#circus

The Ringling Sisters

What a clown show. All four Democrat representatives held a press conference where they made themselves out as helpless, fragile victims. It was all about identity and zero about substance. If they wish to stop division in America they sure have an odd way of showing it.

Isn’t it amazing that in a country supposedly so divided, it still afforded the opportunity for these four minorities to be democratically elected? Surely if it is the racist cesspit they make it out to be there is no chance in hell they’d be where they are today? They’d be stuck under the jackboot of the white supremacists.

Of course anything Trump says is automatically branded racist, bigoted, homophobic, xenophobic or any other form of outrage. Poor old Nancy Pelosi got a taste of being labeled racist last week from Alexandria Ocasio-Cortez”s (AOC) chief of staff. Pelosi was having none of it. One of the few times CM has agreed with her. The left is now eating its own.

To take President Trump at his word on the White House lawn – ” if you don’t like our country, leave!” He followed it up with “you’re always welcome back.” Why didn’t the press speak to the whole context? Is it racist to say to people who seem to hate America to leave and live somewhere they’ll be happier?

CM agrees with the sentiment. If people want to firebomb ICE facilities in one border area and hoist the Mexican flag at another on US soil in place of Old Glory, why not leave? If they hate their country that much to do such things, why not move to where they think it is ideal? Perhaps the 100,000s of thousands of people being processed for being illegal immigrants speaks volumes of where people prefer to live. These people just have to open their eyes instead of howl at the moon. They have a democratic choice to turf this supposed dictator next year. If they don’t win, accept not enough think like them.

As former ICE Director Thomas Homan said to AOC, if people want to be processed as asylum seekers they should go to a proper border and go through the legal steps. They’re simply not doing that, most likely because they don’t have reasonable refugee claims as their countries are democracies not at war. They are seeking more favorable economic conditions. Aspirational asylum seekers.

If AOC wants to trash Homan and get proven completely wrong should we not question her incompetence as a lawmaker?

Do we take the words of Rep Rashida Tlaib, “we’re gonna impeach the Motherf*cker” In her victory speech as the type of conduct that invites unity with the people?

Does Rep Ilhan Omar think tweeting that Trump is a “white nationalist” will stop division, heal wounds and cause his base come around? Coming from one who had to walk back her anti-Israel stance she’s hardly speaking from high ground.

How about Congresswoman Ayanna Pressley who said, “We don’t need any more brown faces that don’t want to be a brown voice. We don’t need black faces that don’t want to be a black voice. We don’t need Muslims that don’t want to be a Muslim voice. We don’t need queers that don’t want to be a queer voice.”

So if one strays from Pressley’s predetermined definition of identity – because they wish to be thought of as individuals – are they betraying their roots? How does one create unity with that type of ridiculous thinking? How dare one aspire to not letting stereotypes prevent them succeed.

Of course leftist heads will explode after reading this. While Trunp ‘s tweets are rarely tactful or polite, if these Democrats wish to unite a country, they need a new playbook. Americans are growing sick and tired of the constant leftist drone.

All four are lawmakers. If they can’t prosecute a sounder argument than moping at a press conference what hope have they got? Perhaps taking his words at face value and doing something about it instead of feeling so oppressed in a country that has provided a platform to change what they don’t like. Maybe they should look to the disunity within their own party. They’ll have another 5 years at least to work that out.

Greatest Corporate Showman on Earth

Tesla’s 1Q 2019 results were dreadful. CM has long held that Tesla is a basket case. The ever charismatic Elon Musk is trying to fan the flames of his company with dying embers. The question is where do we start on this diabolical 1Q report?

1. Musk started off with cash to speak to solvency. Tesla talks to $2.2bn in cash and equivalents. Down $1.5b, partly due to a $920m convertible repayment. Don’t forget Tesla has $6.5bn in recourse debt and $3.5bn in non-recourse debt. It has payables and accrued liabilities of another $5.5bn offset with receivables of just over $1bn.

2. Model S/X deliveries fell from 21,067 in 1Q 2018 to 12,091 in 1Q 2019. That’s -56% at the high margin premium car end. Musk claimed it was due to demand pull forward with a reduction in tax credits. Well he just proved that without credits, demand suffers appreciably.

Model 3 production was 3% higher on the quarter but deliveries were 20% lower. Note customer deposits total $768m, marginally down on the previous quarter. If Tesla starts to implode, customers have a right to get those credits back. Residual values aren’t holding as we discuss in pt.5.

3. Solar deployed -38% year on year

4. (Battery) Storage deployed -39%YoY

5. CM made it clear in point 11 of the 30 reasons why Tesla will be a bug on a windshield report,

The Tesla Residual Value Guarantee, while well intentioned carried risks that crucified the leasing arms of the Big 3. 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…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. Sadly Tesla does not get a say in what the consumer will be willing to pay.”

In the 1Q 2019 result, Musk admits that Tesla suffered $121m impairment on residual value guarantees (RVG). Is it any wonder they stopped this scheme. Now it’s payback time. There are $480mn worth of RVGs still on the balance sheet that are unlikely to have been marked to market values.

6. Level 5 autonomous driving is a pipe dream in the near term. 20+ years away. A fleet of Tesla taxis is an even bigger thought bubble. Regulation will put that on the back burner. The current level 2 systems have already shown significant short comings given the numerous beta testing deaths at the wheel of the Tesla auto pilot.

7. Musk is doing a stealth cash raise by putting a time limit on auto pilot upgrades. The question is when will the next cap raise come. His noise around Tesla taxis, Level 5 autonomous systems, Model Y all speak to the snake oil promises that he needs to distract investors from what is clearly going on.

8. His public spat with his biggest supplier, Panasonic, will not end well. Suppliers have to be on board with production expansion. Panasonic is cooling off its relationship. Musk publicly slapped the Japanese battery maker. It doesn’t augur well for the rest of the supply chain either to see these ructions

Peter DeLorenzo wrote the following with respect to Musk,

That this latest charade from Musk is yet another desperate act in an attempt at saving his floundering company is obvious. Where it differs from other Muskian braggadocio is the fact that he is insisting that his AV technology is safe for mass application and consumption. Sorry to disappoint all of the St. Elon acolytes out there, but this is the insane part…

…Unleashing a fleet of zombie Teslas on the streets of America curated by a notorious nanosecond-attention-span personality such as Musk is the quintessential definition of flat-out crazy. You can’t even squint hard enough to suggest that this is, in some way, shape, or form, rational thought. It’s a case of an intermittently brilliant mind that has wandered over the line into the Abyss of Darkness. A dangerous mind that is so obsessed with pushing his perpetually sinking car company into some sort of elevated stratosphere that he is willing to treat real people as so much collateral damage...

This country is 25 years away – at least – from widespread adoption of autonomous vehicles. Yes, there will be scaled deployment in limited, commercial applications primarily in urban centers over the next two decades, but driverless Teslas careening around less than two years from now? It is a recipe for disaster the likes of which simply defies calculation.”

All the reasons CM has disliked Tesla remain. It is so chronically overvalued. This stock will be lucky to be $100 by year end. Sadly the economy is slowing meaning it will be tougher to compete with more competition launching this year. China may give cause for some future hope but don’t bet on it.

The more Musk talks, the more desperate he is. Don’t forget he is not learning from SEC requests to lay off Twitter. His guidance in 1Q is lower than recent tweets suggesting appreciably higher targets. Tesla is a time bomb.