Odds and Ends: May 2022

Elected Leaders

The national primaries just ended. I find them more interesting than election day. Why, you ask? Because all the lies and innuendos by running candidates, exposes them for the phonies that they are. The Republicans love to claim that they are conservative. They imply by this moniker that they will be for a balanced budget, against taxes and against government into private enterprise. Well, take Idaho for example. It is a solid Red State. One Republican candidate put ads on television saying his opponent for governor supported taxes on food, businesses, etc. This renominated Republican governor has inplace taxes on food, businesses, etc. Another Republican candidate for Congress, voted for every stimlus package, never mentioned a balanced budget and he has been in one government office or another for over forty years. I guess he is not for term limits either? This is why I do not vote. I will not validate these crooks. Someone should do a documentary on the phonies in both political parties. This is another example why our nation needs a new third political party, the Liberty Party that is for the people.

Market

Interesting, sad fact: Everyone who purchased stock shares of the NASDAQ since the November 2020 lows, is in a losing position. We, at Evolution still stand by our projected calls on the major indexes. If we are correct, we will reevaluate our call at that time. We look strongly at volume. 

NSA

Our Big Brother spy operation made a brief announcement this month. They said that now there is no back door into the US by hackers or questional governments because everything is encrypted. I don't know about you, but this scares the hell out of me. It implies that previously there was a way into our data systems. Once you are in, the only way to exterminate the intrusion is to wipe out the system and to start all over again. I do not know how to do this, but our tech leaders need to do this to protect the security of the nation and citizens from hackers.

Crypto Death

It is estimated that 40% of all crypto currency investors are in a losing position. We warned our readers that crypto is not the answer to our banking and currency problems. All crypto does is replace the banking idustry with a new unknown banking industry. The bitcoin is even phonier than fiat. Precious metals has a proven record, but the fiat people control the media and education within our society. A gold foundation has made any nation using it strong until the corrupt nature within man manipulates to weaken a gold/silver curency foundation. Then, that nation falls like Rome, Spain and England with the US heading in that direction. Vote with your dollars. Forget crypto, buy gold and precious metals!

More Retail Doom and Gloom

Many retail firms saw the ramifications of COVID. They realized that lockdowns could cause supply problems. When they had the chance, they doubled up on their orders. Even though many items are in short supply, most retailers were able to weather the storm of the bottlenecks in the supply chain. However, the inflationary effects of food, energy and housing/shelter are causing spending concerns by consumers. Keep in mind, the Ferderal Reserve does not include any of the big three in their phony matrix formula. Like we always say, "End the Fed!" 

Anyway, this consumer cutback on spending is causing a new concern for retailers. Their inventories are too high and they already have to consider next Christmas. Big discounts will be coming this summer. Cash is king!

Fed

Speaking of the devil, President Biden renewed Chairman Powell's term as chief central banker. He immediately got on his puplit to say that he will fight inflation with rates hikes. It is like in the Godfather, whoever claims that he is not the leak, is the leak. We predict that Powell will BLINK! Why, you ask? Because the concept of the central bank is for the wealthy and big business. Their unwritten motto: Privatize the profits, socialize the losses. Quess who the socialize are? They also helped to make the military presence strong by financing our debt. Don't misread this. I am for veterans. But I am against war and the Pentagon presence in our lives. To give you an idea of the Fed's destruction of our dollar, consider this: In 1966, a private was paid $89 per month with a high risk on life. Today, a private gets $386.50 per month with a medium risk on life. Let us repeat ourselves. End the Fed!  

New Tech n' Transport

Harley Davidson is teaming up with Google to bring SmartPhone technology to their bikes, most notably their new electric rides. You can get maps, etc. from the handlebar. 

A German medical research team is developing tech to work with paralized people. Believe it or not, a disabled person can direct to drive a vehicle through a straw that senses mental pluses that can be interpreted to direct a car. This is a self-driving on a whole new level. Wow!    Peace. 

  

Dots and Tidbits

We, at Evolution always say that if you can connect the dots, the big picture is revealed. One helping aspect in the puzzle is how tidbits relate. We have a few for your consideration.

Job Numbers

Ever wonder when job numbers are released, whether it helps or hurts the unemployment percentages? Last week the BLS stated that 428,000 jobs were filled, but the unemployment percentage remained the same at 3.6%. Dear Reader, you know how position on this matter. The real reason why our economy has not been strong for years is found in one aspect - labor participation rate. It is still low. It almost touched 60% in 2020 due to COVID. To give you perspective, the labor rate in 2000 was almost 68%. At present, the labor rate is 1.2% lower than 2020. What does that percentage mean? It means that 896,000 less workers were employed. Both President Trump and Biden BS when it comes to the truth about our economy. You cannot trust Republicans or Democrats. It is why we are for forming a new third political party, the Liberty Party. Continuing...

The other most important stat is the import/export ratio. In 2021, our deficits expanded an astonishing 27% higher than 2020. Consider this, if you have the time? In 2020, the labor participation level was almost 60% and in 2000, it was almost 68%. How many millions of jobs have we lost? You can see the effects sleeping on streets every day.

Layoffs

The news is full of reports on jobs that are left unfulfilled, but there is a real reason why the unemployment rate goes unchanged even in the face of a strong job report. It is layoffs and cost cutting by firms. This gets very little print or coverage. This is a list that we gathered.

1) Better: they layed off 4,000 and the company losr $100 million.                                                            2) Noon: they have 495 less workersin this weight loss firm.                                                                      3) Peloton: 2,800 were given the pink slip on company outlook and losses.                                              4) Thrasio: they cut 20% of staff as this partner of Amazon said that they expanded too fast.                  5) Robinhood: Also claim that they expanded too fast with workers suffering under cost-cutting.          6) Wells Fargo: Mortgage apps have dropped. Company employs cost-cutting in housing devision.        7) Canopy Growth: they have 250 less to grow some buds in this cost-cutting measure.                        8) Food 52: 10% of company layed off as they decided to take a new direction. Does not sound good.  9) Cameo 87: Another firm that uses the cliche that they exoanded too fast.

In a related aspect, some big tech firms like Facebook have instituted a job freeze. Of cource, one reason for Facebook is that they face a lawsuit?

Market

Everyone who has purchased shares on NASDAQ from the November lows of 2020 is in a losing position. Margin calls will be going out soon to which will push the market lower. We maintain our previous outlook under charting for lows in the Dow, Transports and NASDAQ. Protect yourself with stops.  Peace.                                                                                          

Add Global Debt to Problems

- Deficits don't matter!

- Vice-President Dick Cheney

His parents named him right. He is a Dick!

Eli Whitney's great idea of interchangeable parts can also be utilized in other areas, notably, the economy. When things are going well and product is flying off the shelves, production workers enjoy a full forty hour work-week and unemployment is low, the economy should be humming. Well, our unemployment is at record lows, product is flying off the shelves and everyone is looking for help. Full-time work is available. So, why all the recession talk?

What goes up...

also goes down. The connection from production to product to the shelf has many other unseen fasets. There are many parts that are needed to make a machine work properly. There are many little items that the producer must gather to make the final product. The logistics from production to the consumer level requires transportation and packaging. These are the interchangeable parts. If you do not have semiconductors, you have an unfinished product. If you don't have packaging, you cannot deliver. If you don't have your logistics together, everything stops. COVID-19 became the ultimate stopage. 

Then what?

Governments provided stimulus while a vaccine was sought. When they cannot afford the stimulus, they charge it - deficits. It helped, but it was not enough. The one saving grace that most people utilized was to charge it with the credit card. This is personal deficits. They had to because bills still had to be paid and almost everyone was laid off. Then, governments worldwide provided help for housing. Moratoriums were established for renters and mortgages. Now, society is getting the backlash for these restrictions. The moratoriums are ending. Consumers now face balloon payments for back dated leases and mortgages. This forces a new dilemna. Continue to use credit with excessive interest or vacate the premise? As you can clearly see, deficits do matter and they must be repaid.

Anyway, either choice poses problems. This is where we are and another reason for recession talk. Consider the following reports from little known sections of large firms and agencies.

Global Debt Data Sources: They are following the results of the ending worldwide moratoriums on housing. Early signs say a crisis is brewing.

Mastercard Economics Institute: They cover 165 nations. They report that many old, previous businesses to the virus are failing. In 2020, 60% were behind on bills. Their bottom lines improved in 2021, but they are threading on thin ice.

World Bank - Pulse Enterprise Survey: They cover 24 low-income nations. They show 40% of businesses are behind on payments. 

Lenders: They are feeling the pain from the moratoriums. They do not receive mortgage payments and landlord loans.This is part of the interchangeability and velocity of money. This is duress in the system except their influence with government (read taxpayer bailout) and or, central banks watching their back (read Fed) always helps.

Russia's War: Their action in Ukraine only adds various inflationary aspects like shortage of oil, food and worldwide currency exchange. The latest is Russia demanding oil payment in rubles.

World Bank: They reported that under-developed nations need to show more transparency in how they are solving their economic problems. Everyne needs to find ways to keep credit available to households and businesses. 

All of the above are insights to consumers worldwide. They are stretched to their economic limit. Houston, we have a problem.   Take care - Peace.

What's Next?

The title is a little too open ended. I should add clarity. I will talk about two things: the market and what I see as the next big public issue. That is not to say that the present public concerns have been addressd. They have not. Homelessness is the biggest growth issue as well as inflation. The US is getting hit with a double whammy. We oursourced our middle class jobs, but the supply chain to those products got an unexpected bump in the road with COVID. 

We are in for difficult times. Affordable housing gets constructed at a 100,000 units per year. At the moment we have more than one million new low-wage immigrants at the border not to mention the countless more Americans living in cars, vans and vacant lots. It is worth repeating. We are in for difficult times.

Market

It is dropping on high volume. The bounces are at lower highs and the lows at at new levels. Of course, we are in "window dressing." This is the first few days of the month when funds put money into the market. It is the force that always seems to drive the market higher. There will be an unwritten market test. If the market cannot break up over its range, the previous trend, falling, will resume. At present, here at Evolution, we see the Dow testing the 29,200 level. The transports are in sync. They could drop to 13,000 and NASDAQ is leading the down charge. It could hit the 11,000 range. Within the NASDAQ, the three Qs could broach 260. It was as of last Friday, 315. When markets crater like this, it is like swimming naked. The moving tide reveals all things. Sebatian will point out two firms that had big run-ups. People buy into these stocks because they think that someone knows something. This is a flaw in charting. It is why I always like to know the fundamentals as a sidekick to charting.

Teladoc Health (TDOC). This company enjoyed a huge run-up due to COVID. It really has no earnings. It reached $308 in February of 2021 and last Friday, closed at $33 and change.

Carvana Co. (CVNA). This is another firm with little in the bank. Last August it touched $376 per share. As of last Friday, you could get the same stock for $57. Both of these forms demonstrated destruction of capital. Always do your homework. There is no free lunch.

Fed Today...

they will try to control the narrative in our economy and mostly, the market as well as you and I. Whatever BS they throw out after their action will have a lot to do with the near-term market price action.

King $Dollar

You should always watch the price action of the US Dollar. It has been rising as a safe heaven due to world geo-concerns. It pierced $103 last Friday. This price action came from the $95 level. It went straight up. However, long-term charts show resistence at $104. If the dollar breaks higher than that, $120 is game. This will not be good news for the precious metals and commodities. On the contrary view, the dollar could be forming a triple top in charting. This is bearish. It fell back on Friday to $102. Watch King Dollar!

Plastics

This will be the next big public concern. It has been a long time since the "Graduate." He is old and is getting health concerns. When he heard the suggestion of "plastics" no one knew this issue. It is tied to health. Just like the health issue of cigarettes and climate change with fossel fuel, plastics are a problem. They have ingredients that cause cancer. They are in every plastic bottle like water. Talk about irony? We have to have water to live, but drinking it from plastic could cause cancer. Already, the American Chemistry Council is putting out lies to challenge the science and to protect their idustry. Instead of seeking to develop a safe container while they are making huge profits, these no vision CEOs, are playing the same old, same old game. They throw out more garbage to confuse the public. Just like the previous idiot at Exxon, Lee Raymond. He had the chance to develop solar and wind energy at its invent. Instead, he played the confuse the public game. He is a disgrace in our eyes. By the way, the garbage lies by plastic firms are filling up our dump sites and clog our waterways and hurt our oceans. That should tell everyone something.  Pray for peace in Ukraine and Peace to all.

Odds and Ends: April 2022

Earth Day may be on the 22cd of April, but the year ending with 22 is not showing the earth any love. The global community faces a rise in living costs, possible famine in the Middle East, worldwide drought that results in huge wildfires, virus in the air along with other pollutants and war. With the eternal hope of spring, we pray that this will pass. In the meantime, we have to adjust and do the best that we can. 

Market...

had looked at the situation, heard the threats from the Fed and decided to take profits. For many others, cut their losses as signs appear that this downtrend has strength. Not to give self-praise, but here at Evolution, we called this correction. 

Conviction...

comes from many sectors. Sebastian will point out a few past market leaders and their current standing. One leader was NFLX. Netflix double gapped lower. When stocks gap, they trend to come in threes. This is very negative in charting called, "Three Black Crows." NFLX dropped on high volume. It was $700 last November. It closed on Friday at $215. Ouch! By the way, this is its 2019 price.

Facebook, now called Meta Platforms was $350 in November. It closed Friday at $184. It too has a serious, large gap. It too is priced at its 2019 level.

XBI or the biotech sector was $174 in February 2021. It closed Friday at $79 on big, down volume. 

XLK or the technology sector was $176 just four months ago. It closed Friday at $143. It is testing a lower low at $140.

Oil...

is always the most important sector. You always have to watch the price action of the commodity. US crude was $130 in March. It closed Friday at $102. Brent was $139 in March. It closed on Friday at $105. Price action is suggesting, (we are not sure) that the $130 could be a top? If that is true, oil could retrace all the way back to $85? 

What we see

The market is extremely oversold. This could result in a relief rally. You might want to risk a short term trade, but don't be fooled. The 4th of May and the Federal Reserve will be market moving news. The so-called half-point rate increase is a ploy by the Fed. If they were serious about fighting inflation, a full point would happen. They are liars and manipulators. This is another reason why we say, End the Fed!

Strange Occurrence

Everyone knows about the various consumer products that cost more due to inflation. Food is necessary every day. There have been reports of many fires recently to food warehouses and producers. This is conspiracy stuff to some. However, this is a fact. Massive fires in food plants have happened repeatedly and across the nation. I do have one fear. Could this be the result of Russian hackers who found a way to overload elecric lines? The causes have not been determined. In a related aspect, FBI reports that farmers are also being attacked with ransomware. Back to the fires - these fires are spread across a wide range. There was one in Oregon. There was one in New Hampshire. There was one in California and another in Indiana. One of the largest food banks in Texas went up in flames. No answers to the cause in any of the locations. Sadly, as I am writing this piece, another fire broke out at a General Milla plant in Iowa. We conclude that food inflation will continue to rise, especially with the loss of Ukrainian supply. Let's pray that this will pass. Peace

 

Final Leg...

...in the inflation race has my third runner, oil handing the baton to our closer. It is "core" inflation. This is the Federal Reserve's bureaucrat. He has a huge lead over the trailing "2%" contestant. We got our runner from the inflation portal. His length of eligibility will be determined at a later date. We did a little digging into our closer.

Basket of Goods...

is the school of economics where he studied. His grades for accreditation do seem questionable, however no one challeges this point. His training comes from a mission statement that says, "Core inflation is the change in the costs of goods and services. It does not include food and energy sectors. It is calculated by using the consumer price index (CPI). 

This CPI is constantly being changed. Manipulation is a better word. The latest change is to drop the cost of a new motorcycle into the formula. In the past, car insurance was dropped along with bus and train fares. The calculations favor national average pricing to reach a conclusion. They do their research on monthly and quarterly time schedules.

What is included?

They mention food, but add a disclaimer. They use food "related" items. They find average pricing for clothing, transportation, housing, electronics, apparels, education, medicine, et al. Then, they assign a percentage for each to reach their estimate of inflation. They also only use the percentage change on a year over year (yoy) data. They can change the end result by substituting a quarterly report over a monthly or the other way around. They are bureaucrats. Their job is to make government look good or they may end up as a statistic on the BLSs for unemployment. They are not alone. They get the media and "hired" economists to back their conclusions. In addition, the missing two elephants from the list, food and energy. This is political corruption by both political parties. Back to the race...

...Our core inflation runner is crusing to the finish line. Our "timer" of the race gives us the results. Writers are already addressing their concerns. People, like John Williams of Shadow Stats are pushed aside. We get the same old, same old story lines from the same shill writers, "Inflation is peaking! The 2% made up ground in the final leg of the race. We should discount the results of food and energy. Housing will stabilize with higher rates. Core inflation was not really tested. We expect a closer race in the future." 

Here are our results. First leg, housing showed record pricing for both new and existing homes. Rents are up 19% on a yoy basis. Our second runner, food is up across the board. Pricing for diary is up. Beef is up. Vegetables are up. Frozen foods cost more due to the rise in utility rates. In addition, transportation costs are up which is a cost that eventually gets into play. The supply chain problems as well as packaging, metal (can) costs and carboard all will make food more costly in the future. When the Fed eventually lies that inflation has returned to the 2% target, they will not mention that the new higher pricing remains. The producers of food will either raise their pricing as we mentioned in the past or go back to the old playbook: smaller amounts in package with the old price. Our fastest runner, oil needs no description other than the false one use by the Fed, government and "hired" economists. They claim that oil "only" rose 48% yoy. We use our math that says 80% is the real price increase. Finally, we come to our portal runner. Core inflation is listed at 8.5%. We will let them use their stats. Our time for the race, although not a record, is a close second. Shelter/housing is up double digits. Food is up double digits. Energy is off the charts. It is racing toward 100% increase. Core inflation could even hit double digits with COVID resurfacing. It is why we always say, "Save for a rainy day." We remind you that the road to a better democracy begins by Ending the Fed!  Peace.

 

3rd. Leg

 In running track relays, you put your second-best runner first and your fastest last. In my inflation race, it does not really matter. If I were to second guess myself with today's climate, shelter/housing would be first and oil, last. However, I am aiming to show you my point when I finish this segment next week. Today, we look at oil, the most important commodity. We begin with you...

Everyman

If you live north of the Mason-Dixon line, you experience winter. If you live south of the boundary, you want AC come summer. So, those of us in the northern half of the nation, might put on the heat to take the night chill off the house. This is oil or it is needed to make the energy that warms your home. If you drive to work, more oil. If you take a bus or subway/train, oil is needed to provide the energy for the machinery. It does not matter your employment, energy is needed. The trip home is a replay of the morning commute. When you realize the truth about the need for oil, you can begin to see why I say, End the Fed!

They have the nerve to get away from their inflation matrix with no oil.

In the South, your energy bill is low during winter. However, come summer, you feel the pain of the different season. In any event, we see that all of us need oil and its ability to help create other energy like gas and electricity. In the US, we use around 20 million barrels of oil every day. Today's energy prices reflect the lack of preparation in developing energy alternatives. We had plenty of time to develop other forms of energy. This gives insight to our lack of leadership and their vision for our society. In Europe, Germany is crucial. They have implemented alternative energy. To their credit, they receive 20% from this category. However, they and other "cold nations" could have worked with the US and Norway/Sweden to develop LNG for winter heat. They need to sacrifice some cold for the greater good. They need to help put Russia in their place. Russia should seek to make their domestic economy better with all the natural resources that they have. This shows the lack of goodwill among the Communist with their doctrine that every man be treated equally: all talk, no action.

Peace Talks...

are BS! The communist has demonstrated over the years that they only do what is in their benefit. Quick reminder: Korean conflict had talks for three years. Viet Nam had talks for over four years. Putin declared that he would not invade Ukraine. Talk is cheap! We need action! The price of oil jumped due to the possibility of actions by Russia. They supply 7 million barrels a day. We need to make them realize that maybe we can get along fine without their oil. Ultimately, electric cars will dawn the light on them. If there are no buyers for your product, you are out of business. Don't count on peace talks to get the price of oil to decline. Back to reality. Back to the price of oil...

Brent or US Crude?

Brent is heavy oil and US crude is light. Light is better, but heavy has a more plentiful supply. Many users have switched their mechanics to use the heavy stuff. In any case, they both follow the same price pattern with Brent getting a little higher premium. The recent price action on Brent had it touch $139, then it fell to $95. It bounced again to $119, and it is now in retracement. It settled at $101 on Friday.

US crude follows the same price movement. It closed at $98 on Friday. This type of price action is exactly what will continue to happen. Oil will jump or decline on news, data and expectations. However, you and I feel only one thing - a higher price. Oil has increased in price by 80% from last year. This equates to everyman having to cover the cost and still make ends meet. Some of us have already dropped the baton. This race is over like your football team being down by 3 touchdowns at the end of the third quarter. Some of us will need a second job and or, cut back on things like TV streaming. We need to put some money aside for that electric vehicle. It is closer than you think.    Peace.