E-Vehicle Hit

 It is no secret that the gas combustion engine is facing its twilight time. The new kid on the block, the electric powered vehicle is approaching dawn. At present, it comes in two forms: all-electric and plug-in hybrid. The ratio of sales between the two is 60% for electric and 40% for the hybrid.  In numbers, the electric combo sold 720,000 worldwide and the reliable gas cars sold 17 million. The gas powered car is still king of the road, but there is revolution in the kingdom. Nevertheless, experts say that by 2040, it will be an even split. 

California is pushing the timeline. They have set 2035 as the last year for new gas-powered sales in their state. Coincidentally, GM has stated that it will end production of gas-powered vehicles in the same year. Ford says it will be all-electric in Europe by 2030.

With that type of dramatic change, all car manufacturers are preparing. The average price for a new electric style car is over $32,000. In this category, of the three cheapest vehicles in this segment of the market, Ford and Volkswagen hold two spots: Volkswagen with their e-Golf and Ford with their C-Max. They want to expand their presence, but their planning took a hit last week. The problem centers on the fuel, so to speak. Electric need batteries. The best performing batteries are lithium. The engineering problem is to make the batteries safer, increase the range capability and reduce the weight for better mileage, versatility and comfort. 

Tesla is the market leader. Tesla is now also a miner. They have turned their attention to the battery. Tesla recently purchased 10,000 acres containing lithium in Nevada to develop their own lithium process and to ensure supply. This is central to any development into the electric segment of the market. A court decision last week has many ramifications associated with it. 

Intellectual theft...LG Chem v. SK Innovation

is a growing problem. Asian nations have a cultural problem. They do not honor patents. Apparently, SK hired 70 employees from LG. They took with them trade secrets in battery knowledge. This type of theft happens every day in Silicon Valley. One firm poaches another for talent and product knowledge to leap-frog the competition. Whatever happened to the old technique of bribery? Only kidding! This is a serious problem in global commerce. China leads the most wanted list. China would be great in the WWE, where lying, cheating and no rules can lead to success. In life, this is despicable. Someone spends years to develop a system or a product, only to have it copied overnight and sold for less under state sponsored subsidies. This is another reason why I would end all trade with China. Anyway, the ruling by the U.S. International Trade Commission went against SK. This is a serious blow to Volkswagen who has a contract with SK to make a special battery for their ID.4. It is does damage to Ford who also has a deal to make a special battery for their F-150. 

Biden's Green Policy Plan

will be tested by this verdict. Like I stated, this case has many ramifications. Under the surface today, there is another problem. A court's verdict is no longer law of the land. The problem is lawyers. It is not whether something is right or wrong, but who wins. SK will ask Biden to veto the ruling under executive order. The court's decision has put a ban on SK for ten years. SK says that they will build this special battery plant in Georgia. If Biden does not veto the decision, American workers will lose this new source of high paying jobs. On the flip-side, LG has a battery plant in Michigan for GM. Biden's decision is basically picking who wins and who loses. Fortunately, this conflict was between two S. Korean firms. Imagine if one of them was Chinese? China will be watching this case. If I was Biden, I would rule against SK. Do not reward cheaters! You send a signal to China to start behaving in an honorable fashion. By the way, the judge on this court showed real understanding of life. He gave Volkswagen and Ford a transition time to make a new deal or find another supplier. In any event, Volkswagen and Ford took a hit to their future plans for electric vehicles. Peace. 

If Your Premise is Wrong?

 - I no longer listen to what people say, I just watch what they do.

- Winston Churchill

Here, at Evolution, we are followers to those words of wisdom. President Biden has spent the past few weeks undoing by Executive Order what President Trump signed during his administration. Now, the real work must begin. His own party is pushing him to sign another executive order. It is to forgive $50,000 in student debt. We are vehemently opposed to this. If Biden forgives a debt amount, I want that same amount and every citizen who didn't take a school loan, as a check. Guess what? I won't be paying it back! 

Continuing, can Biden get any legislation passed to which is the real laws of the land? Already, his stimulus package has been pushed back to the end of February. If I was you, I would not count that check until it is in your hand and you knew how much you were getting.

What did you expect?

Biden chose for his cabinet, old cronies and old bureaucrats. How can you get new thinking under this old premise? Last week, Biden announced his foreign policy. It is a return to Obama's. This means military intervention, an escalation with tension with Russia and China can do anything it likes as long as it buys US Treasuries and farm products.

Talking on both sides of the mouth...

Biden said that the US will no longer support Saudi Arabia's conflict in Yemen. Then, he said the US supports Saudi Arabian security. Biden said that the US will continue talks with the Taliban in Afghanistan to end the longest war. Dear Reader, it is not the longest war, but a perpetual war. When someone asked if Biden worried about all the deficits? He was quick to point out that Trump incurred $8 trillion to our deficits. No one in his cabinet mentioned that the trade gap widened to its largest percentage amount, 18% on record deficits of $679 billion for the month of December. This is becoming the norm. Record deficits every month and year.

You, do the math!

Private payrolls added over 6,000 jobs last month and another 779,000 sought unemployment just last week. Then, the government says that unemployment dropped to 6.3%. Go figure?! Members of Biden's cabinet pointed out that the workforce of 142 million saw increased hourly work. 

40 is now 35...

That weekly hourly rise was 35 hours and not 40. By the way, this is the most hours on a weekly scale since 2000. Thirty-five hours is the new normal for full-time employment. With our economy under a serviced orientated environment ( read low wages), how sad is that? 

Market Rallies

The S&P 500 and the Russell 2000 hit new record highs. This says the market could rally even higher. One reason that we, at Evolution overlooked was the addition of Millennials to the market place. This is evident in the high recent volumes within the daily and weekly share count. There are more trades now than in the previous decade. You have to go back to the 1990s for similar share count. This new aspect changes the timeline of our prediction for a market correction. With that said, we stand by our thinking that the fundamental economy is weak. Take for example, a report by CBS on housing. They said that 71% of Americans cannot afford to purchase a home. The US medium price is $286,381. This speaks volumes. It shows a lack of social mobility. It shows poor wages. We can add other reports like how many renters are behind on their rent. The only thing keeping them under a roof is an Executive Order. Poverty is the fastest growing segment in our society. Biden is playing politics. He should be talking how he plans, if he has one, to help Americans rise from low-wages to middle class. He should be talking how he plans to tax the wealthy, the internet and help states, whether blue or red to overcome this virus and start growth again. Nevertheless, the market goes higher and the Beat Goes On...