Streetwise Professor

Natural gas has a lot going for it, especially as a fuel for electricity generation and home heating. It is low-carbon, as compared to coal and petroleum. It is also clean burning, producing less particulates than competitor fuels. It does not require extensive (and polluting) refining, like oil. It is increasingly abundant, and hence becoming cheaper, due to technological innovations like fracking. Liquefaction makes intercontinental trade feasible, breaking the previous barrier between production and consumption regions, and allowing more people to realize the benefits of gas. What’s not to like?

Short answer, according to environmentalists: it is a fossil fuel, and therefore it must die.

It is bad enough that there are concerted efforts underway to replace it with renewables for the generation of electricity. There is also a push to eliminate it as a home heating fuel, and replacing it with . . . electricity, generated by yet more renewables. That is, simultaneously to replace NG in electricity generation with renewables, and to increase the demand for electricity . . . to be produced with even more renewables. (Not to mention the desire to eliminate the internal combustion engine, and rely on electric automobiles and trucks.) All without any apparent thought to whether renewables actually scale (putting aside that they are already more costly than conventional fuels at their current scale).

The defects of wind and solar as power sources, especially for reliable baseload power, are manifest. They are diffuse and intermittent. Not a good combination where demand is geographically concentrated, and highly regular. Someday battery storage might mitigate this problem, but that day is a long, long way away Throw in the complexity of the electricity grid, i.e., the need for supply to match demand exactly at all times, and intermittency becomes eve more of a nightmare.

Further, the factors that drive electricity demand (temperature extremes) are often negatively correlated with renewables production. Supply negatively correlated with demand–Not a good thing! Using electricity for home heating will only exacerbate this problem: the wind often does not blow when it is extremely cold, which is when you might want to have the heat in your home working.

Renewables do not scale well–diminishing returns are inherent to renewables production. The footprint of wind and solar operations is huge, and increasing output by X percent requires more than X percent more land because developers locate facilities in the most favorable places first, and can only expand into progressively less windy/sunny locations. Moreover, pesky physical laws, like the First Law of Thermodynamics, lead to decreasing returns to scale. Downwind expansion is less efficient because existing upwind operations reduce the available energy in the wind. Renewables sprawl is not yet a thing, but if some people’s wishes come true, it will be.

Where the wind blows and sun shines does not match where power demand is. So substituting renewables for conventional or nuclear generation requires more transmission–which, perversely, environmentalists can be counted on to oppose.

It is not an accident, then, that the greater the reliance on renewables, the higher the cost of electricity. The diminishing returns inherent in renewables production mean that green dreams to reduce conventionally-fueled electricity supply while increasing electricity demand (not just in home heating, but in transportation) will make it even more expensive still (as these push us further up a likely very steep average cost curve).

Renewables have only penetrated to the extent that they have due to extensive subsidization. Which just means that the costs get shoved elsewhere.

It is perversely ironic that many of those who push the green agenda also claim to be deeply concerned about the poor–and yeah, I’m looking at you AOC, and the rest of the Green New Deal advocates. With friends like you, the poor don’t need enemies. They consume a far higher fraction of their income in the form of energy (both directly, and indirectly through goods like food) than the better-thans who claim to be their champions, and hence will suffer disproportionately from higher energy costs. And the poorer the person, the more they will suffer. This is not complicated.

When you get down to it, not only is the watermelon crowd completely unhinged from basic physical and economic reality, it is profoundly anti-human. Achieving their utopia requires that there be fewer humans, and that those humans whom they deign to let live be much poorer.

I wouldn’t mind so much if they did they put their beliefs that there are too many humans consuming too much stuff into action by offing themselves. Be a good example! Take one for the team! But no. They’d much rather volunteer you–or more accurately, the poorest among us–for death and poverty.

I’ve used the Jefferson Davis quote about his suggested epitaph for the Confederacy–“Died of a Theory”–on many occasions. It is sickly fitting in this context too, but worse in a way. Because it won’t be those pushing the theory who perish literally or politically (as was the case with States Rights fanatics 1860-1865). It will be those whom they claim to be helping.

According to this Seeking Alpha post, Chinese buyers are furious at the Tesla price cuts. The WSJ concurs.

And with good reason. In my post yesterday, I wrote that Tesla cut prices by 6 percent–which was another of the company’s half-truths. Or maybe fifth-truths, because for the pricier models the price cuts are on the order of 30 percent. The Model 3 Performance version price cut is 8 percent in China, and the pricier the car, the bigger the percentage discount. So no wonder buyers are furious. They look like suckers because if they’d waited, they would have saved as much as $50K.

A 6 percent price cut by an ostensibly demand constrained growth company is bad enough. 8-30 percent price cuts is Armageddon time.

As I noted in yesterday’s post, this is a sign of a truly desperate company. Or maybe a completely delusional one. Because anyone in their right mind would know that price cuts–especially of this magnitude, and especially on what should be the most profitable vehicles–vaporize customer goodwill. Especially the goodwill of the type of customers who are vital to making the company profitable by buying the high margin vehicles.

You only do that if you are so desperate for cash today that you say f-the-future, it will have to take care of itself: if I don’t get cash today, I won’t have to worry about the future.

But they’re not done with incinerating their credibility faster than a flaming Model S that lost a wheel and hit a tree! The company also cut prices on its “Autopilot” function–and won’t refund those who pre-ordered and pre-paid. And oh, it just said that what it had previously said about self-driving capability was, what’s that old phrase?–no longer operative.

Suckas.

But hey. Why listen to me? Elon’s got some really, really cool stuff coming . Trust him! What could go wrong?

It’s been an eventful few weeks for our Elon. His new corporate counsel departed after barely enough time to warm his seat, because Elon (whose Twitter free associations the GC was charged with monitoring) tweeted a forward looking statement (“clarified” after a few hours) about 2019 output without the GC’s approval. The SEC then moved post haste to get a judge to rule Elon in contempt of his previous settlement agreement. Then, apparently believing he hadn’t twitted the SEC enough, held an invitation only call with select analysts–a facial (in the Marv Albert use of the term) violation of the SEC’s Regulation FD (“Fair Disclosure”) .

But we’re not done. Tesla announced–at long last!–that the long-promised $35K Model 3 would soon be available.

Yay!

Not so fast. In typical Elon fashion, this was just a garnish on a crap sandwich: in addition to the Model 3 announcement Tesla said, oh-by-the-way-we’re-closing-all-our-sales-outlets-and-laying-off-thousands-and-cutting-prices-6-percent-bye.

This is hardly what you would expect to see from a demand constrained growth company. In typically weasely Tesla fashion, the company said that the closing of sales outlets cut costs and allowed it to cut prices. Uhm, that’s not the way it works.

The price cut is particularly telling. This wreaks of a company that needs to generate cash in a hurry (and is hence willing to burn some goodwill), and has an overhang of inventory on its hands. This price cut has also infuriated recent buyers. And the future effects may be quite damaging: people may well hold off buying, in anticipation of buying cheaper later.

The Wall Street Journal said that Tesla is going into “uncharted territory” by closing its showrooms. Not really: bankruptcy is pretty well-charted.

And of course, desperate times call for desperate measures. So right on cue, Elon/Tesla said that an announcement regarding the launch of the long-awaited crossover Model Y was only weeks away.

Just where is the cash for the capex necessary to build a new vehicle going to come from? How to reconcile this with the capex diet that Tesla has been on in recent quarters?

Methinks that this is really another financing ploy intended to keep the balloon aloft a little longer. With the announcement, the company will be able to take deposits, use the cash for other purposes, and then dawdle on actually, you know, building and delivering cars. (Check out the lag between deposit and delivery on Model 3s, and the difficulty those trying to get back their deposits face.)

This act is getting a little old, but it still works to some degree. So expect Elon to continue his muskapades until reality inevitably rears its ugly head.

My daughter alerted me to this interview of Rhiana Gunn-Wright, “one of the architects of the Green New Deal.” It’s annoying–I swear I would have gone completely mental had she said “right?” one more time–but educational. Not because you will learn anything about the way the world works, but you will learn the way the minds of the Green New Dealers work.

The interview is hosted by ex-Obamaite Jason Bordoff, now of Columbia University’s Center on Global Energy Policy. Given Bordoff’s current gig, he was obviously interested in the GND’s implications for energy. After all, the supposed raison d’etre of the GND is that our current energy system, dependent on fossil fuels as it is, is causing us to hurtle towards catastrophic warming.

But whenever Bordoff asked a question about energy, or climate policy, Gunn-Wright couldn’t even feign interest. Her responses were in the vein of “whatever”, and then she launched into impassioned monologues about what really interested her–a laundry list of progressive dreams from health care to child care to labor policy.

What’s clear from Gunn-Wright’s performance is that “climate change” is merely a Trojan Horse for a hard-core leftist agenda. The plan is to use climate alarmism to stampede voters into electing hard-left politicians who, once ensconced in power, will implement what good (I use that term ironically) socialists have been drooling to implement for decades–since before the original New Deal.

Meaning that if you think the GND as presented by the likes of AOC and Sen. Ed Malarky–excuse me, Markey–would be ruinously expensive–you ain’t seen nothing yet!

Speaking of AOC, thinking of her reminded me of Mark Twain: “First, suppose you are an idiot; now suppose you are a member of Congress. But I repeat myself.” I think even Twain would be gobsmacked by the stupidity of Ocasio-Cortez. It’s beyond disturbing that such a moron promoting such a malign program is taken seriously, and has indeed bamboozled virtually every Democratic presidential candidate into endorsing her program.

But maybe that’s the good news. I think that it is highly likely that as enthusiastically as the coastal elites have embraced GND, it will prove toxic at the ballot box. Trump’s full-throated attacks on socialism certainly indicate that he believes so. And he has an innate sense for these things, as the very fact that he is president demonstrates.

One last thing. If you think I was scathing about the GND, I had nothing on Richard Epstein. He about jumps out of your computer in this podcast from a few weeks back. Worth a listen–especially as an antidote to the leftist bromides of Rhiana Gunn-Wright. Right?

In the folk tale about B’rer Rabbit and the Tar Baby, the trapped trickster bunny is at the mercy of B’rer Fox. The Fox debates ways to dispose of the Rabbit–hanging, drowning, burning–and the Rabbit pleads to do any of those things–just don’t throw him into the briar patch. Falling for the reverse psychology, B’rer Fox hurls B’rer Rabbit into the supposedly dreaded briars, after which B’rer Rabbit says: “Born and bred in the briar patch. Born and bred!”

Yesterday mining behemoth Glencore announced that it would cap coal output at 150 million tons per year, claiming that the cap was an acknowledgement of the threat of global warming. Various activists claimed vindication and victory.

Might I offer a more cynical explanation? Getting thrown into the output limitation briar patch is exactly what B’rer Glasenberg wants. A firm exercises market power by limiting output to raise price: global warming gives Glencore an elite-blessed excuse to limit output, i.e., exercise market power. It will be especially beneficial for Glencore if other coal producers are stampeded into cutting output too.

Indeed, you know how this will play out. The activists will now descend on the other producers, holding up Glencore as a shining progressive example. Some, perhaps most, and maybe even all, will capitulate, further increasing prices.

And Glencore/B’rer Glasenberg will laugh all the way to the bank.

As an aside, this is an interesting illustration of the theory of the second best. In a world without any distortions, an exercise of market power is a bad thing–it reduces welfare. But in a world with other distortions, an exercise of market power can enhance efficiency.

If due to an externality, coal output in a competitive industry is too large, the exercise of market power mitigates the effect of the externality.

Chinese oil major Sinopec released disappointing earnings, driven primarily by a $688 million loss at its trading arm, Unipec. The explanation was as clear as mud:

“Sinopec discovered in its regular supervision that there were unusual financial data in the hedging business of Unipec,” it said in a statement. “Further investigations have indicated that the misjudgment about the global crude oil price trend and inappropriate hedging techniques applied for certain parts of hedging positions” resulted in the losses.

Er, the whole idea behind hedging is to make one indifferent to “global . . . price trend[s].” A hedger exchanges flat price risk–which, basically, is exposure to global trends–for basis risk–which is driven by variations in the difference between prices of related instruments that follow the same broad trends. Now it’s possible that someone running a big book could lose $688 million on a big move in the basis, but highly unlikely. Indeed, there have been no reports of extreme basis moves in crude lately that could explain such a loss. (There were some basis moves in some markets last year that were sufficiently pronounced to attract press attention but (a) even these did not result in any reports of high nine figure losses, and (b) nothing similar has been reported lately.)

The loss did correspond, however, with a large downward move in oil prices. Meaning that Unipec probably was long crude. Some back of the envelope scribbling suggests it was long to the tune of about 17 million barrels ($688 million loss at a time of an oil price decline of about $40/bbl.) Given that Unipec/Sinopec is almost certainly a structural short (since Sinopec is primarily a refiner), to lose that much it had to acquire a big enough long futures/swaps position to offset its natural short, and then buy a lot more.

One should always be careful in interpreting reports about losses on hedge positions, because they may be offset by gains elsewhere that are not explicitly recognized in the accounting statements. That said, as the Metalgesellschaft example cited in the article shows, for a badly constructed hedge, or a speculative position masquerading as a hedge, the derivatives losses may swamp the gains on the offsetting position. In the MG case, Merton Miller famously argued that the company’s losses on its futures were misleading because daily margining of futures crystalized those losses but the gains on the gasoline and heating oil sales contracts the futures were allegedly hedging were not marked-to-market and recognized and did not give rise to a cash inflow. I less famously–but more correctly ;-)–did the math and showed that the gains on the sales contracts were far smaller than the losses on the futures, and what’s more, that the “hedged” position was actually riskier than the unhedged exposure because it was actually a huge calendar spread play: the “hedge” was stacked on nearby futures, and the fixed price sales contracts had obligations extending out years. This position lost money when the market flipped from a backwardation to a contango.

Mert did not appreciate this when I pointed it out to him, and indeed, he threw me out of his office and pointedly ignored me from that point forward. This led to some amusing lunches at the Quandrangle Club at UC.

So perhaps the losses are overstated due to accounting treatment, but I think it’s likely that the loss is still likely a large one.

The Unipec president–Chen Bo–has been suspended. I guess Bo didn’t know hedging.

Bo wasn’t the only guy to get whacked. The company’s “Communist Party Secretary” did too. So Marxists don’t understand hedging either. Who knew?

Bloomberg reports that New York state’s plan to eliminate its few remaining coal power plants has caused power prices for delivery in 2020, 2021, and 2022 to increase. Eyeballing the chart, the impact of the proposed regulation is on the order of $7/MWh, or about 25 percent of the 2019 price.

Coal represents a dwindling fraction of New York’s generation. The EIA reports 0 electricity from coal in October, 2018. As of 2014, the last full year for which I could find data on the EIA website, coal accounted for 4.6 million MWh, out of a total of 137 MWh of generation.

The efficiency impact of this depends on (a) the estimated social cost of carbon, (b) the kind of generation that will replace the shuttered coal plants, and (c) the non-energy costs that this replacement generation creates.

If you believe that the cost of carbon is $40/ton, if coal is replaced by zero emissions generation, the move is efficiency enhancing. A coal plant with a heat rate of a little more than 10 implies a carbon cost per MWh of $40. This is well above the price increase of around $7.

If coal is replaced by natural gas, with a carbon cost of about $20/MWh, the call is closer, but still comfortably in favor of eliminating coal.

Lower social costs of carbon of course affect the math. The other thing to keep in mind, though, is that the price is for energy only. Changing the generation mix also affects the need for ancillary services to maintain grid stability. In particular, substituting diffuse and intermittent renewables for coal increases the non-energy costs of supplying electricity. These costs can be appreciable, though again it’s difficult to see them being so large as to overcome the approximate $160 million in carbon cost savings from eliminating coal, based on a $40/MWh CO2 cost, ~4 MWh of coal fired generation, and replacement of coal by zero carbon emissions generation sources.

What’s truly startling about the numbers, though, is the redistributive impact. Price is driven by marginal cost, and the price impact suggests that the cost of the marginal megawatt hour from coal replacement generation is about $7/MWh above that of the eliminated coal units. Note: that $7/MWh price increase benefits every single MWh generated by inframarginal units (e.g., combined cycle NG). Coal represents (as noted before) ~3 pct of NY generation, but the remaining 97 percent will see a big increase in margins.

This is a crude calculation, but roughly speaking the regulation will result in a transfer of about $1 billion/year from consumers to owners of generation (~140 million MWh x $7/MWh). The vast bulk of this $1 billion will be a quasi rent for inframarginal generating assets. (About $28 million–4 mm MWh/year x $7/MWh–will cover the cost of the more expensive generation that replaces coal plants.)

As is often the case with regulation, the wealth transfers swamp the efficiency effects (which total at most $130 million=~4 MM MWh x $33/MWh in social cost savings). (Since coal generation has probably dropped from the 4 million in 2014, and the price impact reflects the elimination of the remaining coal generation, the total efficiency effects now are probably substantially smaller than $130 million.)

Thus, although this regulation is sold as one benefitting the environment, I strongly suspect that the political coalition that has given it birth is strongly supported by incumbent generation operators selling into the New York market. That is, it smacks of the typical special interest regulation that benefits a small concentrated group at the expense of a large diffuse one (i.e., the consumers in New York), all dressed up in pretty green (environmental green camouflaging Benjamins green, as it were).

Yes, in this instance perhaps–depending on one’s assumptions about the cost of carbon and the incremental uplift costs created by the regulation–this bargain has produced an efficient outcome. But the redistributive nature of this regulation, and those like it, creates a great risk that such regulations will be introduced even when they are inefficient.

Those harmed include ordinary New Yorkers lighting their homes, and commercial and especially manufacturing firms (and their employees) who pay higher power costs. (Employees will pay in lost employment and lower wages, due to a decline in derived demand for labor driven by higher costs of other inputs.) In France, a seemingly small imposition on a similar group sparked widespread social unrest. It hasn’t happened in the US yet (or in places like Germany, where consumers and employers are paying steeply higher electricity costs due to anti-carbon regulations), but US states should be aware that such policies could trigger resistance here as well–especially if and when the hoi polloi realize that the biggest winner from these policies is not the environment, but companies that are pretty unpopular to begin with.

Hard as it is to believe, it appears that Obama has become even more supercilious since his departure from the Oval Office.  All of his sneering grandiosity was on display during a visit to Houston.  (I hope you are sitting down for this: I didn’t attend!)

Being in Texas, Obama felt that he should be thanked for the dramatic growth in US oil production: “You wouldn’t always know it, but it went up every year I as president. That whole, suddenly America’s like the biggest oil producer and the biggest gas—that was me, people.”

I’m wracking my brain here, trying to recall something he said some years ago.  Oh yeah, I remember now: “If you’ve got a business, you didn’t build that.”

Barry: you definitely didn’t build that.  Yet you claim credit anyways.  You remind me of the rooster that believes the sun rises because he crows.

Long-time commenter Howard Roark noted to me on Twitter that the “you didn’t build it” remark was arguably the worst of his many execrable utterances.  That’s probably true, and he makes it all the worse by claiming credit for building something which he had less than bupkis to do with.

Obama also claimed credit for the economy’s recent performance.   He noted, in essence, that the first derivative in GDP was positive during his term, so that he is responsible for the first derivative being positive now.  Apparently the man who is so smart that he can apply the theory of relativity to constitutional law doesn’t understand second derivatives.  Economic growth has accelerated markedly under the Trump administration, and has achieved 3.5 percent growth, something that Obama dismissed as an impossibility when he was criticized for the anemic 1-2 percent growth rate in the aftermath of the Financial Crisis (when one would have expected growth at a rate above long term trend, not below). (I love the title of the linked paper, by the way.  Hilarious!)

But Obama was done.  After claiming credit for building everything, he shared his deep thoughts on identity politics:

“Which is why, by the way, when I hear people say they don’t like identity politics, I think it’s important to remember that identity politics doesn’t just apply when it’s black people or gay people or women,” Obama said. “The folks who really originated identity politics were the folks who said Three-Fifths Clause and all that stuff. That was identity politics … Jim Crow was identity politics. That’s where it started.”

He’s largely correct that Jim Crow and “all that stuff” was identity politics.  But rather than using this to show that identity politics is fundamentally wrong, he uses it to somehow validate its current incarnation.  It happened before, so you can’t criticize it now.  Two wrongs make a right.   You did it to us, so we get to do it to you.

Please go away.  So we can miss you.  Except that I won’t.  But go away anyways.

 

 

There are times when going viral is good.  There are times it ain’t.  This is one of those ain’t times.  Being the hedgie equivalent of Jimmy Swaggert, delivering a tearful apology, is not a good look.

James Cordier ran a hedge fund that blowed up real good.   The fund’s strategy was to sell options, collect the premium, and keep fingers crossed that the markets would not move bigly.  Well, OptionSellers.com sold NG and crude options in front of major price moves, and poof! Customer money went up the spout.

Cordier refers to these price moves as “rogue waves.”  Well, as I said in my widowmaker post from last week, the natural gas market was primed for a violent move: low inventories going into the heating season made the market vulnerable to a cold snap, which duly materialized, and sent the market hurtling upwards.   The low pressure system was clearly visible on the map, and the risk of big waves was clear: a rogue wave out of the blue this wasn’t.

As for crude, the geopolitical, demand, and output (particularly Permian) risks have also been crystalizing all autumn.  Again, this was not a rogue wave.

I’m guessing that Cordier was short natural gas calls, and short crude oil puts, or straddles/strangles on these commodities.  Oopsie.

Selling options as an investment strategy is like picking up nickels in front of a steamroller.  You can make some money if you don’t slip.  If you slip, you get crushed.  Cordier slipped.

Selling options as a strategy can be appealing.  It’s not unusual to pick up quite a few nickels, and think: “Hey.  This is easy money!” Then you get complacent.  Then you get crushed.

Selling options is effectively selling insurance against large price moves.  You are rewarded with a risk premium, but that isn’t free money.  It is the reward for suffering large losses periodically.

It’s not just neophytes that get taken in.  In the months before Black Monday, floor traders on CBOE and CME thought shorting out-of-the-money, short-dated options on the S&Ps was like an annuity.  Collect the premium, watch them expire out-of-the-money, and do it again.   Then the Crash of ’87 happened, and all of the modest gains that had accumulated disappeared in a day.

Ask Mr. Cordier–and his “family”–about that.

 

So Franklin Roosevelt* allegedly responded to Sumner Welles’ statement that Nicaraguan dictator Anastacio Samoza was a bastard.  Despite Samoza’s odiousness, Roosevelt put up with him because it advanced American interests.

Trump might as well have said the same about Mohammed bin Salman and Saudi Arabia yesterday.  Despite the hue-and-cry over the Khashoggi murder, Trump made it clear that he has decided that US interests are best served by sticking with our bastards in Riyadh, rather than engaging in moralistic virtue signaling.

As I wrote before, there are no good guys in the Middle East generally, and KSA in particular.  Since there are no George Washingtons waiting in the wings to replace MbS, I can say with metaphysical certainty that any replacement would be as bad, or worse, insofar as brutality is concerned.  More to the point, it is almost as certain that any replacement would be less supportive of US interests that MbS.  This is particularly true now, given the leverage that the murder has given Trump.

So our choice is: (a) a thug who has largely acted commensurately with American interests, and who has mitigated KSA’s longstanding hostility to Israel, or (b) a thug who may be far more hostile to American interests.

This is not a hard choice to people who exist in reality.  Which largely excludes most of the political and media class.

Further, will those who beat their chests in indignation please specify what would happen the day after the US destabilizes the Saudi regime?  After all, the US record in intervening in Middle East regimes is so great, right?  It always works out swell, no?

And as horrible as the Khashoggi murder was, let’s see things for what they are.  Contrary to his latter-day pose as a crusader for reform, he was in effect a middling character in Game of Thrones who was on the losing side in an internal regime struggle.  You can guarantee had his side prevailed, someone on the other side would have met a grisly death too.  The main remarkable thing about Khashoggi’s death is we know about it.  Pretty sure that there are a lot we don’t know about, and wouldn’t know about, regardless of which of the zillion princes wound up on top.

A friend remarked that maybe there are some princes in KSA who would not act as brutally as MbS were they in charge.   To which I replied: probably so, but immaterial.  Any such softer figure would not prevail in the internecine struggle for power.

Trump’s remarks and the underlying policy choice reflected his transactional approach.  MbS is someone he can deal with.  He has negotiating leverage.  He has used it.  Hence the boasts about lower oil prices, which has spurred people who never gave a crap about the US oil industry before to clutch their pearls about the impact of this on US oil companies, because, well, they have to find a way to criticize Trump.

The most remarkable thing about Trump is that in contrast to Roosevelt, who justified siding with Samoza in private, Trump said he was standing by our Saudi bastard in public.  This demonstrates another way in which he differs from conventional politicians.  Yes, he lies and bullshits repeatedly, but he also tells blunt truths that most politicians would conceal, or wrap in vaporous clouds of hypocrisy.  That’s kind of refreshing, actually.

*This remark is also attributed to Truman.