Tesla v. Toyota and “Green” v. Nuclear

Wed 08 Jul 2020

Here is an interesting comparison of Toyota v. Tesla. Toyota builds practical, reliable and energy efficient automobiles, while Tesla sells a dream of “green” energy.

“Currently, Tesla’s market cap is worth $259 billion compared to $206 billion for Toyota. Why did investors push Tesla’s stock up to $1,400 a share ($259 billion market cap) when its total revenues in 2019 were only a little more than Toyota’s net income profits? As you can see, Toyota posted $19 billion in net income profits on total revenues of $278 billion compared to Tesla’s $862 million net income loss on $24.3 billion in revenues.

Again, a perfect example of the investor mindset today. Profits don’t matter, just technology, regardless if it continues to lose money.

And, if we look at the comparison of car sales, Tesla’s U.S. EV sales were only 8% of Toyota’s North American sales in 2019. Toyota sold nearly 2.4 million cars and trucks versus 192,500 units for Tesla.”

I realize that a Tesla has no emissions at its tail pipe, so it looks good, but there are emissions. The emissions just take place out of sight. Think of the emissions involved in the mining and shipping of the materials for the batteries. There are emissions from generating the electricity to charge the batteries. Most electricity is still generated by some fossil fuel. Many people don’t realize that wind power and solar power actually cause us to burn more fossil fuel.

We are accustomed to having a constant supply of electricity, so that when we flip a light switch, the light immediately shines. We also want a steady supply of electricity at a relatively constant voltage for our computers and televisions. If the voltage dips too much they shut off. Wind and solar do not provide a steady supply of electricity, like we
desire. The reason we have a steady supply is fossil fuel power plants.

Fossil fuel power plants cannot come on line and begin to deliver electricity at the “flick of a switch”. It takes substantial time to get them up and running. Therefore, fossil fuel power plants have to be “standing by” to take up the slack when the wind stops blowing or the sun goes behind clouds and the output from “green” sources drops. This means that we are burning fossil fuels just to keep the “back-up” power plants idling. This is very inefficient.

Another question is how much fossil fuel does it take to build the equipment for solar and wind and then to put it in place along with all the wires for transmission.

Here you can watch a former “green” energy reformer explain why “green” energy does not work and damages the environment.

He had data that showed nuclear power is cheaper and safer than all the other competitors, including wind. He compared Germany, which has a lot of wind and solar, with France, which is mostly nuclear. France had much lower electricity costs and had a steady supply of it, consistent with modern demands. Nuclear power plants emit nothing to the atmosphere.

If our aim is to reduce CO2 emissions, our best bet is probably nuclear power plants. They produce steady power, as we demand, and produce no CO2 while running. They cost less, are more efficient and their waste is contained.

I think what we are seeing with Tesla stock is a maniacal bubble, like the Dutch Tulip mania.

Abraham Lincoln’s Letter to Horace Greeley

June 30, 2020

Slavery as practiced here in the United States was an immoral abomination. It is too bad that Mr. Lincoln was not trying to abolish it.

Abraham Lincoln wrote a letter to Horace Greeley, the editor of the New York Tribune. Mr. Lincoln told us in this letter the real purpose of the Civil War was not to free slaves, but to “save the Union”. I am not sure how unions are “saved” at gunpoint. Mr. Lincoln revealed his real purpose in this line, “The sooner the national authority can be restored….” Mr. Lincoln said everything else was subordinate to this purpose. “My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery.” Unopposed “national authority” was his goal. This authority would be used to impose protectionist tariffs, create a central bank to control the money and for internal improvements (Railroads, etc.). The Civil War was a repeat of the Revolution, except this time “Great Britain” won.

Executive Mansion,
Washington, August 22, 1862.

Hon. Horace Greeley:
Dear Sir.

I have just read yours of the 19th. addressed to myself through the New-York Tribune. If there be in it any statements, or assumptions of fact, which I may know to be erroneous, I do not, now and here, controvert them. If there be in it any inferences which I may believe to be falsely drawn, I do not now and here, argue against them. If there be perceptable in it an impatient and dictatorial tone, I waive it in deference to an old friend, whose heart I have always supposed to be right.

As to the policy I “seem to be pursuing” as you say, I have not meant to leave any one in doubt.

I would save the Union. I would save it the shortest way under the Constitution. The sooner the national authority can be restored; the nearer the Union will be “the Union as it was.” If there be those who would not save the Union, unless they could at the same time save slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union. I shall do less whenever I shall believe what I am doing hurts the cause, and I shall do more whenever I shall believe doing more will help the cause. I shall try to correct errors when shown to be errors; and I shall adopt new views so fast as they shall appear to be true views.

I have here stated my purpose according to my view of official duty; and I intend no modification of my oft-expressed personal wish that all men every where could be free.

A. Lincoln.


June 26, 2020

I run Linux on all my home computers. I have a copy of M$ Windows, but it is not installed at the moment. I will only use it when forced. Those occasions are very rare.

My favorite MUA (Mail User Agent) is mutt. It is light and fast. You do not need a rodent (mouse) to use it and it is very customizable.

Recently I changed email servers. I used to run one at home, but email servers are complex and I had never gotten around to installing and setting up web mail. Needless to say, if you have many devices, web mail is almost a necessity. I changed my email server to PrivateEmail. The service is very good and it is well priced. It comes with different apps, like a calendar and drive. I am not a big fan of using the web browser for email and wanted to get back to my favorite MUA – mutt.

I set mutt up to get mail from PrivateEmail, but I kept getting a message, “tls_socket_write (TLS connection was non-properly terminated)” and the mailbox would close. It took a while to figure out why. Adding these two lines to my muttrc file seems to have fixed the problem:
set imap_check_subscribed=”yes”
set imap_list_subscribed=”yes”.

I think you also need this:
set imap_keepalive = 900 (I am using 150, but I have read that 900 should meet the RFC requirements).

The Deep State in Great Britain

June 25, 2020

One of my favorite shows used to be “Yes, Minister”. The show is about the perennial conflict between the entrenched bureaucracy and the elected politicians. The bureaucrats or civil servants stayed, while the elected officials came and went. Watch Sir Humphrey explain to Bernard what happens when there is too much local rule/autonomy.

Modern Monetary Theory

June 15, 2020

There is a saying, “The more things change, the more they stay the same.” Yes, I know, it is an oxymoron, but it makes a good point about the hubris (or perhaps stupidity) of human beings.

There is a “new” economic theory called MMT or Modern Monetary Theory. There is nothing new about it. In a nutshell MMT holds that whatever the government decides is needed, it can simply print money, “spend” it and get whatever is “needed.” Here is a little more:

“There is nothing new in Kelton’s introduction. MMT’ers have understood these concepts for more than a decade.

But we always must remind ourselves, as traders and investors, what’s important is to discount how the public perceives those ideas. Remember the whole Keynesian beauty contest concept (probably not the most politically correct analogy, but let’s remember that Keynes lived in a different era. In fact, I suspect if Keynes were alive today, he would be more politically correct than some of his most vocal opponents –Niall Ferguson apologizes for remarks).

Keynes rightfully understood that investors discount what the crowd will perceive as the most likely outcome as opposed to the best choice.

Which brings me to my main point. And I know some of you might think this is nuts. But I don’t care.

I have been watching for signs that the concept of “governments are not financially restrained” taking hold within the non-financial community.”

We don’t need to go any further with this. This idea is not new and it doesn’t work. It might “work” (will depend on your perspective) temporarily and that is the problem. People quickly forget and then lose sight of the cause of their misery. All this will do is change the group that prints the “money”. We already have this system with an intermediary called the Federal Reserve. The government already basically “prints” all the “money” that it needs. It is just done indirectly through the Fed. MMT would remove the Fed and have the government do this directly. As you can see, the only change is the bosses. The MMT folks will also tell you there will be no interest paid. Who will save in that environment? To keep such a system together, the government will have to forbid trading for other substances such as gold and silver, bitcoin, etc. Slavery anyone?

If you want real change, eliminate the monopoly the state holds on “money” production. Allow anyone that wants to issue “money” to issue it. The market place will sort the sound “money” from the unsound “money”. Currently, the government does not allow this sorting to take place.

“Lame Street” Media Prefers This Not Be Seen

An article was written in 2005 (15 years ago) on NCBI (a government website), which supports the notion that chloroquine is effective against SARS – a coronavirus:


Severe acute respiratory syndrome (SARS) is caused by a newly discovered coronavirus (SARS-CoV). No effective prophylactic or post-exposure therapy is currently available.

We report, however, that chloroquine has strong antiviral effects on SARS-CoV infection of primate cells. These inhibitory effects are observed when the cells are treated with the drug either before or after exposure to the virus, suggesting both prophylactic and therapeutic advantage. In addition to the well-known functions of chloroquine such as elevations of endosomal pH, the drug appears to interfere with terminal glycosylation of the cellular receptor, angiotensin-converting enzyme 2. This may negatively influence the virus-receptor binding and abrogate the infection, with further ramifications by the elevation of vesicular pH, resulting in the inhibition of infection and spread of SARS CoV at clinically admissible concentrations.

Chloroquine is effective in preventing the spread of SARS CoV in cell culture. Favorable inhibition of virus spread was observed when the cells were either treated with chloroquine prior to or after SARS CoV infection. In addition, the indirect immunofluorescence assay described herein represents a simple and rapid method for screening SARS-CoV antiviral compounds.

Government Spending on Innovation

June 5, 2020

Some argue that we need government spending to fund “innovation”. Too bad most of that “innovation” is sought to further the ends of the “war state.” This argument attempts to focus on results: “See we spent all this money and we got computers”, or whatever. This is poor reasoning and obscures that fact that taxpayer money was forcibly extracted from the population to perform this “research”. What might the people of the population have done with that money had it not been taken from them and devoted to government “research” projects? An example of such a project is virus GoF studies, which may have led to the COVID-19 pandemic.

This is from an article posted in 2015:

“University of Sussex Professor Mariana Mazzucato is making headlines with her 2013 book The Entrepreneurial State, which argues that government, not the private sector, ultimately drives technological innovation.”

We also need to consider that the Federal government has a virtually limitless supply of “money” via Treasury bonds and its partner, the Federal Reserve. Many believe in something called “liquidity”, which means being able to buy and sell things without disturbing market prices. This obviously is a fantasy, especially when it comes to a “fat finger” like that of the government. When the government “jumps into the pool” it is like an elephant jumps in and it makes huge waves and splashes a lot of water out.

The New York Times offered this opinion:

“Fundamental innovations such as nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War. The Internet was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth.”

It is ironic that post World War II, a war supposedly fought to defeat fascism, our country became increasingly fascist. See Wikipedia:

“Fascists believe that liberal democracy is obsolete and regard the complete mobilization of society under a totalitarian one-party state as necessary to prepare a nation for armed conflict and to respond effectively to economic difficulties.[9] Such a state is led by a strong leader—such as a dictator and a martial government composed of the members of the governing fascist party—to forge national unity and maintain a stable and orderly society.[9] Fascism rejects assertions that violence is automatically negative in nature and views political violence, war and imperialism as means that can achieve national rejuvenation.[10][11] Fascists advocate a mixed economy, with the principal goal of achieving autarky (national economic self-sufficiency) through protectionist and interventionist economic policies.[12]”

Here is the support for the notion that our country has become the very thing it allegedly fought in World War II:

“The Second World War changed the nature of scientific research as well. After the war, large-scale federally-funded laboratories devoted to practical applications for new research replaced the small academic laboratories that had existed before the war. Naturally, these new laboratories were geared toward producing new technologies that the federal government wanted, and scientists flocked toward these jobs and new well-funded facilities.
It’s true that many (though not all) of these technologies were developed — typically not invented, but refined — by government scientists working on military projects. The question nevertheless remains as to whether or not this model of innovation benefits society at large. Is this a “good side” of war?”

I think this is actually pretty self-evident. How many billions were spent on the “space race” after Soviet Russia put up sputnik? What sorts of innovations might have come out of the private sector, if that money had been left to private citizens to spend or at the very least was not used to suck brilliant minds into government employ?

Here is more support for fascism:

“We can see these distortions in the effects of the work of Vannevar Bush, the initiator of the Manhattan Project. Bush was chairman of the National Defense Research Committee (NDRC), and later director of the Office of Scientific Research and Development (OSRD), in the Second World War.

Bush wanted a peacetime successor to the OSRD and pushed for creation of the National Science Foundation, which was established in 1950. The NSF was controversial (one proposal was vetoed by Truman in 1947) because of the lack of accountability. A key figure was Senator Harley Kilgore of West Virginia, who initially opposed Bush’s plan to distribute the money through universities (he preferred the government to own the labs) but later agreed to Bush’s model. As Kealey describes it, Kilgore’s goal was not to generate new knowledge. Rather,

‘Kilgore wanted to create a reserve of scientifically trained personnel who could be mobilized for strategic purposes. … The National Science Foundation, therefore, was created in 1950, in the same year (and for the same reasons) as the National Security Council.1’”


Remember these “agencies” had budgets that probably dwarfed anything in the “private sector” and they were not subject to rigorous profit and loss weeding. You cannot argue against this, because that is Mazzucato’s thesis – private industry is not willing or able to fund “innovative” research.

Remember Betamax versus VHS?

“There is no doubt that military spending had a substantial effect on technological innovation. But was it a good one? Military spending distorts the efforts of scientists and engineers, and redirects them to particular projects, ones that do not necessarily generate benefits for consumers.

Military-funded R&D, like any government-funded projects, does not have to pass any kind of market test, so there is no way to know if it is actually beneficial to consumers. We cannot rely on the judgments of government scientists and scholars to say what are the “best” technologies. Remember Betamax? The experts told us that Betamax technology was superior to VHS tapes, from an engineering point of view. Yet, in the end, VHS proved to be economically superior in that consumers ultimately chose VHS over Beta. Betamax failed the market test in spite of its arguably superior technology.”

Putting “experts”, “scientists” in charge of government and its spending and market influence is anti-Democracy. Your greatest “democratic” expression is carried out daily in the market place when you “vote” with your money, your feet and your eyes. When your “disposable” income is diminished by government taxation your “voting” power is reduced!

When will we decide that we have had enough of the war machine and end it?

George Floyd

June 3, 2020

I feel that I need to weigh in on the George Floyd case. The reason is this case bears upon my theme of a limited government that protects individual’s property rights. I am reading about violent protests throughout our “country” and these “protests” are depriving many other people of their property rights. Government has one job and one job only and that is to protect an individual’s right to property. Since contracts are essentially about the transfer of title to properties, they are included. The solution to the government’s failure to do its job is surly not to engage in the same behavior as the government. The behavior of these “protesters” has led to the government failing in its duty to protect property rights again. It appears that law enforcement simply withdrew from the area of violent protests. Here is a brief and probably inadequate summary of the George Floyd case:

“On May 25, 2020, George Floyd, a 46-year-old black man, died in Minneapolis, Minnesota after Derek Chauvin, a white police officer, pressed his knee to Floyd’s neck for almost nine minutes while Floyd was handcuffed face down in the street;[2][3][4] two other officers further restrained Floyd and another stood by and prevented onlookers from intervening.[5]:6:24[6][7] During the last three minutes, Floyd was motionless and had no pulse,[2][4] but officers made no attempt to revive him.[8]:6:46 Floyd was pronounced dead at a nearby hospital.

Floyd was being arrested on suspicion of passing a counterfeit $20 bill at a market.[9] Police said Floyd physically resisted arrest.[10][11] Security camera footage from a nearby business did not show Floyd resisting.[12][13] The criminal complaint stated that, based on body camera footage, Floyd repeatedly said he could not breathe while standing outside the police car, resisted getting in the car and intentionally fell down; he went to the ground face down and, after Chauvin placed his knee, Floyd repeatedly said “I can’t breathe”, “Mama”, and “please”.[2] Several bystanders took videos, all of which were widely circulated and broadcast.[14] While knee-to-neck restraints are allowed in Minnesota under certain circumstances, Chauvin’s usage of the technique has been widely criticized by law enforcement experts as excessive.[15][16][17] At two points, the police officer that was holding Floyd’s legs asked to roll Floyd on his side.[2] All four officers were fired the following day.[18]”

From the little information that I have, it appears that these police officers egregiously deprived Mr. Floyd of his property – his body and they may have taken something that did not belong to them – Mr. Floyd’s life. Unfortunately, what happened to Mr. Floyd is not unique. An innocent man was beaten in the case of Brownback v. King.

Every man and woman on this earth should be a leader, even if they only lead themselves. A leader should do what he or she would like their followers to do. I think what everyone wants is respect for their property. If you WANT PEOPLE TO RESPECT your property, then you sure as hell had better respect other’s property. That means these riots need to stop NOW!

Riots will not solve this problem, but diligent participation by people near to this event in the judicial process hopefully will. I agree there are many things about our “justice system” that are bad, but acting unjustly and taking the property of others will not help the situation. I trust that you have heard, “Two wrongs do not make a right.”

Fed Buying Ever Riskier Assets

May 25, 2020
2 Sivan 5780

Our government is driving us into deep bankruptcy.

After the “crisis” of 2008 all sorts of debt increased. The increase is attributable to Fed “monetary policy”. Interest rates were low and it was easy to get “money” from the corporate paper market. I am very curious to know who owns all that corporate paper. I guess there is a lot in ETF’s, but that does not tell us who really owns this garbage. As a result of all that easy Fed credit we now have a “liquidity” problem (aka falling prices. Liquidity means you can buy and sell your “assets” and not disturb “market prices”). Here is the Fed’s response to this:

‘“This came two days after Powell defended the Fed’s program to buy junk bonds during his testimony before the Senate Banking Committee, which asked how purchases of junk bonds is “helping folks on Main Street.” Powell flagged that the Fed allowed for buying bonds from so-called “fallen angels” to ensure there is “no cliff” between the two lending markets (even though as we pointed out previously, a clear cliff has formed), saying “we don’t want to have a cliff there to where investment grade markets are working well, but the leveraged markets are not, non-investment grade markets are not.”
He then added that “we made a very limited, narrow set of actions to support market function in these markets, including buying ETFs, and that’s had an effect to improve market function there.”
Powell concluded by saying “we’re not buying junk bonds generally across the board at all,” which of course is correct: he is merely buying ETFs that have junk bond constituents.
And this is where the Fed’s first major test of directly manipulating and intervening in market functioning is about to take place.
While the Fed’s H.4.1 statement does not breakdown how much of the $1.8 billion in ETF holdings is allocated to investment grade and how much is junk, it is safe to say that at least $1 dollar of that amount has been allocated to purchases of Junk ETFs.
That will be a problem for Powell, because a quick scan of the holdings of both HYG and JNK reveals that these junk bonds ETFs own, among the hudnreds of other securities, several bonds from the just defaulted rental giant, Hertz.’
Here are HYG’s holdings of HTZ bonds: they amount to just over $50MM in face value across 4 bonds (out of a total of $23.3BN in holdings across just over 1,000 bonds).”

This problem is well illustrated by the Fed’s balance sheet. On 8/28/19 its “assets” were 3.8 trillion dollars and now its “assets” are 7 trillion dollars.

This the result of the Fed trying to maintain “liquidity”. It is another way of saying that Fed pets found themselves holding bags of excrement and they needed a place to unload it and the Fed is that place.

You might think the Fed is not all that smart, but that is not the case. Here is why this is YOUR problem and not the Fed’s problem:

“Is U.S. currency still backed by gold?

Federal Reserve notes are not redeemable in gold, silver, or any other commodity. Federal Reserve notes have not been redeemable in gold since January 30, 1934, when the Congress amended Section 16 of the Federal Reserve Act to read: “The said [Federal Reserve] notes shall be obligations of the United States….They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.” Federal Reserve notes have not been redeemable in silver since the 1960s.

The Congress has specified that Federal Reserve Banks must hold collateral equal in value to the Federal Reserve notes that the Federal Reserve Bank puts in to circulation. This collateral is chiefly held in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities.”

If you read the above carefully, you noted that Federal Reserve notes are the obligation of the United States. As seen above, the Fed has nearly doubled its balance sheet and it is “buying” ever MOAR risky “assets” with those Federal Reserve “notes” that “we the people” back. In other words as the Fed adds to its balance sheet, the liabilities of “we the people” increase. Who do you think will pick up the tab when those “assets” tank completely? If you said, “We the people”, go to the head of the class! “We the people” are the bag holders and there is no gold in that bag!

Here is some information regarding the “bag” from the ZH article above:

“To be sure, we can only extrapolate but it is safe to say that the Fed’s holdings of both these ETFs are modest for the time being, and we assume that the bulk of ETF purchases have targeted the investment grade, LQD ETF; still the fact is that as of this moment, the Fed is a holder, via BlackRock and via HYG and JNK, of bonds which are in default, and which make the Fed a part of the Hertz post-petition equity once it emerges from bankruptcy!”

You can hear and view a brief history of the Fed here and see a hypothetical balance sheet that illustrates what is happening (2:58 – 12:50).

A very interesting thing about the Fed history is how it has gradually taken on assets of poorer and poorer quality. Up until 1932 the “currency” issued by the Fed was backed by 40% gold and 60% commercial paper. In 1932 the backing was 40% gold and 60% Treasuries. Then in 1935 the gold backing was removed and the only backing was by Treasuries. Then in 2008 the Fed added Mortgage Backed Securities into the backing mix. Now it is adding “commercial paper” back into the mix and some of that “commercial paper” is junk.

Remember, always privatize your profits and socialize your losses!

Alina Chan on SARS-CoV-2

May 21, 2020

J.C. on a Bike discussed a recent preprint of a paper by Alina Chan. Here is some of it:

“…Our observations suggest that by the time SARS-CoV-2 was first detected in late 2019, it was already pre-adapted to human transmission to an extent similar to late epidemic SARS-CoV. However, no precursors or branches of evolution stemming from a less human-adapted SARS-CoV-2-like virus have been detected. The sudden appearance of a highly infectious SARS-CoV-2 presents a major cause for concern that should motivate stronger international efforts to identify the source and prevent near future re-emergence.”

“SARS-CoV was observed to adapt under selective pressure that was highest as it crossed from Himalayan palm civets (intermediate host species) to humans and diminished towards the end of the epidemic (15–18); this series of adaptations between species and in humans culminated in a highly infectious SARS-CoV that dominated the late epidemic phase. In comparison, SARS-CoV-2 exhibits genetic diversity that is more similar to that of late epidemic SARS-CoV (Figure 1, Supplementary Table). In fact, the exceedingly high level of identity shared among SARS-CoV-2 isolates makes it impractical to model site-wise selection pressure. As more mutations occur and, ideally, when SARS-CoV-2-like viruses from an intermediate host species are identified, it will become possible to model selection pressure as was done for SARS-CoV.”

A virus’s host environment tends to select against most random mutations. In other words, if it ain’t broke, don’t fix it. If a virus finds itself in a new host environment, it needs to change as was observed with SARS-CoV, or it can’t replicate. Ms. Chan’s findings suggest SARS-CoV-2 was already well “adapted” to human hosts and right now no one has identified the host that preceded humans. This suggests/supports the idea that SARS-CoV-2 came from GoF studies.