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10-15 flushes & the media is still floating

Pie chart of our water use

In 2018, Congress passed the WaterSense Bill which meant that the EPA would only attach WaterSense labels to products that are 20% more water-efficient and perform as well as or better than standard models. The legislation was passed because of long-standing issues with respect to water conservation. According to a 2014 Government Accountability Report, 40 out of 50 state water managers expect water shortages under average conditions in some portion of their states over the next decade.

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Of interest on p.51 of that same GAO report was the admission that “State water managers and other experts we interviewed said maintaining the streamgage network is critical… …Specifically, 40 of 50 state water managers identified collecting data to determine the quantity of available surface water, a function that streamgages provide, as very or somewhat importantMoreover, many state water managers reported that increasing the number of streamgages to collect water quantity data would be a useful action federal agencies could take to assist states’ water management efforts. USGS works in partnership with more than 850 federal, state, tribal, and local agencies to operate and maintain the network of over 8,000 streamgages around the United States.

As the report documents in the chart above, 3,500 streamgages have been discontinued. Which begs the question, why aren’t legislators looking at getting better access to data with which to make more informed decisions?

What do you know? The GAO pointed to the following:

“In response to these data concerns, federal officials told us that insufficient funding is a primary barrier to expanding their data collection efforts. For example, an USGS official told us that the agency is committed to expanding data networks, but USGS’s ability to collect data at more locations, improve timeliness, and conduct additional analyses is severely hampered by funding constraints.

Wouldn’t it be better to bash Trump for demanding more budget cuts at the USGS (ignored by Congress by the way) instead of taking him to task for his style and manner in elucidating concerns over the efficacy of WaterSense legislation in practice?

Yet the mainstream media just couldn’t help but take everything out of context in order to mock Trump. His remarks about flushing toilets “10-15x instead of once” is now headline news. Not the president’s questions with respect to whether the newly labelled products are living up to the product claims. If the media wants to bash him, they only need to do a little digging to find plenty of factual ways of criticizing him instead of playing than man rather than the ball.

Thomas Sowell perhaps said it best with respect to government spending and efficacy,

Those who cry out that the government should ‘do something’ never even ask for data on what has actually happened when the government did something, compared to what actually happened when the government did nothing.”

Red rag to a bull

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CM will be doing Christmas shopping like nobody’s business on Black Friday. If these sanctimonious unwashed time-wasters want people to boycott then CM feels obliged to do the opposite. Sick to death of being told what to do, how to eat and what to say. Then again they only need to look at the hypocrisy of the Extinction Rebellion (XR) leadership to work out that not all pigs are equal. The funniest part of this video is to do with transportation to the studio.

What XR should realise is simple – allow Black Friday to be exactly that and gauge the public perception of the climate emergency. If sales are up, then that is a better indicator of the lack of fear factor XR always wails about. Every time that XR boycotts something, CM will buy/consume the very products these cultural Marxists hate.

Queensland & unpublished data supplied by the Treasury

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Where is Queensland headed? CM was looking at data on the Queensland Treasury’s website and noticed the words “unpublished ABS trade data” which one assumes to be superior to “published ABS trade data.” Hopefully, the boffins at the ABS were happy for this to be released. It is amazing what one can find hidden away in government websites. The question is, do politicians ever bother to look at what drives the economy?

If Queensland politicians want to cut down on the 4-yr high jobless rate, fossil fuels have to be on the cards, regardless of the ideological position of the incumbent Labor government to pander to climate change activism. There is no escaping that coal, gas and minerals will be the mainstay of policy as they account for 80% of the output.

Since Labor Premier Anastasia Palaszczuk took office in 2015, Queensland’s unemployment has breached 6.5% in recent months, back toward levels when she started and the highest on the eastern seaboard. Gross State Product (GSP) has fallen from a 7-yr high of 4.2% annualised to 2.2% in the latest quarterly update.

A colossally poor comparison, as usual

As ever the Climate Council of Australia rarely gets numbers right. Now they are benchmarking electric cars against Norway as a “leader”. While all these wonderful benefits might accrue to Norwegians, Norway is a poor example to benchmark against. Not to mention Wilson Parking won’t be too keen to join the party without subsidies.

Norway is 5% of our land mass, 1/5th our population and new car sales around 12% of Australia. According to BITRE, Australia has 877,561km of road network which is 9x larger than Norway.

Norway has around 8,000 chargers countrywide. Installation of fast chargers runs around A$60,000 per charging unit on top of the $100,000 preparation of each station for the high load 480V transformer setup to cope with the increased loads.

Norway state enterprise, Enova, said it would install fast chargers every 50km of 7,500km worth of main road/highway.

Australia has 234,820km of highways/main roads. Fast chargers at every 50km like the Norwegians would require a minimum of 4,700 charging stations across Australia. Norway commits to a minimum of 2 fast chargers and 2 standard chargers per station.

The problem is our plan for 570,000 cars per annum is 10x the number of EVs sold in Norway, requiring 10x the infrastructure.

While it is safe to assume that Norway’s stock of electric cars grows, our cumulative sales on Shorten’s dud election plan would have required far greater numbers. So let’s do the maths (note this doesn’t take into account the infrastructure issues of rural areas where diesel generators power some of the charging stations…shhhh):

14,700 stations x $100,000 per station to = $1,470,000,000

4,700 stations x 20 fast chargers @ A$60,000 = $5,640,000,000 (rural)

4,700 stations x 20 slow chargers @ A$9,000 = $846,000,000 (rural)

10,000 stations x 5 fast chargers @ A$60,000 = $3,000,000,000 (urban)

570,000 home charging stations @ $5,500 per set = $3,135,000,000 (this is just for 2030)

Grand Total: A$14,091,000,000

Good to see the Climate Council on message with thoroughly poorly thought out comparisons. That’s the problem with virtue signaling. It rarely looks at total costs. Never mind. Tokenism to them is worth it. Not to mention a Swedish study funded by the left leaning government in Stockholm which showed the production of the batteries to power EVs did the equivalent of 150,000km in CO2 before it has left the showroom. That’s not woke.

Seen this all before

What is it with the US auto market that throws up so many canaries in the coal mine? Several years back CM wrote about the growth in sub-prime auto loans. What triggered this boom? Easier access to finance? That was one reason. As it happens the largest factor was driven by the ability for finance companies to shut down a vehicle by remote and repossess the vehicle should the buyer be unable to afford the monthly payments. This lowered risk and allows these long-dated loan products to thrive. Average subprime auto loans carry 10% p.a. interest rates. More than 6 million American consumers are at least 90 days late on their car loan repayments, according to the Federal Reserve Bank of New York.

About a 1/3rd of all US auto loans issued today are stretched out to seven years and beyond, according to the WSJ. A decade ago, the seven-year loan only made up about 10% of all loans. Even 10% of 2010 model year bangers are being bought on 84-month term loans.

After the tech bubble collapsed at the turn of the century do you remember the ‘Keep America Rolling’ programme, which was all about free financing for five years? While sales were helped along nicely, the reality was it stored up pain. As new car sales became harder to achieve, new financial products offered sweeter upfront incentives and buyback guarantees (because cheap finance was everywhere and not a differentiator) helped keep the fire stoked.

However, as front end incentives kept getting juicier, the cars on guaranteed buybacks were starting to return to the market at prices well below the ‘guarantee’ leaving automotive finance arms in a whole world of hurt and huge losses. Goldberg & Hegde’s Residual Value Risk and Insurance study in 2009 suggested on average 92% of cars returned to leasing companies recorded losses on return of up to 12%. Any company can guarantee the price of its used product, in theory, the question is whether used car buyers will be willing to pay for it.

In the last decade, auto loans have ballooned from $740bn to $1.3 trillion. Auto dealers are now making a majority of their money on the finance deal as opposed to the sale of the actual car. Even worse, the US car market is experiencing a third of trade-ins in negative equity meaning the gap is being added to the price of the new car, hence the push out of the loan period to keep a lid on the size of monthly payments. This was 17% in 2008.

CM is sure there is nothing to worry about. It is consistent with nearly everything else that has occurred in finance since the GFC. Just double down, spend more, close your eyes and hope nothing bad happens. Ultimately it will be someone else’s problem.

Serious auto-loan delinquencies – 90 days or more past due – in 2Q 2019, jumped 47 basis points year-over-year to 4.64% of all outstanding auto loans and leases, according to New York Fed. This is equivalent to the delinquency rate in Q3 2009, just months after GM and Chrysler had filed for Chapter 11 bankruptcy. The 47-basis-point jump in the delinquency rate was the largest year-over-year jump since Q1 2010. Actual outstanding delinquent 90 day + delinquencies stand at $60bn in 2Q 2019, almost double the amount of 4Q 2010.

Did CM mention gold?

WeWorked

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WeWork has delayed the IPO. According to Zerohedge, the initial appraisal value of $47 billion appears to be entering the realm of $10 billion. This has ‘canary in the coalmine‘ written all over it. The kaleidoscope of razzle-dazzle in the free money world looks to have stopped spinning.

The company looks toxic. Most people point fingers at the co-founder Adam Neumann,  who, according to WSJ,  reportedly sold $700 million in a mixed debt and equity transaction. CM may be a contrarian, but even he sees the pre-IPO sale as somewhat suspicious. Selling part of your stock as part of an IPO is one thing. Doing it prior doesn’t pass the pub test.

How can IWG plc (better known as Regus) make profits (albeit sideways) with the same concept? 2018 IWG revenue and profit after tax increased 51% over 2014 levels. Revenue increased 13.5% since 2016, but post-tax profit slumped 24%.

WeWork seems like the Tesla of the office space world. Huge promises but the numbers are struggling to stack up. Maybe WeWPresumably, due to a combination of intensifying shared office competition, start-ups spoilt for choice or simply failing to grow.ork should leap into insurance as a way to generate cash flow like Tesla has started to do?

Rosanna Arquette checks her white privilege

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Another brain dead champagne socialist from Hollywood has proven Einstein’s belief that “Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.

This time, Rosanna Arquette told the world of her “disgust” and “shame” at the “white privilege” afforded her. She tweeted, “I’m sorry I was born white and privileged…it disgusts me and I feel so much shame“. If she feels so badly about maybe she should sell her mansion, move to a poor neighborhood and give her money away to charities that support non-white minorities. Only then can she atone for the sins of her parents for not making her another colour.

As ever this smacks more of a lack of career progression. Here is betting she does nothing about it other than moral preen. Because in this day and age showing you care on social media is enough. Who could forget the backlash against the 2016 election advert made by celebrities?