Last night's Tesla earnings would have, you'd think, cut the stock in half.

Tesla is of course a car company.  Elon would love to claim its a bunch of other things, but none of them have been deliverable over the firm's life in meaningful ways.  This includes all of the "revolutionary" lines of business he has tried to argue he'd have sewn up -- the most-intriguing, of course, being driverless cars that entirely change the paradigm of personal transportation.

Being able to buy such a vehicle means you can immediately (subject to various legal constraints, of course) now own a taxi that can take people from here to there when you're not using it, wildly increasing utilization and generating income that offsets its expense.  Said vehicle could be programmed that "I have go to the store at 3:00 PM" and thus it would return and charge with time to do that, but from 2:00 AM when the bars close until then it might run around as "summoned" to various people and take them wherever.

In addition it is a huge mobility boost in that anyone currently unable to drive for medical or age-related reasons, or those who wish to go somewhere but are intoxicated, now can do so without constraint -- if you buy such a vehicle.  Of course the problem with it in the EV space is range (which means in an ICE context its even more valuable as now I can, for example, crawl in the back with a sleeping bag, sixpack of beer and punch in a destination over a thousand miles away and do whatever., having to intervene only to put more fuel in the tank.)

It also immediately shifts all liability -- and thus insurance -- off you as the owner and to the company that makes it.  The earthquake-level implications of this are obvious but Musk has claimed that it would be available "imminently" -- within a year -- now since 2019 and yet no such advancement from the original capability, in legal and operational terms, has occurred.

You'd think that at some point running this "blue sky" nonsense would fold back on him -- but so far it hasn't.

The latest round of this nonsense included even more ludicrous claims, but follows a pattern seen in all the other big market blow-ups.  Now the word is "AI" and of course Tesla is supposed to be an "AI Company."  Except it isn't, of course, although somehow Elon spun this idea that it shall buy many more Nvidia AI "chip stacks" and by doing so become one, never mind solving the driving problem.

Many of you don't remember 1999, but I do.  I was in the middle of the 1990s.  The number of times I heard phantasm-invoking nonsense out of CEOs on earnings calls couldn't be counted.  It all ended in tears, and this time it will as well.

Tesla, on an annualized earnings basis of the reported "45 cents", which incidentally is bogus because that's non-GAAP earnings, sells at ninety times an annualized run-rate of $1.80.  At the same time the firm now is showing negative free cash flow, which is a change -- it was at least cash-flow positive before, even though much of it was tax farming of various sorts.  Nonetheless money is money and now the company is bleeding it at an arterial level, and it appears he's stretching payment times to vendors too, which makes the books look better for a while because the cash isn't flowing out as quickly.

This fever, like the one in 1999, will break.

Probably not today, but break it will, and when it does all of those who have repeatedly managed to sucker people into buying a hope and a dream will be faced with the reality that said dreams are and will be unrealized -- and what will be left is whatever can actually generated in operating income from actual products and services sold to actual customers.

Don't be the guy who's long stocks when that day comes.

One has to wonder from the USSC arguments the other day.

Legal experts said the Biden administration was "on the ropes" in Tuesday’s oral arguments at the Supreme Court in a case questioning whether a Jan. 6 rioter can be charged with a federal "obstruction" crime, which carries implications for former President Trump.

On Tuesday, Jeffrey Green, lawyer for Joseph Fischer – who is one of more than 300 people charged by the Justice Department with "obstruction of an official proceeding" in the Jan. 6, 2021, riot at the Capitol – argued that the federal statute shouldn’t apply and that it had only ever been applied to evidence-tampering cases. 

Biden's DOJ has "repurposed" the SarBox law, in short, to bring the most-serious of felony charges in the Jan 6 cases, and has won many convictions on those charges.  They also form the basis of the most-serious charges against Trump himself.

What's also interesting is that in 2019 the OLC issued an opinion -- which was never "formally" put into practice -- that the law didn't apply in this sort of situation at all.  I was unaware of that but the case process that led to the Supremes hearing the case has brought that into the forefront.

SarBox was passed in the wake of the 2000 tech crash and Enron specifically to provide serious criminal penalties for evidence destruction in a corporate context. As I've repeatedly noted lawsuits are not a deterring factor when aimed at corporations because the company pays them and thus there is little you can do to the actual directors and officers.  While theoretically piercing the corporate shield is possible there are myriad ways for very wealthy people to evade accountability even if you succeed.

Sarbox's particular target was corporate officer and/or board-level interference with auditors who are supposed to prevent such chicanery from going unchallenged.  Imposing hard, felony criminal penalties on directors and officers, particularly CEOs and CFOs, would have provided a meaningful check and balance in that going to prison sucks no matter how rich you are, and its arguably worse the more money you have for obvious reasons (its hard to enjoy that mansion, Lambo or Bizjet when you're behind bars.)

The irony is that prior to Jan 6th only a handful of cases have ever been brought against corporate officers, despite many instances of accounting chicanery.  Indeed the entire 08 market blow-up was arguably over precisely that -- various executives asserting that their "books were clean" and "all was well" while they knew they were making loans that were unsound and in fact the borrowers were committing fraud in their income statements, yet the securitizers were lending the money and selling the paper on to customers anyway.  I will remind you that unlike the S&L crash where a huge number of banking executives went to prison in the wake of 2008 nobody did, despite several instances of publicly-disclosed hard proof of financial frauds -- such as backdating deposits to avoid violating reserve requirements.

One line of questioning I did not hear was why the Government should be able to ignore thousands of such cases including when they're documented in the open press over the space of two decades and then, come a convenient political target, "repurpose" said law and throw a few hundred ordinary citizens in prison for it.

Yet that, I would argue, is precisely the root of the issue here, just as it is in many other contexts.  Indeed you can successfully argue that the Kavanaugh hearing disruptions, which were an official proceeding and undertaken specifically to disrupt or prevent his confirmation with what were later (in at least one case) proved to be a false predicate, has at least the same nexus to this law as do the January 6th events.

A nation that is allegedly governed by laws cannot tolerate those laws being used in this fashion -- where they are molded, scripted and enforced only against those of specific political persuasion while those of other political persuasions are left alone.  SarBox was, as I argued at the time, perhaps not a bad law but it was an unnecessary law in that fraud is a criminal offense already and thus the question turns on being willing to bring the charges, not whether the conduct is a crime in the first place -- and the last 20 years have proved that the Government didn't really "mean it" in that it has almost-never been used when accounting tricks and other similar games are discovered.

I'm very interested in reading the opinion that comes from this case -- should the Supremes toss this "creative interpretation" depending on its scope it could in fact void a huge number of existing convictions.  The Court is generally rather uninterested in doing that sort of thing, and as such I don't really expect that outcome, but even a more-nuanced decision might well stuff, to some extent, that Genie back in the bottle.

We'll see.

The Senate appears to have a rather odd view of the Executive -- then again so does the House, and both are not only toxic they're demonstrably false.

Mayorkas is the first Cabinet secretary to be impeached in almost 150 years. House Republicans voted to impeach Mayorkas in February over his handling of the southern border by a narrow margin after failing to do so on their first try.

Democrats have slammed the impeachment as a political stunt, saying that Republicans had no valid basis for the move and that policy disagreements are not a justification for the rarely used constitutional impeachment of a Cabinet official.

The impeachment of Mayorkas has nothing to do with "policy disagreements"; it is first, last and only about a Cabinet official's deliberate refusal to enforce laws as written, including 8 USC §1324.

That statute mandates felony criminal penalties carrying prison sentences for anyone who assists, harbors or transports illegal immigrants.  Other sections of US law forbid the Federal Government and its agencies from "paroling" into the United States an illegal immigrant unless that have a facially-reasonable claim to asylum.  There is no capacity in the law to permit DHS to do so simply because there are a lot of people illegally crossing.

Policy is defined by legislation and thus has to pass both House and Senate and either be signed by the President or a veto must be overridden.  It is absolutely true that different Administrations will have different policies but the Constitution is clear and each person in all three branches of Government takes an oath to uphold and enforce all of the laws and thus the means to express policy isn't to ignore laws you don't like but rather to work to change them through the legislative process.

If you can't find agreement via that process then until you can the existing policy stands whether you agree with it or not and if you take an oath to enforce the law as written and you refuse to do so on a deliberate basis impeachment is the peaceful and appropriate action to remove you from said office.

Neither the House or Senate acting alone can change policy, no matter which party controls said chamber.  Only both, acting in concert, can do so.  This is intentional in the design of our Republic; policy changes of significant importance to society are described in our laws, and it is both wildly unreasonable and destructive to civil order to change them on a whim when one person wins or loses an office, no matter the office.

The Senate's Schumer led his caucus to toss the entire thing as "unconstitutional" on a part-line vote.  Big shock, right?

When you boil it down essentially everything wrong with this nation comes down to this same issue: Various politicians and paid employees of the government simply ignore any law they disagree with either in its entirety or as applies to some favored group while using it as a cudgel against anyone they dislike.  Our national foundation rests on that never being tolerated by anyone, anywhere and for any reason.

I fully understand that these policy matters have serious and vehemently-expressed opinions on all sides.  That's a good thing: Freedom of expression is in fact also a foundation of America.

But no public official is empowered to take that disagreement and turn it into a malicious abuse of existing law whether by intentional omission or weaponization against disfavored persons or those who hold a different point of view.  Down that road lies a line that cannot be foreseen in advance in that the people may, at some point, determine that the strictures of polite society no longer apply to them by that very example set by our officials.

You do not want this; it is precisely through that road that essentially every civil conflict and social destruction has occurred and if you believe you'll be immune to it if it happens, no matter how wealthy or poor you might be, you're wrong.

What's old is new again.....

Since their birth in 1960, fast reactors have been attracting increasing attention around the world because they can provide efficient, safe, and sustainable energy. The closed fuel cycle of fast reactors can support the long-term development of the nuclear power as part of the world's future energy structure and reduce the burden of nuclear waste. Thus, the fast reactor has become one of the development directions of global fourth-generation nuclear power.

I remind readers that Fermi I in Monroe MI was one of these.  We had a couple more as well.  Japan had one operating, as have a few others.  None of those still are operating and yet this technology, which we know works, is a required component of a closed fuel cycle and sane disposal and handling of nuclear fuel.

Why?

Because using either uranium or plutonium (or for that matter Thorium if you breed it; it is fertile, not fissile) produces Actinide byproducts and those are very, very long-lived radioactive nasty things.  There is only one sane option for them since trying to bury or otherwise keep them safe (e.g. out of the environment) requires tens of thousands of years of confinement in many cases.

The only sane option is to separate them out of the spent fuel, which fortunately can be done chemically as they're all distinct elements (you don't need centrifuges and turning them into a gas first, as you do with Uranium) and if you put them back into a fuel pin and stick that back in a reactor along with more active fuel they will be burned up by neutron bombardment and turned into less-dangerous radioactive elements over time.

They also release a little more energy but you don't do it for that reason, you do it because the only sane place for something so dangerous is where what's in there is so dangerous anyway that it doesn't make it worse.  A fuel pin, in an operating reactor, is already full of ridiculously dangerous stuff and in addition its behind a lot of shielding and physical protection from various physical insults (e.g. terrorist attack, etc.)

Each cycle of said fuel, as you reprocess it, results in more and more of that material being turned into lighter, shorter-lived radioactive elements.  The shorter the better; when you get to things that have half-lives measured in single and double-digit years now we're talking about reasonable confinement requirements that we know how to handle.

The other part of it is that in a commercial, large-scale power reactor (either PWR or BWR) only 5% of the fuel pin contents are fissile.  This is both a safety thing and a requirement thing -- fissile material is expensive and putting more of it into there than you actually can burn up between refueling cycles is stupid.  The rest of the space has to be consumed with something and your choices are U-238 (the most-abundant natural isotope of uranium) or spent fuel material that has been separated out from usable plutonium and is extremely dangerous.  The latter is the obvious wise choice if you have a surplus of it (and you always do when using nuclear fission for power) because you have to do something with it.  In addition in that spent fuel there is both U-238 that did not transmute and Plutonium in a few isotopes that did.  Its very hard (and very dangerous) to separate out the Plutonium isotopes if you want to make bombs because only one of them is usable for that -- the others actually poison the bomb in that they make it "fizz" rather than "boom."  But for power purposes you don't care because you don't want it to go boom anyway so for power purposes chemical separation, which again is much easier and cheaper, is just fine.

If you recycle the fuel like this you can reach nearly 100% utilization although that's probably stupidly-expensive.  Reasonably-economic projections are around 60%.  Contrast this with 5% or less with a "once through and done" system which is what we're doing now and I think you can figure out which is the wiser choice.

We stopped this progress in the United States because Jimmy Carter issued an E/O banning reprocessing.  Those firms who had invested in it lost their money, and that Reagan reversed the order was irrelevant to them: The government had demonstrated that it would screw them out of their money and they had no interest in that happening again, quite-obviously, so they didn't do it again.

Can we fix this?  Of course.  Should/must we fix this?  Absolutely.

Would I prefer that we head toward Thorium-based fuel?  Yep.  Why?  Because it is in coal and a high-temperature reactor (e.g. LFTR), using thorium as a fuel, brings both the capacity to generate electricity and turn the coal into synfuel which solves two problems at once because the cause of lung cancer from coal use comes from the thorium that naturally occurs within the coal and it is trivially able to be separated out as it is both metallic and much heavier than the carbon.

Nonetheless that China has decided to pursue closing the fuel-cycle for nuclear fission and we are not will turn into a significant disparity in energy policy and outcomes -- and its a disparity we cannot afford to let them have, particularly when we have more than 50 years of time under our belt in knowing how to do so ourselves.