History – First Draft 04.24.2015

Will Robots Kill the Asian Century?

The average cost of robot prices has been cut by more than half since 1990 even as they have improved in reliability and speed.

For one, the greater the automation, the less relevant labor costs become, especially if one considers that robots (unlike human workers) can, in principle, work twenty-four hours a day for little additional variable cost.
[And also, no annoying bathroom breaks]

Some reports suggest that a $20,000 robot can assemble thirty thousand iPhones in one year—a cost of sixty-six cents per unit assembled. That number should be similar whether the robot is located in Shenzhen or Detroit.

The Navy’s bribery and prostitution scandal

Weirick argues that the Navy’s inability to punish anyone at the general officer level reveals a disturbing degree of impunity at the US military’s top ranks. The admirals who oversaw officers implicated in the scandal — and a few who even admitted to accepting favors from the company — haven’t received any serious punishment, and a few top officers were allowed to remain in their positions and keep their rank despite having their security clearances suspended.

Our Enemies, the Saudis
They’re invading Yemen to empower Al Qaeda
by Justin Raimondo, April 20, 2015

49 Replies to “History – First Draft 04.24.2015”

  1. Then, there’s this.


    We put earthquake insurance on the house. I have lots of neighbors that have had slabs fixed, walls repaired, windows replaced and so on. This isn’t an “earthquake zone” in the context of say CA or Japan so building codes have generally not reflected that.

    But, you talk to anyone in the industry and it’s just coincidence.

    Of course, the environmental aspects are there as well. In my view, it’s a dead heat on the stretch as to what gets us first – our own hubris or nature. I am thinking of changing my religion from plague prayer to extinction level event prayer.

  2. earthquakes, smurthquakes, play time may be over soon:

    Gail Tverberg says:
    April 23, 2015 at 5:40 pm

    “It depends on how quickly the failure of banks brings the whole system down. I think the most likely scenario is that the next big crash is the last one. We had a big crash in 2008, and were temporarily saved from it. The next one seems likely to be much bigger, and thus to be much harder to avoid the consequences of.

    My expectation is that oil prices will go lower than they are now, and that debt defaults will start hitting the system. Some of these defaults will relate to derivative bets gone wrong. This will start hitting in the next few months. We should be feeling the effects by late in 2015 or early 2016. Oil production will start going down in 2015, and we won’t be able to get it back up again.

    I don’t see prices bouncing back up again much, expect perhaps briefly in the next few months (and probably to less than $100 barrel), as people speculate that our problems are temporary. I don’t think shale drillers will be able to qualify for more debt, and this will prevent production from increasing again. There will be similar problems with new oil sands investment.”

    “and we won’t be able to get it back up again” always a fearful situation.

  3. how long would gail t. last in a wrestling match with adam lanza, maybe 2 seconds? if he wasn’t dead, that is, by an fbi bullet to the brain so he wouldn’t spill all the 9/11 secrets and shit. either one of these bitches woulda kicked his fucking ass and saved all ‘o them poor innocents killed by the cia agent on loan to the fbi, by direct order of, none other than, dick cheney himself.

  4. a couple of seriously expensive nut crackers there. i’m not picky, you choose one, then i’ll take the other one. good god-fearing girls, too.

  5. did you fucking know that bho had his REAL birth certificate hidden in a safe, somewhere, in the wtc towers, but he couldn’t get to it, so he hired obl to blow up the towers? i’ll be fuckin’ dipped in a barrel ‘o shit. the nigger in this here video has proof

  6. don’t change the goddamned subject doom. we’re talking about the child killin’ fbi plant, adam lanza, and how the real culprit in the 9/11 atrocity is bho, not a god fearing true american, namely, dick cheney. it’s time for you to wise right the fuck up. take your head out of your ass, as some, but not me, might say.

  7. bruce, in his latest guise, coulda kicked the shit outta all ‘o bho’ and obl’s henchmen as they were planting bombs an’ flyin’ planes and killin’ all ‘o them ittybity innocents in sandy hook, or should i say sandy hoax? (wink wink)

  8. It’s ok dave. I’d think something was amiss if I didn’t get scoffed at at least once during the day. It comes with the tin-foil hat.

    At the macro level though, the actual details or narrative de jour, of which we really cannot be 100% certain, are not as important as the realization that the government and corporations (“they”) can and will stoop to just about any level to achieve a given goal.

    That they do is not news, that more of the hoi polloi can finally see the brick wall of is the important thing. Telling too is that they don’t really even try to hide it any longer. Impunity is a wonderful thing I guess.

    * BHO isn’t worth the time of day. And his usefulness is waning.

    campaign bumper sticker: ‘Hillary 2016 – “What difference does it make?”‘

    *Jenner – in her dreams. Those thighs like a fatal headlock just waiting to happen at the first unsubtle nibble.

  9. “Consider yourself warned. As the modern day fiat money system inevitably cruises toward its final denouement, individual rights will come increasingly under attack as the world’s ruling elites and centrally directed banking cartels begin to batten down the hatches.”

    no, you cannot have your money back. yes, we know it’s illegal. have a nice day, and please be sure to take one of our new bank calendars.

  10. OK boys, here’s my new pitch: i go to a recently devastated city somewhere, say, today in Nepal. before the total body count is known, i seek an audience with the city/state’s alcalde/mayor/hefe/whatever. i say: “okay, i can make no absolute guarantees, but there’s a chance, if you do as i say, next time you’ll have some advance warning about the earthquake. what’s that worth to you?”

    once its installed and tested to work OK, you pick a local team to report the findings. we’ll even throw in some free long-distance 24-7-365 advice on what the data may mean, but you should also get the local geologists and hydraulogists involved. we can now monitor the isotopes of certain rare gases in real time, remotely. variations in some of them have been shown to be precursory to major earthquakes. here’s our credientials, here’s a brochure and price list* for various array sizes. bigger is usually better. OK, your move.

    *payment requested in gold, silver coin or other precious metals. no fiat, please.

  11. good point, remus. i was thinking about drawing up some papers with a lawyer, first. in Italy, they recently arrested and jailed some scientists for not or mis-predicting an earthquake. and, if you make a call, and it doesn’t happen, oh boy, then they really get pissed off. that’s happened out here in paradise to our local tsunami warning team. their attitude is better warned than not. plus, they’re feds.

  12. eh, eruptions are like a lot of other things. you know it’s going to happen, but you can’t know when. we live in the middle of chaos…

  13. acctually, i should probably say something more like: somethings are more obvious than other things, but nothing happens until it happens…in theory, one can predict the behavior of some, relatively simple, chaotic systems; but only in theory. why? cause all conditions are in constant flux.

  14. you’re trying to impose a mechanically determined solution on a chaotically deterministic system. a lot of people do this. this is basically why you believe in conspiracy theories. good luck. luck, of course, is generally random.

  15. It’s not a matter of believing in conspiracy theories dave. There’s a legal definition for conspiracy for a reason.

    “impose a mechanically determined solution on a chaotically deterministic system” That’s bullshit dave.

    Enjoy the ride.

  16. volcanoes are a lot like zits. you can tell in various ways when one is about to erupt. it expands or swells. the color changes to bright red. maybe even a white or yellow-white top (these are the dead white cells in zits). what they both have in common is the swelling induces changes in the surrounding rock/tissue.

    in the case of volcanoes, the swelling can be very gradual and sometimes gives weeks to months warning by changes in the dissolved gases in the groundwaters, radon is an example. we are working on a helium isotope monitor. it can even detect the magma dynamics, like when new magma arrives at the shallow crustal reservoir. these cause–effects have been known for decades, from conventional sampling. what’s new is our ability to measure these isotopes in the field, in real time.

  17. legalities…now there’s a fucking idiot’s answer to anything if there ever was one. who the fuck pays attention to “the law”, except when it happens to be convenient? or you can pin something on someone you don’t like? why not ask a the next cop you see what he or she thinks of “the law”. ask a fucking lawyer. it’s a tool to be used, backed up by a gang of thugs with guns. not that i have anything against cops, per se.

    and, try to get this remus. this is an important concept. even in a so called court of law, one generally, except, of course in the case of a rigged (kangaroo) court, needs something called “evidence” to prove the existence of said criminal conspiracy. try to understand that assholes posting on the internet does not constitute “evidence”, except for other assholes posting on the internet.

    god, i can’t believe that i have to have these conversations with so called fucking “adults”.

  18. so doom, go make your prediction with a weeks or months of hedging on either side of it. then see what happens when, even with your hedging, you end up with egg on your face. go right fucking ahead. it would make me happy.

  19. hey dave, remus pulled the law card, not moi. also, i agree with your points about law “enforcement”.

    what i intend to do, seriously, is study the systematics of a particular isotope pair mentioned above, in key active areas. it takes time to work these trends out, especially if time is one of the variables needed. this will likely be a 10-year effort, if well-funded, or moron, if not. you know my concerns about finance stopping our playtime in the very near future.

    it’s too bad, really. the fucking geophysicists like to lord it over all others with their simple toys. these instruments work primarily because they are simple to make, operate and interpret, so they have them all over and have had them in place for decades. and what is their track record? how did they do in Nepal recently?

    i say, give the geochemists a chance. of course, their instruments are more complex and the data are harder to interpret. ten to 20 years ago, we could only dream of competing with real-time geophysics. now, we can really do it. i’m tired of being laughed at and derided by our geophysical colleagues, who in my opinion, have had it easy and are not nearly as great as they think they are.

    agree also with the daunting complexity of the systems we wish to understand and hope to predict. all the moron reason to throw as much as we have at the problems. just saving lives and property. well, it always means moron to those with the lives and property at stake.

  20. OTOH, i’ve sat with two geochemists after a dinner party who were very excited about their recent gas data from an active volcano in Colombia. the trends seemed to indicate that magma was very close to the surface, lots of water, halides, HF coming out with the SO2. they were both killed instantly the next morning. blown to pieces in the explosion. they were just finishing the collection of some of the best gas samples they ever got there, and were having a last victory cigarette before climbing out of the volcanic throat when it went off.

    lots to learn, dave.

  21. Did they both have black hair?
    Having a smoke on a volcano, just wondering if their looks matched their proclivities.

  22. Dave, are you off your meds? Clearly, you and JHK share a similar allergy. “Conspiracy theories” seems to touch a particularly sensitive nerve with you dave, so much so that I think you missed the point of my reference and sent you off on spittle-slinging tirade, as it were.

    I’ll grant I am not the most articulate, so my reference may have been a bit oblique. In reading your comment I could almost hear you spitting out those words (conspiracy theories) with derision and venom. The point of my reference regarding there being legal definition was to remind you that, apparently, conspiracy actually needed to be defined in a legal sense. My experience with attorneys (I have had them as clients, one firm under contract for several years) suggests they tend not to do what isn’t needed.

    “[T]hat assholes posting on the internet does not constitute “evidence”, except for other assholes posting on the internet.” I’ll argue that that applies to the MSM as well. There are few, if any, objective, investigative sources of information.

    As I hoped I had brought out upstream, this isn’t about what some wing-nut (Alex Jones et al) might post on the Internet or the narrative de jour spewing from your TV set or device screen, but it is about human nature. Humans seek what benefits them and theirs. Sometimes they do so with the help of others. Conspiracy can scale, but I think more often than not, what looks like a grand conspiracy may be nothing more than the intersection of compatible goals or agendas or, as you point out, nothing but randomness. That does not take conspiracy off the table.

    There is likely an unscientific correlation between lack of transparency and the number of conspiracy theories. I neither subscribe to them nor reject them out of hand. They are a symptom.

    It is indeed unfortunate you have to suffer those of us who do not share your perspective on life, that is, not adults.

  23. RE: “Tesla must be doing something right”

    a recent, total smack-down analysis of Tesla by TDG (aka Paul) on OFW. long, but worth the read.

    Tolstoy’s Degenerate Grandson says:
    April 27, 2015 at 2:56 am

    “Tesla is no different that the fracking or dotcom bubbles — it is “a crock of shit” and should not exist.

    Tesla: Bonfire Of The Money Printers’ Vanities

    The trouble with the money printing madness in the Eccles Building is that it generates huge deformations, misallocations and speculative excesses in the financial markets. Eventually these bubbles splatter, as they have twice this century. The resulting carnage, needless to say, is not small. Combined financial and real estate asset markdowns totaled about $7 trillion after the dotcom bust and $15 trillion during the 2008-2009 financial crisis.

    Yes, the Fed has managed to reflate this cheap money bubble for the third time now, but the certainty that it will splatter once again is not the issue at hand. What gets lost in the serial bubble-making process of modern central banking is that vast real resources—labor, capital and materials—- are misallocated owing to mispricing of stock, bonds and real estate during the bubble inflation phase.

    During the bust phase, of course, these excesses are written-down on financial statements and often liquidated entirely on an operational basis. But that’s just the problem. These bust-phase corrections amount to deadweight losses to the economy—-a permanent setback to growth and societal prosperity.

    The Wall Street casino is now festooned with giant deadweight losses waiting to happen. But perhaps none is more egregious than Tesla—–a crony capitalist con job that has long been insolvent, and has survived only by dint of prodigious taxpayer subsidies and billions of free money from the Fed’s Wall Street casino.

    Not surprisingly, the speculative mania on Wall Street has reached such absurd lengths that Telsa is being heralded and valued as the second coming of Apple and its circus barker CEO, Elon Musk, as the next Henry Ford. Indeed, so raptured were the day traders and gamblers that in the short span of 33 months between early 2012 and September 2014 they ramped up Tesla’s market cap from $2.5 billion to a peak of $35 billion.

    That’s a 14X gain in virtually no time—-and its not due to the invention of a revolutionary new product like the i-Pad. Instead, we’re talking about 4,600 pounds of sheet metal, plastic, rubber and glass equipped with an electric battery power pack that has been around for decades, and which is not remotely economic without deep government subsidies.

    Beyond that, the various Tesla models currently on the market carry price tags of $75k to more than $100k. So they are essentially vanity toys for the wealthy—–a form of conspicuous consumption for the “all things green” crowd.

    But notwithstanding all the hype on Wall Street, there was nothing remotely evident in its financials that justified Telsa’s $35 billion peak market cap. Net sales for the LTM period ended in September amounted to $2.9 billion, meaning that speculators were putting a silicon valley style multiple of 12X sales on a 100-year old industrial product; and one sold by a fly-by-night company distinguished from its auto company peers, which trade at 0.5X sales, only by marketing hype and a high cost power plant that could be made by any of two dozen global car companies if there was actually a mass market demand for it.

    Needless to say, Tesla’s meager LTM sales were not accompanied by any sign of profits or positive cash flow. September’s LTM net income clocked in at negative $200 million, and operating cash flow of $150 million was dwarfed by CapEx of $700 million.

    Unless you are imbibing in the hallucination-inducing Cool Aid dispensed by Goldman Sachs, which took this red-ink machine public in 2009 and has milked it via underwritings, advisories and early stage investments for billions, Tesla’s valuation was patently absurd. Yet the gamblers piled-in based on the utterly improbable assumption that oil would remain at $115 per barrel for ever; that a mass market for electric battery autos would soon develop; and that none of the powerhouse marketing and engineering companies like BMW, Toyota or even Ford would contest Tesla for market share at standard industry profit margins.

    The truth is, there is massive excess capacity in the global auto industry owing to government subsidies and bailouts and to union protectionism that keep uncompetitive capacity alive; and that chronic condition is now especially pronounced due to the wildly soaring growth of unused production capacity in China. This means that the global economy is literally saturated with expert resources for auto engineering, design, assembly, machining and component supply.

    Consequently, if a mass market were to develop for battery powered vehicles these incumbent industry resources would literally swarm into Tesla’s backyard. So doing, they would eventually drive margins to normal levels, sending Elon Musk’s razzmatazz up in the same cloud of smoke that has afflicted many of his vehicles.

    These is no reason to think that any long-term mass market player in the auto industry could beat Toyota’s sustained performance metrics. In the most recent period, its net profits amounted to 7.5% of sales and it traded at 11X LTM net income. So even if you take as granted the far-fetched notion that in a world of $2-3 per gallon gasoline——-which is likely here for a sustained duration—-that a mass market will develop for electric battery vehicles, Telsa would still need upwards of $50 billion of sales at Toyota profit rates and valuation multiples to justify last September’s peak market cap.

    So let’s see. Tesla’ CY 2014 sales totaled $3.2 billion, meaning that you would need to bet on a 16X gain in sales over the next few years and that today’s rag tag start-up manufacturing operation could achieve levels of efficiency, quality and reliability that it has taken Toyota 60 years to perfect. Yet take one hard look at Tesla’s historical financials and it is blindingly evident that there is no reason for such an assumption whatsoever.

    In fact, Tesla is not a Toyota in the making; it is a Wall Street scam in plain sight. It has been a public filer for seven years now, and here are the horrific figures from its financial statements.

    Since 2007 it has booked cumulative sales of just $6.1 billion, and that ain’t much in autoland; it amounts to about one week of sales by Toyota and two weeks by Ford. Its cumulative bottom line has been a net loss of $1.4 billion, and the losses are not shrinking—-having totaled nearly $300 million for 2014 alone.

    More significantly, during its entire seven years as a public filer, Tesla has failed to generate any net operating cash flow (OCF) at all, and has, in fact, posted red ink of $500 million on the OCF line. During the same 7-year span ending in Q4 of 2014, its CapEx amounted to a cumulative $ 1.8 billion.

    So go figure. Combining OCF and CapEx you get a balance sheet hemorrhage of nearly $2.4 billion. The real question, therefore, is not why Tesla was worth $35 billion, but why it wasn’t bankrupt long ago?

    The answer is that it was and should be now. Tesla would not have even made it to its Goldman-led IPO without a $500 million bailout by Uncle Sam. That the hard-pressed taxpayers of America were called upon to underwrite a vanity toy for the wealthy—–and one peddled by a serial milker of the public teat—is surely a measure of how deep crony capitalist corruption has penetrated into the business system of America.

    But even these egregious windfalls do not begin to compare with the gifts showered on Elon Musk by the money printers in the Eccles building. Tesla has stayed alive only because it has been able to raise billions of convertible debt in the Wall Street casino at yields which are the next best thing to free money. In short, it has been burning massive dollops of cash for years and replenishing itself periodically in capital markets which are rife with momo speculators flying high on cheap carry trades and the Fed’s buy-the-dip safety net.

    During the spring of 2014, for instance, it raised $2.3 billion of 5- and 7-year money at interest rates ranging between 25bps and 125bps. That’s right. This company is a red ink spewing rank speculation, but the money printers have enabled it to raise cash that costs virtually nothing on an after tax basis. Call it free money for the Telsa bonfire of the vanities.

    True enough, these miniscule interest rates were attached to convertible bonds—-so supposedly the “upside” justified giving a proven red ink machine free money. Yes, and the strike price on those converts implied a market cap of about $50 billion!

    In truth, Tesla’s true losses are even greater than its accounting statements suggests. For instance, it has booked upwards of $500 million of revenue and profits owing to ZEV (zero emissions vehicle) credits. The latter were invented by Al Gore after he finished inventing the internet, and amount to nothing more than bottled air—-clean or not.

    Also, Tesla’s affluent customers pocket about $10,000 per vehicle of Federal and state tax credits, meaning that taxpayers have fronted another $500 million or so to stimulate Tesla sales.

    Finally, Tesla’s marketing machine has even converted itself into a repo man for the wealthy. That is, Tesla guarantees a large share of its customers that it will buy back their vehicles at no loss after three years.

    So how does it possibly make a profit deploying this blatant free rent-a-car gimmick? Ask its accountants. In their wisdom and clairvoyance, they have undoubtedly assumed that the residual value of these vehicles will be levitated by the same juice which fuels Tesla’s stock price.

    Yes, Tesla is a bonfire of the vanities. In due course, the bubble will collapse and billions will have been wasted—-much of it with taxpayer money—on things like its imaginary gigafactory in Nevada. But that’s what happens when central bankers destroy honest price discovery and turn capital markets into a gambling casino.

    Oh, yes, and the whole “green” story is a crock, too.”

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