Month: July 2017

Honey, can we shrink the kids?

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Andrew Bolt has posted an interesting video which highlights a loony who thinks that climate change can be abated by growth stunting hormones and other chemical cocktails which would allow mental conformity to more climate change friendly activity. The article states,

People unwilling to act on the climate-crisis narrative should be assisted with drugs that improve and promote conformity, according to eminent bio-ethicist Professor Matthew Liao, of New York University, who also wants to see parents dosing their children with hormones and diets to keep them shorter and less of a burden on the planet.”

It would be funny if it was a joke. Sadly it isn’t.

EVs impact on the grid according to MIT

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The boffins at MIT are forecasting that EVs charging with home fast chargers could add the equivalent power consumption of 3 houses to the grid. According to MIT, “Electric cars being sold today can draw two to five times more power when they’re charging than electric cars that came on the market just a couple of years ago.”

Utilities are now prioritizing areas that are seeing a higher proportion of EVs sold as the risk is that failure to upgrade the connectors could lead to more frequent blackouts. The upgrade costs are borne by all ratepayers, not just the EV buyer.

According to a UK National Grid report, peak demand for electricity will add around 30 gigawatts to the current peak of 61GW – an increase of 50%.

It is doubtful whether most governments have factored in the true costs of EVs on electricity markets other than vague commissioned reports that get them to the result their looking for. Then when it’s too late and EVs potentially start crashing the grid then comes all the regulation around when you can charge and the decade of planning required to set up a new back up electricity facility to make up for the shortfall.

Watch it unfold. Governments doing what they do best. Making promises by which time they’ll be out of office when the true costs must be borne.

2040? Watch auto lobbyists water down the EV legislation

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It isn’t a big surprise. The UK is following French plans to ban the sale of petrol/diesel cars from 2040. However let’s get real. Why is it that SUVs remain one of the most popular vehicle classes around? Could it be that the guy who likes to sail needs a V8 Land Cruiser to haul his 7000lb boat that a Tesla 22” rim Tesla can’t manage even half that? Could it be that a mother with 3 kids who often takes her parents on trips to the beach needs a minivan? Have they considered the single bachelor who wants a BMW sports car? Or the DINKs who want a Range Rover because they love to ski in the winter.

What about emergency services vehicles? Have these governments considered the impact of having reliable heat exchangers (from combustion engines) to power life saving equipment in ambulances? From one of my high school mates who works as a paramedic tells me, “We have Webasto heaters in our cars in the colder areas. Running off the diesel they can run 24/7 if needed. If we don’t have them some of our equipment doesn’t work like our tympanic thermometers, the blood glucose reader and then there is the problem of having cold fluids in the car. This is a problem if we are giving these IV because we can make a patient hypothermic if it’s cold. Then there’s just the general environment inside the cab. It needs to be warm in winter.”

What about LCVs? Will light commercial vehicles be exempt? Just watch the auto makers classify their SUVs as LCVs and dodge the rules! The Hummer is a perfect example of this. It was so heavy that it managed to be excluded from the passenger vehicle qualifications on fuel economy.

Let’s not forget the actions of VW (and all of its sub brands) who use the same technology blatantly lied about emissions and found a way to cheat the system. That isn’t to condone their behaviour for corporate malfeasance but certainly shows their true colours on what they feel about climate change. Now they will be forced to sell plenty of brands to pay for the penalties imposed on it.

Take California’s new $3bn plan to support EV sales – effectively a deeply Democrat state fritting away tax dollars to subsidise the wealthy. The poor guy who has to drive a 20-yo petrol pick-up truck because he can’t afford a new one is probably paying taxes to subsidise the guy who pays him to mow his lawn to buy a Tesla.

Have these governments consulted the auto industry? It wouldn’t seem so. Automakers are dead against full EV because it ruins the most fundamental part of their DNA – the drivetrain. When you read all the blurb on the pamphlets what is the one area car makers can milk consumers for? Power and performance. Mercedes can sell you a C180 for a little bit of profit and absolutely gouge out your eyeballs for the high performance C63 and basically vaporize your wallet with the options. Auto makers don’t want to go full EV.

What is it with these governments getting involved in every aspect of our lives? Have they considered the huge hole in the budget to come from a reduction in petrol excise taxes? Fuel duties in the UK are expected to fetch around $35bn in 2017 or c.4% of total tax receipts.

Have they considered that consumers are already clearly showing their belief in ‘climate change abatement’ by the cars they buy? When the subsidies were torn from Tesla in HK, sales went to ZERO while in Denmark Tesla registrations fell 94%. Isn’t that evidence enough of how these vehicles are only tax avoidance devices, not the action of deep seated ecologists?

So before running for more mad green schemes to save the planet perhaps they should look at the evidence and listen to their constituents. Moreover when governments get heavily involved in subsidizing industries it generally results in disaster by creating massive oversupply like we saw in solar and wind industries. Spain perhaps provides the strongest evidence of this. Around 2004 it wanted to get 1GW of solar under its feed in tariff over 4 years. Instead it got 4GW in 1 year meaning its budget exploded 16x and it had $100bn in tax liabilities over the course of the promise. In the end the government reneged. So much for the assurance of government programs.

The German authorities went big for bio-fuels in 2008 forcing gas stands to install E-10 pumps to cut CO2. However as many as 3 million cars at the time weren’t equipped to run on it and as a result consumers abandoned it leaving many gas stands with shortages of the petrol and gluts of E-10 which left the petrol companies liable to huge fines (around $630mn) for not hitting government targets. Claude Termes, a member of European Parliament from the Green Party in Luxembourg said in 2008 that “legally mandated biofuels were a dead end…the sooner It disappears, the better…my preference is zero…policymakers cannot close their eyes in front of the facts. The European Parliament is increasingly skeptical of biofuels.” Even ADAC told German drivers to avoid using E10 when traveling in other parts of continental Europe.

So for all of the grandstanding of governments this push for mandated EVs will not be a plus, much less achievable. I remember as an auto analyst in Europe in 2000 when law makers were saying EVs would be 10% of the market by 2010. It is 2017 and they’re 1%. Once again governments are clueless as ever. They’ve achieved only 10% of their goal in effectively twice the time. Then again what do we expect of governments who do their math on the back of an envelope and never let we, the tax payer, properly evaluate how they got there? Then when targets aren’t reached and costs associated with their incompetence end up a double whammy for taxpayers. Anyway by 2040 most of the current crop of politicians won’t be there in parliament to defend their legacy, or what is left of it.

The reality is that the automakers will skillfully lobby these bureaucrats to water down the laws which will allow hybrids and all other types of loopholes to exist making the “ban” more like a “request”. Appeal to industry wide job losses and technical hurdles (which are immense by the way) and it will be bumped. Even in the US, Corporate Average Fuel Economy laws continually got pushed out, reclassified and adjusted to suit the industry.

Is PM Abe’s at risk of a health relapse with yet more voter backlash?

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Yet more voter backlash for PM Shinzo Abe and the LDP. The scandals and shenanigans are causing some glaring results at the local and prefectural level. Last month’s Tokyo Municipal Assembly elections saw the LDP experience its worst ever outcome. The Sendai Gubernatorial elections this Sunday saw the LDP stench continue. Japan has been pushing the Abenomics revival theme but given the stress from a plummeting approval rating (26% heading into the Kake Gakuen hearings in parliament) will his health issues kick up forcing him to resign? The July 22-23 Mainichi newspaper poll showed that 56% did not back his government, +12 points from the previous survey in June.

Independent candidate Kazuko Kori (right) promised education reform and a quick resolution to the problem of long child care waiting lists. Her LDP competition in the form of  Hironori Sugawara (left),ironically a president of a funeral services operator, was defeated.

PM Abe’s left his first term after just 12 months in 2006-2007 being diagnosed with an illness known as chronic ulcerative colitis — a type of inflammatory bowel disease which according to the Bungei Shunju monthly magazine in Feb 2008:

“He would rush to the toilet in pain…he felt the urge to evacuate every half hour or so.

While in the 2012 campaign Abe assured us he’d been cured, the question is whether the current crop of scandals (involving him and his wife Akie) will see a relapse of this condition, rendering him out of action. Markets are not yet forecasting Abe to resign but whatever one thinks about “Abenomics” it has brought some long overdue semblance of stability in Japanese politics. Should an event occur we could see some financial evacuations.

Death from overwork on the Tokyo Olympic Stadium

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After the first stadium was rejected for its exorbitant cost, the ‘budget’ conscious stadium started 14 months later than anticipated. Due to the delay, work on the new stadium has caused another scandal – excessive overtime. One worker has taken his life after logs showing he had worked over 211hrs of overtime in a month. One shift saw the worker start at 6:30am and finish up 26 hours later. One wonders what will turn it? If Tokyo Governor Yuriko Koike offers a glib apology what hope is there of reform? The punishment for Dentsu (who saw a worker commit suicide) was it wasn’t allowed to apply for any Tokyo government ad contracts for one month.

While the advent of Premium Friday (workers can knock off at 3pm on the last Friday of each month) is a positive step forward and having employees clock on & off makes sense, there is a deep seated cultural problem of not wanting to become an outcast within a company. Although the The Japan Institute of Labour Policy & Training reports that since 2002 bullying and harassment claims to the Labor Tribunal have soared from under 6% to over 20% at the same time total disputes have trebled to over 300,000 annually. One worker from Olympus complained his bosses were being unethical by poaching many of a contractors staff. His punishment was demotion among other humiliation. In order to avoid being unfairly treated, people are using the ‘-hara’ (pawa-hara = power harassment, seku-hara = sexual harassment, mata-hara = maternity harassment) route to their advantage as the following charts show.

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For corporates in Japan, the government is the leader. It took PM Koizumi some 15 years ago to introduce the ‘Cool Biz’ concept (removal of neckties in the middle of sweltering summer during a period of power conservation) because corporations didn’t want to risk being the odd one out.

However there are exceptions. One company in Japan has a very open approach to hiring and paying its staff top rates that are based on performance. Staff are willing to work long hours because inputs have transparent outputs. Instead of getting one or two months pay twice a year like many Japanese corporates offer no matter how ordinary the real performance is this company has employees who think, according to one, “like working in heaven.” Simple – they are paid for their abilities and the trappings of that success are indeed visible.

Pauline Hanson TV special in Japan tomorrow

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TV Tokyo will broadcast a Pauline Hanson special tomorrow. Interesting to see how they portray her. The blurb is as follows:

いまオーストラリアでホームレスが増加しているという。シドニーでは1年で25%も急増、200人に1人がホームレスなのだ。その原因が移民だという。そんな移民を排斥しようという極右政党まで現れた。ポーリン・ハンソン率いるワンネーションだ。ポーリンはその過激な発言から「オーストラリアのトランプ」の異名を持つ。反移民・反イスラムを訴え、2016年の選挙で60万票を獲得した。

“Australia is witnessing an acceleration in homeless. Sydney has seen a 25% increase over the last year with 1 person in 200 now homeless. The reason is said to be immigration. There is now a extreme right wing party which seeks to boycott immigrants. It is the One Nation Party led by Pauline Hanson.  Due to her strong rhetoric she is being named the “Aussie Trump”. Her anti-immigrant anti-Islam stance won her 600,000 votes in the 2016 election.”

It will be interesting to see how she is portrayed by the Japanese media. It is quite rare to see Aussie politics make it to Japanese TV but it is telling to see that her views are making waves enough for it to be broadcast. If only Turnbull had such impact – well to tell the truth the only impact he had was sinking the Japanese subs deal which brought widespread negative press. This is how he was pilloried.

Finally something to really cheer about

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Ever noticed how most news is negative these days. It was last week when I took a break from writing any blogs because frankly I felt I was adding to the endless negativity.  So today, I was warmed by a story of a high school in NSW Australia that brought forward a student formal by 6 months to enable a terminally ill school girl, Hannah Rye, to attend it with a National Rugby League (NRL) hero, Trent Hodkinson.

The NRL is often plagued by sex, drug, alcohol and violence related scandals so it is truly nice to see there is a positive face.  Too often we are exposed to overpaid juvenile brats who can’t see anything other than their own media bubble.

It is nice to think that someone in “real” trouble with few months to live is given such a wonderful opportunity to see out her last days with pride, dignity and joy. I sincerely hope Hannah gets all the media attention she deserves and the wish it relieves the anguish of all the physical pain caused by Ewing sarcoma — a cancer found in the bones or soft tissue.

Even the self-entitled should grasp the essence of going out of one’s way to help another selflessly is worthy in every way. Inspiring stuff that decency in humanity still exists.

Warned to be mild

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Steppenwolf coined the “born to be wild” moniker which became synonymous with Harley-Davidson. Harley is all about conspicuous consumption. It has generally been a good indicator of discretionary income. Harley is not so much about transport but lifestyle. Harley-Davidson’s sales fell 9.3% in the U.S. and 6.7% globally in Q2 2017, ending June 25th. Harley also stated it had lost ground in the big-bike market (601cc and above), dropping from 49.5% market share to 48.5%. Matt Levatich, President and CEO, Harley-Davidson. “Given U.S. industry challenges in the second quarter and the importance of the supply and demand balance for our premium brand, we are lowering our full-year shipment and margin guidance.” Q3 shipments are expected to be down c.20% (39,000-44,000 units).

Harley-Davidson sold 262,221 motorcycles last year and forecast a flat market this year but has downgraded those numbers to a forecast of 241,000 to 246,000 units (-7~8%). US shipments were well below expectations in the US.

Harley-Davidson is suffering from divine franchise syndrome. It has failed to modernize its line up until very recently. While it has plans to put 2mn new bikers on the road over the next 10 years, its competitors do not seem to be suffering with BMW, KTM and Triumph hitting new shipment records. The European makes have much broader product line-ups which adds to the rumours that Harley may wish to bid for Italian sportsbike maker Ducati from Audi to plug the segment gaps in its line up. Harley has had a failed attempt in the sports category via Buell but the Italian maker brings a proper platform to the party vs an in-house employee wanting to rev up Harley products out of a barn.

 

The Dunkirk diversity police

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The sad thing about the diversity brigade is that victimology must trump historical fact. Dunkirk was a mostly white British, French, Dutch, Polish and Belgian male affair. It just was. Historical movies tend to work better when they reflect authenticity. A story of the brave putting their lives on the line to save other braves from almost certain captivity if not worse fate. To think the entire course of WW2 may have altered were the Allies to lose 330,000 troops. The Allies were mulling a conditional surrender but the success of the rescue was a massive shot in the arm for the plucky Brits and the Allies. The High Command wasn’t mulling over how much diversity was on the shores of Dunkirk, they wanted to save as many lives as possible under harrowing circumstances. The Dunkirk movie got berated for sticking to facts rather than Hollywood’s general taking liberties with them.

So spending time bleating about a lack of diversity when 68,000 Allies troops gave their lives to protect the freedoms they enjoy today misses the mark. It is typical of the ungrateful and selfish mindlessness of those who thrive on victimhood despite most cases being a function of their own actions. Victims of change rather than agents of it.

Perhaps one could argue there were too many African-Americans in the Tuskagee Airmen but common sense would be to acknowledge they were in fact African- Americans who had the enviable record of not losing a single bomber on their watch in WW2? Such was their success, the bomber crews would insist on their escort, not knowing their background. Sadly their colour was contentious at the time. Still the movie cast the correct balance of diversity based on cold hard facts.

Surely they should celebrate the appointment of a female Dr Who after 12 consecutive male time lords. One would imagine the complaint will be that the BBC could have picked an LGBT candidate of colour instead of a heterosexual white blonde.

Some may argue that the recent Hawaii 5-0 salary row was discriminatory and defends the need for hard diversity targets. The two Korean actors who often play a relatively minor role in the show complained they were paid less than the main stars. They chose to refuse the contract. Few of us are privy to the driving economic factors which draws the audiences – presumably the main stars Steve McGarrett & Danno. If the next season of Hawaii 5-0 tanks the ‘white’ producers will be fired for poor judgement. Bill Cosby had the #1 ranked TV comedy for 5 years straight and earned $40,000 per episode, the highest paid actor in television history at the time. At one point, The Cosby Show was even ranked the most profitable television show in history.

As one who has hired Jamaicans, Kiwis, Koreans, Chinese, Japanese, Americans, Canadians, Brits, Thais among countless other nations including members of the LGBT community there were three thing that were relevant – ability, hunger and passion. Nothing else really mattered. It wasn’t their diversity in background. It was the diversity in thought. Perhaps the diversity brigade should learn these lessons before crying foul at every opportunity. Some claims may have legitimacy but the dig at Dunkirk’s cast has absolutely none.

Poland would happily trade in its EU membership to save its culture

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An IBRiS poll conducted for the liberal and pro-EU weekly Polityka was published on July 5. The two questions posed to 1,000 people polled was essentially to gauge loyalty to the EU or Poland. Poland would seemingly be happy to trade in EU membership than sell out their culture. This is not a debate about the rights and wrongs of taking in asylum seekers rather to point out what is happening on the ground.

Q1: “Should Poland refuse to accept refugees from Muslim countries even if this should lead to the loss of European funds?”
– YES: 56.5%
– NO: 40.4%

Q2: “Should Poland refuse to take in refugees from Muslim countries even if this should lead to the obligation to leave the European Union?”
– YES: 51.2%
– NO: 37.6%

This opposition to the relocation of asylum seekers arriving in Greece and Italy is reflected in the popularity of the Polish conservative PiS party. The PiS hit 41% in a June IPSOS poll for the first time (against Donald Tusk’s Liberal party PO at 26%). The poll was conducted at the same time the European Commission had announced the launch of sanctions against Poland, Czech Republic and Hungary for their refusal to accept immigrant relocation quotas.

It was only last week that Italy threatened to issue 200,000 refugees with EU travel documents that would legalize their movement around Europe (i.e. encourage their departures from Italy to the desired destination of Germany).

In response to Italy’s threat, Austria is now looking to shut its border with Italy at the Brenner Pass. Bild newspaper has said that Vienna was ready to close the Brenner Pass within a day if migrant arrivals increased. Tensions are already high. Austria has threatened to send armoured vehicles and 750 soldiers to stop migrants crossing.

Whether we like it or not, for all of the altruism in the world, it seems that a growing number of citizens want their governments to prioritize them first. Failure to do so is being typified by what is happening in Greece.

According to the annual survey by the firm Adecco titled “Employability in Greece,” the brain drain phenomenon has been increasing over the last three years. In 2005 only about 11% of unemployed respondents said that they were actively looking for a job abroad. This figure increased to 28% in 2016 and reached 33% so far this year.

The responses show that the unemployed have different reasons to seek work abroad. Whereas in 2005, the main reason was the prospect of a better wage, in 2016 and 2017 the main reason given were better career opportunities abroad. Greeks are giving up on Greece. EU fiscal thuggery is leaving a public system (especially health) under so much strain that it is buckling. 36% of Greeks live below the poverty line. That means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Forced refugee quotas on countries that plainly don’t want them is a bad strategy. Economic conditions are clearly not in the EU’s favour with poverty and youth unemployment at record high levels. For refugees, most do not want resettlement in either economically weak zones or those that are openly hostile toward them. That is completely understandable. For the citizens of member states to be threatened with sanction or penalty for failing to comply is the wrong way to go. By the EU’s own statistics bureau, 80% of asylum seekers are ‘economic’, not fleeing war zones. It is understandable that citizens become concerned when public services that are already under strain become overburdened.

Some can scream at these people for being bigoted, racist or intolerant till the cows come home but ignoring their views, much less ridiculing them has the opposite effect of winning hearts and minds. As a grandchild of refugees, helping those in dire need is basic human decency. One can be sure that many in real ‘need’ will give back to those that have given them a second chance. Those who have come to help themselves at the expense of others who have worked hard to attain it should hardly be surprised when they are not given the same level of sympathy.

What we are seeing in Poland, Italy, Greece and Austria is ‘actions’ over ‘words’. Unless concerns are addressed by political leaders, altruistic lip service will be ignored and sadly people will increasingly take the law into their own hands.