Takes a licking and keeps on ticking

Just like a Rossi demo! (Those were the days! Live TV!)

The occasion for this brilliant wit, a masterpiece, if I say so myself, and I do, is ele’s continued citation of the Cherokee legal stuff, even though it is completely irrelevant to the topic, Cherokee is an LLC that makes risky investments, and a few fail, and the accounting is complex, and with that, an SEC settlement of $100,000 for an accounting error, with no finding of intention to defraud anyone, is SOP, and equivalent to me being fined $0.05. Yet to ele, this is “very interesting.”

I covered this first on Ele mental my dear, posted 5/18/2017 at 5:10 PM. So today I see another post from ele on the same topic. 5/18/2017 12:41 PM.

As before, there is a cover story:

Googling around about Woodford and Cherokee. Seems that SEC has done an action against them:

There is nothing new here. The SEC affair was already shown in ele’s post two days ago. The story has nothing to do with Woodford, and the relevance to Cherokee is only the obvious. Cherokee is big business ($2.2 billion in assets managed), and that business is investing in risky developments, done through compartmentalized LLCs, an LLC per project. According to one story on them, they put about $25 million into a project, and then more money is raised for that project (often much more), from investors interested in it, often local. And these projects sometimes fail, and when they fail, the LLC can go bankrupt. The result of that is that Cherokee loses their investment, or part of it. So the bottom line of these stories are that Cherokee sometimes loses money. And of the SEC story is that accountants sometimes screw up. There is nothing else there.

Planet Rossi, like Rossi himself, at least in his public persona, has only the fuzziest idea of how business operates. ele is here trolling, seeing how far he can go pursuing off-topic interruptions. His point:

So a good question would be where are the 250M$ that IH has rised using Rossi technology ? What use they are doing of all that money ?

Ah, Rossi English again…. what is unmistakeable are the Rossi tropes.

“$250 million” IH is known to have raised the original $20 million from a stock offering in 2013 (much of it personal funding by the founders — but Rossi will have us think that this came from outside), and then, $50 million was, from case documents, committed in 2014, not after the Woodford site visit in February. This money did not go into IH. It appears that IH was planning on moving all equity to IPH, the Dutch company, (and a defendant in Rossi v. Darden), with IH becoming wholly-owned by IPH, but Woodford, in a brilliant move in hindsight, insisted on a new U.K. entity being formed. This then became the sole owner of IH, existing where it would be easily accessible to Woodford if there were problems. They purchased, with the $50 million, preferred stock which conveyed low voting rights, indicating trust in the existing management, which was Mazzarino and Darden. As I recall, with Vaughn, they have majority control, but I haven’t looked in quite some time.

Setting aside the original $20 million (from friends of Darden, none of this was or is sold to the public), $50 million has been raised by the people behind IH, for LENR investment. On that $50 million, IH Fanboy has often repeated the casual comment of Paul Lamacraft on hearing that there were problems with the Rossi investment. He wrote this yesterday:

it remains that Woodford stated in no uncertain terms that Rossi’s technology was core to their investment. And the valuation documents that are now on the docket confirm that (as it is split out based on LENR tech, with Rossi’s accounting for most of it).

That’s a misrepresentation what was said, following the Planet Rossi trope. (This error is actually in the joint pretrial stipulation, apparently Rossi counsel slipped it in). The actual statement was in response to the planned IH press release about March 4, 2016 (shortly before the Penon report)

This is clearly very disappointing given that Rossi’s technology was a core element of the initial investment.

It is hazardous to parse casual emails in an attempt to nail down meanings. However, what is easily noticed in this and other quotations is that how a shift in language is used to reduce the appearance of one meaning and increase the appearance of another.

It was not “their [our] investment.” It was the initial investment. Woodford apparently made only one investment in IHHI. Lamacraft is here reacting with sympathy to an understood disappointment. Not his own disappointment, I suspect, but that of IH. Woodford’s money was not invested in “Rossi technology, ” as such. Little or none of that $50 million went to the development of “Rossi technology.” The “initial investment” was, I think most likely, that of IH itself, which put over $20 million, most of that into the Rossi investment.

“Has rised using Rossi technology.” (What, does it print money?) IH has not actually used Rossi technology to raise money, they have used the very risky possibility of LENR, and “crushing the tests” with Rossi was part of that. That IH was bold enough to take such a risk when it seemed foolish to much of the world would be an element in Woodford’s support, my sense.

On Planet Rossi, IH took Woodford on a visit to show them the Plant steaming away, or at least making some gauges move, or were they moving? what exactly did visitors see? Apparently Rossi (reportedly Woodford thought Rossi a “crazy inventor” and “cagey”) — and then, bowled over by the sheer magnificence of the megawatt plant, with the steam pipe going through a hole in a wall into … into what? Surely to impress visitors, the alleged “heat exchanger” would have shown, with that room being intolerably hot (but if the air was flowing in through the door, it might be tolerable to peek in). But we don’t think anyone was shown that.

… bowled over, they coughed up $50 million. However, that investment was arranged in 2014, it was only that it “closed” in May, 2015, with the money going into IHHI, and from there to be used to support other LENR initiatives, not Rossi. That is obviously what really pisses Rossi off. How dare they?

IHHI still has millions in reserve, or had at last report. So that’s where the $50 million went.

But what about the other $200 million? That is another Rossi trope, he has repeated it many times. I have never seen documentation on it. I suspect he thinks that this was a Chinese investment. My sense is that if the Chinese put in $200 million, it would be in a Chinese company, with an agreement with Industrial Heat for collaboration and cooperation. It would not go directly to IH or IHHI.

The big problem is that the “Rossi technology” never became something that IH could sell without committing fraud or possible fraud. So they didn’t. If Rossi had supported them in making devices that would pass independent testing (not faux “Rossi independence”), they’d already have raised, my sense, billions. This was clearly their plan. Ampenergo, Rossi’s friends, knew that. Rossi does not listen to his friends.

While some aspects of this case may remain forever mysterious, the most likely story is that Rossi’s claims to have a commercial-ready technology , already in 2011, were false or grossly exaggerated. The “1 MW Plant” was supposedly already tested, ready to install — which then explains the otherwise crazy schedule for the original GPT.

Eric Walker asked the obvious question:

Can you provide your source for that $250 million figure?

I think Rossi has said it numerous times, but, of course, ele claims not to read the Rossi blog. And if you believe that….

THHuxleynew wrote:

How do you get from Cherokee misallocating 100K legal expenses (and you know how complex such things can be) to IH having 250M income? You have no evidence of this, nor likelihood…

The entire conversation is off-topic where raised, inserted arbitrarily and without connection — and repeatedly, while moderators twiddle thumbs.

I understand, it’s a problem: how to allow free speech and discussion …. while … while what? What is the goal of LENR Forum? I have never seen it stated. Without clear goals, there is no way to balance the benefits of “free speech” with the clutter that inhibits deeper conversation.

ele wrote:

THHuxleynew wrote:

How do you get from Cherokee misallocating 100K legal expenses

A troll will use an error in an inconvenient question to divert attention from the question, to make the questioner look bad or at least sloppy.

Expanses ware much more…..

Expanses are vast, by definition. Ah, expenses. “Much more,” well, that’s a subjective comment. They misallocated about what ele says below, as I recall. The $100K was the penalty assessed for this error. This is far, far less than would have been assessed for anything that looked like fraud.

“The groups have already reimbursed all of the $455,698 in questionable expenses,”

The number of found raised from investors is documented to be (not a RossiSay or TomTold). about 250M$.

I’m sure his English is better than my Italian. “Is documented” is passive, giving no source and no described process, impossible to verify. What we know is that this is a Planet Rossi trope. So Sifferkoll may have added together this or that, and multiplied by the number of pages in the local phone directory, creating a “document,” so it is “documented.” Or what?

Help us out. I’ll do some searching.

THHuxley in April 2016 wrote about rumors, and attributed them to Rossi.

From JONP:

February 9, 2017 at 1:58 AM

Dr Rossi, Now there comes a new claim that Boeing tested the Ecat for/with IH, and it did not work for them, were you present during this demonstration?

Andrea Rossi

I never knew of this demo and I do not know with which apparatus it has been done. I apprehended of it during the litigation. The replications and tests I have been informed of from September 2013 through February 2016 are the ones on the base of which Cherokee Fund Partners-IH have collected 250 millions in UK and China. No further comment.
Warm Regards,

Notice the tropes. First of all, the Boeing test was not a “demonstration.” It was an independent test, apparently. Rossi always wanted “demonstrations,” where he was in charge, but he also may have allowed tests where his methods were set up and followed, not the independent tests that independent experts would use. Then he refers to Cherokee Fund Partners as the same as IH, that’s a claim of his in the lawsuit, originally sustained on a claim that Cherokee was the sole owner of IH, which was … never the case. Then he claims that money was raised on the “base” of a set of tests through February 2016, and obviously includes the Woodford U.K. investment of $50 million. But that was not “collected” by IH, much less by Cherokee. It went into IHHI, in a place where Woodford could manage it if necessary — and that was at their insistence.

If Rossi isn’t just simply lying, his mind is full of snakes and snails.


Observer • a year ago (May 16, 2016)

Does IH have the $ 89 million to pay Rossi, even if they wanted to? From what I gather, they have raised ~ $60 million from investors for IH and ~ $200 million from the Chinese for R and D in China. The first priority of any money raised would be to pay back Darden’s 11 million, already payed to Rossi. Cherokee would be taking their usual “fees”. Significant effort has been made to expand their IP portfolio by buying alternative LENR IP. They dragged their feet in getting the one year test started, and I do not think they budgeted for its success. The current law suit also puts a damper on their ability to raise more money.

I think “Observer” is Paradigmnoia, usually careful. He was speculating here and wasn’t completely accurate. Back then, it was common to assert the initial investment ($11.5 million) raised in 2013 as the first investment. However, that was a stock offering allowing up to $20 million. Sources say that they spent more than $20 million on the Rossi affair, they may have borrowed some of it. Then there was the Woodford investment, agreed in 2014 and closed in May of 2015. Woodford invested in IHHI (not IH), which, before this, probably at Woodford insistence, bought all the IH stock for stock in IHHI, and some paybacks may have occurred. Some IHHI investors are in line to receive a refund of investment, but Darden is specifically standing apart from that.

[Note added: Paradigmnoia corrected my “I think,” which was an erroneous pattern match. His ECW user name is Obvious. And, yes, it is also obvious. Duh! I did see this as anomalous, and am grateful to P. for correcting it. I wish more users would correct errors, as he did.]

Cherokee was never an investor in IH, and is not an investor in IHHI. I have seen no evidence of major management fees being charged, so the “of course” was speculation, and it wouldn’t be Cherokee. Cherokee did support IH with office space and some employee time, but was reimbursed for that, it is claimed. (When you are the CEO of a $2.2 billion corporation, you might get perks like that! — I.e., convenience. If there is a delay in reimbursement, IRS rules may require interest to be imputed….)

“they dragged their feet” — that’s the Rossi story, probably not true. They were never eager to run that test, I’m sure, it was essentially either dumb, unnecessarily difficult, but IH was apparently read to install and run the plant in Raleigh, but Rossi argued against it. Florida Much Better! Besides, Johnson Matthey! And $1000 per day! For a plant that only cost $200,000! Kiss my ring.

As to damper, maybe. However, they had arranged funding for a total of $200 million from Woodford. If it had been needed, they’d have been jumping for joy. A real MW test? Worth hundreds of billions of dollars. Again, this idea that they couldn’t pay was a Planet Rossi trope. This probably came from the lawsuit filings, and people had no idea just how deceptive they were. Surely Rossi would not lie in court?

(And I remember comments that apparently believed that pleadings were testimony and therefore must be true or would be a criminal offense. No. However, we now have piles of depositions, where testimony is indeed sworn under penalty of perjury, and documents have been attested as true copies, again under penalty of perjury, etc.)

(As an example, the Second Amendment. The missing signatures were obvious immediately. Yet Rossi asserted that the Second Amendment was in effect, and did not claim estoppel. If fact, this was dubious at best, because Rossi did not bother to assert that there was a written agreement to the start of the GPT, as the Second Amendment required. However, I assume that this was probably just a technical glitch, that there existed a copy with all signatures. And a date! Rossi was asserting a blatantly invalid document as the foundation of his lawsuit. He knew that the proposed amendment had failed, he called it “cancelled.”)

This piece from JONP takes the cake:

April 11, 2016 at 10:30 PM

Dr Andrea Rossi
Can we have the following information about the ERV that made the report:
1- education
2- has he been chosen and agreed upon by both Industrial Heat and Leonardo Corporation ?
3- has IH been able to talk with him for any complint for all the 1 year long test ?
4- has the ERV experience in plants that produce steam ?
5- has the ERV experience of nuclear reactions ?
6- who paid the ERV ?
7- has he experience of validations ?
8- how old is he ?
9- whose were the instruments he used to make the measurements ?
10- who installed the measurement instruments ?
11- did IH participate to the choice where to install the instruments ?
12- did IH maintain his personnel in the plant during all the days of the test ?
13- did IH have the right and the possibility to contact the ERV for delucidations along all the test period ?
14- is it true that IH visited multiple times the plant in operation with their investors ?
15- is it true that they collected 50 million dollars from Woodford funds and initiated a 200 million business in China after theyr delegations visited the plant in operation ?
16- is it true that during the visit IH made also their investors talk with the director of the factory of the Customer during their visits, after which the investors gave them the money to be invested ?
Thank you very much if you can answer: your answer will clear a situation after Mr Darden has diffused information based on which IH was totally unaware of the fact that there was a test on course based on the agreement.

So, an anonymous user, “Soky,” who has never before appeared in connection with Rossi, nor since, somehow knows to enumerate, within a few days of the filing of Rossi v. Darden, the major points of the Rossi claims and arguments (which are now totally familiar from many documents), so concisely and perfectly? Rossi’s answers comes as no surprise:

Andrea Rossi
April 12, 2016 at 10:15 AM

All your questions have been answered already, but “repetita juvant”:
1- doctorate in nuclear engineering, obtained with 110/110 csumma cum laude in the Alma Mater of Bologna (Italy). Note : the University of Bologna is one of the main Italian universities and in particular the Faculty of nuclear engineering is considered very selective
2- yes
3- yes
4- yes
5- yes
6- 50% IH, 50% Leonardo Corporation
7- yes
8- I think around 55
9- the ERV used only his instruments, and retrieved them at the end of the test to control their status
10- The ERV, helped by personnel of Industrial Heat
11- yes
12- always, every single day
13- yes
14- yes
15- yes
16- yes

Warm Regards,

This will be worth a separate post. For now, just this:

15- is it true that they collected 50 million dollars from Woodford funds and initiated a 200 million business in China after theyr delegations visited the plant in operation ?

This is what we know: Woodford was planning to invest $50 million before the end of 2014. They did visit the Plant in February, and the investment was closed in May, with the money going into IH Holdings International, Ltd. This wasn’t IH “collecting” anything, rather, IHHI bought IH. It’s true that more money became available for the goals of IH, i.e., supporting LENR.

As to China, there were a number of visitors who were apparently Chinese. It is unknown if they were connected to any Chinese business formed, and as well, what relationship this might have to Industrial Heat. But Chinese money would be very likely to stay in China, not “collected” by IH. It would not be surprising if there were collaborations or even license agreements, but nothing like $200 million would go to IH or IHHI. There is no sign of such investment in IHHI, which has a list of all investors. See the UK Companies House, the annual return 24 May 2016. There is a relatively minor investment titled “IHHI nominee” (something intended to remain confidential?), as about 2 million Series B shares, allocated January 15, 2016, long after any possible Chinese investor visit. However, that’s penny stock, par value $20,000. Maybe Rossi got the decimal point confused and thought it was dollar stock? But it would still only be $2 million. And it is purely speculative that this has anything to do with China.

So what is the source of the $200 million Chinese idea? Looking for sources, all roads point back to RossiSays, in spite of ele’s denials.

An April 20, 2016, Popular Mechanics article takes Rossi’s claims as source, thus representing history through the eyes of Rossi.

This was the earliest source I have found: JONP, April 7, 2016. The whole rant is worth reading. Or maybe not. It is Planet Rossi at the core. Just before it, he explains why he lied about his relationship with IH, how “good” it was as he was preparing to sue them. If he believes what he wrote, he’s an idiot. Anyway, to the point here:

Andrea Rossi
April 7, 2016 at 7:27 PM

Dear Janne:
I have to comment the press release of IH, being a press release and not a forensic act.
…  they made replications with the attendance of Woodford, after which they got 50 or 60 millions of dollars from Woodfords’ investors, they made replications with the attendance of Chinese top level officers, after which they started thanks to the E-Cat they made an R&D activity in China in a 200 millions concern, they made replications with an E-Cat completely made by them under my direction the very day in which the 1 MW plant has been delivered in Raleigh, they made replications that we have recorded. After the replication they made with the attendance of Woodford in 2013 Mr Tom Darden said publicly: ” this replication has been stellar” ( witnesses available). But this is not the place to discuss this.

The details are wonky, the expression is incoherent. We don’t use “replication” that way, it means something quite different from a “demonstration,” which is what Rossi and magicians do. Or someone flogging Timex watches, using an outboard motor.

This version does not claim that they received $200 million, but vaguely asserts some connection with a $200 million concern. Darden has participated in some events and activities in China. It is unknown to what extent this has anything to do with LENR or the Rossi technology.

Yet Rossi clearly thinks, from later comments, that Darden et al received $200 million from the Chinese.

Author: Abd ulRahman Lomax

See http://coldfusioncommunity.net/biography-abd-ul-rahman-lomax/

11 thoughts on “Takes a licking and keeps on ticking”

  1. The Cassarini notes indicate a possible extra $200M from Woodford. At least by one reading. So maybe this is where the $250M idea gains traction.

    The silly thing is that for IH not to have $250M lined up would be them not doing their job. But, having it lined up (if all goes well with the Rossi dreams) and having it given are two separate things. Rossi was very lucky getting his $10.5M from IH/Woodford, and seems to think that such qtys of money are just given away without working product. It is not (normally) true and would not likely be for this extra $200M.

    1. Woodford was not involved, as far as we know, until about 2014, there is no sign of an early Woodford investment. It’s $11.5 million, raised immediately in 2013, a few days before the $10 million tranche was to become due. If Rossi believes what he’s claimed, he was colossally naive. VC’s like IH (or Cherokee) are not sitting on large amounts of unallocated cash. In the case of Cherokee, they have enough to be able to invest in the project-specific LLCs, not to complete them. So they put in $25 million, reputedly, and then find specific individual or institutional investors to put in more, and go after grants and other funding…. and loans, including mortgages.

      $25 million is roughly 1% of their total assets under management. So if a project fails, goes bankrupt, they will lose some of that. They may lose all of it (ENCAP, say, I think, though there are lawsuits). It’s almost pocket change for them. Win a few, lose a few. It’s funny to see Planet Rossi making a big deal out of a handful of bankruptcies, but never actually looking in detail at the facts, just running with implications, i.e., bankruptcy is bad, a sign of incompetence, when, in fact, it simply represents a project that failed, which may be for reasons beyond the control of the investors, of which Cherokee was only one. I don’t know the numbers for total projects, but $2.2 billion assets under management, indicates what might be roughly 80 projects. If 4% of projects go into bankruptcy, resulting in complete loss, that’s a loss of $100 million. However, if these projects succeed, and it looks like most do, they may make $100 million from even one. Anything more would be gravy. They play the odds, and we may think this is gambling, but it is more like math, it only becomes gambling when risk assessment is shallow. No assessment of risk can be perfect. If I invest in what seems like a sure thing, and it fails, that does not indicate incompetent assessment. Maybe it was a meteor strike. There is a failure of assessment if the failure could reasonably have been expected. If I bet $100 on a coin flip with a fair coin, with an expected return from a correct choice of $400, my bet may be rational and not “gambling,” even if the outcome turns out to lose the $100. If I do this behavior over and over, the rational expectation would be massive profit, unless I’ve made some deeper error. A fake coin, for example.

      Those Cassarino notes were not known in 2016, probably not to Rossi. But someone may have told him something vague about $200 million and he jumped to conclusions. And then, when IH obviously didn’t have $200 million sitting around, he then comes up with the fraud theory. All this is fairly obvious from familiarity with the case files, but few take the trouble to become familiar. It takes a lot of reading that can seem pointless and confusing, but that is how we learn the fastest, in a ‘confusing’ environment, like children. So going through the Motions, placing the opposing arguments together, and adding links to the documents cited not only makes research for anyone else easier, it makes me look, at least quickly, at about everything. Then, over time, patterns start to appear. This is how humans learn, through pattern recognition. It’s a process that can fail, can generate misleading patterns, so it’s necessary to factor for that, but …. we have nothing better. Rigid logic fails more often, when there are hidden assumptions.

      Rossi treated the Doral “test” — it was actually a managed demonstration, merely observed in a limited way by Penon — as if the $89 million were a Prize, instead of being a recognition of the value of the technology, and a managed demonstration is not a demonstration of actual value. With a real customer, it would get closer. But, as was emphasized in documents, the only factor that would create the ability to raise the $89 million would be confirmed and independently validated technology transfer. Then IH would have something to sell! It is absolutely remarkable that Rossi claims unjust enrichment, as if they were making money hand over fist from selling the technology. Rather, the large outside funding appears to have only come from Woodford, which had a clear — and long-investigated — interest in LENR as a whole, and that money was not dedicated to Rossi technology, almost the opposite. It was dedicated to hedging, to creating alternatives, if they could be found, and it may take millions to determine what are practical alternatives and what are not. That is not “making money,” and that money cannot go into Darden’s pocket (Theoretically, managers of IHHI could charge management fees; I don’t think they are. Fogleman has some shares now. He may have been paid as an accountant and decided to invest some of it in shares). It is creating expanded investment, and Woodford clearly expects, as IHHI has announced, that IHHI will probably run out of money before creating possible profits, and will need more investment. Maybe much more. Maybe a billion dollars more.

      My recommendation to IHHI, at this point, based on the limited information available to me, is the same as to the field as a whole and to any funding agency or individual: invest in basic research, nailing down basic questions, as recommended by both DoE panels (1989 and 2004). If that is done, and if this work indicates the reality of LENR, in at least one manifestation (there may be many claims that are artifact-based, this arises because of the difficulties of the field), I expect truly major funding to open up, and IHHI will have its finger on the pulse, will know where activity might have commercial potential, being ready to move rapidly. This is a very sane business plan, in my opinion, and they are better placed than anyone to follow it. “Patient Capital Trust” is the Woodford investing entity name. Appropriate. This will lose a lot of money before it makes any, if it ever makes any. The only excuse for shutting it down, however, would be mismanagement or a clear finding that existing LENR evidence is misleading, that LENR does not exist, or perhaps is inherently impractical in the forseeable future. And that would, in itself, be a valuable finding, merely difficult to make money from!

      Then we could focus on other useful energy technologies and stop pursuing swamp gas. However, I know the LENR evidence and consider this an unlikely outcome, but sane investment strategies consider all outcomes considered possible and weigh them by probability.

  2. Abd, I am not, nor never have been “Observer”. I post as Obvious on ECW, and if anyone cares to check, clicking on the Obvious name there reveals Paradigmnoia. I have a a sort of grandfathered Discus screen name. On Mats blog, I briefly appeared as Obviously Paranoid.

    1. Thanks, Paradigmnoia. Of course. Obvious, not Observer. My mistake. Thanks for pointing it out, I’ll strike it. It did seem outside the envelope for you! Good news: you came here to make the correction, so now comments from you are automatically approved. I wish that others who notice errors would do the same. Together, little by little, we go far.

      In line with how Planet Rossi sees evidence, I’d point out the amazing two-letter match. Coincidence? We think not! (1 chance in 676!) APCO! FUD! Attempt to influence the judge and/or the jury! And then I’d attack any disagreement as being paid by the Ventriloquist of Raleigh. An obvious observation, but … also obtuse, of course, how about obsenile? Hey, another great word to use!

  3. Hi Abd

    You said this on your blog.

    Surely to impress visitors, the alleged “heat exchanger” would have shown, with that room being intolerably hot (but if the air was flowing in through the door, it might be tolerable to peek in). But we don’t think anyone was shown that.

    It is to bad T.D did not ask Murray what are important things
    I should ask Rossi about the Doral test say in the spring of 2015.
    He likely would have said ask him to show you the heat exchanger.

    1. As far as we know, the alleged heat exchanger was not mentioned then, the earliest references are this year, after critique on the obvious obvious was shown, on the blogs, to have legs, so Rossi needed a story to tell — which contradicted his earlier stories.

      We don’t know the conversations between Rossi and Murray, and no conversation was allowed until February, 2016, as the reactor was being shut down. The infamous Exhibit 5 was a set of questions for Penon, and claimed to not be a complete list, but a start, addressing the subject of the Penon report — which ignores dissipation and Penon had stated to Mats Lewan that whatever happened in the “customer area” was no business of his — thus demonstrating incompetence. With a claimed megawatt, it obviously matters!

      The whole idea of a megawatt test was that it’s extremely difficult to hide a megawatt. So where did that megawatt go? Yes, this is an obvious question, and that’s why it was being asked last year. Rossi realized this was a case-killer, so he had to invent an answer. It makes no sense to me that, if the heat exchanger existed, and the heat were real, he would have been happy to show it. That could easily have been done without revealing the “customer secrets,” which were only Rossi secrets, if, indeed, cooking a few grams of platinum sponge was a secret (how would this have been visible to visitors?) And if he had Quark-Xs lying out on tables, it takes a minute to throw a sheet over them.

      No. Rossi lies, and continues to lie, it’s obvious, and I have no doubt that if this goes to trial, which is looking likely at this point, the jury will see right through Rossi’s bluster, providing, of course, that Jones Day skillfully presents the evidence and necessary arguments. If they don’t, all bets are off. Juries can be fooled by counsel willing to deceive. It looks to me like Rossi’s counsel is betting on that possibility.

      One more point. Asking in the spring of 2015 would have run entirely contrary to the IH approach, which required them to “keep Rossi sweet,” as long as “within reason.” That was a difficult judgment call, but the confrontation did not really begin until July, 2015, when Rossi rejected the Murray visit. Yes, before then someone could have asked an apparently innocent question about the heat dissipation. I don’t know if that was done. It might have. What we know as to what is public is that Rossi did not assert “heat exchanger” until 2017. If someone has seen something else, I’m all ears.

      1. I wouldn’t be surprised if Mr Rossi had a CD player going on the JM Products side of the partition, belting out industrial machinery sounds from behind the partition. I vaguely recollect Matts Lewan reporting there was some evidence of a manufacturing process taking place behind the partition. Since it’s unlikely anyone of any importance actually went in there to see anything, since we now know there was nothing happening in there, it would be entirely reasonable to assume any sounds of something real being manufactured was coming from a CD player. An appropriate track might be Pink Floyds “Welcome to the machine”. All those steam noises etc. A great track which would go a long way towards convincing me. Well, maybe not. But at least I would enjoy the music. 🙂
        Welcome my son, welcome to the machine,..

        1. Rossi’s talent is that he can deceive people so thoroughly with half-truths and evasions – no need for overt deception (or hardly ever). So, if he had this tape, there would be a reason for it that made perfect (in a Rossi world) sense.

          I think it works this way because then Rossi can also so deceive himself. It is why the heat exchanger is so interesting – it looks like a complete fabrication but more Rossi’s style to have something up there which is vaguely like a heat exchanger.

          1. The sounds are to inspire the workers. I.e., Rossi and Bass. Mats Lewan reports rumor with little discrimination. At this point, we know with clarity that the customer was fake, was only a Rossi sock puppet, in the Rossi puppet theater. So now, Lewan wants to wait for the trial. He was a journalist. He was then a blogger. Now, according to Mats, Thomas Clarke is obsessed. Mats is a stuffed shirt, propped up, ready to fall over. Too bad. Maybe he will turn around, the real story is fascinating, and he knows a lot, if he will reflect on what he actually knows and actually doesn’t know.

  4. People tend to divide knowledge into what we know, what we know we don’t know, and worry about the third category of what we don’t know that we don’t know. However, what they should worry about is what we think we know but is wrong, since that is more likely to bite you on the bum.

    Rossi is a master at persuading people that he’s telling the truth when it is pretty obvious (to some of us) that he isn’t. Though the heat exchanger wasn’t mentioned or in evidence until recently, Peter Gluck kept telling me that Rossi would have a good scientific explanation for how he got rid of the 1MW of heat without anyone noticing. It seems Peter couldn’t propose any way that would not have been obvious, either. As it turns out, of course, the way Rossi says it was done would have surely been noticed if it had happened that way. Any passers-by would have been very aware of it and would likely have complained about the noise, as well as their toupées being blown away by the air-flow and the palm-trees going brown. We have a situation where the dog didn’t bark. No-one noticed the presence of that heat-exchanger, not one. There are also no records (at least so far) of the materials or components being purchased, the work needed to put it together or dismantle it, or indeed any solid evidence that it ever existed. It would surely have shown up on an IR survey of the site, and should have even shown on a NASA IR satellite survey – I’m sure there’s at least one satellite monitoring IR emissions with sufficient resolution.

    Unlike Tom, I think the heat-exchanger story is entirely false and that there was actually nothing there. I think it was only the realisation of Rossi that he’d need to explain where the heat went that brought the heat-exchanger into its shadowy existence, since earlier he’d said that it was up to JMP to get rid of the heat and it wasn’t his problem, until of course it was revealed that he was indeed also JMP and it was thus his problem. Rossi didn’t expect people to ask about that, so hadn’t thought to have something in the upstairs room to show photographs of.

    For the “work noises” emanating from the JMP side, it’s hard to think of what noise a few grams of Platinum sponge being maintained at 100°C would actually make. Not much, I’d have thought. It’s not like they were forging sponge Iron into wrought Iron. Maybe a tape therefore, since using a CD seems a bit too modern for Rossi.

    Still, “where did the heat go without being noticed” remains an unanswerable question, since any proposed way of dissipating it would have been noticed. It’s not nuclear heat, but steam heat, and we have centuries of experience with that (not that nuclear heat would be any less visible).

    1. People tend to divide knowledge into what we know, what we know we don’t know, and worry about the third category of what we don’t know that we don’t know. However, what they should worry about is what we think we know but is wrong, since that is more likely to bite you on the bum.

      See Clueless.

      Great minds think alike. What you just wrote, Simon, could have been taken directly from the standard Landmark Introduction, where the Leader draws a circle on a whiteboard, the “circle of all knowledge,” then draws slices. A small slice, KK, “What we Know and we know we know,” A similar or sometimes larger slice, KDK, “What we know we Don’t Know.” And then, “What about the rest of the circle?” It’s DKDK. And from that realm arises transformation.

      Head-bound that I am, I always noticed the missing fourth logical possibility: DKK, what we know but don’t know that we know. This is actually large, but for practical purposes it is functionally part of the DK realm. (And then transformation can arise from it when the knowledge is realized. Once recognized, the knowing is obvious, we knew it all along.)

      As to what we think we know that we don’t know, this is simply error, which can occur with any categorization. In the circle scheme, it is a part of DKDK, that is, our imagined knowing is actually not-knowing.

      “How many legs does a dog have if you call his tail a leg? Four. Saying that a tail is a leg doesn’t make it a leg.” (Abraham Lincoln).

      That’s a semantic trick, because this is all language, whereas the final claim pretends that “leg” — a word — is reality. When we count things, we have classified them, “called” them by the names we have given them. So we are counting the names or interpretations, not the reality qua reality. So if we “call” it a leg, it’s a leg for our counting. Lincoln is disregarding process, how we know what we know. We categorize and classify according to givens, to assumptions, identifications.

      But there is nevertheless a point to his question and answer. He is pointing to a reality beyond names. Where we get into trouble is when we confuse the names with reality. “The finger pointing at the Moon is not the Moon” is an ancient comment on this.

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