October Budget Deficit Surges 34% To $134 Billion, Worst In Five Years

October Budget Deficit Surges 34% To $134 Billion, Worst In Five Years

One month after the Treasury reported that in fiscal 2019 the US budget deficit hit $984 billion, a 26% increase from a year earlier, and the largest annual deficit since 2012’s $1.1 trillion, today the US Treasury released the latest monthly deficit data which revealed that in October, the first month of Fiscal 2020, the US deficit shortfall hit $134 billion, a $34 billion, or 34%, increase to the $100 billion deficit in October 2018, bigger than the average forecast of $130 billion.

October’s deficit was the biggest in five years, just shy of the $136.5 billion in October 2015, and sets the US on the path to surpassing a $1 trillion deficit for the first time in eight years.

In the first month of fiscal 2020, income of $246 billion dropped 2.8% from a year earlier, while spending of $380 billion jumped 7.6%. The biggest sources of income were individual income taxes ($126 billion), social insurance and retirement ($90 billion), while the biggest outlays were social security ($89 billion), national defense ($71 billion), medicare ($56 billion) and health ($51) billion, while the US Treasury spent $33 billion on interest on the Federal debt, roughly the same that it spent on veterans’ benefits, education, and agriculture combined.

The monthly deficit would have been greater had Trump not imposed tariffs on Chinese goods: in October, customs duties boosted US revenue by $7.8 billion, up from $5.6 billion a year ago, and represents tariffs U.S. companies paid on imports of Chinese merchandise.

In October, the cumulative 12-month deficit gap hit 4.7% of GDP, the largest since May 2013. The US has not had a full-year budget surplus since 2001.

So far this year, the CBO’s forecast is spot on: the budget office estimated the October deficit would be $133 billion, and it sees the total federal deficit topping $1 trillion in the current and 2021 fiscal years, about 5 % of GDP.

Addressing Congress earlier on Wednesday, Fed Chairman Jerome Powell said that “the federal budget is on an unsustainable path” that ultimately could limit lawmakers’ ability to support the economy in a downturn. During the question-and-answer period before the Joint Economic Committee, Powell said lawmakers can’t ignore deficits and that it’s important for the economy to grow faster than debt. Alas, one look at the CBO’s long term debt forecast suggests that by that definition, the US is probably doomed.


Tyler Durden

Wed, 11/13/2019 – 15:24

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U.S. Diplomat Bill Taylor: It Was ‘Crazy’ To Freeze Aid to Ukraine ‘for Help With a Political Campaign’

American diplomat William B. Taylor, the chargé d’affaires in Ukraine, told congressional investigators during his impeachment inquiry testimony on Wednesday that both a White House meeting and the release of a military aid package to the country were contingent on Ukrainian President Volodymyr Zelenskiy publicly pursuing anti-corruption probes sought by President Donald Trump.

Taylor testified that Gordon Sondland, the Ambassador to the European Union, relayed that “everything” was dependent on Zelenskiy’s announcement that he would both investigate former Vice President Joe Biden and his family, and look into a theory that Ukraine intervened in the 2016 election to benefit former Secretary of State and Democratic presidential candidate Hillary Clinton.

Taylor also detailed a conversation he had on Friday, Nov. 8, with David Holmes, the counselor for political affairs at the U.S. embassy in Ukraine. Taylor says that Holmes told him he had been privy to a July 26 conversation between Trump and Sondland. On that call, a day after the much-discussed exchange between Zelenskiy and Trump, the president asked the E.U. ambassador where he was with “the investigations.” The Ukrainians were “ready to move forward,” Sondland allegedly replied.

The ambassador then told Holmes “that President Trump cares more about the investigations of Biden, which [Rudy] Giuliani was pressing for,” referring to the president’s personal lawyer.

In Taylor’s opening statement, he stressed what he saw as the vital importance of the $400 million in security aid to Ukraine, which was appropriated by Congress to help the Eastern European country fend off Russian military aggression. “It’s crazy to withhold security assistance for help with a political campaign,” Taylor said.

Daniel Goldman, counsel for House Democrats, asked Taylor if he had ever been privy to “personal or political interests of the president of the United States.”

“No, Mr. Goldman, I have not,” Taylor said.

Also testifying was George Kent, the deputy assistant secretary of state for European and Eurasian affairs, who told investigators that the notion that Ukraine interfered in the 2016 presidential election on behalf of Clinton is not substantiated. “I think it’s amply clear that Russian interference” affected the election, he said.

On the subject of Hunter Biden’s involvement on the board of the Ukrainian energy company Burisma, Kent said he reported his reservations to the office of the Vice President that there might be “the perception of a conflict of interest.” When asked about then-Vice President Joe Biden’s successful attempt to depose a prosecutor in Ukraine, Kent told Goldman that there is no evidence to support the notion that he did so to assist his son. Trump has accused Biden of intervening to help the younger Biden avoid any potential corruption probe of Burisma, despite the fact that several international agencies lobbied for the prosecutor’s removal on corruption accusations.

“To your knowledge is there any factual basis to support those allegations?” Goldman asked.

“None whatsoever,” Kent replied.

“When Vice President acted in Ukraine, did he act in accordance with official U.S. policy?” Goldman asked.

“He did,” Kent said.

House Republicans dismissed the impeachment inquiry, with ranking member Rep. Devin Nunes (R–Calif.) equating it with a “carefully orchestrated media smear campaign.”

In his line of questioning, Steve Castor, counsel for House GOP, sought to characterize allegations of Ukrainian corruption—both during the 2016 election and in Burisma—as valid and worthy of exploration apart from any explicit reward Trump stood to gain. During one exchange, he repeatedly pressed Taylor to admit that he “certainly could appreciate President Trump’s concerns” about Ukrainian election interference.

“I don’t know the exact nature of President Trump’s concerns,” Taylor said, adding that he “was surprised by them.”

Castor also portrayed Hunter Biden as unqualified for the role he held at Burisma, asking Taylor if he felt he had the proper experience to work at the energy company.

“I believe that companies build their boards with a variety of reasons in order to promote their business plans,” Taylor replied.

When Republican representatives took their respective turns probing the witnesses, they coalesced around two primary points: that Taylor and Kent could have both separately misheard and misunderstood all of their exchanges with those in Trump’s circle, and that, since the aid was eventually released without Ukraine investigating Biden, there was a quid—but no quo.

Rep. Mike Turner (R–Ohio) cast the conversations as hearsay, although the statements relayed during testimony on Wednesday would not qualify as such. “If I’m sitting here and I overhear your conversation right in front of me, I have heard it,” explained CBS legal analyst Rikki Klieman, “so when I repeat your words this is something I’ve perceived with my own ears, the same way as if I saw something. So we’re getting the legal term into this mismatched.”

Rep. Jim Jordan (R–Ohio)—the combative congressman added to the House Intelligence Committee just last week—emphasized the latter defense, highlighting that no investigations took place before Ukraine’s aid was reinstated.

“Those two things didn’t happen, so you had to be wrong,” he said.

“The other thing that happened when that assistance was on hold,” Taylor replied, “was that we shook the confidence in our reliability.”

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Evo Slams “Sneaky, Nefarious Coup” As Oppo Senator Names Herself Acting President Of Bolivia

Evo Slams “Sneaky, Nefarious Coup” As Oppo Senator Names Herself Acting President Of Bolivia

After now ousted Bolivian President Evo Morales showed up in Mexico, where he’s been granted asylum, chaos continues gripping the streets of the Latin American country, as Morales-supporters have taken to the streets en mass to condemn what they’re calling a military coup.

Making matters worse Senator Jeanine Añez Chavez, the deputy senate speaker, on Tuesday declared herself interim president of Bolivia, yet without so much as a senatorial quorum or public vote on the matter, yet with the support of the army which says it’s in line with the constitution. She vowed, however, that she hopes to see elections “as soon as possible.”

Senator Jeanine Añez has the support of the military as self-declared ‘Interim President’, via Pagina 12 News

Regional reports noted that only Morales’ critics showed up to the Senate session where Anez unilaterally named herself interim president. 

Morales, meanwhile, was quick to respond from his place of asylum in Mexico that she is a “coup-mongering right-wing senator” and said his supporters’ attempts to access the Senate had been denied. Morales also called the series of events which led to his rapid ouster at the start of the week “the sneakiest, most nefarious coup in history.”

Meanwhile security forces have vowed to take back the streets, deploying heavily in the administrative capital of La Paz, where throngs of angry Morales supporters squared off against police. The US embassy has evacuated all non-essential personnel according to reports, as pro-Evo socialist demonstrators have vowed to reject the “right-wing coup”

The AFP reports the death toll is rising fast amid fresh clashes:

Bolivia’s attorney general, Juan Lanchipa, said Tuesday that seven people have died in unrest since the election, raising the previous toll of three.

The United States meanwhile warned its citizens against travel to Bolivia, ordered its diplomats’ family members to leave and authorized non-emergency employees to depart due to the unrest.

Anti-Morales opposition activists have haled Sen. Anez’s declaration as being in accord with the Bolivian constitution, while legislators from Morales’ Movement for Socialism declared the assembly session “illegal”.

Left-wing critics of the turnover in power are likening the crisis to a new imperialist takeover and “coup” hostile to indigenous communities.

And to be expected, Washington chimed in, with the White House issuing a statement on Morales’ ouster, calling it a “significant moment for democracy in the Western Hemisphere” and accused the former socialist president of attempting to “override the Bolivian constitution and the will of the people” in seeking a fourth term, which triggered the opposition uprising in the streets against him. 

The White House also stated” “These events send a strong signal to the illegitimate regimes in Venezuela and Nicaragua that democracy and the will of the people will always prevail.” And added provocatively, “We are now one step closer to a completely democratic, prosperous, and free Western Hemisphere.”


Tyler Durden

Wed, 11/13/2019 – 15:06

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Truckers, Beware… CA Wants You Gone

Truckers, Beware… CA Wants You Gone

Authored by Kelli Ballard via LibertyNation.com,

California used to be the dream place to live and work. With its range of landscapes, beaches, mountains, pleasant weather, and fertile soil, people flocked to the Golden State to make a better, more enjoyable life for themselves and their families. In days past, “California or bust!” could be seen on the sides of wagons as people rushed West to seek their fortune in gold.

Now, however, it seems more accurate to say “Leave California or bust!” as many independent contractors find out that new Assembly Bill 5 (AB 5) could put thousands of owner-operated truckers and other drivers, such as those for Uber and Lyft, out of business.

Another one of Gov. Gavin Newsom’s schemes to come under fire, AB 5 makes it hard for companies to justify hiring independent contractors. In an op-ed for the Sacramento Bee, he wrote:

“Contributing to this imbalance is the misclassification of workers, where companies eager to save on labor costs identify workers as ‘independent contractors’ rather than employees. Workers lose basic protections like the minimum wage, paid sick days and health insurance benefits. Employers shirk responsibility to safety net programs like workers’ compensation and unemployment insurance. Taxpayers are left to foot the bill.”

Also known as the gig worker bill, AB 5 threatens the livelihood of many independent contractors as well as businesses that depend on them. First introduced in December last year, the bill and seeks to codify Dynamex Operations West, Inc. v Superior Court of Los Angeles. The case determined that Dynamex wrongfully classified its workers as independent contractors based on the assumption that “a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits.” As a result, the ABC test was put into place.

According to HDT, “The ruling required companies to use a newly adopted ABC test to determine who is an independent contractor, which consists of certifying:

A That the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;

B That the worker performs work that is outside the usual course of the hiring entity’s business; and

That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.”

The Western States Trucking Association told its members during a meeting in May, “Most legal analysis of the ruling agrees the ABC test sets an impossible standard for most of our members to meet,” especially the B provision.

Shawn Yadon, CEO of the California Trucking Association (CTA), said that amendments could have helped protect the “70,000 predominantly minority-owned truckers currently operating as independent contractors.”  He added:

“There is no reason why protecting workers does not include defending the right of tens of thousands of drivers who have built their businesses around the independent owner-operator model, invested hundreds of thousands of dollars in their trucks and have operated their own businesses for decades.”

Labor unions have been pushing the bill, but, as Yadon noted, the bill doesn’t distinguish between a driver under a truck lease-purchase program and one who owns the truck outright. “It virtually destroys the independent contractor model for trucking.”

The state already suffers from residents and businesses moving on to greener – and less expensive – pastures, and AB 5 only worsens this trend. Yadon warned the bill will have consequences that extend beyond employment classification. “Like the rest of the nation, California is experiencing a shortage of truck drivers, this measure will aggravate the problem by removing thousands of drivers from rosters as many have indicated they will move to other states or seek a different line of work all together.”

Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, told HDT that he heard from owner-operators that the well-known Swift Transportation company already was terminating owner-operator leases in the state.

According to CTA, there are more than 136,950 primarily small and locally owned trucking companies with small fleets and independent drivers in California. One of those businesses, AB Trucking, a small drayage company based in Oakland, is owned by Bill Aboudi. The businessman said that his company owns its own trucks but sometimes uses owner-operators for special accounts the company can’t handle on its own or during peak volumes.

“[AB 5] will have an impact on us accepting more work,” Aboudi lamented. “Most of the companies are pure owner-operator companies [that] will be destroyed, and the owner-operators will have no place to go – a complete disaster.”

The bill is set to go into effect on Jan. 1.


Tyler Durden

Wed, 11/13/2019 – 14:55

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San Francisco Activists Are Trying to Stop Business Owner From Converting His Arcade Repair Shop Into a Normal Arcade

San Francisco business owner Joey Mucha wants to convert an arcade repair shop he owns into a simple arcade and restaurant space, a use his property is already zoned for. Yet he has been stymied by neighborhood activists who argue that his project will further contribute to the gentrification of the Mission District.

With the help of the city’s notoriously cumbersome planning process, these activists have delayed Mucha’s project for months already, and they might succeed in killing it off entirely. Should that happen, his arcade will become yet another promising business idea snuffed out by a pervasive NIMBYism that is trying to freeze America’s cities in place.

“I’m hemorrhaging money at the moment to keep my employees on [and] to weather this storm,” Mucha tells Reason.”If this gets voted down, I will likely have to slim down my already-small business to survive, to support my family.”

Opposing Mucha’s plan is Kevin Ortiz—an activist affiliated with local anti-gentrification groups Cultural Action Network (CAN) and United to Save the Mission (USM)—who has asked the city’s planning commission to stop Mucha from setting up an arcade.

An arcade space, Ortiz has argued in planning applications and in the press, will cost the neighborhood valuable repair space and the blue collar jobs that come with it—all so wealthy newcomers to the city can have yet another place to party.

Come Thursday, the commission—which has absolute say over most building permits—will decide whether Mucha can go ahead with his plans for his property, or if he’ll have to abandon them entirely.

Mucha’s request for a permit for his arcade should have been a relatively straightforward affair: His family already owns the property in question. The only occupant of the building was his own arcade rental business, Joey the Cat, which uses the space to store and service a collection of Skee-Ball, pinball, and Whac-A-Mole machines. The site is already zoned to allow for arcade and restaurant use, meaning it doesn’t require special variances or conditional use permits. On top of that, most of the neighbors are OK with Mucha’s plan to add additional public space to the neighborhood.

Not being able to move ahead with his arcade would be both a financial hardship and a personal tragedy.

Mucha says he got into the arcade business almost by accident when he purchased a used Skee-Ball machine off eBay for $500 a decade ago so that he could hone his skills to play in a Skee-Ball league.

“I practiced on it, and figured out how it worked. I disassembled it and reassembled it,” he tells Reason, saying that he soon started to rent out the machine to clients of the start-up firm he worked at, where he had a marketing job.

His side gig proved profitable enough that he started buying more machines and placing them in bars and restaurants around town. Eventually, he quit his day job, and made arcade rentals his full-time occupation.

At first, he ran the business out of his apartment, then a shipping container storage area, and, after that, out of a section of a city-owned warehouse. In 2014, with the help of his family, he purchased his current building on 19th Street in the Mission from the owner-operator of an autobody shop who has since retired.

Having his own space allowed Mucha’s business to offer another service: private events.

“That happened organically. We’ve got these games, we fix them up, they’re staged here ready to go out to bars and events, why don’t we see if people want to come play them,” says Mucha, who started renting out his repair space for corporate off-site retreats, non-profit events, and even neighbors’ birthday parties.

These events required Mucha to get permits from the San Francisco Fire Department and Entertainment Commission, which he did.

But despite his property being zoned to allow for arcade use, the site’s past use as an auto body shop required him to get a change of use permit—something he didn’t have, and without which his private events were technically illegal.

In March 2018, a complaint was filed against Mucha for hosting private events at his business. A July 2018-dated notice of enforcement from the Planning Department informed Mucha that, while a game arcade was allowed at his property, he would still need to obtain a change of use permit to convert it from a production, distribution, and repair use.

Realizing he’d need to go through the city’s labyrinthine planning process, Mucha hired a permit expeditor, and together they started trying to abate the planning department’s complaint.

At first, he tried to get his building converted to some sort of trade shop that would allow him to keep his repair operations onsite while still hosting private events. That, he says, proved unworkable.

Instead, Mucha decided he would move the repair portion of his business to a different location and convert his 19th Street place to a public arcade and restaurant space—a major undertaking.

“We are talking about a $1-million-dollar project,” he says. “We’re talking structural [change], build a mezzanine, build a kitchen, build four bathrooms, redo the entryway, cover up all these building and code things.”

In April, he filed an application with the Planning Department for permission to change the use of his building and perform these extensive renovations.

On June 25, the Planning Department issued a notice informing the public that if they objected to Mucha’s permit application they’d have the standard 30 days to file for discretionary review.

Discretionary review is a process through which any member of the public can ask San Francisco’s Planning Commission—a seven-member appointed body that oversees the Planning Department—to review the application for a permit.

Even if a permit application complies with all laws on the books, as Mucha’s does, the Planning Commission still has the authority to deny the permit, or condition its approval on the applicant agreeing to do things not otherwise required by the zoning code or city regulations.

The discretionary review process is frequently used and abused by NIMBYs and activists to stop or delay disfavored projects, whether that’s a falafel shop, an apartment building, or a single-family home. Even if a request for discretionary review is denied, it can still hold up a project by months.

That is exactly what has happened to Mucha.

On the last possible day, Ortiz filed an application for a discretionary review, listing a number of reasons why he thought Mucha’s arcade would be bad for the neighborhood.

“One of the main threats to the Mission and its working-class and Latino families who are being driven out by gentrification right now is the conversions from blue-collar work sites and community-serving sites to destination and party sites for wealthier newcomers to the city,” reads Ortiz’s application. “This proposal is a quintessential example of this problem and will contribute to further displacement impacts.”

Ortiz also complains that Mucha had already marketed his space for corporate events, and hosted parties from both Google and Uber.

In further comments to the online publication Mission Local, Ortiz explained that he thought yet another alcohol-serving business in the Mission would increase property crime and bring more traffic to the area.

“It’s not designed for families,” he said to Mission Local. (Reason reached out to Ortiz for comment, but received no reply.)

These kinds of complaints are common from CAN and USM activists, which often argue against new development on the grounds that it will sacrifice the traditionally working-class character of the predominately Hispanic neighborhood for the benefit of rich techies.

A quick scan of USM’s Facebook page shows they’ve organized numerous protests against all sorts of projects this year, including a new cannabis lounge, a new gym, a new office building, and new housing.

Come Thursday, the group will assemble at city hall to oppose Mucha’s project, which their Facebook event describes as contributing to the “Disneyfication” of the neighborhood.

Mucha disputes this characterization of his business as an agent of gentrification, saying that in addition to corporate events, he’s hosted community groups, birthday parties for kids, and neighborhood gatherings.

It’s a characterization that rankles some of the neighbors too, including Marlene Samson, who owns the janitorial business next door. Samson, a lifelong Mission resident, says that everyone from her nieces to her mother to neighborhood nuns have participated in events at Mucha’s business.

“One of my nieces went to the venue for a child’s party and it went off without a hitch. The kids had to be pulled out of there, they didn’t want to go home,” Samson tells Reason. “How much more neighborhood can you be when you have the nuns and the kids…and all the neighborhood people there?”

Samson submitted a letter of support for Mucha’s project to the planning commission, as have a number of other businesses, nonprofits, the Mission Merchant Association, and even California State Treasurer Fiona Ma, who had met Mucha previously (and wrote to say that she was “impressed by Mr. Mucha’s entrepreneurship” and that she “support[s] his vision to transform the space”).

Ortiz, as mentioned, filed his discretionary review application in late July, but Mucha’s project didn’t end up getting scheduled for a Planning Commission hearing until November 7. A public notice of the hearing was issued by the Planning Department on October 18.

However, when Mucha showed up to the planning commission on November 7, Ortiz was not present. A Facebook post dated that same day pictures him attending the California Alcohol Policy Alliance’s annual summit in Los Angeles, which was held on the same day.

Another project opponent, who identified herself as Spike Kahn, was present on the day, but asked commissioners to delay the hearing as she had just heard about the project that morning, and needed more time to prepare.

This is despite an October 30-dated Planning Department packet on the discretionary review hearing listing a Spike Kahn as already having sent a letter opposing the project. (Given that this is San Francisco, it is improbable but not impossible there are two different people named Spike opposing the same project.)

Mucha pleaded with the commissioners to go ahead with proceedings anyways, saying he had been trying to legalize his business for over a year and that further delays would cost him time and money he didn’t have.

Instead, planning commissioners voted 3-2 to postpone the hearing to this Thursday.

Mucha describes the postponement as a deliberate pressure tactic, saying “any delay can be catastrophic for my business.

Even if that’s not the case, it is remarkable that despite it being Mucha’s business up for discussion at the hearing, most of the commissioners decided to privilege the interests of his opponents in the planning process—one of whom hadn’t bothered to show up, and the other of whom showed up supposedly unprepared, even though they were identified as a project opponent a week before the hearing.

For most of the time that his project has been working its way through the planning process, Mucha has been unable to host private events—events which he says had up as much as 40 percent of his revenue.

Fortunately, in early October, the Planning Department gave him temporary permission to host twice-weekly events during November and December while his permanent change of use application worked its way through the planning process.

That, says Mucha, is helping him stay afloat. Should his application to convert his space into an arcade get rejected, Mucha predicts that he will have to let his two employees go and return to being a sole proprietor.

But what rankles him the most about the process, he says, is the accusation that his business won’t be family-friendly.

“I just had a kid. I live on the block,” he says. “Why would I try to make a space that isn’t family-friendly when I’m raising a family within 200 feet?”

Barring further delays, Thursday’s hearing will decide the fate of Mucha’s business. Win or lose, his story is yet another example of how the city’s planning process forces business owners to go through hell just so they can eke out a living.

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Fiat Chrysler Is Trying To Stuff Dealer Channels With Over 40,000 Cars

Fiat Chrysler Is Trying To Stuff Dealer Channels With Over 40,000 Cars

As the global automobile market continues down the path of recession, it isn’t just tensions with consumers that are rising.

Fiat Chrysler is apparently at odds with many of its U.S. dealers after trying to get them to accept inventory of about 40,000 vehicles that they didn’t order, according to Bloomberg

Four dealers came forward and said that the company has revived a “sales bank”, which is a decade old practice that is frowned upon by investors and analysts because it can muddy the waters of an automaker’s inventory figures. Dealers dislike it because it creates pressure to take delivery of vehicles they don’t want.

Chrysler had used sales banks in the two times it needed eventual rescues from the U.S. government – in 1980 and 2009.

While the company doesn’t appear to be in the same type of distress, the tactic has been brought up again as the company has pursued mergers with Renault and PSA Group.

Sales banks date back to the 1960s and were sworn off by Lee Iacocca in 1979. He called the practice in his autobiography “nothing more than an excuse to keep the plants running when we didn’t have dealer orders for the cars.”

Fiat denies that it has started a sales bank, stating that it “put a predictive analytics system in place early this year that aims to better align its supply chain and manufacturing plans with anticipated dealer orders.”

The company said: “We’re producing pre-specificationed vehicles against predicted demand so the right vehicles are available when dealers need them.”

The strategy was put in place by North American Chief Operating Officer Mark Stewart, formerly of Amazon. Putting the system in place and extending the lead time it took for dealers to order cars saved the company about $441 million this year, through Q3. The company has reduced inventory by about 120,000 during that span, Stewart says. 

Fiat had started to accumulate the inventory glut over the summer, with dealers looking to pare back inventory after being hit by rising interest rates that increased the cost of holding cars. Other dealers blamed lack of incentive support from the company. And Fiat is lagging behind the rest of the industry in moving old product off its lots: it took Fiat Chrysler dealers 101 days on average to sell each vehicle during the quarter, 24 more days than the industry average.

Niel Golightly, Fiat Chrysler’s global chief communications officer, said that the company’s modeling has proven accurate and that Fiat has ended quarters with as few as 1,000 vehicles that it has ordered and been unable to sell to dealers.

At the end of Q3, the number of unordered cars was down to about 5,000 vehicles. While that number it low, it still left some dealers “angered” by pressure tactics that they say can “lead to bad behavior”. 

Chief Executive Officer Mike Manley said on a conference call last quarter: “Working with our dealer network to achieve and maintain discipline with stock levels continues to be one of our top priorities.” 

And, hey, it’s different this time, right? David Kelleher, a Philadelphia-area Fiat Chrysler dealer said: “They’re not making this a practice. It’s a one-off. That’s in my rear-view mirror, and I’m pleased with the way Chrysler handled it.”

Chrysler also recently agreed to pay a $40 million penalty related to years of fraudulent sales reports, according to the SEC.


Tyler Durden

Wed, 11/13/2019 – 14:35

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San Francisco Activists Are Trying to Stop Business Owner From Converting His Arcade Repair Shop Into a Normal Arcade

San Francisco business owner Joey Mucha wants to convert an arcade repair shop he owns into a simple arcade and restaurant space, a use his property is already zoned for. Yet he has been stymied by neighborhood activists who argue that his project will further contribute to the gentrification of the Mission District.

With the help of the city’s notoriously cumbersome planning process, these activists have delayed Mucha’s project for months already, and they might succeed in killing it off entirely. Should that happen, his arcade will become yet another promising business idea snuffed out by a pervasive NIMBYism that is trying to freeze America’s cities in place.

“I’m hemorrhaging money at the moment to keep my employees on [and] to weather this storm,” Mucha tells Reason.”If this gets voted down, I will likely have to slim down my already-small business to survive, to support my family.”

Opposing Mucha’s plan is Kevin Ortiz—an activist affiliated with local anti-gentrification groups Cultural Action Network (CAN) and United to Save the Mission (USM)—who has asked the city’s planning commission to stop Mucha from setting up an arcade.

An arcade space, Ortiz has argued in planning applications and in the press, will cost the neighborhood valuable repair space and the blue collar jobs that come with it—all so wealthy newcomers to the city can have yet another place to party.

Come Thursday, the commission—which has absolute say over most building permits—will decide whether Mucha can go ahead with his plans for his property, or if he’ll have to abandon them entirely.

Mucha’s request for a permit for his arcade should have been a relatively straightforward affair: His family already owns the property in question. The only occupant of the building was his own arcade rental business, Joey the Cat, which uses the space to store and service a collection of Skee-Ball, pinball, and Whac-A-Mole machines. The site is already zoned to allow for arcade and restaurant use, meaning it doesn’t require special variances or conditional use permits. On top of that, most of the neighbors are OK with Mucha’s plan to add additional public space to the neighborhood.

Not being able to move ahead with his arcade would be both a financial hardship and a personal tragedy.

Mucha says he got into the arcade business almost by accident when he purchased a used Skee-Ball machine off eBay for $500 a decade ago so that he could hone his skills to play in a Skee-Ball league.

“I practiced on it, and figured out how it worked. I disassembled it and reassembled it,” he tells Reason, saying that he soon started to rent out the machine to clients of the start-up firm he worked at, where he had a marketing job.

His side gig proved profitable enough that he started buying more machines and placing them in bars and restaurants around town. Eventually, he quit his day job, and made arcade rentals his full-time occupation.

At first, he ran the business out of his apartment, then a shipping container storage area, and, after that, out of a section of a city-owned warehouse. In 2014, with the help of his family, he purchased his current building on 19th Street in the Mission from the owner-operator of an autobody shop who has since retired.

Having his own space allowed Mucha’s business to offer another service: private events.

“That happened organically. We’ve got these games, we fix them up, they’re staged here ready to go out to bars and events, why don’t we see if people want to come play them,” says Mucha, who started renting out his repair space for corporate off-site retreats, non-profit events, and even neighbors’ birthday parties.

These events required Mucha to get permits from the San Francisco Fire Department and Entertainment Commission, which he did.

But despite his property being zoned to allow for arcade use, the site’s past use as an auto body shop required him to get a change of use permit—something he didn’t have, and without which his private events were technically illegal.

In March 2018, a complaint was filed against Mucha for hosting private events at his business. A July 2018-dated notice of enforcement from the Planning Department informed Mucha that, while a game arcade was allowed at his property, he would still need to obtain a change of use permit to convert it from a production, distribution, and repair use.

Realizing he’d need to go through the city’s labyrinthine planning process, Mucha hired a permit expeditor, and together they started trying to abate the planning department’s complaint.

At first, he tried to get his building converted to some sort of trade shop that would allow him to keep his repair operations onsite while still hosting private events. That, he says, proved unworkable.

Instead, Mucha decided he would move the repair portion of his business to a different location and convert his 19th Street place to a public arcade and restaurant space—a major undertaking.

“We are talking about a $1-million-dollar project,” he says. “We’re talking structural [change], build a mezzanine, build a kitchen, build four bathrooms, redo the entryway, cover up all these building and code things.”

In April, he filed an application with the Planning Department for permission to change the use of his building and perform these extensive renovations.

On June 25, the Planning Department issued a notice informing the public that if they objected to Mucha’s permit application they’d have the standard 30 days to file for discretionary review.

Discretionary review is a process through which any member of the public can ask San Francisco’s Planning Commission—a seven-member appointed body that oversees the Planning Department—to review the application for a permit.

Even if a permit application complies with all laws on the books, as Mucha’s does, the Planning Commission still has the authority to deny the permit, or condition its approval on the applicant agreeing to do things not otherwise required by the zoning code or city regulations.

The discretionary review process is frequently used and abused by NIMBYs and activists to stop or delay disfavored projects, whether that’s a falafel shop, an apartment building, or a single-family home. Even if a request for discretionary review is denied, it can still hold up a project by months.

That is exactly what has happened to Mucha.

On the last possible day, Ortiz filed an application for a discretionary review, listing a number of reasons why he thought Mucha’s arcade would be bad for the neighborhood.

“One of the main threats to the Mission and its working-class and Latino families who are being driven out by gentrification right now is the conversions from blue-collar work sites and community-serving sites to destination and party sites for wealthier newcomers to the city,” reads Ortiz’s application. “This proposal is a quintessential example of this problem and will contribute to further displacement impacts.”

Ortiz also complains that Mucha had already marketed his space for corporate events, and hosted parties from both Google and Uber.

In further comments to the online publication Mission Local, Ortiz explained that he thought yet another alcohol-serving business in the Mission would increase property crime and bring more traffic to the area.

“It’s not designed for families,” he said to Mission Local. (Reason reached out to Ortiz for comment, but received no reply.)

These kinds of complaints are common from CAN and USM activists, which often argue against new development on the grounds that it will sacrifice the traditionally working-class character of the predominately Hispanic neighborhood for the benefit of rich techies.

A quick scan of USM’s Facebook page shows they’ve organized numerous protests against all sorts of projects this year, including a new cannabis lounge, a new gym, a new office building, and new housing.

Come Thursday, the group will assemble at city hall to oppose Mucha’s project, which their Facebook event describes as contributing to the “Disneyfication” of the neighborhood.

Mucha disputes this characterization of his business as an agent of gentrification, saying that in addition to corporate events, he’s hosted community groups, birthday parties for kids, and neighborhood gatherings.

It’s a characterization that rankles some of the neighbors too, including Marlene Samson, who owns the janitorial business next door. Samson, a lifelong Mission resident, says that everyone from her nieces to her mother to neighborhood nuns have participated in events at Mucha’s business.

“One of my nieces went to the venue for a child’s party and it went off without a hitch. The kids had to be pulled out of there, they didn’t want to go home,” Samson tells Reason. “How much more neighborhood can you be when you have the nuns and the kids…and all the neighborhood people there?”

Samson submitted a letter of support for Mucha’s project to the planning commission, as have a number of other businesses, nonprofits, the Mission Merchant Association, and even California State Treasurer Fiona Ma, who had met Mucha previously (and wrote to say that she was “impressed by Mr. Mucha’s entrepreneurship” and that she “support[s] his vision to transform the space”).

Ortiz, as mentioned, filed his discretionary review application in late July, but Mucha’s project didn’t end up getting scheduled for a Planning Commission hearing until November 7. A public notice of the hearing was issued by the Planning Department on October 18.

However, when Mucha showed up to the planning commission on November 7, Ortiz was not present. A Facebook post dated that same day pictures him attending the California Alcohol Policy Alliance’s annual summit in Los Angeles, which was held on the same day.

Another project opponent, who identified herself as Spike Kahn, was present on the day, but asked commissioners to delay the hearing as she had just heard about the project that morning, and needed more time to prepare.

This is despite an October 30-dated Planning Department packet on the discretionary review hearing listing a Spike Kahn as already having sent a letter opposing the project. (Given that this is San Francisco, it is improbable but not impossible there are two different people named Spike opposing the same project.)

Mucha pleaded with the commissioners to go ahead with proceedings anyways, saying he had been trying to legalize his business for over a year and that further delays would cost him time and money he didn’t have.

Instead, planning commissioners voted 3-2 to postpone the hearing to this Thursday.

Mucha describes the postponement as a deliberate pressure tactic, saying “any delay can be catastrophic for my business.

Even if that’s not the case, it is remarkable that despite it being Mucha’s business up for discussion at the hearing, most of the commissioners decided to privilege the interests of his opponents in the planning process—one of whom hadn’t bothered to show up, and the other of whom showed up supposedly unprepared, even though they were identified as a project opponent a week before the hearing.

For most of the time that his project has been working its way through the planning process, Mucha has been unable to host private events—events which he says had up as much as 40 percent of his revenue.

Fortunately, in early October, the Planning Department gave him temporary permission to host twice-weekly events during November and December while his permanent change of use application worked its way through the planning process.

That, says Mucha, is helping him stay afloat. Should his application to convert his space into an arcade get rejected, Mucha predicts that he will have to let his two employees go and return to being a sole proprietor.

But what rankles him the most about the process, he says, is the accusation that his business won’t be family-friendly.

“I just had a kid. I live on the block,” he says. “Why would I try to make a space that isn’t family-friendly when I’m raising a family within 200 feet?”

Barring further delays, Thursday’s hearing will decide the fate of Mucha’s business. Win or lose, his story is yet another example of how the city’s planning process forces business owners to go through hell just so they can eke out a living.

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We Likely Won’t Cut Carbon Dioxide Emissions 45 Percent by 2030

In order to have a good chance of preventing global average temperatures from exceeding 1.5°C by 2100, the Intergovernmental Panel on Climate Change’s Global Warming of 1.5°C report issued in October, 2018, asserted that global net anthropogenic CO2 emissions must decline by about 45 to 50 percent from 2010 levels by 2030 (and reach net zero around 2050). This is not going to happen, if the new International Energy Agency’s World Energy Outlook 2019 (WEO) report is to be believed.

The WEO projects future energy consumption and emissions trajectories using three different scenarios. In the current trends scenario, countries make no additional efforts to curb fossil fuel consumption and associated emissions. In the stated policies scenario, the agency presumes that all countries will mostly abide by the commitments they’ve made with respect to reducing fossil fuel consumption and carbon dioxide emissions. And the third sustainable development scenario incorporates a set of ambitious policies that assumes significant gains in energy efficiency, the expansive deployment of renewable power generation, carbon capture, and sequestration technologies.

Since most of the IEA report is behind a paywall, let’s rely on the data supplied by the invaluable Carbon Brief to set out the scenarios.

In the “current policies” scenario, world energy consumption grows at 1.3 percent per year and global carbon dioxide emissions continue rising through 205,0 which is the year that the IPCC 1.5°C report says that the world needs to reach net-zero emissions.

IEA emissions reduction trajectories

In “stated policies,” the IEA projects that global energy consumption will rise by 1 percent per year until 2040, which is half the 2 percent rate of growth between 2000 and 2018. About half of that consumption increase will be supplied by renewables and one-third by natural gas. While global carbon dioxide emission growth slows, it would nevertheless rise from 34.7 gigatons in 2017 to 37.1 gigatons in 2030. Global emissions were about 32 gigatons in 2010, so a 45 percent cut means that emissions would have to fall by 14.4 gigatons by 2030.

Are countries likely to fulfill their stated energy and emissions policies?  A new analysis just released by the Universal Ecological Fund, The Truth Behind the Climate Pledges, strongly suggests that this is a doubtful prospect. The report notes that “at least 130 nations, including four of the top five world’s largest emitters, are falling far short of contributing to meeting the 50 percent global emissions reductions required by 2030 to limit global temperature increase to 1.5°C above pre-industrial levels.”

Even in the IEA’s ambitious Sustainable Development scenario, global CO2 emissions decline to 17 percent below 2010 levels by 2030, 48 percent by 2040, and 68 percent by 2050. According to the IEA, this puts the world “on course for net-zero emissions by 2070,” which has a 50 percent chance of limiting average warming to 1.65°C above pre-industrial levels.

Man-made climate change is a big problem, but the new IEA report persuasively shows that steep, immediate cuts in global energy consumption and carbon dioxide emissions are a pipe dream.

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“We Are Going To War”: Has The Final Apocalyptic Conflict Between Israel And Her Enemies Now Begun?

“We Are Going To War”: Has The Final Apocalyptic Conflict Between Israel And Her Enemies Now Begun?

Authored by Michael Snyder via The End of The American Dream blog,

On Tuesday, terrorists in the Gaza Strip fired hundreds of rockets at Israel in retaliation for Israel’s targeted killing of the senior commander of Islamic Jihad in Gaza.  Many of the rockets were intercepted by the Iron Dome defense system, but quite a few got through, and some even reached as far as Tel Aviv. 

Following those rocket attacks, Israeli tanks and aircraft pounded Islamic Jihad positions in the Gaza Strip, and Israeli officials are pledging to continue to respond to any additional attacks.  Unfortunately, it certainly sounds like more attacks are coming.  According to Islamic Jihad’s Secretary-General Ziad al-Nakhala, his organization is “going to war” with Israel.  The following comes from the Times of Israel

We are going to war. [Prime Minister Benjamin] Netanyahu has crossed all the red lines in assassinating Al-Quds Brigades Commander Baha Abu al-Ata. We will respond forcefully,” PIJ Secretary-General Ziad al-Nakhala told the Dar al-Hayat Arabic-language news site.

Israeli officials felt that they had no choice but to kill Baha Abu al-Ata once they had a clear opportunity to do so.  According to Prime Minister Benjamin Netanyahu, he was an “archterrorist” and was “the main instigator of terrorism from the Gaza Strip”.  The Israeli people are fed up with the endless rocket attacks, and so it makes sense that Israel would target the man that initiated so many of those attacks.

But to Islamic Jihad, Baha Abu al-Ata was a greatly beloved hero, and his death sent shockwaves throughout the entire Middle East.  Once news of his death got out, terrorists in Gaza fired “more than 200 rockets into Israel”

Islamic militants in the Gaza Strip sent a barrage of more than 200 rockets into Israel Tuesday and vowed further revenge after the Israeli military carried out a pair of targeted airstrikes on senior Islamic Jihad commanders, killing one in Gaza and missing the second in Syria.

An Israeli airstrike killed Baha Abu al-Ata, 42, and his wife as they slept in their home in eastern Gaza Tuesday, Israel Defense Forces (IDF) spokesman Lt. Col. Jonathan Conricus, said. Conricus added that Abu al-Ata was responsible for a number of recent rocket attacks on southern Israel and claimed he was actively planning new attacks.

In response to those rocket attacks, IDF tanks and planes absolutely pummeled Islamic Jihad military outposts…

Israeli tanks attacked three Islamic Jihad military posts in the Gaza Strip Tuesday afternoon.

An IDF spokesperson stated: “A short while ago, IDF tanks targeted three PIJ military posts in the Gaza Strip.”

The Israeli Air Force has also bombed numerous Islamic Jihad targets in Gaza in response to the firing of dozens of rockets by the terrorist organization.

And IDF spokesperson Hidai Zilberman told the press that the Israelis are “prepared for several days of battle” if it comes to that.

We shall see what happens, but it appears that we may be looking at a conflict that will last a whole lot longer that just a few days.

Islamic Jihad is promising a campaign of revenge that will “have no borders”, and it is being reported that Israel’s enemies are considering “opening a second or third front in the north”

DEBKAfile’s sources report that when Israel’s security cabinet was convening in Tel Aviv on Tuesday morning, so too were senior officials in Tehran, Damascus and Beirut. They were discussing whether to punish Israel by opening a second or third front in the north.

The Palestinian Jihad also maintains armed forces in Syria and Lebanon, who may be conscripted in both countries for strikes against northern and central Israel in solidarity with their brothers in Gaza. The Gaza headquarters initially reacted to the death of its leader by announcing that their retaliation “would have no borders.” Then, after firing some 50 rockets, Jihad stated that as yet “unprecedented retaliation” was still to come, suggesting that Israel faced attacks from additional borders.

Of course every time Israel’s enemies escalate the conflict, Israel is going to hit back even harder.

And if this conflict escalates enough, it could pull in the Iranians and all of their close allies in the region.  In recent years, Islamic Jihad has actually forged very close ties with Tehran.  The following comes from the Jerusalem Post

PIJ is important for Iran because Tehran’s regime often argues that it is the center of “resistance” against Israel and the US. In order to weave a narrative of “resistance,” it must show that it is actually doing something against Israel. Since Iran doesn’t like to sacrifice its own Islamic Revolutionary Guard Corps members, it works through other groups. In Lebanon it supplies Hezbollah with precision guidance for its rocket arsenal; in Gaza it has relations with PIJ and also with Hamas.

At some point, Israel will find itself fighting against Islamic Jihad, Hamas, Hezbollah and Iran all at the same time.

Could it be possible that we are right on the precipice of that war?

Without a doubt, many on both sides of the conflict are eager to achieve final victory.  For example, on Tuesday one activist group in Israel was openly calling for war with Hamas

The group’s activists were seen hanging signs around the country reading, “Bibi – Give Us The Order!”

“The time has come for Israel to achieve victory over Hamas and all the terror organizations in Gaza,” said Im Tirtzu CEO Matan Peleg. “Peace is made with defeated enemies, and that’s the only way to restore quiet to the south. Today’s assassination of a senior Gazan terrorist was a step in the right direction, and now we need to take the next step and defeat the terror in Gaza once and for all.”

If rockets were constantly being fired at my family and friends, I think that my patience would be gone too.

There simply is not going to be lasting peace in the region as long as the status quo exists.  Islamic Jihad, Hamas, Hezbollah and the Iranian government have all pledged to permanently wipe Israel off the map, and the Israelis are going to respond to every attack against them by hitting back extremely hard.

Whether it happens today, tomorrow or at some future time, the truth is that a major war is coming to the Middle East.

And once that war happens, none of our lives will ever be the same again.


Tyler Durden

Wed, 11/13/2019 – 14:24

via ZeroHedge News https://ift.tt/2qRgNwa Tyler Durden

We Likely Won’t Cut Carbon Dioxide Emissions 45 Percent by 2030

In order to have a good chance of preventing global average temperatures from exceeding 1.5°C by 2100, the Intergovernmental Panel on Climate Change’s Global Warming of 1.5°C report issued in October, 2018, asserted that global net anthropogenic CO2 emissions must decline by about 45 to 50 percent from 2010 levels by 2030 (and reach net zero around 2050). This is not going to happen, if the new International Energy Agency’s World Energy Outlook 2019 (WEO) report is to be believed.

The WEO projects future energy consumption and emissions trajectories using three different scenarios. In the current trends scenario, countries make no additional efforts to curb fossil fuel consumption and associated emissions. In the stated policies scenario, the agency presumes that all countries will mostly abide by the commitments they’ve made with respect to reducing fossil fuel consumption and carbon dioxide emissions. And the third sustainable development scenario incorporates a set of ambitious policies that assumes significant gains in energy efficiency, the expansive deployment of renewable power generation, carbon capture, and sequestration technologies.

Since most of the IEA report is behind a paywall, let’s rely on the data supplied by the invaluable Carbon Brief to set out the scenarios.

In the “current policies” scenario, world energy consumption grows at 1.3 percent per year and global carbon dioxide emissions continue rising through 205,0 which is the year that the IPCC 1.5°C report says that the world needs to reach net-zero emissions.

IEA emissions reduction trajectories

In “stated policies,” the IEA projects that global energy consumption will rise by 1 percent per year until 2040, which is half the 2 percent rate of growth between 2000 and 2018. About half of that consumption increase will be supplied by renewables and one-third by natural gas. While global carbon dioxide emission growth slows, it would nevertheless rise from 34.7 gigatons in 2017 to 37.1 gigatons in 2030. Global emissions were about 32 gigatons in 2010, so a 45 percent cut means that emissions would have to fall by 14.4 gigatons by 2030.

Are countries likely to fulfill their stated energy and emissions policies?  A new analysis just released by the Universal Ecological Fund, The Truth Behind the Climate Pledges, strongly suggests that this is a doubtful prospect. The report notes that “at least 130 nations, including four of the top five world’s largest emitters, are falling far short of contributing to meeting the 50 percent global emissions reductions required by 2030 to limit global temperature increase to 1.5°C above pre-industrial levels.”

Even in the IEA’s ambitious Sustainable Development scenario, global CO2 emissions decline to 17 percent below 2010 levels by 2030, 48 percent by 2040, and 68 percent by 2050. According to the IEA, this puts the world “on course for net-zero emissions by 2070,” which has a 50 percent chance of limiting average warming to 1.65°C above pre-industrial levels.

Man-made climate change is a big problem, but the new IEA report persuasively shows that steep, immediate cuts in global energy consumption and carbon dioxide emissions are a pipe dream.

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