Coyote Blog

You folks can disagree with me about the prospects for the Tesla stock price.  You may hero worship Elon Musk and think he's a genius where I think he is a charlatan with PT Barnum promotion skills.  You may really, really love our Tesla car (I thought the Model S was a fine car when it first came out -- the Model 3, not so much).  But PLEASE do not rely on your Tesla autopilot.  Or at least read this Ars Technica article first.

A while back I went to a party in the suburbs of New York and needed a ride back to my hotel in the city.  A friend of a friend offered to give me a ride.  It turned out he was driving a Tesla Model X (SUV).  In the same way that you can't go 3 minutes with a Vegan without getting a diatribe on the virtues of veganism, for some distance in the ride we heard a paean to Elon Musk and Tesla.  This guy had really drunk the Kool-Aid.  Before my wife started kicking my ankle, I expressed a few of the reservations I had about the company and Musk, and the driver got really defensive. So much so he set out to prove Tesla's superiority.  So he drove us the rest of the way home (mostly) with his hands off the wheel through the freeways around Manhattan.  It scared the cr*p out of me, because I knew that while the AP could drive impressive distances and navigate on its own, it was only 99% reliable.  And since it makes hundreds of decisions every trip, those are not great odds.

What worried me is that he insisted on using the AP almost as a test of religious faith.  There is this weird dichotomy where all the Tesla literature that is actually reviewed by their lawyers and the DOT tell you never to take your hands off the wheel, but Musk goes on 60 Minutes bragging and doing exactly that (almost hitting another car) and verbally the company constantly brags on its AP capability.

This is crazy.  You only have to look at Boeing and the 737MAX experience to understand that even a very careful and experienced company like Boeing can screw up the software-hardware interaction  The 737MAX worked most of the time, just like the Tesla AP, but in Boeing's case you don't see consumers arguing that this makes it OK -- you see the DOJ initiating criminal investigations.  Tesla is a much less experienced and far less careful and organized company than is Boeing.  Despite Musk's bluster, third parties rank them close to dead last in self-driving technology development, but they are the only major self-driving provider who are actively encouraging their customers to use it outside of a carefully controlled test environment.   Everyone who actually understands AI believes Musk is totally full of sh*t when he talks about AI, particularly the much-hyped "shadow mode."

Interestingly, that latter reaction is the same one I hear from nearly everyone who hears Musk discuss something they actually know about. My moment came listening to Musk talk about the hyperloop, which is truly a crazy, unfeasible, uneconomic joke.  As I wrote before:

Elon Musk is not the smartest guy in the world.  He is clearly a genius at marketing and brand building.  He has a creative mind -- I have said before he would have been fabulous at coming up with each issue's cover story for Popular Mechanics.  A mile-long freight blimp!  Trains that run in underground vacuum tubes!  A colony on Mars!  But he suffers, I think, from the same lack of self-awareness many people develop when they are expert or successful in one thing -- they assume they will automatically be equally as brilliant and successful in other things.  Musk creates fanciful ideas that are exciting and might work technically, but will never ever pencil out as profitable business (e.g. Boring company, Hyperloop).

I watched the Ant-man and the Wasp the other night and listening to Musk is a lot like Marvel movie physics -- both use recognizable terms (if you had a drinking game in this last Ant-man movie that took a shot when they said "quantum" you would be dead now) that sound good to laymen but make no sense to people who actually understand the topic.  There may have been some excuse to lionize Musk's brilliance a year or five years ago, but how can anyone think this guy is anything but a knucklehead with an overcharged ego after the Boring Company fiasco?

Anyway, don't rely on this guy's reputation.  If you like what you see in the Tesla showroom (if there are any left), then by all means by the car.  But do not turn on the auto-pilot.  Please.  A loss of even one of you readers could... reduce my blog visitation by whole number percentage points.

Today I received a victim notification from the DOJ that the Feds were prosecuting David William Bell for fraud.  I encountered his fraud attempts here, where I described how a fake bill from UST or US Telecom was actually a scam contract in disguise.  Apparently Ken White has been on this guys case for years and described the two different investigations against him here (one for the scam I was presented with, and a second one involving payroll companies).  I was actually a victim of neither, because I saw the trap before I fell into it, but I guess since I wrote a letter to the Feds informing them of the fraud they added me to the database (actually they informed me of the wrong fraud -- the payroll company fraud -- rather than the one I was tangentially involved with, but that's the government).  Ken White always says that the wheels of justice in such cases turn slowly but they do turn, and once the Feds get you in their sights, they can be relentless (for good and for bad).

Update:  Not sure why I am getting this now when Ken White reported that David Bell pled guilty in both cases in August.

In response to the twin notions that sexual assaults are a) increasing and b) particularly prevalent on college campuses where a "rape culture" supposedly exists, comes this recent report from the DOJ on sexual assault prevalence among college aged women.

Update:  For a university the size of UVA (20,000 students, presumably 10,000 women) these data imply about 200 of the current students will be sexually assaulted over their four years.  This is a depressingly large number, and makes one wonder with this many examples to choose from how Rolling Stone managed to find one case that was so obviously heavily embellished (at a minimum) or fraudulent.  200 is, however, an order of magnitude smaller than the 2000 that would be predicted by the "1 in 5" number which is repeated so uncritically by public figures.

As to the declining trend, I understand the issue of under-reporting, though most folks in the know seem to think this type of study (which includes unreported cases) is more accurate than reported crime figures.  But for under-reporting to affect the trend (rather than the absolute numbers) one would have to argue that the reporting percentage is declining, something for which I have never seen evidence and which is a proposition that defies common sense.  Over the last decades, sexual assault victims have gone from being shamed to being protected to being put on a pedestal (given our current fetishization of victimization).  It is hard in this environment to imagine sexual assault reporting rates going down.

Ken White at Popehat offers some useful insight to non-lawyers among us about compelled testimony (in the context of the Louis Lerner/IRS saga)

Some people have argued that Lois Lerner should be compelled to testify, either by court order or by grant of immunity. Lerner and her lawyers would love that, as it would make prosecuting her for any suspected wrongdoing incredibly difficult.

Compelled testimony is radioactive. If a witness is compelled to testify, in any subsequent proceeding against them the government has a heavy burden to prove that no part of the prosecution is derived from the compelled testimony, which is treated as immunized. This is called theKastigar doctrine:

"Once a defendant demonstrates that he has testified, under a state grant of immunity, to matters related to the federal prosecution, the federal authorities have the burden of showing that their evidence is not tainted by establishing that they had an independent, legitimate source for the disputed evidence." 378 U.S. at 378 U. S. 79 n. 18. This burden of proof, which we reaffirm as appropriate, is not limited to a negation of taint; rather, it imposes on the prosecution the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony.

If I read this right, if the House were to compel her to testify, they might as well grant her immunity and be done with it.

Further on in the post, Ken points out an issue that I have been wondering about myself -- Those who want Lerner to testify are concerned with government arbitrary abuse of power for political purposes.  Given that, how can these same folks have any doubt as to why Lerner might plead the Fifth in front of a hostile and partisan House committee

I've been seeing a lot of comments to the effect of "why should Lois Lerner take the Fifth if she has nothing to hide?" Ironically these comments often come from people who profess to oppose expansive government power, and from people who accept the proposition that Lerner was part of wrongdoing in the first place — in other words, that there was a government conspiracy to target people with the machinery of the IRS for holding unpopular political views. Such people do not seem to grasp how their predicate assumptions answer their own question.

You take the Fifth because the government can't be trusted. You take the Fifth because what the truth is, and what the government thinks the truth is, are two very different things. You take the Fifth because even if you didn't do anything wrong your statements can be used as building blocks indishonest, or malicious, or politically motivated prosecutions against you. You take the Fifth because if you answer questions truthfully the government may still decide you are lying and prosecute you for lying.

Pardon me: if you accept the proposition that the government targets organizations for IRS scrutiny because of their political views, and you still say things like "why take the Fifth if you have nothing to hide", then you're either an idiot or a dishonest partisan hack.

If you want to get bent out of shape about something, you are welcome to wonder why Lerner is being investigated, apparently, by the hyper-partisan civil rights division of Justice rather than the public integrity section.  That, combined with President Obama's pre-judging of the DOJ's conclusions, is more of a red flag than Lerner's taking the Fifth.

Remember, Martha Stewart did not go to jail for securities fraud of any sort.  She went to jail for statements she made during the government investigation.

I was reading about the DOJ push back on the proposed American-US Airways merger.  It strikes me that you never want to be the last merger in an industry consolidation.  When the consolidation begins, say with 8 players, a merger -- even if it results in a very big company -- reduces the number of competitors from 8 to 7.  After a while, though, the later mergers are proposing to reduce the players from, say, 4 to 3.  This will look worse to the DOJ, who by this point in a consolidation may be feeling remorseful, in retrospect, that it let some of the earlier deals go unchallenged.  So the last deal gets to catch up / payback from the earlier deals.

I think this is in part what is happening with the American merger.  I don't have the data, but my sense is that earlier mergers (e.g. United and Continental) were far more problematic from an anti-trust standpoint.

Disclosure:  living in Phoenix, whose US Airways hub will likely get downsized or eliminated in the merger, my life will be worse likely if the merger is approved.   Executives swear Phoenix will remain a major hub but most residents here consider this a "If you like your hub you can keep it" type promise.

Adam Goldberg in the Huffpo has 11 reasons why a shutdown would be "terrible" for me.   Many of these are absurd [sorry, left the link out originally]

1. HUGE NUMBER OF FURLOUGHS: As many as 800,000 of the country's 2.1 million federal workers could be furloughed as the result of a shutdown

There it is again.  Apparently the most useful thing these 800,000 people do is draw and spend their paycheck.

9. NATIONAL PARKS, MUSEUMS (AND PANDAS!): The country's national parks would be forced to close without a government funding deal

Parks! I think I have made my point here already (here and here)

2. ENVIRONMENTAL PROTECTION ON HOLD: The head of the Environmental Protection Agency says that the regulator would "effectively shut down" without a deal to fund the government.

8. WORKPLACE SAFETY: Most Labor Department investigations into workplace safety and discrimination would cease if a deal is not reached to avert a shutdown.

6. FOOD SAFETY: Most routine FDA food safety inspections would be suspended in the case of a shutdown.

This is just playing on the public's ignorance of how these agencies operate.  I suppose there are low information voters out there who think that EPA officials are stationed at each plant with binoculars looking for emissions and once they get furloughed, companies will race to dump a bunch of stuff while they are not looking.  Monitoring is all by data reporting on these issues.  The departments conduct audits and investigations retroactively.  Delaying these investigations that can take years does absolutely nothing in real time to change health or safety.  As for routine food safety inspections, these happen on a timetable of weeks or months, so that a few days delay in an inspection that occurs every 90 days or so is not going to make a difference.

10. STOCK MARKET PANIC: The stock market reacted negatively on Monday amidst worries about a shutdown and an upcoming fight to raise the country's debt ceiling. The lack of a resolution could mean more market madness to come.

Dow up 20 points, S&P up about a half percent as I write this.

7. NO BACK PAY: Employees of one U.S. attorney have been warned that there is a "real possibility" they may not receive back pay if the government shuts down.

Holy crap!  Government workers might not get paid for not working.

11. DOJ DISRUPTION: Attorney General Eric Holder on Monday warned that a shutdown would have a "disruptive impact" on operations at the Justice Department. He pointed fingers at the House of Representatives and stated that there are "good, hard-working Americans who are going to suffer because of this dysfunction."

This is hilarious.  A partisan rant from one of the most partisan knife-fighters in the Administration is not data, and in fact there is no detail at all here.  As it turns out, the DOJ is mostly NOT affected except for some civil litigation, where cases that already drag on for years might take a week longer to complete, and a few lawyers may lose a few days of pay

Under the Justice Department's contingency plan for the shutdown, civil litigation will be curtailed or postponed. The employees of many DOJ agencies will be exempted from furloughs because their roles are deemed "essential."

This is pretty amazing -- a FOIA and a subsequent string of emails between a USA Today reporter and the Department of Justice.  Like any email string, you need to go to the end and then read up.  Essentially, the DOJ tells the reporter that they have information that undermines the reporter's story but won't tell him what it is.  Instead, they threaten to hold it until after the reporter has published, and then give the information to another media outlet in order to embarrass the reporter, all because the reporter is "biased" which in Obama Administration speak means that he is an outlier that does not dutifully fall in line with the Administration's talking points.

My guess is that this is a cheap bluff to prevent a story from being published that the DOJ does not want to see in the public domain.  Even if it is not a bluff, this is a horrendous approach to releasing information to the public.

One of my theories I have mentioned before on this blog is that the worst abuses of freedom occur when the Left and Right in this country agree.  Here is another great example -- combine the Right's law-and-order drive to hand more power to,  and remove accountability from, police and prosecutors with the Left's need to string up some executives after the Enron collapse -- and you get this:

The DOJ has inexplicably teed up another trial of Brown, who was the only one of the Merrill defendants who was convicted on additional charges of perjury and obstruction of justice for having the temerity of protesting his innocence to the grand jury that originally investigated the Nigerian Barge deal. Brown's new trial is currently scheduled to begin on September 20.

But in the meantime, Brown's legal team has been leafing through enormous amounts of exculpatory evidence that the Enron Task Force withheld from the Merrill defendants in connection with the first trial back in 2005, but which the DOJ has recently been forced to disclose.

The result of the Brown team's effort is set forth below in the Supplemental Memorandum in support of a motion for a new trial for Brown on the perjury and obstruction charges (the downloaded version of the memo is bookmarked in Adobe Acrobat to facilitate ease of review). The memorandum details the appalling length that the Enron Task Force went during the first trial in suppressing exculpatory evidence in favor of Brown and his co-defendants and generally disregarding the rule of law in order to obtain convictions. As the memorandum concludes:

The conclusion is now inescapable that the ETF engaged in a calculated, multi-step process to deprive Brown of his constitutional right to Due Process. (1) They repeatedly denied the existence of Brady material, told this court they had met their Brady obligations and fought vehemently against producing anything [exhibit reference and footnote omitted]. They highlighted only selected material in a veritable garden of Brady evidence "“ much of their selections being vague, tangential or marginal"“while working around clear, declarative, relevant exculpatory material even in the same page, paragraph or document. (3) When ordered by the Court to produce summaries to the defense, they further redacted even the Brady material they had themselves highlighted and withheld the crucial facts that they had highlighted as Brady. (4) They egregiously capitalized on their misconduct at trial by making assertions that were directly belied by the exculpatory evidence they withheld.  .  .  .

The memorandum goes on to set out dozens of Brady violations, including charts that compare the exculpatory statements that the Enron Task Force withheld prior to the first trial with the incriminating statements that the Enron Task Force extracted from witnesses during that trial.

Folks, this is really bad stuff. But as bad as it is, I have not seen any mention of it in the mainstream media.

Tom Kirkendall has stayed on the case of Enron Task Force prosecutorial abuse even while most of the world has turned away, apparently believing that "mission accomplished"  (ie putting Skilling in jail) justifies about any set of shady tactics.

But the evidence continues to grow that Skilling did not get a fair trial.  We know that the task force bent over backwards to pressure exculpatory witnesses from testifying for Skilling, but now we find that prosecutors may have hidden a lot of exculpatory evidence from the defense.

Meanwhile, continuing to fly under the mainstream media's radar
screen is the growing scandal relating to the Department of Justice's
failure to turnover potentially exculpatory evidence to the defense
teams in two major Enron-related criminal prosecutions (see previous
posts here and here). The DOJ has a long legacy of misconduct in the Enron-related criminal cases that is mirrored by the mainstream media's myopia in ignoring it (see here, here, here, here and here).

This motion
filed recently in the Enron-related Nigerian Barge criminal case
describes the DOJ's non-disclosure of hundreds of pages of notes of FBI
and DOJ interviews of Andrew Fastow, the former Enron CFO who was a key prosecution witness in the Lay-Skilling trial and a key figure in the Nigerian Barge trial.

Enron Task Force prosecutors withheld the notes of the Fastow
interviews from the defense teams prior to the trials in the
Lay-Skilling and Nigerian Barge cases. If the Fastow notes turn out to
reflect that prosecutors withheld exculpatory evidence or induced
Fastow to change his story over time, then that would be strong grounds
for reversal of Skilling's conviction and dismissal of the remaining
charges against the Merrill Lynch bankers in the Nigerian Barge case.

The post goes on to describe pretty substantial violations of FBI rules in handling interviews with Fastow, including destruction of some of the Form 302's summarizing early interviews.  The defense hypothesis is that Fastow changed his story over time, particularly vis a vis Skilling's involvement, under pressure from the task force and the 302's were destroyed and modified to hide this fact from the defense, and ultimately the jury.

As the DOJ's Corporate Fraud Task Force pats itself on the back for the great job it is doing, Tom Kirkendall rips them up in a scathing rebuttal.  I encourage you to follow the links -- he has great depth on every point he makes.

As the DOJ's Corporate Fraud Task Force pats itself on the back for the great job it is doing, Tom Kirkendall rips them up in a scathing rebuttal.  I encourage you to follow the links -- he has great depth on every point he makes.

As the DOJ's Corporate Fraud Task Force pats itself on the back for the great job it is doing, Tom Kirkendall rips them up in a scathing rebuttal.  I encourage you to follow the links -- he has great depth on every point he makes.

Tom Kirkendall has an update on the various Enron cases, starting with the Nigerian barge case where  the conviction of four Merrill Lynch executives was vacated by the Fifth Circuit.  In fact, the appeals court ruling was so damning that the DOJ has decided not to retry the executives, and the case may well be a leading indicator that other Enron-related prosecutions are in jeopardy.

Although expected, the DOJ's decision in the Nigerian Barge case
reverberates through several other pending Enron-related cases. The DOJ
can retry three of the four former Merrill Lynch executives, but that
would be petty by even the DOJ's standards given the eviscerated nature
of the original charges and the fact that each of the defendants has
already spent a year of their lives in prison based on a prosecution
that was based more on resentment than on true criminal conduct. The
Fifth Circuit's now final decision in the barge case casts doubt (see also here) on a substantial number of the charges upon which former Enron CEO Jeff Skilling was convicted, and dispositively blows away over 80% of the case against former Enron Broadband executive Kevin Howard. In addition, the re-trials of Howard's former co-defendants from the disaster that was the first Enron Broadband case are now in various states of disarray, as is the pressured plea deal of former mid-level Enron executive, Chris Calger. And don't forget the mess that is the DOJ's case against the NatWest Three (see also here).