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 

More Than Retaliation

- Think before you speak

- Fran Lebowitz or maybe Catherine Molloy 

Although the words of wisdom could be attributed to either does not make the thought any less potent. This piece will offer a few gems. The only question is there more to the words of the moment?

Archive

After the financial crisis of 2008, central banks were basically in collusion. They were seeking more money to continue their game. There were three choices: IMF, World Bank and China. The world Bank offered this report around 2011. It expects the US dollar to lose its dominance by 2025. The report went on to say that a larger role for the renminbi (China) would help resolve the disparity between China's great economic strength on the global stage and its heavy reliance on foreign currencies.

China also gets support from the leader of the IMF. Christine Lagarde in 2017 said, "If we have this conservation in 10 years' time...we might not be sitting in Washington, DC. We'll do it in our Beijing head office."

The truth behind the lies of China came out in 2011 from their past president, Hu Juntao who said, "The dollar is a product of the past."

The dollar and its top spot is the biggest question and worry from now on...

So much for our allies. Then, we get president Trump announcing tariffs to China, Mexico and Canada only to change his mind a few days later. Why, we ask?

Maybe he is negotiating something? Maybe he has a bad habit of speaking without thinking? What we do see is his new idea to end government waste and limit our deficits with Musk (as head of DOGE) to which we feel is a great idea, but it is getting backlash. Trump is right to stop all foreign aid to review the process, but the Democrats are only offering examples that make this decision look bad. Then, we see this from Time Magazine. They put Elon Musk on the cover. He is sitting behind a desk like the president. This is blantantly seeking to upset Trump's ego. They appeal to the ego of Musk, but they are hoping to put a wedge between him and the president. Again, why, we ask? They do not want the positive results of ending government waste and debt. This is a status quo front and center.

Anyway, Trump will amend his tariff thinking this week. He did on Monday. We believe his tariffs will be a tit-fot-tat. We do not like tokenism. We say, tax the hell out of all nations because they all use protectionism in one form or another. We also noticed that China responded poorly to the president of Panama. This leader did not accept their renewal contract to operate some ports in the canal. We hope Trump gets a deal that gets China out of the canal.   

Market

It is still in an uptrend, but we worry when we read reports like this: Pension funds have their highest allotment in the marker, ever. This is also from the archive. The last time that pension funds had their highest level of investment was 1974. The market soon crashed after that. The market considers us and pension funds dumb money. Pay attention to price and volume, especially follow the charts on semi's and Walmart...  Peace.

 

Eerie Quiet

- We don't know what will happen with tariffs, with immigration, with fiscal policy, and with                     regulation policy.

- Federal Reserve Chair, Jerome Powell (Last week).

What?

Don't fret! This is not a mea culpa. If it were, Powell would admit the Fed was established for the rich - to protect against foolish, risky ventures by using taxpayer money as a back-up (privatize the profits, socialize the losses). However, with so much happening last week and so much passed as "a matter of fact" that something began turning in our stomachs. 

We had President Trump signing executive orders, one after another. We had the yearly meeting in Davos and the first meeting of the Federal Reserve for 2025. We got news, but no ramifications from acts. Actions have consequences. The stock market quivered, but ended up for the month to which is usually a good indicator for the year. Nevertheless, there were too many actions. This is the root of our worry.

Of course, we expect a tit-for-tat in tariffs. This is why we advocate not tokenism of 10% to 25%, but real, harsh taxes like 100% or MORE. We force our manufacturers back home. The politics of small actions only hurt ordinary Americans with higher inflation. In either case, an economic slowdown will happen. Our method will have the results intended, but pussy-footing around will cause serious economic repercussions. The yearly GDP came in at 2.8% and the yearly inflation rate came in at 2.9%. We still are in a stealth recession. The people are suffering and Wall St does not represent our economic struggles. Even the ground hog sensed the poor vibes. He decided to go back to sleep for another six weeks and then, maybe things will appear better. The only problem with that is the date. It will be around the Ides of March. If you combine that with the year of the snake, something will hit the fan?

 A quick recap of the first year in office...

Previously

New administrations usually get a honeymoon period before a shoe drops. This use to be the thinking. One year into Bush's first term, nothing until 9/11. The first shoe led to war that lasted over twenty years. His last two years saw the second shoe drop. The financial crisis. We all suffered except the rich. They received tax cuts worth millions and our deficit hit $9 trillion. President Obama was greeted by the recession. He listened and followed all the greedy, idiots that caused the problem. He bailed out the rich and left the rest of us to our own devices. No honeymoon. President Trump's first term had a short honeymoon and then, COVID-19. The rich got richer and more of us got poorer. In the decade, our deficit added another $10 trillion. It was $19 trillion and growing...

President Biden wanted a legacy of doing for everyone. His chip and infrastructure acts were home runs. Everything else was not. His spending was reckless. During his term, we should all realize that government lies and that the Federal Reserve do not know what they are doing except burying all of us in debt. The cycle says that $40 trillion is coming even before the decade ends. This is where we are except no one mentions how many enemies of the US and our democratic experiment are out there.

List

The real dangers start at home. The rich have lobbyists in the ear of ALL politicians. If you look at the above patterns in government, only the rich benefitted with tax cuts and the lie of the Federal Reserve saying that they pump money as stimulus into the economoy. They pump it into finance which is the pocket for the wealthy. This needs to change! Change the tax structure and loopholes to put a 50% tax rate on the wealthy. This is needed to save the dollar or we become a third world nation which the anti-democracy people aspire.

European banks generally follow the Fed.They say this is cooperation. We use a different word, collusion. With our no rate cut, we expect the ECB to do the same. They get a cheaper euro that will help with their exports unless new tariffs give cause for concern and a change in policy. China has put them on notice with its subsidized EVs that threaten the economies of the EU. Then, the old problems of Europe, the aristicracy. The elites use Davos. They use their power and influence to push ideas that cause many problems in American society. Many large firms had ties to Nazi Germany and they resent the US for WWII. Immigration is causing budget and economic problems. The war in Ukraine does not help. Overall, things do not look good for the EU.

South America begins in Mexico due to culture, religion and language. Mexico sends 80% of its exports to the US. Tariffs will hurt not only Mexico, but US citizens with inflation. China is also seeking to use the new NAFTA to push their EVs into the US to which will further hurt our economy. We say end the lie of free trade. End NAFTA! Go back to taxing some things with the idea that balances trade with our two border nations.  

Brazil is playing us and China. This will explode on them. The leading economic nation in the southern hemisphere will find that their BRICS alliance is a tool being used by China with Russia being duped. They should emulate Paraguay, Uruguay or Chile. Hey, Argentina, are you listening?  

China is building "ghost" cities because they are looking at war. Their other choice could be their long game option. We have a feeling that they will try another end run to change the world away from the dollar to the IMF's Special Drawing Rights. This egotism will not end well. What will the first option bring? What will their new empire get? The loss of millions of Chinese, destruction to the planet and loss of resources. Wake up! Learn to live and let live.   Peace.

Odds and Ends: January 2025

 - The only constant is change.

- (Great minds think alike) Heraclitus and Ben Franklin

A week into the new administration and this week begins the new year for the Chinese people. It ends on 3rd of Feburary. The stock market is riding high with Trump euphoria, but there are cracks beneath the surface. Trump has declared openly that he wants rates lower, both here and in Davos. The Fed will announce their first decision for 2025 on Wednesday. The only constant is change.

What We See with the Periscope

Since the president didn't mention the things that we see and none really do, we will offer them here.

Retail: The only thing growing since 2023 is store closings. They are up 69%. Ouch!

They are not alone. Manufacturering shed another 13,000 quality jobs last month. Their share of employment is down to 10% and falling. 

Debt: The budget deficit rose in December. It is now 40% higher than it was a year ago. Many economists see a financial crisis coming during Trump's administration. Sadly, the only thing the Democrats offer is hoping he fails with an eye on the next election in two years. They seek power not solutions. A good reason why they lost.

Housing: Since we are a consumer society, this is the most important. It effects and connects to every- thing. Homebuilders are showing a serious decline on the charts. This is a dark cloud on the market and the economy. Home sales in 2024 were the lowest in 30 years.

Energy: Trump declared, "Drill, baby!" He knows we need more energy. It creates wealth and it helps family budgets when it is cheap. The "experts" predicted coal usage would decline in 2023. Now, they say it will increase through 2027. Trump is against wind energy. We feel he is totally wrong on the issue. He has not said much about solar. Together, this will not help climate and world heating. This leads us to a more dangerous topic, the movement of the magnetic poles. In our deeper self, we, at Evolution feel this is the source to climate change with wind, rain and sunlight. 

Magnetic Poles are shifting. No one knows or has an answer to the problem, but it causes problems to navigation and communication beside our belief in climate change. We also think that the world will see more earthquakes due to the movement.

Tariffs: They start soon for Canada and Mexico. They should be to all nations and much, much higher. This is tokenism to fulfill a campaign promise.

Meanwhile

The Chinese are out celebrating. Maybe they will take time to read? They will find that a BRIC member, India is complaining (as we predicted) about China being a hypocrite. China will not give them access to tech and other quality products. We know why. China fears that foreign forms will move production to India. Then, we read this. China is not accepting Russian oil due to sanctions. Since when did China follow US policy? Maybe they are opening a door to ease tension? We say, do not fall into this trap. This will connect to the Panama Canal and Taiwan. After all, it is the year of the snake.  

Good News

There is a international goodwill concerning wildfires. Nations help each other by offering fire fighters to help in an emergency. Our northern neighbor, Canada has welcomed over 9,000 fire fighters from other countries to help them and now, they sent over 4,000 to LA to help us. We love this, but do not be misled by One World advocates. Just like social security is a great idea, does not mean socialism is a great idea even though this is one of their contributions.   Peace. 

 

Pre-Inauguration and Inauguration

Best Wishes:

- Heavenly Father, please give me discernment to recognize Your peace above everything else. Give me the guidance to recognize the signs of Your divine wisdom. Help me to seek confirmation and assurance in making decisions that align with Your perfect plan for my life. I rely on Your peace and the Holy Spirit's wisdom to lead me in all things. In Jesus's name I pray, Amen

- Inner Peace (anonymous).  

Cheers and Blues

We all see what we want to see. We all hear what we want to hear. In this special piece, I have divided the work into two parts, the pre-inauguration and inauguration. I did the first part on Saturday and the second after the new president was sworn-in. The early thoughts were things that I hoped the president would give direction. The second part is a reflection on what PresidentTrump didn't or did say.

Before

To us, here at Evolution, the most important thing that connects to everything is the dollar and our debt. Our government needs to rein in spending. Why do we give food stamps to illegals and fight about giving food to our poor? There is speculation about more money under tax cuts. The belief is the rich will use the money for investment. We say, "Yeah! For themselves!" The concept of tariffs to push manufacturers home is the right call. However, the tax must be high enough and to all nations to induce the change. We say, what is needed is an objective. Domestic producers should have a minimum of 40% market niche. We need to reverse the economic loss of quality jobs to which kills our middle class, hurts social mobility and are overall standard of living. Our nation is not even in the top 20 in standard of living.

The first place President Trump should address is affordable housing. Give citizens a stake in their communities. We need to turn the tide against drug usage and selling. We need to put money into mental health that has kids acting out violently. When you help the lowest, you build a foundation that promotes the general welfare. Lastly, our military is misguided, misdirected and misled. We don't need to waste time on "wokeness." We need technicians to run programs for drones and to protect against hacking. We do not need sitting duck aircraft carriers. We need nuclear subs, self flying planes, supersonic missiles and end the wasteful use of troops in over 100 foreign bases. We need to put pressure on our so-called allies to spend on their military. We need to put pressure on Israel and Netauyahu to stop being a bully, war-monger or we will not provide anymore support for Israel until they turn a cheek and to allow a two-state deal. Trump is right about the southern border with nations emptying their jails to jump across our border. We saw the same thing with Castro back in the day.  

Inauguration Day

Trump began, "I will put America first." He went on and on about how our nation will return to its greatness, but he offered no details. He spoke about our concerns about about government and the way it is used to weaponize against opposition. This is correct except that he plans to do the same thing to his enemies. I did like his comment on, "Revolution of Common Sense." We can only hope. He directed his message to the Southern Border and illegals. He added that he sees a connection to terrorists cartels and he will get them. We say, "Good." He will stop the EV money and favor regular auto production. He will overhaul our trade deals. Again, we say, "Good." His department of efficiency (DOGE) is excellent, but will the recommendations be followed? He declared that he is taking back the Panama Canal as that nation violated the gift agreement. This will be a conflict with China unless some other deal is made. He tried to invoke JFK by saying that we will go to Mars.

Later, in a second speech given in Emancipation Hall, he cited how ex-president Biden pardoned 33 murders. Who, you may ask? We don't know the list, but it includes, his son Hunter, Dr. Fauci and General Mark Milley. 

He did not mention his tax cuts, TikTok, our debt or his pardoning of the "hostages" of January 6th. We will add this one tidbit. Steve Bannon, the self-appointed populist leader for Trump has said this, "He will get rid of Musk!" This is a big cloud because Trump's last term had one in and one out month after month. 

With that said, our last thought is one of hope like with spring. "May He grant you joy of heart and may peace abide among you...

- Sirach 50:23        Peace.