Is It Time to Invest in AI?

- Education is simply the soul of  a society as it passes from one generation to another.

- G. K. Chesteron

Talk is Cheap

All the talk, all the buzz centering on AI will find fools seeking easy riches. When you step back and think about progression within society, about the changes through innovation and technology, there is a natural path that shows the impact of that change. Consider the first cars or telephone service? It takes years to refine the product and reduce the costs so it is affordable by ordinary consumers. When those two aspects are achieved, sales within society will reach an inflection point. When that point is pierced, the real impact begins.

AI

It has not done anything other than fraud. We now have pretend characters that sound like the person who is being minicked. The real nuts and bolts is to have a program use the data in its banks to offer new and quicker responses, to find solutions to help humanity. 

At the moment, AI is beginning to find success in a few sectors of society. Keep in mind, that AI is just a version of a faster computer with the hope to create solutions. All the big players are investing. China's, Deep Seek is seeking to do the same thing. The model cannot reason, but it can do many math tasks and code tasks. Like all the big,Western tech firms, China is trying to find the chip with the answer. They have not yet found it. We believe that programmable chips will be the next step.

Gold Rush

Back in 1849 when gold was found in California, the area boomed. Most miners did not get rich. The people who did, never mined for gold. They sold shovels and picks. They sold tents and made a new longer lasting pants, Levi Jeans. My point is if you want to get into AI, buy Microsoft or Google. Follow the chips like Nvidia and Taiwan Semi. It will be less risky and maybe, you'll get lucky? You have to do your homework. Also, in a few years, someone could develop quantum computing and AI will never be mentioned again. 

Timeline

AI has been around for over 15 years. If you fell for the initial push, you took a big loss. The inflection point is still a long ways from reality. However in 2024, headway showed promise. The puzzle starts to assemble as models like ChatGPT, AI co-pilot, etc. emerged. What investors forget is one crucial point, energy and its cost. AI eats like a pig. Companies are trying different approaches. Will Microsoft get permission to restart Thee Mile Reactor for data? The company is already pulling back from investments in Europe. These things take time and a new problem has arisen. The Heathrow Airport fire at its substation. They need a large transformer, but it will take over a year to get a replacement. Transformers have a back-log. Utilities are behind the eight ball, especially in dealing with the grid. 

Pluses

There have been positive impacts in a few fields. The biggest has to be in movies and video games. Although the use of Generative AI is being applied by thieves with fraud, gaming and movies have used the platform to lower costs and the graphics aregettring better and better.

The other industry that stands out is healthcare and education. In healthcare, AI helps with documents. This lowers costs. AI tools are helping surgery and dianostics. Of course, fraud will appear in clinical studies, but the positive is in connecting ideas.

In education, AI can help in language, grammar and writing. We believe that all AI writing should have a disclaimer before any piece. 

Climate

It is in the early stages, but AI can connect data to help in weather forecasting. It can also be used to locate areas where wildfires can happen. We need to thin the threat. Wake up, Sierra Club! It is better to cut some trees than to have them burn. We use the wood to make housing cheaper. We grow new trees. 

Labor and Economy

Some skills can be done by robots. Dear Reader, this is AI. Sadly, AI will eliminate jobs. Government should sponsor repair technicians now, because everything eventually breaks. Estimates say that 25% of low skill work will be lost. If we prepare to repair automation, some of those lost jobs can become quality work.

Current Market

Whatever you decide to do, know this. You do not need AI to read and learn about charting. Last Friday, the charts revealed a bearish pennant pattern. The downtrend will continue. So, study stocks that you like or think will grow with AI because a down market will take everything with it. The INDU could test a low at 40,500. If it does, volume could indicate a further fall? Be patient! ...Peace.

Odds and Ends: March 2025

- We know tariffs are coming in, and all forecasters have tariff inflation affecting core CPI inflation.

- Fed Chair Powell

Last Week...

...after the Federal Reserve announced no change in interest rates, he gave his BS on their thinking. The above tag-line is in sharp contrast to Powell's last byline just weeks before. You may recall that he said, "We don't know what will happen with tariffs, with immigration, with fiscal policy, and with regulatory policy."

Let's tell it like it is - from inflation being transitory to the truth that the import deficits get worse and worse with record setting amounts under the liability column each year. Our central and biggest consumer purchase, home sales is at its lowest point in 30-years. Leynette Zange sees excessive debt in all 3-levels: individual, corporation and government. She concludes that a new system is needed or a hyper-inflationary period will arrive. Another little followed economists and investor, Jack Mallers believes another "Nixon Shock" is on the horizon. Our question? Why doesn't Powell address these questions and the role of King Dollar before another crisis arrives? By the way, Powell suggested inflation is still around and that is the primary reason for no rate change. He even mentioned that the inflation rate exceeds our growth rate. We have been saying just that for the past three years. We called it, "Stealth Inflation" because no one else recognizes that if inflation exceeds your growth, you are in stagflation. Powell never addresses this truth. Bottom line: The roots of the Fed is corrupt. Their track record should have them rebranded as, "Boom and Bust Council."Their existence controls our democratic, economic freedom. We conclude, "End the Fed!"

Meanwhile...

retail continues its slow death with a popular chain, Tex-Mex filing for bankruptcy. Red Robin is closing more locations. They are not alone. Manufacturing shed another 13,000 jobs. Keep in mind, the decline in quality work as a percentage of economic value is under 10%. A healthy economy needs at least 40% share in a domestic market. We have a long way to go. However, the economic slowdown has hit Europe's biggest economy. Siemens and Volkswagen plan to cull jobs. They cite automation. Robots are the new competition. Siemens is laying off 6,000 and Volkswagen is doing away with 7,500. They add that it is possible for the number to climb as high as 35,000 over the next five years. 

In our unpublished book, we say, "All things are connected." In Germany, the slowdown carries over to auto suppliers and related fields. Companies like Bosch, Schaeffler AG and ZF Friedrichshafen are laying off workers. Siemens says that it will devote more resources into EV charging stations. At the moment, Tesla and China dominate the market. Peace. 

So-Called Allies

- Jesus said to his disciples: "You have heard that it was said, You shall love your neighbor and hate your enemy. But I say to you, love your enemies, and pray for those who persecute you."

- Mt 5:43-44.

Most Difficult

The above teaching of the Master is the most difficult. I can understand the logic. We pray that the wax that causes the sin and pain by our enemies will be lifted. They will see the light. However, the Master says that whomever refuses God's word, then wipe their dust from your sandals. 

President Trump's tariffs is the right step for our nation. It has revealed a much larger truth. The media is against Trump even when he does something correct. He is attempting to reignite our manufacturing sector to which will stop the bleeding of our middle class and standard of living. It will turn the pendulum of deficits, lower our national deficit and provide revenues for our government to finally do something for our citizens. The media platforms and their correspondents do not even understand the basics of economics. They just point out problems and never a compliment. If the Democrats had any true values, they would support Trump. They have no real values. With that said, We, at Evolution have learned an important truth about global economics and our so-called allies.

EU

They have coasted for decades. With no worries about defense, the EU has achieved a better standard of living. Way better than the US. They have used the US to dump product to keep their good life going. They forget all the blood that was shed by Americans to keep their freedom. They forgot the Marshall Plan that put them on the road back to prosperity. They know the US is deep in do-do in debt. They know what Trump is trying to do. So,after one little tariff that will cut into their good life, they show their true colors. This is not to say the whole EU is rotten. Finland and Holland have demonstrated actions of a true friend, the rest had better reflect. We, at Evolution like what the President of Finland, Alexander Stubb said in reference to Ukraine: "If there is a cease-fire between Russia and Ukraine and Russia violates it like it has done repeatedly, Ukraine gets an auto entry into NATO and article 5." Tell this to Putin and start preparing to back up those words with action. 

Canada

I was out shopping the other day when I discovered another truth about loopholes and tariffs. I went to the Dollar store. By the way, there is nothing for a dollar there anymore with inflation. Anyway, I was hoping that they had a cheaper version of a laundry softener. They did. When I got home, I put on my glasses to read where the product was made. To my surprise, it said imported from Canada. However, there was another line that read, made in China. This is a loophole in tariffs. Chinese producers send product to Canada who exports it to the US. This is why we should put another 50% tariffs on Canada. They value our friendship so little that for a few dollars more (Sorry, Clint) they allow this type of import/export to happen. They are not alone.

Mexico

They have attacked our tomato growers for years. They have used our outsourced manufacturing for years. Their economy is a leach attached like a parasite to grab whatever they can from us. Consider this one aspect: Would you let millions of immigrants cross your border, walk through your nation and help them illegally enter your allies' border? They did. Now, they are inviting China into the frey. They expanded their entry port to accommodate Chinses vessels. They extended their railroad line to take Chinese goods to the Texas border to export under a lie of Mexican goods. It gets worse. Mexico built a commercial park in Jalisco. It is their high-tech center. Chinese tech is using a loophole to build chips and import chips through this location. We need to impose 100% tariffs on Mexico until they decide whether they are our friends or just in it for a buck? There are trade deals and BS. Canada and Mexico have gone corrupt. End NAFTA! Drop the WTO! Let us strive to be self-sufficient.

One More

How abour South Korea? We gave them blood. We gave them the good life and for what? So, the conglomerate, Samsung could sell $44 billion in chips to China? They need to choose. Either you do no business with China or we ban you from the US. Period! By the way, S.Korea, you had better start rebuilding your defense. One good thing that I will say about some of their companies. They have built their plants in the US. We need to reaccess and to revaluate who are our true friends because it is very difficult to love our enemies.  Peace.      

Address: Trump, Slotkin and Evolution

- The love you take is equal to the love you make.

- Beatles

Different Levels

Your individual choices have a direct bearing on your life. You meet the perfect girl for you, but all you do is seek to nail her. Later in life, you settle. Maybe this correlates to our sad stats on marriage and divorce? On a larger scale, we have our federal government. The decisions these people make affect our lives, especially in the pursuit of happiness. 

Last week, President Trump addressed Congress even though he has not been in office 50-days. It was a State of the Union without enough weight in time to formulate results. However, it is what it is. The Democrats gave their response without facts. At Evolution, we will throw in our two cents.

First 10-Minutes

Just a waste of time with Trump glad handing his loyal followers. The next five minutes had Trump highlighting his election results. Waste of time! He continued a litany of his execuive orders while in the Democratic seating area, party members held up signs, "Liar!" "False!" "Stop Musk!" Waste of time! One Congressman, Al Green had to be removed for being unruly.

Trump's use of the term "common sense" finds us agreeing with his transgender position.

His biggest bravado, "to balance the budget." We hope he can, but seeing is believing, especially with another debt ceiling that is fastly approaching.

Then, in referrence to Musk and DOGE, Trump pledged to drop 10 old regulations before a new one is established. We are for eliminating waste, but the transition should be on a schdule with a plan. Mass layoffs is not a plan.

Trump also pledged to drill for more oil. He uses the meme of the Madden football Raiders. Cool. Trump's crying over fraud in social security is just one of his many uses of exaggeration. I believe that he says crazy things just to set a point where negotiation can begin? 

He did announce some good news: Apple building a plant in the US, Taiwan Semiconductor another plant in Arizona and a auto plant by foreign company in the US. This is good stuff. In military spending, he is advocating that the US build a missile defense shield. We agree. The so-called, on and off again with Ukrainian minerals is a good back-up plan to help Ukraine. It will provide jobs and put money in their economy. Miners do these type of deals every day with streamers that receive a percentage for upfront loans. 

Trump says that he wants ship-building. This is great, but only time will tell. He is right about the Panama Canal. China offers money to poor nations, but makes them put up their resources as collateral. Their Silk Road Project is the poster child for their devious scheme. Eventually, they will be hated for stealing natural resources of countries. His hope for Greenland is up in the air. 

Finally, his tariffs is the right direction, but his approach is tokenism. Our import deficit for January 2025 was a record at $131.4 B. This is over one trillion for the year. If we had tariffs of 50%, we would have $500 B in revenues. You get two positive results. One, you balance the import/export sheet. Secondly, you get exporters that will no longer dump in America because it will no longer be profitable. The vacuum could be filled by an American firm. Keep in mind that we have over 330 million customers. The tariffs should be on all nations so foreign firms can't find loopholes

Democrat Response

Senator Slotkin of Michigan gave the reply. She started out by informing us about herself. When she stated that she is ex-CIA, we, at Evolution knew that we cannot trust her. 

She implied that Trump will only help his billionaire friends. If Trump uses his new-found revenue as tax cuts, he will kill the dollar. However, the Democrats ran up the deficit with no concern for our deficit. She had the gall to suggest kitchen table issues when under Biden, inflation was at its worse level since the 1970s. Her approach is quietly endorsing the beliefs of the One World crowd. No wonder the democrats lost. It is really sad that a great state like Michigan has her for a senator. She creates no love on the peninsula.  We gave our beliefs after the words of the two politicians... Peace.

BEAR: Market, Economy

 - Education is simply the soul of a society as it passes from one generation to another.

- G.K. Chesterton

Legacy

One good thing about society is books keep knowledge and experience for all to grow. The flipside is all the wrong people are doing the reading to gain advantage. In the stock market we are fortunate that the Japanese people have passed along the tool of candlestick charting. We use it everyday. Since the market has been in a correction mode, the question about a bear market surfaces. 

Ground Hog...

...was right. We are getting six more weeks of winter, but the weather does change as well as everything else. The previous bullish energy in the market is waning. The market is still around its highs, but with less conviction as seen with volume. There are more down days which is a sign of change. It bears watching (did you like the pun?). The up and down breadth is turning down even though as mentioned, the market remains around the highs.  Finally, under "Dow Theory" the indexes are not in harmony which is an indicator of change. The three indicate that a possible bear market is coming, but there is no conviction at the moment. There are many gaps that are being filled. We advise caution for now.

Economy

With all the news about tariffs, we did some digging as in metals. What we find is the truth. It is hardly heard in America. Trump is correct to place tariffs to bring manufacturing back. However, we disagree with his approach. It is only tokenism. It will only add to inflation and not achieve the target - US production. 

A nation needs to be self-sufficient or as close to that goal as possible. Hats off to Japan and Germany who have little resources, but they are still a force in manufacturing. This helps their economy and standard of living. Both of those nations have a bretter standard of living than the US. Think about that?! We have natural resources, a population greater than the combined totals of those two nations, a much larger land space then the two combined and yet, we do not come close to them in manufacturing, standard of living and education. This is not only sad, but mind boggeling. Here is some facts that pertain to real strength in an economy.

Top 10 in Aluminium (tariff news)

Number one is China. India is next and then, Russia. Number 10 is Malaysia. Among the list is Norway, Canada and the United Arab Emerite as well as Bahrain. BAHRAIN!!! It has a popuation of 1.47 million. Brooklyn, New York has more people. The US is not in the top 10. This is why we are declining with homelessness and loss of hope. These are high paying jobs that makes a middle class. It gives social mobility. It develops hope. The Democrats and Republicans are both guilty. This is why we need unions and repeal the Taft-Hartley Act.

Top 10 Steelmakers

Quess who is number one? That's right, China. All the BS about the US being the top economy is just that, BS! The rest are: India, Japan and number four is us. Continuing: Russia, Turkey, Germany, Brazil and Iran.

Top 10 Copper

Chile grabs the gold. The rest: Peru, Democratic Republic of the Congo, China and we are number five. Continuing: Russia, Indonesia, Australia, Zambia and Mexico. Copper is needed in almost everything. It is why the metal is referred to as Dr. Copper. 

Lithium 

We include it because it is important today and even more important, tomorrow. Chile gets another gold. China, again and then, Argentina. The US is not on the list, but every list contains China. China also earns the most PH/Ds in education for engineers and mining. We are falling behind, badly.

I will add the most important product for any nation, auto production. It is connected to so many sectors of an economy: the interior, tires, transportation, electronics and technology. Japan and Germany dominate the list with GM at number 10. The EV market is being ruined by over capacity by China. Although by market capitalization, Tesla is the number one company in the world. We do not put much value in these type of stats. We classify this as a "Marketing Stat."  Production and sales are what we believe counts and being number 10 is unacceptable in our book. Start tariffs at 50% and go up from there. Put more money in education to trade schools and maybe in four years, we can grab the top three spots in every category.  Peace.

Odds and Ends: February 2025

- You aspire to great things? Begin with little ones.

- St. Augustine

We have quite a few gems to end the month. Like the saying above or the Chinese proverb, "The journey of a thousand miles begins with the first step."

Shout Out...

to Brazil for showing that renewable energy can supply your electricity needs. The nation took to dam building in the 60s for hydroelectric power. However, the ability to continue this approach is ending. Time shows environmental problems as well as changes in water flow. The country turned to solar and wind. The rewards came in 2024. Brazil received 90% of its electric needs from renewables. Congrats!

Veir Inc.

The Massachusetts company has developed high intensity wire to solve the surges in electricity that use AI. Howver, their system uses a cooling nitrogen and that is expensive. Hope they solve it.

Thyssenkrupp AG...

a German steelmaker received $2 billion subsidy to help pay for a hydrogen furance. This is still in the planning stage, but the government has changed leadership. The election in February could decide what happens. We have one question, "Is the funding earning any interest?" 

Singapore Shipping...

owners have reached a settlement for the destruction of the Francis Scott Key Bridge in Baltimore. Their insurance will cover $350 million. In a separate deal the owners of the corporations will pony up another $101 million for civil claims. The final cost for a new bridge could be $4 billion. This story is not over as the FBI and the state of Maryland are investigating with more claims coming. 

Nor All Bad News...

in Singapore. The city/state gave approval for what could be the greatest project for sharing energy. The deal has an Australian firm building a pioneer underwater "submarine" cable to Singapore. We worry about the dangers to the ocean, but if it works, it will be a great step forward. It will provide jobs and the sharing of energy will be good for relations and the planet. All the Best!

Fabulous News

Apple will spend $500 billion (Is that a record for a corporation?) to build a new factory in the US. It will provide for 20,000 jobs. Yay!

Top Secret? 

We say what secret? Its on the internet. The US military had developed a plane (X-37B) that can break the orbit to space. We see two results. The next war will include space. However, the timeline has been pushed back (Yay) because the US now had air superiority. This will keep the peace...for a while.

Meanwhile

The market is starting to worry. However, they are nervous about future problems from tariffs, Middle East cease fire, Ukraine resolution and inflation. We worry about people losing their jobs as we continue to read about layoffs. We remind you that the only thing growing in our retail sector is store closings. They are up 69% . They are not alone. Manufacturing has shed another 13,000 high paying jobs. The contagion is also in home building and now, the airlines. Here is the latest.

Chevron is cutting 15% to 20% of its global workforce.                                                                              JP Morgan Chase is printing pink slips. We will soon know how many.                                                      JC Penny is adding more stores for closing.                                                                                                  Joann (fabric & crafts) is closing 500 of its 800 locations.                                                                            Jeff Bezos, yes the billionaire, is laying off people in his Blue Origin space program to safe on costs.      SW Air is cutting 15% of its workforce.                                                                                                        Advanced Auto Parts is closing 600 locations                                                                                              An unknown total for 7-Eleven, Denny's and Best Buy, to the amount of store closings. Looking ahead, the list to be announced from retail chains include: Macy's, CVS, Walgreens, Foot Locker, FamilyDollar, Rite Aid and Victoia Secret. 

In a related aspect, Spirit Airlines has entered into bankruptcy and has refuse two offers to merge.

We end on some good news. It concerns the wildfres in California. There is an international exchange of fire fighters to help each other to stop these huge wildfires. Canada welcomed 9,000 foreign fire fighters and they sent 4,400 to help other nations, mainly the US and last year to LA.  Peace.

Roots of Protectionism

- Men more frequently need to be reminded than informed.

- Samuel Johnson

Recap: Industrial Revolution

After England touched off the industrial revolution, the other European leaders took notice. Although they were still in their aristocratic, monarchy stage, the crowns realized that England would soon out produce them and maybe, overwhelm them? They saw the new technology in railroads, machinery and textiles. Their farmers were getting higher yields with less labor and lower costs. The British had coal for energy and they had a global reach with their foreign possessions with a strong navy to bring resources to the homeland. When the French helped the American colonies, this went through their minds beside the fact that they still possessed the central land of the new continent. 

Looking Ahead

These leaders were also egos and paranoid. The first thing that monarchies always do is to establish a strong military. At that time, they realized that technology was changing. It would also change warfare. They would need steel and bullets. The other thing was money and resources to furnish steel plants. They would welcome their rich, aristocratic moneybags to partner with government. This led to Europe invading Africa. They cut up the continent in search of riches. 

Europe continued its history of petty conflicts, but it also entered into the industrial age. They developed their cities around large economic projects. Their governments slowly changed due to the impact of the American and French revolutions. However, "old" money was the best source to provide investments for steel, coal and agriculture. This economic growth era for Europe lays in the partnership of money with government. After each nation built up its infrastructure and constructed a central palace, the only way to expand was through conquest or trade. 

When certain industries found success in trade, the government would soon become their partner. The marriage ensured success with regulations, protection and deep pockets. This is the first form of protectionism. It is in every European nation then and today. Global trade is only a banner mask to make each nation stronger by winning with exports. As for the Asian nations, their time development was stagnated, but it followed the same playbook.

Marshall Plan

As European industry lay in destruction, America showed compassion. It continued to spend beyond its means to help rebuild Europe. Yes, there were concerns about communist Russia, but by putting food on the table, all of Europe benefitted. How did it show gratitude? France, Sweden and Switzerland wanted our gold in trade. By playing the currency manipulation game, each nation could target an economic sector to which they did. European politicians could help their economy by "dumping" goods to the US market. They were not alone. Japan was also in disarray. Little was done until the politics of the Korean War. Logistics saved Japan and their economy. Toyota, on the brink of death was saved. Japan followed the European example. They invaded America with their cheaper products that were subsidized by government.  

As time moved along, the roots of American greed surfaced. With the law of Taft-Hartley, American producers could kill unions by shifting work to non-union states. This eventually led to oursourcing. This led to America's decline. China is just the latest to use our market to dump their crap to which grows their economy. The real danger is in the excess amount that China drops on our ports. One thing that Germany, Japan and China do that is noteworthy. They spend to help their economy. When America spends, it is money for the financial system that spreads to Wall St. They rarely offer programs that benefits the entire economy or citizens.

Today

Trump realized the discontent from the lost of quality jobs and little to no social mobility, the loss of hope and faith in our government. He used it to capture the prize. He, along with the paranoid elite, suddenly realized from the ravages of COVID, that we lack manufacturing. We could not even make masks. This is part of the reason why Trump would not allow Nippon Streel to buy US Steel. It is the same thinking in Italy. Baku Streel is seeking to buy Llva Steel. The loss of the firm by foreign control will have serious impact on the nation's manufacturing. The Democrats also understood the dangers. Biden's chip act was very smart. Intel is coming back. Trump understands the situation. With tariffs the government gets revenues. With money he can do things. He has a chance to actually make America great again. He has to convince producers that this new protectionism is not only for one administration, but a new wave for the future. We, at Evolution worry that the tariffs are not strong enough and Trump will use the revenues to push tax cuts that only help the rich. Maybe he will get an epiphany? We can only hope.  Peace