Germany

BMW Motorrad soft in H1. FY forecasts trimmed

D28E87F1-35FA-4C36-9237-4E0EA0AFB6A2.jpeg

BMW Motorrad’s H1 performance was soft showing a 1.6% drop in unit sales and 23.6% drop in profit. The number of motorcycles sold during the Q2 reporting period was partially influenced by the model change in the mid-class segment, with 51,117 units sold between April and June (2017: 52,753 units).

In Europe, the number of motorcycles delivered to customers totalled 53,989 units (2017: 58,617 units; – 7.9 %). Germany (11,739 units) was also down on the previous year (2017: 14,461 units. Shortfalls in France (9,068 units; 2017: 9,447 units; – 4.0 %) and Italy (8,647 units; 2017: 9,099 units; – 5.0 %). By contrast, motorcycle sales in Spain improved slightly by 1.3 % to 5,647 units (2017: 5,573 units). In the overall contracting US market, the BMW Motorrad reported a slight increase (+ 3.1 %) in six-month deliveries to 7,379 units (2017: 7,157 units).

With effect from the first quarter of 2018, the Motorcycles segment is forecast to achieve a slight increase in deliveries (2017: 164,153 units). BMW said in its Annual Report 2017, that “a solid increase was expected.”

Who says the Germans don’t do humour?

8E1E95AA-735B-41FA-9B07-1E7D044092B7.jpeg

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.

Presidential behaviours

While the glass jawed POTUS has many shortcomings, surely the unelected EC President Jean-Claude Juncker does the EU absolutely no favours by being sozzled to the gills at a NATO summit. One has to ask PM Theresa May how she thinks the EU is a credible opponent to negotiate Brexit? No deal seems a no brainer.

NATO – 19 nations may hit 2% promise 18 years after committing to do so

maddog.png

It is a farce. In 2006, NATO Defence Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to defence spending. This guideline, according to NATO,  “principally serves as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts.” In 2017, only 5 of the 28 members outside the US have met the 2% threshold – Greece, Estonia, UK, Romania & Poland in that order. Despite Greece’s economic problems elsewhere, it manages to honour the deal. NATO Secretary General Jens Stoltenberg said “the majority [not all] of allies now have plans to do so by 2024.” 3 more are expected to hit the target in 2018. So for all the good will in the world, is POTUS wrong to call the other 19 members slackers that ride off the US taxpayer when so many of them are only likely to hit the target 18 years after ‘committing’ to it?

NATO commitment in 2017 can be seen as follows.

NATO.png

Although all credit to the Europeans and Canadians for getting away with it for so long. Previous US presidents have obviously not concerned themselves with getting a fair deal on mutually agreed commitments. Although in what world would American taxpayers be upset to see the rest of the team pick up the slack?

Naturally the media are getting mileage out of the insensitive bully attacking his supposed allies. In fact Stoltenberg said last month on record that, “burden sharing will be a key theme of our summit next month, and I expect all allies to continue their efforts.” He reiterated that to Trump yesterday.

NATO2.png

To be brutally honest, how effective can a NATO force truly be if words aren’t put into action? What good is a promise if it is to be honored 18 years later. Imagine if that is the mindset should NATO be forced to act militarily. Would those meeting their obligations feel within their rights to have a bigger say in how NATO should work?

The problem with such a lack of commitment is that over the 12 years where 23 nations have not come close to meeting their obligations, the sum total of the actual defence capabilities suffers for the duration. The US is 67% of total NATO spend and the UK, France  & Germany make up half of the remainder. Yet building a sustainable capability in defence does not come through half measures or poorly thought out procurement. What is missed on many is that over 70% of defence budgets are allocated to soldier pay, housing, healthcare, training and so forth. Procurement and RDT&E get funded out of the balance. Have a skirmish somewhere and yet more money is chewed out of buying new equipment for the sake of logistics (feeding 10,000 troops and servicing hardware in a foreign land). Then there is the subject of terribly managed procurement programs.

Take the French disaster that is the aircraft carrier Charles De Gaulle. Despite delays because of problems with a retrofit for radiation shields, the naval brass had to add 14 feet of deck because it realized that the E2-C Hawkeye surveillance planes it purchased couldn’t take off and land in its original build spec. Even now the flight deck is not long enough to conduct simultaneous launch and recovery operations. Even worse the blueprints for the CdG‘s propellers had been lost in a fire, which meant that the ship had to be refitted with hand-me down screws from carriers Foch and Clemenceau which meant her speed was cut from 27 knots to about 24 knots—which was unfortunate since her predecessors steamed at 32 knots. Speed to war zones is kind of important to gain a decisive edge. All of the spend to fix poorly thought out designs cuts from being able to procure other equipment and materiel. Scary to think Australia is buying 12 subs from the French! The problems are already revealing themselves despite not one boat having hit the dry dock.

History tells us many things of how NATO type organisations have failed in the past.The Peloponnesian Wars (431BC – 404BC) highlighted how things can change when allies do not keep up commitments and capabilities aren’t maintained.

Athens required her Delian League member states (consisting of city states mainly along the Ionian Sea) to pay tributes (phoros) to the treasury which was used to build and maintain the naval fleet led by Athens. Yet over time the member states relied too much on the wealth of Athens and over the course of the draining war and the costly campaign to Sicily, failed to honour the ever increasing demands to fund the league with the appropriate level of tributes which drove Athens into massive debt. Defence spending by the Athenians had been cut to around 30-60% of the average over the previous decade. The Delian League’s capabilities dwindled as a result and the Spartans, funded by Persia, took advantage of this and crushed it for good, in the very art of war that Athens was renowned for – the navy.

It is not hard to think of Trump feeling like a modern day Pericles. NATO is the Delian League and its projected enemies chip away all the while members dither over commitments, forcing the US to sustain the limited capability. Like the Athenians, the US has the most powerful navy in the world with a fleet bigger than the next 11 countries combined but even it has pared back the number of ships to less than 10% of what it had in WW2. Enhanced capability is one factor in cutting the surface fleet but even the US DoD realised that the conventionally powered US Kitty Hawk consumed 2% of the entire US military fuel bill annually so it was taken out of service to save money.

One can argue the $750 billion annual defence budget is plentiful but the US realises that power projection is an expensive business. Even Japan understands it can’t stay nestled in the bosom of US stationed forces forever without taking a proactive stance to defend itself. That is the same message to the 19 members NATO failing to pull their weight.

EU – 1.3m abortions, 5m births p.a.

DivMarr

Eurostat statistics on abortion reveal that Germany, France, UK, Spain and Italy alone terminate a combined 760,000 fetuses per annum. Across the EU-28 there are 1.25mn terminations. Without getting into a debate on abortion rights, the pure statistical number points to 20.4% of fetuses never make it out of the womb alive. Every. Single. Year. At that rate over 10 years that is 12.5 mn children that could have added to EU population sustainability do not occur but the EU seems to think embarking on mass migration is the only solution to plug the gap. Is it? Ironically child support is one area the EU is happy to cede control to individual Member States.

The fertility rate across the EU-28 is now 1.58 children per woman, flat for the last decade and down from 2.9 in 1964. Demographers suggest that a fertility rate of 2.1 is required in developed world economies to maintain a constant population (in the absence of any migration). The number of live births in the EU-28 peaked in 1964 at 7.8 million. In 2017 this had fallen to 5 million. There was a brief period (2003-2008) when live births in the EU-28 started to rise again, returning to 5.5 million by 2008 but the GFC sent it down again – as economic hardship tends to cause a decrease in births. So are economic incentives too low to cause a rebound?

France has the best incentives for children and the highest birth rate inside the EU at 2.0 up from 1.7 in the 1990s. Germany is around 1.4 drifting from 1.6 in the 1990s. The lives for child rearing French are eased by cheap health care, inexpensive preschools – for infants as young as 6 months old – subsidized at-home care and generous maternity leave. Mothers with three children can take a year off of work – and receive a monthly paycheck of up to €1,000 from the government to stay home. Families get subsidized public transportation and rail travel and holiday vouchers.

In order to stop the declining working population over time, imagine if Europe hypothetically put the onus back on consenting couples to take responsibility for their actions and makes abortions harder to access without compulsory consultation over options? Why not graphically show the entire process to get some sense of reality for both parties? You can gross yourself on this link.

Perhaps, in today’s electronic world, automatically deducting child support from fathers that run from responsibility might make sense? Why should the state pay for others’ lack of accountability? Even if the child is placed in foster care, why not wire child support to foster parents indirectly via the Ministry in charge of its administration? The population crisis is not going away in Europe. Why not provide more incentives to married/same-household couples?

Mathematically speaking the numbers are huge. Imagine if the million-plus fetuses every year had a vote to be raised with foster parents as opposed to being terminated, what they would choose? Consider the €23bn Merkel has spent on mainly economic migrants in the last 2 years being put toward preventing 200,000 abortions in Germany over that period? €115,000 to avert each one might have been better spent. That is a huge sum of money period.

CM is not advocating control over the womb but surely transparency in policy over individual responsibility is not a bad thing with respect to many issues, not just abortion. What level of economic incentives are required to prevent some couples/women choosing to terminate? Surely that plays a part in deciding to terminate. Consultation services with respect to the subject don’t seem too commonplace or at least structured in such a way as to prevent them.

According to Eurostat, since 1964 the divorce rate in EU-28 equivalents has doubled and the marriage rate has halved. For every eight marriages in 1964 there was one divorce, now there is one divorce for every two marriages.

The proportion of births outside of marriage now stands at 40%, from 27% in 2000 to less than 7% in 1964. 8.8 % of the EU-28 population aged 20+ lived in a consensual union (de-facto). In Japan the number of births out of wedlock is 25% according to the MHLW. The dynamics of the traditional nuclear family are fading.

51% of the Swedish population is now single household. 51%! While some is attributed to an aging population, 19 of the EU-28 members has a single household ratio of over 30%. 12 over 35%. By way of comparison, Japan’s single household ratio stands at 34.6% from 27.6% in 2000.

9E454726-9076-4241-8F2C-268C04B01FEC.jpeg

To further analyse the new ways of living together and to complement the legal aspect, statistics on consensual unions, which take into account those with a ‘marriage-like’ relationship with each other, and are not married to or in a registered partnership with each other, can also be analysed.  Sweden (18.3 %) has the highest rate followed by Estonia (16.4 %), France (14.3 %) and the lowest in Greece (1.7 %), Poland (2.1 %), Malta (2.5 %) and Croatia (2.9 %).

Is employment a factor?  It is mixed. Eurostat reported in Germany, the fertility of non-employed women has increased and that of employed women decreased, while in Spain, the opposite occurred; in Greece, the total fertility rate (TFR) of non employed women fell below that of employed women, changing from a positive differential of about 0.2 average live births.

Is education a factor? Apart from Nordic countries (Denmark, Finland and Norway), Portugal and Malta, in general, women with lower education had higher TFR between 2007 and 2011. Eurostat state the fertility of women across the EU over the same period with a medium level of education dropped by about 9%, while the decrease for women with high or low education was less significant.

Eurostat argues that economic recessions have correlation to falling child birth rates. Apart from the direct impact of economic crises at an individual level, the economic uncertainty that spreads during periods of hardship seem to influence fertility. From this point of view Eurostat believes the duration of a crisis may play an important role and, the duration and the depth of the current recession are unprecedented in some countries. The agency states,

The expected relationship is that negative changes in GDP correspond to negative changes in the TFR, possibly with some delay, thus showing a high positive correlation at particular lags. The correlation with the TFR is relevant in Spain and Latvia without any lag; in Bulgaria, Poland and Romania with one year of lag; and in the Czech Republic, Denmark, Estonia, Greece, the Netherlands, Finland, Sweden, Iceland, Norway and Croatia with two years of lag. Taking the overall average across countries, a change in GDP is mostly positively correlated with a change in the TFR within about 19 months.”

Do we cynically argue that stagnant child birth rates aren’t just a factor of societal changes? Perhaps a truer reflection on the higher levels of poverty in the EU since GFC and the harsh realities for a growing number of people behind the growing levels of populism who are suffering greater economic hardship than statisticians are presenting to the political class? Hard decisions must be made before they are made by external factors.

ICE – the facts

ICE.png

In yesterday’s piece, Child Abuse – the shocking stats, some decided to launch expletive laden criticism on the lack of discourse on the US Immigration & Customs Enforcement’s (ICE) treatment of children at the Mexican border, the inference that CM was turning a blind eye to the beastly Trump administration in reporting the extent of child abuse. First, the politicization of children is abhorrent. Where were the media when these same supposed crimes of removing children from (supposed) parent/guardians was occurring since 2013? Reading through the ICE end of year report of 2017 we let the stats speak for themselves. Forgive the preamble.

Recall the one-sided media coverage of the lifeless body of 3yo Syrian boy Aylan Kurdi on the shores of Turkey. Yet the facts were clear – he had not been in any danger. The family had been safe in Turkey for 3 years. His father was trying to make his way to Germany for dental surgery. Aylan’s parent chose to risk his son with no life jacket to make a hazardous trip on an overcrowded boat to seek selfish opportunism. Is it up to the West to take responsibility for the individual choices of people who are not at risk of war zones? Yet the media still used the image to show how callous we were to allow this.

It was only a few weeks ago that Time magazine posted a photo-shopped image of a crying little girl looking up at POTUS. Despite a tongue-bitten retraction tucked at the bottom of a long article to acknowledge the toddler had not been wrested from her mothers arm by ICE storm troopers, we find out the mother had abducted her with the help of people smugglers while abandoning her husband and 3 other kids.  The picture was used to great effect by the Refugee and Immigrant Center for Education and Legal Services (RAICES) to raise $20mn via crowdfunding! Even after the lie was outed the group still used it to lift the target to $25mn.  US veterans are committing suicide at the rate of 20/day and people are willing to crowdfund an unethical group by 1000s of multiples. Priorities. Or is it that TDS is that extreme?

Who wants to see screaming kids? No-one. Locked in cages? Even less. Separated? Well there is good reason for that. When even the likes of left-leaning HuffPo admitted in December 2014 that 80% of women and girls are sexually assaulted while trying to make it across the border there is a good reason to question the proof of identity of the supposed parents. Even if 90% of parent/children pairs are legit, what of the 10% that aren’t? Do ICE risk it? Australia had an experience of a mother from Nepal (a democracy not at war) who deliberately poured boiling water on her infant to expedite processing on the mainland. Are these the values of people we should provide refuge to? We should not forget that many people make the journey knowing ALL the risks that confront them yet still attempt it despite the warnings.

To emphasize the danger of lax screening,  multiple kids were found dead after being abandoned once across the border as their usefulness as a golden ticket on compassionate grounds was expended. If that isn’t some of the worst forms of child abuse then what is? Moreover these people are hardly the type that decent Americans would want to embrace with open arms!

In Jan 2016 WaPo noted, “The Office of Refugee Resettlement, an agency of the Department of Health and Human Services, failed to do proper background checks of adults who claimed the children…several Guatemalan teens were found in a dilapidated trailer park near Marion, Ohio, where they were being held captive in squalid conditions by traffickers and forced to work“. So slave labour to repay human traffickers? Let’s encourage more to attempt the crossing?

Then ICE has the trouble of finding the parents/guardians (sponsors) already living (often) illegally to collect their unaccompanied children at pre-arranged court hearings. The media went into a frenzy saying that ICE had lost the records. The truth came out in Feb 2016 that,

“The head of ICE’s removal operations, Thomas Homan, told members of the Senate Judiciary Committee that 7,643 immigrants who arrived as children were sent home between the 2012 and 2015 budget years…More than 171,000 children, mostly from Honduras, El Salvador and Guatemala, were arrested at the border during that same time…The number of children caught crossing the border illegally spiked in 2014 [see impacts in NY Times graphic below] and the Obama administration promised that those who were not eligible for protections in the United States would be swiftly sent home… And with an immigration court backlog of more than 474,000 pending cases some cases can take years to move through the court system…

ICE SURGE

…about 40% of immigrants are no shows at court…Finding immigrant children with outstanding deportation orders is also complicated by the fact that they often are no longer at the addresses provided to the government.”We are out looking,” Homan said. “But they are hard to find. A lot of these folks who don’t show up in court, we don’t know where they’re at.”

The pictures of kids in concentration camp style cages were from 2014. Yet don’t let that get put in the way of a narrative to show the nationalist tendencies of the current administration.

While we can express outrage at the treatment of illegal immigrants at the border, the tougher laws have started to resonate with Ana Garcia Carias, wife of Honduran President Juan Orlando Hernandez, who said, “Stay in the country and let’s look for solutions to support you.” She visited the border and said that she didn’t recommend her citizens go to the US undocumented. If a court system has nearly 500,000 backed up in the system, it seems reasonable to push for a zero tolerance policy to end

So let’s examine the ICE data. 

To contextualize what ICE’s enforcement focus includes with respect to removable aliens we find:

(1) have been convicted of any criminal offense;
(2) have been charged with any criminal offense that has not
been resolved;
(3) have committed acts which constitute a chargeable criminal offense;
(4) have engaged in fraud or willful misrepresentation in connection with any official matter before a governmental agency;
(5) have abused any program related to receipt of public benefits;
(6) are subject to a final order of removal but have not complied with their legal obligation to depart the United States; or
(7) in the judgment of an immigration officer, otherwise pose a risk to public safety or national security.

An administrative arrest of a criminal alien is the arrest of an alien with a known criminal conviction. The figures as follows:

  • 2015: 101,800
  • 2016:  94,750
  • 2017: 105,736

Here are some of the reasons of arrest (both criminal convictions and charges) for 2017:

  • Driving under the influence : 80,547
  • Dangerous drugs: 76,503
  • Immigration violation:  62,517
  • Assault: 48,454
  • Larceny: 20,356
  • Burglary: 12,836
  • Fraud: 12,398
  • Illegal weapon possession: 11,173
  • Sex offences: 6,664
  • Stolen Vehicles: 6,174
  • Forgery: 5,210
  • Homicide: 1,886
  • Kidnapping: 2,027
  • Prostitution racketeering: 1,572

An initial book-in is the first book-in to an ICE detention facility to begin a new detention stay. This population includes aliens initially arrested by Customs & Border Protection (CBP) and transferred to ICE for removal. Once again the combined bookings are as follows

  • 2015: 307,342
  • 2016: 352,882
  • 2017: 323,591

The decrease in ICE’s overall removal numbers from FY2016 to FY2017 was primarily due to the decline in border apprehensions in 2017. Many fewer aliens were apprehended at the border in FY2017 than in FY2016—possibly reflecting an increased deterrent effect from ICE’s stronger interior enforcement efforts (which is exactly what they wish to achieve).

  • 2015: 235,413
  • 2016: 240,255
  • 2017: 226,119

In FY2017, ICE Enforcement and Removal Operations (ERO) conducted 143,470 overall administrative arrests, which is the highest number of administrative arrests over the past three fiscal years. Of these arrests, 92% had a criminal conviction, a pending criminal charge, were an ICE fugitive or were processed with a reinstated final order.

If one views even the short term trend of ICE operations one can see that the extent of the problem is not just a Trump issue. From even before Obama’s time, border related issues have been a festering problem. The press can beat him and his supporters senseless but it would seem he is merely fulfilling election promises. With almost half a million still to be processed in the courts, is there any sense in clogging the legal system with even more to process. Even after the repeal of legislation that prevents parent-child separations, no credit is given by his detractors despite the fact this was enacted well before he took office. Where was the press outrage during the Obama era when all the same sort of ‘abuse’ was going on? Nowhere.

People trafficking is as deplorable an occupation as can be imagined yet the idea of  publicizing open borders fuels their industry as shown in the lead up to 2014. The ultimate irony is now Frau Merkel has instituted border camps of her own as the results of her misguided altruism led to countless human traffickers to benefit from her come one, come all policies.

In summary, Rasmussen Reports notes that most Americans do not want to abolish ICE. The polling firm noted,

“only 25% of Likely U.S. Voters favor getting rid of ICE whose duties include border control. Fifty-five percent (55%) are opposed…Sixty-nine percent (69%) of Republicans and 53% of voters not affiliated with either major political party oppose getting rid of ICE. Democrats agree by a narrower 44% to 36% margin.”

AS CM always says, if people don’t like the laws, then move to change them.