Narcissism

Down and out in Davos

Davos is likely to be unlike any gone before it. Lucky for the globalist elitists who like to rug up in mink collar lined Moncler down jackets, Trump won’t be there to verbal them over their blatant double standards. Ironically the fact he isn’t going is more evidence of their inability to self reflect rather than the other way around. Trump is hardly an eloquent mouthpiece at the best of times but his words and stance around nationalism resonate far wider than the €200 Chateau Briande chewing wealthy will be prepared to admit at Davos.

France. As the Gilets Jaune (Yellow Vest) movement rolls into week 9, where has the media been reporting it? Macron would normally attend the Davos mob as “the poster child” but he can’t because of the domestic situation. Should he show up to hug his globalist chums, the chaos at home would exacerbate. This is no small matter for the proponents of world government. We shouldn’t forget Marine LePen is polling higher than Macron. Nor should we overlook the fact she won 35% of the 2nd round vote, twice the level ever seen in the anti-EU Front National’s history.

Germany isn’t much better. Although Frau Merkel will be in Davos. Despite stepping down from the rotting carcass her policies have turned her party into, she’ll be fawned over at the matriarch. Deutschland, the paragon of the EU’s economic chest beating, saw industrial production plunge 4.7% in November, its worst showing since the GFC. The fastest rising party in Germany, the anti-immigrant AfD, whose chairman was bashed to within an inch of his life, plans to be far more open about jettisoning the EU going forward. Yet more anti-globalist forces at the gate.

Italy has felt the wrath of EU meddling in ratifying its latest budget. Despite 60% of the country voting in eurosceptic parties last year, the EU is still pushing its weight around via the ECB. Italians are far from pleased with Brussels. Many of her banks in the south are carrying nose bleed territory bad debts which make them technically insolvent. Italians want out.

Hungary, Poland and the Czech Republic have openly rejected globalism and any shaming from the Bullies from Brussels has only led to bigger majorities handed to them by their citizens.

Austrian Chancellor Sebastian Kurz has made it clear that illegal immigration is not for them, no matter how much UN global compacts or EU directives want to encourage it. Why else would he appoint a member of the anti-immigrant FPO as the minister for that portfolio?

PM Rutte of The Netherlands lost seats in the last election, mainly to Geert Wilders’ anti immigrant PVV. The socialist parties were all but annihilated.

UK PM Theresa May is looking on shaky ground to pass her version of Brexit through the Commons. Even Jaguar’s woes in China are supposedly the fault of Brexit. Even the iconic brand’s UK sales are up 76% since 2013. Surely it’s macroeconomic headwinds not leaving the EU that is driving this. Despite all the scare stories from the BoE, the people aren’t buying it. The UK has its highest ever petition signed to get parliament to vote for “No Deal”. So much for the expert’s advice!?

There is a groundswell movement the establishment continues to ignore. Famous economists giving fire side chats to out of touch journalists don’t convince the people who aren’t living these utopian dreams espoused from Davos.

Davos seems a bit like an Oscars gathering. The audience they are appealing to are increasingly looking the other way and tuning out. It matters not whether some believe we need to show more compassion and embrace global cooperation. The people in charge of selling it could not muck up the messaging and execution of said plans if they had a mandate to do so.

Davos 2019 may well see its proclamations become little more than rearranging deck chairs on the Titanic. We’ve been so overdue an economic correction and the little bigoted people increasingly trying to protect their own interests are already telling us they’re knee deep in recession already. At the same time they’re sick of their leaders legislating against them for supposed intolerance.

Maybe France is the globalist canary in the coal mine. Macron’s police force is already being asked to step it up a notch against the protestors. He need be wary of the police switching sides which would be a cataclysmic blow for globalism. Bring it on.

MSNBC embraces capitalism by looping socialism

MSNBC has decided to do a non stop loop of Obama’s 16 minute 2004 DNC speech until President Trump’s wall address to the nation is over. It is indeed a choice as an independent network to embrace the free market to cater to its audience.

Although MSNBC should not be surprised if Trump or Huckabee Sanders skip the network’s reporters during question time at White House briefings. Easy argument to make that their viewers don’t care much for what their leader has to say in any event. Best pick networks that have audiences interested in the machinations at 1600 Pennsylvania Avenue.

MSNBC spokesman, Harland Dorrinson, claimed the cable news station’s own research showed next to zero people wanted to watch the national event and the rerun was a better bet. Would love to see the polling figures of who was asked. Staff cafeteria perhaps?

CM has argued for a long time that reduction in Trump’s airtime by the mainstream media is their strongest asset in taking the wind out of his sails. However to date, even though 99% of the coverage is negative (sometimes deserved), Trump is on a non-stop loop with hysteric items of news with next to no relevance dominating coverage. After all Melania wore Timberlands in Iraq – a source of national importance to Americans.

Despite this, Trump’s popularity ratings remain ahead of the majority of the very world leader’s that MSNBC fawn over. These are facts as distasteful as they are to many.

It should be known that there has been a long standing unwritten rule when a sitting president addresses the nation that the media complies for the sake of getting that message out to all citizens. By all means MSNBC could run a panel of experts to vilify the bigoted man behind the wall construction after the address with rigorous debate. Instead they chose to snub. On the other hand it is fair to say in today’s world, anyone wanting to watch will be able to do via C-SPAN or social media.

Ultimately markets will judge whether MSNBC got the viewer stats to back the strategy but surely there was a better opportunity to draw audiences than a 15 yo loop which only cements its reputation for overwhelming partisan bias. Perhaps Reagan’s 1987 speech in Berlin calling for Gorbachev to “tear down this wall” would have been a more apt address to throw two fingers up at Trump? Perhaps even he might get the subtlety of the barb? Use your imagination MSNBC!

Single use plastic bags- 80% cut to common sense

Queue the virtue signaling. The National Retail Association (NRA) claims there has been an 80% drop in the use of “single use” plastic bags in the past three months since it was introduced across supermarkets in Australia. The irony is that this claim is not backed up by the increased sales of plastic bags from “aisle 7” so consumers can dispose of household rubbish. All they did was substitute bags, not cut down on the total use. Spuriously quiet on that front!

Who cares when one can shout out their empty environmentalism that aren’t backed by facts?

Putting the substitution argument to one side, not one group has told us what the “correct level of plastic use” actually is. Perhaps we should ban takeaway outlets for the obscene short term use of plastic trays and cutlery!

In 2006 the UK Environment Agency did a study on the effectiveness of alternative packaging solutions to HDPE (conventional plastic bags) in terms of lowering environmental impact. It said,

The paper, LDPE, non-woven PP and cotton bags should be reused at least 3, 4, 11 and 131 times respectively to ensure that they have lower [impact] than conventional HDPE carrier bags that are not reused.”

So if conventional biodegradable plastic shopping bags are used to throw out garbage that means 6, 8, 22 and 262 days.

While we’re at it, do people realize that the majority of take away wax-lined coffee cups aren’t recycled even though you can feel good about yourself when disposing of it in the right bin? How many people elect to have their brew poured into a ceramic cup? Look next time – hardly any! The cost to recycle the 500 billion (and rising) coffee cups consumed annually is so astronomical (it is hard to separate the wax that stops the cup disintegrating because of the energy intensity involved to do so) that over 90% end up in landfill. No one talks about that 300 million tons of virgin paper used to make these cups! How many of us give it one thought when we need a shot of caffeine? Right?! Although Starbucks is trialing a 5p latte levy for those that elect to use a paper cup.

All this ban has done has inconvenience people. 60% of mismanaged plastic waste was from East Asia (i.e. China), 11% from South Asia; 9% from sub-Saharan Africa; 8% from MENA; 7% from LatAm; 3% from Europe and 0.9% from North America. Australia doesn’t even get a mention. Our impact is zero.

So much like the “save the planet” renewables movement in Australia with regards to electricity generation. Our efforts to push for less reliable sources of power which will cause higher prices will create zero impact in lowering world temperatures by 2100.

So our cutting of plastic bags will likely have zero impact on plastic waste unless we get the environmental vandals of China, SE Asia and Africa to lift up their socks. Why do we self-flagellate when we’re not the problem? Do we honestly think China cares what Woolies do inside supermarkets?

Why does the mass media not ask simple questions instead of regurgitate incomplete stats?

Musk charged with securities violations

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Tesla CEO Elon Musk has been accused by the SEC of violating Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5]. The SEC claimed,

“Musk’s false and misleading public statements and omissions caused significant confusion and disruption in the market for Tesla’s stock and resulting harm to investors…Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions. When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a “special purpose fund,” and had not confirmed support of Tesla’s investors for a potential going private transaction. He also knew that he had not satisfied numerous additional contingencies, the resolution of which was highly uncertain, when he unequivocally declared, ‘Only reason why this is not certain is that it’s contingent on a shareholder vote.’ Musk’s public statements and omissions created the misleading impression that taking Tesla private was subject only to Musk choosing to do so and a shareholder vote.”

The eccentric and maverick CEO responded,

This unjustified action by the SEC leaves me deeply saddened and disappointed. I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

It is common knowledge to corporates that the exchange is the first port of call for all public releases to be openly documented for consistency and equal access. It is irrelevant whether a social media feed might be deemed as “in the spirit” of open disclosure to Musk’s personal opinions. The SEC rules are the rules. There aren’t soft interpretations. A listing requirement is to follow the rules of fair disclosure. Whether Musk was or wasn’t aware is irrelevant – as the CEO of a $50bn company he should know better or at least sought the advice from those that do.

In any event if he was true to the spirit of good corporate governance he would have the good sense to realise his position as CEO has become untenable. How the board can have confidence in him is beyond CM? The multiple senior resignations give an insight but for all of Musk’s instellar cosmic brilliance as a salesman, unfortunately laws are there to provide safety for investors. The shares are offered 13% lower in the aftermarket.

A court will ultimately decide his fate but the $420 a share with secured funding unraveled so quickly as to question his judgement.

Investors, even the die hard believers, don’t need a CEO already under the pump to be distracted anymore than he already is. It is a shame because he is undoubtedly a brilliant mind. Unfortunately that would seemingly make him feel he’s somewhat untouchable leading him to make knee jerk decisions such is what he’s been charged over.

Tennis code violations – who is worse?

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Some argue that the 2018 US Open was biased against female players. In the singles men played 3,176 games in the recent tournament. Or 1.538x more than the 2,065 games played by the women. Yet the stats show men suffered 86 code violations vs 22 for the women or 3.91x. So on balance men 2.54x more likely to suffer a code violation than women on a per game basis. Is it the blokes are just more ill-tempered? If we use the 1.538x ratio of more games played, the boys get penalized (over the last 20 years of grand slam violations);

4.2x more for racket abuse

1.6x more for audible obscenity

2.8x more for unsportsmanlike conduct

2.5x more for verbal abuse

1.2x more for visible obscenity

1.5x more for time wasting

The girls get penalized more than boys in the follwing ways.

60% more for coaching

10% more for ball abuse

Although trying to compare ‘bias’ in tennis with respect to code violations is kind of irrelevant. Certain players ‘blow up’ more than others. McEnroe got many more warnings than Bjorn Borg.

Just for the record, at the US Open Djokovic had to play 136 games for his $3.8mn vs Osaka’s 86. So for each game Osaka earned $44,186 vs Djokovic’s $27,941. Maybe this is why he made his comments about men deserving to be paid more? If we look at the runner ups, del Potro won $17,961 per game vs Serena Williams’ $26,428. So Serena’s. 2nd place earned her almost as much as Djokovic win.

Naturally a better judge is not games played but viewership. The Serena Williams/Naomi Osaka final drew 3.1mn viewers on ESPN, more than the 2.07mn that watch Djokovic/del Potro the next day. If women get 1.5x the audience of the men in the final could one argue the men need to play 1.5x longer to earn the same? Arguably Serena was fighting to match Margaret Court’s record which was part of the boost.

To be honest women’s tennis can be more entertaining to watch in so far as frequent sustained rallies. Men’s tennis can often be a blast fest of aces and blistering returns of serve.

It is likely that Osaka will attract higher than average audiences going forward. Perhaps she is entitled to claim higher prize money than the men based on the extra attention she brings to the sport?

If we look at golf, Tiger Woods used to be paid $300,000 just for attending a tournament regardless of how poorly he finished. If Naomi Osaka helps click the turnstiles surely she deserves a cut of the gate?

Two diplomats and the bloke who said what everyone else was thinking

Yesterday CM wrote about the terrible sportsmanship of Romano Fenati who tried to cause a competitor to crash by grabbing his front brake during a race. Race winner Andrea Dovisioso and reigning world champ Marc Marquez gave diplomatic answers as to what punishment fits the crime but 3rd place getter Brit Cal Crutchlow told the refreshing truth – that Fenati’s team should have immediately fired him. Race Direction handed out a pithy 2 race ban. Fenati’s team agreed with Crutchlow.

Fenati’s team said,

Here we are. Now we can communicate that the Marinelli Snipers Team shall terminate the contract with the rider Romano Fenati, from now on, for his unsporting, dangerous and damaging conduct for the image of all. With extreme regret, we have to note that his irresponsible act endangered the life of another rider and can’t be apologised for in any way. The rider, from this moment, will not participate in any more races with the Marinelli Snipers team. The team, Marinelli Cucine, Rivacold and all the other sponsors and the people that always supported him, apologised to all the World Championship fans.

Is Musk losing it?

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Is Tesla CEO Elon Musk losing it? More senior resignations from accounting and HR this week  reveal more cracks in the automaker. He emailed a journalist, calling him a “mother f*cker”. He went further to say he hoped the cave rescuer he called a “”pedo” sued him because a UK man who is single and spent so much time in Thailand must be a child rapist.

He rattled off he had “secured” funding of $420/share to go private and then all of a sudden he didn’t, prompting the SEC to investigate. He was then on radio with comedian Joe Rogan toking what is reportedly a mixture of tobacco and marijuana. Are these the actions of a man running a $50bn market cap company?

Clearly his board can’t control him.  With the shares collapsing and bond prices falling, refinancing will become problematic. Chief  Accounting Officer Dave Morton quit the company after revealing his concerns about the various obstacles Tesla faces.

Tesla’s Chief People Officer, Gabrielle Toledano, took leave in August and said she wouldn’t be returning to Tesla.

Musk has been a genius and visionary to get Tesla where it is today. Yet he is a direct victim of his own hubris. Sleeping under boxes with Tesla bankrupt written on them to living on the factory roof to rattling off about production hell while accusing families of drivers dead due to over reliance in a system he aggressively promoted.Tesla was technically asking for suppliers to refund a portion of the monies they were paid since 2016 to the EV maker so it could post a profit which is borderline accounting manipulation in an attempt to give the impression of an ongoing concern.

He also complained at the lack of support in the media despite being called out on this nonsense.

Musk’s compensation is also linked to a $650bn market cap, which is effectively saying to the market that his company will be worth more than Daimler, BMW, VW, GM, Ford, Toyota, Nissan, Honda, Renault, Fiat-Chrysler, Ferrari and Porsche combined. Just read that last sentence again. Do investors honestly believe that Tesla which consistently misses and is going up against companies that have been in the game for decades, seen brutal cycles, invest multiples more in technology and forgotten more than they remembered will somehow all become slaves to a company which has no technological advantages whatsoever?

The Tesla story is on the ropes. Expect more mega-releases on new products to try to keep the dream alive and the disciples faithful. I guess ‘Lucy in the sky with diamonds’ worked for The Beatles…