the Bulls worry not. Does John Calipari worry about his $33 million paycheck after his Kentucky basketball team lost again to a 15-seed in the first round of March Madness? Do investors in Digital World worry about evaluation? It is in the billions for a media company that only has $3.4 million in revenues. Do the Bulls read about the pending longshore strike in the port of LA? In a related message, the CEO of Maersk, the largest shipper saying, "Overcapacity is killing shipping rates." We think not. By the way, Maersk chartered the ship that hit the bridge in Baltimore. 

On the flipside...

A crazy stat. AI will consume more electricity by 2027 than the nation, the Netherlands.

Germany has legalized pot smoking. If you have not made it a Lenten sacrifice, take a puff and reread the above. Exhale. Thank God for all His blessings. Have a wonderful Easter, Passover, Ramadan or any other follower of a higher power. Take consolance that in this aspect, we have a common understanding and agreement. Even the atheists realize that faith believers make the world a better place...Peace.

Changing Outlook

 I was going to open with the latest market manoeuvres, but I was caught and captivated by the call-out speech of Senator Schumer of New York. He displayed great political courage and his views are worthy of being in JFKs classic work, Profiles in Courage. 

He is Jewish and the leading American in politics with that faith. He will be attacked by radical Zionists, but he is not only correct in our view, but noble for standing up to the prime minister of Israel, Netanyahu about the way that he conducts the present war in the Middle East and stating that he would never recognize Palestine to be a nation. We stated in earlier pieces that there will never be peace with this man. Schumer even called for the citizens of Israel to vote him out of office. Bravo!

Market

Whenever you talk about the market, you need to lead with the big dogs. Even though the industrials hit a new all-time high, the transports have not come along to show a true bull market. Microsoft (MSFT) has been in an uptrend since last October. Amazon's (AMZN) chart looks similar. However, Google (GOOG) has been in a sideways pattern. Tesla (TSLA) has been in a downtrend since last July. Apple (AAPL) has declined since last December. Dropping the AI in cars leaves a lot of doubt for the market and investors. Bottom line: A mixed bag of results.

Commodities 

Led by gold, copper and oil have all seen either breaking out or approaching new highs. If you think about this price action, you will realize what we have stated all along, inflation is not going away. We could experience a second wave of inflation. This will put pressure on the dollar. We always remind you to watch King $Dollar. It had a bounce last week, but failed to reach the 103.5 level which is the confluence point. 

Oil

It is the most important commodity. Of course, you could argue that you can't eat oil and food is number one. Food, by the way, has disharmony in pricing. Potash is down. Stables are sideways. Anyway, both US crude and Brent are in an uptrend since last December on good volume. Oil needs to break $84 to show conviction.

Copper

The good doctor has been on vacation since March 2022. At that time it hit a high, but immediately declined. It basically was in consolidation since July 2022. It broke out of that range last week. It can prove itself by piercing $4.40. Electric cars need copper and since the AMA keeps a lid on new medical schools, supply issues will come into play. (Forgive that play on words, but we feel that more medical schools are needed. We need real doctors!) Dr. Copper is just a nickname for the metal.

Gold

We saved the best for last. If you look at a monthly chart of gold since 2011, you will see a cup and handle pattern that got completed in 2022. This is very bullish. Gold broke out last week. It hit a new all-time high. It has solid support at $2000. With Fibonacci we project gold to reach $2550 with the possibility of $2668. YAY! 

No Change

The Fed will announce their policy later today. We expect no change with a hint for a future change. We never place any faith in this corrupt cabal. 

With that news, I hope that you had a nice St. Patrick's Day, enjoying a holy Ramadan and for others, getting ready for Passover and Easter. Peace.  

State of Union is a Pulpit Campaign

 We, at Evolution are Baby Boomers. We have seen and experience a lot in our lives. We have heard many state of the union speeches. The only one that we can recall that had some reality, some truth was by Gerald Ford in 1975. His diagnosis of America at the time was honest except he only talked about the present state (consequences) and not the causes. Here is the gist of his speech...

State of the Union - 1975

- The state of the union is not good. Millions of Americans are out of work. Recession and inflation are eroding the money of millions more. Prices are too high and sales are slow. This year's federal deficit will be about $30 billion...Some people question their government's ability to make hard decisions and stick with them...

This is honest except when even admitting problem issues, he falls short in declaring the reasons for the state of the nation. We know: Foolish war that lost lives, resources and exploded our debt with the corruption of LBJ by keeping the war off the books, the Fed printing money, and the outsourcing of jobs and the lack of protections for American firms. You know, some things never change...

Today's Speech, Response and Real State

Biden opened loud. He referred to Trump as his predessor and not by name. He declared support for Ukraine to which we support. His made in America of computer chips is something we have advocated for a long time. He offered an olive branch to the Republicans by using a positive from R. Reagan's administration. Then, he switched gears to the abortion question. We are Catholic. So, we are against abortion, but like JFK, we obide by the nation's call. Except we never get to vote as this is the flaw in our constitution. Anyway, after this, everything that he said was either buying votes by spending or an outright lie. What lies, you ask? How about the issue of being safe? How about the point that he claimed to produce 800,000 jobs in manufacturing. We say, "What about the 12 million that we lost?" Towards the end, he made overtures to the populist or independent voters with a suggestion of taxing the wealthy and corporations. I don't believe him. If he was honest, he would've attempted this from the beginning. His plan on immigration lacks truths besides a lack of judges. How can you allow an illegal asylum, when that person has demonstrated a complete disregard for our laws by sneeking into our country and then claim to be innocent? We need a better process to register people seeking to enter the US and become citizens. Here is an idea. With so many at the border, (in the millions) maybe we should move those who speak English to the head of the line. Kids who do not speak English is one major cause why our education system is doing so poorly. Also, immigrants need to demonstrate that they would be good citizens by following our rules and procedures. We have nothing against immigrants.

The republican response was nothing more than using the Tricky Dickie playbook of law and order. Katie Britt said nothing but fear. She didn't even bother to include the populist or independent voters in her reply to the democrats. The one thing that we agree with her is the point about the withdrawal from Afghanistan. Typical, as a republican, she offered no plan for our nation because the republicans only support the wealthy. Do you know the GOP stands for? Guardians of Privilege. You know, some things never change...

Neither party addressed our disgraceful national debt or the Fed that sponsors our debt. Neither party addressed the hacking that takes place everyday. Neither party offered any ideas to lower our debt and stop the bleeding in our standard of living. Neither party called out the prime minister of Israel for his imperialist attitude toward the Palestine people. We agree that Israel is justified to defend itself, but using this conflict to grab land only gives cause to continue the hate, the distrust and more violence between each people. He has repeatedly in his time to use power to expand Jewish settlements into what was Palestian territory like he quietly did last week by approving 3,400 new settlement on Palestine territory. Two wrongs do not make a right. One sin does not justify to allow more sins to be committed.

We, at Evolution feel that in an election year, neither party will do anything to address these issues. Some things never change... Peace.