Economy – Page 17 – Really Right

PG&E Has Failed…..What is Next?

Pacific Gas & Electric–also known as the “Firestarter” for causing too many fires this past decade–has announced that it intends to split off its natural gas division and/or file for bankruptcy protection. This is a direct result of actions taken Thursday, January 3^rd, by the largest insurance companies in the state; Allstate, State Farm General, and USAA filling suit to recover damages incurred by the Camp Fire.

Insurers sue PG&E over damage caused by Camp Fire

The Camp Fire for those of you who; live under a rock, vote democrat, or are related to a Park Brother, is the fire that burned all of Paradise and Magalia late last year. The fire was started by a spark at a PG&E power generating facility, which had a myriad of maintenance issues by the way. The utility could be on the hook for over $15 billion in damages from fires over the last two years alone, an amount that could well exceed the company’s total value.

How did we get here you may ask? In short, California has a strange law (only 1 other state has it as well) called inverse liability. This law applies to utilities in the state, basically saying, if there is any chance your power lines/equipment may have caused the fire, you are 100% liable for all the damage. In the fires in Sonoma and Napa in 2017, as well as the Camp Fire in 2018, it appears PG&E will be liable for all damages under this law. So, whether the cause was sparks from a generator in Concow this year, a tree falling on a transmission line in Napa, or a short in the line in Sonoma, PG&E is on the hook, not your insurance company. Additionally, because this is set law, no judge will overturn this, or rule in the utility’s favor.

As a result of these liabilities, PG&E late Friday night began to look to implement “Project Falcon” named for the Peregrine Falcons that land on top of the San Francisco HQ’s roof. Project Falcon includes selling off their prime real estate in San Francisco and relocating elsewhere in the Bay Area. Maybe they should relocate somewhere less expensive…like I don’t know….ANYWHERE ELSE! It includes finding additional board members and directors with a background in safety…..yeah probably should have done this after San Bruno, but ok. In addition, they are looking to sell off/spin off their natural gas operations; i.e. the gas part of your bill.

Is PG&E Dropping The ‘G’? Source Says The Utility Is Exploring Selling Off Natural Gas Division

This I have no opinion on, the entire company is ethically and morally bankrupt so I don’t know if two companies are better than one, but I digress. Actually, they lobbied State Senator Bill Dodd (D-Soviet Berkeley) to pass legislation to absolve them of all liability from fire stemming from their electrical lines. While Dodd may have been their puppet for a year, the bill went nowhere, and he has since reversed his stance calling PG&E one of the most corrupt companies he has ever dealt with. I guess the check never cleared the bank?

This issue is actually very complex, and I see it two ways:

On one hand, PG&E like other utilities are a legalized monopoly governed by a state regulator who essentially tells them how much they can charge and how much they can make. The other problem is their service territory is very large; they have over 5 million electricity customers in their territory. In addition, most of their territory is rural, meaning they must bury their lines (very expensive) or have them on towers running through heavily wooded areas or rugged terrain.

For example, PG&E must somehow get power to the town of Biggs. Since this is part of their service area, they must run power lines there or have a generation plant for this community. Let’s say that they run electrical transmission lines there and create a defensible space of call it 20 feet on both sides of the lines. In theory, that is all well and good, but along the route of the transmission lines are 100-foot-tall trees. When the trees fall or large branches break off and knockdown the lines, perhaps as the result of a storm or disease, not only could they disrupt power but might start a fire. Since the transmission lines belong to PG&E, they own the resulting repair costs even if it was not directly their fault. While I do not feel sorry for them, the job is not very easy, especially when you are a monopoly and have no choice but to provide electrical and natural gas service.

On the other hand, I’m sorry; you are without a doubt the most ethically bankrupt company in the state, and by a wide margin. When the San Bruno pipe blast occurred, your company never admitted or accepted blame, they passed it off and gave traditional corporate speak answers.

That pipe rupture and explosion killed people, and you were caught lying to a judge when they discovered the pipe was essentially “frankensteined” by welding together a bunch of scrap pieces.

You decided to save face by running a bunch of feel good ads on TV essentially saying you are working harder than ever to keep our communities safe….liars! The fires in Sonoma, Napa and Paradise killed many people. This is a direct result of a total lack of maintenance and integrity. As much as I do not wish to see my gas provider go bankrupt or be split up/sold/etc. they need to be held accountable. So far, they never have been. I had to watch your annoying commercials then watch a town go up in flames because of your equipment and lack of accountability to your rate payers. When it came time for maintenance or tree trimming, I’m sure you just had a single employee check it, initial a log and move on to the next site. Rather than have a cross checker or someone to make sure the work was actually done, it was ignored, and people lost lives/homes and possessions as a result. Shame on you. You never learned your lesson, you just continue to repeat the same mistakes just hoping for a different outcome.

The Blog Father and I agree on several things involving this corporation. First, it will be interesting to see how the bankruptcy proceedings handle what is likely a much-underfunded union pension plan for employees. This state is very pro-union, and like most utilities, PG&E is very heavily unionized. If the state swoops in and takes them over, do the union pensions get bailed out by the taxpayers? Does the state bail the company out? It will be fun to watch. If the company splits, how does the gas company make it on its own? Natural gas prices are literally at their lowest levels and it has been this way a long time. Also, what happens to both companies? Splitting up is an easy temporary solution but the problems will still exist. Finally does the company even know what it actually owns or has infrastructure wise? Some of these lines were laid decades and decades ago underground. As a matter of fact, PG&E scoped the sewer lines in both our neighborhoods recently for some unknown reason. As I stated earlier no one even knows what this company has infrastructure wise or the length of time it is guaranteed to work for. My suspicions are that huge portions of underground infrastructure in this state are decades past their useful life and in need of replacement.

Here is what needs to happen:
CEO Geisha Williams needs to be led out in handcuffs, she may not work in the field but she as CEO is the captain of the ship and sadly the ship has been taking on water for too long. The failures happened under her watch. Come out and admit your failures and shortcomings in the maintenance division. Allow a judge to investigate the senior management including any supervisor in the areas where the issues occurred. The Public Utility Commission (PUC) should be allowed nowhere near this, they have direct oversight of all CA utilities and have been asleep at the switch. Talk directly to the ratepayers, PG&E’s electric rates are among the highest in the country, yet the upkeep has lacked badly. In addition, please stop running your statewide propaganda commercials about how safe you are and how you are removing tree branches to keep us safe. They are just that…propaganda. Thanks to your negligence, many people lost everything, some even paid with their own lives. Oh, and take a look at what you have done to your stockholders this past year. In addition to a free-falling stock price, your bond rating was cut to junk, and you eliminated the dividend–a traditional hallmark of all utility stocks…good thing I was never an owner!

Geisha Williams presides over PG&E’s scorching of California

What is going to happen:
Xavier Becerra is going to take a break from suing Donald Trump and the feds for a minute to take up an investigation and sue PG&E. I guess that’s a good thing because he won’t be wasting taxpayer dollars for a bit, but isn’t this too little too late? I thought the job of government was supposed to be oversight? Instead they just read and react, suing after the fact to get their pound of flesh. Apparently, even your corporate record of supporting Liberal causes with large campaign contributions can’t buy you enough goodwill to get out of this mess. I’m still angry that you gave large sums of ratepayer money to fight against traditional marriage back when we were voting for Prop 8. Any linkage between electricity usage and what ratepayers do with their reproductive organs is beyond my comprehension, but then I don’t live in San Francisco.

Becerra is talking about criminal charges against the corporation…how does that work? Send the transformer to jail? Put the power lines on supervised probation? Get it together! Sadly, I forsee a government owned utility coming soon to every part of the state near you, that includes you Southern CA Edison customers, your utility is in only slightly better shape. I offer up this evidence, PG&E wants to split into 2 companies as discussed above; gas and electric being separate. This runs against the current trend of electric utilities buying gas utilities, also both companies have a record of serious neglect for safety of its customers. The state knows this. They also know that PG&E has a very underfunded pension, and its bond credit rating has been cut to junk, essentially meaning the company faces insolvency very soon. Enter the State of California, coming in hot with a bailout, keeping the union workers happy, just simply folding them into CALPers. I’m sure the state looks at the electric rates charged by PG&E and salivates over being able to add that kind of coin to the general fund each month. Gov. Newsome is on his way to state run healthcare, might as well make utilities the same way, this way they can make you install solar, and simply take it and not pay you.

Conclusion:
I think the answer lies somewhere in between these two scenarios. I see the state essentially “parting out” PG&E. In the past (2005), SMUD put out a study and a ballot initiative to annex Davis and Woodland as mentioned above. PG&E spent big to defeat it. I think this plan could come back to fruition. I could see the State selling off the territory to SMUD under an agreement that SMUD also take the surrounding rural areas and agree to a massive overhaul of the maintenance of existing infrastructure.

I see this scenario playing out all over the state to be honest. I don’t really see criminal charges, but I do see a major fine coming. When you look at PG&E’s service territory you can also see a case to break up the company into about 3 – 4 smaller companies, similar to AT&T’s breakup. Bottom line, this company needs to be gone ASAP and take all their employees with them. This has to be the most corrupt company in CA history.

Are You Living With Debt

An old pastor once told me that the word “mortgage” is from two Latin words; “mort” meaning death like in mortuary and “gage” meaning grip, thus a mortgage was a “death grip”. This is what I thought of when I say this headline today:

1 in 5 millennials with debt expect to die without ever paying it off

The average millennial (aged 18 to 34) had about $32,000 in personal debt, excluding home mortgages, last year, according to Northwestern Mutual’s 2018 Planning & Progress Study. That debt can feel both crushing — and endless.
Just over 60 percent of millennials (classified here as those aged 18-37) with debt don’t know when, or if, they’ll ever be able to pay off what they owe, according to a new CreditCards.com report. That includes roughly 42 percent of millennials who don’t know when they’ll be able to wipe out their debt, and almost 20 percent of those who expect to die in debt.

Expecting to die with debt is not a formula or mindset for success. No wonder so many say they prefer socialism. This blog is about hope for the hopeless.

The above article, without attribution, then proceeds to list several of Dave Ramsey’s “baby steps” for getting out of debt. Ramsey has 7 steps to getting out of debt.
1 Save $1,000 to start an emergency Fund
2 Payoff all debt (except mortgage) using debt snowball
3 save 3-6 months of expenses
4 invest 15% in retirement
5 save for child’s college fund
6 pay off your home
7 Build wealth and give

Dave Ramsey–Baby Steps

I can attest that following Ramsey’s advice will put you on the path to financial freedom. The cornerstone of his plan is the Emergency Fund. By putting this money away, you have a pool of cash to use for car repairs, new tires, fixing the dishwasher, unplugging the drain, or whatever else life throws at you without reaching for the “magic plastic”.

As you are saving this Emergency Fund, Ramsey asks people to cut-up their credit cards and use their Emergency Fund instead. Then replenish the money so you keep the fund available.

If you are married, it is vital that both of you agree on this course of action. Deciding to get out of debt must be a joint decision. You must be working together and not be unequally yoked to this idea. Nothing is more divisive in a marriage than fighting about money. To get both of you on the same page with getting debt free, Ramsey has classes that he offers called Financial Peace University. The cost of materials is about $100 but worth it.

My wife and I attended the Financial Peace classes at a local church about five years ago. I didn’t really know what to expect but found the classes helpful. The classes are held over several weeks. Part of the class is viewing Ramsey and some others, often his daughter, via a DVD presentation. The class facilitators also do various exercises with those attending, many of these are as groups. When we attended, there were eight or nine families. Any worksheets involving money are anonymous although those leading the group many have an idea who wrote which numbers.

The exercise that really got my attention was the one at the beginning where everybody listed their debts and then turned the number into the facilitators. This is part of a before v after comparison designed to show progress towards the baby steps of establishing an Emergency Fund and starting to pay off debt via a “snowball”. It was shocking when the total debt in the room was announced—remember this figure did not count anything owed on a home. Over half of the debt in the room belonged to me and my wife! It was a sobering moment.

Since that night we have paid-off over $100,000 of that original debt and the remaining balance will be gone before the end of 2019. Truthfully, we don’t stick with the snowball as religiously as we could. We still allow for vacations and a few wants. We are honest enough to distinguish between “wants” and “needs”; however, we always pay cash.

A word of caution, when you start cancelling credit cards, the offers begin pouring into your mailbox. Ramsey is a big advocate of going “cold turkey” on the plastic. Cut it up, throw it away, and never look back. Your dealers, Wells Fargo, Citibank, Discover, Golden 1, Chase, Amazon, Costco, etc., will really miss their 24 percent payment each month and offer you even more debt to come back.

If this is the MasterCard, guess who’s the slave?

I think of it as free drugs from the dealer just to get you hooked again. Two percent cash back is still 22 percent to the dealer so exactly how is that a bargain? Buy the heroine and get free needles? Oops, not blogging about San Francisco today.

Anyway, if you are up to your eyeballs in debt, there really is hope and a support network should you need it. Yes, your lifestyle may change as you learn to live within your means but freedom has always had a price. The only thing better than being debt free is teaching your children to learn from your mistakes and showing them a better way.

Since starting down this path, we are optimistic about our future. How many of you still paying for DirecTV so you can watch Fox News and CNN can say the same?

Johnnie Does: Side Burn BBQ & Brew

Editor’s Note: Johnnie Does is an irregular feature on this blog. Whenever Johnnie has a bone to pick with someone or something and just has to vent by writing about it, he sends it my way. Today, Johnnie presents a food review of a recent lunch at a Dickey-less BBQ establishment.

About a month ago, the Dickey’s BBQ in Elk Grove suddenly closed. It was strange. They were overpriced but the food was generally decent. I frequented the joint about 4 times a year. Truth be told—like any BBQ joint–it all comes down to how much people like your cue’ sauces. There are many different styles of BBQ and I’m not here to educate…so let’s get to the food!

I learned that the old Dickey’s was re-opening as a “Side Burn BBQ and Brew.” This was intriguing; I thought a new independent store was opening. I found out upon my arrival that the local Dickey’s franchisee Jared (omitting his last name) closed all 7 of his local stores (none were Subways) and started his own brand! Good for him!

I entered the venue and found it to be basically the same as the old Dickey’s. The only changes I noticed; no more ice cream machine, and all the references to Dickey’s were removed. Besides a fresh coat of paint and a menu board with a few changes, not much was noticeable in the differences department. The menu, however, was noticeably dissimilar with many new meat items added and sides as well, but the old Dickey’s concept was present overall; the board, large baked potatoes, meat plate combos, pre-selected meat sandwich combos, etc. The prices were similar or maybe even higher than the old Dickey’s…I found this odd; especially since the article I read about the re-launch stated that the change was due in part because the franchisee wasn’t making much $$$ as a Dickey’s owner. They serve BBQ burritos…odd, and only do tri-tip on Tuesdays, and beef ribs only on Saturdays. I don’t understand the burrito thing; I really don’t get limited choices available only on certain days. I get it when a store does a daily special or deal of the day, but limiting a menu item to one day a week seems misplaced. What if someone raved about the tri-tip, and on Friday night I swing by your joint and am told you only serve it once a week?

They are going with the new trend among younger people with the whole “locally sourced thing.” I think it’s a mistake, when people go to a BBQ joint I don’t think they care if their chicken is from a Vietnamese market in South Sacramento or one from MacLean, Virginia. They probably also don’t care if it was raised anti-biotic free or not. I am calling BS on a couple of these “local companies” Harris Ranch does their beef products; they are from Bakersfield, almost 6 hours away. I don’t call that local to the Sacramento area. The chicken is from Petaluma, so I’ll give that t them, but I don’t get the anti-biotic free and free ranged raised thing. The pork is from Smithfield Farms…yes the company owned by the Chinese and based in Virginia. Not local, also I know a local rancher who basically said they are bottom line in terms of quality. Max’s Bakery does their bread, they have a bakery in Fresno, but I don’t really care who bakes my bread, I’m fine with a roll from the local grocer or Sysco truck. Mi Rancho makes their tortilla’s, they are opening a factory in Elk Grove, doesn’t get more local then that! But how many burritos is a BBQ joint serving up? Silva Sausages are local, however they are very bottom end, Safeway will sell me a 4 pack of sausages, not on sale mind you for $4. Color me unimpressed.

I went with the pork sandwich with coleslaw, when asked if I wanted to add two sides for $5 extra I balked, the total ticket would have been over $12. My sando…I guess that hipster for sandwich was $6.50. My counterpart in the office ordered a two item plate, which came with two sides and cornbread or a roll for $13. He chose jalapeno jack sausage and brisket. Apparently they serve two kinds of brisket, juicy or dry, he chose juicy. For his sides he chose hatch mac and cheese, and red skinned mashed potatoes.

The concept is set up the same as Dickey’s; similar to a Chipotle except we had to order and pay first. Only one other person was in the store. We wanted to watch our food being assembled but we were shooed away which was interesting considering there are low counters conducive to being able to watch the sausage being made, pardon the pun. Our food arrived, we both looked disgusted….this was like being told you’re getting a filet mignon and out comes a Salisbury steak. My sando was a burger bun, no more than 4 oz of pulled pork, two Vlassic pickle slices and one red onion circle.

Notice the word circle not slab. I took one bite and immediately ran to the BBQ sauce and doused it. The meat was so bland and flavorless!

My counterpart’s dish was no better. His brisket was dry, and again in bad need of sauce, his sausage was a bigger joke, he got about 4 slices of sausage, cut diagonally to appear like a larger serving. The mashed potatoes were out of a box, guaranteed, no way those aren’t instant mashed potatoes found at your local hospital or retirement home. The mac and cheese was a bigger joke, it was Kraft for certain with a couple hatch chili shavings in it. His cornbread…well we don’t know because a roll came out instead.

Overall, without a doubt average BBQ, average setting playing pop music as opposed to country or western music. Prices way too high, and in general I was so unimpressed. It was only day two since they opened but as stated earlier only 1 other patron was in the store at 12:30, not a good sign for high lunch hour.

Best of luck, but I have a feelin’ ya’ll be closin’ soon,

Johnnie Does

Now Tesla is Spying on You

Tesla Charging Station in China

The Tech Industry is very cozy with the Chinese government and not just because iPhones are cheaper to make there. Tech companies willingly participate in Chinese government censorship and suppression of their citizens. Tech companies know that most laptops, cell phones, televisions, and other electronic devices that they sell all over the world regularly report user data back to their masters in China but have no problem with this as long as the get their financial cut.

Governments in the United States are tinkering with the idea of mileage taxes which have rightly raised the specter of government tracking your every movement—which my cell phone and health band already do.

Now this from China.

SHANGHAI (AP) — When Shan Junhua bought his white Tesla Model X, he knew it was a fast, beautiful car. What he didn’t know is that Tesla constantly sends information about the precise location of his car to the Chinese government.

Tesla is not alone. China has called upon all electric vehicle manufacturers in China to make the same kind of reports — potentially adding to the rich kit of surveillance tools available to the Chinese government as President Xi Jinping steps up the use of technology to track Chinese citizens.

More than 200 manufacturers, including Tesla, Volkswagen, BMW, Daimler, Ford, General Motors, Nissan, Mitsubishi and U.S.-listed electric vehicle start-up NIO, transmit position information and dozens of other data points to government-backed monitoring centers, The Associated Press has found. Generally, it happens without car owners’ knowledge.

And critics say the information collected in China is beyond what is needed to meet the country’s stated goals. It could be used not only to undermine foreign carmakers’ competitive position, but also for surveillance — particularly in China, where there are few protections on personal privacy. Under the leadership of Xi Jinping, China has unleashed a war on dissent, marshalling big data and artificial intelligence to create a more perfect kind of policing, capable of predicting and eliminating perceived threats to the stability of the ruling Communist Party.

China’s electric vehicle monitoring raises surveillance fear

Shanghai Data Center monitoring real-time data

Oh, remember all those self-driving cars the utopian folks here in California want to unleash on the public? The article addresses that too:

There is also concern about the precedent these rules set for sharing data from next-generation connected cars, which may soon transmit even more personal information.

Many vehicles in the U.S., Europe and Japan transmit position information back to automakers, who feed it to car-tracking apps, maps that pinpoint nearby amenities and emergency services providers. But the data stops there. Government or law enforcement agencies would generally only be able to access personal vehicle data in the context of a specific criminal investigation and in the U.S. would typically need a court order, lawyers said.

Automakers initially resisted sharing information with the Shanghai monitoring center; then the government made transmitting data a prerequisite for getting incentives.

“The automakers consider the data a precious resource,” said a government consultant who helped evaluate the policy and spoke on condition of anonymity to discuss sensitive issues. “They gave you dozens of reasons why they can’t give you the data. They give you dozens of excuses. Then we offer the incentives. Then they want to give us the data because it’s part of their profit.”

There was concern that data pulled from electric vehicles might reveal proprietary information about, for example, how hybrids switch between gas and battery power, and eventually set automakers up for commercial competition with a Chinese government entity. As cars become more connected, carmakers are looking to tap new revenue streams built on data — a market McKinsey estimated could be worth $750 billion by 2030.

The Chinese government’s ability to grab data as it flows from cars gives its academics and policymakers an edge over competing nations. China tends to view technology development as a key competitive resource. Though global automakers have received billions in incentives and subsidies from U.S., European and Japanese governments, they are contributing data to the Chinese government that ultimately serves Beijing’s strategic interests.

Global automakers stressed that they share data to comply with Chinese regulations. Nearly all have announced plans to aggressively expand their electric vehicle offerings in China, the world’s largest car market.

“There are real-time monitoring systems in China where we have to deliver car data to a government system,” Volkswagen Group China chief executive Jochem Heizmann said in an interview. He acknowledged that he could not guarantee the data would not be used for government surveillance, but stressed that Volkswagen keeps personal data, like the driver’s identity, secure within its own systems.

“It includes the location of the car, yes, but not who is sitting in it,” he said, adding that cars won’t reveal any more information than smart phones already do. “There is not a principle difference between sitting in a car and being in a shopping mall and having a smart phone with you.”

Jose Munoz, the head of Nissan’s China operations, said he was unaware of the monitoring system until the AP told him, but he stressed that the automaker operated according to the law. Asked by the AP about the potential for human rights abuses and commercial conflicts posed by the data sharing, Munoz smiled and shrugged.

If you read the American media, you’d think the real threat to our nation comes from Russia. Really?

In the 1980’s, Japan was famous for saying, “Business is war”. Almost 40 years later, China has raised the concept to an art form—with the support of likeminded people in America—and the stakes are not just commerce but the freedom of the world. We have never seen a global totalitarian regime rule the planet but China is positioning itself to be the first.

Those that see this as a possibility are considered nutjobs by the Liberal Elites. Donald Trump is concerned that America’s dependence on China is a problem but most folks don’t care as long as YouTube and Facebook are working on their cell phones.

Obama Motors Kills Electric Car

General Motors announced that it is terminating 15 percent of its workforce. That is just over 14,000 jobs.

The cuts will eliminate more than 14,000 jobs in all, roughly 8,100 white collar positions and more than 6,000 factory jobs, according to the company.

GM to halt production at several plants, cut more than 14,000 jobs

I can’t recall the last time I saw more white collar jobs cut than blue collar. Per the above article, GM is also closing several production facilities. Hardest hit at Michigan, Ohio, and Toronto, Canada.

The Detroit automaker said plants in Ohio, Michigan, Maryland, and Ontario will be “unallocated” in 2019 and it will cease operations at two additional plants outside of North America by the end of next year. It will also wind down operations at propulsion plants in White Marsh, Maryland, and Warren, Michigan.

GM is expecting the move to save the company 6 billion per year starting in 2020. Speaking of the blue collar jobs:

More than 6,200 jobs are at stake: roughly 1,500 in Hamtramck; 1,600 in Lordstown; about 2,500 in Oshawa; and a total of 645 at transmission plants in Warren in suburban Detroit and near Baltimore.

The Hamtramck plant makes the Chevrolet Volt and Impala, the Cadillac CT6 and the Buick LaCrosse. Those vehicles and other cars made at the targeted facilities will be terminated.

General Motors to close Detroit, Ohio, Canada plants

President Obama visits Volt manufacturing plant

This brings us to the most sarcastic article on the subject.

Six years ago, President Barack Obama promised to buy a Chevy Volt after his presidency.

“I got to get inside a brand-new Chevy Volt fresh off the line,” Obama announced to a cheering crowd of United Auto Workers activists. “Even though Secret Service wouldn’t let me drive it. But I liked sitting in it. It was nice. I’ll bet it drives real good. And five years from now when I’m not president anymore, I’ll buy one and drive it myself.”

Now it looks like Obama will not get his chance to make good on the promise. General Motors announced Monday that it would cease production of the hybrid electric plug-in Volt and its gas-powered sister car the Cruze. The announcement came as part of a larger restructuring by the car company as it seeks to focus production around the bigger vehicles in favor with U.S. consumers.

The Volt and the Cruze were two of the signature achievements of the partnership between the Obama administration and General Motors following the auto-industry bailout. Although the Volt was long-planned by GM executives, it received a lot of support from the administration. Obama described the Cruze as “the car of the future.”

Watch: Six Years Ago Obama Promised to Buy a Chevy Volt. Now It Is Dead

President Trump and the United Auto Workers are on the same page about this announcement. Per CNBC:

“This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,” said Terry Dittes, a UAW vice president who leads negotiations with GM.

The Detroit Free Press reports:

President Donald Trump, who made keeping manufacturing jobs in the U.S. a major campaign point and promised Lordstown workers that their jobs were safe, was disappointed in the announcement.

“We don’t like it,” Trump said.

He said that he was “very tough” with Barra.

“I spoke with her when I heard they were closing,” Trump said in response to a reporter’s question specifically about the Lordstown closure. “And I said, ‘You know, this country has done a lot for General Motors. You better get back in there soon. That’s Ohio, and you better get back in there soon.’ “

This move by GM does not bode well for Elon Musk and Tesla. General Motors decision to short-circuit production of the Volt insures that the federal government will not by subsidizing production and purchase of electric or alternative energy vehicles anytime soon. A corollary with this is that government subsidy of charging stations and electric car infrastructure is gone also.

Conclusion: the free market wins and utopian Liberals lose. Government arbitrarily picking winners and losers in the market place will get trumped by consumer choice every time.

California Conservatives Voting with Their Feet

Many years ago, a young man seeking to improve his lot in life was given the advice to “go west, young man”.

Now, a hundred odd years later, folks in California are echoing Davie Crocket, “you may all go to hell and I will go to Texas”.

About 130,000 more residents left California for other states last year than came here from them, as high costs left many residents without a college degree looking for an exit, according to a Sacramento Bee review of the latest census estimates.

They most often went to cheaper, nearby states — and Texas. Since 2001, about 410,000 more people have left California for Texas than arrived from there. That’s roughly equivalent to the population of Oakland.

California has seen more than 15 consecutive years of net resident losses to other states. The trend was sharpest at the height of the housing boom between 2004 and 2006. It slowed markedly during the housing bust but quickened again during recent years.

California lost more residents to other states than it got last year

Folks the conservative trickle will become a tsunami under Gavin Newsom as the middleclass seeks refuge elsewhere as Gavin does for the State what he did to San Francisco.

However, lest you think the grass is greener, this warning from Texas.

When economist James Gaines gave a talk recently about the economy and the real estate market, his biggest audience response came from an unexpected topic.

Gaines, chief economist at the Real Estate Center at Texas A&M University, told hundreds of local real estate agents what to expect in the years ahead regarding the state’s population growth and demographic changes.

“Do you know what Texas looks like in 30 years?” Gaines asked the audience.

“California,” he offered as the whole ballroom of folks groaned and rolled their eyes.

Nothing gets a bunch of Texans more riled up than to tell them they are turning into California.

“I’m serious about it,” he said. “The problems, the issues, politically, socially, economically, land use, housing resources — go down and tick off the issues. We are going down the same path.”

A house in Texas’ most expensive metro area — Austin — that will cost you just over $300,000 will go for twice that in Los Angeles and more than $1.5 million in San Francisco.

With soaring home and apartment prices on the West Coast and a shortage of affordable labor, no wonder everyone, from recent college grads to Amazon’s top brass, is looking east for greener pastures. And Texas is at the top of their shopping list.

Say it ain’t so: Is Texas turning into California?

Bottom line: Liberalism doesn’t work here so don’t take it with you when you leave. Don’t turn the rest of the country into a third world cesspool like California. If you aren’t willing to adopt traditional American values, stay home.

FBI’s Tesla Criminal Investigation

Despite what some fan boys have told me about how ingenious Elon Musk is, Tesla is once again in the news for blowing smoke. Being that they make electric cars, that in itself is quite a feat.

Following the recent spanking by the Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI) is looking into Tesla for lying to investors.

Federal Bureau of Investigation agents are examining whether Tesla misstated information about production of its Model 3 sedans and misled investors about the company’s business going back to early 2017, people familiar with the matter say.

Action in the criminal investigation, headed by the U.S. attorney’s office in San Francisco, has intensified in recent weeks after the Securities and Exchange Commission settled separate civil charges with Tesla and Chief Executive Officer Elon Musk, the people said.

Tesla had disclosed on Sept. 18 that it had received a “voluntary request” for documents from the Justice Department, 10 days before the company and Mr. Musk struck a settlement with the SEC of civil charges on in a separate case involving controversial tweets from Mr. Musk. But it hasn’t been previously reported that the Justice Department is focusing on Tesla’s Model 3 production issues dating to early last year and that the criminal securities-fraud probe is intensifying.

In February 2017, after reporting fourth-quarter 2016 results, Tesla laid out an aggressive production plan to bring out the Model 3, with plans to ramp up to 5,000 vehicles a week in the fourth quarter. On a conference call that month with analysts, Mr. Musk said he was pushing suppliers to be ready for a weekly run rate of 1,000 vehicles in July to 2,000 in August and 4,000 in September.

A few months later in July, Mr. Musk sounded confident that Tesla would be producing 20,000 Model 3s a month in December 2017, in line with his previous pledge of having 5,000 vehicles a week by year’s end. “Looks like we can reach 20,000 Model 3 cars per month in Dec,” he tweeted on July 2, 2017, days before the first Model 3 rolled off the production line.

Tesla ended up producing 2,700 Model 3s for all of 2017, and 793 in the last week of 2017.

Now the FBI is comparing the company’s statements with its production capability during 2017. Authorities are homing in on whether the company made projections about its Model 3 production knowing it would be impossible to meet the goals, people close to the situation say.

Tesla faces deepening criminal probe over whether it misstated production figures

Give Musk’s erratic behavior recently and his supposed genius I.Q. it makes me wonder if he wants to be kicked off the Tesla Board so when the proverbial wheels fall off the company he can avoid the blame. I don’t recall that being the captain’s strategy when the Titanic hit the iceberg but then again you can only go down with your ship once.

Why is SEARS Going Bankrupt?

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.

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 15^th, 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.

Tesla Has Been Framed: Elon Musk is a Genius

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.

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…”

Rod Serling welcoming us to the Twilight Zone

Musk Out at Tesla…Well Sort of

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.

Tesla’s Elon Musk, SEC settle fraud charges

Is Musk really that out of control or does he want to be off the Board when the company financially implodes?