Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-62474 Sun, 25 Jun 2017 21:51:52 GMT Seymour Hersh - Confirmed: Trump's Attack on Syria Was Exclusively for PR/Self-Gratifying Reasons http://implode-explode.com/viewnews/2017-06-25_SeymourHershConfirmedTrumpsAttackonSyriaWasExclusivelyforPRSelfG.html iehi-feed-62473 Sun, 25 Jun 2017 20:45:11 GMT Contagion from the 2 Friday-Night Bank Collapses in Italy? http://implode-explode.com/viewnews/2017-06-25_Contagionfromthe2FridayNightBankCollapsesinItaly.html ... two of the private investors -- hedge funds Fortress and Elliott -- walked away from the negotiating table [for the bailout of Monte Paschi] in "a dispute over the sales terms," which likely means that even an 80% mark down on MPS' non-performing loans may not be enough to attract private investors. If they don't come back, Monte dei Paschi will have only one willing investor to turn to: Atlante. In other words, back to square one.

The hedge funds' withdrawal prompted fears that it could jeopardize not only the government's efforts to save Monte dei Paschi but also Banca Popolare di Vicenza and Veneto Banca. That has now happened. Contagion at work. And the risk of contagion is still huge.

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iehi-feed-62472 Sun, 25 Jun 2017 19:30:04 GMT How Greece Became A Guinea Pig For A Cashless And Controlled Society http://implode-explode.com/viewnews/2017-06-25_HowGreeceBecameAGuineaPigForACashlessAndControlledSociety.html The International Monetary Fund (IMF), which day after day is busy "saving" economically suffering countries such as Greece, also happens to agree with this brave new worldview. In a working paper titled "The Macroeconomics of De-Cashing," which the IMF claims does not necessarily represent its official views, the fund nevertheless provides a blueprint with which governments around the world could begin to phase out cash...

Beginning July 27, dozens of categories of businesses in Greece will be required to install aptly-acronymized "POS" (point-of-sale) card readers and to accept payments by card. Businesses are also required to post a notice, typically by the entrance or point of sale, stating whether card payments are accepted or not. Another new piece of legislation, in effect as of June 1, requires salaries to be paid via direct electronic transfers to bank accounts. Furthermore, cash transactions of over 500 euros have been outlawed.

In Greece, where in the eyes of the state citizens are guilty even if proven innocent, capital controls have been implemented preventing ATM cash withdrawals of over 840 euros every two weeks. These capital controls, in varying forms, have been in place for two years with no end in sight, choking small businesses that are already suffering.

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The irony that [Greek pensioners, abiding by the new rules] were paying by card to avoid taxation themselves was lost on them--as is the fact that the otherwise fiscally responsible Germany, whose government never misses an opportunity to lecture the "spendthrift" and "irresponsible" Greeks, has the largest black market in Europe (exceeding 100 billion euros annually), ranks first in Europe in financial fraud, is the eighth-largest tax haven worldwide, and one of the top tax-evading countries in Europe.

Also lost on these otherwise elderly gentlemen was a fact not included in the official propaganda campaign: Germans happen to love their cash, as evidenced by the fierce opposition that met a government plan to outlaw cash payments of 5,000 euros or more. In addition, about 80 percent of transactions in Germany are still conducted in cash. The German tabloid Bild went as far as to publish an op-ed titled "Hands off our cash" in response to the proposed measure.

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iehi-feed-62470 Sun, 25 Jun 2017 14:34:06 GMT Why "How many jobs will be killed by AI?" is the wrong question http://implode-explode.com/viewnews/2017-06-25_WhyHowmanyjobswillbekilledbyAIisthewrongquestion.html Despite these scary statistics and scenarios, however, there's no need to panic. For one thing, previous predictions about losses and gains over time in specific jobs have almost always been way off, and there's little reason to believe the current crop will be any better. For another, the Oxford study looked only at destruction, and not also creation. It didn't try to estimate how many new jobs and job categories will come along with future technological progress. There will surely be many of these, from robot wranglers to AI interpreters.

[However, there are reasons for concern; for one,] despite very low apparent unemployment, there actually is a serious joblessness problem among some groups. How can this be? It's because people who have stopped looking for work altogether are not included when calculating the headline unemployment rate. And a surprisingly large percentage of prime-age men, especially less-educated ones, are in this category. According to a 2016 report from the White House, by 2014 more than 16% of US men between the ages of 25 and 54 with a high school education or less had dropped out of the workforce completely. Again, there are many reasons for this phenomenon. It appears that one of them is that many men who did or aspire to stereotypically brawny work like assembly line worker or coal miner are not eager to take available service sector jobs in growing areas like health care, eldercare and education. As automation takes over truck driving and other similar jobs this mismatch between desired and available jobs is likely to grow, as will the joblessness and attendant problems that come with it. 

Furthermore, less skilled workers who do find work often end up with stagnant wages. Real wages are essentially unchanged for the bottom 50% of the income distribution, even as income has grown overall, especially for the most educated and highly paid people in the workforce. This is reflected in growing inequality, but also in greater gaps on other metrics like suicide, alcoholism and drug abuse. As Anne Case and Angus Deaton have documented, "deaths from despair" have increased sharply among the white working class over the past 20 years, after falling in previous decades.

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iehi-feed-62469 Sun, 25 Jun 2017 14:31:19 GMT Stocks to plummet 40% or more, warns Marc 'Dr. Doom' Faber http://implode-explode.com/viewnews/2017-06-25_Stockstoplummet40ormorewarnsMarcDrDoomFaber.html "We've had more than eight years of a bull market. The Nasdaq is being driven by very few stocks," said Faber on Friday's "Trading Nation." That rally "is not a particularly healthy sign from a technical point of view, and valuations are very high," the investor added.

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Faber is deeply concerned that wealth has flowed to big corporations and affluent people. He believes the imbalance could eventually disrupt the markets as we know it.

"Either people with money will be taxed heavily ... or we'll have a massive deflation in asset prices -- I repeat: massive," he warned. "Eventually the system will break."

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iehi-feed-62467 Sun, 25 Jun 2017 13:56:31 GMT Robots That Make 400 Burgers an Hour May Soon Take over Fast Food Restaurants http://implode-explode.com/viewnews/2017-06-25_RobotsThatMake400BurgersanHourMaySoonTakeoverFastFoodRestaurants.html You don't need to worry about the line cook messing up your order any more. The BurgerBot is a totally automated burger creating machine! The machine can pump out 400 burgers an hour. But not just any 400 burgers, all the burgers can be made with fresh ground beef, salad, complete with a toasted bun.

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This robot has a pretty expensive outlay of $30,000 but you can imagine it would pay itself off very quickly. Tech blog Xconomy reported the prototype they saw demoed could save a fast-food restaurant up to $90,000 a year in training, salaries, and overhead costs.

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iehi-feed-62466 Sat, 24 Jun 2017 14:11:54 GMT Camden Council says hundreds of households to be evacuated in wake of London tower fire http://implode-explode.com/viewnews/2017-06-24_CamdenCouncilsayshundredsofhouseholdstobeevacuatedinwakeofLondon.html iehi-feed-62464 Sat, 24 Jun 2017 02:48:49 GMT Brexit forever or Brexit never? http://implode-explode.com/viewnews/2017-06-23_BrexitforeverorBrexitnever.html While both May's Conservatives and the opposition Labour Party now explicitly support leaving the club the United Kingdom joined in 1973, some of the Union's most powerful politicians have raised the possibility of Britain cancelling Brexit.

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With her authority so weakened, May will have to gauge whether she can get a deal from the EU that she can sell at home.

If she thinks she will fail to get a Brexit deal through parliament, some business leaders fear she will allow talks with the EU to collapse and take Britain out with no deal.

A disorderly Brexit could spook financial markets, tarnish London's reputation as one of the world's top two financial centers and sow chaos through the economies of Britain and the EU by dislocating trading relationships.

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iehi-feed-62463 Sat, 24 Jun 2017 02:22:30 GMT Amazon Takeover of Whole Foods Puzzlingly Missing Any Economies of Scale http://implode-explode.com/viewnews/2017-06-23_AmazonTakeoverofWholeFoodsPuzzlinglyMissingAnyEconomiesofScale.html If Amazon.com Inc hopes to revolutionize grocery delivery, then its bid to buy Whole Foods Market Inc for $13.7 billion will be just the start of a long and costly process. The e-commerce giant would need to add a large network of specialized grocery distribution warehouses, former AmazonFresh employees and logistics experts said. This is something Wal-Mart Stores Inc and other competitors have already done. Whole Foods, with a relatively small distribution footprint of its own, does little to change the picture for Amazon, they said.

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Whole Foods has over 1 million square feet of warehouse space for distribution to its markets, and a chunk of its inventory goes straight from suppliers to stores, MWPVL said. "It's a peanut. It's nothing," MWPVL President Marc Wulfraat said of Whole Foods' distribution

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Even using Whole Foods stores to provide food for delivering to nearby urban shoppers would have hard limits, since many outlets lack the floor space to handle thousands of online orders.

"It's a space issue for stuff coming through. It's a labor issue for people tripping over each other," said Tom Furphy, former vice president of consumables and AmazonFresh, and now chief executive of Consumer Equity Partners. There would also be a risk that "the quality starts to go down because the e-commerce orders are getting better product."

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iehi-feed-62462 Sat, 24 Jun 2017 01:50:04 GMT Trump joins the effort to pass a health-care bill, but another GOP senator is opposed http://implode-explode.com/viewnews/2017-06-23_TrumpjoinstheefforttopassahealthcarebillbutanotherGOPsenatorisop.html Heller is seen as a bellwether for how the bill is perceived across the country. He is facing reelection next year in a swing state where Democrat Hillary Clinton defeated Trump but where there is also an active Republican base, which turned out overwhelmingly for Trump during the battle for the GOP presidential nomination. Nevada is among 31 states and the District of Columbia that expanded Medicaid under the ACA.

"I cannot support a piece of legislation that takes away insurance from tens of millions of Americans and hundreds of thousands of Nevadans," Heller said at a news conference in his home state Friday, where he was joined by Republican Gov. Brian Sandoval.

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[Trump] can afford to lose only two votes from the pool of 52 GOP senators, with all Democrats united against it and Vice President Pence ready to break a 50-50 tie.

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iehi-feed-62460 Fri, 23 Jun 2017 23:59:42 GMT U.S. Will Lose Syria to Iran and Abandon Kurdish Allies, Former Ambassador Says http://implode-explode.com/viewnews/2017-06-23_USWillLoseSyriatoIranandAbandonKurdishAlliesFormerAmbassadorSays.html The Syrian government and its allies, including Iran, will eventually overcome U.S. efforts to secure influence in the nation, and Kurdish fighters may pay for siding with President Donald Trump and his administration, according to a former U.S. ambassador to Syria.

Robert Ford, who served as envoy to Syria under former President Barack Obama from 2011 through 2014, said during an interview Monday with the London-based Arabic-language newspaper Asharq Al-Awsat that "Obama did not leave the Trump administration many options to achieve its goal" of defeating the Islamic State militant group (ISIS) and curbing Iran's foothold in the region. While Iran and Russia back Syrian President Bashar al-Assad against various insurgents and jihadists trying to topple him, the U.S. supports an irregular coalition, the Syrian Democratic Forces, made up mostly of Kurds, but including other ethnic minorities and Arabs. Despite the group's recent successes in storming ISIS's de facto capital of Raqqa, Ford said "the game was finished" for U.S. plans to overthrow Assad or compete with Iran's success in the country.

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When the opposition, which also received support from Turkey and Gulf Arab states such as Saudi Arabia and Qatar, did launch a large-scale insurgency against the state, the CIA ultimately decided to train and equip certain rebel groups. After this policy came to light, Ford said in 2014 that the U.S. was "behind the curve," as Russia and Iran were devoting extensive resources to defending Assad, much more than the U.S. was willing to devote to the insurgents, Many of the insurgents were later overtaken or absorbed by more radical Sunni Muslim militant moves such as ISIS and Al-Qaeda.

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iehi-feed-62459 Fri, 23 Jun 2017 21:01:34 GMT Economists draw mixed conclusions over May new home sales report http://implode-explode.com/viewnews/2017-06-23_EconomistsdrawmixedconclusionsoverMaynewhomesalesreport.html "Despite May's good news, new home sales still have a long way to go to reach historic norms," Trulia Chief Economist Ralph McLaughlin said. "When taking into account the U.S. population, new home sales are still about 69% of the long-run average."

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"Ultimately this report is a disappointment for those looking to builders to meaningfully help solve the pressing supply issues in the market overall, especially for entry-level buyers," Zillow Chief Economist Svenja Gudell said. "The median price of a new home sold in May was close to $350,000, by far the highest it's ever been and likely well beyond the budget of younger, first-time buyers that make up a sizable portion of the market right now."

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iehi-feed-62458 Fri, 23 Jun 2017 20:58:31 GMT McDonalds Is Replacing 2,500 Human Cashiers With Digital Kiosks: Here Is Its Math http://implode-explode.com/viewnews/2017-06-23_McDonaldsIsReplacing2500HumanCashiersWithDigitalKiosksHereIsItsM.html iehi-feed-62457 Fri, 23 Jun 2017 16:41:02 GMT Trump visited this Boeing factory to celebrate jobs -- It just announced layoffs http://implode-explode.com/viewnews/2017-06-23_TrumpvisitedthisBoeingfactorytocelebratejobsItjustannouncedlayof.html On Thursday, workers at the North Charleston plant learned they'd soon face layoffs. The airplane manufacturer announced it would be cutting "fewer than 200 people" at the 787 Dreamliner campus and other facilities in the city.

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"Our competition is relentless, and that has made clear our need as a company to reduce cost to be more competitive," Boeing said in a statement. "We are offering resources to those affected by layoffs to help them in finding other employment and ease their transition as much as possible."

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In December, Boeing said it planned to cut jobs this year because of a dropping demand for new planes. The company revealed it would decrease production of the Boeing 777 by 40 percent in 2017.

By March, the company had accepted about 1,880 voluntary layoffs from employees in Washington state. Then nearly 500 workers near Seattle received involuntary layoff notices in April, according to the Seattle Times

Jonathan Battaglia, representative for the Machinists Union, which the Boeing employees in North Charleston voted not to join in February, said about 700 people in South Carolina have taken buyouts over the past year. The coming wave of layoffs at the North Charleston campus are the first involuntary dismissals to hit its South Carolina workforce.

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iehi-feed-62456 Fri, 23 Jun 2017 16:39:18 GMT An Overview of the New Senate Health Care Bill: Rich To Get Tax Relief; Poor and Middle Class to Face Higher Burden http://implode-explode.com/viewnews/2017-06-23_AnOverviewoftheNewSenateHealthCareBillRichToGetTaxReliefPoorandM.html The Affordable Care Act gave health insurance to millions of Americans by shifting resources from the wealthy to the poor and by moving oversight from states to the federal government. The Senate bill introduced Thursday pushes back forcefully on both dimensions.

The bill is aligned with long-held Republican values, advancing states' rights and paring back growing entitlement programs, while freeing individuals from requirements that they have insurance and emphasizing personal responsibility. Obamacare raised taxes on high earners and the health care industry, and essentially redistributed that income -- in the form of health insurance or insurance subsidies -- to many of the groups that have fared poorly over the last few decades.

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Like a House version of the legislation, the bill would fundamentally change the structure of Medicaid, which provides health insurance to 74 million disabled or poor Americans, including nearly 40 percent of all children. Instead of open-ended payments, the federal government would give states a maximum payment for nearly every individual enrolled in the program. The Senate version of the bill would increase that allotment every year by a formula that is expected to grow substantially more slowly than the average increase in medical costs.

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States would continue to receive extra funding for Obamacare's expansion of Medicaid to more poor adults, but only temporarily. After several years, states wishing to cover that population would be expected to pay a much greater share of the bill, even as they adjust to leaner federal funding for other Medicaid beneficiaries -- disabled children, nursing home residents -- who are more vulnerable.

High-income earners would get substantial tax cuts on payroll and investment income. Subsidies for those low-income Americans who buy their own insurance would decline compared with current law. Low-income Americans who currently buy their own insurance would also lose federal help in paying their deductibles and co-payments.

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States could get rid of the online marketplaces that help consumers compare similar health plans, and make a variety of other changes to the health insurance system. The standards for approval are quite permissive. Not every state would choose to eliminate such rules, of course. But several might.

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Americans with pre-existing conditions would continue to enjoy protection from discrimination: In contrast with the House health bill, insurers would not be allowed to charge higher prices to customers with a history of illness, even in states that wish to loosen insurance regulations.

But patients with serious illnesses may still face skimpier, less useful coverage. States may waive benefit requirements and allow insurers to charge customers more. Someone seriously ill who buys a plan that does not cover prescription drugs, for example, may not find it very valuable.

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But because federal subsidies would also decline, only a fraction of people buying their own insurance would enjoy the benefits of lower prices. Many middle-income Americans would be expected to pay a larger share of their income to purchase health insurance that covers a smaller share of their care.

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The reforms are unlikely to drive down out-of-pocket spending, another perennial complaint of the bill's authors, and a central critique by President Trump of the current system. He often likes to say that Obamacare plans come with deductibles so high that they are unusable. Subsidies under the bill would help middle-income consumers buy insurance that pays 58 percent of the average patient's medical costs, down from 70 percent under Obamacare; it would also remove a different type of subsidy designed to lower deductibles further for Americans earning less than around $30,000 a year.

What a mess. It's doubtful these tweaks will come even close to bringing our health care system back to solvency; and they'll go a long way to pissing off (and making life harder for) the lower 75% of Americans economically. However, we will point out: the part about the rich getting tax "breaks" is disingenuous; the investment and payroll surcharge taxes that would be removed were actually only just recently added by Obamacare. We're also glad to see the individual mandate go -- there's no way this mandate ever did much to make the system solvent (since those who would face a meaningful penalty could also comfortably afford insurance), so it will just remove an arguably-unconstitutional (SCOTUS ruling notwithstanding) intrusion of the government into our lives.

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iehi-feed-62454 Fri, 23 Jun 2017 15:29:26 GMT Merkel Says May's Brexit Proposals 'Not the Breakthrough' http://implode-explode.com/viewnews/2017-06-23_MerkelSaysMaysBrexitProposalsNottheBreakthrough.html German Chancellor Angela Merkel said at the end of an EU summit in Brussels on Friday that proposals from British Prime Minister Theresa May on preserving the rights of EU citizens after Brexit were "not the breakthrough".

Speaking at a joint news conference with French President Emmanuel Macron, Merkel said: "It was a good start but it was also not the breakthrough, to put it conservatively."

"It became clear during the discussion last night that we have a long path ahead of us. And the 27 (other EU countries), especially Germany and France, will be well prepared, we will not allow ourselves to be divided.

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iehi-feed-62453 Fri, 23 Jun 2017 14:50:54 GMT Sears Holdings to close 20 more stores as retail crisis continues http://implode-explode.com/viewnews/2017-06-23_SearsHoldingstoclose20morestoresasretailcrisiscontinues.html iehi-feed-62450 Thu, 22 Jun 2017 20:41:49 GMT The Little Putsch That Could Beget a Great Big Coup - David Stockman http://implode-explode.com/viewnews/2017-06-22_TheLittlePutschThatCouldBegetaGreatBigCoupDavidStockman.html iehi-feed-62449 Thu, 22 Jun 2017 20:40:36 GMT The Rise of a Prince Ends Doubts Over Saudi Arabia's Direction (BUT RAISES DOUBTS OVER ITS INT'L STRATEGY) http://implode-explode.com/viewnews/2017-06-22_TheRiseofaPrinceEndsDoubtsOverSaudiArabiasDirectionBUTRAISESDOUB.html iehi-feed-62448 Thu, 22 Jun 2017 20:36:03 GMT The Wheels Come Off Uber http://implode-explode.com/viewnews/2017-06-22_TheWheelsComeOffUber.html Not surprisingly, the financial press has been all agog about the drama of Travis Kalanick's forced departure from Uber's CEO position yesterday, fixated on salacious insider details.

That means journalists largely have ignored what ought to be the real story, which is whether Uber has any future. I anticipate that Hubert Horan will offer a longer-form treatment of this topic. Hubert had already documented, in considerable detail in his ten-part series, how Uber has no conceivable path to profitability.

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Uber's managerial upheaval of the last few months mean its decay path is sure to accelerate. I've been following the business press for over 30 years. I can't think of a single case where even an established, profitable business with an solid franchise has had so many top level positions vacant, and for such bad reasons. As reader vidimi quipped, "With no CEO, CFO, COO, and CIO, uber is coming very close to becoming a self-driving company." And that's not even a full list.

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And in a scandal that will have a much longer tail, Uber's former head of its Waymo driverless car unit, Anthony Levandowski, has had his case involving alleged theft of intellectual property from Google referred to the Department of Justice. Kalanick was deeply involved in Levandowski's sudden exodus from Google. It seems implausible that Kalanick didn't know Levandowski was making off with boatloads of files. If the case does lead to a criminal prosecution, it is hard to see how Kalanick could escape scrutiny as a potential criminal co-conspirator.

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Some of the top executive departures, such as of its recently hired COO, brought it to help the company grow up, its CFO and its head of communications, were voluntary. That's not what you see in Silicon Valley stars on a winning path. Confirming that picture are rumors of insiders being cashed out at valuations well below that of recent fundraisings.

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And particularly worrisome is the resignation of Uber's chief financial officer, Gautam Gupta, at the end of May, when Uber announced $708 million in quarterly losses... A CFO departure is often a red flag, particularly when it is abrupt and mysterious.

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The wee problem is it will prove impossible to effect anything resembling a turnaround at Uber. As Hubert Horan pointed out, the very culture that made Uber a success is now its biggest liability. And as a result, investors don't appear to have a plan for how to straighten out Uber.

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