The Curse Of America’s Thinking Class

Authored by James Howard Kunstler via Kunstler.com,

How might we account for the strange melding of neuroticism and dishonesty that has gripped America’s thinking class since the ascent of Donald Trump as an epically reviled figurehead on our ship of state?

It all seems to come down to shame and failure.

There is, for instance, the failure of America’s leading economic viziers to arrest the collapse of the middle class — and with it, the disintegration of families — that more than anything produced the 2016 election result. What is a bigger emergency: the destruction of all those towns, cities, and lives in flyover-land, or the S & P stock index going down twenty points?

The choice made by the “experts” the past ten years is obvious: pump the financial markets at all costs by using dishonest policy interventions which they are smart enough to know will eventually blow up the banking system. They did it to preserve their reputations long enough to retire out of their jobs. The trouble is that the damage is now so extreme that when the time comes for them to apologize it will not be enough. They will lose their freedom and perhaps their heads.

The neuroticism and dishonesty is exactly what turned two of this country’s most sacred and noble endeavors, higher education and medicine, into disgraceful rackets. Sunday night, CBS 60 Minutescovered both bases in their lead story about how the NYU medical school recently declared its program tuition-free. This great triumph was due to an enormous cash gift from one of the founders of the Home Depot company, billionaire Ken Langone. Nowhere in the broadcast did CBS raise the question as to how the cost of a degree became so outrageous in the first place. Or how Mr. Langone made his fortune by putting every local hardware store in America out of business, which enabled him to capture the annual incomes of ten thousand small business owners and their employees. NYU’s grand gesture is just a way to paper over the shame of the University executives’ role in the college loan racket that may destroy countless lives.

Neuroticism and shame is what drives identity politics with all its weird ritual persecutions and punishments. It was the thinking class that led the civil rights campaign of the 1960s. Here we are fifty years later with dozens of ruined cities, failed public school systems, and prisons stuffed with black men way out of proportion to their actual demographic in the general population (nationally 37 percent versus 13 percent). In California, it’s 29 percent while only 6 percent of the state’s male residents are African American. The favored narrative of the thinking class says that the high incarceration rate is due to unfair application of drug laws for relatively minor offenses, especially being caught holding weed.

Okay, marijuana has been legal in California for several years now. Has that altered the statistics? I guess we’ll find out soon. Is there another explanation? Perhaps disproportionate bad behavior of other kinds: assault, robbery, murder? Perhaps the result of government policies engineered by the thinking class to promote single-parent households with no fathers present for three generations now?

After all this time and all the evidence of how pernicious this condition is, why is there no debate about it? Why is the thinking class so dishonest about the most ruinous ingredient in everyday public schooling: bad behavior, violence, and constant classroom disruption. The thinking classes must be ashamed and appalled by all this, since it appears to contradict all the mighty efforts made to uplift the black underclass. And so what was the most notable response? The Obama Department of Education directed school districts to stop suspending and disciplining black kids who behaved badly because it looked bad, and that policy is still in place. How’s that working out?

The latest appeal among the thinking class to remedy these otherwise intractable and embarrassing problems is the panacea of reparations for the descendants of slaves. Of course, the money spent on social services the past half-century, if simply distributed as cash, would have made every African American a millionaire. Personally, I can’t imagine a worse way of ginning up racial animosity across America to the breaking point than these proposed reparations. We will surely hear more about this in the long slog to the 2020 elections, and it will only make the USA look more insane to the rest of the world.

The thinking class’s position on both legal and illegal immigration is possibly even more cynical — because they surely know how dishonest it is, even through the fog of self-deception. Last week California’s attorney general Xavier Becerra proposed that illegal immigration be decriminalized. Surprisingly, nobody laughed at this extraordinary exercise in casuistry. Meanwhile, the state slides into hopeless insolvency, squalor, and chaos — a reminder that people don’t necessary get what they expect, but rather what they deserve.

RussiaGate, of course, has been the most acute locus of neurotic dishonesty across this land the past two years. The primary information organs of the thinking class — The New York TimesThe WashPo, CNN, MSNBC — have not only omitted to apologize for the dangerous hysteria they knowingly propagated, but they persist in supporting the matrix of fantasies at all costs in what must now be seen as a hopeless attempt to preserve their reputations and perhaps even their livelihoods. The repudiation of this nonsense by chief inquisitor Robert Mueller could not be more absolute, even if he was compelled by reality against his own wishes and instincts to do it.

And now, what avenue will all this diseased animus of the thinking class go down in its destructive, shame-fueled frenzy to justify itself?

via ZeroHedge News http://bit.ly/2IkJHvp Tyler Durden

Will a Free Press Cheer on Government Censorship of the Internet?

Internet CensorshipThe United Kingdom appears to be following in the footsteps of the European Union and Australia in trying to punish online platforms that don’t censor content the way government officials want them to.

The British authorities are pondering a proposal to create an entirely new government agency to regulate, and even punish, online communication platforms to make them more thorough in removing content the government deems dangerous or violent.

There isn’t a full-fledged plan yet—more of a blueprint of what lawmakers would like to get passed. But the intent is very clear: The government wants to hold executives at various tech companies liable, financially and possibly even criminally, for content that officials do not want posted online.

Sadly, this move should not be surprising. Every outrage has led to more calls for regulation, and the viral distribution of videos of the recent massacre in Christchurch, New Zealand, may finally be the tipping point, or at least the latest excuse.

What may be more surprising is how willing people in the media—people whose work depends on the right to a free press—are to frame this as a story of wise leaders holding the feet of those irresponsible, profit-grubbing Silicon Valley tech bros to the fire.

Consider Tony Romm’s report on the British plan, published in The Washington Post. It contains a lot of loaded language for what is supposed to be a straightforward news story. The lede to Romm’s piece describes these online companies as having “long dodged responsibility for what its users say or share,” not-so-subtly suggesting that Facebook and Google are getting away something sinister. The article later says these companies face this regulation because they are “failing to clean up a host of troubling content.”

Romm uses the “experts said” route (he literally uses the words “experts said”) to suggest that these regulations could stop the reach of violent content online, yet the only individual human beings quoted in his story are government officials. His example of an “expert” is U.K. Prime Minister Theresa May, who is proving to be no expert in anything at all.

The story ends with a quote from Sajid Javid, U.K.’s home secretary (the cabinet-level position overseeing national security), saying they’re “forcing these firms to clean up their act once and all.” That leaves readers with a message that these companies are doing something wrong by not engaging in enough censorship that pleases the government.

Romm also links to a pro-censorship “Somebody do something!” panicked commentary by Margaret Sullivan that insists that social media companies have to “deal with the crisis that they helped create” by using “editorial judgment” to control what can be said on their platforms, just like news outlets do.

The punchline: Directly under Sullivan’s panicked fearmongering are 1,300 comments posted by readers. They were not, in fact, hand-picked by the Washington Post‘s editors. Here’s how their professional judgment works when it comes to online participation:

Most discussions on The Post are post-moderated, which means reader comments appear almost instantaneously. We do this to foster an organic discussion without delay, but this also means comments that go against the rules may appear before they’re removed.

Our team moderates discussions 24/7, but we rely on the community to help police discussions. If you see a post against the rules, use the flag button to report it. Reports go directly to our team, so be judicious.

Alternatively, readers can block posts from other commenters by muting them. To do this, click their display name and select “Ignore.” You can unmute a reader by going to your profile.

So not even the Washington Post operates the way Sullivan wants. If, say, the U.S. government were to fine the Washington Post if somebody posted an inappropriate comment and their moderators didn’t delete it fast enough, how long would it take for commenting to be removed entirely? Many in the media (myself included) have a love-hate relationship with commenters, so it wouldn’t be surprising if some people at the Post actually want such an outcome. It would be a soft form of government censorship, because it wouldn’t be directly imposed. The Post itself would make the decision—but only because of its fear of fines.

Over at the BBC, technology reporter Chris Fox actually went through the effort to talk to people who value online speech freedom, rather than just leaving this story presentation as though it was about wise regulators bringing feckless tech monsters to heel:

Jim Killock, executive director of Open Rights Group, said the government’s proposals would “create state regulation of the speech of millions of British citizens”.

Matthew Lesh, head of research at free market think tank the Adam Smith Institute, went further.

He said: “The government should be ashamed of themselves for leading the western world in internet censorship.

“The proposals are a historic attack on freedom of speech and the free press.

“At a time when Britain is criticising violations of freedom of expression in states like Iran, China and Russia, we should not be undermining our freedom at home.”

Rather than leaving readers with a government official demanding more control over the Internet for all our own good, Fox chose to end his story with a warning from civil libertarians that these proposals from the United Kingdom could “violate individuals’ rights to freedom of expression and privacy.”

They’re absolutely right to be worried.

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Automakers Stuff Fleet Channels Amid Showroom Demand Collapse

Fleet sales – those to rental companies – have been for a long time the dirty little secret of the automobile industry. They are often times where automakers can bolster numbers that would otherwise looks dismal based only on organic, showroom sales. And according to Bloomberg, this is exactly what has been happening over the last couple of months.

Rental car deliveries and other non-retail buyers have accounted for more than 33% of total sales last month for Ford and Nissan, according to data from Cox automotive. In fact, deliveries to rental companies alone in March and in the first quarter were the highest that they’ve been in two years.

There is, of course, a catch: rental car sales have lower profit margins and generally erode used vehicle prices once they hit the resale market. It seems as though automakers are now, more than in the past few years, leaning on fleet deliveries to make up for demand in the showroom as economic growth in the US and worldwide, is collapsing. 


Zohaib Rahim, manager of economics and industry insights at Cox, told Bloomberg: “Any favorable view we have of the market is because of sales into fleets. The market peak of 2016 is behind us and retail sales are softening more and more now.”

Automakers sold 550,000 vehicles to rental car companies in the first quarter, the most since the first quarter of 2016 and up 6% so far this year. This increase comes on top of a 7% gain in 2018 to 2.7 million. This surge helps explain the resilience of the auto market of late: sales have been down every month this year, but the annualized selling rate has improved to 17.45 million.

Of all auto makers, Ford leaned on fleets the most in March, with its fleet deliveries accounting for 39% of sales, including 19% from rental car companies. The automaker is discontinuing models like the Focus that used to be significant volume contributors.

Ford says it expects these fleet sales to “smooth out over the course of the year” and that they were “dictated by the timing of orders from rental companies”. Oh, but of course, we’re sure it’s all just one big coincidence.

Mark LaNeve, Ford’s U.S. sales chief, said: “Our plans are to end 2019 down slightly in the rental channel. The retail performance was strong where it needed to be, in trucks and new SUVs.”

Nissan’s total fleet share was equally as significant, at 36%, with “most” of the volume going to rental lots.

  • General Motors saw deliveries drop 7% for the quarterwith all four brands falling
    • Chevy Silverado was down 16%
    • Chevy Suburban dropped 25%
  • Fiat Chrysler sales fell 7.3% (estimates were for a decline of 6.4%)
    • Jeep sales fell 11%, continuing the February trend of SUV demand drying up
  • Toyota sales fell 3.5%
    • This beat estimates for the month, but still showed softness
    • Toyota also fell 5% for the first quarter, hurt by a decline in demand for its Corolla
    • Nissan sales were down 5.3% in March
      • Nissan’s first quarter sales were down 11.6%
      • Deliveries fell 23% for its Infiniti brand
    • Ford sales were down 5% in March, according to industry data
      • The company is expected to show a 2% decline for the quarter
    • Honda saw a 4.3% percent increase, as passenger car sales rose more than 4%.
      • Accord sales were up 5%

    And that’s with the fleet channel stuffing. We can only imagine what happens later this year when the rental companies no longer have capacity to buy whatever the OEMs have to liquidate…

    via ZeroHedge News http://bit.ly/2IjImFf Tyler Durden

    Uninsured Farmers Face Existential Crisis As Floods Destroy 100s Of Millions Of Dollars In Crops

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

    This is the worst economic disaster for U.S. farmers in modern American history. 

    Our ongoing trade war with China had greatly depressed prices for wheat, corn and soybeans, and so farmers were storing more crops on their farms than ever before in early 2019.  And then the floods came.  The water moved so fast that the vast majority of the farmers in the affected areas could not have moved what they had stored even if they wanted to, and the scale of the losses that these farmers have suffered is starting to become clearer. 

    According to UPI, “hundreds of millions of dollars in crops” that were destroyed by the flooding were not covered by insurance…

    Hundreds of millions of dollars in crops destroyed in Midwestern floods this month were not insured, farmers say. And the losses could leave many without sufficient income to continue farming.

    “This uninsured grain issue is really starting to affect people,” said Jeff Jorgenson, a western Iowa corn and soy grower whose farm flooded when the Missouri River spilled over its banks March 12.

    Without an extraordinary amount of assistance, there are thousands of farmers that will never be able to come back from this.

    One fifth-generation farmer that was interviewed by Fox News said that about 7 million dollars worth of grain was destroyed in his county alone…

    Dustin Sheldon, a fifth-generation grain and soybean farmer, watched in horror as the floods that devastated the Midwest began to recede and he could assess the damage to his crops.

    He said the record-breaking floods caused about $1 million in losses for his family farm.

    “We figured that there is roughly $7 million worth of grain sitting in these grain bins here just in our county alone that is either destroyed or inaccessible right now that we won’t even be able to get to or sell,”he said. “Financially, there’s a lot of farmers that can’t come back from that and they may be out of business.”

    According to government regulations, when stored crops get flooded they must be destroyed.

    And unfortunately, the government also doesn’t have any sort of a program to cover those losses.  In fact, USDA Under Secretary Bill Northey told Reuters that “there’s nothing the U.S. government can do to help”

    Hundreds of farmers may be out of luck trying to recuperate losses after last month’s historic floods in the Midwest. Millions of bushels of grains were destroyed in more than 800 on-farm storage bins – mostly in eastern Nebraska and western Iowa – and U.S. Department of Agriculture (USDA) Under Secretary Bill Northey recently told Reuters that, under current laws and disaster aid programs, there’s nothing the U.S. government can do to help.

    Of course Congress could pass a law to change all that, but right now that is not happening and it does not appear likely to happen.

    This is yet another example that shows who we send to Congress really matters.  If I had won my race for Congress, I would be endlessly causing havoc until our farmers got the emergency assistance that they desperately need.

    Because as it stands, thousands of farmers that have been financially ruined by this flooding are going to be forced out of the profession forever.

    For 71-year-old farmer Bruce Biermann, it looks like the end has come after the floodwaters destroyed more than $100,000 worth of his stored crops…

    The two grain bins on Bruce Biermann’s farm near Corning, Missouri, could not withstand the strong currents of the Missouri River.

    With four feet of water pressing from the outside and grain swelling from moisture inside, the bins burst.

    At 71, Biermann is looking at more than a $100,000 loss.

    Because of the trade war, he had been storing 12,000 bushels of corn and 8,200 bushels of soybeans until prices went up again.

    Now all of that hard work has been washed away, and no help is on the horizon.

    33-year-old farmer Travis Green has a similar story

    Travis Green, 33, who operates farms in both Kansas and Nebraska, stored 25,000 bushels of yellow corn in a pair of grain bins in White Cloud, Kansas, near the Missouri River.

    One of the bins “literally just blasted open,” after it filled with floodwater and the other was uprooted— destroying an estimated $100,000 worth of corn. On top of that, he’s unsure whether he’ll be able to plant anything this year because of the water damage.

    Even before the floods came, U.S. farm incomes had already sunk to a 12 year low.  America’s farmers need our help more than ever, and yet Congress has chosen to abandon them.

    Overall, AccuWeather is now estimating that the total amount of economic damage from all of this flooding will reach 12.5 billion dollars…

    AccuWeather estimates the total damage and economic loss caused by record-breaking flooding in the Midwestern U.S. this spring will total $12.5 billion, based on an analysis of damages already inflicted and those expected by additional flooding, as well as the lingering health effects resulting from flooding and the disease caused by standing water.

    Personally, I think that number is too low, but we will see.

    And remember, a lot more flooding is still on the way.  Just check out what one expert is saying

    “We’re not done. There is what amounts to a wall of water that will cross the state of Missouri, by way of the Missouri River, and meet a rapidly rising Mississippi River,” Dr. Hurburgh says.

    The snow in Wisconsin and Minnesota is melting this week, and flooding is expected in northern Illinois and southern Wisconsin. That’s all going to end up in the Mississippi River, at a point, he says.

    In addition, a lot more rainfall is coming too.  In fact, powerful storms are set to dump up to 6 inches of rain across the southern portion of the country through Monday night

    In addition, the prolonged period of wet, stormy weather will only exacerbate and worsen the ongoing flooding issues on the Mississippi River and its tributaries.

    Through Monday night, the highest rainfall totals of 3 to 6 inches are forecast to extend from eastern Texas and western Louisiana into southeastern Arkansas, northern Mississippi and western parts of the Tennessee Valley.

    Overall, at least a million acres of U.S. farmland were covered by water by the recent floods.  It is a disaster that we will be talking about for a very long time to come.

    Unfortunately, time is not on the side of the thousands of farmers that have been financially ruined by this great tragedy.

    Congress needs to act, and they need to do so quickly.

    via ZeroHedge News http://bit.ly/2IlMrso Tyler Durden

    Trump Administration Labels Iran’s Revolutionary Guard Corps a ‘Terrorist Organization’

    The Trump administration said today that it is designating a powerful Iranian paramilitary organization as a foreign terror group.

    The Islamic Revolutionary Guard Corps (IRGC) has long faced accusations of sponsoring global acts of terror. A White House press release cites several examples, including an alleged 2011 plot to assassinate Saudi Arabia’s ambassador to the United States. The IRGC has also been known to support various militant groups in the Middle East.

    “The Iranian regime is the leading state sponsor of terror,” says the press release. “It exports dangerous missiles, fuels conflicts across the Middle East, and supports terrorist proxies.”

    “This action sends a clear message to Tehran that its support for terrorism has serious consequences,” President Donald Trump declares in a separate statement. “We will continue to increase financial pressure and raise the costs on the Iranian regime for its support of terrorist activity until it abandons its malign and outlaw behavior.”

    The IRGC is not part of Iran’s normal military, though it is a government organization that answers to the nation’s supreme leader. This move—the first time the U.S. has labeled an entity within another government as a terror organization—means any American conducting business with the IRGC could face criminal charges.

    Secretary of State Mike Pompeo says it will be another week before the new designation takes effect.

    Relations between Iran and the U.S. have been tense for a while, especially since Trump withdrew last year from the two nations’ Obama-era nuclear deal. “We will answer any action taken against [the IRGC] with a reciprocal action,” says a statement issued by a majority of Iranian lawmakers, according to Reuters. “So the leaders of America, who themselves are the creators and supporters of terrorists in the [Middle East] region, will regret this inappropriate and idiotic action.”

    Iranian Foreign Minister Mohammad Javad Zarif has reportedly sent a letter to President Hassan Rouhani calling on Iran to label U.S. military forces in the Middle East “terrorist groups.” Since then, Iran has dubbed the U.S. a “supporter of terrorism” and the U.S. Central Command a terror group.

    Trump’s action came after much debate within the administration, The New York Times reports, with Pompeo and National Security Adviser John Bolton pushing for the designation.

    “There is a reason that successive administrations have held off designating the I.R.G.C. as a terrorist organization, and why many of Trump’s own military and intelligence officials are said to be highly opposed to the move: The potential blowback vastly outweighs the benefits,” Jeffrey Prescott, a Obama-era member of the White House National Security Council, tells the Times. “It will put our service members in Iraq and throughout the region at additional risk with nothing to show in return.”

    John Glaser, director of foreign policy studies at the libertarian Cato Institute, expressed similar sentiments on Twitter:

    The IRGC is, no doubt, a shady organization that does very bad things. But officially labeling it a terror group won’t necessarily decrease, and may well increase, its willingness and ability to cause harm.

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    Trump Fires Head Of Secret Service

    Following former Homeland Security Secretary Kirstjen Nielsen’s Sunday resignation due to her “abysmal failure” to curb the crisis at the southern border (indeed, the number of migrants and asylum seekers pouring into the US has reached unprecedented levels this year), President Trump appears to be embarking on a purge of all Nielsen’s allies and direct reports – starting with Secret Service Director Randolph “Tex” Alles.

    Alles

    Secret Service Director Randolph “Tex” Alles

    According to CNN, Trump has asked Chief of Staff Mick Mulvaney to fire Alles. Alles is reportedly aware that he will soon be pushed out, but his departure hasn’t yet been made official. One of CNN’s sources described Alles’ ouster as part of a “near systematic purge” as Stephen Miller, who has been charged with running the administration’s immigration policy, consolidates power. One official described Miller’s purge as a “wholesale decapitation” of DHS.

    “There is a near-systematic purge happening at the nation’s second-largest national security agency,” one senior administration official says.

    And Alles’s likely won’t be the last head to roll at DHS. Two other top officials are reportedly on their way out.

    United States Citizenship and Immigration Services director Francis Cissna and Office of the General Counsel’s John Mitnick are expected to be gone soon, and the White House is eyeing others to be removed.

    A former marine, Alles was recommended for the post by former White House Chief of Staff John Kelly, who ran the department before his move to the West Wing, per the AP.

    Notably, Alles firing may also be related to an embarrassing episode for the secret service after a Chinese woman illegally entered the President’s Mar-a-Lago club carrying four cell phones, two passports, electronic devices and a thumb-drive containing malware. Whatever the reason, the White House and DHS declined to comment to CNN on the matter.

    via ZeroHedge News http://bit.ly/2VrlgQN Tyler Durden

    Morgan Stanley Sees Tesla Stock Sliding To Musk “Margin Call” Strike Price

    It’s the elephant in the room that nobody, especially Elon Musk, wants to talk about but analysts and investors may soon have to face the idea of “teflon” Elon’s Tesla stock approaching extremely uncomfortable territory. Not only does a falling stock price put pressure on the company when it eventually goes to sell equity (assuming it can), but it also calls into question the fate of hundreds of millions in stock that Elon Musk has personally borrowed against.

    Here things are getting uglier by the day: the steady decline in analyst price targets for Tesla keeps inching closer to Musk’s inevitable margin call territory, which we believe is around $232. And this morning’s downgrade by Morgan Stanley slapped a price target on the company that is just several dollars away from a price that we, and others, believe will trigger Musk’s margin call. 

    Morgan Stanley’s Monday note addressed delivery volume, paltry Model S and X sales and falling revenue while slashing EPS and automotive gross margins targets while calling into question the company’s liquidity (or lack thereof) profile. 

    “We expect the 45% YoY decline in 1Q Model S+X volume will largely continue throughout 2019, impacting mix, margin and cash flow. We mark to market our forecasts following disappointing 1Q deliveries and lower our target to $240. Reiterate Equal-weight,” Morgan Stanley analyst Adam Jonas said in a note out this morning.

    On delivery volume, the one-time Tesla fanboy said:

    We have cut our total company full year 2019 delivery forecast to 344k units vs.362k units previously. We are now below the low end of Tesla’s 360k to 400k range. Over 100% of our delivery reduction is from Model S and X, which we now expect to average 14,800/quarter through the remainder of the year.

    Jonas then lowered his revenue forecast by 7.5%:

    Our 2019 total company revenue forecast falls 7.5% on the delivery revision, exacerbated by mix degradation from Model S and X declines. Our revised auto revenue forecast calls for a 3% YoY decline in both 3Q19 and 4Q19 revenue.

    He also slashed automotive gross margin to 18.4% from 22.3%:

    We have revised our 1Q19 US GAAP auto gross margin forecast to 18.4% from 22.3% previously. Going forward, we forecast US GAAP auto gross margin to improve to 20.9% in 2Q,21.9% in 3Q and 22.2% in 4Q.For the full year, our 2019 GAAP auto gross margin has been revised down 150bps to 21.1%. Our FY forecast includes slightly more than $400mm of ZEV (zero emission vehicle) credit revenue, which is worth 140bps of margin.

    Finally, Jonas took an absolute hatchet to GAAP EPS estimates for the year, revising to a negative $6.55 from a negative $3.59:

    FY19 US GAAP EPS revised to negative $6.55 from negative $3.59 previously. Our 2020 EPS forecast falls to $0.21 from $2.64 previously. Our 2025 EPS forecast falls to $14.78 from $15.88 previously.

    In addition, the note addressed what Jonas believes could be “key changes to the narrative” that could send the stock lower, including concerns over the company’s financial strength and whether or not the company has access to capital. 

    So just another downgrade? Why is any of this notable or material? Because back in April of 2018, we asked whether or not Musk would be the next high profile CEO to potentially face a margin call. We noted then that Musk’s loans were limited to 25% of the value of the pledged stock, a policy that seemingly did not exist when the 2017 proxy was issued. The figure we used for the value of Musk’s margin loans came from the registration statement for Tesla’s March 2017 stock sale, in which on p. S-9 it notes that he (at that time) owed a total of $624.3 million to various financial institutions, with the largest amount ($344.4 million) owed to Morgan Stanley.

    We concluded that $232.30 could be a reasonable target for a Musk margin call:

    “…if Musk owed $624.3 million over a year ago and subsequently paid interest on that loan while drawing a minimal salary ($49,920) and continuing his aforementioned luxurious lifestyle while pouring $100 million into his latest distraction, the Boring Companyit seems reasonable to guess that his current loans total approximately $800 million, which means—according to the new proxy—they’d need to be collateralized by $3.2 billion in Tesla shares. As the proxy notes Musk has currently pledged 13,774,897 of his 37,853,041 shares to support those loans, it implies that at a share price below $232.30 (assuming a current balance of $800 million), he’d face either a margin call or the need to post additional shares as collateral. (For some perspective, earlier this month the stock dipped as low as the $244s.)”

    But for now, Tesla stock has still defied most analysts’ pessimistic expectations of it, despite finally breaking below the $300 level.

    What Morgan Stanley refers to as negative sentiment we just refer to as reality, and the cold hard facts are that if reality ever hits this company, analysts won’t even matter at this point: it’s stock price may become a self fulfilling prophecy – in the wrong direction for Elon Musk.

    via ZeroHedge News http://bit.ly/2U6bEJE Tyler Durden

    “Trying To Stay Afloat:” Tesla Employee Resorts To GoFundMe After Workers’ Comp Denied

    Launched on Saturday, a GoFundMe campaign titled “Trying to stay afloat,” was created by a Tesla Motors employee who alleges the company has not paid him workers’ compensation in over four months.

    Carlos Aranda, 43, a lead production worker at Tesla’s Fremont factory, was injured on the job in December “because of their [Tesla] gross negligence,” said the GoFundMe summary.

    “I am not one to even want to ask for help but ive come the lowest point in my life. My company has been refusing to pay me what is owed. I was injured at work in December and have been off work since then because of their gross negligence. My quality of life is massively reduced because of my injuries. In the last over 4months they have only paid me for 10 days. My wife who also is injured and works for the same company has had to return to work but that is not enough to keep us going. We are about to lose our living situation and our car because we cant pay for either one. We are almost to the point of no food or gas money. We have 2 children in foster care and without the car or gas money we cant even go see them or do anything towards our reunification. I havent been asking anything from workers comp other than what has been owed to me. Ive worked for the last 28yrs and would love to be able to return to work but they have not accomodated me and are refusing to pay me. Any help now would be appreciated even if its just to spread the word. Thank you so much for taking your time to look at this.”

    About 120 days since the accident, Aranda alleges that Tesla has only compensated him for ten days. By law, Tesla is required to carry workers’ compensation insurance, which should cover a majority of Aranda’s wages while recovering from the work-related injury. However, that is not the case here.

    Aranda said his “quality of life” has collapsed since the accident, and he cannot pay his bills because he has exhausted all of his savings. “We are almost to the point of no food or gas money. We have 2 children in foster care and without the car or gas money we can’t even go see them or do anything towards our reunification,” part of the summary read.

    The employee posted his Work Status Summary on Sunday, which provides some legitimacy to the GoFundMe campaign.

    “I wanted to share with everyone what injuries i am dealing with. I have bilateral carpal tunnel syndrome, ganglion cyst left wrist, left arm cubital tunnel syndrome and though not listed in the picture i have plantar faciatis in both feet,” the summary read.

    A Truthdig report in November revealed how Tesla employees on the production line aren’t allowed to dial 911 in the event of a severe or life-threatening injury; they must first ask for permission from supervisors.

    The report said one worker last year severed his finger and wasn’t allowed to ride in an ambulance, but instead, Tesla doctors called a Lyft to have him transported to the emergency room.

    Former Tesla clinic employees said line workers had been systematically sent back to work without proper medical attention.

    The GoFundMe campaign has raised roughly $2,800 in less than 24 hours by 48 people. Scrolling through recent donations, you will find a handful of the Tesla short crowd [#TSLAQ] donating funds to Aranda.

    via ZeroHedge News http://bit.ly/2KhBSt0 Tyler Durden

    “Ghastly” Vancouver Home Sales Crash By 46%, Lowest Since 1985

    The Saretsky Report contributed to this article.

    Just like last month, when Grant’s Interest Rate Observer dubbed the Vancouver housing market as “ghastly”, in April Vancouver once again reported the fewest monthly sales in 33 years.

    According to the Real Estate Board of Greater Vancouver, total housing sales were 46.3% below the 10-year March sales average and was the lowest total for the month since 1986. Condo sales took a steep drop, falling 35% year-over-year as they play catch up with the detached housing market.

    City of Vancouver Condo sales in March

    “Housing demand today isn’t aligning with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced,” Ashley Smith, REBGV president said. “For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market.”

    “What policymakers are failing to recognize is that demand-side measures don’t eliminate demand, they sideline potential home buyers in the short term. That demand is ultimately satisfied down the line because shelter needs don’t go away. Using public policy to delay local demand in the housing market just feeds disruptive cycles that have been so well-documented in our region.

    Given the lack of sales this allowed condo inventory to nearly double, growing 94% from last year. While the rapid pace of inventory growth is concerning the months of inventory remains balanced at just under 6 months. However, given new listings continue to grow and there are still over 40,000 units under construction in Greater Vancouver so inventory will continue trending higher which will surely place added price pressure on the condo segment.

    As we can see, with lower sales and rising inventory price pressures are already building: looking at the overall market, the MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver was $1,011,200 in March 2019, a 7.7% decrease from March 2018. The benchmark price for a detached home is $1,437,100, a 10.5% decrease from March 2018, and a 0.4% decrease compared to February 2019.

    Finally, condo prices fell 7.5% year-over-year. The average price per square foot now shows an 11.5% decline from last year…

    … all of which is a vivid reminder of what happens to various global assets when Chinese oligarch bidders of last resort, desperate to park their assets offshore, step away.

    via ZeroHedge News http://bit.ly/2FWn1im Tyler Durden

    24 California Cities Sue to Stop Home Weed Deliveries

    A coalition of California local governments is suing the state’s top marijuana regulator for legalizing the home delivery of recreational cannabis.

    On Thursday, 24 cities and Santa Cruz County filed a lawsuit against the Bureau of Cannabis Control (BCC), alleging that the BCC’s decision in July 2018 to allow for door-to-door pot delivery statewide violated Prop. 64, California’s legalization ballot initiative.

    That measure, passed in November 2016, ended marijuana prohibition but left local governments with wide discretion over how to regulate the newly legal industry. That includes the power to ban recreational cannabis businesses outright, something 80 percent of California’s 482 municipalities have done, according to the Los Angeles Times.

    The dispute over home delivery pits the power of these local governments against those citizens who, having been deprived of nearby brick-and-motor stores, depend on delivery services for ready access to marijuana.

    “The negative impact delivery bans would have on the industry and the state cannot be understated,” Josh Drayton of the California Cannabis Industry Association tells the Los Angeles Times, warning that a ban on deliveries would force users “into the illicit market.”

    Opponents of home marijuana delivery argue that when Prop. 64 let local governments ban marijuana-related businesses, that naturally included marijuana delivery businesses. Their lawsuit also points to a failed bill last year that would have kept local governments from prohibiting home marijuana deliveries, saying this is evidence that existing law gives local governments that power.

    Supporters of home delivery point out that Prop. 64 did not let local governments ban the transportation of marijuana through their jurisdictions. A law passed by the California legislature further establishes that “a local jurisdiction shall not prevent delivery of cannabis or cannabis products on public roads.”

    The lawsuit argues that even if cities can’t regulate deliveries on public roads, they still have the power to pass rules on what happens at private addresses.

    As a matter of what the law says, the cities suing the BCC may have a point about the state overreaching. As a matter of what would be good policy, the justification for limiting home deliveries is remarkably weak.

    For all the problems with banning a physical weed store, it at least targets something that anti-cannabis people can see and be offended by. A ban on home delivery, by contrast, targets behavior that is almost entirely undetectable. It basically limits what cannabis consumers can do in their own home, which undermines the whole purpose of repealing the state’s marijuana prohibition in the first place.

    At best, these bans will only force consumers to drive to the next town over to purchase marijuana. More likely, it will just mean more consumers continue to rely on an untaxed, unregulated black market. That might not trouble libertarians, but it cuts against the stated goals of home delivery opponents, who justify their bans by saying they want to prevent the criminal activity that will come along with any commercial cannabis activity.

    The lawsuit will take a while to wind through the courts. In the meantime, California potheads might want to order as much home-delivery weed as they can.

    from Hit & Run http://bit.ly/2Iks0wb
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