Elon Musk"s First Payload To Mars: His "Midnight Cherry Tesla Roadster Playing Space Oddity"

In late November, we reported on Elon Musk’s desperate attempt to boost market confidence with a shock and awe performance unveiling Tesla’s new semi-truck and roadster. While the event was a thriller, it appears the laws of physics may have finally caught up with Tesla’s stock - now in a bear-market from September highs.

Musk is undeniably the greatest snake oil salesman modern financial markets have ever seen, and that is why he is planning the next spectacular event before a further correction.

On Friday evening, Musk tweeted what the payload of the Falcon Heavy would be— his “midnight cherry Tesla Roadster playing Space Oddity”.

But the story gets better, because the powerful Falcon Heavy rocket will launch his Tesla into the orbit around Mars. Musk added, the Tesla “will be in deep space for a billion years or so if it doesn’t blow up on ascent.”

Payload will be my midnight cherry Tesla Roadster playing Space Oddity. Destination is Mars orbit. Will be in deep space for a billion years or so if it doesn’t blow up on ascent.

— Elon Musk (@elonmusk) December 2, 2017

As Musk would say, the show must go on with the Falcon Heavy launch expected “next month” (January 2018) from Pad 39A at Kennedy Space Center in Florida. According to ARS Techinca, “a static fire test of the rocket’s three cores, and 27 engines, on the launch pad this month.”

Falcon Heavy to launch next month from Apollo 11 pad at the Cape. Will have double thrust of next largest rocket. Guaranteed to be exciting, one way or another.

— Elon Musk (@elonmusk) December 2, 2017

In simplest terms, the Falcon Heavy is three of the company’s Falcon 9 rockets strapped together. It will then create enough lift as proposed by Musk to propel his Tesla out of low Earth orbit onto a trajectory to Mars. When it comes to timing— don’t take the company seriously. Musk has pushed back Falcon Heavy’s maiden flight more than once: it was originally planned for a summer launch but moved to November and now to January 2018.

Musk said, at a press conference in July, that the Falcon Heavy might not even make it to orbit on its first attempt to leave the atmosphere. That means the upcoming event could turn into a very expensive firework showing.

While the practical use for a Tesla roadster on Mars is still unknown, it would buy Musk some time to keep the stock elevated for perhaps a few more secondly offerings. If Musk is successful in this latest endeavor, it would signal that NASA’s ambitions to Mars could be fulfilled by a Falcon Heavy. So far, no private company has launched a rocket beyond low-Earth orbit, nevertheless to another plant.

Phil Larson, an assistant dean at the University of Colorado, and a former SpaceX official said, “the launch of the biggest rocket since the U.S. Moon booster is a game changer for our country’s space exploration future and for national security. The fact that development of such a capability is coming from U.S. industry is a very positive sign for our economic competitiveness.”

As we have highlighted before, the short thesis for Tesla (see: Jim Chanos Adds To Tesla Short, Sees Musk Stepping Down) explains the financial circumstances of why Musk is attempting to conduct the great show ever known to man through SpaceX, as it means the cross promotion would keep his scheme alive. In the mean time, the short theses build:

1. Negative Cash Flows

“If you can’t make money selling a $100,000 car to rich people, how are you going to make money selling a $45,000 car to normal people?” Rocker told The Times. He was referring to the upcoming mass-market Model 3. “I’m saying they’re going to lose money on every Model 3 they build and sell,” Spiegel said. Based on Tesla’s Q4 2016 earnings report, he figured the combined average selling price for non-leased Model S and X is about $104,000 and the combined average cost of building them about $82,000.

 

2. Competition from the Big Guys

Electric vehicles are still only a tiny fraction of total new vehicle sales in the US. Tesla sold about half of them. In March, according to Autodata, Tesla sold 4,050 vehicles in the US, similar to Porsche. All automakers combined sold 1.56 million new vehicles. This gave Tesla a market share of 0.26%. “Tesla faces a formidable set of competitors, and they’re coming in with guns blazing,” Wahlman told The Times. “Once the market is flooded with electric vehicles from manufacturers who can cross-subsidize them with profits from their conventional cars, somewhere around 2020 or 2021, Tesla will be driven into bankruptcy,” Spiegel said.

 

3. Tesla’s vanishing tax credits

The federal tax credit of $7,500 that EV buyers currently get is limited to 200,000 vehicles for each automaker. Once that automaker hits that point, tax credits are reduced and then phased out. Of all automakers, Tesla is closest to the 200,000 mark. Under its current production goals, the tax credits for its cars could start declining in 2018. This would give competitors, whose customers still get the full tax credit, a major advantage. About 370,000 folks put down a refundable $1,000 deposit on Tesla’s Model 3, perhaps figuring they’d get the $7,500 tax credit. But as it stands, many won’t. Rocker thinks that this is going to be an issue. The refundable deposit “commits them to nothing,” he said. Those that don’t get the tax credit may just ask for their money back and buy an EV that is still eligible for the credit.

 

4. The Question of patent protection

Tesla has made its patents available to all comers, thus lowering its patent protections against competitors. Also, the key part of an EV, the battery, is produced by suppliers; they, and not Tesla, own the intellectual property. This is true for all automakers. But Tesla might still be closely guarding crucial trade secrets that are not patented.

 

5. Musk’s distractions from his day job

Musk has a lot of irons in the fire: Tesla, SpaceX (with which he wants to build a colony on Mars or something), solar-panel installer SolarCity which Tesla bailed out last year; projects ranging from artificial intelligence to tunnel digging; venture capital activities…. “He’s all over the map, from tunneling to flights to Mars to solar roof tiles,” Rocker said. These announcements have the effect of boosting Tesla’s stock: “It’s ‘Let’s get the acolytes excited. Implant in the brain! Let’s buy Tesla stock!’”

 

6. Execution risk

“Investing is all about possibility and probability,” Yusko said. “Is it possible that Tesla will produce 500,000 cars in the next two or three years? Yes. Is it probable? No.” Tesla has missed many deadlines and goals, and quality problems cropped up in early production models. As Tesla is trying to make the transition to a mass-market automaker, execution risk will grow since mass-market customers are less forgiving.

 

7. Investor fatigue

Having lost money in every one of its 10 years of existence, Tesla asks investors regularly for more money to fill the new holes. In March, it got $1.2 billion. In May last year, it got $1.5 billion. Tesla will need many more billions to scale up production and to digest the losses. Tesla has been ingenious in this department. But when will investors get tired of it? “We’re awfully close to the point where people wake up and realize these guys are seriously diluting our equity” with new stock and convertible bond issues, Yusko said. According to The Times, Yusko “is looking for the moment when the true believers begin to lose faith.”

 

*Update

8. Emerging solid-state battery technology

Musk has invested a lot into his Gigafactory and technology producing lithium-ion batteries. The EV game is all about the best battery technology and a new threat has emerged using solid-state technology. If Tesla does not adopt to these new battery trends consumers would likely gravitate to EVs who posses such technology, because of the longer distance and shorter charge time.

 

Secret SpaceX Falcon 9 Launch With Mystery Payload Planned For November

Via StockBoardAsset.com,

Regulatory Filings Suggest Elon Musk Is Planning a Secret Rocket Launch In Mid-November. 

According to Spaceflight Now, federal regulatory filings suggest SpaceX will launch a mysterious payload on a Falcon 9 rocket mid-November. Mainstream media remains silent on the event considering the payload is top secret. Filings indicate the payload has no public claim of ownership– from any government or private corporation.

With-in the regulatory filing, the Federal Communications Commission says the flight will use a Falcon 9 booster launched from pad 39A at NASA’s Kennedy Space Center in Florida.

Further into the article, SpaceX is said to be submitting more filings to the FCC on the use of “telemetry transmitters and receivers to track the Falcon 9 rocket in flight”, and two other filings detailing launch plans. Here is what they had to say… 

SpaceX must apply for special authority from the FCC to authorize the company to use telemetry transmitters and receivers to track the Falcon 9 rocket in flight.  

Two filings concern the secretive launch next month, one for the Falcon 9’s liftoff and climb into orbit from Florida’s Space Coast, and another for the first stage booster’s planned return to Landing Zone 1 at Cape Canaveral Air Force Station for refurbishment and reuse.

Since the payload is a mystery. Here is an infographic of the Falcon 9 capabilities. In terms of weight, the rocket can lift about 10 Tesla Model Xs into a low earth orbit (LEO).

Further into the filing, the launch could occur as soon as November 10, 2017. The identity and purpose of the payload codenamed ‘Zuma’ remains a mystery. Over the years, U.S. government agencies have been the top player in launching secret spy satellites into low earth orbit.

The article states, Cape Canaveral has been the chosen site to launch secret spy satellites. Most recently in May, a Falcon 9 rocket launched a “secretive payload 250 miles above earth for the government’s spy satellite operator”.

Earth-imaging satellites that fly in lower orbits normally launch into polar orbits providing more global coverage.

Such payloads flying on Falcon 9 rockets usually take off from Vandenberg Air Force Base in California, but launch trajectories to the northeast from Cape Canaveral have been used for some NRO satellites in high-inclination low Earth orbits, most recently in May when a Falcon 9 rocket launched from Florida placed a secretive payload 250 miles above Earth for the government’s spy satellite operator.

In the meantime, the real test for SpaceX is for a successful launch of  Koreasat 5A communications satellite on October 30. The satellite is designed for “direct-to-home television broadcasts and maritime relay services in Asia”.

Last September, SpaceX Falcon 9 rocket managed to destroy Facebook’s $200 million satellite on launch. Over the years, Elon Musk via Space X has had a long list of failures:

Interesting enough, Elon Musk’s list of failures goes unnoticed with the mainstream media. Back in 2015, SpaceX Falcon 9 catastrophic error cost taxpayers $112 million.

Despite a checkered history of launch failures, SpaceX seems to be doing fine in 2017. The launch manifest states–13 successful missions.

US launch calendar through mid-November. Space X will conduct a launch on October 30 and November 10. 

As SpaceX gears up for a busy autumn, the next test for the Falcon 9 will come on October 30. Then shortly after, the mysterious payload dubbed ‘Zuma’ will launch on November 10 with the expectation of another spy satellite catapulting into low earth orbit.

The question we ask: can Elon Musk complete all space missions in 2017 without blowing up a Falcon 9?

The Big Banks Are Coming For Bitcoin

No matter what Jamie Dimon may say, bitcoin’s durability can be expressed by one simple fact: With a market cap of $100 billion, digital currencies have become too big for banks to ignore.

As Bloomberg recalls in a story about how banks are preparing to confront the thorny regulatory issues related to dealing in bitcoin and other digital currencies, on the same day Dimon trashed bitcoin, calling it a “fraud,” his firm’s private bank hosted a panel featuring cryptocurrency investors, and even helped some wealthy clients transact in a bitcoin exchange-traded product listed in Stockholm, raising questions about whether the bank violated its fiduciary duty in doing so.

Dimon isn’t the only one of his peers to harbor reservations about bitcoin. Bridgewater Associates’ Ray Dalio and BlackRock’s Larry Fink have criticized it as a “bubble” and a “a tool used by criminals.” Morgan Stanley CEO James Gorman defended bitcoin, arguing that it is “more than just a fad.”

But with clients demanding bitcoin exposure in greater numbers, banks have little choice but to assent to their demands, like JPM did. Goldman’s tentative embrace of bitcoin has so far also been the most ambitious, with the firm saying it is considering opening a bitcoin-trading business that would function like an interdealer broker for exchanges and large players.  

Two days ago, Goldman CEO Lloyd Blankfein tweeted that he’s still on the fence about bitcoin, and that he’s “not endorsing or rejecting” the digital currency.

Still thinking about #Bitcoin. No conclusion - not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.

— Lloyd Blankfein (@lloydblankfein) October 3, 2017

      But for banks hoping to enter the bitcoin business, many unanswered questions remain.       For example, how do banks that are required by law to prevent money-laundering handle a currency that’s not issued by a government and that keeps its users anonymous?

According to Bloomberg, handling bitcoin would invite scrutiny from every major U.S. regulator, according to Joshua Satten, director of emerging technologies at Sapient Consulting.

“From the perspective of the U.S. Treasury, do you classify it as an asset class or a currency?” Satten said. “If banks are starting to manage and hold bitcoin for their clients, you would have the OCC and the FDIC looking at how they classify the assets on their balance sheet and how they state the assets for the portfolio of a client.”

However, the advent of cryptocurrency focused hedge funds like the $500 million crypto-focused fund being planned by Mike Novogratz means that banks risk falling behind their competitors if they hesitate.

Already, there are 75 funds investing in the space, according to Autonomous Research.

And that number will likely rise after the Chicago Board Options Exchange introduces bitcoin futures and options, which it says it’s planning on doing some time next year, making it easier for traditional investors to gain exposure to bitcoin.

Other potential applications for bitcoin that are being considered by banks include derivatives contracts and using the digital currency for trade finance, Bloomberg reported. For regulators considering how to move forward, Switzerland created a precedent over the summer when it granted a license to Falcon Bank to transact in bitcoin on behalf of its wealth-management clients.

However, while an endorsement by the banks would help cement bitcoin’s reputation as a legitimate asset, it could also bring changes as regulators demand more transparency. After all, the lack of transparency and the difficulty enforcing financial laws were both cited by the SEC as reasons for the rejecting two proposed bitcoin ETFs back in March.

Assuming US regulators assent to allowing banks to deal in bitcoin, the fundamental question then becomes: Will the banks change bitcoin? Or will bitcoin change the banks?

"Sunday Night Football" Ratings Slide Following Day Of Player Protests

As it turns out, President Donald Trump may have been on to something when he said NFL players were turning off viewers by kneeling during the National Anthem. As Deadline reports, both the NBC and NFL took a hit during Sunday Night Football last night when ratings dropped, as some Americans appeared to heed Trump’s call to boycott the NFL unless owners agree to fire or suspend players who don’t stand during the anthem.

In metered market numbers, the primetime match-up between the 27-10 winning Washington Redskins and the Oakland Raiders snared an 11.6/20. That’s the worst rating for SNF so far this season, marking an 8% dip from the early numbers of last week’s Atlanta Falcon’s 34-23 win over the Green Bay Packers, and a 10% dip from the same week last year.

The Redskins linked arms last night, while nearly every single Raiders player sat on the bench during the anthem, Deadline says.

Here are the top markets for last night’s SNF:

D.C.- 23.3/40

Richmond – 22.1/33

Norfolk – 19.8/31

Sacramento – 17.5/32

S.F./Oakland – 17.2/35

New Orleans – 17.2/24

Denver – 16.2/27

Buffalo- 15.4/24

Kansas City – 14.8/24

Las Vegas – 14.5/23

However, not every network saw a ratings dip. Bloomberg reports that CBS, whose Sunday night games included a closely fought matchup between the Green Bay Packers and the Cincinnati Bengals, experienced a small ratings bump, probably because the close score drew in more viewers. Fox hasn’t yet released viewership numbers for its NFL games on Sunday. Overnight ratings are subject to change when final numbers are released later Monday. The New York Times and other mainstream media had discounted Trump"s claim, tweeted over the weekend, that the NFL"s ratings had suffered because of the protests, despite a survey showing that many fans reported tuning out last year because of the protests.

Trump criticized the NFL Friday night during a rally in Alabama, where he called players who kneel for the anthem "a son of a b***H" and said any team owner who fired or suspended the protesting players would become "the most popular person in the country - at least for a week." His comments drew rebukes from NFL Commissioner Roger Goodell, as well as Patriots owner Robert Kraft and former Buffalo Bills and New York Jets head coach Rex Ryan.

The trend of kneeling for the anthem started last year when no- unemployed quarterback and then San Francisco 49er Colin Kaepernick refused to stand, saying he refused to honor the US because of institutionalized racism. Since then, a number of NFL players have publicly protested police brutality and racial injustice by not standing for the National Anthem.

Schlichter: "Normal Americans Are Bored By The Fake Drama"

Authored by Kurt Schlichter via Townhall.com,

I took a week off from the milieu of political insanity to go out amongst the normals and chalk up another huge trial victory, and when I got back I was stunned - stunned! - to find that a consensus had formed that Nazis are bad. Beforehand, I had no idea where the establishment stood on Nazis, but now it"s crystal clear. They hate Nazis because Nazis are bad. Everyone from CNN to Mitt Romney hates Nazis. I couldn"t be prouder of an establishment that takes that kind of tough stand. They"re going to hate Nazis, and they don"t care whose jack-booted toes they step on!

I also learned that if you hate Nazis for being bad, you"re not allowed to hate anybody else who’s also bad, because Nazis are so bad that you have to devote all your hating capacity to hating Nazis such that there"s no room left to hate anybody else. Those hammer and sickle flag-carrying Communists? Well, you must love the Nazis if you hate them, because you have got to hate the Nazis with all your mind and all your heart since, as we learned this week, Nazis are bad. I"m so glad that our moral betters have this all figured out.

This new breed of Nazis - for whom breeding doesn"t seem to be in the cards - is less menacing that the originals. Instead of schmeissers they pack Tiki torches - for reasons no one seems able to explain. The old Nazis invaded Poland and wouldn"t leave; these invade their moms’ basements and will never leave. But apparently these 300 or so misfits and malcontents are a potent peril to our republic. I"m not sure if they themselves are a direct threat to anything besides the bottom line at a Golden Corral all-you-can-eat buffet unlucky enough to have them as patrons. The only thing scarier to its manager would be seeing Lena Dunham waddling in on a cheat day.

They are not utterly harmless; one of these cowardly morons ran over and murdered a woman, which fulfilled the media’s long-standing dream of being able to report on a terrorist who wasn"t a radical Muslim, a Black Lives Matter fan, or a Bernie bro. But the fact remains that this scraggly collection of polo-shirted dinguses numbering in the dozens is less of a threat to our society than the gleeful attempt by the establishment and its media puppets to use the looming threat of the Third Helping Reich to crush all opposition to the status quo.

The establishment’s tactic is to paint anyone they dislike as Nazis and any ideas its members oppose as hate speech, all in support of a strategy of slamming shut the Overton Window on any kind of change. The media is running with it, and if you get on Twitter, anyone to the right of Maxine Waters is now a Nazi - especially if you dare observe that the fascist fatties are not the only scumbags out there.

Even after a week, CNN is still quivering and writhing in an earth-shattering Nazigasm. When it finally ends, I expect in the network to be cuddling and sharing a Virginia Slim with the New York Times. And everyone from Hollywood half-wits to the CEO of Starbucks are making clear that they disapprove of Nazis - and no one else.

It"s also got the usual suspects of the wuss right activated. That"s why you see needy Fredocons like Mitt Romney being retrieved from their well-deserved obscurity and sent out to dance eagerly for the nods and nickels tossed his way by the same media that said he gave people cancer. I don’t know, but assume the guys vying to replace John McCain as the leader of the Blue Falcon wing of the GOP, Jeff Flake and Ben Sasse, competed vigorously to see who could ignore violent leftists in order to signal the most solemn rejection of Nazis in a manner that validates the lying liberals’ premise that the Republican Party harbors Nazis. Of course, we saw another pathetic grasp at relevance in the form of finger-wagging by the has-beens at that failing cruise cabin sales organization,The Weekly Standard.

But this cheesy grab for short-term political advantage is much more dangerous than that motley collection of stormdoofuses. The Times is now running op-eds advocating the suppression of speech its coastal elite readership finds unappealing. Yeah, a newspaper advocating censorship seems like a smart long-term strategy. The ACLU has added an asterisk to its acronym that explains that the only civil liberties it"s going to be protecting from now on are the ones exercised by people approved by its rich liberal donors. Yeah, abandoning the one thing that earned the ACLU grudging respect across the board, its free-speech absolutism, seems like another smart long-term strategy. Oh, and the tech twerps of Silicon Valley decided to take it upon themselves to decide what discourse may be discoursed. Yeah, that"s a smart long-term strategy that couldn"t possibly explode in their smug, goateed faces.

But what"s the effect on normal people? Taking a break from Twitter and the media for a week to go be with normal people gave me an interesting perspective that I don"t get when I"m surrounded by others invested in politics. None of them care. The exact number of times I heard normal people mention Nazis was zero. No one normal was talking about it, except on the occasional big screen I passed in my travels. No one normal was paying attention to the Wolf Blitzers or the Rachel Maddows. Everyone normal was living their lives, and this fake moral meltdown had no part in them. The fact that the whole thing is so ridiculous doesn"t help it gain traction. Donald Trump is a lot of things, but a Nazi is not one of them.

And the idea that when there are two sets of idiots facing each other you can"t point out that both sets of idiots are idiots just doesn"t ring true.

Normal people are blessedly free of the little taboos that the establishment seeks to impose, like the one that forbids pointing out that the alt left is just as scummy and slimy as the alt right. The general feeling among normals is “A pox on both your basements.”

The Great Nazi Panic of 2017 will fade away when its sponsors realize that it"s not having the effect on the mass of the normal Americans they hoped for. But that doesn"t mean it hasn"t caused grave damage. The establishment has, in its desperation to return to unchallenged supremacy, eagerly jettisoned its dedication to the concept of free speech. It might not work out the way they hope once there is a national arbiter of what may and may not be thought or spoken. After all, as we found out last November, the person you think is going to be wielding the power isn"t necessarily the person who you thought was going to be wielding the power.

Of Queen & Country, God And Guns

Authored by "Revanchist" via The Burning Platform blog,

Though our stars tend to rise and fall in opposition through the years, your reputation for adventure, fearlessness and a legendary hunger for more lingers, and for the most part we find that admirable—no, more than that—we find it astonishing.

We may denigrate your American whisky (as well as your tendency to spell it with the Irish ‘e’) as you joke about our pasty faces and reliance upon dentures, but we are cousins—if not always kissing—and share a rich common language, culture, customs and cuisine. We are more alike than different in nearly every respect but these: One, we are a constitutional monarchy and Two, despite what you may have heard we really, really envy you your guns.

America has always seemed the dangerous, glamourous older brother. You were the cowboy, the gangster, the astronaut and the comic book hero of our collective imaginations. You were the captain of the debate team, dating the homecoming queen and cruising through life in your ’55 Chrysler, one hand on the wheel, elbow on the door, working on that car tan.

The 40’s, 50’s and 60s were perhaps your finest hours. During World War II you were overpaid, oversexed and over here, breaker of hearts and hymens. The winds of heaven tousled with a loving hand your perfect hair, the sunlight glinted off your straight, white teeth. After the war you invented rock and roll and corn dogs and forty-seven million things to do with sugar including LSD, and we were dazzled.

While we were washing under our arms from basins of cold water in cold rooms in a bitterly cold country, you were inventing the hot tub. At the cinema, we would bask in shimmering visions of your highways and high fashions, your Endless Summer California culture, your glittering skyscrapers and flawless pavements, then trudge home and tune in the wireless for a Parliamentary debate on whether or not we could afford to clean centuries of coal smoke from our cracked and blackened buildings.

While you were bringing Caesar Salad, Martinis, Bananas Foster, Baked Alaska and the almighty, sacred Hamburger into the world, we anticipated the prospect of instant mashed potatoes finally becoming available down the local shops. We were unimaginably insular; it is within living memory that people in Britain believed spaghetti grew on trees.

Despite pretensions to polite behaviour we relished your films and television programmes like The Godfather, The Maltese Falcon, The Third Man and White Heat; more recently The Sopranos, Breaking Bad and Deadwood—the more violent the better. We admired Clint Eastwood’s entire oeuvre. We devoured books like Lonesome Dove and the works of Steinbeck, Hemingway, Mark Twain and Raymond Chandler. Some of us even like bluegrass but those people are mainly in the looney bin. We treasure pretty much everything about you, but we’re British so you don’t hear us mention it very often.

Some Britons flinch when one suggests ever needing a gun in Old Blighty but don’t believe the lukewarm protestations. As the past few years have unfolded any remaining hesitation is apt to change, and soon. What we are beginning to remember is that for thousands of years everyone on this island was armed at all times with daggers—with swords if you could afford them, with throwing axes and longbows for truly special occasions. Personal defence was not just a choice, it meant accepting full responsibility for individual safety beyond city or castle walls. Defending ourselves with grace and strength and skill was something we once took great pride in.

Our downfall can be charted in three separate events:

Two hundred years ago, give or take a couple of decades, Sir Robert Peel established a full-time, professional and centrally-organised police force with the passing of The Metropolitan Police Act of 1829. It was not well received at the time; the public felt they did very well already with night watchmen and personal vigilance and besides, who was expected to pay for it? And why hadn’t the people been consulted? As things usually go between governments and their subjects, government had its way. We turned our weapons over to legally-sanctioned protectors and began to soften as a people.

 

In the midst of austerity after The Second World War, universal healthcare for all was rolled out to tremendous fanfare, followed by a steadily increasing system of welfare for mothers and children, later for pensioners, then veterans and civil servants. There was in the early days some shame associated with taking a government handout but practice makes perfect and before long anyone with a doctor’s note affirming a sprained wrist or dodgy knee could sign on and be supported for life. No one asked this time who would pay—no one wanted to hear the answer anyway. And we grew softer still.

 

Simultaneously, the government threw open its doors to the former colonies. Indians, Pakistanis and Caribbean Islanders answered the call to serve as a labour force and in short order became a demographic who never actually seemed to leave. Politicians had discovered the lucrative stand of virgin timber that was the immigrant class and promised them anything, even citizenship, in exchange for their vote. And vote they did, until their children grew up, stood for election themselves and were voted in by their own people on the colour of their skin. When native Britons asked why they were never consulted on allowing this flood of immigrants they were called racialists. Since Britain had just finished dealing Jerry a bally good hiding, any accusation of holding Nazi sentiments was social poison. Hence we softened our principles and muffled the warning of our hearts.

This is how we joined the invertebrates.

Now we are facing Islam, though not many know that what is happening today is just another battle in a very old war.

From the 16th to the 18th centuries upwards of two million Europeans were captured and sold as slaves in Tunis, Algiers and Tripoli. These weren’t people who were taken at sea but from their beds, in the dark of night in coastal towns and villages in Cornwall, Devon, Dorset, up into Wales and along the west coast of Ireland, as well as throughout the Mediterranean. Why who would do such a thing, you may ask—the Barbary Pirates, of course—Muslims.

This carried on for two hundred years with only sporadic and half-hearted interruption. England talked a good game and now and then ransomed a lord or two out of slavery, but what’s a few missing Cornish fisherman, their wives and children here and there? It wasn’t until American ships began to be attacked and raided for goods and slaves that investors studied the situation and concluded, “You know, this could be bad for business,” and went to war.

First though, in the interest of fair play, Thomas Jefferson and John Adams made the perilous journey across the Atlantic to London for a sit-down with Sidi Haji Abdrahaman, the envoy from Tripoli. When asked what right the Barbary pirates had to force Americans into slavery, Jefferson recorded the ambassador’s answer in two letters and his personal diary:

“He replied that the right was founded on the Laws of the Prophet, that it was written in their Koran that all nations who should not have answered their authority were sinners, that it was their right and duty to make war upon them wherever they could be found, and to make slaves of all they could take as prisoners, and that every Mussulman who should be slain in battle was sure to go to Paradise”.

So, not a lot’s changed then.

In an Anglo-Dutch-American alliance three campaigns of The Barbary Wars were fought and the Muslims were at last subdued and colonised. Client kings and strong men were installed and until the present day Muslims have remained a benign tumour on civilised society.

It was a stunning victory and Francis Scott Key composed a song to mark the occasion. The original verses included:

And pale beamed the Crescent, its splendor obscur’d
By the light of the star-bangled flag of our nation.
Where each flaming star gleamed a meteor of war,
And the turban’d head bowed to the terrible glare.

It wasn’t a huge hit at the time though after the War of 1812 he dusted it off, rewrote some of the more laboured lines and it eventually became the American National Anthem.

Were you taught all this in school? No? Nor I. Why is it that where our history intersects with Islam it always seems to either vanish like morning mist or become corrupted into making the Christian world into the bad guys and aggressors?

This brings us to the current mayor of London, Sadiq Khan, the platitude-puss Pakistani with links to Hamas, Al-Nusra, Al-Qaeda and the Muslim Brotherhood. When he’s not scurrying along the baseboards he’s raring up on his two hind legs and sporting the most punchable, weapons-grade constipation face this side of the Atlantic. It doesn’t take an adept in Texas Hold’em to ascertain that Khan’s tell is one of a man who is eternally biting back what he really wants to say.

Within an hour of the latest cultural enrichment, Khan is on hand with fair-minded and reassuring statements like, Terrorism is part-and-parcel of living in a big city or London is one of the safest cities in the world. Meanwhile, the poisonous flood of piety and bloodlust threatens to drown us all.

What people in Britain are gradually coming to grips with is that Islam teaches that this life on earth is merely a stepping-stone to Paradise and that Muslims must stop at nothing to attain it. To paraphrase Kyle Reese, they can’t be bargained with, they can’t be reasoned with, they don’t feel pity, or remorse, or fear and they absolutely will not stop, ever, until all non-Muslims are dead or enslaved.

For politicians, though, hope springs eternal; just fire the old PR firm and hire a new one. Hence, the RUN•HIDE•TELL campaign is off to a rocketing start. Of course, scruffy young tearaways were quick to deface the posters by substituting the last word to read RUN•HIDE•SUBMIT but the kings of PR, the Americans, have gone us one better with DRAW•AIM•SHOOT as the only viable response. We respect this, of course, because we love your guns.

In other news, on 28 May 2017, police sent a helicopter and combat-ready police to confiscate a karaoke machine from a backyard BBQ because the hosts played a song mocking Osama bin Laden. Bear in mind this was four days after bomb and bloodshed at a concert attended by teenaged girls in Manchester Arena. Several days after the karaoke caper, the horrific massacre on London Bridge took place. Clearly, prioritising threats could do with some work.

Our current PM, Barren Cat Lady, famously stated upon her election, “Brexit means Brexit.” We’re still waiting. After the London Bridge Massacre she said, “Enough is Enough.” At this rate she’ll probably say,”Potatoes are Potatoes,” next and the media will still stand up and applaud it.

But now I am just lobbing outrage darts at the page so I’ll wind this up.

Governments which no longer guarantee the security of their citizens are worthless, and those that disallow the right to defend oneself are worse than negligent, they are clearly dangerous to support in any way. People here are beginning to get this, but I still feel it’s too late to prevent the rivers of blood alluded to by the brilliant Enoch Powell, king of ‘racialists,’ true patriot and martyr.

As I write this it’s less than twenty-four hours till we march once more unto the polls to vote in an election that probably won’t make a bit of difference except to take our Brexit away for good. And yet it could also upset the entire apple cart as well. Such are the times we live in.

My American friends, you are surely aware that you don’t have to own a gun to fight like hell to retain your right to bear arms, as well as the freedom to play anything you damn well please on your karaoke machines. Preserve those rights, defend them, they are more precious than you know. Never sell them. Never soften.

They say a falling knife has no handle and yet our British politicians keep snatching it in mid-air, then expressing astonishment and dismay at the cuts on their hands.

Based upon past experience they’ll just carry on trying to catch it while the rest of us bleed to death.

Country With The World's Largest Oil Reserves Runs Out Of Gasoline

In a testament to the efficiency of socialism, leftist-run Venezuela has long prided itself on selling its citizens the world"s cheapest gasoline... that is when it has gasoline to sell. 

While fuel supplies in the country with the world"s largest proven oil reserves...

... have continued flowing despite monetary collapse and hyperinflation, a domestic oil industry in turmoil and a deepening economic collapse under President Nicolas Maduro that has left the South American country with scant supplies of many basic necessities, that changed last Wednesday when Venezuelans faced their first nationwide shortage of motor fuel since an explosion ripped through one of the world"s largest refineries five years ago. At the time, the government of then-President Hugo Chavez curbed exports to guarantee there was enough fuel at home.  This time, however, the problems were all man made and the shortage was mainly due to problems at refineries, as a mix of plant glitches and maintenance cut fuel production in half.

In the immediate aftermath of the shortage, Venezuela’s state oil company, Petroleos de Venezuela, rushed to replenish gasoline supplies in various neighborhoods of Caracas as drivers lined up at filling stations amid a worsening shortage of fuel. While Petroleos de Venezuela, or PDVSA, says the situation is normalizing and blamed the lines on transport delays, the opposition says the company has had to reduce costly fuel imports as it tries to preserve cash to pay its foreign debt. The opposition was likely right.

According to Bloomberg, tanker trucks were seen in several neighborhoods of the capital city resupplying filling stations after local newspaper El Nacional reported widespread shortages across the country.  As the company’s crumbling refineries fail to meet domestic demand, imports have become a major drain of cash as the country buys fuel abroad at market prices only to sell it for pennies per gallon at home, unless, of course, one buys abundant gasoline on the black market where its cost is orders of magnitude higher than what one would pay at the gas station.

“Yesterday, I went to three filling stations and I couldn’t fill my tank,” Freddy Bautista, a 26-year-old student, said in an interview while waiting outside of a gas station in the Las Mercedes area of eastern Caracas on Thursday. “I’ve been waiting 30 minutes here, and it seems like I’ll be able to fill up today.”

But the key reason PDVSA has been reducing the money-losing imports as it prepares for $2 billion in bond payments due next month, said Jose Brito, an opposition lawmaker on the National Assembly’s oil commission. “They’re not importing enough because they are saving up to pay the debt,” he said in a telephone interview. “It’s unbelievable that this is happening in an oil producing country.”

It gets better.

While PDVSA was "suddenly" unable to keep the domestic market stocked, it had no problems supplying gasoline to its main export partners such as Cuba and Nicaragua. As Reuters reported, Caracas has continued exporting fuel to political allies and even raised the volume of shipments last month despite warnings within the government-run company that doing so could trigger a domestic supply crunch. Shipments from refineries to the domestic market needed to be redirected to meet those export commitments, internal documents showed.

"Should this additional volume ... be exported, it would impact a cargo scheduled for the local market," read one email obtained by Reuters and sent from an official in the company"s domestic marketing department to its international trade unit. Venezuela last month exported 88,000 barrels per day (bpd) of fuels - equivalent to a fifth of its domestic consumption - to Cuba, Nicaragua and other countries, according to internal PDVSA documents seen by Reuters.

That was up 22,000 bpd on the volumes Venezuela had been shipping to those two countries under accords struck by Chavez to expand his diplomatic clout by lowering their fuel costs through cheap supplies of crude and fuel. The order to increase exports came from PDVSA"s top executives, according to the internal emails seen by Reuters.

Then came the departures.

As Reuters adds, the strain on the country"s fuel system has been worsened by the quiet departure of staff in PDVSA"s trade and supply unit who are key to ensuring fuel gets to where it is needed and making payments for imports, three sources close to the company said. Clearly unconvinced that Venezuela is the socialist paradise shown on brochures, the unit has seen around a dozen key staffers depart since Maduro shook up PDVSA"s top management in January. Among those who left was the head of budget and payments.

"Every week someone leaves for one reason or another," said a PDVSA source familiar with the unit"s operations. Some have been fired, while others have left since the shake-up inserted political and military officials into top positions and bolstered Maduro"s grip on the company that powers the nation"s economy.

The imposition of leaders with little or no experience in the industry has further disillusioned some of the company"s experienced professionals and accelerated an exodus that had already taken hold as economic and social conditions in Venezuela worsened.  A recent internal PDVSA report seen by Reuters mentioned "a low capacity to retain key personnel," amid salaries of a few dozen dollars a month at the black market rate.

The vacancies have led to all-out chaos inside the state-run energy company: the departure of staff responsible for paying suppliers, as well as a cash crunch in the company and the country, have led to an accumulation of unpaid bills for fuel imports into Venezuela. Had those bills been paid, the supply crunch would have been less acute, company sources said.

About 10 tankers are waiting near PDVSA ports in Venezuela and the Caribbean to discharge fuel for domestic consumption and for oil blending.

Only one vessel bringing fuel imports has been discharged since the beginning of the week, shipping data showed.

PDVSA ordered some of the cargoes as it prepared alternative supplies while refineries undergo maintenance.

As a result of this clusterfuck, Venezuela finds itself in a particular bind: while there are millions of gallons of gasoline parked offshore (not to mention some 300 billion barrels of oil underground) they will remain there indefinitely until PDVSA pays for their cargoes. Should PDVSA pay - up to $20 million per cargo - shortages could blow over relatively soon. However, as noted above, it won"t, as it is saving every dollar for an upcoming bond payment: PDVSA is preparing for some $2.5 billion in bond payments due next month.

Meanwhile, the shortages persist despite calls for calm from PDVSA.

Ysmel Serrano, commercial and supply vice president at PDVSA, said on Twitter last Wednesday that the company has sufficient supply from its refineries and is working to increase shipments to stabilize distribution after transportation delays led to lines at gasoline stations in four states. “We call for calm and to resist false rumors from sectors trying to create chaos in the country!” Serrano said.

The comments came just hours after the company said it had controlled a “minor” fire at the Amuay refinery in Falcon state, the largest refining complex in the country where a 2012 explosion killed dozens of people.

To be sure, shortages are nothing new in Venezuela. The hunt for gasoline is just the latest headache for consumers after years of severe economic contraction and triple-digit inflation have produced shortages of everything from bread to antibiotics.

Unfortunately, even once the bond payment is made there is no assurance the flow of gasoline to the domestic market will resume. Venezuela has been forced to increase imports of finished gasoline and components over the past years as its refinery utilization rates declined because of deteriorating infrastructure and under-investment. The country imported about 75,000 barrels a day of refined products from the U.S. in 2016, according to the U.S. Energy Information Administration.

As Bloomberg writes, in Caracas’ eastern Sucre municipality, around 20 cars were lined up outside of a PDVSA gas station trying to fill up. National police in the Las Mercedes part of the city, meanwhile, were trying to prevent lines from forming outside of filling stations there. Outside of Caracas, El Carabobeno, a newspaper based in the central city of Valencia, reported widespread lines there.

* * *

On Wednesday, Maduro found a way to briefly deflect blame for the ongoing debacle: Venezuela’s public prosecutor ordered the arrest of Marco Antonio Malave, PDVSA’s manager of international trade, for supposed wrongdoing related to fuel purchases for the domestic market. Malave was detained at a Venezuelan military facility and his bank accounts have been blocked. This attempt to scapegoat failure on one person will resolve nothing.

The Sure Thing

Submitted by Michael Lebowitz via 720Global.com,

The Sure Thing

The New England Patriots pulled off a stunning come-from-behind victory in Super Bowl LI, and one that was truly unprecedented in American football. Throughout modern NFL history, playoff teams that had a 19 point lead or greater in the fourth quarter, as the Atlanta Falcons did, were 93-0. A Patriots comeback was deemed virtually impossible by the odds-makers. There is an important lesson here worth considering. The Patriots improbable victory follows a variety of other unlikely, but surprising high-profile events in the past several months, some of which will have far greater impact on our lives than we may realize.

The British referendum to leave the Euro

Last summer, the odds of Brexit gaining a majority vote briefly dipped below 5% in the days preceding the vote. In a premonition to the upcoming U.S. election, The Sun newspaper in London mistakenly announced that the head of the Brexit campaign, Nigel Lafarge, conceded to the “Remain” vote.  

Graph and Newspaper cover courtesy: Hypermind.com and The Sun respectively

Leicester City’s improbable Premier League Championship

Leicester City entered the 2016 Premier League season as a 5,000 to 1 underdog to win the league championship. Fortunately for Leicester City, the existence of long odds bear no direct influence on outcomes as they went on to win the Premier League Championship. For the sake of comparison, the worst team in the NFL, the Cleveland Browns who finished the 2016 season with one win, started the year with odds of 200-1 to win the Super Bowl. According to odds-makers, the Browns were 25 times more likely to win the Super Bowl than Leicester City was to win the Premier League Championship.

Image Courtesy: ESPN

The U.S. Presidential Election

In the days leading up to the U.S Presidential election, Donald Trump was a serious underdog with only a 20% chance of winning the election.  Even after some states had closed their polls and results were trickling in, a Hillary Clinton victory was all but a foregone conclusion. Newsweek infamously released their upcoming issue with a picture of Hillary Clinton under the words “Madam President.”

Graph and magazine cover courtesy: New York Times and Newsweek respectively

Super Bowl LI

With the Patriots trailing 28-3 mid-way through the third quarter, the odds of a Patriots Super Bowl victory were placed at 0.3% or 333 to 1. The Falcons were a virtual lock to win. The graph below charts the progression of the in-game odds for each respective team winning. The gray line highlights the point where the Falcons had the greatest chance of winning.

Graph Courtesy: Matthew Cascio @mattcascio  

Why?

Given that “impossible” events are seemingly occurring with regularity, we must ask, “Why?”

Maybe another question that should be entertained is why the favorite, at any point in the contest, is given such commanding status? Given what we have seen out of Tom Brady in his illustrious career, why would experts count him out with a seemingly eternal 23:29 remaining to play in the biggest game of the biggest sport in America?

To apply this concept to another great global sport, do U.S. equity market valuations imply similar false confidence in future outcomes for the pace of earnings and economic growth?

The Dow Jones Industrial Average just crossed the 20,000 mark with great fanfare. Immediately following the celebration, the media and market “experts” began discussing the next benchmarks they expect to fall, Dow 25,000 and 30,000.  Like those supporting the aforementioned clear favorites, everyone seems to be caught up in euphoria and the absolute certainty of an outcome. Like the attitudes that prevailed in 1929 and 1999, market experts appear to be convinced that the equity markets are moving in one direction, higher.

Spot VIX, an indicator that conveys confidence or concern about future equity price moves, is near-record lows. This implies tremendous confidence that stock prices will indeed move higher. Conversely, however, lesser followed VIX futures currently trade at historically steep premiums which suggest more than a few market participants harbor anxieties about the future.

We have been vocal in our thoughts about the confluence of historically high valuations, economic headwinds and the uncertainties of a new administration. It is hard for us to get on a bandwagon that is not supported by fundamentals. We feel like the sole Patriots fan listening to everyone around us debate whether Falcon’s quarterback Matt Ryan or star receiver Julio Jones will be the MVP.

Like all of the instances listed above, the odds are clearly wrong. The fundamentals governing each event were carelessly neglected, and probabilities radically miscalculated, sending the experts and their followers, in the wrong direction. While sports or politics may not be your thing, we urge you to pay attention.

The odds of equity market victory are very near 100%.  What could go wrong?