September 9th Links

• This was such a great thread. Maybe when the bear market returns, the CBS commentariat will have the Animal Spirits for these types of discussions again. [CBS]
• Are there debates happening today in Russian, German, Japanese, and so forth, that would shake the world if only the world could read them? Or are those conversations mostly internal reactions to intellectual trends pioneered in the Anglophone world (just as the intellectual conversation in China, c. 1911-1949 was mostly a reaction to ideas imported from Europe)? Has the engine of thought really left the Old World behind? [Scholars Stage]
• It is incredible how much useful information from the business world is becoming lost to history. I can get detailed box scores from decades-ago college football games, but finding a 1975 annual report from a midsize company is surprisingly difficult. [New Yorker]
• The thing people don't get in the electric vehicle discussion is that gasoline is almost a waste product in the refining industry. Our civilization runs on diesel and JP-8 and asphalt. The logistics, farming, and mining systems run on this stuff and electrification is utterly impossible, and you can't run the equiment on gasoline either: the torque curve requirements necessitate higher octane fuels. There will never be an electric or gasoline combine harvester or freight train or barge or surface mining vehicle. Refining profits are made from diesel/jet fuel and asphaltenes for industrial applications. The refineries make gasoline out of the remaining stuff that cannot be profitably re-fractionated into higher octane products. So it really makes almost no sense to power personal vehicles with electricity from uranium/coal/natgas when we are going to have the gasoline anyway whether we really need it or not, as it's basically a way to get rid of the leftover crap. I see many city electrified light rail and diesel/natgas powered bus systems that I am almost sure would operate at a fraction of the cost if replaced by fleets of large gasoline powered vans. Just give them reserved lanes and optimize traffic light timing for them. People would actually *use* public van transit that showed up very often (every eight minutes) and zipped past traffic. SWPLs really need to get over their superstitions (oooh, monorail) and think about these things systematically. [LoTB]
• Pursuant to the Settlement Agreement, the Parties concurrently entered into a share repurchase agreement (the "Repurchase Agreement") providing for the purchase of the shares of common stock of the Company, par value $0.01 per share ("Common Stock"), beneficially owned by the Investor Parties as of the date of the Settlement Agreement, by the Company and Christopher Hughes, the Chairman of the Board of Directors of the Company (the "Board"), President and Chief Executive Officer of the Company, for an aggregate purchase price of $5,956,712.50 in cash or $6.25 per share, subject to the terms and conditions contained in the Repurchase Agreement (the "Repurchase"). In addition, the Company has agreed to make a payment of $1,543,287.50 to the Investor Parties for the settlement of the pending litigation (the "Settlement Payment"). [EDGAR]
• Despite the billions of dollars cigarette companies invested in new technologies, it took a start-up to popularise e-cigarettes. Founded in 2015, Juul Labs has seized more than 70 per cent of the US vaping market, a market that is growing fast: the US now has 14m adult vapers alongside its 39m adult smokers, Wells Fargo estimates. The speed of these changes has forced cigarette makers to respond. Last year, Altria invested $13bn in Juul for a 35 per cent stake, pledging to use its sway with retailers to promote Juul's products. The tobacco group's efforts to diversify have also seen it spend $1.8bn on a 45 per cent stake in Cronos, a Canadian cannabis company, and $372m for a majority stake in Burger Söhne, the Swiss manufacturer of On, an oral nicotine brand. [FT]
• They'd find old cars driving through town, and they'd give the drivers $50 to drive back and forth through a scene so that they'd have 1982 Cutlasses in the background of a shot. He bought a '73 pickup truck that they'd drive to the set every day in case of a problem — if you look in the background the truck "drives through the movie about 90,000 times". [NY Times]
• Musk is an excellent promoter. He did not come up with the technological innovation in batteries that would have allowed battery electric vehicles to make economic sense. Nor did he come up with a technological innovation in photovoltaic solar panels, balance of solar system, or installation procedures that would allow them to make clear economic sense for residential installation. But he started companies in those two industries anyway. With his excellent promotion skills he was able to raise a lot of money for them and sell products to tech dorks, albeit at prices that result in the continual consumption of the capital he has raised. Because the capital has been consumed and continued operations would consume more he needs more - but the fundamentals of his businesses do not allow him to raise money if he gives a clear, straightforward presentation of the economics. That is why he depends on promotion and tantalizing sizzle - a promise that he can write now but that will not be cashed for "six months" or more. [CBS]
• Sad, however, that its marketing uses the word "shark" to describe company owners who have decided to attempt to work with fellow owners to convince managements (their employees!) to take actions that they feel would be beneficial. Also, the term "takeover defense" is euphemistic and misleading. How about calling it "management entrenchment"? Or "principal-agent accountability disruption"? Good corporate governance is, to a large degree, the inverse of the "takeover defense" and anti-"activist" devices that have been created over the past decades to entrench management agents at the expense of their owner principals. [CBS]
• So-called "takeover defense mechanisms" drive a wedge between ownership of the company by shareholders and the rightful exercise of that ownership through control of the company's operations. This makes way for a parasite class of non-owner management to usurp wealth. [CBS]
• Go out in bad weather! Seriously, a friend of mine broke into the stock photography business by shooting at Boston Logan airport only on bad weather days when no one else was. He built up an impressive portfolio of powerful images that an agency was willing to take on. This was a side-business for him but soon after he wound up getting hired to shoot the final A6 Intruder cat-shot on a US Navy aircraft carrier! Brooding dark skies and dangerous clouds really add a lot of drama to otherwise repetitive blue-sky landing or take-off pictures. [link]