Germany

AfD is 2nd most popular party in latest Bild poll

15DCD128-E7CE-42CE-AF7D-81E3463154CF.jpeg

The left leaning Bild newspaper published a poll showing the anti-immigrant AfD as the second most popular party in Germany with 16% (+2) The socialist SPD polled an awful 15.5% (-5), it’s worst post war performance. The Greens also polled well.

Yet another country growing tired of politicians from incumbent major parties who are failing to deliver to their constituents.

Regardless of what one’s views are on Merkel’s misguided altruism, it seems fewer people support it at home. Call it racist, bigoted it worse but the fact more people are prepared to back the party that answers their sense of frustration speaks volumes of underlying mood. Either that or the CDU is doing a terrible job selling its message. What does one expect when the media and police are muzzled?

Across the border Poland and Hungary are linking hands in a sign of solidarity to reject the EU’s forced migration quotas. On April 8 Hungarians vote on whether they want Orban’s Fidesz party to stay in power. It looks a formality. The question is by what margin? When 98.4% who voted in the Hungarian referendum several years back to reject forced migration, this seems an election issue which opposition parties stand no chance of getting up if they support it.

Approval ratings of world leaders

8A045556-211E-4DE9-B940-A27ED3474BA5.jpeg

Macron, France, Nov., 2017: 46%
Merkel, Germany, Dec, 2017: 38%
Trudeau, Canada, Jan., 2018: 37%
Turnbull, Australia Feb 2018: 37%
May, UK, Jan., 2018: 29%
Pena Nieto, Mexico, Nov., 2017: 26%
Trump, USA, Feb., 2018: 49% (Rasmussen)

Looks like the mainstream media should be serving up the beatings for unpopularity to other world leaders.

Why is Merkel pushing for a coalition when a caliphate is for the taking?

Why is Merkel bothering trying to form a fragile coalition when she can submit to a caliphate? To be honest seeing this video of a German state run children’s TV channel with two white, blonde Germans submitting to Islam doesn’t surprise. Such is the growing level of indoctrination to make up for the cataclysmic failure of Merkel’s misguided altruism that the state doesn’t even bother to hide it anymore. Is it any wonder that the AfD is 14% of the vote? People are increasingly growing tired of the political correctness yet the authorities in Germany are ever more willing to charge citizens for what the state deems as ‘hate speech’. Politically motivated violence is up 30%YoY in the last two years.

To try to brainwash young kids to accept a growing Muslim population is one thing, getting them to submit to it is outrageous. How naive is the left to think that this is in anyway normal or going to wash with large parts of the population? If they believe in preaching tolerance to young kids why aren’t they looking to form an alliance with a Saudi TV station to help kids In Riyadh to submit to Jesus Christ? For the left spineless submission and shared misery are seen as a virtue. Their Marxist view is that acceptance can be won by denying the national identity.

Promoting tolerance is one thing. Indoctrinating it is another. Germans are a socially conscious people but there comes a time when they feel that their generosity is being taken for granted. When that support requires them to make adjustments to the ways they have practiced culture, dress or community for centuries they have a right to a proper explanation rather than face the threat of the courts.

Go back several years when we witnessed the aftermath of the Cologne sexual assaults on New Year’s Eve. The police and press were muzzled. However after the incident could no longer be concealed, the Mayor of Cologne came out and openly asked women to dress more appropriately to avoid being harassed. Think through the logic. German citizens (more specifically females) must take extra precautions around the very people billions in taxpayer euros are going to support, moreover save them from their desperate plight? Of course not all refugees are responsible for the 64% jump in foreign crime reported by the Interior Ministry (BfV).

Ask why as of June 2016, there were 402,301 small arms carry permits in the National Weapons Register according to the BfV, some 50% higher than that recorded in June 2015? A coincidence that more Germans are feeling ill at ease with Merkel’s social experiment?

While every effort should be made to accomodate those fleeing from persecution and war zones, propaganda videos to brainwash innocent children like this only accentuate the depth of the problem faced by Germany.

Such is Merkel’s folly the EU confirms that 80% of these seeking asylum are economic refugees so much so that she is now pushing a scheme dubbed “Your country. Your future. Now!” which will run until February this year. Individual migrants can receive up to €1,000 if they voluntarily return home, while families can receive up to €3,000 to do the same. The assistance is meant to help reintegrate rejected asylum seekers in their home countries. The refugees, which were unsuccessful in their applications, could also get subsidized housing for a year—to help pay rent, home renovations, or get basic equipment for a kitchen or a bathroom.

Await the excuses that will come out assuring Germans that the children’s TV program was merely a drama and not to be taken as a mainstream view. Common sense will tell us that this is not the last time we will see such media pushed on the local population to force diversity to cover for dreadfully planned policy failure.

Let’s await the June 2017 small arms carry permits statistics to see whether the people are in tune with the view of the state.

What Australia’s authorities can learn from Germany’s extremist boom

8169EDE1-EFF5-4112-8799-2CAF43D3EB02.jpeg

Of course the easiest thing to do is label the Melbourne-based True Blue Crew (TBC) a bunch of racist bigots. It’s members view themselves as patriotic vigilantes. TBC is a group filling the void left wide open by the politically correct who in its mind are glossing over the things that matter to everyday Australians. One can debate their motives til the cows come home but growing numbers suggest that the political class is not responding. Germany is seeing a similar wave of vigilante behavior. Is it any wonder that Merkel is struggling to form a coalition with the surge in the AfD party to 14% of the vote. One Nation is at 10%. Notice a trend?

TBC, according to its Facebook page is planning to meet and then march through the streets of Melbourne to protest a “lack of action by the courts”  They have a point. An opinion piece in The Australian this week highlighted this leniency:

When it comes to sentencing, the courts take a sensitive approach. Ibrahim Kamara, from Sierra Leone, received a suspended sentence of just over one year, with an 18-month good ­behaviour order, after admitting to five counts, including grooming and having sex with a minor. The ACT Supreme Court judge said “(Kamara) has tried to make a good start on his life in Australia”.

In NSW, an Islamic sect leader was the first person in Australia to be imprisoned over the genital mutilation of two sisters aged six and seven. Notwithstanding a 21 years maximum, the leader ­received 11 months’ jail, while his two accessories will serve a minimum of 11 months’ home detention. This sets a derisory bench­mark for future sentencing….Judges have become politicians in robes and, like the police and other unelected authorities, selectively administer the law according to their prejudices.

Ironically, as much as the police and political class downplay the extent of  “African crime gangs”, “radical Islamic terrorism” or “FGM” the hardware suggests otherwise. We have “Public Order & Riot Squad” emblazoned across police cars in NSW and police officers are decked out in full para-military kit including M-4 automatic assault rifles, a superior weapon to that used by the Australian Infantry. These riot cars and machine guns didn’t exist 10 years ago. While we’re told all is well, the preventative materiel speaks volumes of the concerns within. The only problem is that the voting public is not that stupid that it doesn’t notice the hardware.

TBC also plans in the 2nd part [of the meeting] to take a stand on the streets which it claims “isn’t for the PC (politically correct) so keep that in mind. PC is not going to stop people’s houses being invaded, innocent people being attacked etc.”

Why are we surprised at such groups springing up? Germany’s Federal Ministry for the Interior (BfV) updated its factbook on the explosion in left and right wing groups and the rise of Salafists at home. To summarize:

In 2016, the BKA (Federal Criminal Police Office) registered 41,549 offences in the category of politically motivated crime, an increase of 29% over the 2014 figure.

Right wing extremist party membership has risen from 22,600 in 2015 to 23,100 in 2016.

1,600 (2015: 1,408) registered cases, the number of violent criminal offences with a right-wing extremist background increased by 13.6%. At 1,190, the number of violent crimes directed at foreigners (2015: 918) was the highest since the current definition of politically motivated crime was introduced in 2001. The number of violent crimes against actual or supposed left-wing extremists (250; 2015: 252) remained about the same. The number of violent offences against other political opponents fell significantly (34; 2015: 82).

Left wing extremist party membership has risen from 26,700 in 2015 to 28,500 in 2016.

In 2016, 5,230 criminal offences were classified as left-wing politically motivated crimes with an extremist background (2015: 5,620), of which 1,201 were violent crimes (2015: 1,608). The number of violent criminal offences with a left-wing extremist background that were directed against the police and security authorities significantly decreased to 687 (2015: 1,032) and is gradually returning to the level of 2014. The number of violent criminal offences against actual or supposed right-wing extremists also decreased to 542 (2015: 833). The number of violent crimes in the context of campaigns against restructuring more than tripled in 2016 (2015: 54, 2016: 188).

Islamic Extremists

Salafist movements in Germany have risen from 8,350 in 2015 to 9,700 in 2016 with the BfV noting on the whole, that all Islamist following in 2016 amounted to approximately 24,400 individuals, slightly down over 2015. BfV did note

Although this total number is smaller than in the previous years, the threat situation has not at all eased. On the contrary: the shift towards a violence-oriented/terrorist spectrum has revealed a new dimension of the Islamist scene, which was also illustrated by the attacks carried out in Germany in 2016However, Salafism in Germany enjoys undiminished popularity. Its continuous attractiveness shows the importance of Salafism being subject to a debate in society as a whole and of intelligence collection carried out by the community of the German domestic intelligence services. This is even more significant as adherents of the jihadist tendency of Salafism not only reject the West – symbolised by the free democratic basic order – but also actively fight against it: either by travelling to so-called jihad areas or by mounting attacks in the West.”

In the area of politically motivated crime by foreigners, 2,566 offences with an extremist background were registered (2015: 1,524), including 427 violent offences (2015: 235). The total number of criminal offences in this category thus increased by 68.4%, the number of violent crimes even by 81.7%. In 2016, there were two homicides and 13 attempted homicides by foreigners with an extremist background (2015: three).

Limp wristed rhetoric and responses (this town hall meeting in Germany is a good example) by officials is a large part of the problem for the rise of such groups. When people feel marginalized and ignored for long enough they will take matters into their own hands. It is not a question of whether groups like TBC are right or wrong in their approach to street justice but law enforcement risks having the problem blow up in their face because few in the political class are willing to tell it how it is.

World government – why it would never work and why you shouldn’t want it to

F241490E-8417-42F5-9352-CDFD70A3FC95.jpeg

World government. Some criticise the US move to hobble the UN via funding cuts as justification for it. Some argue that international laws cramp the style of just about every government under the sun so those with power go out of their way to prevent it. The same people argue that the UN should be democratized and nation states should submit to international law and independent institutions set up to enforce it.

Presumably within this Marxist manifesto there should be no borders and total freedom of movement. However within this socialist dogma not one has put forward how it might work economically which is probably the best signal that it would fail to be a sustainable form of government. We’ve had multiple attempts at socialism and in every case it has failed. Oh how the left championed Chavez as a model of successful socialism. How quiet they are now. Still it doesn’t prevent them extolling the virtues of ‘equality’ even if some pigs are more equal than others.

Still suppose we entertain the prospect of a world government. We have to start somewhere. Regardless of whether we like it or not, a world government would need to address economic status to sign up willing participants. The US economy is 24% of world GDP with less than 5% of the world’s population. In order for the US to agree to join a world government they would rightly demand that they get 24% of the seats in a world parliament? Why would they join at 5%? What is the incentive? Virtue? Australia has a disproportionately large raw materials base relative to the population. Should the Aussies have just one vote if it ends up benefitting others more than itself?

We have a living working example of how fusing completely different economic systems doesn’t work, even when the population speaks the same language – German reunification. From Der SPIEGEL,

Today, the eastern German economy is still in a sorry state, and there are no indications that the situation will change. An estimated €1.3 trillion ($1.6 trillion) have flowed from the former West Germany to the former East Germany over the last 20 years. But what has that money achieved? Historic neighborhoods have been restored, new autobahns built and the telephone network brought up to date, but most of the money was spent on social benefits such as welfare payments. The anticipated economic upswing failed to materialize…Most of eastern Germany has turned into an economically depressed region that lags behind the west in all respects:

The per capita economic output in the east is only at 71 percent of the western level, with a disproportionately high share of economic output attributable to the public sector. The economic output generated by the private economy is only at 66 percent of the western level.

To close the gap, the eastern German economy would have to grow more rapidly than in western Germany, but precisely the opposite is the case. Germany’s leading economic research institutes expect the economy in eastern Germany to grow by 1.1 percent this year, compared with 1.5 percent in the west.

Since the fall of the Berlin Wall, the population of eastern Germany has declined by almost 2 million people, a trend that is continuing unabated.

The proportion of household income derived from welfare payments is 20 percent higher in the east than in the west.

Of Germany’s 100 largest industrial companies and 100 largest service providers, not one has its headquarters in eastern Germany.

The lesson is clear. When given a choice, the citizens of the former socialist state stampeded to the capitalist state because they knew ‘opportunities’ were far more abundant and desirable. The power of the free market. What better indication of a repudiation of socialism than those that have actually lived under it. Many ‘socialists’ today (who ironically have never experienced it) are envious. Indeed former PM Baroness Margaret Thatcher put it best, “the Labour Party would prefer the poor were poorer provided the rich were less rich” Instead of enterprise and looking for ways to get ahead, many sit back and complain why it isn’t handed to them on a platter.

So in the case of world government without borders, it would make complete sense for people from say Africa or the Middle East to move to NY, London or Berlin. As they left their homes in the millions, sheer logistical issues would come into play – housing, food, healthcare and sanitation. The only way to ration scarce resources would be to let the free market decide it. World government wouldn’t allow it. Shouldn’t a Congolese family have a claim to live in a penthouse on 5th Avenue or Mayfair in the interests of equality? Maybe the owners of the 5th Avenue apartment should have the property repossessed to promote equality. Surely a noble gesture for the other 99%.

What about filling the world parliament? How do we look to address balance? The Indians and Chinese represent 35% of the global population. Should they not occupy 35% of the seats? Is there a global vote? As an Australian do I get a say on the Chinese candidates? Do they mine? Assuming we had global votes, language barriers would be a problem. How would an English speaker be able to work out the depth in abilities of a Chinese candidate from Harbin who only speaks Mandarin? Even if we could translate his every word, what hope would we have of delving deep into his or her history or the subtleties of cultural ‘meanings’ hidden within language to be able to cast a ballot on as fully informed a basis as possible?

Or should we cut the pie of global government candidates based on religious grounds? Muslims represent 24% of the population. Should all countries submit to having 24% of the laws made by a global government Sharia compliant? Christians represent 31% of the globe. Should they have the right to enforce the world to take Christmas as a public holiday? If the international parliament votes to repeal Ramadan should it stand? Afterall that is the result of a properly functioning global democracy!

Some in favour of the UN being the ‘social democracy’ that binds us honestly believe that it would not fall foul of greed, corruption or poor governance. Do we seriously wish to put power in the hands of the UN as our global government if one of its groups thought the murderous dictator Robert Mugabe was a worthy ambassador for WHO? Do we think the UN to date has shown exemplary governance and ethics to provide a comfort level for we minions to hand over our regulatory frameworks? Take the former UNIPCC chair who directed UN procured funds toward his own ‘scientific research body’. Conflicts of interest anyone? The UN argues it is independent but how could it be if it is so self serving? To think there was a strong suggestion that the UN deploy blue helmets in Chicago to help quell gun violence. The question one should ask is why wasn’t such action taken when Obama was president? So much for a guarantee of independence if the UN so blatantly takes sides because they want to retaliate against Trump.

We already have a preview of world government policy looks like. Many Western governments are already pandering to political correctness in ways which are causing growing backlash among constituents.

Some on the left believe that nationalism is a “backward, regressive, half-baked ideology which is used by ruling elites to control their populations” Wasn’t the open minded Labour heartland in the Midlands one that leaned to Brexit? Wasn’t it in France where Marine Le Pen’s Front National doubled the number of voters ever seen for her party? Was it not Hungary that voted 99.4% in favour of a referendum to reject forced migration quotas? The surge in the AfD in Germany to 14%. The huge landslide in Austria where the young PM has given his immigration portfolio to the FPO? The surge in the eurosceptic 5 Star Movement in Italy…the list goes on. Even Switzerland handed back its free pass to join the EU (which is about as close as one gets to a world government) because it puts sovereignty and the wish to preserve culture and customs ahead of ‘socialist’ ideals. Isn’t that patriotism rather than nationalism? Lukas Reimann of the Swiss People’s Party, said:

It is hardly surprising that the EU looks like an ever less attractive club to join. What, after all, is the appeal of joining a club into which the entire world can apparently move?”

So what would a world government do to combat nationalism? Regulate against it! Restrict freedom of speech. Incarcerate those that protest against what they perceive as injustice. Of course it would be easy to simplify these people as racists or bigots for not conforming. The price of progressivism is to muzzle dissent. Identity politics and the victimhood it breeds are so pervasive that it creates the exact division it seeks to stop. For  those pushing for world government make no mistake that the elites among the commissars will still be more equal than others.

What is wrong with celebrating differences?  Isn’t visiting a foreign country to immerse oneself in a different culture half the fun of an overseas vacation? Learning about how civilization developed over millennia. Experiencing foreign cuisine, learning a foreign language or respecting local customs (e.g. wearing long sleeves and pants into a Buddhist temple) are not things to be frowned upon. They are exactly the reason why all of the tribes of the world can’t be homogenized into the one box. Yet the world government wouldn’t tolerate such thinking.

Tesla – reports of only 345 deliveries of Model 3 in November

08A6D7EA-03D5-49D2-A8D6-A6F3AC11C172.jpeg

Seems that Tesla has only managed to make 345 Model 3s in November. A far cry from the promises to make 5,000 Model 3s every week by December. At the Q3 results the goal was pushed out til March 2018 at the earliest as “production hell” bites. Note that no single mainstream auto supplier is on Tesla’s deck which tells us how little faith they have in the company. Auto suppliers run on the smell of an oily rag and after so many bad experiences won’t accept dealing with auto makers who may jeopardize their own future. Recall how many auto suppliers almost went to the wall (many were in Chapter 11) after the tech bubble collapse at the turn of the century.

The other news is that Norway is ending Tesla subsidies and Germany has now disqualified Tesla Model S subsidies as the cars breach the €60,000 threshold. Finally a government that thinks it’s not advisable to give the well heeled tax breaks when it’s the battling insurance salesman Manfred from Bremen living paycheck to paycheck whose taxes to register his clapped out 1983 VW Golf diesel pay for it.

The shares have languished and even the hype of the new products and outrageous deposits has not converted into a ramp up. Q4 is likely to be a shocker at this rate. When will the faithful eventually pull the plug? Maybe Tesla should gamble the deposits on Bitcoin to see if they can lever cash flows that way?

Tesla – 30 reasons it will likely end up a bug on a windshield

Tesla 30.png

Contrarian Marketplace ー Tesla – 30 Reasons it will likely be a bug on a windshield

Contrarian Marketplace Research (CMR) provides 30 valid reasons to show Tesla (TSLA) is richly valued. Institutional investors have heard many of the financial arguments of its debt position, subsidies, cash burn and other conventional metrics. What CMR does is give Tesla all the benefits of the doubt. Even when extended every courtesy based on Tesla’s own 2020 production target of 1,000,000 vehicles and ascribing the margins of luxury makers BMW Group (BMW GR) & Daimler (DAI GR) the shares are worth 42% less than they are today. When stacked up against the lower margin volume manufacturers, the shares are worth 83% less. There is no fuzzy math involved. It is merely looking through a different lens. We do not deny Tesla’s projected growth rates are superior to BMW or DAI but the risks appear to be amplifying in a way that exposes the weak flank of the cult that defines the EV maker- ‘production hell’.

Follow social media feeds and Tesla’s fans bathe in the cognitive dissonance of ownership and their charismatic visionary, CEO Elon Musk. No-one can fault Musk’s entrepreneurial sales skills yet his business is at the pointy end of playing in the major leagues of mass production, which he himself admitted 18 months ago was a ‘new’ challenge. Let us not kid ourselves. This is a skill that even Toyota, the undisputed king of manufacturing, a company that has coined pretty much every industrial efficiency jargon (JIT, Kanban, Kaizen) has taken 70 years to hone. It might have escaped most investors’ attention but Lockheed Martin called on Toyota to help refine the manufacturing processes of the over budget F-35 Joint Strike Fighter. If that is not a testament to the Japanese manufacturer’s brilliance Tesla is effectively Conor McGregor taking on Aichi’s version of Floyd Mayweather.

Yet Tesla’s stock has all the hallmarks of the pattern we have seen so many times – the hype and promise of disruptors like Ballard Power, GoPro and Blackberry which sadly ended up in the dustbin of history as reality dawned. Can investors honestly convince themselves that Tesla is worth 25x more than Fiat Chrysler (a company transformed) on a price to sales ratio? 10x Mercedes, which is in the sweet spot of its model cycle?

Conventional wisdom tells us this time is different for Tesla. Investors have been blinded by virtue signalling governments who are making bold claims about hard targets for EVs even though those making the promises are highly unlikely to even be in office by 2040. What has not dawned on many governments is that 4-5% of the tax revenue in most major economies comes from fuel excise. Fiscal budgets around the world make for far from pleasant viewing. Are they about to burn (no pun intended) such a constant tax source? Do investors forget how overly eager governments made such recklessly uncosted subsidies causing the private sector to over invest in renewable energy sending countless companies to the wall?

Let us not forget the subsidies directed at EVs. The irony of Tesla is that it is the EV of the well-heeled. So the taxes of the lawnmower man with a pick-up truck are going to pay for the Tesla owned by the client who pays his wages to cut the lawn. Then we need look no further than the hard evidence of virtue signalling owners who run the other way when the subsidies disappear.

To prove the theory of the recent thought bubbles made by policy makers, they are already getting urgent emails from energy suppliers on how the projections of EV sales will require huge investment in the grid. The UK electricity network is currently connected to systems in France, the Netherlands and Ireland through cables called interconnectors. The UK uses these to import or export electricity when it is most economical. Will this source be curtailed as nations are forced into self-imposed energy security?

So haphazard is the drive for EV legislation there are over 200 cities in Europe with different regulations. In the rush for cities to outdo one another this problem will only get worse. Getting two city councils to compromise is one thing but 200 or more across country lines? Without consistent regulations, it is hard to build EVs that can accommodate all the variance without boosting production costs. On top of that charging infrastructure is an issue. Japan is a good example. Its EV growth will be limited by elevator parking and in some suburban areas, where car lots are little more than a patch of dirt where owners are unlikely to install charging points. Charging and battery technology will keep improving but infrastructure harmonisation and ultimately who pays for the cost is far from decided. With governments making emotional rather than rational decisions, the only conclusion to be drawn is unchecked virtuous bingo which will end up having to be heavily compromised from the initial promises as always.

Then there are the auto makers. While they are all making politically correct statements about their commitments to go full EV, they do recognise that ultimately customers will decide their fate. A universal truth is that car makers do their best to promote their drivetrains as a performance differentiator to rivals. Moving to full EV removes that unique selling property. Volkswagen went out of its way to cheat the system which not only expressed their true feelings about man-made climate change but hidden within the $80bn investment is the 3 million EVs in 2042 would only be c.30% of VW’s total output today. Even Toyota said it would phase out internal combustion in the 2040s. Dec 31st, 2049 perhaps?

Speaking to the engineers of the auto suppliers at the 2017 Tokyo Motor Show, they do not share the fervour of policy makers either. It is not merely the roll out of infrastructure, sourcing battery materials from countries that have appalling human rights records (blood-cobalt?) but they know they must bet on the future. Signs are that the roll out will be way under baked.

While mean reversion is an obvious trade, the reality is that for all the auto makers kneeling at the altar of the EV gods, they are still atheists at heart. The best plays on the long side are those companies that happily play in either pond – EV or ICE. The best positioned makers are those who focus on cost effective weight reduction – the expansion of plastics replacing metal has already started and as autonomous vehicles take hold, the enhanced safety from that should drive its usage further. Daikyo Nishikawa (4246) and Toyoda Gosei (7282) are two plastics makers that should be best positioned to exploit those forking billions to outdo each other on tech widgets by providing low cost, effective solutions for OEMs. Amazing that for all of the high tech hits investors pray to discover, the dumb, analogue solution ends up being the true diamond in the rough!