Elon Musk takes over Twitter

Happy to indulge. I saw that this morning. He actually put it in terms of, "They are going to cause a severe recession."

Translation: The rate-hiking cycle has crushed the value of my Tesla stock, including a 20 percent or so drop in the last month. You need to do more of what blew it into a bubble and made me spectacularly wealthy on paper.

But yeah, if they actually do what they need to do to tame the inflation their hubris let loose, something slightly worse than a severe recession is going to be necessary. They likely won't see that through. ... but they are backed against a wall with a no-win problem of their own making.

There has been so much malinvestment (including people who piled into Tesla stock or into cryptocurrencies because of cute Elon Musk tweets) that still needs to default, on all of the mispriced debt it was predicated on. Musk will be fine, but a good chunk of his wealth on paper is the result of a monetary-induced bubble. He rode that bubble, borrowing and diluting the value of the stock of his company without being penalized due to the market distortions.

His only hope now is that they give up on trying to deal at all with the price inflation that is killing everyone, and choose to inflate away the debt levels they have spurred in the process (on the back of runaway inflation). And even then, he will be nominally more wealthy, but not any more wealthy in real terms.