A leftist filmmaker is interviewed in a leftist magazine about his recent pro-nuclear documentary

Another one that got somehow left behind in the queue.

 I'm not going to go into the merits of the arguments or of the film itself, other than to say it was fairly well-reviewed, with a 75% Tomatometer, where even the negative reviews seem to be mostly complimentary of the content—just not of the uncharacteristically low-key filming style.

If I get a chance to see it, I may have more to say on that subject, but what's interesting here is the way that climate change is realigning the left in unexpected ways.

I mean, seriously. Who out there would have predicted that Oliver Stone would go pro-nuke, and that Jacobin would give him a friendly reception when he did?

Oliver Stone Goes Nuclear

Ed Rampell:

So how did Nuclear Now come about?

 

Oliver Stone:

I was scared. In the 2006 movie [An Inconvenient Truth by] Al Gore, I was obviously conscious that he was giving solutions to the problems of clime change. But I was confused by the many different sides I was hearing. It was confusing — and I wanted to straighten it out for myself. I saw a book in 2019 that was well reviewed in the New York Times by Richard Rhodes: it was called A Bright Future. It was written by Josh Goldstein, an emeritus professor of international relations, and by a nuclear scientist named Staffan A. Qvist, from Sweden. It was a small little book, but it was simple and commonsensical. Common sense is important. It was very different in the sense that it was saying: “What’s wrong with nuclear power?”

Because that’s all you had heard for many years. I didn’t know; I just went along with the consensus that nuclear power was a bad thing. But when you read the book, you begin to understand that it is not a bad thing — it has been confounded with nuclear war; war and power are not the same thing — and that we have lost, bypassed a great opportunity, in America anyway, [compared to] if we had followed through on “Atoms for Peace,” what presidents Dwight Eisenhower and John Kennedy had started in the 1950s and ’60s.

Nuclear power was working. It worked for many years with the Navy, with Hyman Rickover, and then he transferred his acumen to building civilian power stations. Shippingport, Pennsylvania, was the first one in the United States; in 1958 and 1959 it came online. Many of those same reactors are still going; they’re called “legacy reactors,” but they’re almost finished now. But they worked seventy years [laughs], and nobody complained.

Except there was a scare at Three Mile Island, where no one died, and in fact, the containment structure worked. But a lot of hysteria and brouhaha — as you know, I’m not a guy who believes in passion, necessarily, when it’s wrong. You’ve got to call it out; I wanted the truth, and this is the truth.

I’ve been talking to many scientists. I went to Idaho National Laboratory; I went to France, and I went to Russia and talked to a lot of people. It’s all a lot of hooey from a lot of scared types who love to tell you what’s wrong with everything. You’ve got to scale it down and say, “Relative to what?” Relative to climate change — coal, oil, and gas?

Ed Rampell

In Nuclear Now, you criticize the fossil fuel energy industry for spreading disinformation regarding climate change. Did the nuclear industry have anything to do with the funding of Nuclear Now?

Oliver Stone

No, no, no. This was done with private investors. And the nuclear industry [laughs] has not done a very good job defending itself, if you look at the history. It has had no sense of fighting back. When Jane Fonda and Ralph Nader started their attacks, there was no really interesting response from the industry. It kind of folded up. Which was a shame, because I think when history is written, if we presume the planet will survive, and there’ll be a civilization, and I’d very much like. . . . I am an optimist. When this is written, they’ll say: “This was a huge mistake in the 1970s to stop building nuclear reactors in the United States.” Thank God they did not stop in Russia or China or France, which has kept it going.

But as we said in the film, “It’s too good to die. You cannot kill it off.” The United States is now slowly getting back into, of course, smaller reactors and more modern, new-generation reactors. There’s a lot promise. But the big building is still going on in China, Indonesia, Eurasia, India and so on.

How can we say that Flow is a bad idea if Andreessen Horowitz invested a third of a billion dollars in it?

“Here’s my idea for a new business.”

“That’s the stupidest thing I’ve ever heard. The business model is crap. The potential market is tiny. And it’s not even original.”

“It’s a tech company.”

“Can I invest $350 million?”

Though it never had the straight out punchline business model of MoviePass and it never approached the eye-watering overvaluation of Tesla ($1.5 trillion at its peak), there was a certain purity about WeWork that made it perhaps the definitive dumb money enterprise of its time. 

God knows, we've said our share of mean things about Uber and Lyft and Netflix and Tesla, but for all of the confusion and myth-making that drove those valuations to their current sky high values, even I have to admit that there was at least the possibility of the promise of something big behind each of those companies. The rise of the smartphone made new models of personal transportation possible. We can argue whether the dominant business model will be all-you-can-stream or a la carte or heavily tiered or advertiser-driven, but there is little question that more and more video viewing will be done online. The future of cars is both electric and autonomous.

By comparison, you almost have to admire the pure distilled bullshit of WeWork. There is nothing to ground this business model, no recent or even promised technological advance, no big innovation, nothing but the CEO babble and Ted Talk happy speak so in vogue in Silicon Valley these days.

But perhaps the most impressive thing about this con is that Adam Neumann pulled it again.

WeWork co-founder lines up $350 million A16Z investment for a new billion-dollar real estate venture

If there were ever a story that demanded the talents of Patrick Boyle...

The Inevitable Decline of WeWork





Adam's Back!

Josh Marshal's understating how dysfunctional the titans of Silicon Valley have become

 I find myself in the odd position of disagreeing rather strongly with a recent post by Josh Marshall. Not about any major conclusion, and certainly not about his political analyses (you don't tug on Superman's cape), but we've spent more than a decade here at the blog criticizing tech messiahs in general, and Elon Musk in particular, so I feel fairly comfortable raising some points about these three paragraphs, specifically about how the Tech right is attacking biomedical research for reasons that go far beyond a fixation with artificial intelligence.

 First, you have Elon Musk, the belief that AI can and will essentially replace research scientists and the related belief that AI-backed tech has essentially achieved a kind of escape velocity from government-supported science. So AI will soon replace research scientists. I, Elon (or tech generally) own the AI. So there’s no big harm shutting down this research apparatus. And since I own the AI, not only will we cure all the diseases but I’ll own all the cures! What’s not to like? This may seem like hyperbole but it is at most only a hyped up version of what these people think. This informs A LOT of the thinking behind the cuts. The aim of knocking the eggheads off their perch is easy to understand. If there’s also no downside (in terms of lost cures, lost leads in the sciences) why not?

Related to this is something I’ve picked up in discussions with a friend who is a very close and shrewd observer of the tech world. That’s the Silicon Valley class war between the folks with tens or hundreds of millions or more and the working stiffs on salaries of $400,000 or $500,000 a year. That tech “working class” salary point may sound absurd. But it really captures a big part of this. The dynamic is intensified by the ossification of tech. It used to be that the half-a-million-a-year folks might be one great start-up move away from hitting super wealth themselves. That’s not happening anymore. Meanwhile, the Elons and sub-Elons have super wealth and it’s annoying to have to listen to the gripes, the borderline-woke thinking and everything else, from the guys who fuel your wealth. A Thorstein Veblen type could explain it better than I can, but, for present purposes, we’ll settle for this thumbnail version.

Needless to say, government scientists don’t make half a million a year and neither do all but maybe a tiny elite of science grant superstars. But when the tech oligarchs in Elon’s world see these folks with their PhDs and their peer reviews and their long-ass study timelines, they see the uppity salaried techs who run their companies. And they act accordingly.

Rather than being surprising and unexpected, the tech right’s hostility toward biomedical research is a logical consequence of foundational beliefs that have, in some cases, been around for more than 20 years.

 The point about the class struggles of the Valley is true but not particularly relevant here. More importantly, I'd argue AI plays a secondary role here. It's true that if you asked Musk et al. today why they are cracking down, their answers would almost certainly include artificial intelligence—because in 2025, any question you ask these people will be answered by some combination of LLMs and humanoid robots (here and here for more details on the latter)—but while AI has always been a favorite subject for techno-optimists, it really only became top of mind after the implosions of the previous “next big things,” the metaverse and Web3. The antipathy toward this kind of research goes back way further than that.

Arguably, the defining trait of this crowd is an extraordinary—often straying into delusional—faith in their own ability and rightness. One consequence of this is a general disdain for expertise. They know more about medicine than doctors, more about banking than bankers, more about manufacturing than industrialists,* more about mechanical engineering than actual engineers. We saw an early indication of this with the rise of biohacking and various flaky life-extension theories—the latter also reflecting the reluctance of these men, who saw themselves as all-powerful, to submit to death at some point.

Inevitably, this combination of absolute faith in their own opinions, combined with the tendency to dismiss those of people who knew what they were talking about, led to all manner of flaky ideas and junk science getting a foothold. This came to a head during the pandemic, when Silicon Valley effectively became ground zero for COVID denial and quack cures.

It has been noted elsewhere that COVID was when numerous tech-world figures either became radicalized to the far right or simply decided it was safe to come out with their extreme opinions.

Another related core belief among this group is the idea that these successful tech visionaries are omnicompetent. The term first showed up on our radar when Alon Levy used it to describe Elon Musk, but there are lots of examples to pick from. Perhaps my favorite is when Zuckerberg promised to cure all disease in his child’s lifetime by pledging to match around 1% of the NIH budget.

For a long time, it was part of the popular mythology that whenever these titans decided to disrupt a new field, they would inevitably crush the old, slow-moving competition. If you dug into any of the famous examples, you would find that either the success was greatly exaggerated and/or based on the work of those same experts Silicon Valley so disdains. Possibly the best example is SpaceX, where the accomplishments have been somewhat overstated, and—more to the point—were produced by TRW rocket scientists basically continuing the research they'd been doing for their previous employer.

The idea that an Elon Musk or a Marc Andreessen could step in with no relevant experience and effortlessly fix all of our problems has been around for years, and no matter how many times they fail, their confidence—and that of their followers—is unperturbed. As recently as this year, a writer as intelligent as Noah Smith continued to depict Elon Musk as super-competent, though those arguments have been trailing off as of late.

Musk, in particular, is now entirely in the thrall of the worst of the far right, more likely than not to agree with a Laura Loomer. It's not surprising to see him going after traditional targets like stem-cell researchers, but the idea that the messiahs of Silicon Valley could burn all this down and easily replace it with something far better is a notion we have seen countless times from all of these people and it long preceded the current hype bubble around artificial intelligence.

* "I Think I Know More About Manufacturing Than Anyone Currently Alive On Earth." ElonMusk

Another one for the lexicon: deerstalker

 

A deerstalker is a belief which is:

1. Held by the general public;
2. Discounted by the moderately well-informed;
3. Known to be true by experts.

The name comes from the hunting cap worn by Sherlock Holmes in the stories of Arthur Conan Doyle.

While it is true that Sherlock Holmes, a generally well-dressed upper-class English gentleman, would not go about the streets of London wearing a deerstalker any more than an American outdoorsman would wear his Elmer Fudd hunting cap to a fine restaurant, he would wear one when appropriate, such as when out in the country and at least once on what we would call a stakeout in London. He was routinely depicted as wearing a deerstalker in the original illustrations, and at least once, Doyle included a description of the hat in the stories. He did not use the specific term but that was the type of apparel he was clearly describing.

What brought this to mind was the deep dive I've been doing into the technological revolution of the late 19th and early 20th centuries, particularly the impact of Thomas Alva Edison.

While the popular conception is that Edison was the greatest inventor of his time, it has become fashionable to be dismissive of this view. Bring up Edison's huge and hugely influential list of patents, and you will probably have someone inform you that he actually invented very little—if anything. He was just an administrator who took credit for the work of other researchers, much in the way that Walt Disney's signature used to appear on every piece of art involving characters owned by the studio.

I was always a bit skeptical of the "Edison didn't really do anything" school of thought—after all, he was only able to put together a team because of early inventions like the quadruplex telegraph—but it wasn't until I did some serious reading that I realized how completely wrong this take was.

Because of the way Edison worked, and because of the enormous scrutiny he was under both during his life and posthumously, we have a remarkably detailed and accurate picture of the process behind all of his patents and behind those innovations—like his improvements on X-ray equipment—that he refused to patent to make them more widely available. We can go from the initial sketches in his notebooks, follow along through the detailed records of each iteration and refinement of an idea, and read the contemporary accounts and the memoirs of the researchers who were working alongside him.

With very few exceptions, Edison had the original idea, set up the research project to develop it, and supervised—and frequently personally conducted—the experiments needed for each iteration. With the caveat that, given the fever pitch of research at the time, there were almost always so many brilliant researchers pursuing any promising notion that it was generally impossible to say exactly who truly invented what, Edison's body of work is very probably unequaled. And even that is dwarfed by the impact his model for organized, large-scale research has had. 

1. Edison was the greatest inventor of the 19th Century

2. Edison was just an administrator and promoter

3. Edison was the greatest inventor of the 19th Century

A few years ago Morgan Stanley released an analysis promising that the metaverse would soon be worth more than $5 trillion dollars. Their latest one on humanoid robots may not rise to that level of prescience.

Guys, we've been pointing out bubbles here at the blog for well over a decade now and, trust me, this is a bubble

Just as it did in response to the metaverse hype of a few years ago, Morgan Stanley has jumped on the humanoid robot bandwagon with a report predicting:

Based on our analysis, we believe ~75% of occupations and ~40% of employees in the US have some degree of "humanoidability." This amounts to an estimated addressable market of ~$3 trillion, or ~63 million humanoid units in the US alone. While this estimate considers only the US, we note that a TAM based on the global labor market could be greater by multitudes of magnitude. 

The analysis rests almost entirely on conflation, omission, and insane amounts of techno-optimism.

The current capabilities of these machines are grossly exaggerated. Their likely costs are absurdly lowballed. The potential market size is substantially overstated. Alternative robotic approaches that would be undeniably more efficient, productive, and cheaper are virtually ignored altogether.

The eighty-six report has one paragraph on why multi-purpose robots should characters from I, Robot which mainly boils down to the Cylon Design Fallacy.

 Why humanoids? Many investors reading this report will ask the question “why do we need robots shaped like humans?” There are indeed strong arguments for robotics to take many highly specialized forms (robot arms, snake-shaped robots, robot dogs, robotic dust and as many form factors as you can imagine). However, many robot and AI experts say the strongest argument for robots in a human form factor is that in a world already created for humans, the environment is already "brownfielded" for humanoids. Nvidia CEO Jensen Huang recently stated “The easiest robot to adapt into the world are humanoid robots because we built the world for us. We also have the most amount of data to train these robots than other types of robots because we have the same physique." Additionally, think of the great variety of tasks that humans are able to perform with our bare hands or using tools and the multitude of machines designed for human hands and fingers.

Notice the -- if you'll pardon the phrase -- sleight of hand here. There's no reason a robot with 5-fingered hands with opposable thumbs needs to be otherwise humanoid. Being bipedal is arguably the main driver of cost and complexity but it barely figures it all in the only reasons they give for going with the humanoid design.

As we've discussed before, the bipedal humanoid design has lots of problems. It is needlessly complex and expensive, bringing virtually no added functionality in most situations. It's unstable—even those impressive Boston Dynamics demonstrations have to edit out the scenes where the robot falls over. In addition to the daunting engineering challenges of building a robot that walks on two legs, there's also the issue of a top-heavy design, since the battery is generally stored in the torso. This places the center of gravity three to four times higher than what you get with more traditional wheeled-base designs.

Worse still, having the batteries relatively inaccessible means these robots must be taken offline for substantial periods just to recharge—compared to more traditional designs, which often allow for fast and easy battery swaps.

It's remarkably difficult to make a compelling case for bipedal locomotion in robots, and the arguments presented barely address the elephant in the room. In particular, the "training" argument applies mostly to arms and hands. Outside of a few isolated applications, if you replace the legs with wheels, you get a cheaper, more efficient, more stable, and more reliable machine—one that also has the added benefit of being able to operate virtually 24/7.

The authors lean heavily on the biomimicry throughout the report.  

 Along similar lines, note how Morgan Stanley equates "humanoid" with "general purpose."

 This is a huge misrepresentation of the state of robotics. There is no reason whatsoever that a general-purpose or multi-purpose robot needs to be humanoid. If anything, it is in many ways a particularly poor design choice due to its instability, its complexity and cost, and the limitations imposed by naive biomimicry. The design has no innate advantages in performing complex tasks or demonstrating dexterity. If anything, the previously mentioned instability puts it at a disadvantage when it comes to delicate work.

 These are incredibly thin arguments if you're trying to defend design choices determining a multi-trillion-dollar shift in the economy that would replace a large portion of the workforce. I suspect that, on some level, the people making these arguments realize how unconvincing they are—which might be why they're never prominently featured in these analyses and articles. You have to dig quite a ways into this massive document before you reach the one and only paragraph justifying the humanoid design. But of course, that's not the real reason. These robots look the way they do because it seems cool and futuristic—like something out of a science fiction movie. From a serious business standpoint, those reasons are indefensible. But if your primary objective is to build a hype bubble, they make perfect sense.

In case you think I'm being unfair about the sci-fi crack:

 

 And, of course, Elon is cited.

One billion humanoid robots by the 2040s? Tesla CEO Elon Musk has been increasingly focused on Optimus (Palo Alto engineering center) in recent months, per his comments. Tesla first unveiled its humanoid robot, Optimus, on September 30, 2022. The bipedal robot included 28 actuators in two categories: 1) rotary actuators, consisting of harmonic reducers, ball bearings and sensors, for rotating motions such as shoulders and elbows; 2) linear actuators, comprising planetary rollers, ball bearings and sensors for linear motions like human muscles. Twelve actuators for two hands. Many more details have been kept internally at the company. In January of this year, Elon Musk said he expected to see over 1 billion humanoid robots in operation by the 2040s. At Tesla's June 13th 2024 annual shareholder meeting, Mr. Musk stated he expects to have at least 1,000 Optimus robots working at Tesla next year, and that "things are gonna scale up very rapidly from there." In the same meeting, Mr. Musk expressed his confidence that humanoid robots will eventually outnumber human beings and "probably be 20 billion or more" (no timeline shared).

 

In case you're new here, Musk has predicted a million Tesla robotaxis on the road "next year" every year since 2019 and predicted SpaceX would make its first Mars landing in 2022.

 

Surprisingly, despite Elon Musk's involvement, this may turn out to be a scam.

 

Folks, we've been keeping an eye on hype and bubbles for a long time here at the blog, and we've accumulated a pretty good track record. So take it from me: we are looking at a metaverse-level event with humanoid robots. When the dust settles, hundreds of billions of dollars will have been wasted on an embarrassing techno-optimist hash of bad engineering, flawed economic reasoning, and hackneyed sci-fi tropes.

I just went through the Morgan Stanley rainbows and unicorns report on our robot future. I'll have more to say about that in the coming days (spoiler alert: it's bad). For now, here are a couple of threads from an actual engineer who does a good job laying out the absurdity of it all.

The Cylon (TOS) Design Fallacy

Just to be clear, I'm talking about these Cylons...

 

... not these Cylons.

In the pilot of the original Battlestar Galactica, Apollo and Starbuck steal a Cylon fighter. They're able to do this because those ships, like all of the others depicted in the show, appear to be designed for human use. They have manual controls, display screens, life support systems, and voice communications—all things that were either unnecessary or horribly inefficient for technology designed to be used by a race of robots.

It's best not to try to think too deeply about that 1978 show. For one thing, we know the reason that Cylons looked like they did. It was because the producer, Glen Larson, blatantly ripped off Star Wars and got sued for it (Larson was one of the few people in Hollywood who couldn't get along with the famously well-liked James Garner—to the extent that Garner once punched Larson in the mouth over plagiarized Rockford scripts) . Cylon centurions looked the way they did because they were supposed to remind people of Imperial stormtroopers.

The Cylon design fallacy is that robots should be designed to interface with systems that were designed to interact with humans and systems designed to work with robots should interface with them in the same ways they would interact with humans.

The standard argument for humanoid bipedal robots, put forward by people like Elon Musk, is that they can do anything that humans can do physically. That's a dubious claim, but even if they could back it up, it's really not that impressive a boast. Most of what we do requires tools, which raises an interesting question: since robots are tools, why pick a design that is far more expensive and less efficient just so it can use tools that only look the way they do because they were designed for humans to use?

Bipedal humanoid robots are inevitably top-heavy and unstable compared to other designs, badly suited for lifting, carrying, and stacking heavy objects—particularly those where the load can shift while moving (think of a half-full container of liquid or a box with loose objects that can slide around). It's true that a humanoid robot could operate equipment such as a forklift, but if you're going to go to that expense, you could get an autonomous forklift that would do the same things at far less than the combined price—with the added advantage of being more compact, since it would not need space for a driver.

As for the argument that the same robot could go from working in a factory to cleaning your house, why would we want it to? You’ll be paying for functionality you don’t need and compromising on functionality that you do. And even if you insist on a one-size-fits-all model, what reason—other than the naivest of naive biomimicry—is there to believe that the sci-fi movie robot is the design you’d want to go with?

I hate to reschedule "The Cylon (TOS) Design Fallacy" yet again, but we had a big news day on the Tesla front

I've got some real posts coming up on Elon's Optimus and the humanoid robot bubble, with any luck starting tomorrow, but the last three days of April were just too eventful to ignore.

Remember, as I'm writing this, Tesla's P/E ratio is 155.30. Toyota's is 7.10. Alphabet's (Google) is 18.23.

Tesla (TSLA) chair sells most of her stocks – her time is done?
Fred Lambert | Apr 29 2025

Tesla’s Chairwoman, Robyn Denholm, has filed to sell another $30 million in Tesla stock. She appears to be completely liquidating her stake in the company she chairs.

This morning, we noted that a Tesla insider made their first stock purchase in five years.

Other than the small purchase from Joe Gebbia disclosed last night, Tesla executives and board members have exclusively exercised stock options and sold them right away.

Robyn Denholm, Tesla’s Chairwoman, has been the top seller. She sold over $150 million worth of Tesla stocks over the last 6 months.

She has received over $600 million in stock compensation since joining the board just 10 years ago, and she has sold over $500 million worth.

While that looks bad, there was a potentially far bigger announcement, but first a bit of background. More from former Elon fan Lambert.

When explicitly asked about Waymo, which is already seen as the market leader by most experts, Musk again claimed that it won’t be competitive because of cost:

Well, okay. The issue with Waymo’s cars is it costs way more money, but that is the issue. The car is very expensive, made in low volume. Teslas are probably cost 25% or 20% of what a Waymo costs and made in very high volume. So, ironically, like, we’re the ones to make the bet that a pure AI solution with cameras and what do you have? The car actually will listen for sirens and that kind of thing. It’s the right move. And Waymo decided that an expensive sensor suite is the way to go, even though Google is very good at AI. So I’m wondering. And it is worth noting that Tesla has both an incredible AI software team and AI hardware chip design team.

While it’s true that Waymo’s vehicles are more expensive, this has little to do with an “expensive sensor suite”, as Musk claimed.

Tesla’s sensor suite, which consists only of cameras, is certainly less expensive than Waymo’s, which includes cameras, radar, and lidar sensors. Still, most of the cost difference is due to Tesla building vehicles in high volumes for consumers while Waymo buys existing vehicles and retrofits them with its sensor suite in much lower volumes.

Talking to Business Insider this week, John Krafcik, who helped launch Google’s self-driving vehicle program and was Waymo’s first CEO until 2021, doesn’t see it as a problem:

In the long run, the cost of sensors has a “trivial cost-per-mile impact over the useful life of a robotaxi,” he told BI,” while also providing massive quantifiable safety benefits.”

Krafcik has been skeptical of Tesla’s efforts for a while and even suggested that what Tesla plans to launch in Austin in June could amount to “faking” self-driving.

If Waymo were in a position to build in high volumes, the math might be very different.

On a completely unrelated note.

Waymo, Toyota strike partnership to bring self-driving tech to personal vehicles
Jennifer Elias, Lora Kolodny

Alphabet-owned Waymo and Toyota on Tuesday announced a preliminary partnership to explore bringing robotaxi tech to personally-owned vehicles.

“The companies will explore how to leverage Waymo’s autonomous technology and Toyota’s vehicle expertise to enhance next-generation personally owned vehicles,” the two companies announced.

The companies said they aim to use the partnership to more quickly develop driver assistance and autonomous vehicle technologies for personal vehicles. Toyota is the world’s largest automaker by sales. 

Waymo co-CEO Tekedra Mawakana said the strategic partnership could also result in the Google-owned company incorporating Toyota’s “vehicles into our ride-hailing fleet.”

And there's this.

To be blunt, I don't see any way out for the company. Elon is—and will remain—the public face of Doge, regardless of how much time he spends in the White House. As long as he is with Tesla, the brand will remain toxic.

But that 155 P/E is wholly dependent on the false belief that he is an engineering genius who will make trillions of dollars through robotaxis and humanoid robots. If he leaves, investors will have to face the fact that this is a small car company with a horrible brand trading at something like 20 times any reasonable value.

Tesla may be the platonic ideal of "The market can stay irrational longer than you can stay solvent," but when sanity does hit, it's likely to hit hard.

Sometimes it's useful and I think healthy to imagine trying to explain the news of 2025 to the you of 2015.

Paul Krugman has a good take on the larger ramifications.

If Trump had merely made economic demands on our northern neighbor, Canada might have acquiesced, although it’s not clear what concessions it could have made. But by repeatedly insisting that Canada must become the 51^st state, he made any hint of Trumpiness toxic in Canadian politics. Hence the stunning defeat for Pierre Poilievre, the Conservative leader (who lost his own seat in Parliament.)

...

Consider the state of negotiations — or, actually, non-negotiations, since talks appear to have broken down — with Japan, another country Trump appears to have thought he could bully. Japan does sell a lot to the United States and might have been willing to offer something to preserve its access to our market.

But reports indicate that Japanese representatives sent to Washington left without accomplishing anything because they found Trump’s people impossible to deal with. The Americans insisted that the Japanese make offers without giving any indication of what our side wanted — in effect, they demanded that Japan make a show of obeisance without any reason to believe that it would get anything in return. The Japanese government wouldn’t, probably couldn’t do that. After all, it has to answer to its own voters. So there is no deal.

And then there are the Chinese, who — unlike the Canadians or even the Japanese — probably have more economic leverage over us than we have over them. They have no interest in helping Trump sustain his fantasies of dominance. Bear in mind that Trump’s trade war is working out very well for them. Bloomberg reports that

President Xi Jinping’s diplomats are fanning out across the world with a clear message for countries cutting deals with Donald Trump: The US is a bully that can’t be trusted.

Unfortunately, they’re right. And Trump’s repeated insistence that the Chinese are negotiating with him, when they say they aren’t, comes across as pathetic.

Will the robotaxi business really be worth $443 billion to Tesla?

As discussed previously, one of the ten largest corporations in the world by valuation is a failing car company with small and rapidly declining sales, which the CEO and largest shareholder himself has suggested may never release another new model.

Despite this and other damaging revelations, the price of the stock has recently shot up almost 20%. As I'm writing this, its price to earnings ratio is 155.82. (Toyota's is 7.25.) Other than the possibility of graft (and it would have to be truly unprecedented to justify this market cap), the bull case for holding—let alone buying—the stock rests entirely on two products still in the prototype stage and already facing intense competition from companies with a bigger foothold in the market and what are arguably superior technologies.

We've talked about Optimus, the humanoid robot, earlier, and we will come back to it. For now, let's look at Tesla's proposed robotaxi business.

For starters, there are the findings that the company's own analysts reached even when they included Musk's absurdly optimistic assumptions. [Joe Wilkins writing for Futurism.]

Tesla's robotaxi will also have to contend with Musk's ever-irrational ego trips. In new reporting, The Information found that when an internal Tesla analysis suggested that the Cybercab would was unlikely to sell well or become profitable, Musk buried the report instead of facing reality.

"We had lots of modeling that showed the payback around [Full Self Driving] and Robotaxi was going to be slow," Rohan Patel, Tesla's former head of business development and policy who left the company last year, told the outlet. "It was going to be choppy. It was going to be very, very hard outside of the US [Keep in mind, this was before Musk and Tesla saw their popularity plummet across Europe -- MP], given the regulatory environment or lack of regulatory environment."

Per The Information, the internal analysis was based on Musk's own hare-brained assumptions that "individuals would buy the cars, but a large portion of the sales would go to fleet operators, and the vehicles would mostly be used for ride-sharing." In addition, "many people would give up car ownership and use Robotaxis" and "Tesla would get a cut of each Robotaxi ride."

Along with some other executives, Patel used this analysis to highlight how much more reasonable it was to focus on the $25,000 vehicle, but Musk shrugged it off. Instead, he axed the $25,000 Tesla program altogether, and went all-in on the Cybercab.

Musk is promising a 90% plus share of the robotaxi market.  He  has also promised to have a million robotaxis on the road "next year" since 2019. In that time, Waymo has gotten a pretty good head start.

[For a good rebuttal of Musk's dismissive comments about Waymo, check out these comments from John Krafcik, Waymo founder and former CEO.]

Ironically, the one part of the earnings call that arguably got investors most excited—the June launch in Austin—was the most damaging to the robotaxi narrative when you dug into the details.

Supposedly, Tesla has self-driving solved and the Cybercab ready to roll into mass production next year. So what will the upcoming rollout of robotaxis look like (assuming it happens at all)? Ten to twenty Model Ys, geo-fenced and teleoperation-assisted—in other words, what Waymo has been doing for years, only without LIDAR.

There's no way to reconcile what Musk has been claiming with what he's proposing. The rollout doesn't prove anything. It can't add significantly to the data they already have on Full Self-Driving using their current array of sensors. All this does is reiterate the fact that they have absolutely no technological advantage over their well-established competitor.

We've been down this road before with Elon. Remember when he promised a futuristic underground system that would take your car at blinding speeds to any point under Los Angeles, thanks to his fantastic new tunneling machines? Instead, what we got was a car driven through a completely conventional tunnel, stabilized with wheels bolted to its sides. All these years later, The Boring Company has produced no technological innovations whatsoever. It is a Theranos-level failure to deliver on promised technology.

As of this writing, Tesla has a market cap of $892.88B. Almost all of that is based on the potential profits from robotaxis and robots. It's difficult to see how the first of those two justifies hundreds of millions in market cap. We'll talk more about robots next time.

#SummerOfScarcity

If you're selective with social media and limit yourself to following smart, savvy—in the good sense—people (which now pretty much means Bluesky), you will often start hearing about the next big story a week or more before everyone else.

Case in point: last week, when everyone was trying to decipher the latest vague and contradictory comment on tariffs out of the White House, those who followed people like Carl Quintanilla knew that the first wave of damage from the tariffs was already on its way (or, more precisely, not on its way), and it was too late to do anything about it.

This information was coming out before and during the huge market rally.

 

Toward the end of the week, this started getting serious coverage. Of the major news orgs, the LA Times seems to have beaten the competition by at least a day or two.

Imports at the Port of Los Angeles are expected to plunge in the next two weeks, even as negotiations over the final tariffs that China and other countries must pay are still being negotiated by President Trump.

That was the sobering message that port Executive Director Gene Seroka had Thursday for the Los Angeles Board of Harbor Commissioners during an update on port activity.

“It’s my prediction that in two weeks’ time, arrivals will drop by 35% as essentially all shipments out of China for major retailers and manufacturers have ceased, and cargo coming out of Southeast Asia locations is much softer than normal,” Seroka told the board.

That whole thread from Marshall is worth checking out, particularly the conclusion.

Social media platforms such as Blue Sky have tools that let you decide who to let in and it turns out that these platforms can be pretty great if you only listen to people worth listening to.

Markets can remain high on LSD longer than you can remain solvent.

I'm not sure there has ever been an earnings call as disastrous as Tesla's three days ago. I'm absolutely certain there has never been one this disastrous that was followed by such an inexplicable reaction. As for the disaster: just over a 70% drop in profits, an enormous—perhaps unprecedented—level of brand damage, and a flagship product they couldn't sell before the CEO became one of the most hated men in the world.

Musk basically dropped the pretense of arguing that the car manufacturing business could ever justify the stock price of his company. Instead, he went all in on robots and robotaxis, despite a report leaked to the press a few days ago revealing that Tesla's own internal auditors had determined the self-driving taxi business would actually be a money loser.

But here's the truly amazing part: the markets responded to this train wreck of dumpster fires—this once-in-a-lifetime chance to see a company absolutely implode—by pushing the stock up 17 points over the next couple of days. The P/E ratio is now an eye-watering 142.83.

Tesla now has the worst of both worlds. Musk said he will continue his involvement with (and being the face of) the toxic DOGE movement, while also spending more time in the office tweeting, playing video games, and randomly rage-firing people.

Edward Niedermeyer, who wrote the definitive book on Tesla, probably does the best job capturing the profound insanity of  the call. Here are a few excepts of his very long thread.

"somehow the car business which generates the majority of the company's revenue doesn't matter" because Tesla will never make enough selling cars to justify its valuation, not even if it sold more than Toyota, VW, Ford, and GM combined. The fact that sales are cratering only highlights what has always been obvious.

Make a mental note of that last one.

As recently as October, his robots required human operators to perform tasks as simple as pouring drinks. 

When Noah Smith and Ezra Klein wax poetic about abundance, remember they're getting their ideas from people like Marc (crypto, WeWork 2.0) Andreessen and Elon Musk.

It looks like the proposal is for a modest geo-fenced version that at best matches what competitors have been offering for years. Not an option you'd go with if you had "a general solution to self-driving, present tense."

I also wouldn't be surprised if this was the last we saw of the Cybercab.

Musk has been promising a million robotaxis on the road next year since 2019.

Because Waymo has waymo advanced technology. 

About that...

God, what a loser.

This next part is fun.

As mentioned many times before, Musk learns most of his engineering lines phonetically. Currently there are a number of conversations on Blue Sky with actual experts trying to figure out the original line he mangled.

"Been down so long it looks like up to me" -- a tale told mostly in tweets*

Market Psychology in 2025

"I'm going to lob a half dozen grenades into that building!"

Everyone runs out, screaming and trampling each other.

[Consults with advisors]

"Maybe I'll just lob three grenades into the building."

Everybody runs back in, singing and dancing.

 

We’ve talked about this before. Despite what you’ve heard, the current stock market loves uncertainty—probably because it contains at least the possibility of good news, and traders really want to hear some of that. As far as I can tell (keeping in mind that I am no expert on the financial system in general, and bonds in particular), bond traders remain more traditionally hard-headed in this respect.

Huge surges are sparked by vague, noncommittal statements from a secretary who is currently in a power struggle with Musk and Loomer and who may not outlast those unsustainable tariffs.

While on the subject of uncertainty, you have to wonder how the markets would react under some other administration if the Secretary of the Treasury—who was seen as one of the primary sources of stability in the economy—were to get into a shouting match in broad daylight at the White House with the second (second?) most powerful man in the country.

Putting aside the fact that these new “moderate” tariffs are still sky-high, there is no reason to believe that Trump won’t return to his more extreme position. For starters, Trump and many of his advisors deeply believe in the wisdom of tariffs, though their rationales may differ and even contradict each other.

Trump’s ego—and his favorite negotiating strategy—both depend on maintaining a perception of dominance. It is difficult to imagine the general reaction to this new position not getting under his skin.

It is worth mentioning that even if Powell’s job is secure through the end of his term—something I’m not sure we should necessarily assume—Trump is continuing to interfere with and attempt to intimidate the Fed on a level that, in normal times, would cause an outcry and a substantial reaction from the markets.

"May defend"

Even if we take the tariffs and the firing of Powell off the table, there’s still plenty of bad news to go around.

* Technically not "tweets" but you know what I mean.