Archegos -Theranos - Honolulu Rail: The Price of Lying

What do these three multi billion dollar failures have in common?

The repeated intentional lying about the workings and costs of each project.

Archegos (AXIOS)

The March 2021 implosion of the hedge fund-like Archegos was one for the ages, eventually costing banks like Morgan Stanley, Nomura and Credit Suisse billions of dollars.

Archegos' responses to questions were often "deceptive, false and misleading.”

It's interesting to see the banks portrayed as the victims in the saga, especially since several of them saw red flags around Archegos that made them nervous — but they stuck with him all the way down.

Theranos (Wikipedia)

By 2015, Forbes had named Holmes the youngest and wealthiest self-made female billionaire in America on the basis of a $9-billion valuation of her company. The credibility of Theranos was attributed in part to Holmes's personal connections and ability to recruit the support of influential people, including Henry Kissinger, George Shultz, Jim Mattis, and Betsy DeVos, all of whom had served or would go on to serve as U.S. presidential cabinet officials.

The decline of Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company's technology claims and whether Holmes had misled investors and the government. In 2018, the U.S. Securities and Exchange Commission (SEC) charged Theranos and Holmes with deceiving investors by "massive fraud" through false or exaggerated claims about the accuracy of the company's blood-testing technology.

Honolulu Rail

The project started by Mayor Mufi Hannemann as a 34 mile, $3 billion proposal in 2006 and settled into a 20 mile, $4.6 billion elevated steel-on-steel “light rail” in 2008, to be completed in 2019. At the present time, Honolulu Rail is an incomplete, underfunded 18-20 mile construction project with a year 2031 projected completion at a cost of well over $11 billion.

The project is under investigation by the US Department of Justice. There have been several allegations and instances of fraud and gross errors; two samples from 2016 and 2019:

• Change.org petition: Investigate the political corruption, fraud, and abuse involving the Honolulu Rail project.
• Suggesting that fraud may be the cause of cost overruns, City Council newcomer Heidi Tsuneyoshi is demanding a forensic audit of contracts tied to a plan to build a transit system for Honolulu. (A forensic audit was never approved by public officials.)

Similar to the multi-year lying and defrauding at Archegos and Theranos, the fraud (i.e., the irresponsible wasting of billions of taxpayer dollars) at Honolulu Rail continues unabated: “Inside the ‘frantic’ push to shorten rail and keep its federal funding -- Project officials stress that they’re still fully committed to getting rail to Ala Moana, but it’s still not clear financially how that would happen. Rail leaders are presenting a “truncated project scope” to the Federal Transit Administration in order to secure rail’s remaining federal dollars. Project officials stress that they’re still fully committed to getting rail to Ala Moana, but it’s still not clear financially how that would happen.” (Honolulu Civil Beat, April 28, 2022)

 

 

 

PSA: Avoid Airport Covid Testing by US Careways dba XpresCheck

April 23, 2022 UPDATE: BBB was unable to get ant response to my complaint from this shady company. See note at the end.

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My public service announcement is based on personal experience and follows my complaint filed with the Better Business Bureau.

My dispute with US Careways involves a rapid Covid test I did at their  Denver Int'l airport  XpresCheck lab on February 21. 2022 at a cost of $250.

US Careways specializes at rapid Covid tests at airports. (At an exorbitant price, but that's besides the point.) Their lab at DEN provided me with a negative covid result without a time stamp, making the test invalid for my expensive international flight for which it was required.

See Figure 1 for the PDF results and Figure 2 for the on screen results.

I have taken several Covid tests required for flights and all of them come with the date and time the specimen was collected. See my sample test from CVS which correctly shows the date and time (Figure 3). This was the first incomplete test and caused me tremendous aggravation at Dulles Airport prior to being able to get on my flight to Europe. 

They must be stopped from charging $250 for a $10 test and provide incomplete (useless) results. 

Adding insult to injury, Chase Visa refused my dispute of this charge. They opined that the test was conducted as promised. But the service provided to me is like a car manufacturer selling me a car without a full VIN. I can't register and legally use the car!

Figure 1

Figure 2

Figure 3

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In regards to your correspondence concerning US Careways, your position was communicated to the company. We regret to inform you that BBB was unsuccessful in obtaining a response from the company.

When a business does not respond to a dispute, its report with BBB is updated to reflect an unanswered dispute which has an adverse affect on its BBB rating. If the company has contacted you, please let us know so that our files may be updated. If not, we regret that BBB can be of no further assistance.

We appreciate you taking the time to contact BBB and report your experience. Please be assured that your complaint will remain in BBB’s file for this company for three years, and may be referred to if a pattern of similar practices emerges.

Madi Posey
Your Better Business Bureau

The Causes of Inflation

Consumer prices are up 7% year over year, the highest rate of increase since 1982. It's causing major headaches for the White House. Until we diagnose what’s really causing the inflation, we won’t be able to treat it, said economist Stephanie Kelton. (Axios, 1/24/2022)

The causes of inflation are rather obvious now. Free government money has created a substantial INCREASE in DEMAND. On the other hand, worker shortages worldwide due to free money from governments (why work... often for less $$$), and more worker shortages due to Covid illness/fears/deaths, retirements and fatigue (see nurses, teachers and cashiers) have caused a substantial DECREASE in SUPPLY. 

The reduced supply of materials and workers to create products and services that people demand has pushed costs up, which is inflation.

These are the main causes for the inflation. Other parts of the cost increase include infrastructure problems (capacity at ports and warehouses), energy jitters due to political games (Russia) and due to renewable and other expensive mandates, regional weather problems that compound the difficulties above, and various national or regional controls and restrictions for Covid that reduce productivity or directly increase costs.

The worst is not over, because now there is pressure for wage increases in both public and private sector. Income increases will affect both demand and production costs, adding more fuel to the inflation fire...

In Defense of Plant Based Meat

My Letter to the Editor

Reno Gazette Journal

January 12, 2022

"No Future in Manufactured Meat" by Jim Hightower (RGJ 1/2/22) will be one of the most erroneous editorial opinions this year. The article is peppered with scientific jargon to scare the reader about substances in plant-based meat. But these substances can be found in many foods consumed routinely. Hightower states a hyperbolic past cost, but today a 4oz plant-based meat hamburger putty is about $2 at Costco. 

Hightower asks, “who needs a meatless burger?” Everyone who likes meat does! The cattle industry is the number one agricultural source of greenhouse gasses worldwide, a major source of climate change that affects everyone. In June 2020, UC-Davis research estimated that livestock are responsible for 14.5% of global greenhouse gasses. 

Based on a large US-based study by the Harvard School of Public Health, in 2012 the National Institutes of Health informed that red meat is linked to increased risks of diabetes, cardiovascular disease and certain cancers: “one additional serving per day of unprocessed red meat over the course of the study raised the risk of total mortality by 13%”. 

Last month, the White House stated that high meat prices are caused by four monopolists in the US meat-processing controlling 85% of the market: Beef prices in November were up 21% from a year ago and climbing. 

Other benefits of increased substitution of red meat by plant-based meat include the reduction of animal slaughter, the reduction of water and land pollution from massive amounts of animal waste, and reduced handling, transportation and energy consumption because plant-based products are produced closer to the consumer.

Robert Poole: Problems on the Road to All-Electric Transportation

Excellent summary of opportunities, impediments and realistic timelines for surface transportation electrification by Robert W. Poole Jr. of Reason Foundation.

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Over the past few years, I’ve become convinced of the superiority of electric vehicles. Part of this was an exhilarating ride in a friend’s Tesla and more enthusiasm has come via keeping up with technology advances. As electric vehicles (EVs) mature, with next-generation battery systems having much greater range and/or much shorter recharging times, I’ll be happy to trade in my current vehicle for the cleaner, quicker, and less maintenance-intensive EV that is coming.

That said, there are some major problems preventing the emergence of an all-electric personal vehicle fleet. (I’ll discuss all-electric trucks on another occasion). As a starting point, I recommend renowned energy analyst Daniel Yergin’s recent piece in Politico Magazine, “The Major Problems Blocking America’s Electric Car Future.” His article discusses supply chain transformation, modernization and expansion of the electricity grid, and public acceptance of very different vehicles. Another good introduction is former U.S. Department of Transportation (DOT) research and technology advisor Steven Polzin’s Q&A session at Arizona State University.

Here is my brief overview of the problems the industry and government must address to get beyond idealistic projections of no more fossil-fuel vehicles sold beyond 2030 and a completely carbon-free electricity sector by 2035.

Enough electric generating capacity

Most attempts to quantify a complete phase-out of fossil fuel electricity generation by 2035 take the objective to be replacing the current 4.13 terawatt-hours generated in 2019. Reason science editor Ron Bailey earlier this year wrote a good summary of the Energy Information Administration’s estimates of what this would take. For example, it would take 290 new nuclear power plants to replace the 62% of current electricity generated by coal and natural gas, at an estimated cost of $3.6 trillion—and in just 15 years. Alternatively, aiming to get 90% there via wind and solar (with some natural gas backup) was estimated by a University of California—Berkeley Center for Environmental Public Policy study to cost $1.7 trillion.

But that is just to replace current electricity uses. If even 60% of all US cars were electric vehicles by 2050, the nation’s electricity capacity would need to double by that date, according to the January 2021 electrification futures study by the National Renewable Energy Laboratory. Reuters’ Nichola Groom and Tina Bellon provided a good summary of this challenge in “EV Rollout Will Require Huge Investments in Strained U.S. Power Grids.” I will venture to say that neither replacement of all existing electricity capacity by 2035 nor doubling its current capacity by 2050 will happen.

Battery problems

News articles regularly appear about the limitations of current electric vehicle batteries. They don’t provide enough range for trips beyond urban travel. They take far longer to charge than refilling a conventional car’s gas tank (which is why nearly all of today’s gas stations lack the room to serve more than a handful of EV charging customers per hour). The current lithium batteries cost way too much (which is why EVs cost far more than a conventional car of the same size), they can catch fire and explode, and they require a number of rare and expensive metals, whose sources are mostly in either China or underdeveloped countries. The good news is there’s a fortune being invested in new kinds of vehicle batteries, but no one can predict how soon and how much better the next generation of EV batteries will be.

Far more (and much faster) EV charging

The “more” problem is one focus of the Biden administration’s environmental agenda, focusing mostly on subsidies for electric vehicle charging stations. If successful, this risks putting lots of new capacity in place before there is enough demand for it, but leave that aside. The administration and the Senate have shown no interest in changing federal law to allow EV charging facilities on rural Interstate highway rest areas, unlike the House, whose Fixing America’s Surface Transportation (FAST) Act reauthorization bill includes such a provision. An informal business/environmental coalition is trying to build support for including this provision in one of the pending infrastructure bills, but the White House and DOT have remained silent on this.

Faster EV charging is being developed by researchers and battery companies (established and startups), but even cutting it from 45 minutes to 15 still means much longer waits for customers and far more acreage needed due to durations several times longer than at gas pumps. This will be a much bigger problem for long-distance car and truck trips than for urban travel, where much EV charging can take place overnight at home, or at workplaces.

Environmental opposition

Experts know that the kind of electrical transformation desired by the Biden administration and (in theory) by nearly all environmental groups will require a huge investment in new long-distance electricity transmission lines, huge areas to locate a vast expansion of solar panels and windmills, and a very large expansion of mining rare-earth minerals, such as lithium and others. Yet as these efforts are starting to get underway, we see various environmental groups, often allied with local NIMBYs, seeking to block new transmission lines, large-scale solar arrays even in deserts, a major expansion of wind power installations, and domestic attempts to start mining lithium and other rare earths. Since this is a surface transportation newsletter, let me just say that there are numerous examples and they are taking place with increasing frequency. The major environmental groups need to start speaking out against this kind of opposition if we are to take their commitment to widespread electrification seriously. And the Biden administration needs to reform the National Environmental Policy Act (NEPA) to reduce endless opportunities for litigation that seeks to block just about every kind of new infrastructure project.

For all these reasons, I have to be skeptical about grandiose electrification goals for 2030, 2035, or even 2050. And if achieving those goals will actually take a lot longer, we need to think through what is actually possible, let alone cost-effective. A completely EV America will require a much larger electricity sector.