Sears Corporation will be filing bankruptcy as early as Saturday, or as late as Monday morning. Sears is the definition of a former retail/corporate powerhouse. Look at some of these companies that used to be a part of Sears: Dean Witter, Allstate, Discover Financial, Morgan Stanley (later merged with Dean Witter), Orchard Supply Hardware (OSH) AKA (rest in peace, liquidated 2018) spun off: Sears Hometown, and Sears Canada in 2015. Wow look at that list! In its heyday, (think 1960’s) Sears sold everything from toys to hardware, to mail order houses, now its circling the drain at ramming speed. What caused all this death spiral you might say? Well a series of poor decisions that began with the ill-advised merger with Kmart in 2004. This is because while Sears competed in the middle to higher end, Kmart catered to the lower end customer seeking value and low prices. A fatal mistake is Sears began cross selling its most valuable brands in Kmart stores such as; Craftsman, Kenmore, and Diehard. By doing this they cheapened their brand, and due to needing to sell the product at a lower price had to cheapen their product.
Craftsman was a very trusted top of the line name in the tool category, they also came with a lifetime guarantee if it broke, by the way, it was actually good for life, not a certain number of years. As a young child, Craftsman tools were a large part of my father’s childhood. He and his father would always be working on or fixing something with Craftsman tools in hand. He always told me he could count the number of times a tool broke on one hand and usually have 3 or so fingers to spare. When it broke you simply went to the local Sears and presto, no questions asked it was replaced. No such luck anymore. The tools are made of cheap material from China that resembles the graphite found in a number 2 pencil. There is a reason they are sold at discount prices, they break with ease. Similar to when you hire folks from LaborReady or whatever they are called now, if the directions call for 1 wrench you better buy 3. Oh, and getting the tool replaced…get ready to gear up for a fight over that “lifetime warranty” means. Cheap crappy tools.
Back to a central part of this blog, the real reason for bankruptcy is CEO Eddie Lampert.
Eddie Lapert
If you are thinking the same guy who runs hedge fund ESL investments, your right. Lampert has never run a retail business, he just knows how to buy lots of stock in a company, force changes, and cash out when he makes a tidy profit; think Buffett, Icahn, and Nelson Peltz.
Lampert has actually been running a liquidation sale over the last decade to tell you the truth. He is a hedge fund guy, the only thing they know how to do is monetize assets and suck every dollar out of a company as humanly possible. Lampert inherited a company which albeit was struggling but had 3,500 stores, the company now has 700, planning to close another 150, keep 300 open and decide the fate of the other 250 in due time. This is too small a footprint to compete, more on this later. Lampert over the past few years has spun off most of Sears property (the ground/building) not the name into a different company to monetize its real estate, spun off Lands’ End into a stand-alone, mostly inside of Sears stores business, selling Craftsman to Stanley Black and Decker (by the way now available at Lowe’s, Home Depot, and pretty much everywhere). He also has loaned the company money through his fund ESL investments. By doing this he can charge a corporate bond interest rate think 8-12%, so he can suck more money out of the company. Lampert may own quite a bit of Sears stock, but he is very wise, shareholders are last in line in a bankruptcy, the banks are close to first, his loans essentially make him a creditor, and thus he will get most of his money back. Now here we are today, with Sears owing a $134 million dollar debt payment October 15th, they have no way to pay it. Enter Lampert again; offering to loan the company the money to make the payment, in exchange for Kenmore and several real estate plots the stores currently sit on. Sounds like a pretty good deal for Ole Eddie. The board is contemplating this, and I think they won’t go for it.
The moral of the story is this, we here at ReallyRight.com don’t like to see anyone lose their livelihood or see stores close but Sears hasn’t been relevant in at least 15 years. Honestly, they got rid of the Christmas (or is it Holiday) Catalog, likely to save money, bought a chain known for selling cheap crap with Blue Light Specials, and viola, it’s over. Cheapen your core brands to the point no one wants them or make it so they are now available anywhere not just exclusive to your store. In addition, ask yourself this question, what can you get at Sears that you can’t get cheaper elsewhere? Or better yet what do you go to a Sears to buy? Sears is the new Toy’s R Us, except that when it goes out of business it won’t be back, rumor has it Toy’s might be risen from the ashes like a Phoenix. It doesn’t help when you have a blood sucking hedge fund manager out only for himself who owns and runs the company.
I was invited to a social function last Friday to celebrate the fall ritual of Octoberfest. I engaged a person that I know at the party in conversation. The subject of Elon Musk came up, partially because the person hosting the party just purchased a Tesla. I recounted the production difficulties, Elon getting kicked off the board of his own company, and the quality control problems of Tesla which are well documented. Boy did I get an explanation from an alternative world.
I was told that Elon Musk was screwed by the big three automakers because they fear him. The reason his manufacturing plant is not producing enough units (cars) is as follows:
This person told me that he knows for a fact that the company that sold the manufacturing robots to Tesla purposely sabotaged the equipment, so it would not work. He claimed that Tesla hired a South Korean company to rewrite the robot’s software and that the manufacturing problems have been resolved. He assured me that Tesla is exceeding its manufacturing goals and is really making money hand over fist.
I asked about the Wall Street Journal article and others stating that most cars were defective and required repairs, before they could be sold. Also, that Tesla is not making enough units to be profitable. He told me that this too is due to the Detroit automakers controlling the media because they spend so much on advertising that they have arranged it so that Tesla only gets bad and untrue reports in the popular media.
At this point, I’m thinking this guy is channeling Preston Tucker.
Preston Tucker
I asked about our friend’s car. “Yeah he likes it,” I was told, “It did have a defective paint job, but they fixed it right away and now everything is great.”
I commented that there is not enough infrastructure to make Tesla the car of the future. His spin was that Tesla’s will be people’s second car i.e. commuter car and everyone will own one.
He then brought up the subject of self-driving cars. I was promised that self-driving cars would be widely available in five years. The commuter lanes would be only for self-driving cars and they would be computer controlled and drive 120 miles per hour and be four inches from the car in front of them. They would be like impromptu trains that speed up and down the freeways (think NASCAR on steroids.)
I was assured that in five years it would be commonplace to see vehicles with no drivers or passengers zipping around the highways and byways of America (Think Jetsons meets Bladerunner.) I asked about the many wrecks of self-driving cars and was told that once again it was just bad public relations. I was assured that every Tesla crash was driver error even when autopilot was engaged. He assured me that other companies have technology far beyond what Tesla is using and they are ready to deploy it now.
My comment was that humans are better drivers and that you can’t have a mixture of humans and robot piloted vehicles on the same roadway. He laughed and said the computers were far safer drivers and stopped just short of saying that we would all have to surrender our driver’s licenses. He just said that the next generation will not even have a license because computers will be driving everything real soon.
So, there you have it. Cue Rod Serling’s voiceover because the way that conversation went, I think one of us was “in the Zone…”
The Securities and Exchange Commission (SEC) has issued the following edict:
Elon Musk has been forced to step down from the Board of Tesla but he will remain CEO. Translation, he is figurehead of the company but can be out voted if he wants to do stupid stuff.
Within 45 days, an independent chairman will replace Musk, who will be ineligible for reelection for the next three years. Tesla will also be required to appoint two new independent directors to its board, in addition to putting into place controls to oversee Musk’s communication.
Sales at Dick’s Sporting Goods tanked in the last quarter while most retailers are doing better with increased consumer spending. This was due to the store caving in to political correctness.
Comparable-store sales fell 4%, Dick’s said. Not adjusting for the 53rd week last year, the company’s same-store sales declined 1.9%.
The weaker-than-expected results bucked a trend in the retail sector, which largely has benefited from a surge in consumer spending fueled by a booming economy.
Consumer confidence for August, measured by the Conference Board’s consumer-confidence index, was the highest it has been in about 18 years.
That sentiment, along with other factors, has powered companies such as Walmart Inc. and Target Corp. to their best quarterly results in more than a decade.
Dick’s said part of the company’s sales problems were a result of Under Armour’s decision to sell in more stores including Kohl’s. Under Armour declined to comment.
Also hurting sales was Dick’s decision to tighten its policy on gun sales after 17 people were killed in a February shooting at a Parkland, Fla., high school. The retailer halted sales of any firearms to people under age 21 at all of its 845 Dick’s and Field & Stream stores and stopped selling assault style weapons at Field & Stream.
Ruger 22 is semi-automatic rifle. The stock clip holds ten bullets. It fires one bullet at a time.
Please note that there is no such thing as assault-style weapons. Anything used as a weapon can be used to attack or defend a person, family, or property. Claiming that a special class of weapons called “assault-style weapons” is the myth of illiterate Liberals and city folks. Fully automatic weapons have been illegal since the days of John Dillinger. Thus, all guns commercially since the 1930’s are only capable of firing one bullet at a time. So, Dick’s claiming to stop selling assault-style weapons is a bald-faced lie.
Dick’s has limited buying options, limited who they will sell too, and let gun loving folks everywhere know they are openly hostile to them. As a result, their sales fell. No surprise here. Had they done nothing they would have shown a profit last quarter. I hope this is a trend that hurts them in the pocketbook.
Loyal followers know that The Chief very seldom holds back when it comes to hot takes, but this story actually had blood gushing out of my eyes. Verizon Wireless serves many purposes, largely they are known as a wireless provider “allegedly” they also are the second largest of wireless provider behind AT&T. Fun fact: Verizon is actually a former “Baby Bell” spun off from the breakup of the old AT&T. As almost anyone with a cell phone knows, every so often you get the dreaded message “You are close to going over your data limit” or “You must upgrade your plan to get faster download speed” knows you generally must relent and agree to the additional charges. As far as I am concerned, I don’t have much of an issue with this practice, since usually a swift change in your lifestyle will yield your old plan working just fine.
Here is my “chief issue” with Verizon, they used a similar practice on firefighters fighting a blaze in Mendocino County. They used a term called throttling which in laymen’s terms means reducing the data speed rates that are used by folks surfing the internet. While I disagree with data throttling and other manipulation, to do it to firefighters, in the midst of fighting a major forest fire, is downright despicable. Verizon Wireless in their infinite wisdom, cranked down the data usage by our firefighters fighting a huge blaze. Yes, you read that correctly, they were in Mendocino fighting the biggest fire in state history—which as of this writing is still only 67 percent contained—one where communication among everyone was key. Just to clarify for all of you from Rio Linda as Rush likes to say, this was not a drill, or a daughter or son texting their boyfriend or girlfriend and causing a data overage, this was a real life or death situation.
Mendocino Complex Fire – currently combined 425,177 acres have burned
In order to get more data for their command center in the midst of fighting this fire, they had to agree to pay double
their current monthly bill even though they supposedly had an unlimited plan.
Verizon says the fire department was subscribed to an “unlimited” data plan that was limited. The company has come under fire for its use of the word “unlimited” while placing limitations on plans. In this case, the plan firefighters were under was “unlimited” until they hit a certain data point, then their data would be throttled to a slower speed.
Look at this quote from Santa Clara Fire Chief Anthony Bowden “This throttling has had a significant impact on our ability to provide emergency services. Verizon imposed these limitations despite being informed that throttling was actively impeding County Fire’s ability to provide crisis-response and essential emergency services .”
Per KOVR’s report, the fire Chief went on to say:
“Verizon representatives confirmed the throttling, but rather than restoring us to an essential data transfer speed, they indicated that County Fire would have to switch to a new data plan at more than twice the cost and they would only remove throttling after we contacted the Department that handles billing and switched to the plan.”
At this point, Bowden says fire personnel had to rely on their own personal devices rather than the mobile command center. Verizon eventually lifted the throttling, but not until the department signed up for a new plan.
Editor’s Note: In the same testimony the fire chief listed other fires he had fought where Verizon did the same thing to them in the midst of firefighting.
How many additional structures burned as a result of this action Verizon took? Also, one firefighter died; was he trying to get into contact with his colleagues but unable to due to “data overage?” While I am no fan of investigations led by the government this is one that needs to happen. Was Verizon responsible for any structure being destroyed or fire fighter deaths? If so they should be charged criminally, very similar to how PG&E was held liable for some of the fires their wires started. Verizon may actually be the lowest of the low, Warren Buffett may be blushing. Verizon has since come out and apologized, interesting that the apology was issued as Congress announced they would be investigating. Also, this has not been reported but Verizon announced today, they would offer a new program with unlimited “emergency data” to first responders plan for about double the normal price for an unlimited data plan, I guess as Rahm Emanuel said, “never let a good crisis go to waste.”
Verizon messed up badly, and likely are responsible for additional millions in damage and likely the death of a firefighter due to their “greed.” Exceptions can and should always be made, and during emergencies is one. While most people run from fire, firefighters run towards the fire with every intent to save structures and any people in its path. Verizon halted that, all due to corporate greed. They put additional structures and people in harm’s way all in the name of profit. In all likelihood they will be fined, both federally, the state will also get their pound of flesh, a couple of counties may get a pay off as well, but nothing will change. No lessons will be learned, apologies do not bring back memories or loved ones unnecessarily killed or destroyed. I’m sure Verizon has their legal department on overtime looking for ways that their insurance policy can cover this. Who is more morally bankrupt? Wells Fargo, PG&E or Verizon……I’ll take all of the above.
The lesson here is life goes on, regardless of whether your possessions or loved ones do, corporate profits are far more important, got to hit next quarter’s numbers!
Editor’s Note: Hey Chief, if they do this for a rural fire what do they do when we finally get hit with “the big one” and much of L.A. or San Francisco is in rubble?
“You’re a legend in your own mind.”
—Clint Eastwood as Dirty Harry in Sudden Impact (1983)
Elon Musk is not just a legend in his mind but for many that uncritically accept his claims. Musk follows the axiom of selling the sizzle not the steak . The difference is that Musk is finding that he can’t deliver and a few folks that he has bewitched are waking from their stupor to find that reality is a cruel thing.
Is Tesla really the future?
Below are some quotes pulled from a New York Post story on Musk and Tesla.
Musk is walking a razor wire, another source says, between the things he’s promising and the things he can actually deliver. Until recently, Tesla investors and employees bought into Musk’s vision, even though Musk was “saying things that don’t make sense, because he’s accomplished so much.”
“He is very difficult to move off his stance,” says the source. “He’ll say, ‘The car can do X, Y or Z,’ And yes, that is possible — two decades from now,” the source said. “He bases his argument on the physically possible rather than the practical reality.”
One insider … says that when Musk tweets about a new functionality or feature, it’s often in response to a fan who has asked when such a thing might be available. Musk, says this source, will often email the tasked department, then tweet back to the fan the date it will be done, no matter how unrealistic the request.
Meanwhile, Tesla’s current great hope, the (relatively) affordably priced Model 3, is having its own issues, as is the sales force responsible for moving them.
On Tuesday, Business Insider reported that although Tesla hit its production goal of 5,000 Model 3s by the end of June, 4,300 of those vehicles required substantial fixes. That’s 14 percent making it through “first pass yield,” or an initial production line that requires no fixes at all.
This Tesla employee isn’t surprised.
“The Model 3s come in [to the showroom] scratched or damaged,” he says. “They don’t fit together properly. If you look at the panels, they’ll be mismatched. They won’t line up.”
On Thursday, Business Insider reported that Wall Street analysts tore apart a Model 3 to find multiple failures, including “inconsistent gaps & flushness throughout the car, missing bolts, loose tolerances, and uneven & misaligned spot welds … The results confirm media reports of quality issues & are disappointing for a $49k car.”
Even as doubts fester within Tesla’s factory walls, few want to believe the trajectory may be downward.
“Elon emails us directly, saying ‘We’re on top, we’re going to prove [everybody] wrong,’” this employee says. “Everyone realizes it’s f–ked up, but everyone’s afraid of losing their job before Tesla ‘hits it big.’ It’s a mess.”
Doubtless you are familiar with the phrase “Crime doesn’t pay” but actually is does; just not much unless you are in elected office.
I came across the latest wage schedule of what prisoners earn per hour when working inside the prison system. When compared to what Apple pays people to make iPhones, these guys are really doing well.
Depending on which report you believe, Apple pays somewhere between five to thirty dollars in manufacturing costs to assemble each phone. The hourly wage is estimated to be about $1.78. The guy in China making $1.78 per hour is probably having to support a wife and their government permitted one child plus all his household expenses.
Note: no recent cost estimates were found, Apple keeps this info under wraps
On the other hand, incarcerated individuals pay no housing costs and get three squares a day. Their income is tax free and used primarily for their own use. They also get free healthcare that is better than whatever you’re getting on the outside. If they had to pay Medicare, Social Security, plus State and Federal taxes, they would have to be paid much more (as a percentage) to clear a dollar an hour in wages.
2018 prison wage schedule
In many cases, taxpayers pick up this slack for guests of the California penal system and pay their families welfare, Obamacare, and other benefits.
Does anybody out there have a problem with these numbers? Oh, per the article, April jobs were 26,000, May 7,200 and June 800.
Am I the only one seeing a trend in the wrong direction here?
The Party line is summarized by Michael Bernick, former Director of EDD, “California has a broad and diverse economy, and we’re now in our 99th month of employment expansion,” he said in an email.
Once again, I invoke the saying, “there are lies, damn lies, and statistics”.
So where were the growth areas in June’s job report? Government, tech and Hollywood. All other sectors lost jobs.
Last month, employers in four of California’s 11 industry sectors added jobs.
The education and health services sector gained the most, growing by 8,000 jobs. The information sector, which includes tech companies and Hollywood studios, grew by 4,600 jobs.
Employers in the government sector and the professional and business services sector also added jobs.
The other seven sectors saw job losses. Leisure and hospitality cut 4,000 jobs. The construction sector shrank by 2,900. Trade, transportation and utilities lost 2,600 jobs. Employers in manufacturing, finance, mining and logging and “other services” also trimmed payrolls.
Given the above, the bean counters in Sacramento are offering two explanations but choosing neither.
Option 1
The slowdown could signal that California is simply reaching full employment. Employers are struggling to find workers.
Option 2
It’s Trump’s fault because he is starting a trade war with Wal-Mart, oops, I mean China.
Bernick and others said that the economy appears mostly healthy despite the poor June numbers. But Bernick said federal trade policy could hamper further job growth.
“A widening trade war is the main threat to California’s continued employment expansion,” he said.
If you drill down into the numbers, only government or things that it subsidizes are growing. The private sector is clearly contracting. Given our tax burden this is not a surprise.
Only government creates jobs in California
If California’s economy is so great, then why is the California economic news all about homeless people and illegal immigrants when we are supposed to be at full employment? Full employment means that everyone has a job and wages are increasing due to a shortage of qualified workers.
We have millions of able bodied people on the dole in our State. California has one third of all welfare cases in the United States, a huge chunk of illegal aliens, and a large portion of the nation’s homeless. Liberals admit that these problems are getting worst not better but on the other-hand, these same folks are claiming we are at full employment. Can you say logical disconnect?
The reality is we have a shortage of housing that normal people can afford. Heck, apparently folks in San Francisco are so miserable that they can’t even afford toilet paper and indoor plumbing.
This is one of the results of socialism. Under socialists and totalitarians, there is an elite group of haves and another of have-nots. The middleclass all but disappears leaving a huge gulf between rich and poor.
The real story here is that California is a mess and that Gavin Newsom may end up having his utopian hands ties by an economic downturn caused by Sacramento’s draconian tax policies.
Elon Musk and his fantasy car company Tesla were in the news with a strange story. It reminded me of the movie Tucker when the 1950’s car company was taken to court for ripping off investors for selling dealerships with no cars. In the days leading up to the trial, Tucker and his band of merry men, cobble together 50 cars to show that he had production capability and his business model wasn’t a scam. Tucker rolled the 50 cars onto the grounds of the courthouse and lost his company anyway. These 50 cars are still in existence today and are among the most desirable collectables.
Tucker: The Man and His Dream
Tesla Background
Tesla is burning through its cash at an unsustainable rate. Their credit and stock have been downgraded. Then media reports surfaced a week ago that orders for the Tesla car for the everyday person (Model for $35K) were being cancelled faster that new orders were coming in. Tesla has never hit their promised production goal of ten thousand cars per week.
Early this morning, analysts at the New York-based investment banker downgraded Tesla shares from hold to underperform (Wall Street-speak for “sell”). Needham cited several reasons for its newly bearish stance on the electric-car maker, as outlined in a report on StreetInsider.com
Complicating matters further, Needham notes that its “checks” on the market show that Tesla is experiencing net cancellations of Model 3 orders by customers as “refunds are outpacing deposits.” The analyst believes this trend is accelerating, with as many as 24% of would-be buyers now asking for their money back.
In a coup de grace, Needham ends with a point on Tesla’s cash burn.
Tesla burned through $4.1 billion in negative free cash flow last year—twice its $2 billion reported loss and more than twice the $1.6 billion in negative free cash flow it suffered in 2016, according to data from S&P Global Market Intelligence. Faster Model 3 production is supposed to mitigate cash burn, but Needham believes Tesla will still go through a further $6 billion “through 2020.”
The analyst also notes that Tesla has a $1.5 billion debt payment coming due in 2019. Although Tesla has enough cash in the bank ($2.7 billion, according to S&P Global figures) to cover that payment now, continued cash burn will eat away at it, meaning that by the time Tesla’s debt comes due, it may not have cash on hand to pay it. That implies additional debt issuance (i.e., paying debt with more debt) or stock sales (i.e., dilution) may be necessary to keep Tesla solvent.
None of this adds up to much of a buy thesis for Tesla stock—but it may justify a sell.
In addition to the above, Elon Musk has been saying stupid stuff on Twitter; especially about the divers that saved the cave kids.
At a crucial juncture for the company, which is struggling to show it can mass-produce an electric sedan and generate cash, Musk has tangled very publicly with government regulators, stock analysts, journalists, former employees — even the creator of a farting-unicorn coffee mug.
On Sunday morning, after a rescue diver took to CNN to criticize as a “PR stunt” Musk’s offer of a small submarine to transport a Thai soccer team out of a flooded labyrinthine cave, Musk called the man a “pedo” on Twitter — short for pedophile.
Musk soon removed the tweet but not until the unsubstantiated slur had ricocheted around the world. The diver told reporters he’s thinking about suing Musk.
Tesla has yet to officially comment on Musk’s accusation. Thus far, Tesla’s board of directors has been silent on the matter. But on Monday, Tesla’s stock fell 2.75%, to $310.10. It is down 14% since Musk announced on July 2 that Tesla had hit a goal of producing 5,000 Model 3s a week.
Musk’s confrontations come as he continues to struggle to fix crippling production problems with the Model 3 electric sedan, which Musk regards as a “bet the company” proposition.
The production goal Tesla hit earlier this month lags far behind earlier benchmarks set by the company. In August 2017, Musk told stock analysts there should be “zero concern” the company would hit 10,000 Model 3s a week by the end of this year. The calendar says that’s still possible, but he’s currently struggling to sustain the 5,000-a-week rate.
Meanwhile, the company’s cash pile continues to shrink. When a section of the Model 3 assembly line was shut down after Musk — who is not only the company’s chief executive but also its chief engineer — failed at an aggressive attempt at robot automation, he set up a tent in a parking lot at the company’s Fremont, Calif., factory to handle the overflow, with partly finished car bodies transported from factory to tent on tractor beds and forklifts.
Tesla Yesterday
Portions of the Internet blew-up yesterday when it was announced that some enterprising fellow on Twitter had found a whole lot full of thousands of Tesla cars. Shortly thereafter, another bunch was found in another city.
Aerials of the facility identified earlier today at 500 E Louise Ave, Lathrop, CA…more to come, but I didn’t want to make people wait any longer to see the big picture.
Yesterday, several Twitter sleuths uncovered two parking lots, in Lathrop, California, and the other in Burbank, California, at which several thousand Tesla Model 3s are being stored.
The thousands of Model 3 cars are jammed together on dusty lots, baking in the California sun. Approximately 2,500 in Lathrop and another 2,000 in Burbank.
And what ever could be the reason for Tesla storing hundreds of millions of dollars of inventory in dusty lots when it instead could be converting the cars to cash, given what it claims is strong demand?
Is it logistical chaos? Do the cars need rework? Is it all part of some grand plan?
I don’t have the answers, but the questions are not going away.
Tesla’s (TSLA) grand plan was to avoid hitting the magic 200,000 federal income tax credit limit in Q2. To that end, Tesla would stockpile cars near the end of Q2 so it could unleash them in Q3, as every car it delivers in the U.S. in Q3 and Q4 will qualify for the full credit.
Tesla evidently executed the first part of the plan, stopping just short of the 200,000 number as June ended, reporting more than 11,000 Model 3 cars in transit.
So, is this just a tax dodge? A Tucker moment to boost faith in the company or what? Remember that Musk has been cutting employees in some parts of his empire and working others like dogs. Tesla has been promising production numbers of ten thousand units a week for the last several years but has failed to deliver. They also absorbed the debt from Solar City. And as shown above, he is in bad shape.
As I was researching for this blog, I found an opinion piece that expresses what I was about to say so I will just quote it. This was published earlier today.
One disastrous tweet has finally revealed Elon Musk for what he is: a fraud.
Enraged that a British cave diver called his idea to rescue the Thai soccer team for what it was — “a p.r. stunt [with] absolutely no chance of working” — Musk took to Twitter and called him a “pedo.”
Just like that, Tesla’s market value plummeted by $2 billion.
Musk has been in business since 2002. His stated goal is nothing short of transforming humanity through his products: his electric cars, space travel, and an underground high-speed Hyperloop system.
He has yet to succeed at anything but somehow spins every failure into proof of imminent success. His only accomplishment has been this decades-long Jedi mind trick.
Tesla is best known for blowing deadlines and consistently falling short on production.
In November 2017, Bloomberg reported that the company burns through $500,000 per hour. For two years now, Tesla has been suffering an epic talent drain and in May, two top execs — one the liaison with the National Transportation Safety Board — walked out the door.
Tesla was founded in 2003, but the world’s largest automakers quickly surpassed Musk’s vision for electric vehicles. Tesla will never catch up. Shareholders are finally catching on.
So should the government, which reportedly gifts Musk’s companies with an estimated $4.9 billion in subsidies.
Star investor Jim Chanos called Tesla a “walking insolvency” back in 2016. He doubled down in December, saying Tesla is “headed for a brick wall.”
What Next?
Musk is playing games with the Tesla company and that is nothing new. He is a cross between P.T. Barnum, Preston Tucker, and the fictional character played by Danny DeVito in “Other People’s Money”. Musk is using other people’s money to bring a utopian energy dream of environmentalists and Leftists of many stripes to fruition. The reality is that Musk is ultimately going to live or die in the free market. Every time the Establishment types bet on winners and losers, we all lose. Musk is a dreamer and an idea guy. What he sells is smoke and mirrors, the realities of making a profitable product on such a large scale are beyond him but as long as he can keep people investing in the pyramid then it keeps going.
The fact that there is no infrastructure to keep the electric car business running is something people are willfully neglecting. You don’t have the freedom to drive Tesla cars anywhere you want. Even in states like New York and California, most of the state has no ability to charge electric vehicles. Also, where is all the electric generation to keep such a fleet of battery operated vehicles going to come from? Especially when most folks will want to charge their cars at night. These same states are outlawing every known electric generation method in existence with the hope that solar and wind will be the answer. But that’s my point, there is no existing reliable form of energy production except technology based on nuclear or hydrocarbon fuels. Liberal energy policy is based on bad science and wishful thinking.
The self-driving technology employed by Tesla is a class action lawsuit ready to happen. Sooner or later the government is going to be forced to confront Musk for the safety record of his vehicles. Currently, government is trying to shelter him from the consequences of the deaths caused by failures of his system. How many deaths does it take to call the Tesla product defective? Other automakers and insurance folks are watching this aspect of the Tesla company. This might be the path to the financial ruin of one Elon Musk.
Elon Musk’s dress rehearsal for leaving his troubles behind
That Musk appears to be playing games with Washington to keep the Federal tax credit in place is disturbing. Again, at some point the government giveaways will end and he will have to stand on his own two feet. Some day soon, the free market will decide Musk’s fate. Donald Trump winning the 2016 election was his worst financial nightmare. Had Hillary Clinton won, the floodgates of government incentives would have flowed to Musk for decades. California’s mandate that all houses built after 2020 must have solar will benefit Musk but it’s not enough to bail-out the Solar City albatross that he wrapped around the necks of Tesla investors.
Musk is running out of time, money, and excuses. Lucky for him, Mars is a nonextradition planet. At least he might utilize SpaceX for a unique exit strategy for his financial problems.
Sportscaster, Howard Cosell, famously told it like it was. People either loved him or hated him, but Howard was never shy about expressing his point of view. He grew-up in New York and folks couldn’t deny his love of sports. To many of us, Howard was a big part of what made Monday Night Football a phenomenon for many decades. Howard also helped to make Muhammed Ali and Evil Knievel the household names that they were in the 1970’s.
ABC’s Howard Cosell
In the same frank, plain talking sort of way, President Donald Trump just completed a very successful trip to Europe that has folks here up in arms about nothing.
Below are what I think are the four accomplishments of this trip.
England
Trump took grief for allegedly insulting the Prime Minister for telling her to honor the vote of her own people and get out of the European Union; i.e. Brexit. The British leadership is feckless and frozen with fear. Trump wanted them to be decisive and act.
Germany
Trump told Germany that it was stupid to get all their country’s energy needs from Russia. If NATO was created to protect Europe from Russia then why enrich Russia with this monopolistic energy deal? It is a conflict of interest to be in NATO and have this deal with Russia at the same time.
NATO
Trump told NATO nations that they need to take an active interest in defending their countries. Most NATO countries contribute nothing and let the United States pick-up the tab for military spending that they should be paying. This was a campaign promise of Trump so why does the media and many of these nations act like this is something new? The media always bitches about the U.S. being the world’s policeman and then complains when Trump asks them to stand on their own two feet so we don’t have too. If a Democrat said this they would be cheering.
Putin
Trump met with Putin. No on mike whispering that after the next election the President would be in a better position to do favors for them like we had with Obama. The media is stuck on stupid about Russian and the election. If the Russians did anything, it was to make Hillary look bad—which only takes a mirror—but this idea that Trump and Russia collaborated to thwart the Democrats and steal the election is just sour grapes. Yes, many of us really do hate Hillary and think the only reason that she had a political career was because she slept with Bill. She has no ideas or accomplishments; she was an incompetent Secretary of State and her track record was painted red with the blood of people all over the world that died because she was/is an idiot.
President departing Air Force One
Trump had a good trip to Europe. How can you tell? Because the media and the political class are having kittens. They talk and Trump does. That ladies and gentlemen is the difference. They still can’t believe that Trump believed all that stuff he promised in the campaign and is trying to make it happen. Donald Trump, promises made, promises kept. That is how you Make America Great Again.
