Contrarian

Flannery departs GE. Market rewards +14% in pre-market

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General Electric (GE) shares have been a dreadful investment. The company, which trades in negative equity is indicated c.14% higher in trade after CEO John Flannery stepped down inside one year on the job. Lawrence Culp replaces him as Chairman & CEO.

Losing Flannery will look to add about $14bn to GE’s value. Keeping Musk will look to add $7.1bn to Tesla’s value today. A tale of two CEOs. The power or losing one to that of keeping one.

If we’re so keen to stick to Paris should we feel guilty about nuclear power?

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Australia seems keen to stick to the Paris Accord. Despite knowing whatever we do on saving the planet through following the politics of Paris will result in no palpable change in world temperatures at considerable economic cost to overstretched taxpayers. If we seem so keen to do our bit for tokenism, why not copy so many signatories and build nuclear plants? After all if we don’t want to be censured for abandoning the accord should we feel any sense of guilt if we adopt the very same CO2 limiting measures of others? Safety in numbers – literally.

CM was privy to a meeting with a former US Navy officer who was speaking about how negative PR can create false narratives. Nuclear power was one of them. He argued that the US & Japan were losing the PR war hence technological leadership on civilian nuclear power. The likes of Toshiba-Westinghouse are now shrinking minnows whose dwindling order book looks like the victim of a sunset industry when in reality it has been terrible program management. However why should it?

Nuclear power is set to be 14% of global electricity generation by 2040 from 11% today. Emerging Asia get the practicalities of nuclear power. Affordable and sustainable baseload with virtually no emissions.

Of course the horrible outcomes of poorly managed nuclear plants has come at great financial cost as experienced most recently  with Fukushima but the safety record of nuclear power is astonishingly good. Quantum levels more people die in coal mine accidents every year than the combined deaths from radiation from Chernobyl or Fukushima meltdowns since either occurred.

The misplaced fear of Fukushima was so high at the time that Americans across the Pacific were stocking up on radiation masks and Geiger counters in preparation of impending irradiation. It seemed the further one got away from the reactor the more hysteric people became. Deaths in the US as a result of the Fukushima meltdown? Zero!

As it stands, the US has two nuclear plants under construction at present which are saddled with delays and costly overruns based on incompetent execution. The Chinese have twenty in the build phase. India 7. Korea and the UAE 4 each. Russia 3. Even Bangladesh & Pakistan have two in the pipeline using technologies outside of the US/Japan.

There are about 150 power reactors with a total gross capacity of about 160GWe on order with about 300 more proposed. Where are the former world leaders in power technology? Next to nowhere. Cowering in a corner and allowing themselves to be beaten up senseless over false statistics. Where is the PR reporting reality? It’s as if they’ve given up. Where is the media lambasting China, India and other nations for putting our lives at risk? That’s right – nowhere.

What probably escapes many people is that for all the negative news cycle around nuclear power and the thirst for renewable alternatives, many Americans are already surrounded by active nuclear plants. While they visit a zoo or the beach they are blissfully unaware that at all the naval ports dotted around the mainland (e.g. California, Connecticut, NY, Florida, DC, Texas, South Carolina etc) and islands (e.g. Hawaii, Japan) there are 100s of nuclear reactors sitting safely in close proximity to millions of civilians. Yet where is the outrage? Not a peep.

Shout from the hilltops at the efficiency of renewables all you want. Then explain why those with higher levels of renewables as baseload power end up with the highest incidents of blackouts and steepest prices.

South Australia is the case in point. Australia is home to the cheapest materials (gas, coal and uranium) to make affordable electricity but we have caved to the green madness and saddled ourselves with punitive power prices to meet goals based on unproven and often whistle blown manipulated science. If climate scientists were subject to the same punitive damages that players in the financial industry are then it is likely the “targets” leading to our ecological disaster would be pared back to such a degree we’d just keep calm and carry on. Yet because there is no risk of jail sentences the tax dollars get misappropriated, funding an industry whose survival and growth depends on fear. Talk about a lack of ethics.

Even worse we want to double down on this inefficient renewable technology (where claims are often made on 100% capacity rather than the 20% they truly operate on) despite having empirical evidence of its all too obvious shortcomings. Virtue signaling actions such as blowing up old coal fired power stations has ironically proven the stupidest of moves in that all the while demand hasn’t changed reductions in reliable baseload supply makes us vulnerable.

Throw on the desire to electrify the automobile  and we already know that existing base load won’t cope with the increased demands. Take a look at Britain as an example. Apart from the risks of losing massive fuel tax levies (around 5% of total government revenue) the power industry’s current projections of new electricity generation additions can’t meet the expected demand if we all plug our EV in overnight.

So Australia should quit worrying about what others think and act in its own best interests. Maybe Canberra needs a PR agency more than the nuclear industry does. High time to look at real data and sustainability.

 

Harley-Davidson to go into the Adventure category

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Actually credit where credit is due. Harley maybe very late to the party but realizes it must be bold to survive in the long run. Adventure (ADV) bikes (think of them as 2-wheeled SUVs)  are one of the most popular motorcycle segments now due to versatility but the competition is fierce and only getting moreso. Harley plans to launch a 1250cc ADV bike in 2020.

It is unlikely to cause segment leader BMW to quake in its boots with respect to its best seller GS series although the question is can the Harley brand can carry any sales at all? At the luxury end BMW, KTM, Ducati, Triumph, Moto Guzzi and Aprilia all have ADV bikes. BMW & KTM are the sales chart leaders. BMW for inventing the segment and KTM for strapping a 160hp nuke to its expertise in off road and 17 straight wins in the Paris-Dakar.

It is fast becoming a horsepower war. BMW is looking to launch a 145-150hp 1250cc next year for the GS from the 125hp 1170cc twin it currently has to keep up with the competition.

Without a spec sheet it is hard to tell much about the Harley ADV. It looks heavy. Weight matters. The BMW is around 240kg. The KTM 210kg. Will the Harley keep it under 260kg?

Horsepower is not a Harley strong suit. You won’t find power in a Harley spec sheet at the dealer. Will it use a clump of lazy torqued Milwaukee pig iron for an engine? In a low slung cruiser one can get away with it but in a tall ADV bike, when negotiating goat tracks (that’s a wide belly pan!), traction, power delivery and how a bike carries its weight is crucial. Can Harley produce over 120hp from this 1250cc engine with flexibility across the rev range? Will it be chain driven? Shaft? Belt? These things matter to the ADV snobs.

The design of the ADV Harley is certainly bold. CM likes it although if you drop it that headlight unit sure looks expensive to replace. Like many SUVs never see more off-road than a gravel driveway, the most dirt tracking Harley ADVs will see might be some road repairs on Route 66. The Pan America name certainly rings of highway biased use.

The next thing will be price. Even before (and after) we have full specs can Harley launch the bike at a competitive price? Harley can’t just rock up into a segment it’s never been active in and demand the type of premium it’s cruisers carry. It’s top of the line CVO series can be $50,000. BMW is considered the premium offering in ADV. Luxury Italian brand Ducati tried to price it slightly north and was caned in the sales race. KTMs are priced slightly cheaper but BMW remains king and having owned one know exactly why. The BMW is good at absolutely EVERYTHING.

Harley has history in new ventures. It broke the mold decades ago and took a stab at sports bikes with the Buell brand, but it was an abject failure. Porsche was called into help develop the V-Rod engine some 18 years ago but that is no longer sold.

Harley also aims to launch electric bikes, smaller 250-500cc categories for Asian markets and a mid range 500-1250cc for new sport type street fighters. All looks margin crushing from a distance.

From an investor perspective the accountants will require a lot of volume to justify the R&D expense. The shares closed toward the lows on the announcement.

Without getting too Harvard MBA, Harley feels extension of product is vital. To a degree it is right. Unfortunately graveyards for such strategies are too commonplace. Few get it right. Buell was case in point. BMWs K1600 Bagger will flop because it was an excuse trying to find a home for its 1600cc 6-cylinder regardless of capabilities. Customers see through this.

Harley’s ADV will have distribution channels as it’s biggest weapon. It will have a hard time converting ADV faithful unless it offers something truly better at a competitive price. Otherwise it will gather dust on showroom floors.

Personally this ADV will probably do better than most think. It won’t get close to toppling the Beemer but there are enough quirky people out there who want to be different. Nice job Harley but can it turn groups profitably around? The last 5 years have been a disaster. The question is all this product arrives at a time when the economy is likely to turn south.

Who says the Germans don’t do humour?

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Mercedes-Benz has decided to showcase its least fuel efficient SUV, the G63 AMG (which has the aerodynamics of a house brick), overlooking some renewable wind power. Irony, sarcasm and humour rolled into one. Is this to champion the importance of boosting policy that encourages carbon offsets or will the car double as a back up generator when the wind doesn’t blow?

Maybe the joke is on us. Perhaps the Germans aren’t doing humour at all but providing realistic assessments on actual consumer behaviour and the inability of renewables to provide baseload power.

These results may surprise many

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We are often told by the likes of Pelosi et al that race relations in the US have never been worse than now. More narrative busting from Rasmussen,

”Voters feel young black Americans are better off under President Trump than they were under Barack Obama, the nation’s first black president. 

The latest Rasmussen Reports national telephone and online survey shows that 32% of Likely U.S. Voters believe life for young black Americans has gotten better since Trump’s election. Slightly more (36%) say life for these Americans has gotten worse, while 26% think it has stayed about the same.

But in March 2014, just 16% said life for young black Americans had gotten better since Obama’s election five-and-a-half years earlier.  By July 2016 in Obama’s final year in office, only 13% thought life was better for young blacks.

Even black voters are nearly twice as likely (28%) to say young black Americans are better off now than they were in the closing year of Obama’s presidency (15%).

Forty-seven percent (47%) of all voters, however, believe race relations are worse since Trump’s election. Still, that compares to 60% who felt that way after eight years of the Obama presidency. Just 20% say those relations are better now, while 30% rate them about the same.

Checking privilege or checking presumptions?

CM has lost count of the times the white privilege moniker has been thrown about as a way to shut down debate. There is an almost uncanny wish for liberal whites to white-shame other whites these days. It seems that 99.9% of those who throw the white privilege word are white themselves. The tacit argument is that they feel they gain acceptance with non-whites by denying their own identity. Have non-whites come out en-masse demanding this? Virtually none that CM has met.

The left is obsessed with this idea that all minorities are distinct groups who share identical thoughts and beliefs. Take the radically leftist inspired C-16 compelled speech laws in Canada where the trans community took what was supposed to be a compassionate piece of legislation as one where they felt betrayed by the lack of consultation and presumption of shared voice. There is a fantastic scene from Freedom Writers to this very point. Do these supposedly justice for all human rights crusading cultural Marxists assume all minorities are facsimilies within their clusters? Why do these activists become self appointed spokespeople for these groups? It is exactly this type of condescending action which creates the very division they are trying to stop. Diversity of thought among individuals, anyone?

Take these posters from the University of San Francisco (uSF). Karl Marx may have recently turned 200 but his legacy lives and breathes in California. So much for universities being the cradle of free and open thinking. The University of Texas has the MasculinUT program which is equally obtuse. Men must not feel obliged to express unrestricted masculinity. Do not pass Go, do not collect $200 – why not castrate male UT students or force inject female hormones instead? Let’s not start with the mind-bending educational programs forced on pre-schoolers across the world. The designers don’t even hide the agenda. Not to mention Bill 89 in Ontario which allows the state to remove children from parents who don’t accept their gender identity in time. Or a Massachusetts kindergarten that has banned the use of the word ‘best friend’ for the sake of inclusivity. We’re even being told to ask for an infant’s consent to change their diaper. It is a slippery slope that the left wants considered mainstream when it is patently empirically extreme.

Apart from the deeply condescending nature of the uSF posters, are Christians the only religion that should feel privilege? Why not Buddhists, Jews, Hindus or Muslims? Do those groups not observe religious holidays? Do the majority of Muslims protest Christians celebrating Christmas? No. Do Christians take to the streets when Muslims celebrate Ramadan? No. When you’re busting to go to the bathroom do you consciously check cisgender privilege? Most likely not. It is surprising more cisgender women don’t cross the border to use male bathrooms when their line in long. Probably because of a group assumption that men are less hygienic and might leave the toilet seat up.

Let’s look at some of the leftist thinking about ranking ‘privilege’.

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Take the quick test above. According to this table you will need to become an other, intersex, gay, trans, Middle Eastern, homeless, blind, disfigured, short, Muslim scientist (presumably climate professors get extra negative scores) to maximize all potential disadvantages. There is no worse combination for future victimhood in the liberal identikit than a tall, white, straight, cis male who works in finance. Although thankfully Australians are regarded at the lowest spectrum of whites. Still, how unfair to the Japanese who have gone through two decades of virtually no economic growth and untold natural disasters to be compared to Aussies that have had 25 years of unfettered economic expansion and face some dangerous snakes and spiders. Or is that a function of the Japanese being required to check their colonial past throughout Asia in the early 20th Century?

White privilege is just another tenet of group categorization. Should whites pay a tax to offset their level of privilege, presumably relative to their position on the chart above?

Going back to the white privilege shamers, many of those CM knows have backgrounds in finance. In an industry that is often tagged for having a penchant for deregulation, free spirits and mugging Main St. is anything but, when so many scream to the world at their virtuous moral code. How many of them support so many ideologies around equality of outcome despite most of these ‘white’ investment bankers being the first in line to cry foul if their ‘supposedly’ superior skill sets have not been rewarded accordingly. So while on the outside they protest so much injustice and inequality, they scream like libertarians internally. They can’t have it both ways. CM has always been a libertarian and believes in equality of opportunity rather than equality of outcome.

CM appreciates there are injustices throughout the world but the worst way to achieve it is by compelling it, even under the veil of affirmative action. The case studies of doing so are overwhelmingly conclusive of producing the opposite outcomes. If everyone is assured the same result, why bother studying or striving for the extra mile? It is counter intuitive. It is also downright demeaning to assume that ALL ambitious minorities are crying to be given a leg up.

The most recentwhite privilege jab was over a discussion of the freedom of speech of NFL kneelers. Because many of the players happen to be black, CM needed to check white privilege. The only argument CM made was that these NFL players were employees who have a boss. How dare CM silence these people fighting for a cause! CM argued that no one is claiming they do not have a right to protest but if their bosses are witnessing customers (aka fans) deserting the games, hence impacting revenues which ultimately impedes the ability to throw multi millions to the same players something has to give. Put simply they have a business call to make. Make it all about police brutality but when harsh economics ends up seeing players sacked, don’t cry to CM. Is your boss unfair to sack or demote you if you are not prepared to please customers in order for the business to stay afloat? Just take a knee and see how far you get. CM bets none of you will. You know full well the boss is entitled to expect a return on the money he or she pays you. The boss isn’t doing it solely out of generous spirit. The NFL bosses aren’t questioning free speech but forecasting the net present value of the franchise.

The irony is that most of the kneelers (although CM read that Colin Kaepernick does invest into some of the causes he is protesting) do not invest their own spare time to fight those injustices. Many are trying to stay out of the courts given their all too frequent misdemeanors off the field – rape, DUI, resisting arrest, dog-fighting etc. Yet the white privilege shamers come forward with the argument that fans should put up with it. The liberal creed is that ‘social justice’ must be beaten into viewers. Do these SJWs get that the more they hammer these messages home the further they drive the people they’re trying to convince away? If we can white shame these spectators enough they’ll cave, right? Wrong. Little do they realize that these same fans might have financial, marital or employment stresses that the game is supposed to take them from? Is it just white fans seeking remediation? Most certainly not.

White privilege was hurled at the US education system for unconscious racial bias. What The NY Times article failed to document was that 99.6% of ALL kids stay out of big trouble which would result in serious disciplinary action, including arrest. All too easy to dumb it down to colour alone, yet when looking at liberal (Brookings Institute) or libertarian (Heritage Foundation) think tanks, both point to broken homes as a major cause of problems in graduation rates and disciplinary action. This has been documented over decades. Yet the liberal view is that all this division can only be attributed to white privilege. Torn asunder if black libertarians like Thomas Sowell, Larry Elder or Candice Owens don’t tow the line.

Skin colour seems to be a single-variable regression to white shamers. Does CM tell his half-Japanese kids to moan and complain that they are mixed race? Or does he try to impart to them the value of hard work, diligence and making their way through application and effort? They hopefully get the message that their father has tried to impart to them many times that the ‘taste of victory’ is umpteenths times greater the harder the challenge. Did Oprah become the world’s highest paid entertainer for hard work or just because she is black? Should we gut the NFL and put in less competent white players to ensure that ethnic balance is restored along the lines of population weights? Would fans want to pay a premium to see inferior performance? White shamers would suggest they would. Common sense would say not.

Yet, white privilege is the problem that if fixed will supposedly solve everything. Australian nurses and midwives are being told in the latest code of conduct to check white privilege and admit their colonial past to expectant mothers of other backgrounds. No seriously, instead of focusing on ensuring safe deliveries they are being asked to bow down to this ridiculous indoctrination. Will mothers giving birth feel empowered that the midwife grovels or marvel in the miracle of bringing life into the world?

Little by little, freedoms are being forcibly removed from society under the guise of political correctness. Reasoned debate is ignored. Outcomes are engineered in a way that ensures the data fits the legislation. Canada is one of the worst examples of this in action and the latest polls against PM Justin Trudeau reflect the backlash. Instead of debating sensibly through democratic means, the left wants to channel their doctrine through education and compelled speech. The left shouldn’t be surprised when a growing list of countries throughout Europe are becoming fed up with centralized control and voting at a sovereign level to disassociate themselves. Even if Brussels still tries to influence those constituents as to how they democratically choose to sustain their cultures, as evidenced this week in Italy.

Take the UK stance over Islam. British authorities seem so afraid of their own shadow that they have introduced a two-tiered approach to the control of citizens that would even make Lenin blush. Not initially by design but by avoidable mistakes. The dithering non-confrontational nature of the Brits means that they muddle through issues which end up making them more uncomfortable and put the population in a worse position, period. There are undoubtedly swathes of Muslims who detest the way they are tarred with the same brush as the more radical among them that are behind terrorist activity or grooming under-age girls for rape and sex trafficking. Rightly so. Any group of Christians would feel equally appalled to have their faith associated with sexually deviant priests molesting young boys. Therein lies the danger of generalizing groups rather than correctly targeting individual perpetrators, regardless of whether religion has been taken out of context to commit crimes.

Radio presenter and founder of Quilliam, Maajid Nawaz, has openly critized the UK authorities for pandering to political correctness.

For too long in this country, we have ignored the issue of grooming gangs. Of young vulnerable teenage girls who have been victimised, drugged, raped and abused…Whether it’s the Rotherham case or all the other cases that were replicated across the country, it is both the conclusion of the prosecutor in the Rotherham case…or indeed the official inquiry into why it took so long for these young vulnerable under-age girls to get justice – both of those concluded that fears of racism prevented us from coming to the defence of vulnerable under-age girls…Fears of racism meaning that the state was scared that it would be accused of being racist if it rightly arrested and prosecuted largely British Pakistani Muslim men in their abuse of under-age white teenage girls…If we hadn’t all been silent, if we had all addressed this issue head on when it needed to be addressed, when it was time to address it, then the void would not have emerged for the populist agitators to fill that gap…

Nawaz holds no punches. The British government has presumed the majority of Muslims may get offended so 1,000s of innocent under-age (white) girls became sacrificed on the altar of political correctness. One Labor politician claimed that these rape victims should shut up for the sake of diversity. Should that be categorized as a white privilege offset? Presumption is a dangerous game. Are people surprised when the cover up is finally exposed that Britons become enraged? It is hardly a win-win for the Muslim community at large to have this fester beyond the squalid state it already has become.

Yet examining the state of UK prisons, inmates identifying as Muslims number 15% of the population despite being 7% of the UK population. Is that a sign the judiciary is being biased against the Tommy Robinsons of the world? No. While the drive-thru jailing of him last week apears overly biased, the explosive growth in the Muslim prison population would not exist were the courts targeting non-Muslims. If only the courts were able to expedite justice for these poor girls as quickly as Mr Yaxley-Lennon.

Examining the huge surge of violence (against fellow inmates and guards), an 800% leap in unexplained deaths (aka murder) and the 6 fold jump in call outs of the tactical riot squad within UK prisons over the last decade coincide with the doubling of jailed radicals. It must worry the law makers no end to how they solve for this disturbing rise in crime and stick to politically correct narratives.

The simple solution is to engage a broader section of all communities beyond those that have clearly produced no tangible results. When will they realize it is not working and DO something about it, rather than presuming the several speak for the whole?

If liberals desperately covet diversity and identity politics for the good of peoplekind, they are going the wrong way about it. Shaming others has proven to be a recruiter for the right. To put this in chess parlance –

The best chess move is the one which your opponent least wants you to make

Instead of ostracism and presumption, try engaging individuals rather than expect them to accept accusations of association to groups that they may abhor.

He’s not called ‘Jackass’ for nothing

Aussie Jack Miller, affectionately known as ‘Jackass’, finished in his first ever pole position at the Argentinian MotoGP after risking slick tyres in the wet conditions. If anyone wondered why MotoGP is so much better than the politically correct F1 this is why. Talk about putting it on the line!