Numbers: Fear and Risk

- Faith means trusting in advance what will only make sense in reverse.

- Phillip Yancey

10 New Millionaires

Last week 10 chipmakers added a combined $10 trillion in value in price and maket cap. Some like Micron's boss who says that they see another 80% growth. We know big teck has spent trillions on new data centers for AI. Someone had to feel the effects of all their spending. The chips on the table are all-in on the chipmakers. Anyone who had a chipmaker last week is rolling in big bucks. The NFL isn't the only one printing new millionaires.  

Chip Snapshot

Microm (MU) rose an incredible 38% just last week on strong volume. The chart agrees with the CEO. It says momentum will continue.                                                                                                                  Nvidia (NVDA) is now worth over $5 trillion in market cap. Even at highs and highly priced, it rose another 8% last week. The volume was steady.                                                                                            Broadcom (AVGO) is not as strong as its peers, but rose with them.                                                            Intel (INTC) is one of the big turnaround stories. Since late March, it has been on a tear. It rose another 25% last week. The volume is very strong. It could rise even more.  

Sounds Great, but...

...we stand by our call on the market. We see a pullback. Remember, we told you that the market indexes are overly influenced by teck firms. The money spent like Nvidia on its partner, Coreweave (CRWV). The firm loses money, but Nvidia keeps the stock up. Together, this is pumping up the market and related sectors in technology. A cheaper way to play is the ETF in technology, XLK. However, when we look at that chart, there is no conviction in volume. This is a red flag. This is another reason why maybe you should know when to walk away from the table, have a nice dinner, treat your family and self a night on the town. There will always be another trade. Why, you ask?

NASDAQ

It was 23,000 in March. In less than 10 trading days, it rose to 29,000. The market says there is no risk and no fear. Consider cybersecurity in data centers. The AI models are not perfect. Hackers are breaking into these platforms. They are just stealing from big teck with no investment other than their time to hack. 

Then...

...look at the rest of the market. The high tide is not lifting all boats. Check out the price of Avis (CAR). It was $850 in April. Last Friday, it was $145. How about doing some laundry? Whirlpool (WHR) was over $107 last July. Last Friday, it was $44 on strong negative volume. How about Nike? They got shot with a 44 too. The stock was over $78 last August. Last Friday, it was $44. Not good. There are many others. I think that you get the point.

In addition...

...the government released its jobs report. They BS was about a strong showing. Folks, it was 115,000 new jobs. Well, that is a lie! With our population over 325 million, it takes a minimum of 150,000 just to stay even. So, this is a negative and yet, the government claims unemployment held steady at 4.3%.  This lie will quietly be changed in the next update to read 4.4% which in itself is another lie like the inflation report. You can get a clearer picture with the labor participation rate. It fell again. It is below 62%. This is a danger zone. As we put the pieces together, we say there is serious risk in this market. When the tide goes out, it leaves all boats stranded. Beware!   Peace.

Really? 3.2% and 2%?

- The real problem is not why some pious, humble, believing people suffer, but why some do not.

- C.S. Lewis

Sell in May...

...and go away is an old Wall St. saying. Last week the government broadcasted two important stats. They claimed inflation grew in March at 3.2%. They followed this by announcing that our GDP grew by 2% in the quarter. Really?

Infaltion: This is only true by their phony matrix formula that does not include the three necessities that we all need everyday. We all know that fuel has risen by 40%. Every time we go to the grocery store, prices rise from week-to-week. Your rent only changes when the lease is due. Your home may have risen in value, but the expenses to keep and maintain it have risen. The worst is utilities and insurance. So, does anyone believe that inflation only rose 3.2%? We don't think so. It is more like 10%.

DGP: Our economy grew by 2% in the quarter. We find this misleading. We point to two facts with our conclusion.

First, the government, especially the administration, by now knows that war pumps the economy. They keep the debt caused by it out of the limelight. Ever since Russia invaded the Ukraine, we have aided the Ukrainians with weapons, supplies and other aspects. This aid has added strength to the economy. The recent conflict with Iran only adds to military spending which helps the economy. It masks my second point. Our economy has been consumer generated since the late 1970s. Then, our retail environment grew radiply along with housing. This created a problem. We overbuilt shopping centers and malls.  

As inflation slowly worked itself into the pocketbook of consumers along with the impact of shopping on the internet, brick and mortar locations began to suffer. The gradual decline was not alarming as everyone knew developers overbuilt. However, this decline saw two dramatic surges in the decline. The first was the financial crisis of 2008 and this was followed by COVID-19 in 2020. 

We have posted in many of our pieces the continuation of retail damage. It is now at the catastrophic stage. It is no longer just retail. Spirit Airlines is just the latest firm to go to bankruptcy. It seems every week another business announces job layoffs. Almost every firm cuts back on investment research. This implies no future products or service. Of course, you may doubt our point when you read about high-teck and their investment in AI and data centers. Dear Reader, this is a two-sided sword. Case in point: Meta announced that they will be risking $600 billion in AI and data centers. Folks, that extremely high number does not come without repercussions. In another statement, Meta is dropping 8,000 skilled positions. 

This type of investment and subsequent cutbacks appears with all the big players like Oracle, Apple, Microsoft, Amazon and Tesla. There are many more firms that are seeking the benefits of AI, but so far, and as far as we can see, there is no financial reward. Google is seeking money to do their entry into the field with a 100-year bond. That is crazy! This money has enticed chipmakers, servors and other infrastucture in the sector. It has also caused the stock market to hit new all-time highs in the S&P 500 and NASDAQ. We already told you that their indexes are closely tied and over represented by these same firms. This is misdirection. We said it before and we will repeat it here: there is a disconnect between the market and the economy. The market has nothing to do with the economy and the lives of our citizens. It may hold positions that could effect our retirement and things like that, but nothing in our present state. Oh yeah, the hidden dangers looming in private credit market.

2cd. Opinion?

Gary Shilling, the past, famous economist from Merril Lynch, sees recession as definite with the market dropping 30% by the end of the year. He sees some of the things that we see.

Present State:

Nike: they are cutting 1,400 jobs.                                                                                                                  Lammes Candies: famous candy store in Texas that had been in business for 141 years is gone.            Microsoft: is offering buyouts to 7% of their firm.                                                                                      Meta: is laying off 10% of its help.                                                                                                              Amazon: throwing in the towel on 16,000 workers.                                                                                    Oracle: They can't decide on how many they will lay off. Somewhere between 10,000 & 30,000.        Block (part of Square): they are dropping 4,000.                                                                                        Salesforce: so long to another 1,000.                                                                                                            Snap: Goodbye to 1,000.                                                                                                                              Eddie Bauer: is filing for bankruptcy.                                                                                                          Popeyes: is closing 3,193 locations and all the jobs tied to them.                                                                Starbucks: continues store closings. They added another 568 locations and jobs.                                      Coinbase: is cutting 14% of its workforce.

Bottom Line: Our consumer economy cannot keep retail from declining which means consumers do not have enough disposable money to maintain our economy. We advised you to save for a rainy day...Peace.

Odds and Ends: April 2026

- It always seems impossible, until it's done.

- Nelson Mandela

End of the Month

This is the time to keep your fingers crossed if you are invloved with private credit. All the people who state this is not a worry from chairman Powell to the big CEOs of our largest banks are preparing their answers if proven wrong. Wells Fargo is the latest to admit excessive exposure to private credit. They have a whopping $36 billion conected to these firms. That, Dimon is not a cockroach, but an elephant. 

Oh, yeah. It is not just the US market. We read in the UK that MFS and First Brands saw some cockroaches when they turned on the light.

It gets worse. Another reports states that a massive $14 trillion of previous debt in bonds is coming due. This is public and private debt. Not only is this going to create higher yields, but the squeeze could effect the new debt probem in private credit?

Related. The six largest banks gave their CEOs an average of $45 million in bonuses and yet, these same banks say that they can't afford to cap credit card interest at 10%. Yeah, right!

Peace in Iran, US/Israel Conflict?

If you saw the 10-point list on the negotiation table, you would realize that it is a Christmas list. Not only does the parties continue to provoke each other in the strait, but here are a few items on the agenda. Iran wants the US to drop all sanctions, close all military bases in the region and return control of the waterway back to Iran. Oh, yeah, they want the US to pay for all damages caused by our bombing. Houston, we got a problem. One might also think, why isn't the UN involved? Well, the chair recently said that the UN could collapse due to members not paying their dues. 

Energy and Batteries

If you do not know already, China leads the world in battery production and development - by a lot. China has added more capacity in 2025 than the US has in its whole system. However, just like clouds begin to appear on the horizon, a change is coming. For the assholes who run Polymarket, never bet against the US when it comes to innovation. Ford may have thrown in the towel on EVs, but it is strongly into batteries, especially for storage. They have partnered with the Chinese giant, CATL. Separately, Ford says it already has ideas to build on from their partner, CATL. 

They are not alone. Form Energy is leading a new approach with batteries. Their iron air battery can last longer than anyone else product. Battery power averages just 4-hours. This new battery can last 100-hours. Wow! Congrats!  

There is also a new energy trend that combines batteries with gas. Why, you ask? The cost of batteries has fallen 75% since 2018. Big teck is looking into this to power their new data centers. 

New Need and Old Law

The Mining Act of 1872 is being dusted. It allowed miners to use federal lands and not pay taxes on profits. Nothing like the rubber barons influencing government. Anyway, the new need for critical minerals is pushing the old act to get miners to dig tax free. Perpetua Resources is jumping into old claims. They may only have 5% of the minerals government wants, but the other 95% is gold.

Did you know that Wastewater Scan which is a project by Sanford and Emory University checks for virus nationwide through our utilities? This is a great behind the scene idea to reveal any new health problems. They may need it in Brazil.

BYD and Condescension

The EV auto maker is building a plant in Brazil. Sounds nice, but reality is another thing. BYD gives the best positions to Chinese workers and the menial work to Brazilians. It gets worse. They supply housing if you do not mine overcrowding? Get this. To apply for the job, Brazilians must pay an excessive deposit. They only get their money back if they stay on the job for 6-months. We stated before that China only seeks for China. They have supplied loans to poor nations with clauses that state if they default, China gets the collateral. In mamy cases this means taking that nation's port and harbor. Read the fine print!

Inflation

We said it was not going away. We add two more points. Diesel is over $5 per gallon and over $6 in Ca. Trucking is the source of shipping on land. The Hormuz Strait is not just oil. Did you know that over 20% of the world's fertilizer passes through the strait? Higher food prices will continue. Go to the library and get a cook book. You can learn to cook cheaper and healthier.

Bye, Bye, Powell

This is probably the last Fed meeting with Powell as chairman. He will probably play it safe with no rate change. Doesn't matter. If President Trump gets his way and we feel that he will, it is so long, hasta luego, adios, sayonra, arrivederci, baby! Trump will be happy, but we won't. We only will be happy when our meme is fulfilled, "End the Fed!"

Meanwhlie,

The NFL is doing its best to help the economy. They have minted over 100 new millionaires. We like the bonus for Logan Jones. He was the 57st. draft pick. The famous ketchup company, Heinz 57 is giving him free ketchup for the rest of his life. Lucky boy...Peace 

Election Cycle, Stats and Outlook

- Keep your face toward the sunshine and shadows will fall behind you.

- Walt Whitman

Mid-Term Year

There seems to be a cycle for everything. This makes them seem irrelevant. However, like the stars on your team, some are worth more than others. Generally, the first year of a new administration produces a favorable outcome. The second year becomes crucial because it becomes a barometer to the party in power to control Congress. If they lose there, they can lose the next presidential election. 

As stated repeatedly, we do not endorse either of the two political parties. We feel that they are both corrupt. With that said, the political situation is what it is with the hope that a third party arises. Anyway, there is a historical repeating aspect of the mid-year election data. It points to a market peak around the third week of April. After that, the market regresses until November and then, rallies. 

The recent market activity seems to follow the historical election cycle. To keep you reading and to build suspense, Sebastian will hold his prediction until the end of this piece. 

Stats

Just like cycles, there are stats for everything. In football, players perform better on grass than turf or warm weather compared to cold or wet conditions. However, humans like schedules and schedules become traits and the foundation of stats. 

Strait of Hormuz

Under normal conditions, shipping traffic runs between 1200 and 1300 vessels per day with 20% of the world's oil production. It is also important to mention that one-third of the world's fertilizer passes through the strait. The temporary cease-fire has resulted in around 102 ships seeking to pass safely through the strait. Nevertheless, the war has resulted in moves effecting stock prices and economies. The cease-fire announcement saw US oil crater to close at $85 last Friday. Under charting, it had a dark cloud which means more downward pressure on oil. We also saw gaps at $77 in price with the lowest at $69. We see a consolidation in that range level. Brent oil has more gaps and thus, more volatility. However, we see it also forming a consolidation in a similar range as US crude. 

The fear put US gasoline prices up over 36%. Diesel has risen 50% to over $5.00 per gallon. It is over $6.00 in Ca. In Europe, gasoline rose 32%. Even with that worry, the European market has risen by 17% and the US indexes have erased all their yearly losses with a new record in the S&P 500. 

The 10-year note only rose .3pts. Oil and financing relate to everyday pocketbook expenses. There are two other big commodities worth mentioning. Aluminium inventory dropped 400,000 tons. Doctor Copper use to be .70-cents per pound. It closed at $6.07 on Friday. The chart looks wild and crazy. There are many gaps. The lowest is $5.28. Banks forecast that copper prices will range from $6 to $8 per pound. We see a consolidation at $5.90. 

Outlook

With all the termoil and loose cannons like Netanyahu, the back and forth changes to agreements and the points in the negotiations, inflation spike, supply bottlenecks, etc. There is too much that can go wrong. We believe the mid-year cycle will hold sway. The market should regress until November. During that span, we will check the volume and market sentiment for a clearer picture...Peace. 

 

Still Happening

- The strokes of the pen need deliberations as much as the sword needs swiftness.

- Julia Ward Howe

Betting on Life

A wager risk in contest like football reveals the sporting nature that lies within us, but crossing the line like Polymarket to gamble on human lives, reveals a lack of humanity. Their latest was will the US rescue the downed pilot behind enemy lines or will he be caught and maybe killed? Take their license away! 

Private Credit Contagion

We told you about Blue Owl and Apollo Global restricting withdrawal redemptions from their fund. Fed Chair, Powell has stated this is not to worry. Didn't Bernanke say the same thing just before the financial crisis of 2008? CEO, Dimon of Morgan Chase says, "This is a cockroach." We saw last week that investors are still seeking to get their money back. Another 22% of Blue Owl's investors want out. The firm has capped withdrawals to 5%. So, if you are on the wrong end of that list, it will take two years before you can hope to get your money back. Oh, yeah, we have two new names of funds that their investors want out, Ares and KKR.

Are big names reading our blog? We also saw these names talking about the growing situation connected to private credit funds. Michael Burry, Jeffrey Gundlach, Mohamed El-Erian and George Nobel, the ex-Fidelity fund manager all echoed our worry. 

Banks Denying

President Trump has asked the banking industry to cap their credit card usury fee at 10%. They cried, "We can't afford to do that!" Well, the big banks are reporting profits of $18 billion in the last 90-days. Can we get a chorus from the Eagles band, "You can't hide your lying eyes..."

By the way...

Are central banks playing the market? Turkey just sold 60-tonnes of its gold into the market. They made a nice profit. Well, their action has spread. France just sold 129 tonnes of gold. There is one, big difference. France repurchased the 129 tonnes at a lower price. Maybe some of the recent volatility in the metals is from the manipulations of central banks? However, the world is deep in debt and rising. At last count it was over $350 trillion. Gold and silver has only one path, up.

Inflation...

...is still out there as we said it is. The government and the Federal Reserve still seek to manipulate our thinking. They admit inflation, but they keep repeating that the Iran conflict should end soon and with it, inflation. The March report last Friday claimed inflation rose at 3.3%. The consumer sentiment fell to its lowest. It revealed consumers see inflation rising to 4.8%. We say that inflation is closer to 10%, now!

Peace?

How can it happen when the war-monger, land stealing leader of Israel, Ben Netanyahu will use any excuse to take land along its borders. This is not to say that Israel's enemy, the extremists are right, but Netanyahu is a terrorists for peace.

Retail Disaster

It shows its face every week. Popeyes is closing 3,193 locations under its bankruptcy filing. Sadly, we read this piece on a pizza chain. Gina Maria's Pizza entered bankruptcy after 50 years in business. The retail catastrophe has extended itself for over ten years. We hope it ends soon. As always, Peace.

AI, No Data Centers for You

- He who sows sparingly will reap sparingly, and he who sows bountifully shall reap bountifully.

- 2 Corinthians 9:6

What AI Revolution?

You read everyday that some high-teck firm is building a new data center. The only thing that is happening is the land purchase, permit and some concrete. The nuts and bolts aren't coming. Dear Reader, we lost so much manufacturing that even when backloads of orders are being placed, the suppliers cannot meet any demand. This holds true to even the exporters. There is a lack of transformers, switchgear, batteries and other fascets that is needed. 

The above also tells us that the damage to the Iran and Middle East refineries will take years to fix. Why, you ask? Because the similarities in manufacturing will not be able to meet the demand for the thousands of parts necessary in an oil plant.We also extracted another point from the Artemis II rocket. Did you know that it takes over 11,000 pounds of propellant per second to lift these engineering feats? Reread that! NASA pushes our pride, but at what cost? What will we learn from this great expense? Nothing that is not already known. However, many defense firms both national and foreign make billions off this flight. The military has plans to extend the next war into space because then, it can disable communications. It is bad enough that man is polluting the earth, but now, he adds the outer layers of our atmosphere. 

Back to AI

There is also a growing backlash against these energy consuming monsters. Many states after giving permits to build, are beginning to realize that their utility firms may not be able to meet this increase in energy demand and still service the population? Maine has taken the next step. They will no longer give permits in their state. They understand that these data centers effect the environment as well as the population. They decided the needs of many outweigh the needs of one. I dub thee, "The Three Musketeers State."

Consider This...

...If AI is so smart, how come Anthropic is seeing their code being leaked over the internet? We told you in previous pieces how AI does things without human permission that causes big problems like what happened at Amazon. I guess it comes down to this, Who ya going to call? Ghostbusters!...Peace.

Market Charts

- The elevator goes up and down. It goes slower going up with stops, but generally, goes down faster.

- DOORMAN

Chart View

Our Doorman in another life could have been a stock market analyst. In a rising market it has price levels that appear like a staircase. They have an expression, "Stocks rise the wall of worry." When the market craters like at present, it goes down like an express elevator. For the month of March the market has shown high volatility, but the trend is down. It has fallen over 4,000 points in the industrials. Year-to-date, the S&P 500, Nasdaq, Transports and Industrials are all down. Nasdaq is in correction territory. If it falls another 10%, it will enter bear level. We made this prediction in December with the slight adjustment from mid-February to mid-March. We did not call the war with Iran, but we did mention geopolitical dangers.  

Fibonacci Levels

We are a believer in fibonacci math. Looking at the charts, this is the retracement points to watch. Keep in mind, we also believe in volume. If the indexes fall with no conviction, the market will bounce back. If it falls on stronger volume, the downtrend will continue. Here are the closing prices as of last Friday.

If the Industrials continue to drop, the first stage is a 38.2%. This puts the index to 45,204. Friday's close at 45,166 has already seen it pierced. The next level is 50%. This equates to 43,556. The completion of the progression is 61.8%. The index would see 41,908. We see 42,500. Note: If you consider the index last high, it too is in correction territory.

The S&P 500 has fallen 7% year-to-date. If it reaches the 38.2% retracement that is 6174. Friday's close at 6368 is still a ways off. However, a 50% drop equals 5917 and the full 61.8% is 5660. We see 5700 as a possibility.

Nasdaq has fallen the most. It is in a correction level with Fiday's close at 20,948. The first stage at 38.2% means a price at 20,500. A 50% means 19,409 and a full fibonacci is 18,317. 

Dear Reader, peope forget the transports. They are necessary in Dow Theory. Friday's close at 18,174 is a long way from what we see. We feel the test is 16,500.   

In Addition...

We notice many of the big names are in bear territory or close to it. Here is a sample.

Meta = down 30%.                                                                                                                                      Alphabet = down 18%                                                                                                                                  Microsoft = down 32%                                                                                                                                Tesla = down 24%                                                                                                                                        Nvidia = down 17%.

Many people buy the dip. I would not as the trend is down. A flood swallows all. We took a gamble on EVGO. This is an EV charging station. It has fallen below what was resistance. We will keep it for now. Our gold miners were also caught in the negative draft. Keep the faith! It is in a long term bull cycle. We also believe in cycles. Peace. Have a wonderful Easter.