MADNESS AND INSANITY IN A TIME OF JOE BIDEN

thelivyjr
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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 15, 2022 AT 10:29 PM

Paul Plante says:

Sounds like Fisker all over again!

Will Joe be bailing out these EV companies as well?

And I wonder if and when Joe Biden will ever figure out that the more people trying to obtain the same resources at the same time always drives the cost of those resources up, not down:

Reuters

“Electric vehicle makers burning cash, slammed by sky-high costs”

By Akash Sriram

November 14, 2022

Nov 14 (Reuters) – Every time Lucid Group Inc or Rivian Automotive Inc sells an electric car, they are losing hundreds of thousands of dollars due to staggering raw material and production costs, their latest earnings statements showed.

Quarterly reports from electric vehicle (EV) makers from the past two weeks show them struggling to hit delivery targets and rapidly burning through cash.

Lucid’s cost of revenue surged to $492.5 million in the July-September quarter from $3.3 million a year earlier, and its losses widened as customers canceled orders fearing long wait times.

The company, which went public a little over a year ago and is backed by Saudi Arabia’s Public Investment Fund, saw its market value shrivel by two-thirds this year to about $20 billion from $95 billion at its peak in November 2021.

The company said it had enough cash to sustain itself at least into the fourth quarter of next year and is looking to raise about $1.5 billion through a stock sale.

Its stock price slumped 17% after results, and clawed back some losses in the next two sessions to finish on Friday down 4.4% from before it reported.

U.S.-listed British firm Arrival SA warned last week it may not have enough cash to keep its business going toward the end of next year, and would have to cut jobs.

It has yet to start mass production.

Canoo Inc said in May it had “substantial doubt” about remaining a going concern.

At the end of September, it had $6.8 million in cash and equivalents, down sharply from $415 million a year earlier.

Many EV startups recorded huge losses in the September quarter and warned that high costs were here to stay due to surging inflation and a global supply chain crisis.

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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 16, 2022 AT 11:44 AM

Paul Plante says:

White & Case

“President Biden Signs CHIPS and Science Act into Law”

12 August 2022

On August 9, 2022, President Biden signed the CHIPS and Science Act (H.R.4346), which seeks to bolster the US semiconductor supply chain and promote research and development of advanced technologies in the United States.

Key provisions and updates in the CHIPS and Science Act are as follows:

* “FABS Act” investment tax credit. The bill establishes a new 25 percent tax credit for investments in semiconductor manufacturing facilities in the United States (not envisioned in the USICA or the COMPETES Act).

*********************

“GlobalFoundries plans job cuts, hiring freeze, shifting priorities from thoughts of second Malta fab”

Larry Rulison, Albany, New York Times Union

Nov. 14, 2022

MALTA — Despite reporting record earnings last week, Saratoga County chipmaker GlobalFoundries is planning company-wide job cuts and a hiring freeze, contributing to uncertainty over if and when it will build a second factory in Malta.

GlobalFoundries spokeswoman Erica McGill confirmed the plans Monday and said the reasons for the layoffs go beyond the company’s positive third-quarter results.

“On the heels of a strong third quarter with solid fourth-quarter guidance, we face rapidly developing uncertainties of the global economy, including inflation, continued elevated energy costs and rapid interest rate increases that are impacting our industry and GF,” McGill said.

“Based on the current macroeconomic environment, we are taking a very disciplined, proactive approach to contain costs and accelerate our planned productivity initiatives,” McGill said.

“Like many in our industry and across the technology sector, we too are initiating a hiring freeze and taking a set of focused actions to selectively reduce our workforce.”

GlobalFoundries CEO Thomas Caulfield said at the start of the call that some customers have recently asked to “modestly adjust some of their 2023 shipments downward,” likely in the first half of the year.

“We are proactively taking actions to contain costs and to accelerate our previously planned productivity initiatives,” Caulfield said.

“Though it is difficult to take these actions during a year of record output, we believe that taking these actions now enables us to continue to outperform the market regardless of the economic environment.”

During the conference call, GlobalFoundries Chief Financial Officer David Reeder mentioned the “smart mobile” device market as one sector seeking fewer chips due in part to an “inventory correction,” meaning the sector is seeing less demand for its products.

Apple has seen lower-than-expected demand for its new iPhone 14, for example.

The chip industry is notoriously volatile and chipmakers will cut jobs and other expenses if they forecast difficult economic conditions due to the enormous costs of chip manufacturing.

Although GlobalFoundries can tap into $52 billion in federal government subsidies made available to chipmakers to expand in the U.S. through the recently approved CHIPS Act to build the new facility, Caulfield said no firm decisions have been made on whether — or when — construction would begin.

“From a GF perspective, we will not put capacity on without customers committed to that demand,” Caulfield said during the conference call.

“The rate and pace at which we do it will be dictated by how quickly our customers are looking for us to create this capacity for them as they think about rebalancing their supply chains and bringing some of that product to the states,” Caulfield said.

“I call it the $52 billion question.”

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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 16, 2022 AT 7:13 PM

Paul Plante says:

OCTOBER 13, 2021

FACT SHEET: Biden Administration Efforts to Address Bottlenecks at Ports of Los Angeles and Long Beach, Moving Goods from Ship to Shelf

President Biden knew that there would be massive economic challenges emerging from the pandemic.

The Biden Administration acted quickly to get the economy moving again – passing and implementing the American Rescue Plan to get checks in bank accounts and get Americans vaccinated.

But as the country recovers from a once in a century pandemic and economic crisis, the private businesses that make up our supply chains, which get goods to businesses and the American people, have struggled to keep up.

The President launched the Supply Chain Disruptions Task Force in June, which included a focus on transportation and logistics bottlenecks to the U.S. economic recovery.

After meeting with local government leaders and companies to diagnose the problems and identify solutions, Port Envoy John Porcari was appointed in August to help drive coordination between the many private firms who control the transportation and logistics supply chain.

Today, the Administration is convening business leaders, port leaders, and union leaders to discuss the challenges at ports across the country and actions each partner can take to address the delays and congestion across the transportation supply chain.

And the President will meet with the leadership from the Ports of Los Angeles and Long Beach and the International Longshore and Warehouse Union (ILWU) to discuss the actions they are each taking to address these challenges in Southern California.

These leaders are announcing a series of public and private commitments to move more goods faster, and strengthen the resiliency of our supply chains, by moving towards 24/7 operations at the Ports of Los Angeles and Long Beach.

These two ports are the point of entry for 40 percent of containers to the U.S., and are on track to reach new highs in container traffic this year.

********************************

Reuters

“Port of Los Angeles October imports tumble, pressured by labor worries”

By Lisa Baertlein

November 15, 2022

LOS ANGELES, Nov 15 (Reuters) – October volume at the busiest U.S. seaport fell to its lowest level since 2009 as shippers sent cargo to alternate trade gateways to avoid potential disruptions from ongoing West Coast port labor talks, Port of Los Angeles Executive Director Gene Seroka said on Tuesday.

The data comes as ocean trade activity returns to more normalized levels after booming in the early days of the COVID-19 crisis.

Seaports like New York/New Jersey, Savannah and Houston have benefited from the uncertainty surrounding ongoing West Coast port labor talks and continue to report robust results.

Port of Los Angles data showed that the facility handled 678,429 20-foot equivalent units (TEUs) last month – almost 25% fewer than in October last year.

The biggest drag was from incoming “cargo that has shifted to the East and Gulf Coasts due to protracted labor negotiations” between West Coast port workers and their employers, Seroka said.

Beyond that, U.S. demand for physical goods is retreating from the early pandemic’s record highs.

Consumers who splurged on goods like golf clubs, grills and sofas before infection control measures lifted are now prioritizing travel and other entertainment as inflation squeezes their disposable income.

Imports, which accounted for almost 50% of October’s volume, tumbled 28% from the year earlier.

Empty containers, comprising 37% of the work handled at the port, dropped more than 25%.

Year-to-date volume is down almost 6% versus 2021, when Los Angeles port volume hit an all-time annual high.

Seroka expects the downtrend to continue at the Southern California port.

“The November numbers will be soft.”

“So will December,” he said.

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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 17, 2022 AT 11:44 AM

Paul Plante says:

Watertown Daily Times, N.Y.

“In Syracuse, Biden touts Democratic economic successes as he welcomes Micron chipmaking facility”

Alex Gault, Watertown Daily Times, N.Y.

October 28, 2022

Oct. 28—SYRACUSE — In a visit to the city on Thursday, President Joseph R. Biden championed a resurgence in American manufacturing as he and other federal, state and local officials welcomed semiconductor and computer microchip manufacturer Micron to Central New York.

Alongside Micron Technology CEO Sanjay Mehrotra, Gov. Kathleen C. Hochul, Senate Majority Leader Charles E. Schumer, D-N.Y, and Sen. Kirsten E. Gillibrand, D-N.Y., the president declared that upstate New York’s manufacturing legacy is back.

“One of the most significant investments in American history is going to ensure that the future is made in America,” President Biden said to a gymnasium of people on the Onondaga Community College campus Thursday afternoon.

Returning to the city where he attended law school, President Biden struck a triumphant tone as he talked to the assembled crowd, and said the Micron investment is just the start of a new future for New York and American manufacturing.

***********************************

Reuters

“Micron to supply fewer memory chips in 2023, plans fresh capex cuts”

Reuters

November 16, 2022

Nov 16 (Reuters) – Micron Technology Inc said on Wednesday it would reduce memory chip supply and make more cuts to its capital spending plan, as the semiconductor firm struggles to clear excess inventory due to a slump in demand.

Micron was the first major chipmaker to sound an alarm about falling demand for personal computers and smartphones earlier this year in the face of decades-high inflation.

Chipmakers and electronics companies, which had been preparing for the pandemic-led demand surge to sustain and had for long struggled with supply constraints, soon found themselves with overstocked inventory.

The broader weakness seeped throughout the industry, and is now affecting all end-markets from personal electronics to data centers to industrial.

“In order to significantly improve total inventory … DRAM bit supply will need to shrink and NAND bit supply growth will need to be significantly lower than previous estimates,” the company said.

Micron said it is reducing DRAM and NAND wafer starts – or the initial process in semiconductor production – by about 20% compared with the fourth quarter that ended on Sept. 1.

For 2023, the company expects its year-on-year bit supply growth to be negative for DRAM and in the single-digit percentage range for NAND.

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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 20, 2022 AT 10:15 PM

Paul Plante says:

The Hill

“Gretchen Whitmer’s auto job race to the bottom”

Opinion by James David Dickson, Opinion Contributor

19 November 2022

Gov. Gretchen Whitmer wants to be known for creating jobs in Michigan’s all-important auto industry.

In October, she proudly declared that “since taking office, we’ve announced 30,000+ auto jobs and counting.”

But “announced” is different from “created,” and she’s walking back earlier claims that she has overseen actual job growth.

Worse, she is ignoring that her actions to spend taxpayer money on electric vehicle (EV) production are helping to kill the very auto jobs she claims to care so much about.

In her four years in office, Whitmer has presided over a spate of layoffs from the Big Three automakers: General Motors, Ford and Stellantis.

In August, two months after getting a $100 million state subsidy to hire 3,030 blue-collar workers to build EVs, Ford let go about 3,000 white-collar workers, saying a “significant percentage” would be in Michigan.

The state of Michigan paid Ford $100 million in taxpayer dollars to trade white-collar jobs for blue-collar jobs.

GM dismissed about 800 workers in Detroit three years ago, while Stellantis, which makes Chrysler vehicles, started downsizing over the summer at various Michigan plants.

The layoffs are connected to each company’s efforts to ramp up production of electric vehicles.

EVs do not require as many workers to build, which fundamentally means a slimmed-down American auto industry.

And that means fewer jobs.

If this were a market-driven dynamic, there would be little to complain about.

But it’s not — it is the government using taxpayer dollars to subsidize vehicles that require fewer jobs to manufacture.

The Whitmer administration is following the Biden administration’s lead in the push to make the Michigan auto industry produce more electric vehicles.

Just last year, President Biden issued an executive order targeting that 50 percent of vehicles sold by 2030 be electric or carbon-free.

When it was announced, the Big Three supported this overly ambitious goal, but made a point to say that it could “be achieved only with the timely deployment of the full suite of electrification policies committed to by the administration in the Build Back Better Plan,” including “incentives to expand the electric vehicle manufacturing and supply chains.”

These incentives have grown beyond the federal government and now come straight from the hands of state taxpayers.

In that Ford deal in June, Michigan threw in another $50 million in tax exemptions for Ford’s EV facility in River Rouge.

Since taking office in 2019, Whitmer has thrown well over a billion dollars in taxpayer money at electric vehicle production.

Why are taxpayers being forced to pay for the privilege of lost jobs and potentially unwanted electric vehicles, which have an average sticker price of $66,000?

These giveaways are being sold as all upside in the future, but the downside is being felt in the here-and-now.

Layoffs today are more real than the hope of good-paying jobs tomorrow.

Michigan already has half the amount of the auto jobs it had in 2000, the state’s recovery from the Great Recession has lagged the rest of the country, and throwing billions of taxpayer dollars toward EV production will do little to bring those jobs back.

Job announcements have a way of not materializing.

Taxpayer giveaways are bad business.

Nationwide, the jobs touted in subsidy announcements have a track record of never showing up, reflecting in part the uneconomical nature of taxpayer giveaways.

If the promised electric vehicle jobs don’t arrive in Michigan, it will reflect reality: These businesses don’t work, even with the subsidies.

Oops.

Whitmer surely knows this, given the history of failed green-energy subsidies under one of her predecessors, Jennifer Granholm, now the U.S. Secretary of Energy.

But like many other supporters of taxpayer giveaways, she also knows that when it’s finally clear that taxpayer money was wasted, it won’t affect her.

By the time taxpayers learn how those deals went, there will be no way to hold accountable those who championed them.

The conventional wisdom, from reporters and pollsters and political consultants, will claim that “everybody has moved on.”

That’s why Michiganders and taxpayers across the country should pay attention now.

Catch the next one before it happens.

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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 21, 2022 AT 10:11 PM

Paul Plante says:

“Showered with subsidies, GlobalFoundries, Micron eye cuts”

Larry Rulison, Albany, New York Times Union

Updated: Nov. 18, 2022

Just months after President Joe Biden signed the $52 billion CHIPS Act that will provide billions of dollars to chipmakers to build new factories in the United States and expand existing facilities — and just weeks after U.S. Senate Majority Leader Charles Schumer and Gov. Kathy Hochul celebrated a landmark deal to convince Micron Technology to build a massive new factory outside of Syracuse, the industry is starting to signal that it needs to put the brakes on spending.

GlobalFoundries and others have said they plan job cuts and hiring freezes.

And Micron says it will cut memory chip production by 20 percent, along with pulling back on capital spending.

The situation is raising eyebrows because of the number of incentives New York state and the federal government are offering these companies to build upstate.

When you operate factories that cost up to $10 billion each, the easiest way to go bankrupt is to operate them at full capacity when demand is falling.

Right now, the chip industry is facing a tough outlook for the first half of 2023 as customer demand for chips, especially for smartphones, is softening due to persistent price inflation, high energy prices, a recent pummeling of technology company stocks and a crisis in the crypto market.

Robert Maire, a chip industry analyst who runs a firm called Semiconductor Advisors in New York City, said Micron had already signaled significant cuts to capital expenditures earlier this year, and this latest announcement could mean it “will all but go to zero” for the time being.

The oversupply of memory chips, Maire said in a research note published Wednesday, is due in large part to technological advances that make memory chips more powerful than previous generations.

There is no need for end-users to buy new chips right now.

“This fact is also the same with every other memory maker from Samsung (the largest memory chipmaker in the world) on down, so we will be floating in excess memory chips for a long time until demand picks up to absorb the excess supply brought about by technology advancements,” Maire added.

“Micron’s new fab in Boise will clearly be delayed as need for additional capacity is nonexistent over the next several years,” Maire continued.

“The fab after Boise, in New York, will clearly be pushed back even further.”

GlobalFoundries CEO Thomas Caulfield told analysts last week that the company’s plans to build a second fab at its headquarters in Saratoga County, where it has an existing factory, are dependent on customer demand and long-term orders that have yet to be found.

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Re: MADNESS AND INSANITY IN A TIME OF JOE BIDEN

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THE CAPE CHARLES MIRROR NOVEMBER 26, 2022 AT 10:02 PM

Paul Plante says:

This is a story about how one out-of-control and out-of-touch-with-reality “world leader” obsessed with wielding raw power like a cudgel or bludgeon can take actions harmful to the world at large that cannot be challenged by anyone being harmed because the obsessed “world leader,” a fool, really, is too powerful, to wit:

Politico

“Europe accuses US of profiting from war – EU officials attack Joe Biden over sky-high gas prices, weapons sales and trade as Vladimir Putin’s war threatens to destroy Western unity.”

By Barbara Moens, Jakob Hanke Vela and Jacopo Barigazzi

November 24, 2022

Top European officials are furious with Joe Biden’s administration and now accuse the Americans of making a fortune from the war, while EU countries suffer.

“The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,” one senior official told POLITICO.

The explosive comments — backed in public and private by officials, diplomats and ministers elsewhere — follow mounting anger in Europe over American subsidies that threaten to wreck European industry.

The biggest point of tension in recent weeks has been Biden’s green subsidies and taxes that Brussels says unfairly tilt trade away from the EU and threaten to destroy European industries.

The growing dispute over Biden’s Inflation Reduction Act (IRA) — a huge tax, climate and health care package — has put fears over a transatlantic trade war high on the political agenda again.

“The Inflation Reduction Act is very worrying,” said Dutch Trade Minister Liesje Schreinemacher.

“The potential impact on the European economy is very big.”

“The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,” said Tonino Picula, the European Parliament’s lead person on the transatlantic relationship.

Cheaper energy has quickly become a huge competitive advantage for American companies, too.

Businesses are planning new investments in the U.S. or even relocating their existing businesses away from Europe to American factories.

Just this week, chemical multinational Solvay announced it is choosing the U.S. over Europe for new investments, in the latest of a series of similar announcements from key EU industrial giants.

Despite the energy disagreements, it wasn’t until Washington announced a $369 billion industrial subsidy scheme to support green industries under the Inflation Reduction Act that Brussels went into full-blown panic mode.

“The Inflation Reduction Act has changed everything,” one EU diplomat said.

“Is Washington still our ally or not?”

An official from France’s foreign affairs ministry said the diagnosis is clear: These are “discriminatory subsidies that will distort competition.”

French Economy Minister Bruno Le Maire this week even accused the U.S. of going down China’s path of economic isolationism, urging Brussels to replicate such an approach.

“Europe must not be the last of the Mohicans,” he said.

The EU is preparing its responses, such as a big subsidy push to prevent European industry from being wiped out by American rivals.

“We are experiencing a creeping crisis of trust on trade issues in this relationship,” said German MEP Reinhard Bütikofer.

“At some point, you have to assert yourself,” said French MEP Marie-Pierre Vedrenne.

“We are in a world of power struggles.”

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