Some hope for electric airplanes from Nova Scotia’s latest battery tweaks?

Electric airplanes currently cost more to operate per hour than gas-powered ones. A major factor is the limited life of the battery. Throwing out a $20,000 battery after 700 to 1,000 flights is more expensive than overhauling a piston engine after 2,200 hours.

Nova Scotians funded by Tesla to the rescue? This WIRED article talks about a battery that can handle 4,000 cycles.

Related:

  • May 2018 post with some discussion in the comments about battery cycle life (also a discussion about Californians using taxpayer funds to run Slovenian electric airplanes: “The students flying these world’s-most-advanced training aircraft are currently “unemployed.” In other words, they are young Americans who can’t get organized, in one of the tightest labor markets in U.S. history, to walk down to McDonald’s at 3 pm and start an evening shift. The California officials, however, have decided to train them for a job that requires getting up at 4:30 am.” The flight school’s blog suggests that the project is on hold pending FAA regulatory approval.)
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Tale of two children

Photos from a recent visit to a friend’s house in suburban Massachusetts…

The daughter, an elementary school student, baked cookies from “women owned” dough:

(But how can anyone be sure that the owners of this dough company continued to identify as “women” after the package was printed and distributed into grocery stores?)

The son, a middle school student, showed off a home-decorated coffee mug:

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How to steal $billions

Billion Dollar Whale is an instructive tutorial from two Wall Street Journal reporters. The “whale” is a pudgy Malaysian-Chinese guy named Jho Low who managed to steal billions of dollars from Malaysians and Arabs via diverting money from a sovereign wealth fund that he created and controlled.

One critical part of the scheme was setting up companies, and therefore bank accounts, that had the same names as legitimate cash destination firms, but that were incorporated in a different country and that were controlled by Jho Low:

For the next step of his scheme, Low set up two shell companies in the Seychelles. The firms—ADIA Investment Corporation and KIA Investment Corporation—appeared, given their names, to be related to the Abu Dhabi Investment Authority, or ADIA, and Kuwait Investment Authority, or KIA, two of the most famous, multi-billion-dollar sovereign wealth funds in the world. But the look-alike companies were purely Low’s creation, with no links to Abu Dhabi or Kuwait. In setting up ADIA Investment Corporation, Low experimented with another financial trick that he would add to his repertoire. The company issued just one unregistered share, valued at $1, and it was controlled by whoever physically held the stock certificate. These “bearer shares” were banned in many jurisdictions, including Great Britain and the United States—Nevada and Wyoming in 2007 became the last states to abolish their use—because they allowed owners of companies to hide behind layers of secrecy and made it nearly impossible for regulators to determine the owner of an asset at a given point in time. Seeking to find tax cheats in the early 2000s, the United States started to pressure offshore centers to hand over details of the beneficial owners of companies and accounts. Even the British Virgin Islands had recently outlawed the practice of bearer shares. But in the Seychelles, Low learned, they were still permitted.

The second element was an association with Mohammad Najib bin Tun Haji Abdul Razak, the Prime Minister of Malaysia, and his diamond-seeking wife.

The third element for getting money was Goldman Sachs, which was more flexible than other banks:

The 1MDB fund had agreed to pay $2.7 billion for power plants owned by Malaysian billionaire Ananda Krishnan’s Tanjong Energy Holdings, the first of a series of acquisitions it planned to make in the sector. To give the deal a veneer of authenticity, 1MDB needed an independent valuation of the plants. Leissner stepped in, asking Lazard if it could oblige. The U.S. bank agreed to take a look, but its bankers crunched the numbers and couldn’t figure out why 1MDB was willing to pay $2.7 billion for the suite of plants, which were located in Malaysia, as well as Egypt, Bangladesh, Pakistan, and the UAE. The deal seemed favorable to Tanjong, especially given that its power-sale agreement with the Malaysian state would soon run out, handing the government leverage to achieve a bargain price. Lazard believed the whole deal smelled of political corruption. It was common in Malaysia for the government to award sweetheart deals to companies in return for kickbacks and political financing; that was what Lazard thought was going on, and so it pulled out. With no other choice, Goldman instead became an adviser to 1MDB on the purchase, as well as helping the fund raise the capital. The bank provided a valuation range that justified 1MDB paying $2.7 billion for the plants.

In return for this flexibility, Goldman earned 100-200X standard investment banking fees:

Goldman was preparing to launch what it internally dubbed Project Magnolia, a plan to sell $1.75 billion in ten-year bonds for the 1MDB fund. But some board members were alarmed by what Leissner had informed them: Goldman would likely make $190 million from its part in the deal, or 11 percent of the bond’s value. This was an outrageous sum, even more than Goldman had made on the Sarawak transaction the year before, and way above the normal fee of $1 million for such work.

[Of course, some of the deals were made on the global douchebag circuit, i.e., at Davos:

The World Economic Forum, held each year in the Swiss ski village of Davos, is a microcosm of elite networks that span the globe, attracting world leaders, Wall Street titans, and chief executives of Fortune 500 companies. The events, in which panels of experts debate high-minded topics like radical Islam or the “democratic deficit” in front of audiences, is only the public face of Davos. In rooms open only to the chosen few with special white VIP passes—the highest in a color-graded hierarchy—the real deal making occurs. In late January, Michael Evans, a Goldman vice chairman in New York overseeing “growth markets,” had an important person to see on the sidelines of Davos: the prime minister of Malaysia. Evans’s audience was with Prime Minister Najib, brokered by Tim Leissner—just the kind of meeting between a Wall Street banker and a world leader that was typical at the event in the Swiss Alps. In public appearances at Davos, Najib was in his element, deepening the impression of Malaysia as a beacon of democracy in the Islamic world, and himself as an urbane technocrat. “We have to take care of the young people, we have to give them jobs,” he told Fareed Zakaria of CNN during an interview on the sidelines of Davos. But here, with Evans and Leissner, Najib had a strikingly different agenda. After pleasantries with the two bankers, Najib brought up the role Goldman had played selling bonds for 1MDB in 2012, and asked if the bank was willing to do so again, getting the money to the fund quickly and quietly, just like before. Goldman’s top management, advised by Leissner, had been expecting more 1MDB business. But Najib’s demand, less than three months since the fund last tapped the market for almost $1.75 billion, was almost too good to be true. The prime minister said the fund wanted to raise a further $3 billion. Such a staggering sum would mean another major payday for Goldman.

Goldman earned $600 million within 12 months, which the authors say is 200X the standard fee.]

The fourth element for avoiding scrutiny was to get auditors such as KPMG to sign off on the sovereign wealth fund’s books, using a fictitious investment in the Cayman Islands to show that the fund hadn’t been looted out.

For spending money, a big part of the key turned out to be working through a big American law firm:

But it was one thing to take money from a Malaysian fund and funnel it to Swiss bank accounts under the guise of a sovereign investment, using friends in official positions to address any concerns of compliance executives at banks. Now, Low wanted to get the money into the United States so he could spend it on luxuries and begin building his empire. That was risky, because the United States had started clamping down on corrupt foreign officials buying assets in Western nations. To do so, Low turned to Shearman & Sterling. Founded in 1873, with its headquarters at 599 Lexington Avenue in Midtown Manhattan, Shearman was as white-shoe a law firm as they came, an organization more suited to handling major mergers and acquisitions than dealing with the likes of Low.

Low informed his new legal team that he would be making a sequence of major investments, but he was very concerned about privacy. He opted to use the firm’s Interest On Lawyer Trust Accounts, or IOLTAs, to help distribute the money. These trust accounts are typically formed by U.S. law firms to pool clients’ money, say, when they are holding short-term funds for business deals or property purchases. This arcane corner of the financial world came into existence three decades ago as a way for law firms to earn short-term interest on client money to finance legal aid for the poor, but over time the accounts developed a reputation for shielding the identity of clients in transactions and helping to hide the origin of funds. Some states mandate that law firms set them up. IOLTAs are at once good for society and a powerful tool for crime. Lawyers, unlike bankers, don’t have to conduct due diligence on a client. Details of transfers through IOLTAs, meanwhile, are protected by lawyer-client privilege. While it is illegal for lawyers to abet money laundering, they are not required to report suspicious activity to regulators. The Financial Action Task Force, a Paris-based intergovernmental group that sets standards for stopping fraudulent use of the global finance system, has highlighted the United States’s poor oversight of lawyers as a weak spot in its defenses against money launderers.

Low pushed $369 million through the law firm. How much did the guy spend?

Between October 2009 and June 2010—a period of only eight months—Low and his entourage spent $85 million on alcohol, gambling in Vegas, private jets, renting superyachts, and to pay Playmates and Hollywood celebrities to hang out with them.

Despite connections to the Obama White House, things do begin to unravel for Mr. Low. I don’t want to spoil the suspense, though. The worldwide civil and criminal litigation is ongoing, but it seems safe to say that Goldman gets to keep all of its fees!

More: Read Billion Dollar Whale.

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Northwest Passage fairly open this year

Two of the passengers on Roald Amundsen were on a voyage last year on Fram that had to turn back due to ice in the Northwest Passage. This year we found enough ice to prevent driving through the Bellot Strait as planned, but Amundsen’s 1903 route down through Peel Sound was passable, especially with the assistance of Canadian Coast Guard icebreaker Terry Fox (thank you, Canadian taxpayers!).

We stopped at Beechey Island, the lonely site of some Franklin Expedition graves:

Then it was time to head south, following a Canadian cruise ship that was following the icebreaker.

Wildlife sightings so far: a few fin whales, five polar bear, perhaps 30 seals, many seabirds.

Weather today in Gjoa Haven, Nunavut: right around freezing with a 40-knot wind. Thanks to Bell Canada for the LTE service:

Regarding the proper term for the locals, one said “Eskimo is a Cree or Algonquin word meaning ‘eater of raw meat.’ That’s not who I am. Though of course I do love to eat raw meat.”

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European perspective on Trump’s China policy

This Northwest Passage cruise contains a lot of retired European multinational executives. They talked about being forced by China to set up factories in China in order to have access to the Chinese consumer market. “Trump is fighting the right battle,” one said, “though you can argue about whether he is using the right tactics. But he is the first American to try to deal with these unfair Chinese policies.”

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How to party with Hollywood Stars and Supermodels

Billion Dollar Whale is a fascinating story by two Wall Street Journal reporters. The “whale” is a pudgy Malaysian-Chinese guy named Jho Low. Aside from making friends with Arabs and stealing from Malaysian taxpayers, the authors don’t credit Mr. Low with any skills. Is that an obstacle to partying with movie stars and beautiful women?

Low rented a suite of rooms that cost $100,000 per month. The flashy new resident showed up at the building in a convoy of black Cadillac Escalades with a retinue of security, and he paid for a number of other apartments in the building for his entourage, which included Hamad Al Wazzan, his wealthy Kuwaiti friend from Wharton. Long-term residents complained about the bodyguards and the ostentation, but that was exactly Low’s aim: to show he had arrived. He began to spend eye-popping amounts, running up a $160,000 bar bill at Avenue, a new club in New York’s Chelsea district, on a single night during fall Fashion Week in 2009. On another occasion, Low sent twenty-three bottles of Cristal to actress Lindsay Lohan’s table when he spotted her during a night out in Manhattan.

It’s a little-discussed secret that even the biggest movie stars take payment to attend events, and Low began to seek out the managers of top actors, or pull on the Strategic Group’s network of club promoters, to get celebrities to his parties. The rumor that Low was a billionaire with unlimited funds made him an attractive person to know. Even for DiCaprio, one of the world’s top-paid actors, with a sizable fortune of his own, the scope of Low’s purported wealth was alluring. The night at the Palazzo in October 2009 was just the start of many parties the actor would enjoy with Low.

Robert De Niro, Charlize Theron, Swizz Beatz, Alicia Keys, and Jamie Foxx become some of the regulars as well.

Where do all of these folks hang out?

It was Fleet Week in Saint-Tropez, and the world’s superyachts vied for berthing space at the town’s marina. In July and August, the resort on the French Riviera, centered around a warren-like medieval old town of ochre-colored houses and old churches, is heaving with the world’s richest people. They flock to the town for parties on yachts and in the town’s bars and the daytime carousing at the clubs on nearby Pampelonne beach.

The most illustrious of all is Les Caves du Roy, a fixture on the world party scene since the 1960s. Every inch of the club, situated in the basement of the Hotel Byblos, just a few hundred meters back from the port, is covered in gold. There are golden columns, which end in waves of fluting, a parody of the Corinthian style meant to evoke champagne bursting from a bottle. The dance floor is golden, as are the tables on which are perched gold leaf–covered cocktail bowls.

Once there, Low spends 2 million euros on Champagne.

His friends also know how to party:

In Abu Dhabi, Al Qubaisi wore the traditional emirati cloak and head covering, and had a family home, a sprawling villa, where his wife and four children lived. But like many rich emiratis, he conducted a different life overseas. At his villa on the Côte d’Azur, with Bugattis and Ferraris parked outside, he partied with models, and he had a younger Moroccan wife in Paris. When abroad, he traded in traditional emirati dress for tight-fitting T-shirts, including one with a montage of images of Al Pacino’s Tony Montana from the 1983 film Scarface. Once, when an executive showed up to Al Qubaisi’s mansion in France to discuss business, he answered the door wearing a skimpy swimsuit, while women in bikinis lingered in the background.

There is still time to appreciate art:

A few weeks after the Wolf of Wall Street premiere, Low, posing as Eric Tan, sent DiCaprio a $3.3 million painting by Pablo Picasso as a late birthday present. The oil painting—Nature Morte au Crâne de Taureau—was accompanied with a handwritten note. “Dear Leonardo DiCaprio, Happy belated Birthday! This gift is for you,” it read. Then, Low told a Swiss gallery that was storing a $9.2 million Basquiat—a collage entitled Red Man One—to transfer ownership to DiCaprio. The order, made in a letter also signed by DiCaprio, indemnified the actor from “any liability whatsoever resulting directly or indirectly from these art-work.” The actor also got a photograph by Diane Arbus—cost $750,000—from Low. In private, DiCaprio was happy to accept these gifts. On the red carpet, he was in a more philosophical mood. Some critics of the film—including voting members of the Academy who heckled Scorsese at an official screening ahead of the Oscars—complained it glamorized Jordan Belfort’s fraud and was more likely to spawn financial malfeasance than serve as a cautionary tale. DiCaprio had carefully prepared his retort. “This is an indictment of all of Wall Street. But it’s an indictment about something that’s in our culture, this incessant need to consume and this incessant need to obtain more and more wealth with complete disregard for anyone except yourself,” he told one interviewer.

Political donations lead to invitations to hang out (and take selfies) with President Obama and family at the White House.

What about sex with supermodels?

Miranda Kerr, the Australian supermodel, walked in. She had come from a formal event and was wearing a ball gown, at odds with the atmosphere in the down-to-earth eatery. With her soft brown curls, iridescent blue eyes, and trademark dimples, the thirty-year-old was instantly recognizable, … After winning an Australian modeling competition, aged only thirteen, she had eventually moved to the United States, where she became a Victoria’s Secret model. In 2013, she earned $7 million, making her the second-best-paid female model in the world after Gisele Bündchen, and offers kept piling up—from H&M, Swarovski, Unilever—to promote products. But a supermodel’s earnings aren’t enough to launch a major business, and Kerr was interested in what Low had to offer. She had tired of modeling and was looking to transform herself into an entrepreneur. The next morning, she had a package of KORA products couriered over to Low’s apartment in the Time Warner building. Back in October, Kerr had divorced actor Orlando Bloom, with whom she had a three-year-old son,

Kerr explained her priorities:

“Simple things, like, you know, a fresh bouquet of flowers makes me really happy, watching the sun rise or the sun set,” she told one interviewer.

Low apparently did not realize that a floral bouquet would be sufficient:

A few months later, he would buy Kerr yet more jewelry, a $3.8 million diamond pendant, making a grand total of over $8 million to acquire the supermodel’s affections.

The $8 million is just for a rental, as it turns out…

Kerr had split with Low after the first stories about him began to emerge in early 2015. In May 2017 she married Evan Spiegel, the billionaire founder of Snapchat, cutting all ties with Low.

More: Read Billion Dollar Whale

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