Elon Musk's opinions on the CV response.

[Philip G.]

I used to not like Elon Musk.  But, his response in this interview has changed my mind a bit.  I really enjoyed the interview.  Here he is with Joe Rogan talking about CV and how "we" have gone too far. 

[LausTibiChriste]

Musk is a modern-day ponzi scheming douche.

The ONLY reason he is not in jail is because the whole system is so fraudulent a guy like him would never end up in jail since he's a ringleader.



I'm shorting $TSLA in the long term.

[Tales]

Yes, he is the modern version of John Law.  His company is a fraud and when it finally implodes it will be a new Enron or Lehman moment.  It is so blindingly obvious it disturbs me that people do not see what a scam his "business" is.

That being said, do not short any stocks, that is a recipe for a colossal disaster.  The Fed has expanded its balance sheet by near $3 trillion dollars since March and is set for another $3 trillion coming soon.  The stock market risks turning into the Venezuelan stock market - best performing stock market of its time, but not due to the success of Venezuela companies, but due to the implosion of the value of the currency.  Shorting anything now is extremely dangerous.  Even though Tesla's intrinsic value is negative, I wouldn't dare short it.

[Maximilian]

That being said, do not short any stocks, that is a recipe for a colossal disaster...   The stock market risks turning into the Venezuelan stock market - best performing stock market of its time, but not due to the success of Venezuela companies, but due to the implosion of the value of the currency.

Interesting point, but I wonder if it is accurate?

If I short a stock at $100, and then it goes to $200, but in the meantime there has been Venezuelan-type inflation, such that it takes $1,000 to buy what used to cost $100, then when I buy the stock back at $200, it really only costs me the equivalent of $20 at the original price.

This is my amateur analysis. Others here may have given this question more in-depth thought.

[Prayerful]

Yes, he is the modern version of John Law.  His company is a fraud and when it finally implodes it will be a new Enron or Lehman moment.  It is so blindingly obvious it disturbs me that people do not see what a scam his "business" is.

That being said, do not short any stocks, that is a recipe for a colossal disaster.  The Fed has expanded its balance sheet by near $3 trillion dollars since March and is set for another $3 trillion coming soon.  The stock market risks turning into the Venezuelan stock market - best performing stock market of its time, but not due to the success of Venezuela companies, but due to the implosion of the value of the currency.  Shorting anything now is extremely dangerous.  Even though Tesla's intrinsic value is negative, I wouldn't dare short it.

If I could pronounce his child's name, I'll do it, that is, I won't. Questioning the CV response is just a easy way to seem dangerous. Yet he's not the standard conman. Unlike John Law and his investment programme, the Tesla is an excellent car. I suppose investors hope Tesla will move away from wasteful practices like the inefficient body manufacture, and just mint money with a good product, insofar as it's possible these days.

[Tales]

His business is not a business.  It is a scam.  There have been $19 billion dollars of equity and a balance of $13 billion of debt (today) invested into Tesla.  With $32 billion dollars of capital I could make an electric car too.  In fact electric cars have been around for over a hundred years.  All Tesla did is make inefficiently overpowered ones that do not look overly ugly and subsidized it with worldwide government subsidies and Wall St funny money from the teat of the Federal Reserve and their counterfeiting operations.  His "business" has never made a profit, it has hemorrhaged $6 billion in losses, it is losing cash like its nobodies business, and his car sales plummet off a cliff once governments remove their subsidies (look at Tesla sales in HK once the government removed the subsidy to buy a Tesla... no more sales, closed sales office).

It is not a real business.  It is a scam from an expert salesman who read our society like a book, realized what fantasy they wanted to live out, and suckered these fools for everything they would give him.  People want to be "cool" and "eco friendly" - let's build inefficient electric supercars for them and get society to pay for it.  Not only has never a profit been made, but not a single cent of that $32 billion in invested capital has been returned to "investors." It isn't a business.  It isn't even a charity, unless producing electric supercars for aging dreamers funded by counterfeiting Wall St is a charitable act.

In any sane world his "business" would have ended operations ages ago.  But so long as counterfeit money from the Fed will keep flowing his way, he can keep the scam going.  And anytime the scam becomes endangered, he just comes up with a new scam to keep the fantasy of the society alive.  He almost assuredly is disgusted with how stupid everyone is for believing his scams as they become increasingly absurd, as if he is challenging us to see how far he can go.  Hyperloops across America, cars in outerspace, flamethrowers, tunnels built under LA for car hyperloops built from "The Boring Company", horrifically ugly Cybertrucks with shattered bulletproof glass.   And so on so forth.

He manipulates his stock price by torching the shorts by falsely claiming he is privatizing the company.  In any sane world he would already be in prison for that.  His "business" has gotten off scot-free from all the deaths caused by his criminally reckless driverless car systems.  In any sane world his "business" would be overflowing with liabilities from selling such a thing.  Similarly he has gotten off scot-free for his cars bursting into flames and killing their drivers.  Again, his company should be crippled under lawsuits from selling such dangerous products.

But he is protected because he is offering The Dream(tm) to a society which lives in delusions.  The aging generations want to live like the Jetsons and so he is offering to them electric cars, driverless cars, rocketships to space, hyperloops across the country, automated tunnels to carry your car (because apparently merely driving the car is no good, nor is even having a robot drive your car good enough, now we need immensely expensive underground tunnels with sleds to drag our cars automatically around [why even need the car then?]).  It's all fantasy.  The majority of society gave up on God long ago, and they turned to technology and the 'arc of progress' for their salvation (their new Ark).  Elon Musk is just the tech messiah offering to save people from their droll lives with a future of hyperloops and roadsters in space.

[Tales]

That being said, do not short any stocks, that is a recipe for a colossal disaster...   The stock market risks turning into the Venezuelan stock market - best performing stock market of its time, but not due to the success of Venezuela companies, but due to the implosion of the value of the currency.

Interesting point, but I wonder if it is accurate?

If I short a stock at $100, and then it goes to $200, but in the meantime there has been Venezuelan-type inflation, such that it takes $1,000 to buy what used to cost $100, then when I buy the stock back at $200, it really only costs me the equivalent of $20 at the original price.

This is my amateur analysis. Others here may have given this question more in-depth thought.

Max,

There are no guarantees on how it would play out in the future but generally one common theme throughout major inflations is that the worker's salary no where keeps up with the inflation.  So while prices of goods are running through the roof it is not necessarily the case that the worker's salary will keep pace.  It is almost guaranteed it will not.  I would not count on it being easy for a person to earn $1,000 in salary to pay off that short position even if $1,000 can only purchase what $20 used to be able to buy.  And it is also possible that the inflation is not that intense but only 5x and thus that $1,000 can only purchase what $200 used to, and now you really are underwater in terms of loss of purchasing power.

It would boil down to a cost-benefit analysis and that is of course notoriously difficult to do since so many assumptions are necessary.  To enter into such a position one would have to believe that Tesla's share price will go down from its current level and that there is not major inflation going on (otherwise the cash profits would be low value anyways).  This would have to be balanced against the risks of its share price going up (and thus getting torched) or having an inflationary market melt-up (and having to earn the new higher price through salary even though its purchasing power is not as great as it nominally appears).

In my opinion one would need to be very confident that Tesla is due for a major drop and that major inflation is not on the horizon.  This is essentially to bet against the Federal Reserve.  The Federal Reserve is working to keep all financial prices up and to nuke the value of the dollar.  I do not recommend fighting against the people who have the legal power to counterfeit trillions of dollars.  Instead, if one were to do something related to this all, I would recommend fighting on the side of the Fed by buying gold.

[LausTibiChriste]

Yes, he is the modern version of John Law.  His company is a fraud and when it finally implodes it will be a new Enron or Lehman moment.  It is so blindingly obvious it disturbs me that people do not see what a scam his "business" is.

That being said, do not short any stocks, that is a recipe for a colossal disaster.  The Fed has expanded its balance sheet by near $3 trillion dollars since March and is set for another $3 trillion coming soon.  The stock market risks turning into the Venezuelan stock market - best performing stock market of its time, but not due to the success of Venezuela companies, but due to the implosion of the value of the currency.  Shorting anything now is extremely dangerous.  Even though Tesla's intrinsic value is negative, I wouldn't dare short it.

Thanks for that David - I won't actually short, because no matter how obvious his scam is,$TSLA will still rise. Only in this day and age could the DOW set records on the same day as an unemployment record is set.

Starting at 1:39 is how I view things right now:

[clau clau]

The Enemy of my Enemy is not necessarily my friend.

[Heinrich]

If a running Tesla were to plunge into a pond, would all the fish fry? Serious question. Another for our resident Finance Math guy, Davis: you mentioned that Tesla sales would plunge if the government were to stop subsidies(in HK). How do government subsidies affect demand?

Thanks!

[Tales]

Heinrich,

Taking Hong Kong as an example, it used to offer a massive subsidy for electric cars.  For example, during the subsidy a Tesla Model S cost $800k HKD (a little over $100k USD).  With the subsidy expired it now costs $1.5 million HKD ($190k USD).

https://www.scmp.com/news/hong-kong/economy/article/2074016/decision-cut-hong-kongs-electric-vehicle-tax-waiver-backwards

The result of the removal of this subsidy is that in the year the subsidy was removed (starting April 1), from that point on till end of year only 32 cars were sold (however before the subsidy was removed there was a rush of buyers).  This is down from about 2,700 annual sales with the subsidy on.

https://www.scmp.com/news/hong-kong/economy/article/2131925/tesla-ready-put-brakes-hong-kong-business-if-city-refuses

I do not follow it closely since I do not live there but I think many EU countries offer subsidies as well.  If you subsidize something its just free money for the buyer (at the expense of everyone else) and just incentivizes over consumption of something people otherwise would not be willing to purchase.

[Heinrich]

Heinrich,

Taking Hong Kong as an example, it used to offer a massive subsidy for electric cars.  For example, during the subsidy a Tesla Model S cost $800k HKD (a little over $100k USD).  With the subsidy expired it now costs $1.5 million HKD ($190k USD).

https://www.scmp.com/news/hong-kong/economy/article/2074016/decision-cut-hong-kongs-electric-vehicle-tax-waiver-backwards

The result of the removal of this subsidy is that in the year the subsidy was removed (starting April 1), from that point on till end of year only 32 cars were sold (however before the subsidy was removed there was a rush of buyers).  This is down from about 2,700 annual sales with the subsidy on.

https://www.scmp.com/news/hong-kong/economy/article/2131925/tesla-ready-put-brakes-hong-kong-business-if-city-refuses

I do not follow it closely since I do not live there but I think many EU countries offer subsidies as well.  If you subsidize something its just free money for the buyer (at the expense of everyone else) and just incentivizes over consumption of something people otherwise would not be willing to purchase.

That makes perfect sense. I thought the subsidies were direct to the company, not the consumer. Either way, though, the floor price would be lower. I wasn't thinking that prices were affected, only that EM was pocketing the money or keeping his stock manipulated.

[Tales]

Heinrich,

All of these mega companies are receiving corporate subsidies in many diverse and hidden ways.   Tax rebates, land concessions, tax waivers, utility subsidies, and of course the biggest by far is Wall St. itself.  The Fed prints trillions which are handed to Wall St. banks which then flip it out to their favored corporations like Tesla.  When new money is printed the person who gets it first gets the benefit of the new money.  The people who get it dead last are the ones who got ripped off.  Hence why Wall St is perpetually rich, the corporations keep getting bigger and bigger, but your average American is struggling to pay the rent / mortgage and is up to his eyeballs in debt.

In this specific case I cited it was actually a subsidy to decrease the price in the showroom.  HK car prices are crazy high because government taxes make them 2x+ their American sticker price.  So this subsidy was just to reduce the government tax.  But that is lost tax revenue for the government that it would have otherwise gotten when said rich person would have splashed out on a $200k Mercedes rather than the subsidized half price Tesla.  That guy was going to buy a pricey car, but the government was just temporarily giving them pricey cars at half price.  With it gone who wants the exploding Teslas over a Mercedes?

Note:  I have no car, haven't had one for 11 years.  Drove on a short vacation for the first time in eons and it was like driving heaven, hah.