New Year, Old Problems

- The US has achieved the soft landing.

- Janet Yellen

I begin with the above quote. I use it in scorn. For most of the world we are in a new year. The Chinese lead the orientals a little later. They should be happy with anticipation. Their favorite zodiac sign, Year of the Dragon is approaching. Maybe they will be right. The year turns out good for them and the rest of us. Then, "Yellen" Yellen would be right and us here at Evolution, wrong. Wesley Snipes said, "Bet on black." We say, "Never bet on what the Federal Reserve says." They always have a hidden agenda. 

Banking

The banking issues surprised all the "experts" in 2023. Dear Reader, they are not over. Our largest bank, JP Morgan Chase showed declining profits. Why? They took a $2.9 billion hit with the acquisition of the defaulted regional bank. Their declines are not over. Then, we hear that Citi Group reported losess of $1.8 billion. They are closing branch banks. They anticipate dropping 20,000 employees. Their pain is not over. Finally, we read from our best bank, Bank of America that they too sustained deep losses. They lost $1.6 billion due to regulatory charges. Their profits declined. Their pain is not over. All these and almost every bank suffers from the Federal Reserve hiking interest rates. They all have government bonds paying 3% or less. Inflation aside, they all are losing money. They all have unrealized losses. The amounts are staggering. They could total over $100 billion. Banking issues are not going away.

Inflation

The phony report came in last week. It stated that inflation ended the year at 3.4%. The media uses ex-president Clinton's concept, "Keep saying things are better and eventually, people will believe it." The various articles showed declines in food like eggs that dropped in price by 29%. So, we did the math. We even used the government's numbers. The egg price beginning in January of 2023 was $1.29 per dozen. When you add inflation by the month, the price in November was $2.54. You show a 29% drop in price. The price of a dozen eggs is $1.81 which is .52 cents more than in January. This is the lie! Inflation may drop in a month, but the total effect remains with us. It is ingrained. People are suffering to make ends meet. You can see the real effect of inflation to consumers by their credit card data. Reports show that 49% of consumers are carrying debt. This translates to 56 million people. They are paying higher debt fees. Many carry a balance that is up 40% yoy. We say, please, live within your means. You have to look out for number one and follow Rodney Dangerfield's wisdom, "Don't step in number two." 

2cd. View of Inflation

You might have doubts about our above example as egg prices differ throughout the nation. How about shelter? Even the government admits rents are up 6% yoy. We all know mortgage rates are high and they make the price of a home very expensive. However, how about those who already have a home? Home insurance is up everywhere in the country. The worst state is our third largest. Florida has a dual whammy. Many insurance firms are leaving the state due to hurricane costs. The ones who remain have raised their rates like around Tampa at 100% yoy. Rate increases hit our largest state, California by 40%. Many states like New York and New Jersey have boards to request rate hikes. They too approved insurance hikes at 17% for Jersey and 8% for New York. People are having a hard time in keeping their home due to taxes, insurance and maintenance. This is very troubling.

Scary Trendline

The above is troubling. This is down-right scary. Russia started war with Ukraine in Febuary 2022. Hamas invaked Israel in October 2023. In 2024 we have Yemen rebels attacking shipping. We have civil unrest in Ecuador. We have cities throughout Europe where citizens are upset about immigration. We have elections in many global nations. Dictatorship is rising. Taiwan just elected a president friendly to democracy and China does not like that. The list goes on and on. Let's hope and pray this threndline ends. Peace.