Coyote Blog

Readers will know that I have somehow been sucked into the Tesla vortex and spend too much time watching Tesla and Elon Musk's antics.  I tried to explain some of the reasons for this fascination here.  Every time I swear off following Musk, he does some new nutty thing, like his joke of a demonstration the other night of his Boring Company tunnel in LA  (as usual, Musk has come up with another idea that would look cool on the cover of a 1970's Popular Mechanics or Boys Life magazine but fails almost every engineering, physics, and business logic test).

Anyway, I am going to mostly resist writing about Tesla and discuss the strange bias many Americans (really, many Westerners) have against short-selling.  Here is a tweet from a random Tesla supporter that demonstrates what I see every day from Tesla fans:

In TSLA's case, SEC's purpose was the protect shortsellers - which aren't investors.

Bashing the SEC isn't illegal, they have no criminal authority.

— ThemeTeam (@ThemeTeamWP) December 21, 2018

lol no, shorts are not investors. They spread false information for profit and when proven wrong, they move to something else to stay relevant.

— ThemeTeam (@ThemeTeamWP) December 21, 2018

This notion that short sellers are not doing anything legitimate, that they do not deserve legal protections (or else should be banned entirely), and that they prosper only by spreading false information are not just a staple of hard core Musk fanbois, but are actually quite common attitudes.  I saw it just the other night watching the movie The Accountant again (a family favorite in part because a streak of OCD and Asperger's runs through my family).  In this scene, the guy talking is called Brax and he is a gangster and a mercenary, but for a variety of reasons the film-makers need to make him more sympathetic than the average thug.  Watch the justification he gives:

The movie-makers are expecting that the average viewer will discount his thuggery here because he is beating up a short-seller, and we all know those guys are unethical and destructive (by the way, I too would be tempted to short a company that has stuffed its workers' pension fund with its own stock, that is a big red flag to me).

Short selling, in which one is betting the value of an asset will go down in the future, is a perfectly legitimate and valuable way to participate in markets.  For those who are unsure what short selling is, here is how it works.  People who own large blocks of a stock, let's say Exxon-Mobil or XOM, can lend their stock, for a fee, to other people.  They do this as a way to generate extra income for their portfolio, particularly if they intend to hold the stock for the long term.  The people who borrow the stock then immediately sell it.  I know, this seems weird -- your neighbor who lent you his mower might be ticked off if you immediately sold it.  But folks who lend their shares know you are going to sell it.

So I borrow and sell 100 XOM shares for, say, $90.  If the price drops to $70, I can buy the stock back at that price and I make a $2,000 profit.  The risk, though, is that if the price keeps going up, I am going to have to buy back at a higher price and lose money.  If the price goes up too much, the broker is going to issue a margin call and likely force me to pony up more cash or buy back at the unfavorable price to cover my position.  If I had to sell at $110, I would lose $2000.

Note that short selling has a more dangerous risk profile than going long, or buying the stock.  If you buy 100 shares of XOM at $90, the most you can lose is $9,000 -- your losses are capped.  On the other hand your upside is unlimited -- if XOM goes up to $500, you make a fortune.  For short-selling, this is reversed.  The short-seller's gain is limited -- the most they can ever gain is $9,000 if the stock goes to zero.  But their losses are uncapped -- if XOM goes up to $500, they will have lost over $40,000.  And even if the stock shoots up to $500 and eventually falls to zero (as do many bubble companies that get shorted), it may be hard to ride the short position to the end, either due to margin calls or failure of intestinal fortitude.

Short selling makes a ton of economic sense in part because it HAS to improve markets.  First, it increases the liquidity of the market and the number and diversity of participants.  The more subtle reason is because markets and pricing are information discovery tools.  Short selling allows more people with information about a security to participate in this information exchange, which almost by definition improves the market.  As Don Boudreaux wrote years ago:

To ban short-selling of stocks is to short-circuit an important mechanism through which people share their knowledge and expectations with others.  Banning a mechanism that better allows share prices to reflect the expectation that the underlying assets are not worth as much as current market prices suggest does nothing to change the underlying reality.  Such a ban merely distorts knowledge of this reality

I like to think about economics and business issues but I am not an economist.  My layman's way of thinking about short selling was outlined in a post 10 years ago, written in reaction to a temporary ban in short selling during the market turmoil of 2008.

Someone noticed that just before certain stocks crash in value, there is a lot of short-selling.  So the US government has banned short-selling, at least temporarily.  Classic cargo-cult logic.

Boy this sure makes perfect sense in a time when we are concerned about speculative bubbles -- let's ban one of the most important tools that exist for bubbles to be shortened and made less, uh, bubbly.  Here is why (very briefly and non-technically) short-selling takes the edge off speculative excesses.

At the start of the bubble, a particular asset (be it an equity or a commodity like oil) is owned by a mix of people who have different expectations about future price movements.  For whatever reasons, in a bubble, a subset of the market develops rapidly rising expectations about the value of the asset.  They start buying the asset, and the price starts rising.  As the price rises, and these bulls buy in, folks who owned the asset previously and are less bullish about the future will sell to the new buyers.  The very fact of the rising price of the asset from this buying reinforces the bulls' feeling that the sky is the limit for prices, and bulls buy in even more.

Let's fast forward to a point where the price has risen to some stratospheric levels vs. the previous pricing as well as historical norms or ratios.  The ownership base for the asset is now disproportionately made up of those sky-is-the-limit bulls, while everyone who thought these guys were overly optimistic and a bit wonky have sold out. 99.9% of the world now thinks the asset is grossly overvalued.  But how does it come to earth?  After all, the only way the price can drop is if some owners sell, and all the owners are super-bulls who are unlikely to do so.  As a result, the bubble might continue and grow long after most of the world has seen the insanity of it.

Thus, we have short-selling.  Short-selling allows the other 99.9% who are not owners to sell part of the asset anyway, casting their financial vote for the value of the company.  Short-selling shortens bubbles, hastens the reckoning, and in the process generally reduces the wreckage on the back end.

If you want to understand the volatility of a stock like Tesla ($tsla), the issue often is not short-selling but the extremely tiny float -- only a very small percentage of the equity in the company actively trades, while the rest sit in hands of folks who are not going to trade or even lend the stock (e.g. Elon Musk).  With such a tiny float, small changes in sentiment lead to huge price swings, making it a hair-raising investment for both longs and shorts.  This situation would likely be worse without the shorts.

As for the supposed false information spread by shorts, I am sure that happens.  But information gathering by shorts is one of the reasons we should treasure short-selling.  Here is my analogy -- one of the few good things about having Donald Trump as President is that the media actually is doing its job and is skeptical of everything he says and does.  It digs into the truth of his every single statement.  And sometimes what the media comes up with is fake or wrong.  But I would still argue we are better off with this sort of accountability than we were with the media as lapdogs to Obama.  Just look at the problems and potential rights violations at the border.  The media ignored most all of this same activity when it was happening under Obama, but is rightly (finally) highlighting it under Trump.

Trump supporters hate the media, and argue that it was "long" Obama and "short" Trump, but whatever the reason, we are learning things we did not know before and knowledge has value.  Shorts play this same role in the market.  For years everyone fawned over Elon Musk and Tesla.  The dedicated EV magazines were basically house organs of Tesla, a sort of Tesla Pravda.  The longs did not want to see or hear any criticism.  Essentially, no one wanted to be skeptical of the Tesla story except the shorts.   The shorts may turn out to be wrong, but they are finding holes in the Tesla love story and that is valuable.

Postscript:  If you do not invest and want a tiny taste of the hate short-sellers engender, go find the hottest, rowdiest craps table in a Vegas casino and start betting the Don't Come line.

In my extended article the other day about Tesla I wrote of Elon Musk

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).

Seriously, go back and look at old popular mechanics covers.  Here is one in my domain:

The magazine specialized in really cool ideas that 14-year-old geeky boys like me ate up in the 1970s.  But most of them share in common with Elon Musk's ideas that they will never be practical.  So it is not surprising that Popular Mechanics put out an absolute puff issue on Elon Musk, apparently aimed at helping the man Popular Mechanics loves rehabilitate his reputation after getting some bad press for making false promises and breaking securities laws.   The piece was such a hopeless PR piece masquerading as journalism that the Atlantic felt the need to call them out for it.

Other readers, particularly journalists, were flabbergasted, including several Popular Mechanics staffers and contributors who declined to speak on the record because they feared jeopardizing their jobs. “It’s not the job of a magazine to do some PR recovery efforts for somebody exhibiting unstable behavior just because you like that he makes cool cars and rockets,” one Popular Mechanics writer said. (Disclosure: I worked at Popular Mechanics as a web intern for about a month in 2012.) For many journalists, the essay collection was a love letter bursting with unbridled, unfiltered admiration for Musk, a public figure the magazine covers, regularly and objectively. The material reads as if it came straight from the public-relations managers whose jobs are to make their boss look good.

In response to criticism the Popular Mechanics editor said:

D’Agostino said he decided to do the project after reading a slew of negative press of Musk and his properties, and, as he put it in the final collection, “myopic and small-brained” criticism. He cited as examples news coverage of the misleading tweet about Tesla, the ensuing SEC debacle, Musk’s weed experience on Joe Rogan’s podcast, and the entrepreneur’s relationship with the singer Grimes....

Musk, he said, is a good representative for the Popular Mechanics ethos. “It’s always been a magazine about what’s possible and the people who sort of tinker with things and solve problems with the aim and goal of improving human life and existence, and using technology to make things better,” he said. “When you look at someone like Elon Musk, we kind of think of him as one of us. He’s doing something very Popular Mechanics—you don’t know if it’s going to work, but he tries these things and gives it his all.”

I am perfectly willing to acknowledge Musk's good points, as I did in my long essay linked above, but in my opinion Musk is leading a lot of very naive investors over a cliff.  Go read the Tesla fan boards and the $tsla tag at twitter and you will see a series of investors who have never bought a stock before talking about how they put all their savings into Tesla.  Ugh.  Magazines like Popular Mechanics have some responsibility not to shamelessly tout a high-risk stock to naive investors.

For those who don't want to read my whole essay, the biggest problem at Tesla is that Musk has promised a lot of things, all of which take capital which it is increasingly clear Tesla does not have.  The promised Semi, pickup truck, coupe, solar shingle, China expansion, EU sales of the model 3, expansion of the sales and service network, bringing body shops in house, implementation of full self-driving -- not to mention repaying a growing accounts payable backlog and over a billion dollars in debt coming due in the next 6 months -- all will require billions of capital and Tesla is hitting bottom.  Musk claims he will be able to fund this with organic cash production but this almost has to be an outright lie.  He needs to raise equity, but has not done so when his stock was at all-time highs.  Now that he is in trouble with the SEC, rumors swirl that he may not be able to raise new capital.  If he cannot, Tesla will be bankrupt in 6 months or less.  Tesla might survive if it can find a white knight (though many of the obvious candidates have turned him down) but this is a lot of risk for noob investors to take on and a lot of risk to simply IGNORE in a Popular Mechanics puff piece.

Postscript:

By the way, is the balance problem on Elon Musk coverage really a dirth of hagiography? This is the man the press explicitly calls the real life Tony Stark.  If anything, he needs that guy referred to in the final seconds of the movie Patton, the person who rides with the Roman general during his Triumph and whispers in his ear that all glory is fleeting.  I have no problem talking about the wonderful things Musk has helped push forward (and I do) but good God aren't you obligated to also include stuff like this, out of his own mouth?

1/ This is crazy. Either this is a total BS excuse (which his $tsla fanboys will likely swallow) or Musk is the worst CEO of a $50 billion company I have ever heard of. $tslaq @TeslaCharts https://t.co/oeTfN9UaNU

— Coyoteblog (@Coyoteblog) October 18, 2018

You can click on the tweet and see my whole response, but eschewing 3rd party dealers and having its own sales and service network has been a Musk strategic pillar for 8 years.  The production ramp for the Model 3 is years behind.  And the CEO just looked at the map and realized they did not have enough service locations even for their less-than-expected sales?  This may be a great idea man and visionary and man who can get great efforts started, but this is not the tweet of a great, or even a good, CEO.

Just to save everyone from sending this to me, Elon Musk has been sued by the SEC.  The details are here, I will not go over all this old ground.  Of course this is just an accusation, and has no immediate effect (except to trash the stock price) until it is settled or proven in court.

I have such mixed feelings for Musk. On one level, it is awesome to see an entrepreneur trying to do build real stuff like rockets and cars. He has all the geeky charm of a 1970's edition of Popular Mechanics, breathlessly hyping captivating but sometimes impractical ideas.  I rode with an acquaintance in his $100,000 Tesla the other day and he loved it. Totally drank the Kool Aid.  Despite my extreme skepticism, he was sure that Elon was going to have same-day body shop repairs for Teslas and could make it work because they only had 3 models of cars with lots of shared parts.  It's the same sort of enthusiasm you see from people who still stand in line first day for the new iPhones. I envy being able to create that as a company.

On the other hand, Musk is just so unsuited to running a public company, is awful at operations, and will end up having cheated a lot of people.  He fails to meet commitments and makes public statements that are transparently absurd.  Just as one example, the other day in response to many delivery problems Tesla has (delivery problems that may actually be due more to efforts to shift 4Q sales into 3Q), Musk said there was a shortage of car delivery trucks and Tesla was starting to build them.  Seriously??? There is zero evidence of a delivery truck shortage and it is absurd to think Tesla had the time or the resources or the skills or knowledge to bang out large truck trailers (that require a variety of DOT inspections and approvals).  Honestly, I can't tell if Musk is the pointy-haired boss from Dilbert who promises absurd things because he is utterly clueless, or if Musk is totally corrupt -- it could be both.  I think his body shop insourcing idea was likely clueless but his SolarCity acquisition was corrupt.

New entries from Jaguar, Audi, and others demonstrate both that Tesla faces a lot of new competition but also that Tesla's original Model S and X still have a lead over competitors.  When the book on the electric car industry is written, I think it will be said that Tesla greatly accelerated the transition to electric cars.  But it is a fact of business history that the pioneer and innovator seldom is the ultimate victor (Lycos, Netscape, Altair, Yahoo, etc).  Tesla has not lost yet, but it still has a huge hill to climb.  Unfortunately, Musk's decisions to do so many things in-house -- own the dealer network, own the fueling network, own the manufacturing, own the body shops, etc. -- is going to require too much capital.

It is pretty clear that Musk is often using Apple as one of his models for what he wants to do with Tesla, and he has successfully created the same kind of almost cultish loyalty as has Apple.  But he ignored a lot of what Apple did.  Apple is a research, software, and design house.  It farms out manufacturing to a partner and sold most of its ipods and iphones initially through third party retailers.  If Tesla had done the same: taking advantage of rich third parties who already know how to sell cars as dealers; working with a consortium to create the fueling network; and going to someone like Kia to do private label manufacturing of the cars -- they might have lost something of the customer magic in the process but they also might be in a much better position to survive.

Update:  Apparently Musk was offered a very, very attractive settlement by the SEC which involved Musk stepping down as Chairman but NOT as CEO, adding a couple new directors, and paying a fine.  It is hard to read this as much more than a slap on the wrist, especially in the context of the SEC now seeking a full bar of Musk from any position at any publicly traded company (hell hath no fury like a government agency scorned).  Frankly, I find this nearly as impossible to understand as the fact that Tesla never raised any equity funding this year when its stock and story were so strong.  Tesla skeptics are arguing that both of these hard-to-explain events stem from the same cause -- that Tesla has some deep dark secret that Musk can't afford for either a new executive or a public offering document to disclose, the same secret (the story goes) that has driven away a number of senior accounting and finance officers in the last several months.  I agree that the existence of such a secret would explain the facts, but I can't imagine what could be much worse than the bad balance sheet and operational data that already is publicly known.

When first presented with the idea of the Hyperloop (a train running in vaccuum in an underground tube), I was extremely skeptical it made any sense.   Sure it might work (after all the London tube started out as a pneumatic system much like those that older ones of us remember sending receipts around department stores).   But did it make any economic sense.  Was it really likely that, if we can't afford rail lines above ground easily, we could afford to build thousands of miles of air-tight large-diameter tubes?  Honestly, it looked to me like any other silly idea on the cover of Popular Mechanics, right next to the titanium zeppelin the size of Connecticut that would someday be doing construction work.

So enter Elon Musk, who is very passionate about the idea, claims to be convinced it will work, and appears to be putting some money behind it.   With his support, the idea must immediately be treated as more credible, and it does indeed get a lot of press.  But here is the problem for me with Musk:  With him, the idea must also be treated as very probably another attempt by him to drain money out of the taxpayers' pockets into his.  Because that is what he does in so many of his enterprises.

Quick - in your last fill up, how much did you pay for gas?  About how many gallons did you use?

If you are like most people, you can probably come pretty close to this.  I paid somewhere just north of $4.00 for about 18 gallons.

OK, second set of questions:  On your last electric bill, how much did you pay per KwH?  How many KwH did it take to run your dishwasher last night?

Don't know?  I don't think you are alone.  I don't know the answers to the last questions.   Part of the reason is that gas prices are posted on every corner, and we stare at a dial showing us fuel used every time we fill up.  There is nothing comparable for electricity -- particularly for an electric car.

I understand some inherent appeals to electric cars.  They are fun to drive, kind of quiet and stealthy like KIT from Knight Rider.  They are really torquy and have nice acceleration.  There is no transmission and gear changing.  All cool and awesome reasons to buy an electric car.

However, my sense is that the main appeal of electric cars is that because we don't see the fuel price on the corner, and because we don't stare at a spinning dial as electrons are flowed into the car, we pretend it is not costing us anything to fill up.  Out of sight is out of mind.  Heck, even experienced car guys who should know better take this attitude.  Popular Mechanics editor Jim Meigs wrote to Glenn Reynolds, re: the Volt:

Others might like the notion of going a month or two without filling the tank

This drives me crazy.  Of COURSE you are filling the freaking tank.  You are just filling the lead-acid (or lithium-ion) one with electrons rather than filling the hollow steel one with hydrocarbon molecules.  The only difference is that you don't stand there watching the meter spin.   But that should not mean that we pretend we are not filling the car and paying a cost to do so.

By the way, if you have read me before, you know I also have a problem with the EPA equivalent mileage standards for electric cars, which basically inflate the numbers by a factor of three by ignoring the second law of thermodynamics.  This fraudulent mileage number, combined with the EPA's crazy-high new mileage standards, represents an implicit subsidy, almost a mandate, for electric cars that gets little attention.  And that will have zero effect on energy usage because the numbers are gamed.

I will tell you that no matter how confidence in one has in his own intellectual ability, it's hard not to experience an "am I crazy?" moment when one reaches a conclusion different from everybody else's.  Case in point is my critique of the EPA's mpg numbers for electric vehicles.   The EPA's methodology strikes me as complete BS, but everyone, even folks like Popular Mechanics, keep treating the number like it is a serious representation of the fossil fuel use of vehicles like the Volt and Leaf.

Sot it was therefore nice to see a mechanical engineering professor independently make the same points I did in this Pajamas Media article. Also, my Princeton classmate Henry Payne, who often writes on automotive issues, linked my article at the Michigan View.

This is perhaps my favorite FAQ question that I have ever seen, in a Popular Mechanics article on 9/11:

But
why didn't you talk about U.S. foreign policy, corporate imperialism,
oil empire, Bush family ties, Halliburton, the Mossad, the CIA, the
Freemasons, the Illuminati or Opus Dei?

Rosie O'Donnell is a great example of the failure of scientific education in this country.  Of late, Rosie has joined the "truthers," using her show to flog the notion that the WTC was brought down in a government-planned controlled demolition.

I will have to yield to Popular Mechanics for most of the discussion about WTC7.  However, I can, from my own engineering training, rebut one point on WTC1&2.  (Note again, future commenters, this applies to WTC 1&2.  There was a different dynamic at work in WTC 7).

Rosie, as others have, made a point of observing that jet fuel does not burn hot enough to melt steel, and therefore the fire in the main towers could not have caused the structure to yield and collapse.  This is absurd.  It is a kindergartener's level of science.  It is ignorant of a reality that anyone who has had even one course in structural engineering or metallurgy will understand.  The argument made that "other buildings have burned and not collapsed" is only marginally more sophisticated, sort of equivalent to saying that seeing an iceberg melts proves global warming.  (Note that this is all written by a person who has no faith in government and is at least as suspicious about government motivations at any truther).   

Here is the reality that most 19-year-old engineering students understand:  Steel loses its strength rapidly with temperature, losing nearly all of its structural strength by 1000 degrees F, well below its melting point but also well below the temperature of burning jet fuel.  For three years I designed piping and pressure vessel enclosures at a refinery.  Many of the processes in a refinery crave heat and run better at elevated temperatures.  In fact, what refineries can do, and how efficient they can be, is really limited by the strength of steel at high temperatures.  Refineries end up being limited to process temperatures no higher than 600 to 800 degrees, and even then these require expensive special metallurgies.  Anything higher requires a very expensive vessel lined with some sort of ceramic insulation material.

The strength curve of steel vs. temperature is dependent on the type of steel, but the curve below is about what I remember from my old textbooks.  Note by 930 degrees the steel strength has dropped by half and in the next 100 degrees it halves again.

But the proof of what went wrong in WTC1 and WTC2 does not take a college education.  You only have to look at building codes.  Building codes generally require that structural steel members be coated with a fireproofing material. 

As the critical temperature for steel is around 540°C (give or take, depending on whose country's test standards one reads at the time), and design basis fires
reach this temperature within a few minutes, structural steel requires
external insulation in order to prevent the steel from absorbing enough
energy to reach this temperature. First, steel expands, when heated,
and once enough energy has been absorbed, it softens and loses its
structural integrity. This is easily prevented through the use of fireproofing.

You have probably seen it- that foamy tan stuff sprayed on girders before the rest of the building is filled out.  In fact, this stuff is not fireproofing per se but insulation.  It is there to keep the structural steel cool during a fire, so the steel will not fail.  Generally the standards are set in the code that the insulation has to be able to stand X time of fire (generally several hours) and keep the steel below its critical yielding temperatures.   Engineers know that a building fire, which burns much cooler than a jet fuel fire, can cause steel members to weaken and fail and the building to collapse.  If this were not the case, then why do builders spend billions every year to insulate structural steel building components?? 

I wrote about this issue in more depth here.  In this post, one of the commenters listed a series of building fires and asked, why did these buildings not collapse?  The answer is:  Because insulation is applied to the building structural steel members to try to prevent the collapse.  Even insulation is just a stopgap -- if the fire burns long enough and
hot enough (or if the insulation is stripped off, say by an airplane
shearing through the building) then the steel will heat up and fail.   So there are three reasons that some buildings have fires and don't fail while the WTC did fail:

• Some building fires can and do cause buildings to collapse.  Insulation on steel members help many buildings to survive, and often does save the building from collapse, but not always.  This building did collapse, at least the top 6 stores.  Oddly, this is actually used by truthers as further proof, somehow, that the WTC fires could not have brought down the building (the link is actually one of their web sites, I think).  But in fact, the Madrid building failed the same way as WTC 1 and 2, with the top six floors collapsing.  Since the building was not fully constructed on these top floors, there was not the huge weight collapsing that created the battering ram effect that brought down the WTC.  The Madrid floors took longer to collapse, but they were 1) under far less stress, since the building above them was not complete; 2) the fire burned much cooler and 3) the insulation had not been mechanically scrubbed from the beams, so it took longer for the beams to heat up.  To me, this is a clear parallel to the official version of the WTC collapse, but even this is distorted somehow by the truthers.
• Fuel burns hotter than normal building fires, so even insulated members will heat up faster.  I have many pictures in my personal collection of refinery fires where the main thing you can see in the aftermath is all the structural steel bent and collapsed.  Truthers may not be able to find many examples of building collapsing in a fire, but you would be hard-pressed NOT to find examples of collapsed structural steel at every refinery and petrochemical fire.
• The insulation that normally protects buildings was stripped off by the mechanical action of an enormous airplane shearing through the building at 300 miles an hour. 

This is in addition to the actual removal of some support columns by the crashing aircraft, which put more load on the remaining structure and thereby hastened the collapse.

postscript: By the way, can anyone tell me why the so called "reality-based"
community, that so often criticizes the Right for theocratic attacks on
science, is so quick to fall for this pseudo-scientific junk?

Update: One other thought:  The hallmark of truthers is that they take small abnormalities or uncertainties in the failure analysis and event reconstruction as justification for throwing out the whole explanation of events in favor of an alternate series of events with much, much larger gaps, contradictions, and logical problems (e.g. how did the buildings get wired for demolition without anyone noticing? or, how did the planes manage to crash into the precise floors wired for demolition without dislodging the charges and their wiring?  or, how did such a massive conspiracy get pulled off without one leak when the administration can't even competently fire 9 US attorneys?)

Anyone who has ever done root cause analysis of a catastrophic failure knows there are always questions no one can answer when all is said and done.  And people who say things like "always happen" or "can never happen" typically don't have any real-world engineering experience.

Update2: One other thought on WTC7, since most of the sites I have visited over the last several days really seem to focus on WTC7.  I consider our government capable of all kinds of hijinx, but why WTC7?  I would argue that about 0.00001% of the outrage that resulted from 9/11 is attributable to WTC7.  How many people not associated with the truthers have even heard of WTC7?  In fact, one could argue that the strike on the Pentagon was effectively irrelevant, since no one really even seems to remember that one.

One minor note:  I saw on a conspiracy site the claim that all military planes were ordered to stand down on 9/11.  I know from personal experience that can't possibly be true.  I was in Manhattan during 9/11 and remember well people in the streets hitting the ground in fear every time a military jet rocketed over the city.

I don't buy all this conspiracy theory not because I think well of the government, but just the opposite.  I consider the conspiracies posited at these various sites to be orders of magnitude beyond this government's capabilities.  Remember Coyote's Law:

When the same set of facts can be explained equally well by

1. A massive conspiracy coordinated without a single leak between hundreds or even thousands of people    -OR -
2. Sustained stupidity, confusion and/or incompetence

Assume stupidity.

Update3:  I guess I need to throw out a few more things.  This was not meant to be a comprehensive or definitive rebuttal of the 9/11 conspiracy theories.  I merely used as a starting point one stupid comment by Rosie O'Donnell on melting, a comment I have heard a lot of times, and that I knew I could refute of my own knowledge.  Those who want to get mad at me because I did not refute this or that, sorry, go deal with the book by the Popular Mechanics guys.  The only other thing I can contribute other than engineering sanity is the fact I have participated in many engineering failure analyses and the fact that I watched the towers fall live, with my own eyes, from the streets of Manhattan.

Every single engineering failure analysis I have ever participated in, from refinery explosions to airplane crashes, has always left unanswered questions and nagging inconsistencies that had, I am sure, nothing to do with conspiracies. We had many things we could never explain about a heat exchanger fire at our refinery in 1985, but I don't think that those unknowns and uncertainties leave the door open to blame government agents for the fire. 

I'll say again, if you want to argue that the WTC buildings were demoed by explosives, you have to explain how the explosives were laid, and, more important, how the explosives and their delicate wiring and detonators survived a plane crashing into the same floors.  And by the way, given that the buildings had not external markings showing the floors, how did the people flying the airplanes hit the exact correct parts of the building?  For every problem with the core hypothesis I could name 10 problems with the truther alternative.  I have no problem with offering an alternative hypothesis to the original thesis, but it is silly to criticize the core thesis for small problems only to replace it with a hypothesis that has problems that are orders of magnitude larger.

Remember all those media reports about the possible "political motivation" behind falling gas prices ahead of the election?  Supposedly oil companies were somehow manipulating gas prices ahead of the election to help Republicans win the election.  This was not a wacky Internet fringe thing -- network news anchors and newspapers like the WaPo and the NYT speculated about it, and not just on their editorial pages.

Well, you and I may remember, but apparently no major media outlet who ran this story remembers what they said.  Because I have not seen a single follow-up story after the election.  Surely, if gas and oil prices were being manipulated down before the election, they would quickly spike back up to their "natural" levels after the election.  But of course, the whole theory was insane to begin with.  To suppose that a few US oil companies, who for all their size are still small players in the world oil markets, could manipulate US commodity prices for any sustained period of time is absurd.  And even if they were successful, the cost would be astronomical (just ask the Hunt family who bankrupted themselves trying to manipulate the silver market).

So I will do the follow-up story.  It turns out that oil and gas prices were falling before the election because ... oil and gas prices are falling.  From the WSJ on Jan 9:

Oil prices dropped $1.69 to $54.40 a barrel early Tuesday as warm
weather in the Northeast continued to hurt demand for heating fuel. The
slide comes on top of last week's 7.8% pullback in crude, which briefly
took prices below $55 a barrel, their lowest level since June 2005.

From Business Week on Jan 8:

Wholesale gasoline prices have been falling for the past few weeks,
noted Jason Schenker, an economist with Wachovia Corp. He expects
retail gasoline prices to fall further; he forecasts a dime-sized
decline this week compared to last, with the per-gallon price dipping
to $2.25 from $2.35.

People often wonder why so many wild and weird conspiracy theories seem to thrive nowadays.  I am sure there are many social and psychological reasons.  But surely one reason is that the media seems incredibly willing to go front page with credulous stories of the most ridiculous conspiracy theories, and then never revisit them when they are proved absurd.  Its telling to me that it was left to Popular Mechanics, rather than the WaPo or the NYTimes, to publish to one authoritative debunking of 9/11 conspiracy silliness.

Popular Mechanics has a very readable debunking of many of the most prevalent 9/11 conspiracies.  I am sure conspiracy theorists will generally respond to most of the scientists quoted with the all-encompassing "they're in on it!"  Once you get so many people giving evidence that the conspiracies are incorrect, you drive the conspiracy into the realm of Meyer's Law:

When the same set of facts can be explained equally well by

1. A massive conspiracy coordinated without a single leak between hundreds or even thousands of people    -OR -
2. Sustained stupidity, ignorance and/or incompetence

Assume stupidity.

In this case, the word stupidity is unfair.  The 9/11 attacks fall into the category of the "unimagined".  Frank Borman (as portrayed in the awesome mini-series "From the Earth to the Moon", I have not been able to find out if they used his actual words) is speaking to a committee hearing on the Apollo 1 fire that killed three astronauts.  Under intense scrutiny for a set of conditions that in retrospect seemed ridiculously unsafe, Borman described the problem as "a failure of imagination". 

In this case, for example, conspiracy theorists ask why no military plane intercepted the aircraft.  First, I would argue that without any prior precedent, no military commander or politician would have the cajones to shoot down a planeload of innocents on a commercial airliner (now THAT would be conspiracy fodder, had it happened).  Second, though, the article quotes a number of military commanders to say that the US didn't really have the radar coverage or aircraft patrols in place to intercept an airplane attacking from within the country - everyone previously imagined the threat to come from outside our borders, and that is how our defenses were arrayed.

Anyway, read the who article - it is an entertaining roundup of conspiracy theories (people do have good imaginations) and a well-argued debunking of them.  (via Instapundit)