Sunday, October 29, 2017

The Political Page, T+279 -- October 29, 2017; Record Snowfall In Duluth -- Already

Throwing Hillary under the bus. Scanning the political headlines over the past two days suggest that the left is getting ready to throwing Hillary under the bus. For anyone in doubt, note this essay in The Week:
Clinton still isn't accepting "the legitimacy of the election," as she put it. And why should she, when she knows that more than 200,000 undisclosed individuals in Wisconsin were prevented from voting — they must be the cousins of all those illegal immigrants who, according to Trump, pulled the lever for her in New Hampshire — and that every single one of them supported her? Why, if you believe that miscellaneous "Russians" — at one point she referred to a generic character named "Igor," which is funny if your level of engagement with Russian culture does not extend far beyond Rocky and Bullwinkle horizons — bought Twitter ads in the hope of targeting 60- and 70-something union retirees in Macomb County, Michigan, would you not think you really won? [Continues below the video.]
Everybody's Somebody's Fool, Connie Francis
It's not just voter suppression in a state where Trump couldn't even beat Sen. Ted Cruz in the GOP primary that Boris and Natasha spoiled Clinton's victory. She also insisted that James Comey — who has apparently gone from being the sensible public servant who refused to recommend charges over the handling of her "damned emails" to the villain of the October press conference to the selfless note-taking hero of the Russia investigation to being an election-rigging monster again — did her in with unnamed female suburban voters who would otherwise have sworn her allegiance as a matter of course.
But what she thinks really sealed her fate with undecided voters was a conspiracy theory surrounding child molestation and human sacrifice and the Illuminati at Comet Ping Pong, a pizza parlor in Washington, D.C. Call me crazy, but I think that anyone willing to believe on the basis of a Reddit thread that one of your chief pleasures in life is sitting down with your friends to eat yeasted flatbread made from the corpses of kidnapped rape victims in the basement of a D.C. restaurant has probably already made up his mind about you one way or the other. [Continues below the video.]
Who's Sorry Now? Connie Francis
But anyway, Clinton intoned in Michigan, the Electoral College should be abolished. After all, we are in the midst of a "new Cold War," she warned, reminding all four of us who did not applaud enthusiastically why the prospect of a Clinton presidency was always terrifying. WikiLeaks, she said, "is a wholly owned subsidiary of Russian intelligence," which may or may not be true. If so, maybe she should ask President Obama to explain his decision to commute the sentence of that noted Putinist hardliner Chelsea Manning.
Even the perfect storm of phantom missing voters, Igor's premium Twitter ads, Comey's partisan treachery, obviously credible-sounding rumors about victims of ritual slaughter disguised as pepperoni, and the wholly unexpected advent of the pesky Electoral College in the midst of Cold War II is not exhaustive of the reasons why Clinton believes she really should be sitting in the White House right now. It's also the left's fault, you see.
And that's just a small piece of the essay.

The Climate Page

Snowfall record broken -- already. Duluth breaks old record set in 1933, when Franklin D. Roosevelt was president.
According to the National Weather Service in Duluth, Minnesota, Duluth received 10.6 inches of snow on Friday; the highest single day snowfall accumulation for any city in Minnesota – on any day in October. 
Records go back to 1055:

Meanwhile, I'm looking for a table for the "English pub" we envision out at the Flathead Lake home.

Tesla Watch - Month 2 Of The Ramp Up -- October 29, 2017

Updates: Following the 3Q17 Sales / Earnings Release

Tesla watch: wow, wow, wow. Buried in the news today -- Tesla's head of battery engineering exits. Wow, wow, wow.  Not aware that it was mentioned on CNBC -- didn't hear it mentioned on "Fast Money" or "Mad Money."

Production hell, November 4, 2017: from Bloomberg. I assume the link will eventually break; that's too bad. Anyone who buys shares in TSLA after reading this article has nerves of steel.

Tax credit. November 4, 2017. Some folks thought that talk of eliminating the US tax credit for EVs was the reason Tesla tanked. Hardly. It was everything but the tax credit talk that tanked Tesla. Tesla will soon lose the tax credit anyway, having reached the sales threshold

Will need capital raise within 90 days, contributor to SeekingAlpha, November 3, 2017. 

Tesla derangement syndrome, November 2, 2017.

Headlines at CNBC crawler after earnings call:
  • largest quarterly loss reported yesterday
  • will cut back production of Model 3
Chevrolet Bolt outsold Tesla's Model S and Model X.

Earnings call: huge miss

  • October sales pending; will see numbers by end of week
  • Chevy Bolt outsells Models S/X for first time
  • Tesla's first month sales plunge from Q3 to Q4 (same link): 3,075 units is a 36% first-month-of-the-quarter-decline for Tesla; the InsideEV source reported Models S/X sales for October but not October sales of Model 3
Original Post: Prior to 3Q17 Sales / Earnings Release

Ramp up, Model 3, company forecast and numbers:
Current non-company forecasts for October, 2017:
  • contributor to SeekingAlpha: less than 100 cars so far in October, 2017
  • MarketWatch: 1,000 units toward the end of November, pushing the S-curve out 6 - 8 weeks
  • Market Watch (same link): bleaker scenario if Tesla unable to meet 1,000-unit-a-week threshold until January, 2018; and, not getting to a higher rate by late April
  • my hunch: the Tesla cult will be happy if 500 units were delivered in October, 2017 (we'll know next week) and the tea leaves suggest the S-curve is simply pushed a bit to the right, regardless of whether Musk Melon says that (everyone has gotten used to his delays)
For investors:
  • old money: I am reminded of Jim Cramer's oft-quoted adage: bulls make money; bears make money; hogs get slaughtered
  • new money: a lot (I wouldn't say "everything" but a "lot") depends on numbers that will be reported this week
  • from a SeekingAlpha contributor, October 31, 2017: for Tesla, it would mean to first emerge from losing $-766 million into a break-even level, and then to earn around $1,750 million a year. 
  • this may be the huge clue that Tesla is slowing down the production line: from The Street: Tesla has cut December orders from one of its Model 3 parts suppliers in Taiwan to 3,000 per week from 5,000 per week. The supplier says that the 40% reduction is due to a production bottleneck for the vehicle. 
  • two things from that clue:
    • if the cut is for December orders, this means that if there is a hiccup in production it extends well into the next year (2018)
    • the reason for the delay in cutting orders may have to do with the contract; it is likely the supplier requires a two-month notice for any request to slow down the supply chain
Investors: Tesla Will Need More Cash
Tesla Chief Executive Elon Musk has outlined ambitious plans to expand its network of factories and service facilities, including potentially an assembly plant in China and up to three more electric battery Gigafactories. He told investors in July the company could sell more shares to fund that expansion. "I'm sure there will be some funding rounds that happen in the future," he said.
Sticker Shock

"Way" more than $35,000. From InsideEVs:
  • base model: $35,000 but that will probably go up (slightly)
  • lowest-price model that folks will actually buy: $42,000
  • "Sure, a top of the line Model 3 will still cost way more than $42,000, but knowing that you can get a decently equipped 3 for just a hair over $40,0000 is a welcoming message." -- Really? Who are they trying to kid?
Price creep
Tesla, by comparison to its legacy rivals, is market value rich, and cash poor. It had $3 billion in cash on hand at the end of the second quarter, and some analysts predict the automaker will have to raise more to cover the expected cash drain from the slow launch of the Model 3, which is lower priced than other Teslas and aimed at the market for $35,000 to $45,000 cars.
JPM, October 20, 2017, just 10 days before earnings come out:
  • Tesla downgraded: Tesla may have to raise prices on the Model 3
The bank said that investors are underestimating the risk of Tesla not being able to solve its production problems. If the Model 3 is simply harder to manufacture than Tesla predicted, it could mean lower delivery numbers and potentially higher prices for the new car. Both of these problems would put dents in the "mass-market" branding of the Model 3. JPMorgan lowered its production forecasts for the Model 3 to 15,000 in the fourth quarter, half of its previous forecast.

How gas guzzlers are fueling development cars -- Reuters. Some key points:
  • margins on EVs, if we ever see profits on EVs, will remain very, very low for quite some time
  • meanwhile, the majors are making tons of money on high-margin SUVs and pick-up turcks
  • majors have robust assembly lines and experience (especially with welding) -- someting Tesla does not have

Miscellaneous Notes; Nothing About The Bakken -- October 29, 2017

Tanger Outlets, Ft Worth

Wow, this is cool. Today on the way home, just past Texas Motor Speedway, from Denton where our older granddaughter had participated in a water polo tournament, we passed a) a burning car; and, b) a sign that said said Tanger Outlets were open. I didn't know it was such a big deal but over on Google Finance  it was one of the top ten national stories. Here's a link to the story:
The long-awaited Tanger Outlets Fort Worth is scheduled to open Friday morning on the city’s far northern edge, just south of Texas Motor Speedway. The outlet mall features more than 70 stores representing some of the best-known brands of shoes, shirts, children’s clothing, jewelry, makeup and many other retail items.
There are stores specializing in Nike footwear, Fossil watches, Michael Kors handbags and Cole Haan shoes. There’s also a Gap Factory Store, a GUESS Factory Store, an H&M, a Levi’s Outlet — and, for furniture aficionados, a Restoration Hardware Outlet.
I'm not interested in any of them. Outlet stores are over-rated. One can get a better deal with the same "celebrity" articles at Marshall's. We were just at Marshall's yesterday and could have bought a Michael Kors purse -- retail, $349, for $79. At $79, it was still about $39 too expensive.

Robots: Take Inventory

Read more here:'m not

I haven't seen them in awhile, so maybe things have changed. But I remember, in the "old days," that once a year, a group of six to ten people with hand-held bar scanners would descend on a store (retail, grocery, pharmacy) and take inventory of everything on the shelves, for tax purposes. I don't know if that's still required; seems fairly archaic. But if it is still being done, it looks like Walmart might be trying out something new.
Robots will soon help stock shelves at about 50 Walmart stores.
The two-foot tall robots are fitted with cameras to scan aisles and check stock, identifying missing, misplaced, mislabeled and mispriced items. The robots will give that information to employees who will fix the issues.
This obviously would work for taking inventory.

Where's Bill Ackman When You Really Need Him?

From KDVR:
A pyramid scheme that lands employees in “financial ruin” – those are the serious allegations in a lawsuit filed against LuLaRoe, a clothing company staffed with 80,000 distributors.

The California-based company amassed over $1 billion in sales in 2016 and recruits many employees that happen to be millennial mothers.

The company said its sales from January through October of this year have surpassed $2 billion.

The company was founded in 2012 and is known for the brightly colored leggings that many sellers splash across Facebook pages, looking to entice buyers and make a profit – or at least break even – from their initial investment to get started as a distributor.

Bringing It All Together -- LIberty Resources North Of Williston -- October 29, 2017

The other day a reader noted that Liberty Resources is having some great success north of Williston. This takes me back to a post earlier this summer: Liberty Resources is building an "oil factory in the Bakken."

So, who is this "Liberty Resources"? From the "Bakken Operators" page:

Liberty Resources Management Company, LLC (same company as Liberty Resources II LLC)
Liberty Resources II LLC (1200 17th Street, Suite 2200, Denver, CO (same address as Liberty Resources Management Company)

  • The one permits Liberty Resources II LLC had is PNC (noted October 29, 2017)
  • Liberty Resources II LLC has one file permit in North Dakota; all the rest are under Liberty Resources Management (see below)
  • January 30, 2014: re-enters the Bakken; 53,000 acres, $455 million; see Liberty Resources LLC above
    • Liberty Resources II LLC is a Denver-based oil and gas company founded in 2013 and led by Chairman and CEO, Chris Wright, President, Mark Pearson and CFO, Paul Vitek.  Liberty was funded through equity investments from funds managed by energy private equity firm, Riverstone Holdings LLC ("Riverstone"), including Riverstone Global Energy and Power Fund V and Riverstone Energy Limited. 
    • About Riverstone Holdings LLC
    • Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $27 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $26.1 billion to 108 investments in North America, Latin America, Europe, Africa, and Asia.

Sunday, October 29, 2017 -- CLR's Holstein Federal Wells Have Been Updated; Note The Dreaded Bakken Decline

Active rigs:

Active Rigs533469190182

CLR's Holstein wells have been updated: they are tracked here. Incredible wells; most have just come off SI/NC. But the production of some of the older wells is what impressed me.

Saudi: take note of this "dreaded Bakken decline" in this "old CLR Holstein well (2.5 years old and this well will produce oil for 30 years -- and many re-fracks); see Filloon graphic at bottom of this post:
  • 27564, 1,235, CLR, Holstein Federal 2-25H, Elm Tree, 40 stages, 4 million lbs, t2/15; cum 577K 8/17; 
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare