Our Reasons for the Downturn

 A robber puts a gun to Jack Benny. He says, "Your money or your life?" There is an awkward moment of silence. The thief yells, "Did you hear me! Your money or your life?" Jack finally says, "I'm thinking."

The phony Fed chairman has the same dilemna with our economy. He will not take as long as Jack to decide with the question, the economy or your job? He will answer after he has rehearsed a thousand times to show a deep consideration. We, at Evolution know the answer, his job.

Nevertheless, we are at an inflection point. The January Barometer is an old indicator that fundamental funds use to determine their bets. If the market is down for the month, the saying is that this will hold true for the year. The opposite says an up month and that leads to an up year. We do not put faith in this voodoo. We, at Evolution use charting and fundamentals to make our decision. 

There is another indicator that says the third year in a presidents term is positive. This is mostly true as an administration uses its position to push stimulus. However, during inflation periods, this president cycle is not positive.

Over the course of time, Dear Reader you should know that our first indicator is labor and their wages. This has been in decline since the 1970s. New technology and improved techniques have seen the gains by this point go straight to shareholders. The weak CEOs forget that it is their employees who go to work to perform the tasks week after week, year after year, but they never receive any rewards. If there is one positive from COVID, it is this. Workers had a chance to find a new direction with the shortage of labor. The result is better wages. Even the low-paying service and retail had gains. However, this aspect soon lost its value due to inflation. The question is who is responsible for it? We agree with Milton Friedman, money printing. Who prints the money? The Federal Reserve. 

Our next indicator looks at fundamentals. At the moment, the government is controling the narrative. Last weeks jobs report has Biden claiming strong job growth with a new lower unemployment rate of 3.5%. This is decieving and a lie. If you take the big picture with labor participation, it reveals that too many people are not counted by their system. The numbers run in the millions! In addition, the one field that improved labor and wages, technology is laying off workers. 

The leader, Amazon is dropping 18,000. Salesforce is cutting 10% of its workers. Facebook is showing the curb to 11,000. Twitter cut half of its labor force. Overall, teck is losing 150,000 jobs. Even the financials like Goldman is giving pink slips to 4,000. This is the writing on the subway walls. 

Even though the market showed a strong rally last Friday, the highest that it will climb is to the bottom of the last retracement. Our charting with Fibonacci says that the Dow will find strong resistance at 35,000 and NASDAQ at 11,000. Are we right? Wrong? Whatever the outcome, at least we are not vague. We don't hedge or beat around the bush. If you at least agree on that point, please tell two people so that our message gets out and our viewership grows. Thank you. 

King $Dollar...

...is always central to the market. We see it bouncing up to 107. If it does, the 200-day moving average will experience a "death cross." The dollar could finally give up all its gains. This does not happen overnight, but it forecasts the future. If this happens, the commodities will take off. If they take off, inflation will not go anywhere. We are truly in an inflection point. 

Some analysts now think that the market won't pivot until the Fed begins cutting rates again. It would be a clear sign that the economy and his job is in trouble. If, and when they do, the Federal Reserve will create this whole mess again. However, we feel that one of these days, this technique won't work. It will be a day of reckoning. It is just another reason why we say, "End the Fed!"

2023: Near-Term Forecast

 Some wisdom for the new year and all holiday seasons...

- I am not alone at all, I thought. I was never alone at all. And that, of course, is the message of Christmas. We are never alone. Not when the night is darkest, the wind coldest, the world seemingly most indifferent. For this is still the time God chooses.

- Taylor Caldwell

A hundred years ago, two things happened that I love. Yankee Stadium opened and my mother was born. It gives me a positive feeling for the number 23. It didn't hurt Michael Jordan either. However, the number does not mean anything for the new year. The two biggest problems could get worse. We can blame the Federal Reserve for the one that directly effects all of us, Inflation. The other is due to the ego, paranoid leader of Russia with his Ukraine War. 

These two aspects will be the cloud that makes the night darkest and the wind coldest. We told you in past pieces that Milton Friedman hit it on the nose, "Inflation is always and everywhere a monetary phenomenon." It is no wonder that he is never mentioned by economist. He spoke the truth! We, at Evolution can translate him for you in laymen terms, "It's the printing press, stupid!"

The Fed multiplied our currency by four times. It takes time for the effects to effect our lives. It is here, now. The dollar has stayed high due to the hike in interest rates. This has caused a chain reaction around the world because a higher dollar causes inflation in other currencies. They too, have raised their rates, but they did not want to pursue this action. The US is not liked for this response and undercurrents are in progress to replace the world's reserve currency away from King Dollar. If that happens, life in America will get increasingly harder. Homelessness, crime, civil unrest and unemployment will become rampant. It would not be pretty and it could last for a long time. The world will miss using the US as a dumping ground to preserve their economies. The Founders of our nation understood the dangers of fiat. We can only hope that some form of a precious metal is reintroduced to our currency. That will provide stable prices and stop inflation. We need other things too like respect for workers, curtailing outsourcing and creating better paying jobs to stabilize society with a stronger middle-class. The poitive effects by achieving those goals could fill a book. Sadly, not now, not today.

Market...

is showing a clear message, the elevator is going down. For the year, it touched bear market levels, but lifted just outside the zone. We, at Evolution see the market testing the March lows of 2020 which was the middle of the pandemic. If the elevator goes straight down, this says the market could bottom. If it acts like it has been acting with some ups and downs, we will be in dangerous waters. The market will react to whatever the Fed does with rate hikes. Keep in mind that $1.7 trillion in bonds are due in 2023. Those buyers will face much higher levels of interest to survive as a going concern. We have serious doubts. We see delinquencies which leads to bankruptcies which leads to unemployment. All things are connected is the theme of our unpublished work. It will be apparant in 2023.    

Oil and Gold

Oil is always front and center to life. The Fed may not count it in inflation, but we know better and we do. Prices have declined due to various factors. China shut down. Any upsurge will cause prices to rise. Europe needs to establish an energy policy for its people and future. However, drilling and supply take time. Many other nations had lower demand and the pandemic is one of the reasons. Demand will rise. At the moment, supply is stronger than demand. This equation will change. This says inflation is not going away. 

We follow the founding fathers. We believe in a strong currency. Looking at gold, the charts show that it bottomed in 2015. We had a rise to $2089 in 2020. Then, it retraced to $1600 level. Gold attacked the high, but it could not pierce it. Not good. Gold did a retest of the $1600 level. It should eventually rise to $2500-2650 level. Have some patience! 

Stats and Numbers

The government is full of them. Keep in mind that the political party in power chooses people that can play a spin on stats and numbers. Milton Friedman is a perfect example. Speak the truth and doom your career. The opposite is the phony Alan Greenspan. When he was young, he wrote a thesis defending gold. When made the Fed chairman, he did everything to debase gold. This is life in America. Meanwhile, the present head of the Fed says the economy is strong with stats and numbers as well as employment. We already stressed to you, Dear Reader, the labor participation level is below the1980s. We suffer manipulation. The market is under the same influence, but like we stated in the past, if inflation is over economic growth that is stagflation and that means you are in recession.

You can site all the stats and numbers you want, but Tesla is down 65% for 2022. We say, it has a long way to drop further when you consider this aspect. Tesla's market cap is greater than GM, Ford, Toyota and the old Dodge combined! They are not alone. Shopify and Palantir Teck come to mind. The former (SHOP) was $180 last year and now, $34 as of last Friday. The firm says it makes over $1 billion in revenues, but they do not show a profit. This tells us that they do not know what they are doing. The latter (PLTR) was $45 last year and last week it fell to $6.42. Ouch! That should be your warning for 2023...Peace.

A Gift for a Need

- A mentor is not someone who walks ahead of you to show you how they did it. A mentor walks alongside you to show you what you can do...

...with those words of wisdom in the mist of the holiday season, not everyone can feel its warmth, both literally and figuratively. Dear Reader, I hope all is well with you and your family and friends. Sadly, I realize that this wish is not true. At this time, consider the following texts. If you know someone who may be hurting, please, pass it to them.

Find Help in the Bible

Anger: Ephesians 4:31-32 * James: 1:19-20 * Proverbs: 15:1

Anxiety: Peter: 5:7 * Matthew: 11: 28-30 * Proverbs: 12:25

Crisis: Jeremiah 29: 11-13 * Lamentations 3:55-58 * Proverbs: 3:5-6

Depression: Nehemiah: 8:10 * Hosea: 6:1 * Psalm: 5-6

Discouragement: Romans: 12: 11-12 * John: 14:27 * Deuteronomy: 31:8

Fear: Isaiah: 41:13 * Joshua: 1:9 * Psalm: 461-3

Grief: 1 Thessalonians: 4:13-18 * John: 11:25-27 * Matthew: 5:4

Illness: Acts:3:16 * James: 5:16 * Jeremiah: 17:14

Loneliness: 2 Corinthians: 6:18 * Deuteronomy: 31:6 * Isaiah: 43:2

Temptation: Ephesians: 5:8-11 * Hebrews: 4:14-16 * James: 1:12-15

We, at Evolution realize that not all have a bible or believe, but you can still add your voice for our nation. Offer this:

- If then my people, upon whom my name has been pronounced, humble themselves and pray, and seek my face and turn from their evil ways, I will hear them from heaven and pardon their sins and heal their land. -

- 2 Chronicles 7:14

Sebastian offers two poems. He does not have permission, but he thinks the authors won't mind. The first is close to JFL as his unpublished work touches the subject.

                                                   Water by Sister Jean Houlihan, MM -

Water cool, clear. Water in trickling streams, in narrow rivers, in majestic oceans. Water fresh, salty the same water, different water. Water drawn from the well running in the kitchen the same water, different water to drink. Water in cyclone weather, in floods to fear. Water cleaning wounds quenching thirst, to heal the same water, different water. Water poured in Jesus' name is life-giving is in-spiriting is the same is different.

The next is rather long. I cut it, but you still receive the message.

                                         Am I My Mother's Keeper? by Sister Jean Fallon, MM -

The earth is bleeding! Our earth bleeds. The eagles scream and the ocean rushes to stop the wound. With 'dozers and drills we tear open our Mother and rip out Her womb that gave us our life...Who will scream with the eagles sharing the pain of our Mother Earth in bringing the birth a new way of living?

Yes who   if not we, if not now then who will weep for us?

Peace - from all of us at Evolution.

                                        

Deflation, Inflation and Stagflation

The title has a lot of  "flationary" ending words. The first two pertain to prices. The last is the only one that reflects an economy. The terms get kicked around lately in the news. We like to express our opinion on our economy and a "beware" forecast on two leaders in teck.

Deflation...

is defined to mean shrinking prices. This could be do to oversupply, expectation of sales or some combination. It also implies the increase value in your currency to purchase items.

Inflation...

is the opposite of deflation. It reflects increases in prices. This could be do to limited supply, expectation of sales or some combination. It also implies that your currency has lost purchasing power. There should be no debate that our economy is in an inflationary period.

Stagflation...

is the most dangerous reflection of an economy. It means inflation is persistent. The next aspect is not overly important to the condition of stagflation. It says unemployment is high. Dear Reader, if one looks at the labor participation rate, our unemployment picture changes. The government reports a very low unemployment rate of 3.7%. If you look at the labor participation rate and combine the two, the result pushes the unemploymentrate to around 7%. Not good, but not terrible. Continuing...The main cause of inflation that could lead to stagflation is a government through its central bank expanding the money supply. We told you last week that the Fed exploded the money supply by 4Xs. They caused this inflation to happen. Continuing...The next point in stagflation refers to economic growth. However, this needs to be looked at with a clearer glass. If a nations economic growth is lower than its inflationary rate, this nation is under stagflation. Folks, no matter what the Federal Reserve chairman says, our economy is in stagflation. Our economic growth is well below our inflationary rate. If your economy is in staglation, you are in a recession. We are in Recession! 

One other sign...

...is the market action. Even though the dollar has declined, the market has not bounced. This reflects market sentiment. It has shifted to the downside. Santa can't deliver to the Ukraine or anywhere else.

Two Tecks Wrecking...

in share price. One reflects the economy and its outlook. The other is due to manipulation that we feel could lead to failure and economic contagion.

Apple: has fallen in share price from $181 last December to $134 last Friday. The downside volume is strong. The share price has returned to its last breakout level. This suggests that Apple could fall all the way back to $115. Keep in mind, it is already below its 50-day moving average and $111 is the 200-day moving average. Pay attention to volume. The present trend is not promising. Apple could fall all the way to $81 or $100 below last years close.

Tesla: Musk has big problems. He overpaid for Twitter. The media firm takes in $1 billion in revenues, but loses $1.5 billion. This is a big bleed. Musk is forcing Tesla to make loans for Twitter. He is also selling his shares in Tesla. He sold over $3 billion. He is using that money to keep Twitter afloat. While he damages Tesla, the electric car company is facing stronger and more competition. The falling share price has cost investors in Tesla over $132 billion in value. Its price is below the 50-day and 200-day moving average. Keep in mind its PE/ratio is over 46. Most car firms have much lower levels. Ford is 5 and Toyota is 8. Combining everything, Tesla could fall all the way to $91.  Ouch!

Enjoy the holidays. Keep a smile, try to buy American and use a cashier. It is faster than self checkout!  It keeps a job for your neighbor.  Peace.

Decision Time

Later today, the Federal Reserve will announce their final decision for 2022 on rates hikes to fight inflation that they caused. We will get beck to that after this. If the move is only a quarter point, then our call at the beginning of the year will be valid. We stated that the Fed will pivot. We called for only a half point hike in their last meeting and only a quarter point in this one. So, if they raise by only a quarter point, our early call would only be a quarter point off the actual number. If they raise by a half or more, then we are off the mark and wrong. Of course, the recent inflation data will influence their decision. No matter what they say and "Yellen" Yellen has declared that by the end of 2023, inflation will be subdued. Book it! We do not agree with her. She is now nothing more than a shill. We see civil employees like teachers, police and firemen, all seeking higher wages and this will be a chain to other working groups. Book that!

What we are not wrong on...

...is blaming the corrupt and not elected agency called the Federal Reserve as the primary cause for inflation, the destruction of the dollar and the lowering of our standard of living. It is easy to understand why Congress and the President signed them into existence. The president can finance projects to get re-elected. Congress is nothing more than a collection of egos with a law degree. They have little insight. If anything goes wrong with the economy, they can deflect any blame by casting it toward the Federal Reserve. It is not our fault! It is the Fed! Then, they go into their spiel, "Elect me for jobs and a better economy." They never get into details on how they would fulfill their slogan. This is one of the reasons why America needs a new third party that stands up for American workers. With that said...

Did You Know...

...that in March of 2020 the Federal Reserve exploded our dollar with their printing press. Yes, we know the Treasury is the printer, but the Fed buys everything that they print. The treasury knows and operates with this understanding. It is no wonder that a few years back the Federal Reserve announced that they will no longer publish their money supply. Nevertheless, we do get yearly estimates. The Fed has been steadily increasing dollars since the 1950s. In any economic crisis, they add to the supply. However, in 2007, it jumped. Then, in March 2020 it quadrupled! Did the economy grow by four times? Did your paycheck climb by a multiple of four? And our debt is off the charts. It grows by 7% yearly. Again, we ask, did your personal wealth grow by that percentage? 

No! Of course, not! However, we have more hack scams, more street crime and more people homeless. The only industry that is growing is food banks. Can you begin to see the big picture. When we end this piece, will you join us in our meme song? Continuing...

It is so bad that the Fed does not know how many dollars are outside our border. They have lost control of the currency. If their institution was audited, they would be declared bankrupt. Their excessive control over our currency and money supply is central to the founders thinking in framing our nation. They new that a hard currency cannot be manipulated. They chose precious metals as our root to develop our nation. It is in the constitution. The Fed was formed by politicians under the influence of money from big banks. Their money is fiat. Who would you rather trust?

Milton Friedman stated years ago, "Any increase in the money supply will show up in inflation." It is no wonder that they hold this insightful economist in low esteem. We say that he is correct. It also lowers the value of each dollar and thus, our dollar buys less and our standard of living decreases. When you add each action by the Federal Reserve, you can see the results in your own life and on the street. It is why we say and ask you to join us in chorus, End the Fed!

Divergence

There are a few things happening that will keep the market from making a decisive move. The first, is King Dollar. When it rises, the market sinks. When it retraces, the market gets air to rise. Of course, the shadow behind the dollar's direction and the market's, will be the Fed. 

Our Call...

for the Federal Reserve to pivot was off with their last rate hike. However, we stated that if the Fed pivots in their last meeting for the year, well, then, we are not. Time will tell all. With that said, we have been collecting data and info on the present state of the economy. 

Job Cuts...

will begin to effect the psyche of the market. At the moment, the market sees the Fed slowing its rate hikes. This is the force behind the market movement. However, last week, the Bank of America released a report stating that they see the loss of 175,000 jobs per month in the first quarter of 2023. Lately, we have seen teck firms announce layoffs. Layoffs rose in November from October by 129%. If you research the yoy for November, it shows a 417% rise in job cuts. And yet, the government says unemployment remained at 3.7%. Going back to the B of A report, even if this does not happen as the report believes, there are other fear factors.

Inverted Yields...

in bonds is always something to pay attention too. At the moment, 80% of short-term bonds give a higher yield than long-term notes. This is a very dark cloud. 

Commodities...

got a big push last week, but the individual mining stocks did not move with the higher prices. This is disharmony. Digging deeper, take a look at Exxon-Mobil. Their project in Mozambique began producing LNG. There is a stong market for this gas, but the oil giant did not climb. This adds to the picture of divergence. We mentioned last week that Chevron received a US license to pump oil in Venezuela. The stock did nothing. This adds conviction to reveal the market has no conviction in direction. The last aspect that we well look at is the..

Consumer

A government reports reveals that their previous report on US savings pattern was wrong. It is not high, but at a 17-year low. It went from a high at $4.85 trillion to fall to $626 billion. Ouch!

If you are doing Christmas shopping, try to buy American.   Peace. 

Odds and Ends: November 2022

Since the year is almost over, we thought that we look back to our first Odds and Ends: January 2022. We stated that it is the Year of the Tiger and it is hungry as well as the bears who were in hibernation. We mentioned the danger of the Russian buildup along the Ukrainian border. We gave a stat on hackers. As it turns out, another year passes with no one addressing the problem. This should be our foreign policy and not sending troops to police every world problem. Anyway, the year is ending with...

Job Cuts

They keep coming and the market does not understand the ramifications. HP announced 6,000 pink slips that will be given over the next 36-months. Consider these other teck firms: META=11,000, Amazon=10,000, and 700 other teck firms throwing in the towel. Keep in mind that teck was the force behind the bull market and now, they scream bear in the street!

It is not just teck. Carvana, Cisco, Lyft and Stripe are adding to unemployment. You can see that some big money sees the writing on the subway walls. Checkout Tesla. It was $417 last November. Last Friday, it closed up at just $182. Dear Reader, we see $125 as a real possibility. We think Elon Musk has vision, but we do not like him as a person. He is definitely anti-worker just like Jeff Bezos who said that he will probably leave billions to do good for the climate, but he does not give a good economic climate to his help. Take a look at oil. It has been in a long downtrend. There is a possibility of oil falling to $60-bucks. If it does, it will be a buying opportunity to purchase a strong oil company. Oil is not going away anytime soon. PS: Chevron just received a US license to pump oil in Venezuela, again.

Once last thought on the present market outlook. There are lower gaps in the Dow, S&P and Qs. The trend is to close them. The dollar is boucing. This points to a pullback. Then, the calender suggest the Christmas rally. However, January is a cold, wintery month. We expect the rally will be short lived. January is also the yearly barometer. We are not aware of the title to 2023, but it looks tough for the market.

Thanksgiving?

We hope yours went well, but the idiocy of constant shootings forces us to address this question. Your ego was so hurt that you decide to KILL! Of course, this will most likely be your last act on earth. You will die in the process. However, the next moment you will face God. Think about that?!

Meanwhile...

China keeps pushing the envelop to gain financial influence. Last month, they made their first cross-border transaction in digital currency. In 2020, they began the process by having its central bank use digital money domestically in a region that has 350-million people. The idiots in Europe and Davos want to maintain good relations with Red China. Listen up you elite assholes, China controls exports and they are number one in manufacturing as well as a dozen other categories. Once they grab finances, only satellite communication will be the last frontier for them to reveal their true colors, world domination. We repeat our first sentence in our first Odds and Ends 2022, this is the Year of theTiger.

Try to enjoy the holidays. Try to buy American and do some good in His world.  Peace.