Wednesday, December 13, 2017

FCC and Net-Neutrality

"Lies, lies, you're telling
 Me that you'll be true
 Tears, tears, I she'd
 A million tears for you

 Someday, I'm gonna be happy
 But I don't know when just now
 Lies, lies, breaking my heart"
- Knickerbockers

The one hit wonder from the vaults of rock should get a second release, especially in any reference to our government and in this article, its so-called independent agency, the FCC.
 Net neutrality 
The agency like so many other ideas like the EPA and many others, gets contaminated by our election process. When one party does not like the rules and regulations that are enacted, they put their people on the board to get their views back in favor. This happens when our government goes back-and-forth from one of the two political parties that control our government. In fact, the FCC was a New Deal idea. FDR knew the system turned corrupt from the original Federal Radio Commission. At the time, the FCC also received control over wire communications from the Interstate Commerce Commission. It got its funding from the fees it imposed. This was all good until television appeared.
Back to politics 
New party, new appointments. By the way, I think that they are both corrupt. Basically, this kills the reason for any agency in the first place. These so-called watchdogs should be dominated by independent focused individuals and not party spoils. This is why I'm against the Supreme Court. It is nothing more than a power struggle to control our society by the different views of the two parties. In my unpublished work, I address this issue with a democratic solution. In my view they are both out of touch with our people and their views, to which they label, "Populism."
Anyway, the FCC's new leader is a Republican, Ajit Pai. He doesn't seek or care about public input or the poled data that says 81% of us favor net neutrality. He is planning to dismantle "net-neutrality." The agency is acting just like my complaint. The Republicans are sellouts to big business. They are picking the winners and losers. Among the real losers are us, the consumers.
For those that don't understand the issue, it is allowing all networks in all locations equal access on a local line. The whole concept goes back over 100 years. The first battle was among the many new phone companies after the invention of the telephone. Cities were blighted by numerous phone lines and no company would allow a competitor access to their lines. The compromise ended with AT&T allowing competitors access or sharing of wire lines in exchange for control of long distance communication. This is how AT&T gained a monopoly on long distance calls. This ended with the breakup of Ma Bell. This gave way to our modern cell phone service. However, big business only looks out for itself. It doesn't care about you and me and what is good and fair for America. Comcast became the focal point in internet and cable with the issue of equal access. They placed any competitor using their lines to the rear. As a result customers using service other than Comcast, received very slow and poor service. Comcast was looking for a monopoly on their lines. The battle resulted in a return to equal sharing of lines or net-neutrality. I believe there is some truth to a companies position on their lines. They spent the money to build and service these lines. Now, their competitors gains access with no cost. To me, the fair solution is instead of giving the FCC fees, that money should be returned to the company that built the line. This will give equal money to every company that invested with fees on their local lines. However, nobody seeks or seems to resolve issues fairly.
We look around today and we see less diversity of opinion or no opinion as local newspapers go the way of the Dodo bird. Vidme shut down its video service because it cannot compete with Facebook or Google's of the world. How about DuMont? I bet that you never heard of them? They were one of the first commercial television pioneers. They began in 1946. They were killed by FCC regulations and no equal access of wire lines. AT&T ripped them off and they died. People forget or don't know that in the early days of television, multiple broadcasters used the same television station at different times of the day. It took years to resolve. Net-neutrality allowed television to grow. How soon they forget.
1996 Communication Act
This act loosened restrictions. The FCC said no prices would rise due to it. Companies would play fair even if now, they could own multiple stations in a local market. Guess what? See song, either above or below.
We have seen this time-after-time. Companies will seek for themselves and screw the public. Prepare for higher prices and if you have internet service by a company that is not the local yokel, poor service and higher fees.

"Lies, lies, I can't believe
 A word you say.

 Lies, lies, you're
 Breaking my heart."

Wednesday, December 6, 2017

Latest: Bit Coin and Space X

There are complaints going around that from 30% to 35% of all Bit Coins are lost and could be gone forever. It seems that passwords get lost and owners lose out. In dollars, we are talking about $20 billion. Of course, there are internet services that will attempt to retrieve your coins, but at a price. In other news the largest commodity exchange, the CME will begin trading futures in Bit Coin on December 18th. The margin is expected to be 30% to 35%. You know this will cause a spike, but two obstacles are looming. The IRS says Bit Coin is property and that is taxable. In addition, the government wants info on all accounts of $20K and a record of transactions. Are taxes coming? You betcha!
The other enemy of the coin will be the banks. They will hammer it at some point because it is a threat to them. The price action on the coin set a new record on Monday at over $11,500. Trading will begin next Monday and that means there will be not only buyers, but sellers! Buyer beware!
Space X 
We now have an idea what it is valued. Recently, Musk raised another $100 million which puts the estimate to $21 billion. Musk plans to orbit 4,425 high speed internet satellites which will provide internet access anywhere in the world even on an ocean liner...for a price.
Space X has almost a monopoly on reusable rockets. Musk had the foresight and belief in the concept. He has developed his own engines which are based on Russian technology. They give 20% more thrust. This is valuable since it cost $10,000 a pound to fly. This is a huge saving and Musk believes he can lower the cost to $500 a pound. This gives Space X a big advantage over NASA.
In addition, Musk uses new metals which are stronger and lighter. Again, he borrows from Russian research in metallurgy.
We or our government never acknowledges the valuable contributions to space by the Russians. This is very sad and our post war history with them only has a few bright moments. The best is when JFK got together with them to reduce nuclear weapons. Our military complex hated him for that which shows where their heads are directed. It would be nice to show the Russians some love and respect and then, maybe we could Give Peace A Chance.

Wednesday, November 29, 2017

Taxes: Seen, Unseen, and Tax Plan

Mark Twain had it right when he said, "There are two things in life for certain, taxes and death."
Seen Taxes 
In the USA there is a sales tax which is left to each state for revenue. The federal government has an income tax for everyone and then, each has enacted other taxes. There is for example under state's, real estate taxes. Uncle Sam collects gasoline taxes as well as many other examples.
In the world and most notably in Europe, there is the value tax. This is a state government tax on any purchase. It is added to the purchase price. The tax is high, but the money is used for many things like government health care. Some critics claim this gives foreign nations an advantage over US producers. Then, of course there is the question of taxes on imports, exports or both. At the moment, one big aspect of Trump's tax plan concerns profits being bought back to the homeland. Corporate taxes are very high and I agree with Trump that in order to get more manufacturing and quality jobs in the US, we need to lower this tax rate. This is the best and only good aspect of the plan. The rest goes to the haves and haves more.
Unseen Tax 
Inflation is the biggest unseen tax. It is the root disease which kills the middle class and causes the poor to fall to poverty. The Federal Reserve has destroyed the value of the dollar. The decay acts slowly like a cavity in a tooth, but the results are inevitable. Government controls what is classified as inflation, and that is why food, energy and shelter, all the things that we need and use every day, is not included. The system is rigged!
The two sections on taxes, seen and unseen, will also play an important role in any final tax plan overhaul bill, if there is one, and there will be one. The following looks like a lock to be included in the final tax plan bill.
Hidden Tax 
It gets that moniker because it was taken for granted when applied to the selling of stock shares. It you purchased shares of a company over time, you could decide which ones you would like to sell and in any order that you chose. Now, you must sell your first purchase, first. It is called, "First in, first out." This applies to all except mutual funds whose lobbyist got them exempted.
Tuition Waivers
Some schools waive tuition fees and other bills like boarding. These benefits mainly go to students who offer to teach or help in research. Now, they will be taxed as if they were income even though the students didn't receive any income.
Some people collect art, old cars or similar. Sometimes, they make a trade. This use to be tax free if the items were of equal value. I sell a piece of art and I buy another in a similar price range. This was considered a wash out. It is called, "1031 Swap." This happens with airplanes, tractors and so on. No longer! However, due to state pressure, Congress will continue to allow this practice in real estate. Homeowners can still sell their home and buy another of equal value or higher without a tax penalty. There is still a battle over the mortgage deduction on interest. There are many older states with high state taxes and this too, is a point of contention. There will probably be a limit on the deduction. Time will tell, but this could cause a big exit from the Northeast and Midwest to the lower state taxes of the South. This has helped Florida grow to the fourth largest state by population. It also has no state income tax.
One other aspect of taxes that has serious repercussions is the high cost of home ownership and high rents across the nation. It is not addressed because it effects the poor and this is the biggest problem of our government and its so-called leaders. They forget the ordinary citizen. Due to excessive rental costs and high real estate prices, the poor have turned to live in RVs. At one time, the poor moved into trailer parks, but state taxes, environmental rules and zoning have pushed them out of cities. At one point, people lived in their cars. Now, they buy RVs.
In Cupertino, Ca, home of Apple, it is 74%. In Mountain View, Ca, it is 51%. Many of these people live on the street in RVs, to which the rich don't want them in their neighborhood. They line up to park on street after street every night. This is a sad truth of modern America. Poverty in America is well over 20%. Instead of giving more to the have mores, it is time to takeaway any of their tax benefits and give more to state governments so that they can build more affordable housing. Is it too much to ask for decent four walls and a bath? Thank you, George Bailey.  

Wednesday, November 22, 2017

I: Anti-Apple : World: Anti-Oil

Finally, there is enough info to break down the cost of an Apple I-Phone. It is as I always suspected. Apple could have switched production back to the US, but due to greed, it didn't. Instead of providing wealth here in the US, they gave their innovation to offshore aliens. For a long time, we all knew the cost, however marketing kept a cloud on value. There was the two year subscription deals along with other come-ons. Today, you can purchase one on sale for $800. Dear reader, Apple only spends $370 to get it into your local store. They get a great markup as well as the retail outlet. Did you ever consider that the markup is so large that it borders gouging? To put this into perspective consider your local gas station. The owner works on a very small markup.  Usually, he earns just .10 cent a gallon. He has to sell many gallons to make a living. If all gas stations used the Apple formula to price gasoline and get the "Apple" margin, the price of gas would more than double. People would scream "GOUGING!" No one screams at Apple, but me. They suck!
One more tidbit on Apple. They stated that their new home speaker would not be ready for Christmas. They said it needed to be tweaked. I guess when you build it over 7,000 miles from the US, you get echoes in the system.
Sovereign Wealth 
The world's largest wealth fund is in Sweden. It is worth over $!.7trillion. It just stated that their fund will no longer support oil or the companies that cater to it. This is huge. The firm holds 1.4% in every oil equity, oil fund, oil bonds and periphery companies in the world. They reported to their government and they received approval to begin to dismantle their interests in this area of energy. They did not commit to public knowledge as to where they will move their money, but speculation runs to include solar and wind power. If you were not aware Sweden is a large oil producer with many firms that assist drilling, notably offshore. They also have large transportation firms that specialize in carrying oil on water to ports all over the world. This is a big dent to OPEC. The announcement sent US firms like Exxon and Chevron down. The anti-oil meme also got a blow from its biggest supplier. Saudi Arabia's new crown prince, stated that the kingdom needs to diversify away from oil. He offered some ideas, however this puts a dent into Saudi Arabia's prior plan for an IPO for their state oil. The nation originally estimated that the issue would result in a cool $2 trillion for its coffer's. Now, it will probably take in around one trillion and that is still a lot of dinero.
When it rains, it pours
The bad news keeps coming at oil. The Keystone Pipeline reported an oil spill of 200,000 gallons. Didn't they just swear that their new pipeline would never pollute? They got our government to arrest our Native Americans who were protesting the pipeline. They knew better, but the political shills run the government. On Monday, Nebraska regulators gave approval to extend the pipeline through Nebraska. That is one sad story except it doesn't end. The danger could "leak" in many locations from the north border to the gulf coast.
joins the anti-oil movement by announcing on Friday that they will purchase 15 new electric Tesla trucks. Walmart uses the most over-the-road haulers and this shift is big, very big. Every car maker is jumping on the clean, electric band wagon. In fact, the biggest buyer of automobiles, China is considering a phase out of fossil fuel cars in the future. All this anti-oil thinking could cause a back fire. If prices decline too much, bankruptcies will follow. Then, the world will still have demand, but no product. You do know what happens when demand outstrips supply - gouging by the survivors in the energy field.        

Wednesday, November 15, 2017

Skyrocking Military: Future Plague on Earth

If your local Republican politician cites that our economy is vastly improving over Obama and the Democrats, that phony will surely mention the uptick in manufacturing. The party "yes" man will use that sector because it pays well and it has been under duress. The shill won't speak the truth. His party was behind NAFTA. His party is anti-union. His party was for out-sourcing. His party was against Social Security and Medicare and almost anything that is for ordinary citizens. However, the real fear for both the Republicans and Democrats is N. Korea. If a serious war were to break out, N. Korea is banking on China having their back. At present, our nation lacks the ability to ramp up production that a serious war calls for. History verifies that statement.
The North beat the South due to production strength. WWI was tilted to the allies because the US production entered the fray. WWII was won by US production. Today, we exported all those factories. Our corrupt leaders figure it is time to bring those plants back on shore. This is the thought behind the corporate tax plan.  
In the meantime, they can count on their corrupt partner, the Federal Reserve to keep money cheap so the military can continue to spend. The military spends so much that it keeps our defense contractors running at full throttle. You can do that when you get 50% of our national budget, while at the same time, cry that entitlements wreck our budget.
started its decline in the 70s. Isn't is ironic that US wages have been stagnant since that same period? Today, it has shrunk to 12% of our economy. However, that figure would be only 6% if one did not count military spending. You can get two truths from those percentages. One, both political parties are responsible for the decline. Secondly, if my opening sentence was during a different administration, it might read, "if your local Democrat politician..." instead of the GOP. Both parties are equally bad.
The fact remains that the military has put our nation in danger. Don't misread! I'm not talking about our troops, but the military complex. These paranoid war mongers were the ones President Eisenhower warned us about. They hated President Kennedy because he got the Russians to agree to limit nuclear weapons. They never give peace a chance. With that said, I turn to the direction of military spending, particularly, rocket technology, both for offensive and defensive applications. Keep in mind there are other needs like cyber, drones and robots down to bullets and uniforms. However, with 50% of the budget there is enough to go around.
On his Asian trip, President Trump pounded into our allies, the need for them to spend more on "D."
His idea is for them to buy weapons and systems from us, to which the results would be a lower trade gap with the US. So, if in the future, the local shill claims his party shrunk the trade gap, herein lies the real reason for that.
What I found in my research is the location of these military contractors. Although the roots of all
these companies is north of the Mason-Dixson Line, now they open new plants below that line. They are in Huntsville, Alabama, Tucson, Arizona and other southern sites. Many shift under false pretense like Boeing going to the Carolina's. Yep, another non-union state. These companies rake in billions, but seek to pay the lowest wages as possible. If you look at any of their stock prices, they are at highs. There are others, but I used the magic trio.
*RTN= $184 and at all-time highs.
*BA= $260 and at all-time highs
*LMT= $311 and hanging at its all-time high.
In Arizona, Raytheon is adding facilities. It makes missiles, radar and sensors. It also adds key
technology to missile defense. Their rocket system can maneuver 10,000 miles per hour. Sounds great, but space rockets can go 25,000 miles per hour. Do you recall, "You can leave here for four days in space, but when you return, its the same old place...We're on the Eve of Destruction."?
It won't matter who wins, cause we'll all get hurt.
Boeing(BA) has buried little space ships underground in Alaska and California to protect our West coast. Their purpose is to counter an intercontinental ballistic missile attack.
Lockheed Martin(LMT) does similar rocket design. They also offer attacking missiles.
All CEOs of defense see strong signals to increase military spending by our government.
At the moment, there are four different type of missile defense:
* Boeing's Homeland System
* Raytheon's Patriot
* Lockheed Martin's Terminal High Altitude Area Defense or THAAD
* Lockheed's second entry, Aegis System
Thomas Karako, CSIS Senior Fellow, says missile programs are no longer in the millions, but billions. He sees bigger orders coming to all defense contractors.
From Alabama, Raytheon sends missiles to US and Japanese warships in the Pacific. Other US
allies are heeding Trump's call. The list includes Saudi Arabia, Poland, even Sweden. In this piece I kept the focus on the big dogs, but there are many small firms that benefit from military spending. The problem is some day someone could launch us into a plague on earth. The home of the brave could have a dotted landscape of Chernobyl's or Fukushima's.

Wednesday, November 8, 2017

Is Tesla in Your Future?

The title is an open question like a blank check. Elon Musk would like you to first think about his electric car as an answer. It is called, "Branding." There was an old test back in the late 50s and early 60s that solidified the idea. It would go like this: Name an aspirin? The branded answer would be Bayer. Name a soda? Again, the branded answer would be Coke. Almost every car company even Ferrari is coming out with an electric car, but Musk wants you to first think, Tesla.
Dear reader, Tesla is a huge company with over 33,000 employees and it is more than a electric car company.
Cobalt Ontario, Canada
Tesla is looking into the depressed mining town because in what its name implies. As you may or may not know Musk built a huge factory in the Arizona desert to develop lithium. Lithium is a rare earth mineral that is used in making 21th century batteries. This is the power source for electric cars. Cobalt is the other earth mineral that is used in making cars light weight and strong as well as other uses. However, any miner will tell you, digging holes in the ground is expensive. I love Elon Musk's mind. He thinks big and as the ability to connect the dots to achieve a goal. Amazon has achieved it in retail. Musk is seeking not just cars, but many venues. This,I fear, could be his down bringing. He is over extending himself and his company. An old saying reveals the flaw, "A jack of all trades and a master of none."
Did You Know 
that Tesla has many divisions in the company? Tesla offers solar panels, powerwalls, solar roofs for residential and commercial. In addition, it offers a full range of services and infrastructure for utilities. Then, Musk has his other hobbies like the hyper-loop and space travel. By the way, I tip my hat to him for his reusable rocket fuselage. The man does get results. His first model electric car is stylish, gets the best range and it is the safest car ever built. However, just like the word "but," there are many problems at Tesla.
3 Models
There are three versions of electric cars from the company. The original Tesla S, Model X and now, Model 3. The last one is for us. It is affordable at $35,000. At least, that is what Tesla is saying. They say a lot of things like place your reservation and sometime in the next 12 to 18 months, you may get your car. They said that their production would ramp up to 1600 a week and then, to 5,000. So far, the number is a dismal 220.
As a result of this production failure, Musk has decided to sleep in the Gigafactory. Then, he fired 700 employees. The UAW claimed that Musk fired people who wanted to form a union. He said it was due to poor performance. I have my doubts, but let's get back to the divisions within Tesla.
is really a storage battery. It is tied to the solar panel in the solar roof. It can provide energy for up to seven days if regular power goes out. The system is based on average Watt usage of 24 per day. Tesla is aiming for a home run in the utility section. They will design and deploy their distributed energy resources to meet your grid needs. I guess the idea is to allow Tesla to provide for utility company expansion with their service. Tesla claims their assistance will reduce demands on distribution and transmission infrastructure. It is like I said, Tesla says a lot of things, but reality says a different answer.
Maybe with my original question, your answer was investing in the company? There are some things you must understand. Tesla burns through cash like a forest fire eats trees. They lose $619 million and rising. They need the government to continue to provide subsidies to the tune of $4.93 billion per year. These are credits for solar energy and electric cars(clean energy). The stock hit a high in September 2017, however it has slowly declined with each negative quarterly report. It gapped down to $293 and closed last Friday at $306. This company has NEVER made money. Negative volume is building. The stock could fall to $242. If more negative news appears, the stock could test $180, which is major resistance. The company has a large short position which makes for volatile action. I think the stock will fall to $141 and then, consolidate. The 50-day moving average has already been penetrated and the 200-day is $241. The latter is the first resistance mark.
Bottom line:
Musk has failed to show that he can mass produce. Like I stated, I love his drive and accomplishments. If Musk wants us to "brand" his electric car, he has to work his thoughts through and that takes time. Success is not an idea nor does it happen in a day. Maybe he should fire himself for "poor" performance?  

Wednesday, November 1, 2017

Border Wall: Fiasco in the Making

President Trump made many campaign promises. Today, he insists on keeping one of them. Behind the scenes there are six companies in competition to build the Border Wall.
There are many conflicts concerning the wall. Up front is drugs, to which the Border Patrol was suppose to stop. It has failed, but the wall could help. There are other off beat problems like migration of animals, Indian lands and of course, the question of immigration.
I have no protest against immigration except it should be tied to the economy. In good times we can add more and in tough times, limit the flow. However, there is the question and problem of jobs, particularly service jobs since our government does not protect workers in manufacturing. Illegals take those service jobs. They are considered low paying, but what is not considered is this: It keeps one in the labor force. It is honest labor and many of these jobs pay better than one realizes like lawn service, cooks and hospitality. They can lead to other jobs like in construction. You have to be in it to hear about it.
Big Problem
Today, the flow of Mexicans through the border is not illegal Mexicans, but people from Central American nations. Why is that, you ask?  
Because so many global companies have developed manufacturing plants in Mexico along with the loopholes of NAFTA, the Mexican economy has more opportunities than in the US. Mexicans are staying home with better paying jobs. So, in essence, the concept of the wall is probably 20 years too late. Nevertheless, President Trump is going ahead with his promise to build the wall. There were submissions by the hundreds and it has been narrowed down to the final group.
Then, there were 6... 
Last week the deadline to submit a prototype by each company ended. There was a subsidiary contract to the six to help cover costs with the guidelines. The final list is: W.G. Yates and Sons, Caddell, Elta North America, KWR Construction, Tefas Sterling, and Fisher Sands & Gravel Company.
The winning model must possess according to the US Customs and Border Patrol, the following:
* must be able to stop digging to enter.
* must be able to stop climbers to enter.
* must be strong enough to prevent penetration to enter.
* must be transparent so agents can see through it.
Dear reader, the more likes that is added the more the final cost. I heard there is one design that includes a solar application. I like this idea because it could generate revenues while helping our energy and environment and probably be the only positive associated with the wall. For example, there is a height mandate. At present, in locations where there is a wall, it rises from 8 to 10 feet. The six finalist have walls going from 18 to 30 feet. Then again, there is no time table for selection of the winner and it must pass Congress to which is the
final obstacle
When the original idea surfaced, cost estimates ran from $100 million and up. Quickly, the cost zoomed to $1billion. Today, (are you sitting?) estimates begin at $20 billion. It seems the price for the wall keeps climbing like our national deficit. Maybe we should add another feature like the Great Wall of China. The ability to walk on it and make it a tourist trap. What do you think?