- Visualizing How Americans Get Healthcare Coverage
With Obamacare firmly in the crosshairs of Republican lawmakers, the debate around U.S. healthcare is at a fever pitch.
While there is no shortage of opinions on the best route forward, Visual Capitalist’s Jeff Desjardins points out that the timeliness of the debate also gives us an interesting chance to dive into some of the numbers around healthcare – namely how people even get coverage in the first place.
HOW AMERICANS GET HEALTHCARE
The following infographic shows a breakdown of how Americans get healthcare coverage, based on information from Census Bureau’s surveys.
Put together by Axios, it shows the proportion of Americans getting coverage from employers, Medicaid, Medicare, non-group policies, and other public sources. The graphic also includes the 9% of the population that is uninsured, as well.
The following definitions for each category above come from the Kaiser Family Foundation, a non-profit that uses the Census Bureau’s data to put together comprehensive estimates on healthcare in the country:
Employer-Based: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household.
Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare.
Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles).
Other Public: Includes those covered under the military or Veterans Administration.
Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance.
Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.
HEALTHCARE MIX BY STATE
Here’s another look at how Americans get healthcare coverage on a state-by-state basis.
This time the graphic comes from Overflow Data and it simply shows the percent of buyers in each state that receive health coverage from public sources:
Oddly, the state that gets the highest proportion of public health coverage (New Mexico, 46.6%) is kitty-corner to the state with the lowest proportion of public health coverage (Utah, 21.3%).
WHY THE DEBATE IS PARAMOUNT
If you ask some people what is going on with U.S. healthcare, they will tell you that things are going “sideways” – that costs are going up, but care is not improving anywhere near the same pace.
Here’s a graphic we published last year from Max Roser that puts this sentiment in perspective:
It’s fair to say that care has been going sideways in the U.S. for some time, and the stakes couldn’t be higher.
So, what needs to be done to fix the problem?
- Vladimir The Great Sums Up Pope Francis The Fake!
Vladimir Putin has once again demonstrated why he is the most perceptive, farsighted, and for a politician, the most honest world leader to come around in quite a while. If it had not been for his patient and wise statesmanship, the world may have already been embroiled in an all encompassing global configuration with the possibility of thermonuclear destruction.
His latest comments on the purported head of the Catholic Church may have been his most perceptive as of yet and should be heeded not only by Western secular leaders, but by the globe’s one billion or so Catholics, most of whom regard Jorge Bergoglio as pope.
The Russian President’s statement came on a visit to the Naval Cathedral of St. Nicholas in Kronstadt. Mr. Putin succinctly sums up what Pope Francis is not: “If you look around at what he (the Pope) says it’s clear that he is not a man of God. At least not the Christian God, not the God of the Bible.”
No truer words have as yet been said about this cretin by a world leader since his wretched pontifical reign began in 2013!
While Mr. Putin and those with “eyes to see and ears to hear” recognize that “Pope Francis” is not a Christian, the current occupant of St. Peter’s Chair is disqualified for that position on theological grounds. To be a legitimate pope, one must be “bishop of Rome,” and prior to becoming a bishop, one must be a priest. Jorge Bergoglio was not ordained (1969) in the traditional Apostolic ordination rite of the Church, nor was he consecrated (1992) as a true bishop in that rite. His predecessor, Benedict XVI, was, likewise, not consecrated in the traditional rite although he was ordained as a priest under the “old rite.”
Simply put: Jorge Bergoglio is just a layman masquerading as a pope as are all of the other priests and bishops which were given Holy Orders under the new rites which came into effect in the aftermath of the Second Vatican Anti-Council (1962-65).
Not only is Pope Francis a Christian fraud as Vladimir Putin and other perceptive commentators have observed, but in secular matters he is a neo-Marxist in economic thought, a One-World Government advocate, and an enthusiast of open borders and mass migration. In other words, an enemy of what is left of Western Civilization.
Mr. Putin accurately describes his “secular sins:”
- Pope Francis is using his platform to push a dangerous far-left political ideology on vulnerable people around the world, people who trust him because of his position
- He dreams of a world government and a global communist system of repression
- As we have seen before in communist states, this system is not compatible with Christianity**
If these despicable qualities are not bad enough, there is a seedier side of Bergoglio that Mr. Putin did not address. Pope Francis is now the third Paedophile Pope who has presided over the Church’s Great Sex and Embezzlement Scandal. Neither Francis, or his two derelict predecessors (Benedict XVI, JPII) have done anything to either punish or root out the child predators under their charge. On the contrary, Francis has encouraged perversion with his now infamous statement of “who am I to judge.”
The debauchery continues to take place with the latest coming right under the nose of the Argentine heretic. An apartment occupied by the secretary of the Pontifical Council for the Interpretation of Legislative Texts, Franecesco Coccopalmerio, was raided in July to break up a “gay” orgy. The police found drugs and men engaged in orgiastic sex.
Coccopalmerio, who Bergoglio had considered for promotion to bishop, was hauled away and jailed by authorities.
This came on the heels of Cardinal George Pell, the Vatican’s Chief Financial Officer, being charged with sex crimes against ten children. Pell has since left Rome in disgrace for his native Australia to answer the charges.
While Western Civilization is on the decline due to economic stupidity and open borders promoted by the likes of Pope Francis, there are a few bright spots, the brightest of which is Vladimir Putin. If the West is ever going to regain its sanity, it should take the sage counsel of the Russian president especially when he speaks of phonies like Pope Francis.
- Chaffetz Blasts DOJ: No More Press Conferences On Leakers "Until You Have Some People In Handcuffs"
Since election day, the Trump administration has been hit with an unprecedented number of intelligence leaks as classified information seems to be flowing quite freely from Obama holdovers occupying various government agencies and members of the intelligence community directly to various mainstream media outlets. At this point, one has to wonder why the Washington Post and the New York Times shouldn’t just have an office setup inside the NSA with server access and the highest security clearance…taxpayers might actually some money if we didn’t have to pay for our spies to sneak around Washington passing info to journalists.
But, some hope was offered last week by AG Jeff Sessions and Director of National Intelligence Dan Coats who, after months of doing basically nothing, finally announced a plan to crackdown on leakers. Meanwhile, Deputy AG Rod Rosenstein took to the Sunday talk show circuit this past weekend for some more ‘tough talk’ saying the DOJ will prosecute any “case that warrants prosecution no matter what their position is.”
“We’re after the leakers. We’re not after
journalists we’re after people who are committing crimes. We’re going to devote the resources we need to identify who is responsible for those leaks and who has violated the law and hold them accountable.”
“If we identify anybody, no matter what their position is, if they violated the law and that case warrants prosecution, we’ll prosecute it.”
But former House Oversight Committee Chair, and now Fox News political analyst, Jason Chaffetz is calling the bluff of the suddenly eager Deputy Attorney General saying that he “comes with absolutely zero credibility on this” issue after repeatedly refusing to investigate, much less prosecute, Hillary Clinton for lying under oath and/or her litany of other federal crimes.
“[Rod Rosenstein] comes with absolutely zero credibility on this.”
“Remember last year when we had Director Comey come before the Oversight Committee, I was the Chair, I asked him if he looked at Hillary Clinton, whether or not she told the truth under oath. He said he needed a request from Congress so myself and Bob Goodlatte, Chairman of the Judiciary Committee, sent that request to the Department of Justice and it’s never been answered.”
“So, if they want to start, lets start with Hillary Clinton and whether or not she lied under oath. And lets also go back to the State Department who had an open investigation. They reopened it July 7th of 2016. They’ve never closed it. Nearly 300 people who are dealing in classified information in a nonsecure setting, why didn’t they ever close that investigation? They need to answer those questions. Start with that. They come with zero credibility on this issue.”
“There becomes a point where you actually have to answer these things. Don’t do another press conference until you have some people in handcuffs. This is classified information. It’s against the law to just leak it out and give it to whoever you want.”
So what say you on Rosenstein? Dedicated public servant intent upon tracking down and prosecuting leakers or just another political hack who will say whatever is most politically expedient at any given time to maintain his power base? Time will tell.
- Utah Mayor Suffers "Shocking Experience" After Going Undercover As Homeless Man
Amid President Obama's 'recovery', President Trump's 'awesome economy', and record high stock prices, Salt Lake City mayor Ben McAdams secretly entered the world of the homeless in Utah as he pondered a decision (that he knew would anger many residents) on the selection of a site for a third homeless resource center in his city.
As Deseret News' Katie McKellar reports, for four months, McAdams has kept a secret (keeping it out of headlines, hoping to avoid the perception, he said, of a "publicity stunt in the face of human suffering").
Back in March, just days before he was due by state law to select a third site for a new homeless resource center – a decision he knew would anger thousands of his constituents, regardless of his choice – McAdams left work on a Friday with no money or ID and walked to Salt Lake City's most troubled neighborhood.
Dressed in jeans, sneakers and a hoodie, the county mayor spent three days and two nights walking and sleeping among the homeless and drug-addicted in Salt Lake City's Rio Grande neighborhood.
One night on the street. One night in the shelter.
His experience was "shocking" on multiple levels, he said. And while he by no means meant his experience to be an "expose" on the Road Home shelter, an important stakeholder in homeless services reform, his stay did shed light on some troubling realities within the 1,062-bed shelter, including:
- Blatant use of drugs inside the men's dorms, including his bunkmate injecting drugs into his arm – though he declined to discuss details about that encounter with the Deseret News.
- He smelled what he assumed was smoke from drugs "all night long."
- He witnessed violence – a fight between two men in the dorms, during which a man was dragged off of his bunk and hit his head on the concrete floor.
- He didn't feel safe – and could see why someone would take their chances on the streets in 40-degree rainy weather rather than spend a night in the downtown shelter.
The county mayor has kept his experience private for months. But after the Deseret News learned of the overnight stays from a source and requested an interview, McAdams eventually — reluctantly — agreed to discuss it this week with the Deseret News and Salt Lake Tribune.
The purpose of the stay, McAdams said, was not to go undercover and expose the troubles homeless providers face while trying to serve Utah's most vulnerable. Rather, it was meant to help him "deepen" his understanding of the current homeless system before he decided which city would house a third homeless resource center.
"I needed to see firsthand, to understand the complexity of the recommendation I was being asked to make," he said.
The experience "instilled in me a conviction that we had to move forward," McAdams said, during a time when many of his constituents were pushing back against years of effort to reform the homeless system.
"There were many people saying, 'Back away and do nothing,'" McAdams said. "Seeing what I saw … was shocking, and I came away from this experience knowing we had to go forward, we had to change the system, that we as a community had kicked the can down the road for decades and just looked the other way."
Not disclosing who he was, McAdams said he and his employee spent the first night on a street outside the Rio Grande area to "understand why some people would choose not to go into shelter."
"It was cold — below 40s," the mayor said. When he woke up, it was raining. "You wonder why people would choose to do that, knowing that there were beds available in the shelter."
But the next night, McAdams understood why.
The Deseret News learned from two other people that after McAdams had checked into the men's dorms, he saw his bunkmate injecting drugs into his arm. When asked about that incident, McAdams declined to discuss it.
"One person told me to be sure not to use the restroom at night because it wasn't safe," McAdams added. The man didn't elaborate, but McAdams said he assumed it was a reference to sexual violence.
"I didn't feel safe," he said. "It was a fairly chaotic environment."
He added: "I certainly could understand why people would choose not to sleep there."
He said if he were addicted to drugs, he would know "the Rio Grande area is not the place to go" to kick the habit, adding that "drug dealing is at every corner."
Revamping the system, he said, "can't happen fast enough."
Of course, Salt Lake City, Utah is not alone…
Homelessness in San Diego has surged in recent years. A January tally put the number of transients in the city at over 5,600, up more than 10 percent from last year. The total number has risen more than 40 percent since 2014.
The chairman’s idea is for the city to construct temporary housing on the practice field of Qualcomm Stadium, where the San Diego Chargers played until 2016, and the San Diego State Aztecs play.
The number of homeless people in Los Angeles is skyrocketing. In just one year, the figures revealed that the homeless population in the city grew 20% while the numbers for the wider Los Angeles County were even higher at 23%.
As if looking at those numbers isn’t cringeworthy enough, The Los Angeles Homeless Services Authority reported Wednesday that 6,000 homeless young people were tallied across the county in January, a 61% increase over the 2016 total. Most of the young people are ages 18 to 24. All the youth shelters have waiting lists and affordable housing is tough to find, even with a rent voucher, according to Heidi Calmus of Covenant House California, an international youth homeless services agency with a branch in Hollywood. “The system is overwhelmed,” Calmus said Tuesday night as she and a colleague, Nick Semensky, delivered toiletry bags and sandwiches to young people living in the streets.
Despite efforts to combat the problem, the number of homeless continue to go up.
And just like during the last economic crisis, homeless encampments are popping up all over the nation as poverty grows at a very alarming rate.
According to the Department of Housing and Urban Development, more than half a million people are homeless in America right now, but that figure is increasing by the day. And it isn’t just adults that we are talking about. It has been reported that that the number of homeless children in this country has risen by 60 percent since the last recession, and Poverty USA says that a total of 1.6 million children slept either in a homeless shelter or in some other form of emergency housing at some point last year. Yes, the stock market may have been experiencing a temporary boom for the last couple of years, but for those on the low end of the economic scale things have just continued to deteriorate.
Tonight, countless numbers of homeless people will try to make it through another chilly night in large tent cities that have been established in the heart of major cities such as Seattle, Washington, D.C. and St. Louis. Homelessness has gotten so bad in California that the L.A. City Council has formally asked Governor Jerry Brown to officially declare a state of emergency. And in Portland the city has extended their “homeless emergency” for yet another year, and city officials are really struggling with how to deal with the booming tent cities that have sprung up…
There have always been homeless people in Portland, but last summer Michelle Cardinal noticed a change outside her office doors.
Almost overnight, it seemed, tents popped up in the park that runs like a green carpet past the offices of her national advertising business. She saw assaults, drug deals and prostitution. Every morning, she said, she cleaned human feces off the doorstep and picked up used needles.
“It started in June and by July it was full-blown. The park was mobbed,” she said. “We’ve got a problem here and the question is how we’re going to deal with it.”
But of course it isn’t just Portland that is experiencing this. The following list of major tent cities that have become so well-known and established that they have been given names comes from Wikipedia…
- Camp Hope, Las Cruces, New Mexico 
- Camp Quixote, Olympia, Washington State
- Camp Take Notice, Ann Arbor, Michigan
- Dignity Village, Portland, Oregon
- Opportunity Village, Eugene, Oregon
- Maricopa County Sheriff’s Tent City, Phoenix, Arizona
- New Jack City and Little Tijuana, Fresno, California
- Nickelsville, located in Seattle
- Right 2 Dream Too, Portland, Oregon
- River Haven, Ventura County, California
- Safe Ground, Sacramento, California
- The Jungle, San Jose, California
- Temporary Homeless Service Area (THSA), Ontario, California
- Tent City (100+ residents) of Lakewood, New Jersey
- Tent City, Avenue A and 13th Street, Lubbock, Texas
- Tent City, New Jersey forest
- Tent City, Bernalillo County, New Mexico
- Tent City, banks of the American River, Sacramento, California
- Tent City 3, Seattle
- Tent City, Chicago, Illinois 
- Tent City 4, eastern King County outside of Seattle
- The Point, where the Gunnison River and Colorado River meet
- The Village of Hope and Community of Hope, Fresno, California
- Transition Park, Camden, New Jersey
- Tent City, Fayette County, Tennessee, 
- Camp Unity Eastside, Woodinville, WA 
- China Hat Road, Bend, Oregon
Most of the time, those that establish tent cities do not want to be discovered because local authorities have a nasty habit of shutting them down and forcing homeless people out of the area.
* * *
How is all this possible? With 'full employment' and record high stocks?
- China Threatens "Small Scale Military Operation" To Remove India From Bhutan Border
In the latest escalation between two nuclear powers, China has turned the war threat amplifier up to '11' by threatening India (in an article published a Chinese state-controlled newspaper) that it could conduct a "small-scale military operation" to expel Indian troops from a contested region in the Himalayas.
The latest standoff started in June, after Chinese troops started building a road on a remote plateau, which is disputed by China and Bhutan. Indian troops countered by moving to the flashpoint zone to halt the work, with China accusing them of violating its territorial sovereignty and calling for their immediate withdrawal.
China then added a large number of troops to the region:
"The crossing of the mutually recognised national borders on the part of India… is a serious violation of China's territory and runs against the international law," Chinese defence ministry spokesman Wu Qian told a press conference quoted by AFP, adding that "the determination and the willingness and the resolve of China to defend its sovereignty is indomitable, and it will safeguard its sovereignty and security interests at whatever cost."
He also said that "border troops have taken emergency response measures in the area and will further step up deployment and trainings in response to the situation," without giving any details about the deployment.
Then it escalated with a Chinese Ministry of Defense official now warning explicitly that Indian troops must leave the contested area if they do not want war.
And now, it has become more specific, with The Independent reporting that Chinese and Indian media have taken a strident approach, with an article in the Chinese state-owned Global Times quoting a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences saying China is preparing to initiate a "limited war" to push Indian soldiers out of the area.
Hu Zhiyong told the paper: "The series of remarks from the Chinese side within a 24-hour period sends a signal to India that there is no way China will tolerate the Indian troops' incursion into Chinese territory for too long.
"If India refuses to withdraw, China may conduct a small-scale military operation within two weeks."
He went on to say the military operation would aim to seize Indian personnel lingering in Chinese territory or expel them.
"India, which has stirred up the incident, should bear all the consequences," he added. "And no matter how the standoff ends, Sino-Indian ties have been severely damaged and strategic distrust will linger."
An Indian magazine's front cover last month showed a map of China shorn of Tibet and self-ruled Taiwan also ignited public anger on Chinese social media with thousands of angry posts.
"China has made it clear that there is no room for negotiation and the only solution is the unconditional and immediate withdrawal of Indian troops from the region," said a commentary by the official Xinhua News Agency.
"If China backs down now, India may be emboldened to make more trouble in the future," it added.
As we noted previously, this isn’t the first time that these two nations have been at each other’s throats over their borders. In 1962 their armies clashed, leading to defeat of the Indian army, and thousands of casualties on both sides. Based on the rhetoric coming out of Beijing’s state sponsored media, it appears that China is willing to replicate that conflict.
- Is Trump Winning?
Mainstream analysis has been wrong for so long, why start believing it now?
SLL has run a series of articles (“Plot Holes,” “Trump and Vault 7,” “Calling a Bluff?” “Let’s Connect the Dots,” “Powerball, Part One,” “Powerball, Part Two”) advancing interrelated hypotheses. We’ve asserted that President Trump is far smarter and the powers that be far stupider and weaker than current consensus estimates. Trump’s primary motivation is power. The nonstop vilification campaign against him has little to do with policy differences and instead reflects establishment fears that Trump will investigate, expose, and punish its criminality.
The upshot of these hypotheses: Trump is winning and has consolidated his power.
Reader reaction to this non-mainstream and admittedly speculative line of thinking has been mixed and often skeptical.
However, we’ll press on, because our hypotheses have yielded testable predictions, most of which have been borne out. From “Powerball, Part Two”:
To answer a question posed in Part One: if Trump has consolidated power both at home and abroad, don’t hold your breath waiting for a swamp draining. The most effective power is often power of which only a few know. Those he has by the short hairs would be most helpful to him—sub rosa—if they’re still in government. If such is the case, don’t be surprised if the Russia probe fades away, Trump’s nominal opposition consigns itself to rote denunciation, the Deep State sits still for his Middle Eastern policy changes, and he gets more of his agenda through than anyone expects.
Even the Washington Post has admitted the Russia probe is “crumbling.” Trump and Sessions know Special Prosecutor Robert Mueller won’t find much because there’s nothing there, although there may be a sacrificial offering or two to propitiate the investigatory gods. Trump read Sessions the riot act via Twitter and a Wall Street Journal interview about not investigating Hillary Clinton, intelligence community leaks to the press, and Ukrainian efforts to sabotage his presidential campaign. He’s been roundly condemned for publicly criticizing Sessions, but here’s a speculative leap: perhaps publicly criticizing Sessions was not really what Trump was doing.
Perhaps Trump was giving his attorney general political cover to pursue investigations against high-profile Democrats who cannot help Trump, sub rosa or otherwise. Investigations of Hillary Clinton, former Attorney General Loretta Lynch, Susan Rice, Samantha Power, Fusion GPS, and Debbie Wasserman Schultz would demoralize the Democrats, preoccupy and harass key players, expose criminality, and electrify Trump’s base. Providing Sessions further cover, twenty Republican representatives have sent a letter to the Attorney General and Deputy Attorney General Rod Rosenstein demanding the appointment of a second Special Counsel to look into potentially illegal acts by Clinton, Lynch, and former FBI director James Comey.
After recusing himself from the Russiagate investigation, which he knows is pointless, and being “scolded” by Trump, Sessions is now a sympathetic, squeaky-clean figure; even Democrats have expressed support. He has far more latitude to pursue the investigations his boss wants him to pursue. Most of the ensuing criticism will be directed at Trump, which will bother Trump not at all (although there will undoubtedly be answering Twitter blasts).
Trump has quietly (when Trump does anything quietly, take note) made two sea changes in US policy in Syria. At the G20 summit, he negotiated a cease fire with Vladimir Putin for southwest Syria. Last week he ended a CIA program that armed Syrian jihadists fighting Bashar al-Assad’s regime. Both changes are anathema to the US Deep State, the mainstream media, and US allies Saudi Arabia, the Gulf States, Israel, and Turkey, yet other than “rote denunciation,” they have been surprisingly docile. The latter change could presage abandonment of a pillar of US foreign and military policy since President Carter supplied arms and other aid to the mujahideen in Afghanistan during their successful fight against the Soviet Union. The US may be out of the business of arming Islamic insurgents against regimes it seeks to change.
Deft – by this analysis – as Trump has been, his biggest challenge lies ahead.
The government is bankrupt, and demographics will push it ever-deeper in the hole.
The global economy is struggling under monstrous and unsupportable debt.
Fiat money something-for-nothing has a sell-by date, sooner or later the stock market and economy will head south.
Historically, there’s been a tight correlation between stocks, the economy, and presidential popularity.
Can Trump dodge this bullet? Here’s another speculative leap: he is already laying the groundwork. He’s claiming credit for the stock market’s rally since he was elected. That may not be as foolish as it seems. When the market and economy falter, he will claim they went up on hopes for his program, and will blame Congress and the Federal Reserve for dashing those hopes.
Most people blame the Republican-controlled Congress, not Trump, for the failure to repeal and replace Obamacare. Trump proposes, but Congress disposes and Trump has made sure everyone knows that Congress is responsible. In the same vein, he signed the veto-proof Russian sanctions bill while at the same time excoriating Congress for passing it. He has an easier job making his case than a President whose party controls Congress normally would. Trump is a Republican in name only and ran just as hard against the Republican establishment as he did against Hillary Clinton.
Look for him to lambast Congress when it botches tax reform and the debt ceiling. He could be hoping for such miscues. Debt ceiling contretemps may set off financial market conniptions. Trump will sigh and tweet: If only Congress had passed my health care and tax reforms and given me a clean debt ceiling increase, none of this would have happened. If the Federal Reserve continues to raise its federal funds target rate and shrinks its balance sheet, he’ll include Janet Yellen in his tweets.
These hypotheses yield testable predictions. Mueller’s investigation will come a cropper, but investigations of high-profile and no sub rosa value leakers and Democrats – up to and perhaps including Hillary Clinton – will lead to indictments and either plea bargained settlements or convictions. Trump will take credit for the stock market until it reverses. He will continue to harshly criticize Congressional failures and blame them when financial markets and the economy head south. This may come to a head if Congress fails to pass a clean debt ceiling increase by the end of September. Trump will also point his finger at the Federal Reserve. This is a high risk strategy, given the longstanding psychological linkage between presidential popularity, the strength of the economy, and stock market indices. It’s probably the only strategy available to Trump. Time will tell if it works.
The war in Syria has crested; ISIS, though still capable of substantial mischief, has lost. The refugee flow has already reversed, an estimated half a million refugees have returned, which, as noted in “Powerball, Part Two,” gives European leaders some breathing room. Assad will stay in power unless Russia, not the US, sees fit to remove him. The embers of conflict will smolder for years, but Trump will not be fanning them by arming anti-Assad groups or escalating US military involvement. He will continue to use shows of force and diplomatic maneuvers to try to resolve other hot spots—North Korea, Iran, the South China Sea, Ukraine, Afghanistan—and will shy away from exclusively military solutions. He is deeply displeased with the war in Afghanistan and is calling for a rethink that may ultimately lead to withdrawal.
All this is speculative, but it continues a line of analysis whose predictions have been for the most part confirmed. However, borrowing from the ubiquitous financial disclaimer: past performance is no guarantee of future accuracy.
- Zero-Emission Vehicle Credits: The One 'Product' That Tesla Actually Earns A Profit On
As we pointed out last week when Tesla reported its Q2 earnings, making products that actually generate a return on capital for shareholders isn’t a strong suit of the Silicon Valley powerhouse. In fact, Elon Musk managed to burn through a record $1.2 billion of cash in Q2 alone, or roughly $13 million dollars every single day.
But, as Bloomberg points out today, there is at least one product where Tesla manages to earn a staggering margin of roughly 95%. It’s called a Zero-Emission Vehicle (ZEV) credit and it’s pretty much the only reason that Tesla managed to ‘beat’ earnings in Q2.
I’m referring to zero-emission vehicle, or ZEV, credits. California and several other states require that a certain proportion of the vehicles sold by an automaker emit no greenhouse gases. These cars earn the automaker credits, and if they don’t have enough to meet their quota, they can buy extra ones from someone who does. As Tesla only makes vehicles that run on batteries and emit nothing, it usually has a surplus for sale.
The profit margin on these is very high, perhaps 95 percent. The implied $95 million of profit equates to about 58 cents a share. Tesla reported a loss of $1.33 per share this week — beating the consensus forecast by 55 cents.
This isn’t the only time ZEV credits have played a big role for Tesla. Looking back to early 2013, selling credits has given Tesla’s earnings extra oomph in many quarters, likely taking them above consensus forecasts in some (on an implied basis, assuming that 95 percent margin):
After selling $0 worth of ZEV credits in 1Q 2017, Tesla managed to sell $100 million worth in 2Q with roughly $95 million, or $0.58 per share, flowing straight to the bottom line.
Of course, this isn’t the first time that ZEV credits played a huge role in padding Tesla’s earnings. Who can forget Q3 2016 when a $139 million in sales pushed Tesla’s earnings into positive territory for the first time in years?
One notable period there is the the third quarter of 2016. This was the one where CEO Elon Musk exhorted his employees to “throw a pie in the face” of Tesla’s critics by delivering thumping results. It worked, although at the cash-flow level it also owed quite a bit to suppliers.
But ZEVs provided a big tailwind: At $139 million, Tesla booked more revenue from selling the credits that quarter than any other. Using my margin assumption, they added 84 cents per share to earnings, turning a loss of 13 cents into a profit of 71 cents.
In short, as taxpayers we’re all doing our part to help the environment by enriching one eccentric billionaire in Silicon Valley…which presumably makes sense to some politicians in Sacramento.
- China Unveils New Weapons – From Stealth Fighters To ICBMs
As part of the People's Liberation Army's 90th anniversary celebration – it was founded on August 1, 1927 – President Xi Jinping (in military fatigues) hosted a giant parade at the Zhurihe Training Center.
Zhurihe – Zhurihe certainly has enough room to hold all the people and equipment for a parade with thousands of soldiers, hundreds of tanks and armored vehicles, and dozens of ICBMs. -Xinhua News Agency
Here, PLA's most elite forces demonstrated how far China has come in modern warfare. CCTV broadcast the session, which means a domestic and global audience of millions saw the army's showcase of tanks, stealth fighters, artillery, and ICBMs.
Combat support vehicles were not forgotten. Combat engineering vehicles, BZK-006 UAV launch vehicles, communications vehicles, and even fuel tankers followed.
There was plenty of air power, too. A trio of J-20 stealth fighters flew over the parade, followed by Y-20 heavy transport aircraft, KJ-2000 AEW&C aircraft, J-16 strike fighters, J-15 carrier fighters, and J-10B fighters. The latest H-6K bombers, along with H-6U aerial tankers and Y-9 transports, also made an appearance.
J-20 – Three J-20 stealth fighters led the aerial portion of the PLA's 90th anniversary parade. -Xinhua News Agency
Z-10 attack and Z-18 transport helicopters showed up, flying in formations shaped like "90," as well as the Chinese characters for 8-1 (a reference to August 1), with the Z-18 transports landing to disgorge airmobile infantry.
The highlight was likely the public debut of not just one, but 16 DF-31AG intercontinental ballistic missiles (ICBMs). The DF-31AG is an improvement over the 7,146-mile-range DF-31A ICBM. It carries a larger, reinforced missile canister likely carrying a more powerful missile with increased range or payload. The DF-31AG also uses an all-terrain 8X8 launch vehicle, enabling it to go off-road, which will make it much harder to find compared to its truck-launched predecessor.
Other missiles present: the DF-31A ICBM, the DF-26 intermediate-range ballistic missile, and the DF-16 short-range ballistic missile. Surface-to-air missiles were well represented by HQ-9B and HQ-16 SAMs, as well as LD-2000 and PGZ-07 anti-air cannons. The surface-attack options were represented by CJ-10 cruise missiles, YJ-62 and YJ-83 anti-ship missiles, and YJ-12 supersonic anti-ship missile.
The fact that the parade took place not in Beijing, but in Inner Mongolia, was symbolic. Zhurihe hosts the PLA's annual Stride exercises. These wargames pit the resident "Blue Team" (a mechanized infantry brigade that uses NATO tactics) against visiting PLA units. These wargames are played in a variety of urban, hill, and open-area locations, often under intensive conditions, including simulated nuclear battlefields.
- Yuan Spikes After China Export Growth Tumbles To 5-Month Lows
Just as we warned, the EM exuberance has faded and China's torrid trade growth has suddenly slowed dramatically. Offshore Yuan is spiking after both China Imports and Exports dramatically missed expectations.
China customs administration announces data in yuan terms in statement:
- July exports climbed 11.2% y/y; median est. 14.8% rise y/y (range +12.1% to +16.5%, 10 economists).
- July imports climbed 14.7% y/y; median est. 22.6% rise (range +16.0% to +26.9%, 10 economists)
- July trade surplus 321.2b yuan; median est. 293.6b yuan surplus (range 250b-348.3b yuan surplus, 10 economists)
Export growth is now the slowest since February (lower than the lowest estimate) and Import growth is now the weakest since Dec 2016 (lower than the lowest estimate)…
The most obvious reaction in markets was a jump in Bitcoin and spike in Offshore Yuan…
Of course, as Bloomberg reports, the world’s largest exporter is confronting more uncertainty, as U.S. President Trump continues sporadic tough talk on China. The White House may beconsidering an investigation into alleged intellectual property violations, which could risk igniting broader trade conflict. Citic Securities Co. said in a researchreport that rising U.S. protectionism coupled with anti-globalization sentiment in Europe will take its toll on China’s exports.
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