Quotulatiousness

January 27, 2019

Some reasons to be bearish on Tesla’s future

Filed under: Business, Media, Technology, USA — Tags: , , , , — Nicholas @ 05:00

At Coyote Blog, Warren Meyer climbs back onto one of his favourite hobby horses:

Yes, I am like an addict on Tesla but I find the company absolutely fascinating. Books and HBS case studies will be written on this saga some day (a couple are being written right now but seem to be headed for Musk hagiography rather than a real accounting ala business classics like Barbarians at the Gate or Bad Blood).

I still stand by my past thoughts here, where I predicted in advance of results that 3Q2018 was probably going to be Tesla’s high water mark, and explained the reasons why. I won’t go into them all. There are more than one. But I do want to give an update on one of them, which is the growth and investment story.

First, I want to explain that I have nothing against electric vehicles. I actually have solar panels on my roof and a deposit down on an EV, though it is months away from being available. What Tesla bulls don’t really understand about the short position on Tesla is that most of us don’t hate on the concept — I respect them for really bootstrapping the mass EV market into existence. If they were valued in the market at five or even ten billion dollars, you would not hear a peep out of me. But they are valued (depending on the day, it is a volatile stock) between $55 to $65 billion.

The difference in valuation is entirely due to the charisma and relentless promotion by the 21st century’s PT Barnum — Elon Musk. I used to get super excited by Musk as well, until two things happened. One, he committed what I consider outright fraud in bailing out friends and family by getting Tesla to buy out SolarCity when SolarCity was days or weeks from falling apart. And two, he started talking about things I know about and I realized he was totally full of sh*t. That is a common reaction from people I read about Musk — “I found him totally spellbinding until he was discussing something I am an expert in, and I then realized he was a fraud.”

Elon Musk spins great technology visions. Like Popular Mechanics magazine covers from the sixties and seventies (e.g. a flying RV! a mile long blimp will change logging!) he spins exciting visions that geeky males in particular resonate with. Long time readers will know I identify as one of this tribe — my most lamented two lost products in the marketplace are Omni Magazine and the Firefly TV series. So I see his appeal, but I have also seen his BS — something I think a lot more people have caught on to after his embarrassing Boring Company tunnel reveal.

January 11, 2019

“It is profoundly stupid, so most people assume it can’t be. But that’s what the law is now”

Filed under: Cancon, Government, Law, Liberty — Tags: , , , , , — Nicholas @ 03:00

Apparently the federal government believes that drinking and driving is such a huge, intractable problem that they’ve decided it’s worth sacrificing your right to privacy in order to combat this scourge:

It may sound unbelievable, but Canada’s revised laws on impaired driving could see police demand breath samples from people in bars, restaurants, or even at home. And if you say no, you could be arrested, face a criminal record, ordered to pay a fine, and subjected to a driving suspension.

You could be in violation of the impaired driving laws even two hours after you’ve been driving. Now, the onus is on drivers to prove they weren’t impaired when they were on the road.

This isn’t a simple change of rules, it’s a wholesale abandonment of common sense.

“If you start to drink after you get home, the police show up at your door, they can arrest you, detain you, take you back to the (police station) and you can be convicted because your blood alcohol concentration was over 80 milligrams (per 100 millilitres of blood) in the two hours after you drove.”

Changes to Section 253 of the Criminal Code of Canada took effect in December giving police greater powers to seek breath samples from drivers who might be driving while impaired.

Under the new law, police officers no longer need to have a “reasonable suspicion” the driver had consumed alcohol. Now, an officer can demand a sample from drivers for any reason at any time.

But there’s no possible way this could be abused, right?

“It’s a serious erosion of civil liberties,” said Toronto criminal defence lawyer Michael Engel, whose practice focuses almost exclusively on impaired driving cases.

Engel said someone could be unjustly prosecuted. If a disgruntled business associate or spouse called police with a complaint and an officer went to investigate at the persons’ home or place of business, police could demand a breath sample.

“Husbands or wives in the course of separations would drop the dime on their partner,” Engel said, describing the potential for the law’s abuse by those calling police out of spite, for example.

December 20, 2018

Remy: It’s Beginning to Look a Lot Like Christmas (EV Tax Credit Edition)

Filed under: Business, Government, Humour, Media — Tags: , , , , , — Nicholas @ 04:00

ReasonTV
Published on 19 Dec 2018

Government plays Santa Claus with your tax money.

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Have a Tesla on your Christmas wish list? Don’t thank Santa — thank Tom in Ohio.

Parody written and performed by Remy. Video by Austin Bragg. Music tracks, background vocals, and mastering by Ben Karlstrom

LYRICS:

It’s beginning to look a lot like Christmas
Everywhere you go
Folks with six-figure salaries
Are shopping in galleries
With a gift card paid by Tom in Ohio

It’s beginning to look a lot like Christmas
Roadsters all around
And while Tom can’t afford a car
He’ll buy part of one for John
Cuz somehow that’s allowed

Well a black Model X and a tax credit check
Is the wish of Connor and Ken
And a dark Model 3 that is partially free
Is the hope of Bobby and Ben
While Tommy takes the bus and eats Vienna sausages

It’s beginning to look a lot like Christmas
Hear those sleigh bells ring
But what else could you expect
With a tax code so complex?
Ensuring just these things?

Yes a car with aplomb that’s, in part, paid by Tom
Is the wish of Victor and Von
A sedan that can drive and takes years to arrive
Is the hope of Lenny and Lon
While Tommy pinches pennies never flushing number one

It’s beginning to look a lot like Christmas
Soon the credits end
But the funniest sight to see’s
When typical for DC
They’re renewed again
Everything’s renewed again

December 17, 2018

American Jeep vs German Kübelwagen: Truck Face-Off | Combat Dealers

Filed under: Germany, History, Military, Technology, USA, WW2 — Tags: , , — Nicholas @ 02:00

Quest TV
Published on 23 Oct 2018

Bruce puts two iconic World War II trucks to the test: the iconic American Jeep and the German Kübelwagen. Which truck will come out on top? #CombatDealers

December 15, 2018

Season 3 of The Grand Tour to be the final one

Filed under: Britain, Media — Tags: , , , , , — Nicholas @ 05:00

The TV trio of James May, Richard Hammond and Jeremy Clarkson are giving up the show after the third season, due to begin in January, and will instead move on to “Hollywood budget” specials on Amazon Prime:

An emotional Jeremy Clarkson has revealed he will walk away from the studio car shows that helped turn him into a household name following the third series of The Grand Tour.

The outspoken presenter, 58, will give up on the traditional format employed by the hugely popular Amazon show and long-running BBC flagship Top Gear after more than 17 years.

However, fans needn’t be alarmed since Clarkson – joined by co-hosts Richard Hammond and James May – has inked a new deal with Amazon Prime for a fourth series of the show in a brand new format.

[…]

‘It’s a really sad day,’ Clarkson later told The Sun. ‘I will miss the banter with each other and with the audience. But we’ve been doing that show for effectively 17 years — sitting around in studios, watching cars race around the track.’

He added: ‘We all agreed that we’ve been doing it a long time and everything eventually runs its course. Besides, I’m 58 and I’m too fat to be climbing on to the stage.’

Clarkson, Hammond and May will now focus on a series of extravagant, big-budget specials over the next two years that will take them away from their usual studio environment.

I’m far from a petrol-head, but I’ve been a fan of Clarkson/Hammond/May for several years, and I still barely know anything about cars…

December 5, 2018

The true lesson to be learned from GM Canada’s economic plight

Filed under: Business, Cancon, Economics, Government — Tags: , , , , , — Nicholas @ 03:00

Andrew Coyne tries to encapsulate the key economic concept that should be taken away from the GM Canada collapse:

Think of it this way. Governments have proven more than ready in the past to pay whatever the auto companies demanded to hold onto threatened jobs. If there were any chance whatsoever of buying the plant’s reprieve, no matter how foolishly or expensively, can there be any doubt they would have? That they did not — apparently GM waved them off — tells you how hopeless the plant’s prospects really are.

Many have recalled that the closure of the Oshawa plant comes less than a decade after the Canadian operations of GM and Chrysler were bailed out with $14 billion in federal and provincial money, $4 billion of which was never recovered. The lesson some have drawn from this is that GM is a devious ingrate, which may be fair comment but is not especially helpful. The real lesson is this: when you try to buy jobs with public money, the jobs last only as long as the money does. In the end, all you will have done is to lure people into taking or staying in jobs that were long since doomed.

Like most of economics, this is wholly alien to popular wisdom. There is a rich vein of commentary to the effect that the laws of economics are effectively optional, something we can resist by force of will: we can either bend to “market forces,” or we can “stand up” to them in some fashion. But in fact the latter option is entirely imaginary, at least in the long run. You can perhaps lure plants and jobs your way at the outset with subsidies and other goodies. But the only assurance they will stay is if it makes economic sense to the company to keep them there.

If not, then all you have won with your subsidy is the right to go on providing more subsidy, which is a fairly accurate description of Canadian automobile policy in recent decades. The workers whose jobs successive governments boasted of creating or saving were effectively hostages; as in all hostage-takings, the payment of ransom only stimulates further demands for ransom. Until one day when the money runs out, and the workers whose jobs were supposedly saved find themselves abandoned. This may be many things, but one thing it is not is compassionate.

December 1, 2018

CAFE killed the North American passenger car

Filed under: Business, Cancon, Government, USA — Tags: , , , , , — Nicholas @ 03:00

The move by GM to close many of its remaining car manufacturing facilities in Canada and the US is a belated rational response — not to the market, but to the ways government action has distorted the market. In the Financial Post, Lawrence Solomon explains how, step-by-step, the CAFE rules have shifted drivers out of sedans and wagons and into minivans, pickup trucks, and SUVs:

Before the U.S. government introduced Corporate Average Fuel Economy (CAFE) standards to increase the distance cars could travel per gallon of gas, sedans and full-size station wagons were popular and SUVs were unknown. CAFE, which effectively governed the entire North American market thanks to the Canada-U.S. Auto Pact, incented manufacturers to artificially raise the cost of large passenger cars in order to favour smaller, more fuel-efficient vehicles. It soon claimed its first victim: the full-size station wagon, whose flexible interior accommodated both passenger and cargo needs, and which, at its peak, came in 62 models to satisfy different tastes.

But, although CAFE priced the station wagon out of the market, the market still demanded a vehicle that offered its flexibility. Enter Lee Iacocca, the chairman of Chrysler, who helped develop the minivan and convinced the U.S. government to deem it a truck rather than a passenger vehicle, thus exempting it from the strict CAFE standards that killed the station wagon. The minivan took off — the first 1984 model, built in Windsor, sold 209,000 its first year — followed by the SUV, which also was deemed a truck rather than a passenger vehicle. By 2000, the passenger car had less than half the market. Today it accounts for only about a third.

CAFE standards didn’t only claim certain car models as victims, they also made the whole industry a victim by making it dependent on government whims and then handouts. CAFE also distorted the market by creating credits for ethanol and electric vehicles and by creating a lobbyist’s dream through ever-changing regulations that led car manufacturers to continually game the system to favour their own vehicles over those of competitors.

Perversely, by improving mileage, CAFE also increased distances travelled and emissions of pollutants such as carbon monoxide and nitrogen oxides. The 2025 CAFE targets (since cancelled by President Trump) ran to almost 2,000 pages and were estimated to add an average of US$1,946 to the cost of a vehicle. Tax loopholes also helped accelerate SUV sales — like all light trucks, they were exempted from the gas-guzzler’s excise tax and also given preferential tax treatment as business vehicles.

November 27, 2018

Cutting back on ethanol makes financial and environmental sense

Filed under: Economics, Environment, Government, Health, USA — Tags: , , , , , — Nicholas @ 10:40

Craig Eyermann explains why President Trump’s push to expand the use of ethanol in cars is a bad call for many reasons:

For example, because ethanol packs less energy per gallon than gasoline does, vehicle owners can expect to get even lower fuel mileage from the expansion of E15 fuel (a blend of 15% ethanol with 85% gasoline) under the new mandate to include more ethanol in automotive fuels, which would be 4% to 5% less than they would achieve if they only filled their vehicles with 100% gasoline. Today’s vehicle owners already pay a fuel efficiency penalty of 3% to 4% lower gas mileage from the E10 ethanol-gasoline fuel blend mandated under the older ethanol content rules, where the new rules will require even more fill-ups.

Beyond that, to the extent that it diverts corn from food markets to fuel production, corn-based ethanol production also jacks up the price of food—the corn itself, plus everything that eats corn, like beef cattle. One review of multiple studies found that the U.S. government’s corn-based ethanol mandates added 14% to the cost of agricultural commodity prices from 2005 through 2015.

Last summer, the Environmental Protection Agency also found that burning increasing amounts of ethanol has made America’s air dirtier because it generates more ozone pollution, which contributes to smog formation. Worse, growing the additional corn to make more ethanol has also increased agricultural fertilizer runoff pollution in the nation’s rivers and waterways.

That runoff has been linked to the increased incidence of harmful algal blooms, which have been responsible for contaminating drinking water and contributing to red tide events in coastal regions, where fish and other aquatic organisms have been killed off.

There is a solution to these federal government-generated pollution problems: stop forcing corn-based ethanol to be used in the nation’s fuel supplies. There’s even a case study from Brazil, where the city of Sao Paulo found that its air became cleaner after it switched from ethanol-based fuels to gasoline in the years from 2009 to 2011.

November 9, 2018

Tank Chats #37 Daimler Armoured Car | The Tank Museum

Filed under: Britain, History, Military, WW2 — Tags: , — Nicholas @ 02:00

The Tank Museum
Published on 12 May 2017

Historian David Fletcher MBE, in the 37th Tank Chat discussing the Daimler Armoured Car.

The Daimler Armoured Car proved to be a versatile and successful vehicle, serving with the British Army in all theatres of war from 1941 and remaining in service for some years after the Second World War.

Support the work of The Tank Museum on Patreon: ► https://www.patreon.com/tankmuseum
Or donate http://tankmuseum.org/support-us/donate

October 8, 2018

Enzo Ferrari – Tank Sounds – French-American Animosity I OUT OF THE TRENCHES

Filed under: History, Italy, Military, Technology, USA, WW1 — Tags: , , , — Nicholas @ 04:00

The Great War
Published on 6 Oct 2018

Chair of Wisdom Time!

September 13, 2018

Mind Your Business Ep. 2: Aceable in the Hole

Filed under: Business, Technology, USA — Tags: , , , , — Nicholas @ 04:00

Foundation for Economic Education
Published on 11 Sep 2018

Believe it or not, parallel parking is not an impossible task. Meet Blake Garrett, the entrepreneur who is using VR to teach people how to drive, without actually getting behind the wheel.
____________
Produced & Directed by Michael Angelo Zervos
Executive Produced by Sean W. Malone
Hosted by Andrew Heaton
Original Music by Ben B. Goss
Featuring Blake Garrett

September 6, 2018

Trans-partisan planning

Filed under: Economics, Environment, Politics, USA — Tags: , , , , , — Nicholas @ 03:00

At Coyote Blog, Warren Meyer offers a plan to address man-made climate change, pitched to avoid being dismissed as “typical” of one or the other side:

While I am not deeply worried about man-made climate change, I am appalled at all the absolutely stupid, counter-productive things the government has implemented in the name of climate change, all of which have costly distorting effects on the economy while doing extremely little to affect man-made greenhouse gas production. For example:

  • Corn ethanol mandates and subsidies, which study after study have shown to have zero net effect on CO2 emissions, and which likely still exist only because the first Presidential primary is in Iowa. Even Koch Industries, who is one of the largest beneficiaries of this corporate welfare, has called for their abolition
  • Electric car subsidies, 90% of which go to the wealthy to help subsidize their virtue signalling, and which require more fossil fuels to power than an unsubsidized Prius or even than a SUV.
  • Wind subsidies, which are promoting the stupidist form for power ever, whose unpredictabilty means fossil fuel plants still have to be kept running on hot backup and whose blades are the single largest threat to endangered bird species.
  • Bad government technology bets like the massive public subsidies of failed Solyndra

Even when government programs do likely have an impact of CO2, they are seldom managed intelligently. For example, the government subsidizes solar panel installations, presumably to reduce their cost to consumers, but then imposes duties on imported panels to raise their price (indicating that the program has become more of a crony subsidy for US solar panel makers, which is typical of these types of government interventions). Obama’s coal power plan, also known as his war on coal, will certainly reduce some CO2 from electricity generation but at a very high cost to consumers and industries. Steps like this are taken without any idea of whether this is the lowest cost approach to reducing CO2 production — likely it is not given the arbitrary aspects of the program.

These policy mess is also an opportunity — it affords us the ability to substantially reduce CO2 production at almost no cost.

July 23, 2018

Jeremy Clarkson is a maniac

Filed under: Britain, Humour, Media — Tags: , , — Nicholas @ 02:00

Ove Bakken
Published on 19 Oct 2017

July 11, 2018

QotD: Measuring consumer surplus

Filed under: Economics, Quotations — Tags: , , , — Nicholas @ 01:00

Consumer surplus is one of those things which is really, really, difficult to measure. This paper is one of the few that’s able to give us a hard number. But what it is is, really, “how much I would have been willing to pay but didn’t have to?” Say that we’re out and you’re thirsty and I’m not very. You suggest we have a Coke. You’re really interested in this, you’d pay $2 for one, I’m, well, meh, I’d only pay $1 for one. Obviously, the Coke seller (no, not the coke one, that’s different) doesn’t know this so he charges us the same price – $1 each. I’ve gained no consumer surplus I paid a buck for something I value at a buck, you gain $1 of surplus because you would have paid $2 but only paid that buck.

In one manner the consumer surplus is a result of mass manufacturing and marketing. We’re pumping out millions of whatever it is, we’ve got to have a “market price” and some people will value it, whatever it is, at more than that. That greater valuation is that consumer surplus. Without a producer knowing what your individual demand curve is they cannot charge you the full value you ascribe to it.

Of course, they try as hard as they can to do so. This is what brands and product differentiation are all about. VW and car brands for example – there’re SUV models built on roughly the same platform in the Skoda, VW, Audi and Bentley ranges. Oh yes, they’re different cars alright. But perhaps not $300,000 different, which is the price gap between the top and bottom there. Some of this (but please note, only some of this) is because there are people who will pay a fortune to swank around in a Bentley and there are many more who will not, thinking a Skoda is just fine (I do a little work for the company and the new Skoda SUV is indeed very fine but then I would say that, wouldn’t I?). That’s product differentiation.

Another example is what used to happen in old fashioned English pubs – in the public bar and the saloon. The latter had carpets and comfy chairs, the former very definitely not. Beer was 10% more expensive if you wanted the comfy chair experience – very simple and remarkably successful product differentiation. Being able to charge different prices to different groups for much the same thing. Or as it often used to work out, different prices to the same person on different occasions. Dates were in the saloon bar….

Tim Worstall, “Freakonomics’ Steven Levitt On How Inefficient Uber Really Is”, Forbes, 2016-09-20.

June 22, 2018

A Brief History of the Jeep

Filed under: History, Military, Technology, USA, WW2 — Tags: , , — Nicholas @ 02:00

KnowledgeHub
Published on 30 May 2018

Jeeps are the original military vehicle that everybody loved so much, it became a civilian. So whats the history of these? Do you care? I mean you clicked on this video bub.

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