Greater Depression

Open Letter from doctors on BLM during COVID19

RacDoc

An ‘Open letter advocating for an anti-racist public health response to demonstrations against systemic injustice occurring during the COVID-19 pandemic  has been published with 1,288 cosignatories.

It is nothing more than the standard sanctimonious drivel sacrificed on the altar of political correctness served up by liberals desperate to appear chic in a cancel culture using their supposed intellectual superiority over everyone else.

The open letter lends its support to BLM during the novel coronavirus pandemic, stating that “white supremacy is a lethal public health issue that predates and contributes to COVID-19.

Naturally, we wanted to test the depth of the bench of the consignatories telling us that we “Listen, and prioritize the needs of Black people as expressed by Black voices.

Should we view an art therapist who signed as a leading light? The group of Seattle 500 Women Scientists? The transgender entry? The lawyers? The veterinary surgeons? The housing company? The Twitter follower? How about Antonia Beachem, Human? The former probation officer? The postdoctoral researcher at the Barcelona Lab for Environmental Justice and Sustainability? Meditating for Black Lives? The Washington Physicians for Social Responsibility & Radical Public Health? The priest? The pastor?

Apart from the predictable content of the virtue signaling hyperbole, what a shame only 19% of the cosignatories are actual doctors. 37% that co-signed are academics (excluding MDs that lecture), 10% are students and 28% are individuals who don’t list their profession. The rest are a hodgepodge of activist groups.

What these puritans overlook is that most can see this letter is just an expression of their chic political views, wrapped in medical opinion. When so many sign the document from other fields, it dilutes what little credibility there was to begin with.

We’ve seen this sort of thing before.

Remember 11,000 cosignatories to a non-peer reviewed paper on climate change that included Mickey Mouse and Albus Dumbledore?

Or the Feb 2020 Safe Climate Declaration which hosted 100 speakers of which less than 5% were climate scientists. Most were from academia, media and high schools.

Or the 268 cosignatories of an open letter in support of Extinction Rebellion (XR). Perhaps the most hilarious signatory to the letter was Matthew Flinders. Our esteemed explorer seemed to have navigated his way back to life after 200 years.

Or the the sanctimonious video made by the World Mental Health Coalition (WMHC) where all members co-signed the case for Trump’s lack of mental capacity. Sounds impressive using “world”, doesn’t it? Given the World Psychiatric Association represents 200,000 members worldwide, WHMC’s 37 members seems rather pathetic by comparison. Be sure to read how they were prepared to ditch their Hippocratic oath to smear Trump.

Back to this open letter. Let’s not forget the poor ethics displayed by many in the medical community – such as publishing a rushed paper and retracting it in The Lancet on hydroxychloroquine. Or the farcical behaviour of WHO and its kowtowing to China.

Perhaps we might reflect on the alarmist medical experts who lusted power with ridiculously exaggerated forecasts which have likely tanked the global economy and created a far worse outcome for all, especially the minorities they claim to defend.

We can’t wait for them to sound alarms when people attend Trump rallies and accuse them of being grossly negligent.

So in conclusion, certain members of the medical community should stay in their lane. They are entitled to free speech but using fancy letters after their name to lecture the rest of us to check our white privilege discredits them.

A closing thought. Have these MDs considered offering their medical services to the black community gratis to help them overcome centuries of institutionalized racism? Of course not.

Am I a Despot or Not??

We have compiled a spreadsheet titled US State Governor Coronavirus Responsesto see who would appear to have the most despotic tendencies. We have broken down the categories by party affiliation, COVID19 infections, deaths and some choice quotes to express how some treat their minions. However there is one true standout governor that must be channeling former Albanian dictator Enver Hoxha for despotic tendencies.

Before we get accused of being partisan hacks, we note that in some states, governors have seemingly crossed their political ideologies in the opposite direction.

On balance, Republicans governors have been far more eager to open up their economies and remove restrictions. Arkansas, Iowa, Nebraska, North Dakota and South Dakota all resisted issuing stay-at-home orders, while Wyoming, Utah, Oklahoma and South Carolina have only issued such orders in specific parts of their states. All nine are Republican states. Most of these states encouraged “personal responsibility.

Infection rates in the aforementioned 9 rogue states stand at only 0.2886% and death rates are at 0.0096%. The relatively spread out nature of these states no doubt helped. Instead of the predictions that death rates would spiral out of control, 99.99% of the population in these states continue to function.

On the other hand, Democrat governors have had far harsher restrictions with respect to stay at home laws. Some may argue that the population densities of New York skew the figures.

Analysing the data, 178.7 million Americans live in the 24 (+1) Democrat-run states (districts). 149.5 million in 26 Republican-controlled states. COVID-19 infections in Democrat states is at 1.07 million with deaths at 70,652. Republican-controlled states have 456,000 infections and only 21,700 deaths. That means that Democrat states have a 0.5995% infection rate and 0.0395% death rate vs Republicans at 0.3049% and 0.0145% respectively, or effectively half. Stripping out NY for the Democrats would kick those figures to 0.4452% and 0.0262%. This would mean that infection rates were still 46% and death rates 80% higher relatively speaking.

The mainstream media wasted no time pointing out the negligence of GOP states and the shocking reckoning that would follow.

Partisan paper, The Kansas City Star, lambasted Missouri Gov. Mike Parsons (R) on April 1. They contrasted his failures to the successes of NY Gov Cuomo (D), Kansas Gov Kelly (D) & Illinois Gov Pritzker (D) by saying, “Only three other governors in the country have been as laissez-faire as Parson has in dealing with a crisis the likes of which no one alive today has ever seen — and one that will define the legacy of most every elected official now serving.” 6 weeks after this prophecy, 99.99% of Missourians haven’t succumbed to COVID-19 vs 99.994% in Kansas, 99.96% in Illinois and NY at 99.85%. Hardly a train wreck for Parsons!

Perhaps what is scarier is the “staged approach” methodology to removing restrictions which do not seem to be based on robust scientific evidence but copying thy neighbour’s homework. Take a look at some of the gradual loosening of Australia’s restrictions and it smacks of the same “one size fits all” approach in many states in the US. e.g. 10 people only in restaurants. Social distancing etc. Hardly inspiring to have such a lack of independent thinking. Especially when the coronavirus statistics to date are anything remotely as reported in the hysteric media.

Enough from us. Let’s get down to the approaches of these American states.

The most in your face comment during the coronavirus came from Indiana Republican Rep. Trey Hollingsworth.

It is policymakers’ decision to put on our big boy and big girl pants and say it is the lesser of these two evils…It is not zero evil, but it is the lesser of these two evils, and we intend to move forward that direction…We are going to have to look Americans in the eye and say, ‘We are making the best decisions for the most Americans possible,’ and the answer to that is to get Americans back to work, to get Americans back to their businesses

We wonder why data means nothing to Hawaiian Gov David Ige (D)?

Hawaii has a 0.0012% COVID death rate, one of the lowest in the country but Democrat Gov. David Ige pushed the stay at home order to the end of June. Furthermore, in the first month, the Honolulu Police Department handed out 4,600 warnings and 353 citations for breaches of the executive order.

What on earth was Tampa Bay, Florida Mayor Castor (D) thinking?

Tampa Bay, Florida Mayor Jane Castor (Democrat) released 160 prisoners from Hillsborough County Jail over concerns of COVID-19. One prisoner ended up killing a civilian the day after being released.

New Jersey Gov. Murphy (D) & Kentucky Gov. Beshear (D) showed little or no care about the constitution. 

In an interview with Fox NewsTucker Carlson, Democrat Gov. Philip Murphy (D) uttered the words “the Bill of Rights is above my pay grade.” He then went on to confess that he had not considered the effect of his restrictive executive orders on the Bill of Rights.U.S.

District Judge William Bertelsman ruled in May that Kentucky Gov. Andy Beshear’s (D) restrictions on out-of-state travel were unconstitutional.

We were surprised to see Colorado Gov. Polis (D) adopt seemingly Republican style freedoms to his constituents.

Democrat Gov. Jared Polis spoke of Coloradans taking “personal responsibility“. Instead of imposing draconian police state penalties like most of his Democrat colleagues he left it to local authorities to sort out.

Mayor Hicks (D) of Grants, New Mexico decided to take a potshot at his Democratic Governor accusing her of adopting Nazi Germany style tactics. 

Hicks criticised Governor Michelle Lujan Grisham’s Public Health Orders saying, “What the governor is doing is wrong” He allowed small business and golf courses to open before state police intervened and shut him down. He likened the New Mexico State Police behaving like the Gestapo.

It wasn’t just Democrats either. Republican primary candidate Daniel McCarthy took a swipe at Arizona Gov. Doug Ducey (R) saying, “No empathy! Dictator Ducey tacked on another 15 days of shutdowns, leaving Arizonans wondering why our own governor is so comfortable letting lives and businesses be crushed under the weight of our new regime.

Rhode Island Gov. Gina Raimondo (D) took the technology initiative much like Australia’s COVIDSafe app.

An app, called “Crush COVID RI” will be used by state health experts to conduct contact tracing and better understand the spread of the virus across the state.

South Dakota Gov. Kristi Noem (R) is the standout in terms of constituents openly pouring out love to her. 

Gov. Noem was presented with a surprise parade by her constituents thanking her for her considered actions in response to putting the responsibility back on them.

Texas Gov. Greg Abbott (R) slammed the judiciary for its pettiness. 

After a Texas hairdresser was jailed for not apologizing to the judge because she reopened her salon during lockdown, Gov Abbott said, “Throwing Texans in jail who have had their businesses shut down through no fault of their own is nonsensical, and I will not allow it to happen.” She was released.

Gov Cooper (D) of North Carolina copped a slap on the wrist from the judiciary

A federal judge blocked enforcement of a portion of Cooper’s order preventing churches from holding indoor services attended by more than 10 people.

Virginia’s Liberty University used the Bible to criticise Gov Ralph Northam’s (D) criticisms.

We invite Governor Northam (D) to come and see our compliance for himself, rather than making false accusations in press conferences from Richmond. As the Ninth Commandment says, “Thou shalt not bear false witness against thy neighbor.””

Democrat-controlled Wisconsin Chief Justice Patience Roggensack probably could have chosen her words more carefully. 

Roggensack was blasted for her remarks saying the uptick in coronavirus cases in Brown County was due to meatpacking employees testing positive and not “regular folks.” Take that you lowly educated Trump-voting deplorables.

There were many governors channelling Enver Hoxha for despotic tendencies. The reality is that more mayors were enjoying their newfound powers. 

We had LA Mayor Eric Garcetti (D) proudly champion he would have the water and electricity cut off for any businesses that didn’t comply with the lockdown. He also proudly banned sunbathing on dry sand, citing Australia as his benchmark.

We had Chicago Mayor Lori Lightfoot (D) justify having a haircut (considered non-essential to everyone else) because of her regular TV appearances despite berating Chicagoans like children with the threat of the heavy hand of the CPD to anyone who violated stay-at-home orders.

NY Mayor Bill De Blasio had his failed, “dob in your neighbour hotline“, his use of the gym (considered non-essential to everyone else) and the threat to fence off the beach at Coney Island were the peons to misbehave.

Washington DC Mayor Muriel Bowser (D) threatened to get compliance from her minions by “exercising the full force of our MPD, FEMS, DC Health and ABRA and the emergency authority to achieve it.

NY Governor Andrew Cuomo extended the stay at home directive called PAUSE—which stands for “Policies Assure Uniform Safety for Everyone” til June 13th. As most know, NY has had the highest incidences of infections and deaths throughout the country. The high density of NYC compounded the problem.

He ordered that infected patients be sent back to the nursing homes they came from which caused a huge spike in deaths. There are now reports that the data was fiddled to cover up the scandal. He has since stopped sending people back to nursing homes. He said, “Older people, vulnerable people, are going to die from this virus…That is going to happen. Despite whatever you do.

Michigan Gov. Gretchen Whitmer (D) pandered to racism and many other issues from the identity politics playbook to disguise the fact she is being sued by other state legislators for extending the executive orders without their approval. Protestors that descended on Lansing complained they were sick of being treated like small children. 99.5% of Michigan residents haven’t been infected with coronavirus. 99.95% haven’t died.

Alas, Gov. Katie Brown (D) of Oregon has shown herself to be the most despotic leader. Despite 99.92% of Oregonians not being infected and 99.997% not having succumbed to the virus she had no compunction ramming her rule of law. Oregon has less than 4% of the infection rate and 2% of the death rate of NY State yet Brown has kept an “indefinite” stay at home order in place.

An Oregon judge declared that the coronavirus restrictions enacted by Gov. Brown were “null and void” because her emergency orders were not approved by the state legislature after 28 days. The judge agreed with the lawsuit launched by 10 churches against the State of Oregon which argued that the emergency powers only lasted for a month and that to lengthen them required legislative approval which she did not seek!

Not to be outdone, Gov. Brown went to the State Supreme Court where she has a pending review. The Governor praised the Supreme Court action by saying, “There are no shortcuts for us to return to life as it was before this pandemic. Moving too quickly could return Oregon to the early days of this crisis when we braced ourselves for hospitals to be overfilled.

A bit of an odd statement when the number of people hospitalised in Oregon with COVID19 has fallen 63% in the last month to May 12th to 57 people.

Worst of all was her treatment of hair salon owner Lindsey Graham who was fined $14,000 for opening her store because it was a non-essential business. She was further threatened with the prospect of having her lease terminated as she operated out of a building owned by the State of Oregon. The final straw was the dispatch of child protection services to Graham’s home to interrogate her 6-yo stepson and check if bathroom sanitation (aka the cleanliness under the toilet seat) was up to standard.

No one questions the tragic loss of life from this pandemic. We just question the heavy-handed tactics of governors and mayors who have a twisted version of data which is completely at odds with reality. This is all about politics.

A tale: Today vs 600BC

dollar bomb

As a lover of ancient history, this story in ZeroHedge is an interesting parallel on the dangers of debt forgiveness today using the tale of releasing the commoners from debt slavery by Solon in 600BC. In short, everyone ends up paying the price.

We think the sensible solution is to let individual landlords negotiate their own deals. Let them live and die with the consequences of their actions. Undoubtedly every landlord has a unique position where a one-size-fits-all strategy won’t work.

Harley’s horrible huffing contains plenty of puffing

HDQ1US

When companies won’t give guidance, we must find ways to see where we were relative to history to get a picture of the future. Harley-Davidson (HOG) makes a good case study. Coronavirus may be one factor but the company has already produced results that have undercut the worst levels experienced during the GFC. We have long criticised HOG for fuzzy maths under the disastrous leadership of the recently ousted CEO Matt Levatich.

While there are strictly no direct apples for apples comparisons on the timing of coronavirus and the GFC (the latter requiring no lockdown), we note the weakness in Q1 2020 unit sales in the chart above.

This is what the trend of Q2 looks like.

HDUSQ2

If we assumed a similar slowdown for April and May then theoretically the company would comfortably breach the Q2 2009 unit sales level of 58,179 which is only 18.6% below the Q2 2019 level. Q1 2020 global sales fell by 17.7%, even though the company made a very misleading statement which we’ll get to in a moment.

One thing that struck us was the steadily rising value of quarterly inventory as a percentage of quarterly non-finance revenues since Q1 2014. While the former value is a balance sheet item and the latter P&L, Q1 is generally a period where new models are rolled out ahead of the busiest Q2 & Q3 seasons to ensure the distribution network can move metal.

HDQ1Inv

Shipments reflect this. The inventory metric drops off into Q2 although exhibits a similar type of trend to Q1. Given Q2 2009 was the beginning of the tough times post-GFC, will we see the high watermark breached or will the slowdown in production offset it? How badly are revenues affected such even flat inventories lead to a deterioration of this measure?

In Q4 2019, inventories to motorcycle revenues surged to 69.1%.

We note that Q1 2020 shipments equated to an inventory of 12,534 units (+29.0%YoY).

HDq2Inv

Here is where it gets interesting. By HOG’s own admission in the quarterly investor presentation pack (p.7), it noted that Q1 2020 US retail sales were on target to be one of ‘the strongest quarters in the last 6 years through to mid-March‘, until COVID. 6 years ago US Q1 unit sales hit 35,730 units. US sales in Q1 2020 ended up at 23,732.

By deduction,

In Q1 2014, over 90 days HOG shifted on average 397 bikes per day. (35,730/90 = 397)

In Q1 2020, over the 74 days to mid-March, HOG was moving on average 321 bikes per day. (23,732/74 = 320.7027).

If we assumed that HOG was to hit that magic target over the 16 days stolen by COVID19, it would have had to punch out 750 bikes a day. (11,998/16 = 749.875).

We would love to see the order book for these magical beasts that were waiting for a home…it would seem the sales and marketing department cherry-picked one strong day and multiplied it over the quarter to create such a questionable statement.

Here is a chart of motorcycle related revenue for Q1 since 2008. No wonder the shares have underperformed since 2014, even with a small fortune squandered on share buybacks.

HSQ1rev

The Q2 revenue book doesn’t look too flash either if April is wiped out. At present 50% of dealers are shut since late March. Is the market prepared for a sub Q2 2009 print? The share price has rebounded strongly after the Q1 results even though there is no guidance to speak of.

HDq2Rev

But it gets worse. So poor has the Q3 season become for HOG that its unit sales have missed the Q3 2009 post-GFC low for seven out of the last 10 years. Are we to believe if the world is out of lockdown by Q3 that there will be a miraculous surge in new bike sales when unemployment is likely to remain at troubling levels potentially above that of GFC?

HDq3US

HOG is a great example of a divine franchise. It wasted far too much money on share buybacks (now suspended) and sits with a credit rating just two notches above junk.

The annualised Q1 2020 loss experience for the finance business sit at 10-year highs even before it has been thumped by the coming turndown. People buy HOGs as a hobby, not transport. A purely discretionary purchase. We imagine that restoring household balance sheets will take precedence to stumping up serious coin for a Harley cruiser.

Sadly Levatich and his 2027 vision have not been consigned to the dustbin of history which is the only logical filing cabinet for it. Completely unrealistic, devoid of reality and totally in denial of the shifting sands in the global motorbike market.

The new “Rewire Plan” (p.5) while sketchy on detail (as it would with an interim CEO) is a reheat of Levatich’s plan. Sad.

In our view, the entire motorcycle industry needs a strong HOG. New management is a good start but it won’t help if they intend to convince investors that they were on course to shoot Q1 to its best level in 6 years with questionable math. How quickly can inventory be pared? What models will revive its fortunes?

HOG needs to get in touch with its core customer base the way Willie Davidson did after the dark days of AMF ownership. It needs to build products which hark back to its former glory rather answer questions in segments that no one is asking it to fill.

Indian, its rival of 100 years ago is killing it with the FTR1200. Indian’s parent company, Polaris Industries, posted a small single-digit increase for motorcycles in Q1 2020. Enough excuses HOG. You are running out of time and your retained earnings are 1/5th what they were 5 years ago!

Why is the market giving it the benefit of the doubt when the worst is still ahead?

HOG

Harley needs a crisis manager. Will the incoming CEO possess those skills?

Sheepishly downloading the COVIDSafe app is a warning for all of us

NSA raises significant concern to Government abattoir proposal ...

We have no problem with people individually choosing to sign up to the COVIDSafe application launched yesterday. After all, it is voluntary and we believe in personal freedom. However, we are perplexed why so many people feel compelled to post their newfound compliance on social media feeds. It is this blind obedience that worries us.

It is hard to see such self-promotion on social media as anything more than the same virtue-signalling mindset of those who drape their social media avatars with the flag of the country where innocent people were slain by terrorists. Comments such as “I’m doing my bit” reign supreme. Why do people so sheepishly comply to sign up to this when the data is seriously unconvincing to warrant its introduction? Should we report our friends who haven’t publicly declared their status? Admitting one has signed up to COVIDSafe is borderline accepting to become a slave.

The most important point people need to consider is that there is absolutely zero downside for the government during and after this crisis. Remember that number – ZERO. If the economy goes into a prolonged recession or depression, our politicians can simply play the “we did it to save lives” card and tell us it was all for our own good. They can claim they couldn’t have done anything else. Unfortunately, we bear all the risk no matter what the outcome. That is a bad equation in any language. Why would anyone willingly sign up to it?

Indeed, saving lives should be congratulated, not censured. Still, at what point will we realise that the draconian measures put in place are leaving a disproportionate drag on the economy? As we wrote yesterday, if we take the JobKeeper support package alone, it presently costs $1.5 billion per death. Or $19.5 million per infection. The $130bn JobKeeper program is almost as much as the annual federal expenditure on education, healthcare and defence spend combined, three of the four largest budget items. Is this sustainable? If we stay in lockdown beyond the date of the package, this universal income will undoubtedly be extended.

There is a snowball’s chance in hell that we will have a V-shaped recovery. Our central bank might send us comforting lies to maintain the illusion that they are competent but it simply won’t happen.

Our authorities have suggested that the domestic economy comprises 75% of GDP which will provide a great cushion but on what planet do they believe that a crushed export sector which employs so many can be airbrushed to give us a V? Double-digit unemployment, at levels double or treble the present figures will all but guarantee a slower recovery. With household debt exceeding 180% of GDP, any future spending will be directed at rebuilding the balance sheet, not consumption. We’ll be lucky to get an L!!

There will be no normality after COVID19 abates. So much of our domestic future will be driven by the rest of the world’s approach to their own economies. Our neighbours will undoubtedly pursue more nationalist policies which prioritise domestic production. They will also need to contend with the likely aggressive reset of their own relative risk weighting, currency and fiscal positions. For anyone to believe that the magic pixie dust sprinkled by Canberra will avoid any calamity is dangerously naive.

Australia faces a $1 trillion deficit. Await the raft of new taxes on housing, inheritance and income to pay for it. We will absolutely hate what is coming. The sad thing is that we could have taken the pain over a decade ago yet we put short term expediency ahead of rational principle and now await the consequences. We are reaping what we sowed.

Much of the reasoning given by Aussies to sign up has been this belief that it will accelerate the government’s ability to reopen the economy sooner. If the government requires this sort of overlaying safeguard on top of the 99.98% of Australians that don’t knowingly carry the coronavirus or the 99.9997% who haven’t died from it, we should worry about our lawmakers’ ability to manage risk. Seriously.

Why are governments using future hard dates to consider reopening the economy? If today is the best day to do so, why wait till May 30th? Our own experience is that people are broadly respecting the social distancing guidelines. Sure, some might hang out in a park to break the monotony of staying indoors, but we are falling for the taglines from the government to #StayHome a bit too literally. The government should be rebuilding confidence. It isn’t. This app is unlikely to do much given the law of already minuscule numbers. It is all a feel-good measure.

With more than one million COVIDSafe app downloads in the first hour, many have proven that we are willing to conform to guidelines at a moments notice without considering the underlying facts. We saw this during the bushfire season. People blindly donated millions to the rural fire services when we proved their administrative skills were so severely lacking that these monies would unlikely be spent wisely.

In closing, many citizens have sent a wonderful signal to the government that they can easily strip more freedoms away by using panic as a tool to achieve it. The longer the economy is left to rot, the easier it will be to drown obedient plebs in even more regulations and restrictions because we failed to stand up and question the methodology. We will continue to do so. After all, former US President Ronald Reagan once said,

“The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”

Unemployment map by US state

Pew Research has put together an interactive map showing the level of unemployment in the US by state. It is eye opening especially as we pointed out that 99.8% or people aren’t infected and 99.99% of people haven’t died from coronavirus in the US.

Michigan currently has a quarter of the workforce unemployed. We can understand why Governor Gretchen Whitmer has 1.2 million angry natives.

Pennsylvania also has 25% unemployment to deal with. Relative infection rates in the state are marginally higher than the national average but death rates are 30% lower.

Nevada has 23% unemployment. Should we be surprised when the Mayor of Las Vegas wants to open the economy up? Nevada has a COVID 19 death rate of 1/3rd the national average.

California has 18% unemployment or an estimated 3.6 million. Once again, quelle surprise that Governor Newsom is copping flak.

New York, the epicenter of infections/deaths has 16% unemployment or 1.5 million.

On the other end of the spectrum, South Dakota is faring best at 8% unemployment. It has infection rates around 25% lower than the national average but death rates 1/10th the national average.

Flipping the data the other way, Montana has a death rate 18x less than the national average but suffers from 17% jobless.

Calculated risk taking is a must to avoid further economic damage. America’s culture is founded on risk taking not bailouts. The natives are restless and demanding their governors wake up. The risk/reward balance has tipped.

17yo truant should go back to school to learn economics

CLies IT

It has been refreshing hardly seeing our 17-yo truant in chief, Greta Thunberg being exploited by her climate change doomsayers during this coronacrisis. Unfortunately, she caved to the attention deficit by feeling compelled to say she had contracted COVID19 despite not being tested for it. Not atypical of social media-obsessed kids these days.

Alas, the 50th Anniversary of Earth Day came for her to come out of hibernation and tell us,

Whether we like it or not, the world has changed. It looks completely different now from how it did a few months ago. It may never look the same again. We have to choose a new way forward

Indeed it has changed and will change. However, we believe that the coming economic depression won’t lend itself kindly to the untested prospect of a “green jobs” boom. This idea that we can sit back and flood the world with renewables to save us all. It is unworkable in practice. Why?

Let’s take the CSIRO, Australia’s chief government science body.

Why hasn’t Greta made a b-line to reference our CSIRO’s energy transition costings for Australia which exceed $1 trillion with a “T” out to 2050 (p.135)? Note this report isn’t a net-zero study – just lower emissions. So by that logic, net-zero will cost even more. c.100% of GDP. Just as tax revenues are about to go through the floor.

You will feel even warm and fuzzier after reading the next sentence.

CSIRO assures us that “these costs do not include the full integration costs of renewables, but that these costs are expected to be significantly less than $175 billion.” Who cares about billions in a world of trillions? Significantly less?

Why aren’t politicians and Greta looking at the world’s biggest renewable crash test dummy?

As we wrote, “Germany’s Federal Court of Auditors was even more forthright about the failures of renewables…The shift to renewables, the federal auditors say, has cost at least 160 billion euros in the last five years. Meanwhile, the expenditures “are in extreme disproportion to the results…”

Note 330,000 German households are in a state of energy poverty and have had their electricity provider cut them off. That is what happens when projected electricity prices at the time of the hysteria end up double that of the initial costings. Oops.

Yet, how eager are supposed activists willing to sign up to the green movement in practice?

We have a home-grown movement to reference commitment to climate change. 98.9% of households in the electorate of Warringah, that supposedly voted Zali Steggall OAM MP in on a climate change ticket, still haven’t signed up to her ‘Roadmap to Zero’ plans. Given their high powered V8 SUVs are getting one month to the gallon these devout climate change alarmists don’t seem that interested.

What about those on the front lines of the climate crisis? Surely they know best?

When we studied the language within the last 10 years of annual reports of the state fire services around Australia, why was ‘climate change‘, the words that 29 former fire chiefs told us is such a big factor, barely mentioned, if at all? Take Fire & Rescue NSW’s only mention of ‘climate change‘ on p.81 of its 2018/19 Annual Report,

Where practicable, FRNSW crews were encouraged to turn off all non-essential lights on 30 March 2019 from 8:30pm until 9:30pm, joining millions of people worldwide in showing their commitment to tackling climate change and inspiring all generations to support environmental initiatives and sustainable climate policy.

That will do it!

Then what of green jobs?

We keep on hearing about a huge surge in “green jobs”. The ABS reported that after 5 years of straight declines, rooftop solar has been the driver of the rise in the past two years.

Annual direct FTE employment in renewable energy activities in Australia was estimated at 17,740 jobs in 2017-18, an increase of 3,890 jobs in FTE employment (28%) from the previous year (2016-17) and represents the highest level of FTE employment in renewable energy activities since 2011-12...driven by an increase in construction activity for large scale solar photovoltaic (PV) systems (1,950 additional FTE jobs) and roof-top solar PV (1,720 additional FTE jobs). Together, these two renewable energy types accounted for 94% of this increase in FTE employment in renewable energy.

The ABS notes there are 12,500,000 Aussies employed. Therefore full-time green jobs make up 0.14% of the total. Construction makes up 1.056m jobs. Manufacturing employs 770,000. Combined, these sectors make up 15% of all employed.

So our two biggest sectors employ 107x more than the peak in renewables FT employment.

In short

While Democrat Congresswoman Alexandra Ocasio-Cortez brainlessly tweeted you love to see it when referring to the recent trend in negative oil prices, restless natives around the globe will not tolerate governments that pursue green policies that prolong their unemployment pain. They want jobs, not spoon-fed ideological alarmism as their saviour.

This global lockdown is doing one important thing – waking us up to unpleasant truths. Comforting lies surrounding renewables investment will have no place other than the dining tables of crony capitalists who aren’t dealing with lived experience of scraping by without work. That is not to say we won’t get governments trying to prescribing a “reset” but it will be a one-way ticket to being kicked out of office when the results don’t live up to the promises.

Never let a good crisis go to waste – Part 2

Michigan Conservatives Plan To Protest April 15th ...

Small businesses employ 50% of all Americans. The Small Business Administration (SBA) distributed 1.4 million loans worth $350 billion under the Paycheck Protection Program (PPP). It has now run dry. Small businesses are seeking these loans which stipulate the funds must be directed to pay employees coping with coronavirus. Typically, House Speaker Pelosi and Senate Minority Leader Chuck Schumer are trying to stuff unrelated partisan pork into the bill in order to back it.

To sustain small businesses, which employ half the country, the SBA is requesting another $250 billion. Yet Pelosi and Schumer want to use the crisis to ram in more unrelated regulations to the PPP with:

  1. significantly increased funding for disaster grants and loans,
  2. additional support for the food-stamp program,
  3. adequate funding for nationwide virus testing and personal protective equipment,
  4. the collection and publication of demographic data so that government can accurately determine the level of impact on under-served communities and communities of colour.

While all of these items may have a place in a separate debate, surely helping half of the country’s employment providers stay alive is the bigger issue. Never mind Pelosi was happy to parade herself on late-night TV in front of her $24,000 refrigerators while the bill is delayed. We don’t begrudge anyone owning nice things, but the optics of a freezer full of $13 ice cream punnets is hardly reflective of the crisis.

It wasn’t long ago that her party wanted to stuff a laundry list of ridiculous unrelated items to the $2.2 trillion emergency stimulus last month including airline emissions standards, corporate board diversity and wind/solar subsidies.

Now that 22 million Americans are out of work, should we be surprised that 3,000 people were protesting in Lansing, Michigan demanding the economy be reopened? Or the 100s of people in Raleigh, North Carolina.

Do they have a point?

Here is the latest data outlining infections as a percentage of the state populations. The average infection rate across the US is 0.2044% of the population. That means that 99.8% of people haven’t caught it. While social distancing is proving effective, one has to wonder whether the economy can be reopened quicker than the lid on Nancy Pelosi’s ice cream.

Infections

Switching to COVID 19 deaths, the national average is 0.0101% of the population. New York, which we lambasted for the insane advice handed out by its Health Commissioner Oxiris Barbot has 7.6x the national average. Wyoming, while less densely populated than NYC, has 0.03x the national average.

Deaths

Michigan has a death rate of 0.02%, twice the national average. Its infection count is 0.293% or 50% higher than the national average. North Carolina might have a bigger argument to make. It has a 0.0015% death rate (0.1x the national average) and infections at 0.0542% (0.25x the national average) of the state’s citizens. Why aren’t governors looking to reopen their economies sooner, which is their decision, not Trump’s, to make?

These people rightly want the governors to start opening the economy so they can work. Jobs, jobs, jobs. Never cross an American and their belief in “rights”. We think this once again plays straight to Trump’s reelection. People are seriously frustrated and when they join the unemployment queue they are through with partisan politics.

FNF Media has always thought protests would eventually happen. The risks of contracting coronavirus versus the reward of having a job and feeding a family are now front and centre. They would undoubtedly settle for social distancing guidelines while working instead of remaining in lockdown.

We added Australia’s own state/territory data in those previous charts (yellow) which shows just how minuscule our infections and death rates are. We really need to be looking at easing restrictions sooner, rather than later. These statistics should make us all think.

Why insolvency is the best option for Virgin

Virgin Australia | Climate Active

Narrow Road Capital’s Jonathan Rochford believes that insolvency is the best option for Virgin Australia. The common misconception with insolvency is that most people think that means termination. Not so. Insolvency allows companies to take a long hard look at the business and restructure in ways to ensure the rebirth makes for a healthier business on the other side. The most important point to make is that the sooner the pain is taken, the better the ultimate outcomes.

We recall the last time American Airlines went into Chapter 11 bankruptcy, it ordered 900 brand new Airbus & Boeing aircraft the VERY NEXT DAY. Why? Because the leasing companies knew that helping the ailing airline by restructuring its fleet with more efficient aircraft would facilitate a quicker revival. Insolvency is all about forcing hard questions to be asked and executed upon, not waiting for endless lifebuoys to be tossed when all options haven’t been properly assessed.

Over to Jonathan:

“Virgin Australia has been poorly managed and poorly capitalised for years. Whilst the Coronavirus lock-down is the most recent cause of its woes it is merely the latest in a long list of excuses. Qantas had its turn with the begging bowl in early 2014, I wrote then that the Australian Government should deny it a bailout as it wasn’t necessary. A bailout would have gotten in the way of Qantas fixing its problems, which it ultimately did without government help. The situation is somewhat different for Virgin, it is most likely to go into administration without a bailout. However, insolvency is the best pathway for Virgin as it is the best opportunity to fix the longstanding problems.

The Problems with Virgin

Virgin’s structural problems are the result of years of mismanagement. It is trapped between being much more expensive than Jetstar and with a lesser offering than Qantas, although routinely being almost as expensive as Qantas. As a result, Virgin has consistently struggled to attract the high paying customers and load factors that would take it from being a loss maker to a strong competitor.

Virgin’s ongoing financial problems are no secret. After an IPO at $2.25 in 2003, its shares have rarely traded above $0.50 in the last decade. The company has pursued growth over profits adding marginal routes that weighed down the good business it had servicing the capital city routes. This failed strategy has left the airline overloaded with aircraft. The sale and subsequent repurchase of part of the frequent flyer business has left it loaded with debt, with most of the fleet and the frequent flyer business locked up by secured creditors.

The Alternatives to Insolvency

Virgin is now pursuing a dual pathway to attempt to remain solvent, searching for fresh equity whilst at the same time negotiating with lenders for a debt restructuring. Whilst either of these, or both in combination would give the business more time, both are likely to be fruitless endeavours. Virgin needs to go through a deep restructuring of its entire business including;

-Handing back/selling off aircraft it will not need in the medium term

-Making redundant staff it cannot put to work in the medium term

-Negotiating with suppliers for cheaper goods and services

-Reducing office space and corporate overheads

All of this needs to be done at the same time as the business is burning through cash, estimated to be at a rate of $5-7 million per day. Without most of the fleet being back in the air and carry near capacity loads, a situation extremely unlikely in 2020, Virgin will simply run out of cash. Even if all the unsecured debt was converted to equity it would make little difference to the cost base. The only feasible option to right size the business is voluntary administration.

The Earlier the Better for Insolvency

Given Virgin has limited cash left and is rapidly burning through it, an insolvency in a matter of weeks offers the best prospects of preserving a broad business. The less cash that is left when insolvency begins, the more likely it is that Virgin will follow in the footsteps of Ansett and be sold off for scrap. With a decent starting cash balance and in the current economic environment administrators would have a strong hand to:

-Cut a new deal on the greatly reduced number of aircraft that will be needed; aircraft lenders and lessors will be reluctant to take back aircraft given the current glut and economic outlook. [note FNF Media mentioned the history of actions by leasing companies here]

-Reduce staff numbers and cut staff costs back to levels in line with a low-cost carrier; remaining staff will be glad to still have a job.

-Negotiate with airports for reduced charges; the alternative for airports is being left with a dominant customer that is already throwing its weight around.

-Slash debt levels and reduce the balance of unsecured creditors

-Hand back office space and eliminate unnecessary corporate overheads

A leaner Virgin, with a lower cost base and greatly reduced liability position, has good prospects of attracting new owners and winning back customers. Only an insolvency can deliver this outcome. The alternatives of fresh equity, a debt for equity swap or a government bailout, if put in place without insolvency, would all delay and obstruct the necessary restructuring and increase the risk that Virgin ultimately ends up like Ansett.”

The folly of endorsements

The last time we found Elizabeth ‘Fauxcahontas’ Warren talking of endorsements it was a group of hateful feminists – 3,400 of them to be precise – who threw their weight behind her.

Supposedly the backbone of democracy she spoke of came from the likes of the BlackWomxnFor (BWF) movement, which states on its own website,

“THE SPACES CREATED BY BLACK WOMXN FOR ARE INTENTIONALLY INCLUSIVE OF ALL BLACK FOLKS THAT DO NOT CLAIM MALE IDENTITY.

THIS INCLUDES BLACK TRANS & CIS WOMEN, GENDER NON-CONFORMING FOLKS AND OTHERS.”

Yes, inclusivity must have exclusion at its heart. Liberal logic at its finest.

Now that Biden has Warren’s support, will this old white male who challenges voters to tests of toxic masculinity get the support of those that supported her?

Will Biden be awaiting Julian Castro’s endorsement? Recall the senator stated he wanted to guarantee that trans females would have full access to abortions during the Democratic Party primaries. When Castro dropped out he threw his weight behind Warren even though his supporters backed Biden. So much for knowing the mood of one’s following.

At last, Obama has finally got around to backing his former VP. How eerily silent the former president was when allegations about his creepy nature around pre-pubescent girls came to light.  Despite Obama awarding  Biden with a Presidential Medal of Freedom and saying he was the best VP in American history, not one word had parsed his lips in terms of an endorsement.

In what CNN hopes is fake news, the cable network noted that more than 200 former staffers that worked in former President Barack Obama’s campaigns and administration signed a letter endorsing Elizabeth Warren’s 2020 presidential run.

Did Obama realise that Biden said at the time of his staffer’s progressive support for Warren, “I don’t need an Obama endorsement.

Biden said he wanted to put Obama on the SCOTUS bench as an election campaign manifesto, if he’d take it.

Obama’s administration is often credited with “zero scandals” recall his DoJ was so crooked a Texas District Court judge, Andrew S. Hanen, ordered its lawyers to undergo 5 years of compulsory ethics training in 2016 for deliberately misleading the court over illegal immigration. He also ordered AG Loretta Lynch to file a comprehensive plan within 60 days on how to “prevent this unethical conduct from ever happening again.”

Will Biden ask for Obama’s campaign team for help? They said at the time,

We are a group that really uniquely knows that electability is self-determining and that oftentimes it’s the people with the boldest vision and the most unlikely candidacies early on who can really shift the field…Sen. Warren really has the zest and the grit and the gumption and the audacity that we loved that President Obama really embodied.

Just how much value can one put in an endorsement? Because the endorsers of his endorser originally endorsed someone else.

Our view is this election won’t be based solely on the characters per se. There is so much material on both candidates when it comes to gaffes. Lived experience is what is at play here. Telling people they’ve never had it so good when they are struggling doesn’t win votes, which is why Trump won in 2016. This was our thinking at that time. Forget massaged data emanating from the White House marketing departments. It only pushes people the other way. 

The 2020 election will be a test of Americans resolve to be able to live out the American dream. If they vote in Biden and go back to the very administrations of the past that failed to deliver for decades we’ll know they’ve thrown in the towel. If the Bottom 50% believe that the positive change in fortunes under Trump – which we pointed out in the SOTU – before COVID19 shut down the economy, he is still very much in the race. The media will undoubtedly try and play the race card against Trump’s anti-China rhetoric, but never come between an American and patriotism in a crisis.