Tesla Jumps After Smaller Than Expected Loss; Warns Cash Burn Is About To Hit Ludicrous Speed

As we previewed yesterday, perhaps more so that the longs it was the company’s near record shorts who were expecting today’s earnings release to see if their bearish bets on the company will pan out. And while the stock slid all day, losing 4% in regular hours after Jim Chanos announced he was short the car maket, the stock now appears to be jumping in the after hours session having just reported its Q1 results which were as follows:

  • Q1 GAAP Revenue: $1.6Bn, Est. $1.61BN
  • Q1 EPS: $(0.57), Est $(0.60)
  • Q1 Gross Margin 21.7%, Exp. 20.6%
  • Tesla produced 15,510 vehicles in Q1, up 10% from Q4.

A modest beat on the bottom line with a smaller loss than expected, while revenue was in line. Tesla also said that “Model S production of 12,851 vehicles
met plan, but Model X production of 2,659 vehicles was insufficient to meet our projected level of deliveries.” But what was more important to investors was that Tesla reaffirmed full year deliveries which it expects to be in the 80,000-90,000 range.

This is what else Elon Musk previewed in the quarterly letter:

  • Advancing 500,000 unit build plan by two years to 2018
  • Volume Model 3 production and deliveries to start in late 2017
  • Model S orders up 45% compared to Q1 last year, accelerating globally
  • Model X production increased from 507 in Q4 to 2,659 in Q1
  • Cash balance up $245M sequentially inclusive of ABL & exclusive of Model 3
  • Affirming 80,000 to 90,000 deliveries this year

There was not one mention of China in the entire letter.

Of course, this being Tesla, all of the numbers, including revenue, were non-GAAP. Here is what GAAP vs non-GAAP looks like. First revenue:

And then EPS:

 

However, there was just one truly important question – one we asked on Twitter earlier:

We now know: it’s not a new product, but actually just a shift in the delivery calendar, because according to Musk, he now expects to deliver 500,00 cash a year not in 2020 but in 2018, and the result will be a surge in CapEx spending:

Given our plans to advance our 500,000 total unit build plan, essentially doubling the prior growth plan, we are re-evaluating our level of capital expenditures, but expect it will be about 50% higher than our previous guidance of $1.5 billion for 2016

Which brings us to the key topic: Tesla’s perpetual cash burn. In Q1 Tesla burned another $446 million in cash, bringing the total cash burn over the past year to $2.1 billion.

 

Well, Tesla now has an excuse to burn even more as a result of a boost in CapEx spending to meet its accelerated schedule. And as expected:

Naturally, this will impact our ability to be net cash flow positive for the year, but given the demand for Model 3, investing to meet that demand is the best long-term decision for Tesla.

“Demand” which is based on $1,000 refundable deposits. Meanwhile, Tesla’s Cash is now $1.44 billion, up from $1.2 billion three months ago, while it Debt increased by $500 million to $3.1 billion.  The only question is whether Musk will fund his ludicrous cash burn with more debt or an imminent equity offering.

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EIA Petroleum Weekly Report Analysis 5-4-2016 (Video)

By EconMatters

 

Some impressive internals for this report are blunted because of OPEC supply finding its way to the United States. The drop in US Oil Production was noteworthy in this report.

The United States should be thinking much more strategically with their energy policy right now. Again Politicians are dropping the ball at a crucial point from an economics standpoint in the energy industry. China is taking appropriate steps to monetize the current environment, while the United States continues to be the proverbial Deer in Headlights watching an excellent opportunity to add to the Strategic Petroleum Reserves at decade low prices in the oil market slip by the wayside.

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Stocks Slump, Dollar Jumps After China Sends Message To Fed

But but but Tim Cook said AAPL was "optimistic" about China!!!

 

China started the shenanigans by devaluing the Yuan fix by the most since the August collapse…sending a loud and clear message to The Fed – if you normalize rates (and strengthen the USD) we will unleash 'wealth-destroying' volatility…

 

European stocks stumbled once again as Italian bank risks surge…

 

"Most Shorted" stocks fell for the 2nd day in a row – the biggest 2-day drop in 3 months…

 

Trannies & Small caps bearing the brunt of the most shorted weakness…

 

With Nasdaq leading the way (down over 6% year-to-date), S&P 500's 2-day tumble has plunged it back to the verge of red for 2016 (joining Small Caps yesterday). Gold (up 20.7%) and the Long Bond (Up 7.8%) remain the best performers year-to-date as The Fed rate-hike appears to have sparked a flight to safety not a rush to recovery…

 

Just as S&P 500 cash nears 2043.94 (remember 2100?), VIX was smashed lower to save the world…

 

But Bonds & Bullion remain 2016's biggest gainers…

 

As perhaps fear of the "W" remains…

 

It seems we better get Tim Cook on CNBC again tonight…

 

Financials continue to slide and Energy stocks ended notably lower despite a small green close in crude…

 

HYG (high Yield bonds) broke back below their 200DMA..

 

Treasury yields ended the day lower by in a very narrow range

 

The US Dollar rose again (2nd day on a row after 6 straight days lower) led by commodity currency collapse (CAD/AUD down over 2% on the week)..

 

Crude managed a panic-bid into the NYMEX close to end green but in general commodities weakened with the stronger USD (copper, iron ore, rebar were hammered)

 

Charts: Bloomberg

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One Man (Who Is Not A Fan Of Trump) Explains Why Trump Winning Is Good For Democracy

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

While it might sound strange, a coronation of Hillary Clinton in the Democratic primary will mark the end of the party as we know it. There’s been a lot written about the “Sanders surge,” with much of it revolving around Hillary Clinton’s extreme personal weakness as a candidate. While this is indisputable, it’s also a convenient way for the status quo to exempt itself from fault and discount genuine grassroots anger. I’m of the view that Sanders’ support is more about people liking him than them disliking Hillary, particularly when it comes to registered Democrats. He’s not merely seen as the “least bad choice.” People really do like him.

 

The Sanders appeal is twofold. He is seen as unusually honest and consistent for someone who’s held elected office for much of his life, plus he advocates a refreshingly anti-establishment view on core issues that matter to an increasing number of Americans. These include militarism, Wall Street bailouts, a two-tiered justice system, the prohibitive cost of college education, healthcare insecurity and a “rigged economy.” While Hillary is being forced to pay lip service to these issues, everybody knows she doesn’t mean a word of it. She means it less than Obama meant it in 2008, and Obama really didn’t mean it.

 

– From the post: It’s Not Just the GOP – The Democratic Party is Also Imploding

Donald Trump and Bernie Sanders have done America a great deal of good. By running from the political fringes, they have shattered status quo taboos and exposed the two party political system for the monumental sham it is.

Whether you like either one of them is irrelevant. The truth about how undemocratic our elections actually are, and the disturbing overlap when it comes to establishment Republicans and Democrats needed exposing, and that’s exactly what’s happened this election season. Personally, I wanted to see Trump vs. Sanders in the general election. I think the public deserved two non-mainstream choices for President for once in their lives, and such a match up would have provided two distinct non status quo visions for the future. That said, Trump vs. Clinton is the second best option.

The process of awakening that’s been happening across the electorate this campaign season is in large part due to the presence of Trump and Sanders, and this awakening is far more important than who wins in November. As Edward Snowden was quoted saying in yesterday’s piece, A Whistleblower Manifesto:

Fundamentally, in an open society, change has to flow from the bottom to the top.

He’s right. If you want fundamental, long-term change consistent with Constitutional principles, it needs to come from an informed citizenry. America has not had a remotely informed citizenry in over a generation. The divide and conquer tactics of both establishment parties have proven tremendously successful in pulling the wool over everybody’s eyes and convincing them that there’s actually a real difference, when in reality both parties maintain the exact same position on a vast majority of the nation’s key issues. These include:

1) Support for interventionist wars of imperialism abroad.

 

2) An embrace of cronyism and corruption throughout the public and private sector.

 

3) A total pandering to Wall Street and support for taxpayer bailouts without accountability.

 

4) Support for the inhumane failure that is the war on the drugs.

 

5) Support for fake free trade deals that are actually corporate giveaways to insiders and donors.

 

6) Support for the unconstitutional and unaccountable mass surveillance of the American public.

I could go on, but you get the point. The interesting thing about the 2016 election is that millions of Americans are finally coming around to rejecting the policies listed above. The status quo, of course, has not; and therein lies the status quo’s problem.

Between Sanders and Trump, the status quo policy planks listed above have all come under attack. This cannot be allowed, which is precisely why the establishment has relentlessly fought both men in their attempts to win the nomination of their respective parties.

The status quo doesn’t actually care if a Jeb Bush, Marco Rubio or Hillary Clinton wins the U.S. Presidency. The status quo wins either way. Not only because those individuals unquestionably will support the status quo agenda, but more importantly, they will largely refrain from bringing up any real issues during their campaigns. Rather than being fought along the lines of trade deals, Wall Street corruption and disastrous foreign policy, a Bush vs. Clinton matchup would largely be centered around debate about guns, abortion, transgender bathrooms and disingenuous talking points about the free market vs. big government. This distraction provides fertile ground for continued status quo theft.

The problem with Trump is Trump brings up some real issues he’s not supposed to talk about, just like Sanders has done in the Democratic primary. This is extremely dangerous to the status quo because it teaches the American peasants to question issues and think about stuff they aren’t supposed to think about or have an opinion on. There’s nothing more dangerous than a public filled with critical thinkers. As George Carlin brilliantly explained so many years ago:

The real owners are the big wealthy business interests that control things and make all the important decisions. Forget the politicians, they’re an irrelevancy. The politicians are put there to give you the idea that you have freedom of choice.

 

You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land.

 

They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the statehouses, the city halls. They’ve got the judges in their back pockets. And they own all the big media companies, so that they control just about all of the news and information you hear. They’ve got you by the balls. They spend billions of dollars every year lobbying ­ lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else.

 

But I’ll tell you what they don’t want.  They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests. They don’t want people who are smart enough to sit around the kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

 

You know what they want? Obedient workers ­ people who are just smart enough to run the machines and do the paperwork but just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.

 

And, now, they’re coming for your Social Security. They want your fucking retirement money. They want it back, so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all, sooner or later, because they own this fucking place. It’s a big club, and you ain’t in it. You and I are not in the big club.

This country is finished.

That’s all you really need to know. Politicians are irrelevant. They are there to spin issues and make sure the public remains as ignorant, distracted and divided along inconsequentially themes as possible. The thing the status quo really fears is a population that begins to think outside the box, which is why both Trump and Sanders have been seen as existential threats to their corrupt and putrid sandbox of power.

So with all of that out of the way, it makes perfect sense that some establishment Republicans have announced they will support Hillary Clinton. Go back and read my status quo policy planks outlined earlier. Any Republican in favor of them will naturally support Hillary Clinton, because Hillary Clinton will protect and coddle their racket. This is guaranteed. Trump may also end up coddling the establishment, but the status quo can’t be 100% sure. He’s a wildcard and he’s uncaged. They can’t have someone like that causing them headaches and potentially getting the plebs all wound up.

Now let’s turn to Politico, to see a little of what I’m talking about. From the article, Republicans Consider Clinton over Trump:

While many conservative stalwarts are conflicted and stuck in a state of paralysis, some are considering the ultimate betrayal.

 

Hours before Indiana polls closed Tuesday evening when it was becoming clear that Trump was headed for a decisive win, some prominent Republicans were moving away from him. Mark Salter, John McCain’s former campaign speechwriter, signaled his support for Clinton via Twitter. Conservative pundit Ben Howe did the same. 

 

Schmidt predicted that “a substantial amount of Republican officials who have worked in Republican administrations, especially on issues of defense and national security, will endorse Hillary Clinton in the campaign.”

 

But the most absolutist opposition to Trump is largely held by the GOP’s donor class and Washington-based establishment—the very people Trump and his supporters have delighted in offending from the start. 

These four paragraphs tell you everything you need to know. It’s one thing to dislike Trump and decide you are unable to support him. Given some of his rhetoric in the primary, I can certainly understand and respect this position. However, supporting Hillary Clinton, one of the most shady, dishonest, warmongering, corrupt animals the world has ever seen, is a whole other ballgame. It tells you who these so-called “conservatives” really are: status quo sycophants.

But it’s not just Republicans coming out in favor of Clinton. There’s increasing evidence that Clinton will target establishment Republicans for votes. The AP reports:

ATHENS, Ohio (AP) — With Donald Trump all but clinching the Republican nomination for president, Hillary Clinton is beginning to explore ways to woo Republicans turned off by the brash billionaire.

 

“I’m with her,” tweeted Mark Salter, a top campaign aide to 2008 Republican nominee John McCain, on Tuesday.

 

Democrats caution their effort to win over Clinton Republicans — or Hilla-cans, perhaps — is in its earliest stages, but could grow to include ads and other outreach targeted in particular at suburban women in battleground states. Already, aides say, a number of Republicans have privately told Clinton and her team they plan to break party ranks and support her as soon as Trump formally captures his party’s nomination.

 

“We have an informed understanding that we could have the potential to expect support from not just Democrats and independents, but Republicans, too,” said Clinton spokesman Brian Fallon. “There’s a time and place for that support to make itself known.”

 

Clinton has begun casting her candidacy in recent days as a cry to unify a divided country. After a series of victories last week, which all but ensured she will capture her party’s nomination, Clinton called on Democrats, independents and what she called “thoughtful Republicans” to back her bid.

 

Guy Cecil, chief strategist of Priorities USA Action, the super PAC backing her campaign, echoed that language Tuesday night, calling on “Democrats, independents and reasonable Republicans” to reject Trump’s “outdated ideas.”

Irrespective of what you think of Trump, his continued survival in the Presidential circus is undoubtably good. Not because he’s some sort of savior who will “Make America Great Again,” but because he’s bringing up issues he’s not supposed to bring up. Because he’s getting people who have given up on the political process engaged again. Because he’s convincing tens of millions of Americans that it really is possible to give the status quo the boot.

At the end of the day, it’s not the actions of any particular individual that instills true fear in the U.S. establishment and deep state government. What really scares them is a population capable of critical thought beyond false left-right paradigm talking points, and both Sanders and Trump should be applauded for their roles in this regard.

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Pro-Brexit Leader Jokes “Keep Sending Obama Over” After Surge In Polls

Who could have seen this coming? Having told the British public in so many words, "Vote No To Brexit, Vote Yes To Undemocratic Superstate!" it appears President Obama's unwanted presence in the UK-EU Referendum debate has backfired beautifully. As FreeBeacon reports, Arron Banks, the British entrepreneur leading a grassroots effort to leave the European Union urges Americans to "keep sending Obama over," as 'Brexit' odds have risen above plunging 'Bremain' odds since the President paid a visit to the Queeen.

 

 

Brexit leaders are thrilled President Barack Obama came out against them, because they are seeing a bounce in the polls.

“I think it’s hugely important geopolitically because the European Union is developing into a kind of United States of Europe, and that’s something the British are naturally pretty anti,” Arron Banks told the Washington Free Beacon. “And it’s really come down to the point where most of our laws are now being made in Brussels—65 percent. Our ultimate court is in France and we’ve got open borders to 500 million people. So clearly immigration is a massive issue, it’s not dissimilar to a lot of the stuff they are discussing with Trump, in the sense of [how] some of these issues resonate.”

Banks said the American equivalent of being in the European Union would make Congress in Toronto, the Supreme Court in Havana while having a completely open border to Mexico.

Banks criticized Obama for his recent trip to London, where he threatened that leaving the European Union would cause the U.K. to “be in the back of the queue,” in terms of trade. The phrase led many to speculate the president was given talking points from Prime Minister David Cameron.

“He basically said if you leave the European Union you’ll go to the back of the trade queue,” Banks said. “Number one, we don’t particularly like being threatened in our home doorstep. Number two, everyone was slightly confused why he used the word queue and not line. It led to a lot of discussion whether he had just been given it to read. So I think he was briefed obviously by the British government, and it was a favor.”

“But since his appearance polls have actually gone in the other direction,” Banks added. “We need to hear more from him, really. Send him back for another go, we’d be delighted to see him again.”

Banks is optimistic about the referendum vote, despite close polling, because core supporters of Brexit tend to be more energized. A new poll following Obama’s visit saw Brexit gaining support over the Remain campaign, 51 to 49 percent.  The Free Beacon asked Banks what Americans can do if they are sympathetic to his cause.

“Keep sending Obama over,” he said.

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Eight “New Normal” Charts That Are Insanely Abnormal (And Dangerous)

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Is there anyone on the planet who's actually stupid enough to believe these New Normal charts are healthy and sustainable?

Anyone questioning the sustainability and rightness of The New Normal is immediately attacked by the mainstream-media defenders of the crumbling status quo. Not only is everything that broke in 2008 fixed, everything's going great globally, and anyone who dares question this narrative in a tin-foil hat conspiracy nut or simply an annoyingly doom-and-gloomer who recalcitrantly refuses to accept the positive glories of official statistics: low unemployment, rising valuations of stock market Unicorns, etc.

But the New Normal is anything but normal; all the readings of artificial life-support and manipulation are off the charts. If the New Normal were indeed a return to normalcy, we'd see a rapid and sustained decline in official life-support of the economy.

Instead, we see official life-support efforts rising to new and dangerous levels. The only reason stocks are at nose-bleed valuations globally is massive, sustained intervention on multiple levels.

We also see increasing dependence on debt to sustain increasingly weak growth. The New Normal is all about diminishing returns on additional debt.

The New Normal is also about the loss of institutional credibility. The Federal Reserve denies it makes policy decisions based on the stock market, but as soon as stocks start tumbling, the Fed's leadership hits the airwaves with a media blitzkrieg, frantically assuring the world that the Fed will do "whatever it takes" to keep stocks at absurdly overvalued levels forever.

It once cost the equivalent of a new auto to attend a highly regarded public university. Now they cost the equivalent of a new house–and a mansion at that. In the pre-New Normal world of academia, the highest paid employees were senior professors (other than the university president).

Now under-assistant deans are paid $250,000 each while new tenured professors scrape by on $75,000, and most of the teaching (the actual purpose of the university, ahem) is done by academic serfs paid $35,000 to $45,000 a year, with few benefits and no pensions. (A fancy title masks the serfdom: adjunct professors.)

Meanwhile, the quality and value of the education has reached such low levels, a large percentage of student debt-serfs gain no real knowledge and many don't even graduate.

Here's how all those billions of dollars in administrative salaries get paid: with debt enabled by the federal government. If this looks remotely sustainable or healthy to you, please get your eyes checked immediately:

Diminishing returns on soaring debt is the hallmark of The New Normal. Bank credit has shot up like a rocket, but GDP has been subpar:

The recent surge of hope in global stock markets is largely the result of soaring credit expansion in China. The New Normal boils down to this: paper over non-performing loans (NPL) and debt that will never be paid back with new loans.

Debt and (not much) deleveraging (McKinsey & Company)

China's New Credit Surges to Record on Seasonal Lending Binge

China's debt to GDP is another New Normal manifestation of diminishing returns on new debt: every government and central bank is dumping more credit into their economies in the vain hope that more credit will spark "organic growth." Unfortunately for the New Normal cheerleaders, more credit chokes "organic growth."

The New Normal can only be propped up by massive central bank purchases of stocks and bonds. Look at the assets that have been purchased by the Bank of Japan in the past four years: up from 1.2 trillion yen to 4 trillion yen.

The New Normal means central bank balance sheets only go up, they never come down. Everyone knows that if central banks tried to sell even a sliver of their trillions in assets, global markets would promptly crash.

The New Normal is stagnant income for the bottom 95% and fewer people working. In The New Normal "recovery," the percentage of the population with a job has advanced all the way back up to where it was 40 years ago, in the late 1970s.

 

Is there anyone on the planet who's actually stupid enough to believe these New Normal charts are healthy and sustainable? I doubt it. Rather, the apologists, toadies, apparatchiks and flacks are being well-paid to cheerlead, and the "leadership" (using the term lightly) of the discredited institutions are terrified of what will happen when people finally catch on.

The New Normal is not sustainable. Ramping up intervention and new debt to ever-more unprecedented levels will only serve to destabilize the economy and society– a foolishly dangerous path indeed.

*  *  *

My new book is #3 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

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A Very Bearish Stanley Druckenmiller Blows Up At The Fed; Reveals His Biggest “Currency” Position

If anyone had wondered if Stanley Druckenmiller’s recent bearishness had dissipated, or transformed into at least modest bullishness as a result of the market meltup, we have bad news.

Moments ago at the Sohn Conference, Druckenmiller raged at the Federal Reserve’s dire monetary policies, saying that low interest rates have caused an environment where “not a week goes by without someone extolling the virtues of the equity market.”  The obsession with short term stimulus contrasts with the monetary reform of 80’s which led to the bull market, he added. 

Instead, this action by the Fed – which he said was the least data-dependent in history (actually it is the most data-dependent, only the data is the Dow Jones Industrial Average) causes reckless behavior, Druck said and added that the Fed has no endgame and the end objective seems to be preventing the S&P from having a 20% decline.

“Three years ago on this stage I criticized the rationale of Fed policy but drew a bullish intermediate conclusion as the weight of the evidence suggested the tidal wave of central bank money worldwide would still propel financial assets higher. I now feel the weight of the evidence has shifted the other way; higher valuations, three more years of unproductive corporate behavior, limits to further easing and excessive borrowing from the future suggest that the bull market is exhausting itself.”

Repeating something else we have long said, Druckenmiller also correctly said that as a result of the Fed’s permissive policies (who can ever forget Chuck Schumer statement to Ben Bernanke: “Get to work, Mr Chairman”) means politicians can avoid things like tax reform. Or pretty much anything else.

However, the Fed’s action is not without a cost, as “the fed has borrowed from future consumption more than ever before.”

He then noted that he is just as concerned about China, also correctly observing that the local “zombie lending” simply can’t stop, and adding that Chinese people don’t need more debt and houses. Which is true, however when debt and houses are merely financialized instruments, then all is well. 

Druckenmiller ends with saying that gold is his biggest currency allocation. As you might have guessed, he’s bearish stocks

The former Duquesne hedge fund manager also agreed that negative rates are “absurd”, said that he is bearish stocks, and concluded by revealing what his biggest currency allocation is.

Gold.

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Reason Foundation Included in Climate-Change Dragnet Subpoena to ExxonMobil

ExxonMobilBustedIn March, six Democratic state attorneys-general and the independent attorney general from the U.S. Virgin Islands joined forces with climate activist and former Democratic presidential nominee Al Gore to annnounce a legal campaign to intimidate climate change skeptics. As Gore put it, “We cannot continue to allow the fossil fuel industry or any industry to treat our atmosphere like an open sewer or mislead the public about the impact they have on the health of our people and the health of our planet.” 

The heart of this anti-free-speech effort has been a series of subpoenas to ExxonMobil demanding that the oil giant supply various attorneys general with all communications it has had since January 1, 1977, with groups that address scientific and policy issues with respect to climate change. On Tuesday, one of those subpoenas, a March 15 fishing expedition by former EPA lawyer and current Virgin Islands Attorney General Claude Walker, was made public, revealing the wide extent of this intimidation campaign. How wide? One of the organizations named in Walker’s subpoena is the Reason Foundation, which publishes this website. 

Reason is far from alone. The subpoena lists nearly 100 think tanks, advocacy groups, lobbyists, and university centers with which Walker believes ExxonMobil may have had communications concerning “research, advocacy, strategy, reports, studies, reviews, or public opinions regarding Climate Change.” These include the U.S. Chamber of Commerce Foundation, the George Mason University Law and Economics Center, the American Enterprise Institute, the National Taxpayers Union Foundation, the Cato Institute, the National Black Chamber of Commerce, the Federalist Society for Law and Public Policy Studies, the Heritage Foundation, and on and on.

The attorneys-general are seeking to uncover an ExxonMobil-financed conspiracy aimed at undermining public confidence in the scientific consensus that man-made climate change is real and a big problem. Some who are worried about the deleterious effects of climate change have grown weary of trying to persuade their fellow citizens that the scientific evidence is on their side, and so now want to outlaw expressions of disagreement with that consensus.

For example, a prominent group of climate activists sent a letter in September 2015 to the Department of Justice suggesting that Attorney General Loretta Lynch open a “RICO (Racketeer Influenced and Corrupt Organizations Act) investigation of corporations and other organizations that have knowingly deceived the American people about the risks of climate change, as a means to forestall America’s response to climate change.” At a congressional hearing in March, Lynch testified that her office has considered taking legal action against groups promoting climate change skepticism.

As I have earlier argued, these subpoenas are a huge step in the direction of using the courts to silence people who hold views that differ from those of powerful government officials. It’s bad enough to politicize science, but to outlaw disagreements over how to interpret science heads down the perilous path toward Lysenkoism, in which only officially approved science is allowed to be practiced and to be discussed.

ExxonMobil contributed to the Reason Foundation many years ago. If readers – including any attorneys-general – are curious about my views on climate change (and their evolution), please read my 2006 column, “Confessions of an Alleged ExxonMobil Whore,” and a 2015 piece, “What Evidence Would Persuade You That Man-Made Climate Change Is Real?” In addition, my Reason Foundation colleague Julian Morris published an analysis last month assessing the efficacy of the UN’s December Paris Agreement on climate change.

Disclosure: Over the years I have worked with several groups listed in the USVI subpoena on a wide variety of public policy issues relevant to resisting government encroachments into free markets, mostly not having anything to do with climate change. And I still own 50 shares of ExxonMobil stock that I bought with my own money.

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Wisconsin Police Shot a Fleeing Hostage Without Warning, Then Misled the Public

Compliance

Police officers in Neenah (Wis.) shot and killed 60-year-old Michael Funk as he fled a motorcycle shop where he was being held hostage last December 5. 

Brian Flatoff had been allegedly holding Funk and two other men captive in the shop, apparently over a dispute over a motorcycle. Police had surrounded the shop and taken fire from Flatoff, with one officer sustaining injuries after a bullet stuck his helmet, so officers were understandably on edge when Funk frantically raced from the rear of the building holding a handgun. 

Funk, who had a concealed carry permit and never pointed his gun at the police, was shot multiple times and reportedly laid on the ground for 25 minutes without medical care and died at the scene. 

About 10 hours after Funk was shot, the police department released a statement which did not name Funk, but described him as a “male subject…with a firearm” who “did not comply with officers’ instructions to drop the firearm and was subsequently shot at by one or more officers on scene.” 

But video dashcam footage from a police cruiser shows that the officers did not warn Funk, identify themselves as police, or instruct him to do anything, they just shot him as he scrambled from the building. The footage also proves the police’s statement that Funk received medical care and died later at the hospital was also untrue. 

The footage was obtained by USA Today Network-Wisconsin, which reports that Neenah Police Chief Kevin Wilkinson has since conceded that “The video does not give any indication that there was a verbal command given directly to Michael Funk before he was shot.”

By admitting to these facts, Wilkinson directly contradicts his own previous statements on the shooting, as well as testimony provided by an officer in the criminal complaint against Flatoff that he had heard someone shout “Police, show me your hands” or “Police, drop the gun.”

Moreover, it is evident that Wilkinson and the department knew they had shared misinformation about the shooting with the public, but never bothered to correct the record until they were forced to by the public release of the dashcam footage. 

Neenah’s City Attorney Jim Godlewski would not comment on the police officers’ actions in this shooting, but cited the city’s use-of-force policy to USA Today Network-Wisconsin, which states that police are not required to issue a warning if they “were facing immediate danger.”

Funk’s widow, Theresa Mason-Funk, has filed a $3.5 million wrongful death claim against the city and three officers. The Wisconsin Department of Justice recently concluded an investigation into the shooting, but has yet to release its report.

You can watch video of the shooting below (Warning: graphic and disturbing).

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Spot The Odd Car Maker Out

If ever one was in doubt about whether or not a brand can still command a premium price in the market, look no further than the recent global auto OEM valuation comparables produced by JPM.

One look at the comparable charts and you’ll quickly notice that Ferrari is commanding a staggering brand premium from investors.

 

Even after taking into consideration that profitability (using EBITDA margin as a proxy) is significantly higher than industry competitors, we can definitively conclude that brand premiums are alive and well, although the same can’t be said for the sanity of investors.

via http://ift.tt/1SZ6WbO Tyler Durden