China Bets On Europe.

 Here is where some people will have difficulty grasping the issue.

China has ordered its airlines to halt all jet orders from American manufacturer Boeing in response to President Trump hitting the country with tariffs as high as 145% on Chinese goods, according to a report. Beijing has additionally told Chinese carriers to not purchase any aircraft-related equipment from American companies, Bloomberg News reported, citing people familiar with the matter. The order comes after China imposed a 125% tariff on American goods over the weekend, which on its own would have doubled the cost of US-made aircraft and parts, Bloomberg reported. Boeing shares dipped 3% in premarket trading Tuesday over the pause in shipments to China, which the company views as one of its biggest growth markets despite being dominated by rival Airbus.

It would have been absolutely naive to think that Trump would scare China, China can cause the US a tremendous economic pain. But here is the thing--commercial airspace is where China is very vulnerable and depends very much on the West's technology. It is true--Chinese airlines prefer Airbus planes but as I pointed many times--look at what is considered nominally "Chinese" C919:

Immediately, the issue of LEAP (France-US) engines maybe brought to bear by the US and that can create a serious obstacle for C919 which IS needed considering a gigantic scale of Chinese air travel market. If you think, however, that everything is in the clear with Airbus, well ... What if I tell you that even A320 NEO flies on either LEAP or Pratt and Whitney engines--all could be immediately sanctioned even for Airbus. So, this one is not easily resolved. But China had no other option but to try hit the US via Boeing. So, we have to wait and see where it all goes, because this one is not about consumer goods--it is about strategic industry, maybe top 2-3 which defines a true superpowerdom. 

You Know You Are In Trouble...

 ... when this kind of news begins to make headlines around the world. 

Several high-profile candidates have turned down the chance to become Boeing's (NYSE:BA) CEO, including GE Aerospace (GE) CEO Larry Culp, The Wall Street Journal reported Monday, complicating the company's search for a new leader to succeed Dave Calhoun, who has said he plans to spend by year-end. Two other potential CEO candidates, Boeing (BA) COO Stephanie Pope and Spirit Aerosystems (SPR) CEO Pat Shanahan, face complications on their path to the top job, while Boeing director and current Carrier Global (CARR) CEO David Gitlin also declined to become a candidate, according to the report.

That tells you something. It is, indeed, criminal and atrocious what has been done to once great commercial aerospace company, that what once would have been considered a stellar position, a position to be proud of and heralding one's engineering and managerial achievement, has become toxic and nobody wants to take it. Even considering immense financial and other corporate rewards.  

Sadly, Boeing's problems do not stop just with the search for a new CEO:

Boeing’s Starliner spacecraft was set to mark its crowning achievement this month: Ferrying two NASA astronauts on a round trip to the International Space Station, proving the long-delayed and over-budget capsule is up for the task. Starliner is halfway to that goal. But the two veteran astronauts piloting this test flight are now in a tentative position — extending their stay aboard the space station for a second time while engineers on the ground scramble to learn more about issues that plagued the first leg of their journey. 

Obviously, Starliner is a brand new capsule, but, boy, evidently the leaks are serious and under these circumstances it is right decision to keep astronauts on ISS for now. Do we see Soyuz in the nearest future if issues will not be resolved? One cannot exclude such a situation. For the most part astronauts and cosmonauts are a friendly bunch, with the exception of Senator Mark Kelly whose badmouthing Russians is a sign of his inferiority complex, and they do come to help each-other if need be. So, let's keep fingers crossed. Will Musk enter the equation? I cannot even conceive what these two astronauts feel now, especially if they will be cleared to fly Starliner back to Earth. But Boeing is a reflection of the overall state of the United States today.

You Know What?

Fuck it. I am not flying Boeing products other than 747 and 757 anymore. I had it. As much as I view Europe with contempt, at least Airbus makes good planes. For now. 

A Boeing quality engineer went public Tuesday with damaging allegations that the jet-maker took manufacturing shortcuts to increase production rates that leave potentially serious structural flaws on its 787 and 777 widebody planes. The Boeing engineer, Sam Salehpour, alleged that almost 1,000 787s and about 400 777s currently flying are at risk of premature fatigue damage and structural failure. On Jan. 19, lawyers for Salehpour wrote a letter detailing his allegations to Mike Whitaker, head of the Federal Aviation Administration. The agency said Tuesday it is investigating the claims. “We thoroughly investigate all safety reports,” FAA spokesperson Ian Gregor said. Salehpour will speak next week at a Senate hearing convened by Sen. Richard Blumenthal, D-Conn., “to examine Boeing’s broken safety culture, focusing on firsthand accounts.” Boeing said it is in discussions and will cooperate with Blumenthal’s committee and has “offered to provide documents, testimony, and technical briefings.”

This is from Seattle Times. The US literally begins to cease as a functional society, Europe is already there. Will they suicide this guy too? This is what financial economy--meaning "capitalization" fraud and BS taught in economics programs--does to society. Luddites fought "technology", will we live to see stock brokers and "financial advisers" be subjected to the same fate? Remember this, though?

A metallurgist in the US state of Washington has pleaded guilty to fraud after she spent decades faking the results of strength tests on steel that was being used to make Navy submarines.

The country literally sinks, or comes apart at the seams--whatever one prefers. In related news--the guy certainly is not a dummy and knows where the future is:

A German billionaire who vanished under mysterious circumstances under Switzerland's iconic Matterhorn peak six years ago is suspected to be living with a Russian mistress in Moscow, an investigation has claimed. German-American retail tycoon Karl-Erivan Haub, then 58, was training for a ski mountaineering race when he disappeared in April 2018 in Zermatt, Switzerland.The billionaire businessman was last seen heading up the mountain in a lift one morning alone - something his trainer said was strange for a man who was typically very safety conscious and well-prepared - and never returned to his hotel. 

For those who are interested--search the term "Limita" (Лимита), Russians are having a field day with this one, LOL))). And why not?  Plus, Moscow smells with good food, nice perfumes and flowers. It is safe and clean. Beats any European or US city. Yeah, sure, we all know that every attractive Russian woman is a spy but read the article--it is fun. A good fodder for brainwashed UK public loving their tabloids. I will abstain from repeating a good ol' joke why Brits were good sailors... something about their food and wives;))

Story, Never-Ending Story (c).

Ah, so now we hear... the same ol' song. 

The new U.S. Air Force Chief of Staff is warning his service it faces stiff competition in a future war, involving aircraft and personnel losses not seen for 80 years. General Charles Q. Brown, Jr. believes the Air Force must work to accelerate change, adapting to new technologies faster than its potential adversaries. Brown warns that “good enough today will fail tomorrow,” with grave implications for the entire country. 

He also goes as far as to predict WW II level loses for USAF against peers. This is really a classic "cry wolf" situation because Pentagon inflated threats so many times that when, actually, the statement has a ring of truth to it, few will publicly aknowledge its merit. USAF, of course, still blows the smoke up out asses because what the USAF wants is to fight some third-tier opponent with grossly inferior air-force in order to make such statements (famous "analyst" Mizokami does it for them):

The Air Force has essentially been the supreme air force on the planet since 1991. The destruction of the Yugoslav Air Force in 1999 marked the beginning of more than 20 years of virtually uncontested air operations for the service lasting to this day. Since then, combat operations over Iraq, Syria, Afghanistan, Somalia, and elsewhere have largely been uncontested. 

For starters, Mizokami mixed two different things. "Uncontested" merely meant that the US was and is bombing the shit out of countries which didn't have viable air forces to start with. Yugoslav Air Force was barely a factor in NATO's gang-rape of Serbia, which didn't prevent the US from threatening Russia trying to ensure that no S-300 AD complexes ever made it to Serbia. Moreover, in Syria the USAF is contested in a sense that Russia's VKS guard vast territories of Syria from the US control. Russia closes her eyes mostly on Israel's operations against Iranian assets there. The decision is purely political and underscores an immense complexity of politics in the Middle East. Lastly, the USAF met a proper peer in a proper, classic, air-to-air combat only in Korean War against Soviet 64th Fighter Corps and it was an unpleasant account for USAF. I do not include Vietnam here, but even there Vietnamese gave a good account of themselves in the air, while making sure that Air Defense becomes a more complex affair than merely AAA and dogfights. They, with the help of the USSR, surely succeeded. 

Today we are deep inside Real Revolution in Military Affairs where the USAF faces insurmountable barrier of advanced technologies and operational concepts which make all, grossly backward, views on the air-war as merely a contest between two opposing air forces as relevant to reality on the ground, or in the air, for that matter, as having a crank-shaft for 2020 Toyota Camry or Chevrolet Camaro as means of starting the engine. It is good that Charles Brown acknowledges possible losses for USAF in the modern peer-to-peer war, but as Russians say--best air defense is our tanks at enemy's airfields. Russia is not going to be sending tanks to take Rammstein or whatever forward jump air strips may be chosen in case the US and NATO want to commit physical suicide, but modern air war, even before any aircraft reaches the edges of weapons' release, which in itself a dubious proposition, will pretty much have no airfields to come back to, nor, very possible, countries from which any attempts may be made against Russia or, for that matter, China. 

Reality of modern air war is such that every single NATO aircraft will be tracked the moment it takes off from any field in Europe, in fact, many will be tracked while at the runway getting ready to take off, the first wave of counter-strike will be in the air shortly after that and even before those aircraft are properly airborne things will start happening which USAF never encountered before, ranging from great degrading, or complete shut-down, of communications to long-range EW, to disabling GPS and the list is too long to continue. And this is before anything happens at all. USAF never in its history operated in the environment like that and the remedy it suggests is, oh, boy...

How will the Air Force do this? Drones, drones, and more drones. Manned military aviation has been in a death spiral for some time. Technological complexity leads to increasingly sophisticated aircraft that require more time and money to develop. As a result, planes like the F-35 Joint Strike Fighter require two decades to develop, cost $90 million each, and require months to build. The result is a smaller air force where even brand-new fighter jets feature 20-year-old technology, which isn't capable of making up for World War II-style losses.

I am having a... facepalm. A real drone, capable of any real military impact while carrying out whatever mission: strike, recon, air-to-air etc. will still be subjected, in the war against peer (Russia and China), to the same set of threats and counter-measures, which will either mitigate their impact or derail drones' mission altogether, unless it is a drone which is...well..expensive and extremely valuable, which brings us all back to the square one. The United States, as Andrei Raevsky once succinctly observed, can not fight wars on cheap, period. In fact, the ratios of US military technology costs relative to the same by peers continue to grow across the board for the United States. This is not a good indicator at all, for ANY military technology the United States procures or is about to. Same applies to drones. The world changed and any most "advanced" technologies the US tries to develop and procure are already obsolete the moment they leave manufacturing floor. 

Without understanding of modern peer-to-peer conflict as a whole, as a vertical engagement from a strategic down to tactical levels, with all forces involved in it and interacting constantly across modern battle-space, all this silly talk is just...well, silly. At least RAND's big air operations honcho understands that:

We lose a lot of people. We lose a lot of equipment. We usually fail to achieve our objective of preventing aggression by the adversary,” RAND analyst David Ochmanek told a security conference on Thursday. “In our games, when we fight Russia and China, blue gets its ass handed to it.”

Well, good that he at least understands that. As per "aggression" tropes, as I say non-stop: it so tired, it is so contrived and its really so rich coming from people whose actual combat score against peaceful weddings exceeds that against competent and determined air forces as of lately, that one has to simply dismiss this BS and admit that at this stage US military simply cannot adapt and develop a viable fighting doctrine and technology to fight serious adversary capable of rearranging stones, even without any nuclear weapons, anywhere in the world. In related news, Boeing wants at least 20% of its labor force to be black, while Hollywood issued new guide-lines for Oscars on inclusion (wokeness, that is). What can possibly go wrong? s/ 

Pardon My French, Yet Again!

So, they finally figured it out what it takes to stay relevant in the real world. 

Boeing suspends its dividend, holds up buybacks and stops paying CEO and chairman amid pandemic. 

About fvcking time. The only legitimate "buyback" is known as "stock options" which are granted to people working at the company. Obviously, clowns populating a spin machine, aka US media, immediately jumped on the fact of Nikki Hailey leaving Boeing's board of directors and started to speculate that this is the move designed to get Nikki into the WH as VP or, maybe, even as POTUS. I understand that only qualifications pundits have are those of sorting out different varieties of shit, but Hailey, being incompetent idiot and being considered as a viable candidacy for any top two posts in US political hierarchy is a sign of times, the end of times that is. As if we don't have enough problems in hoarding enough booze to survive, in adequate mental state, upcoming presidential debates between current orange genius and senile imbecile Biden, who seems to be positioned to finally qualify the DNC and Democratic Party as an ultimate freak show.  

Speaking of the "geniuses" and the reasons why Russia, as an example, sees no value in talking to Trump. As Daniel Larison points out:

The division in the administration is between the hard-liners in the administration that want to attack the Iranian military directly and the U.S. military that doesn’t want to jeopardize the relationship with Iraq any further. According to the report, the Secretary of State, National Security Advisor, and the acting Director of National Intelligence all urged a larger attack earlier this month. It was only the Defense Secretary and Chairman of the Joint Chiefs that argued against this. They prevailed in the debate because they said that they did not have evidence that the latest rocket attack on was directed by Iran. 

As I wrote previously, last vestiges of the geopolitical competence in the United States are concentrated primarily around armed forces professionals--it is understandable, since they have to plan based on more-or-less realistic data. Yeah, let's call it "more-or-less". The main hawk in Trump Administration today is Richard Grenell, a run-of-the-mill mediocrity who passes under the title of "diplomat" in the US and who is now Director of National Intelligence and is known for creating a shitstorm in Germany, while being an ambassador there, and, in general the guy who is utterly unqualified for either diplomat or "intelligence" positions probably even in the Kingdom of Lesotho (nothing personal against this fine country). But that is the story of the American geopolitical "thought" in the last, well, many years.  

Obviously, the main question remains--how Grenell sees (hint, he cannot--he has degree in Public Administration) this "larger attack" on Iran. Pompeo, another geopolitical "thinker" and insane hawk, who graduated West Point in 1986, at least should have some clue on how modern battlefield is shaped and what happens in it--I think--but there is no guarantee that fat Mike actually remembers any of it. So, here we have a bunch of chickenhawks with dubious religious indoctrination (like Pompeo) trying to kill as many US servicemen in the ME as humanly possible by mounting a "larger attack" on Iran. What can possibly go wrong, right? But even Pompeo, I think, is not well versed in the realities of modern warfare against such state actor as Iran and should be periodically reminded that the United States doesn't have a viable object (bases, HQs, industrial plant) and troop level (brigade, regiment, company) Air Defense capable to stop Iranian cruise and ballistic missiles. So, no surprise then, that it is namely, for all its major flaws, US military which pushes against these insane ideas. I would suggest to Mike Pompeo and Grenell to concentrate on the only thing that are good at--imposing sanctions. As I said many times--more sanctions on Russia, please. I mean it.  

Are They Too Big To Fail?

Good dirty laundry on the US airlines. Really good.

Airlines are begging for a bailout, but they've used 96% of their cash on buybacks over the past 10 years. It highlights an ongoing controversy over how companies have been spending their money.

No shit! Pardon my French. Now they need this so much derided, oh ever trying to regulate things, government to bail their asses out. Cry me a river. 

Major airlines are reeling from massive wave of cancellations as Americans stay home and governments around the world implement travel bans to curb the spread of the coronavirus. "We cannot afford to wait long for assistance," the trade association Airlines for America said in a statement, warning that some companies could be bankrupt by June. But there's a catch. Over the past decade, major airlines — including Delta Airlines, United Airlines, and Southwest — have used roughly 96% of their available cash on stock buybacks, according to Bloomberg. By reducing share count, these repurchases have pushed stock prices higher.

My feel about it is conflicting. I work in commercial aerospace and I understand how industry is tied closely to air travel, in the same time, as it was the case in the US economy in the last decades, stock buybacks are merely tools to make fat cats fatter while leaving many industries rot and labor, without which those industries wouldn't exist in the first place, with ZERO benefits in terms of raises and better health coverage among many other thigs. As long as some CEO can ride his personal business jet to some exotic golf-club and see his salary and bonuses grow who cares, right? 

Led by the tech and finance sectors, buybacks peaked to a record in 2018, according to a according to JPMorgan. For many, the takeaway was simple: These companies were electing to enrich shareholders, rather than invest in their businesses and labor forces.

This is exactly how, as an example, real estate prices got driven into the stratosphere in Seattle area. It was this class of smart managers and financial engineers who did this:

See this lovely, 1987 (33 y.o.) condo in Bellevue, WA? Who wouldn't afford this condo, right? Only Million and a half plus--so typical. But, as a long-time resident of the state, I can recall when houses (not condos) twice larger than this in the same area--you could buy them for $270,000 in mid-1990s. You could buy for $250,000 a superb 3 bedroom house there. Even then, when Microsoft was already on the peak of its might. But then bubbles started: dot com bubble, real estate bubble, so called tech bubble and the number of fat cats close to the life giving springs of dividends and executive bonuses which put decent housing beyond reach of even many white collar highly qualified professionals with decent pay, skyrocketed. Even decent pay stopped being enough. All that was a result of a new financial reality, which saw market "grow" without creating any serious value in anything. Real estate prices grew everywhere, while the distance (pitch) between airline seats grew smaller, the service became shittier and all this was compounded, in the end, by the consequences of 9/11. Obviously, airlines were not the only ones who did stock buybacks, but spending 96% of profits on that--this is really something. 

You, of course, recall what Boeing did too? Now it also calls for help:

On Tuesday Boeing called for a $60 billion lifeline for the struggling U.S. aerospace industry.

I would, however, consider Boeing separately. Airlines can go bankrupt, the new ones will immediately take their place. Same goes for banks. Nobody can take Boeing's place. As much as I abhor Boeing's financial, managerial and some manufacturing practices, it is one of those REAL too big to fail which must be kept afloat at any price. But the state has a right, in this case, to have many strings attached to bailout, which under no condition could be spent on yet another stock buyback, executive privileges or dividends to shareholders. "Socialism" you say? If one wants to use a misnomer, so let it be "socialism". Anyone violates those terms, get FBI busy with something of real national security significance, instead of wasting time on ridiculous conspiracies. Is this arrangement on the horizon for the United States? I don't know, I do not pretend to know but what I know for sure is that "business as usual" is over because it is a physical impossibility, unless one wants to completely destroy the country and drown it in chaos and the bloodshed. I heard one libertarian (a euphemism for being inadequate in assessing reality) is still holding off on what is remarkably "socialist" package which actually considers ordinary folks, however inadequately, for the first time in a long-long time. Remember, these folks are the ones who are armed to teeth and their patience is at the breaking point. 

UPDATE: for demonstration on how Seattle became unlivable. Sadly I could find only data starting from 2006. I am sure Bellevue will have similar profile. 

Now ask yourself a question, who, unless they already owned housing since early 1990s or earlier, can afford to own anything in Seattle area? Right, unless you are a millionaire or making way above 180-200 Ks. As we all know, these salaries are typical for the United States. Nah, I am screwing with you;)  

Friday On Thursday.

My Friday started today due to me being a bit under the weather and taking part of today and all tomorrow away from work. In the end, who knows--better safe than sorry for my colleagues. While sitting home I stumbled upon this headline, just get this: 

Is Boeing Done For? What Charts Say After 64% Fall.Boeing shares have become a disaster.

After that, this "analytical" piece goes into all kinds of Wall Street BS about shares and indices and "volatility" crap which exposes exactly what a complete pile of steaming shit this whole "economics" pseudo-science is. The reason being that the question isn't even stated correctly because people who state this question in this way are either morons (which is highly likely) or "free market" fanatics  (which is also likely), or people who have neither stake nor faith in what's left of American Republic. Putting it even in simpler terms: the nation which, despite Boeing's many well-known problems, doesn't want to preserve its industrial and scientific crown jewel, shares' prices and "capitalization" notwithstanding, and continues to judge it only in financial terms--such a nation doesn't have much to live for. That is how the issue of Boeing should be framed. In this case, such ANALysis like this:

If Boeing can get going back over $180, it puts $200 and $220 on the table. However, if it can’t find buyers and the stock takes out the recent low near $155, the $135 to $140 breakout zone may be the next downside target.

Should be discarded as yet another fluffy mambo-jumbo and psychobabble and one has to consider a possibility of the state taking over this American icon to preserve it. Recall what I wrote 4 years ago: 

In other words, Boeing is a combination of a massive national symbolism and of a damn serious scientific and manufacturing substance. Boeing long ago transcended traditional meaning of private company since it is, unlike fraudulent US investment banking system, is too big and way too important to fail. That is why Boeing exists within, however not-advertised, system of US government contracts and support. Is Boeing perfect? No, not even close, but if Bank Of America fails tomorrow, yes, there will be serious consequences, some economic disruptions, some CEOs may go to jail and some Wall Street a-holes may get heart attacks or may even commit suicide. But within fairly short time this failure will be addressed and the life will go on. Now, imagine if Boeing fails. Depending on what this failure may be, but Boeing's "failure", which may stop such a company in its tracks implies immediately that if Boeing fails, the US also does. It means only that something in the United States went so wrong that it changed its economic and social fabric and relegated the US to the ranks of not so great powers. Boeing is one of the pillars of the United States' superpowerdom. Merrill Lynch and its owner BOA are not.

As you  may have guessed it already "something did go wrong", or, rather, continued to go wrong and this "wrong" is the fact that the United States is run by bookkeepers and MBAs who do not know shit from shinola. That is why they are ready to discuss scenarios of Boeing being "done" based on "valuation" when in reality, Boeing transcends some BS monetary theory and is one of those very few things which is left as real American pride which will be back. Unless, of course, well read my whole post from 2016. As for Dow "plunging 10%" and Fed pouring $1.5 trillion of worthless paper into the pockets of very same people and structures which bankrupted the United States, what can I say--I am writing about incompetence (and corruption) of the American elites across the board for many years. You all, of course, recall Einstein's definition of insanity--observe it in real time. But since it is MY Friday on Thursday, let's recall the times when music was simply incredible and people had a better grasp on things. 

Enjoy.   

Bernhard Of Moon Of Alabama Nails It.

Here is German whose opinion on Boeing I, being Russian myself, share completely. 

It is sad to see a once great company going down over the incompetence of such men.

My sentiment exactly. Has been such for many years. Boeing is more than just American company, for decades it was a symbol of great quality and great airliners. Yet, Bernhard is spot on when he writes:

Boeing had stopped the final assembly line of the 737 MAX because there was no more room to store the more than 400 produced but grounded new planes. It will take more than a year to clear that inventory. But Calhoun now wants to restart production even before the MAX is allowed back into the air. This is beyond silly:

He said Boeing plans to restart the 737 assembly lines in Renton months before the Federal Aviation Administration (FAA) approves a return to service to ensure that production can be restarted with maximum efficiency.“We’ll start it slow so we can practice and practice. That’s a bit of a silver lining in the [production] pause.”

That is an insult to Boeing workers. They do know how to build planes. They do not need more 'practice' but a management that is aware that pressuring workers will not produce better planes. But Calhoun is not interested the gritty details of manufacturing good airplanes. It is all about the shareholders, the only group that counts:

Calhoun said Boeing is not planning to cut or suspend the dividend because Boeing has the “financial capacity and capability to do the things we need to do.” Calhoun said he “will stay on that path unless something dramatic changes.”

So Boeing will take on $10 billion of additional debt to pay dividends and will hike is lobbying spending even while it does not have the cashflow to develop new airplanes.

Get it? It is all about dividends. But then again, who IS Mr. Calhoun? There is precious little about his REAL background except that his education is in accounting. Why I am not surprised with Boeing's not only current pathetic state but also a very dangerous one? The guy who is a bookkeeper (and yes, spare me this BS general title of "businessman") running the place which requires an enormous amount of STEM education and expertise. What the fvck are they doing to more than just national treasure but to an international symbol of air travel? They are literally killing the company. Here is another note-worthy point:

It takes at least 7 years and some $10 to $15 billions to create and certify an all new airplane. Airbus already has some 60% of the large jet market share with Boeing having some 40%. Pushing back the launch of the New Midsize Airplane (NMA) means that Boeing will have nothing new to offer throughout the next ten years. Without a new plane Boeing's market share will slip to 30% which is less than the minimum one third it needs to survive in the duopoly.

The MAX, though, is here to stay. Calhoun said he expects it to eventually reach parity with the Airbus A320neo. He dismissed a suggestion that the MAX may never fly again, or will be renamed to disguise its history, and said passengers’ confidence in the airplane will be restored.“I believe in this airplane,” he said. “I’m all in on it and the company’s all in on it.”

Well, here are some news for him: it is not just Airbus which is laughing all the way to the bank, B-737Max is not a competitor to Russian MC-21, which will inevitably replace ALL B-737s flying inside Russia (which also explains Irkut planning ramped-up production) and already has many firm contracts from Aeroflot, Red Wings and others but, as news have it (for admirers of China's progress it will be a very cold shower), other things come into play here. As rumor has it, Chinese, who already pushed own certification of their COMAC-919 back to 2021, may, actually, face a cold hard reality that this aircraft may have bigger problems than delay of certification. As Aviation Expert reports: 

Задержки при создании новых образцов авиатехники — это вполне распространенное явление. Ещё ни одна конструкция самолета не получилась с первого захода идеальной, без необходимости доработок. Однако неспособность реализовать такие доработки в течение уже длительного срока — серьезный удар по репутации Китая, как возможного нового игрока на мировом рынке производства воздушных судов, который вложил немалые средства в свою первую серьезную попытку составить конкуренцию Boeing и Airbus.  

Translation: Delays during creation of new samples of aviation technology are nothing new--it is a widespread phenomenon. Never in history new design ever achieved ideal from the first attempt, without necessity for improvements. However, inability to implement such improvements over such a long time--delivers a serious  blow to China's reputation as a new player on the global market of commercial aircraft, especially after investing such a massive effort into its first attempt to be competitive with Boeing and Airbus. 

Evidently some serious mistakes in calculations have been made, which affected data required to be sent to engine manufacturer CFM, plus, at this stage all COMAC 919 prototypes spent less than 20% of required 4, 200 hours in the air required for certification. As you may remember, I was skeptical about COMAC from the get go. COMAC's only competitive advantage is its allegedly lower cost, which, most likely, if this aircraft ever to enter large-scale production, will be "financed" by government. Meanwhile, Russia's MC-21 already has a preliminary certification from EASA and, what is very important, has a certified PD-14 own engine. So, you get my drift, do you? I'll give you a hint: SU-35, S-400 and now Russia helping China to develop Missile Attack Warning System. Well, after all, what is CR-929 with PD-35? 

Now, ask yourself a question what Airbus and UAC (United Aircraft Corporation) think about not only Russian market, but gigantic Chinese one, especially with Boeing being taken down by its incompetent management in the most important and profitable segment of narrow-body middle-range aircraft? Russia, sure as hell, knows that she will have some, initially small, share at Middle Eastern market, larger, most likely, at African one and she has a shot at a good slice of Chinese one once MC-21 goes on-line in 2021. Boeing, I think, doesn't have those 7+ years to develop something completely new instead of good but dated B-737 design. So, make your own calculations, including an increase of sanctions on Russia in a desperate attempt to delay a full russification of SSJ-100 and the launch of MC-21 into full-scale production. Russians do not really care anymore, plus, unlike Boeing, UAC features not only competent management, but extremely competent engineering corps and it really caters mostly to Russia's State as the most important shareholder. UAC doesn't see itself as a direct competitor on a global market, after all, here is the UAC's forecast, but it was in 2017--things changed since then dramatically. 

In 2017 nobody could have predicted, let's call it what it is, a catastrophe with Boeing which more and more looks to me as some deliberate attempts to sink a legendary and trusted aerospace giant. But then again, someone, it seems, wouldn't mind splitting the United States into few statelets. All this, as bizarre as it seems, feels like an invisible, behind the scenes, Liquidation Committee or is it just the logical conclusion to a short era of collapsing financial capitalism which cares only about "bottom line" and poor-poor fat cats shareholders who cannot afford another Ferrari (or Maserati) for their harem. I guess, we'll know the answer soon.      

A Bit On Iranian Boeing And Other Business.

I. Going back to the unfortunate (tragic, really) downing of Iranian commercial B-737 in the wake of Iran's missile strike at US bases in Iraq in response to murder of General Soleimani. I maintain and will continue to maintain my position that Iranian missile from Tor-1 which downed this Boeing was launched due to:

a) Mounting pressure on combat crews of AD complexes around Tehran in anticipation of the American response which never came;

b) Possibly not a very good training of crews and failure to follow procedures (which procedures, that matters). 

And here is a clue that Iran was correct in anticipating of some sort of US response after missile strikes. Let's Russia's Sergei Lavrov speak.

Российские системы ПВО-ПРО контролируют воздушно-космическое пространство вокруг России на тысячи километров. Об этом заявил Сергей Лавров, сказавший о том, российские средства ПВО смогли обнаружить у границ Ирана шесть истребителей F-35 через несколько часов после ракетного удара по американским базам. По словам и.о. главы МИД РФ, "в это время в воздухе на границе с воздушным пространством Ирана было минимум шесть F-35. Эта информация еще требует перепроверки, но подчеркивает всю нервозность ситуации".

Translation: Russia's air-defense-anti-missile systems control air and space around Russia for thousands of kilometer. This was stated by Sergei Lavrov, who also stated that Russia's air-defense systems detected six F-35 fighters near Iran's border several hours after Iran's strike on US bases. In his words:"this time, in the air, near Iran's air border, there were minimum six F-35s. This information needs more clarification but it underscores the nervousness of this situation." 

Cannot get any clearer than that. But this also brings fourth couple of important issues: 

1. Trump, as POTUS, needs, ahem, just teeny-weeny bit better explanation on how things can and DO go wrong when people make stupid and irresponsible decisions;

2. Russia's tracked "invisible" F-35s thousands kilometers away using latest radar Container.  

While Russia's ability to detect, track and develop firing solution on VLO targets is news mostly for flag-waving fanboys, one thing which is noted by establishment Rossiskay Gazeta where the article originated is this:

А если говорить по Ирану, то у нас просто нет соглашения об обмене данных по противовоздушной обороне. Возможно, придется их заключать.

Translation: If to speak about Iran, we (Russia) do not have an agreement on the air-defense data exchange. Possibly, we need to have one.

Now the question, could Russia's NTSUO (National Defense Control Center) have at least tipped Iranians about incoming F-35s? Not only it is possible, it is very-very likely. Iranians, most likely, being under stress over anticipation of American attack, simply overreacted. Which, indeed, brings up the issue of Russia covering Iran's air space by early warning umbrella, thus allowing Iran to have track and targeting on any type of targets. That means, making Iran's aerospace largely impenetrable. But that is a whole other story in itself. This also shows that present and upcoming air-defense technologies not only are capable of detecting all those "super-invisible" targets, but able to track them and provide targeting. I do not need to comment on that anymore. 

II. One of the traits of Putin's leadership, which also manifests itself increasingly as time goes by, is his principle of making Russophobia an extremely expensive luxury for anyone who exercises it. Poland fits the bill perfectly. I will omit writing too much on this issue but as you may recall--I state non-stop that Holocaust, that is deliberate annihilation of Jews did happen, it is just that some numbers should be adjusted for Jews who actually died fighting and that Jewish Holocaust was not the only one. Slavs were deemed untermensch also and were murdered on an industrial scale. Read this piece by Israel Shamir to get a scoop on what really is going on.

President Putin is aware of the Polish controversy, and he decided to show the Poles that their relentless hostility to Russia just does not pay. A few weeks ago on December 24, at the meeting of the Russian Ministry of Defence, Putin presented certain documents of the World War Two period, attesting to the rabidly anti-Jewish attitude of the pre-war Polish leadership. For instance, Jozef Lipsky, the Polish ambassador to Nazi Germany until 1939, told the Germans that the Poles would erect a monument to the Reichskanzler Adolf Hitler in Warsaw if he were to rid Poland of its Jews. “Such an anti-Semitic pig!” – exclaimed Putin indignantly.

BTW, Israel DOES have now monument to people of Leningrad (this is not to mention May 9 being Israel's national holiday). 

Poland, meanwhile, equates USSR to Nazi Germany and desecrated monuments to Red Army soldiers who died liberating Poland from Nazism. Plus, of course, there is this "teeny-weeny" fact of Poles taking a very active part in murdering Jews and Russia is declassifying those archive documents as there is no tomorrow.  You see, and that is the whole point, Russians tried not to "disturb" memories in Soviet times in order to preserve a degree of harmony between various nationalities populating USSR. Such as trying to downplay a huge role of Ukrainian nationalists not only in helping Hitler, but excelling at murdering civilian population such as they did to Khatyn, among many other places. They repeated it in 2014 in Odessa. Now it is Poland's turn to face her own REAL history. 

In the end, it was the Red Army which liberated Auschwitz and many other places where horrendous atrocities had been committed against civilian population. Somebody tries to rewrite history. Not so fast. In the end, many world leaders will attend Moscow on May 9, 2020. Even Trump is considering a trip, granted he will not be betrayed by his "own" party. If he survives impeachment, he may find trip to Moscow to be most desirable. Where will Polish delegation be on May 9, 2020? In reality, nobody cares. After all, Russians and Nazis, in accordance to Polish "historiography", are the same. So, let it stay this way in Poland. Just expect few more skeletons being taken out of Warsaw's closet. And then there is Ukraine, but that shithole of a country requires a separate post (not that I want to do it) dedicated to it and pro-Polish agenda of US former National Security Adviser Zbigniew Brzezinski who fvcked it royally up for the United Sates on so many fronts that it may require a separate Ph.D level study of this "American" allegedly "scholar" contribution to a current American crisis. Not to mention a complete destruction of Russian-American relations.      

For White Board MBAs.

Get this: 

(Reuters) - Boeing Co has abandoned a key automation system used to make fuselage sections for its 777 jetliners amid reports of reliability issues, and will instead partially switch back to mechanics, the planemaker said on Thursday. The company began to build 777 fuselages in 2015 in an upright orientation, with robots drilling holes and installing fasteners, an initiative known as fuselage automated upright build (FAUB). The world's biggest planemaker said it had stopped using the system which, according to industry sources, caused problems with reliability and rework issues. Boeing had faced delays last year when the FAUB machine was tried out on existing versions of the 777. Instead, the company will switch to "flex tracks" - an automated method to drill the holes along the circumference of the airplane that are then fastened manually.

Believe me, there is more to it than meets the eye. By far, I underscore it, by far not all things could be done by manipulators (aka industrial robots) and especially so in the aerospace industry where only humans can provide for a foreseeable future required input and actual quality control. Training, qualifications, education become a decisive factor. I will not disclose any secret that many companies in aerospace prefer human layup of aircraft composite parts to any "machine laying", granted that machines can do only few and less complex parts anyway. And then comes the issue of Quality Control. Yes, there are machines involved in it, many machines, some of them very sophisticated, but in the end it comes down to human supervision and decision making process that define if the aircraft flies or it fails. It is good news that Boeing made this decision--in the end, it is Quality Inspector who answers for the aircraft, not some machine which can do only so much. 

This brings a larger issue to the fore--naked numbers on "robotization" which all kinds of white board trained MBAs love to operate with, in no way defines the "strength" or otherwise of economy. Robots are useful and they will continue to be deployed but they are merely tools and sometimes can be harmful due to bad engineering and design. Boeing provided today an excellent example of that. It is one thing to drill a substandard hole in a car on the conveyor, totally another--to do so on a commercial or military aircraft. Lives of people who fly it, including those on the ground, depend on that and no amount of bookkeeping and abstract economic data can ever substitute ethical and professional attitude of people making planes. This is a real hi-tech I am talking about, not assembly of iPhones or CGI. Only designers, engineers and, in the end, production floor manufacturing specialists can have a decisive input on the production issues. 

Boeing Doesn't Seem To Be Able To Catch A Break.

If B-737-Max was bad news overall, this piece of news is bad for Boeing tactically and operationally. 

SEATTLE/PARIS (Reuters) - Boeing Co faced additional uncertainty on Wednesday over future production rates for its 787 Dreamliner after Russian carrier Aeroflot formally canceled an order for 22 aircraft valued at about $5.5 billion at list prices. The cancellation, first reported by the Seattle Times and buried in Boeing's monthly order release, is the final step in unwinding an order that had been shrouded in uncertainty ever since the airline said in 2015 it no longer needed the planes. But the lost business theoretically knocks a hole in the production profile for the 787 Dreamliner after the world's largest planemaker increased its build-rate to 14 aircraft per month from 12 at twin U.S. factories. Barring new orders, Boeing faces the growing possibility that it may have to cut production back by 2022, industry sources say, piling on new pressure as the grounding of the smaller 737 MAX stretches into its eighth month.

While I work in commercial aerospace industry, I am, certainly, not an insider in a financial-economic sense. The article, however, gives a hint:

While demand for the narrow body aircraft that dominate most fleets remains strong, demand for larger, long-haul aircraft like the 787 and Airbus A330 and A350 has weakened. Boeing won most of the wide body orders so far this year but neither planemaker is selling as many aircraft as it would like amid trade tensions, concerns over the global economy and the increased ability of smaller narrow bodies to fly long distances.

Ah, that's warmer. Two major factors on Russian side:

1. MC-21, slated for serial production in 2021, including delays with certification of Russian composites which substituted "sanctioned" ones, is fully capable to carry non-stop 160+ passengers from Moscow or St. Petersburg to Krasnoyarsk or Yakutsk easy-peasy. Same goes for any destination in Europe and Middle East, while good ol' B-777s still fly such routes as Moscow-Vladivostok or Petropavlovsk-Kamchatsky and cover all needs no problem. MC-21, obviously, will have also no problem reaching from Vladivostok (or Khabarovsk) most cities of mainland China, and all cities in South Korea not to speak of Japan, which realistically is not even considered that much of an abroad for Russian Far Easterners. 

2. But then there is this important news. Very important news and I wrote about this few years ago, latest in 2018. And here is the news:

В ПАО «Воронежское акционерное самолетостроительное общество» (ПАО «ВАСО») завершилась стапельная сборка первого опытного образца широкофюзеляжного дальнемагистрального пассажирского самолета Ил-96 400М. Предварительные испытания самолёта должны пройти с ноября 2019-го по январь 2020 года. До мая 2020 года пройдут дополнительные сертификационные испытания, которые в июне должны завершиться выдачей дополнения к сертификату типа — одобрения главного изменения конструкции. С 2020 по 2023 г. пять новых самолётов должна принять Государственная транспортная лизинговая компания (ГТЛК). Ожидается, что они будут эксплуатироваться на линиях между Москвой и Владивостоком с Хабаровском.

Translation: JSC Voronezh Plane Building Society (PAO VASO) just finished assembly of the first experimental long-range wide-body IL-96 400M. Preliminary tests should be conducted from November 2019 through January 2020. Additional certification tests are planned through May 2020 and they should result in issuing of the addendum to certificate of the type in June--qualification of the main change in the design. From 2020 thro0ugh 2023 State Transport Leasing Company will receive five new aircraft. They expected to operate on Moscow-Khabarovsk and Moscow-Vladivostok routes. 

This is fast. Now, what would those new IL-96s be in terms of engines? It seems that those will be four engine (PD-18) machines, until PD-35 hits serial production lines roughly by 2025 and will be installed on Chinese-Russian CR-929 and fully redesigned two-engine IL-96. That explains a lot, albeit not all, in terms of this contract between Aeroflot and Boeing. Frankly, these are stunning developments, simply stunning, they also indicate that PD-14 and its up-powered version PD-18 and down-powered PD-10 to substitute French-Russian SAMs on Sukhoi Super Jets, are well in the pipeline for tests and production. Russia, obviously, goes her own way being only the third (!!!) country capable to produce wide-body commercial aircraft and, that is the fact which should have been foreseen by Boeing and Airbus (read: US and EU) when sanctioning Russia's aerospace industry, which went into overdrive instead of collapsing. These new five IL-96s are not going to remove wide-body foreign aircraft from voluminous Russian market, IL-96s which will follow with PD-35 engine will.

I Am Not Surprised At All.

I already tuned myself to more damning things coming out of Boeing. I do not work at Boeing, so I am not in the position to judge company's current atmosphere and mood, but this caught my eye.  

Boeing has had issues with several models of its jets over the last year. The 737 Max has been grounded since March, the 787 and 777X have engine problems and the KC-46 tanker is restricted from carrying passengers and cargo.AirInsight, an aerospace research, data and analysis firm created in 2009, says it has never before called for any aerospace industry CEO to be replaced.

And then they explain WHY Boeing's CEO Dennis Muilenburg must be replaced. Here is explanation:

"While reducing costs and being competitive is laudable, it can, and has, gone too far at Boeing," Arvai wrote. "Safety appears to be the victim of rushing and cost reduction pressures, guided by a corporate culture that starts at the top." Muilenburg's strategy appears aimed at maximizing the Boeing Company's share price and his executives rather than investing more in new products to better rival Airbus, Arvai argued. The result is Boeing’s market share is falling and the jet maker's failures have caused the company to lose its long-standing reputation for quality and safety, Arvai said.

Ah, isn't it "wonderful" when "financialization" hits the fan and bottom line becomes the only guiding principle behind what is tantamount today to killing Boeing's long time accumulated reputation for quality. I sure as hell recall really well when magnificent B-777 took to the air and it was barely 20 years ago. Today, saying (as it is printed on Boeing's mugs and other merchandising) If It is not Boeing I am Not Going (If ain't Boeing, I am not going) seems like a bad joke. But I wouldn't go as far as this:

"We’ve been looking for good news about Boeing, but simply can’t find any. The 737 Max will end up years from now as a Harvard Business School case study in mismanagement, and the buck stops with the CEO," Arvai wrote. 

And what is so significant in Harvard or any other Business School in America, most of which preach a complete monetarist voodoo BS as an "economy study", when Boeing is just a private case of a much larger complete dysfunction of American political system, much of which is infested with the products of Harvard and other Ivy League degree mills in nothing practical or scientific. Boeing and its current worrisome fate (and I always liked Boeing's aircraft) is just a manifestation of the profound crisis of American statehood. Take a look at Democratic Party--those guys are a complete mental basket case and, as Paul Craig Roberts (correctly I may add) states:

If you are such an insouciant, dumbshit, totally stupid American that you cannot see that there is in front of your eyes, assuming you have any eyes open, an attempt based entirely in the constant repeat of lies by the presstitute media to destroy the political stability of the United States, you should be lined up against the wall and shot for your unimaginable stupidity. That is the message I am getting from many readers. The reason is that it now turns out that the “whistleblower,” an orchestration, first spoke to the piece of dog excrement “Shifty Schiff,” who helped him to write his false complaint before leaking it. The totally false story hyped by the whores who comprise the US media was contradicted in whole by the released unredacted official transcript of the alleged impeachable telephone call.

So, what is the Boeing's case against the background of slow, insidious coup and high treason being committed by primarily democratic establishment against the country? Both are related to what I repeat ad nauseam--they, the so called "elites", do not give a rat's ass about what remains of the nation. Money and power rule, in Boeing's case it is greed of the fat cats, in case of DNC--it is all consuming hunger for power based on delusional and dangerous ideologies. The loss of competence is beginning to reach catastrophic proportions. They simply resorted to making shit up--be it safety of aircraft or basic functions of the state. Does Putin (and Xi) know something we don't? Yes they do. We are left, however, with only one thing--to make sense of the pattern and, if need be, buckle up.

A Tiny Piece Of News.

Behind all the chaos of modern world and a wall of BS by the so called "legacy" media, one piece of news is of a particular interest. While MAKS-2019 proceeds as planned, with MC-21 making a flying (public) debut, news of CR-929 getting to fly in 2023 are a huge deal. As Izvestiya reports two days ago (in Russian), Chief Designer of CR-929 program Maxim Litvinov (I wonder if he is related to Stalin's 1930s Peoples' Commissar of Foreign Affairs) stated that the first flight of CR-929 will happen in 2023 while serial production will start in 2025. This is fast, folks, for a project of such a scale, it is really fast. Russia, in this joint venture, is responsible for a design of the wing and center section of aircraft (in Russian) and, drum roll, for PD-35 engine, which will power this machine. 

As you know, PD-14 already received the certificate of a type and is in serial production for MC-21. Here is what was stated about PD-35 in 2017:

Russia’s new bypass turbofan engine, dubbed PD-35, will be developed in the next six years, Alexander Inozemtsev, chief designer of Aviadvigatel (a subsidiary of the United Engine Corporation), has told TASS news wire. The engine is intended to power future wide body aircraft, including the Russo-Chinese C929. Inozemtsev said the powerplant program is currently in the scientific research phase. Total investment in the project will amount to almost 180 billion rubles (approximately $3 billion). Of this sum, 60 billion rubles will be spent on test benches and laboratory equipment. The PD-35 is a turbofan engine projected to develop 35 tons of thrust. The program was launched in the summer of 2016 as a joint effort by Russia’s largest powerplant specialists, Perm-based Aviadvigatel and NPO Saturn, which is located in Rybinsk (both are part of the United Engine Corporation). The plan is to scale up the core of the PD-14 engine, which is currently being developed for the Irkut MC-21 narrow body airliner, and add a stage to its high-pressure compressor. There will be nine stages in the compressor and two stages in the turbine.

So, these latest news about CR-929 taking to the skies in 2023, then, could be viewed as a confirmation that PD-35 development is on schedule (give and take a year). This is also a confirmation of Russian civil aviation not just taking off--we knew that it was taking off years ago--but getting to the cruise echelon. As Yvonne Lorenzo reports (in her wonderful review of my new book):

Russian-based MAKS 2019 aviation exposition, Boeing was an exhibitor, and the news was reported on the site included, “Boeing Company will announce new strategic initiatives and sign agreements with Russian partners at the International Aviation and Space Salon, according to the press service of the American aerospace manufacturer. Boeing will sign a number of agreements with Russian companies at MAKS-2019. ‘Agreements will be signed with Russian partners and will strengthen long-term obligations within the framework of the company’s partnership with the Russian aerospace industry,’ the statement says.” Thus, sanctions notwithstanding, Russian companies continue to buy—or at least have an interest—in Boeing products and “god-emperor” Trump, “grand and glorious” though he may think himself has—as of now—not prohibited any such sales to Russia by a vital member of the Military-Industrial complex.

What do ya know. Of course, one should remember that a lot of things, including a wing for B-787, were designed at Boeing's engineering facility in Moscow. So, while the United States sanctions Russia non-stop and insists, especially, on Europe doing the same (those morons evidently took it too far for their own comfort now), somehow Boeing continues to operate in Russia and even, well look at that, hosts Russian school kids, the winners of the contest Aviation From A to Z in 2018 (in Russian). Indeed, and why would Boeing do such a thing (wink, wink). 

But all this brings us back to a purely geopolitical question. Whose side is Russia on?  The answer is very simple: Russia is on Russia's side, period. Moreover, pushing on with the development of the MC-21 and CR-929 and the line of their power-plants such as PD-14 and PD-35 Russia not only returns to own domestic civil aviation market with a vengeance, she made sure she will have a huge share of a Chinese one. While public at MAKS 2019, traditionally, was treated to a dizzying display by Russian combat aviation, it was this bird which stole the show for people who look at the world not just through the aiming device. 

In related news, Europe (the United States is not far behind, but there is still a hope, maybe) continues her descend into madness and totalitarianism with Thought Crimes exposed now by Thought Police non-stop. 

PHP Central Europe would have gathered hundreds of users of PHP, a popular programing language, together in Dresden in October, if not for one seemingly innocuous tweet that sowed the seed of destruction coated in a shell of positive verbiage. “This year's PHP CE conference seems to have gone with the ‘White Males Only’ conference lineup. Shame. It's 2019, we can do better,” wrote Karl L Hughes, an obscure tech industry figure and “concerned citizen”, who had no plans to travel to Germany himself. The tweet went viral....  after the brouhaha, “ticket sales stopped.” This week, organizers published a notice saying that the event in Dresden was canceled, citing the tweets and articles as the reason. They say that there will be no PHP CE conference next year or ever again.

I am not sure in 20 years Europe will be able to produce a decent kitchen combine, let alone aircraft, because it will be too busy developing mechanisms of upholding gender, race and religious quotas, lest there be a dominance of smart white males in manufacturing of the technologies for the XXI century.