Chevy Volt a Failure - GM to Layoff 1,300

You never really address my "positioning of events" aside from posts like that, and attempts at putting me down.

However, my posts are plain factual. I am pointing out realities. Whenever I point to a realities you don't like, your attempt at dismissing me is to call it an "ideological belief." What I posted wasn't an ideology. You actually do live in the world (whether you call it Ragu world or just the world). ... whether you are attuned to what is around you or not. Say you didn't understand how the housing bubble was being inflated, for example, in the early 2000s, and you thought it was just wonderful that everyone could afford a home. ... someone pointing out the reality and how it was likely to end wasn't giving you ideology. They were the clear headed person in the room.

Tesla sold 22,000 cars last quarter. Down from 25,000 cars the previous quarter. Demand seems to have plateaued. His supply chain problem. ... not a mention of it until he disappointed. Every car it did sell? It lost money on it, as it always has. A lot of money. With that, until this morning, the company's stock price gave it a valuation greater than GM's -- which sold 10 million cars last year, and earned a profit. It's ludicrous. It's the definition of an asset in a speculative mania due to credit conditions having gone berzerk .

My long posts? That is because there are a gazillion things like that I can point to about how ridiculous this company is. ... I could do a gazillion words of factual posts that make the point. ... This as a poster child for the misallocation of capital you get when debt markets are destroyed by central planners intent on keeping credit flowing. It inevitably funds crazy things -- for as long as the cheap credit flows. Intil the inevitable bursting of the credit bubble. Just like the subprime borrower in 2004 or 2005 who had no verifiable income and were putting 0 down on $250K homes. ... without our debt markets being manipulated to prop up bigger and bigger debt bubbles that have gotten away from the morons who got us here, Tesla would never have been able to do the last 4 capital raises it needed to even stay around. It has burned through billions of dollars of money. ... based on cheap credit being way too available -- even to a carnival barker selling hype, not profitable products. That isn't ideology. It's factual.

 

Tesla sinks 20% from high—entering bear market territory—as concerns about 'bubble stock' mount

 

What does that even mean?

I posted the story as a follow up to my post earlier. ... you were the one who revived this thread. When I saw the thread pulled up to the first page, I thought for sure it was going to be because of Tesla's stock having gotten hit so hard the last few days. But nope.

Short sellers don't "ensure there are no bubbles in our market." Is that how the voices in your head are now reading my posts? Like the, "Crash. Just you wait and see," you seem to think is my point?

This is a stock for which 30 percent of the float was short WHILE fundamentals were being thrown out the window and it turned into a "drunks at a casino" stock. Short sellers got run over by this stock. They had zero ability to keep the speculative mania from happening -- that is what happens when you have 10s of billions of money being pumped into risk assets every month due to central bank quantitative easing -- as it has gone for the first half of this year.

Of course, I pointed that out in nearly every post.

You talk out of both sides of your mouth. Look several pages back. You were trying to goof on me every time I pointed out that fundamentally there was (and still isn't) nothing supporting the ridiculous dot-com bubble like valuation this was reaching. You weighed on one day to post a link about short sellers getting run over by the stock -- presumably because I was so silly for suggesting what I have.

Meanwhile, I never said anything about when, where or how the insanity was going to end. I kept saying the same kind of thing over and over again: "This is a giant bubble that won't be sustainable, but it is impossible to short because they can blow a bubble longer than I can I can stay solvent. I'm not Jim Chanos." I was correct then, as I am now, about both things: 1) This is at a ridiculous valuation, even with the pullback. The company loses money and burns through cash. It wouldn't even be in business without broken debt markets that were broken to keep the credit flowing, which has meant new capital infusions for Tesla at regular intervals with risk not part of the equation anymore 2) If bond yields keep spiking the way they may be starting to, and equities sell off the way they may be starting to, for all I know the BOJ will panic and start buying $100 billion more of assets every month, or Mario Draghi will walk everything back and announce that it is now QE infinity. ... and Tesla could go to $700 a share on the news. And it will still be an artificially-induced poster child for how capital gets misallocated when markets are manipulated by a handful of central planning authorities.

 

Central banking is a fad that will go away? What does that mean to you?

You really don't understand me. You type cartoonish things that don't make much sense with regard to me or with regard to anything and think you get it.

Since you seem to be informed by random articles from Bloomberg, here is an opinion piece from them from 2 or 3 days ago that encapsulates a lot of what I have had to say. ... even a few years ago when you had no fucking clue what I was talking about and were trying to ridicule me, because it hadn't yet showed up in your Bloomberg news digest.

Opinion | Keep Eye on Sovereign Debt for Next Minsky Moment

I have no idea if sovereign debt is going to precipitate what is going to have to be an inevitable and painful deleveraging that is going to have devastating consequences for the world. If you do like you always do, though, you'll miss the point and turn that link into me making some market timing prediction or me saying as gospel that a sovereign debt crisis will be what causes the necessary deleveraging that has to happen.It could be that -- because sovereign debt levels are beyond insanity now. But the global leverage that have been created is staggering and it permeates everything. Just as nobody knew that Iceland and Lehman and Bear Stearns would be the catalysts last time, there are many potential catalysts now -- so many things are overindebted. That piece pointed out the most recent numbers: "Global debt levels are up 276 percent in the last decade to $217 trillion, or 327 percent of GDP, according to the Institute of International Finance."

As that piece also points out that has all kinds of effects, including "a misallocation of economic resources." Or as it put it (and it might as well have been talking about Tesla), " made it easier for inefficient firms to survive, as in a rising tide that lifts all boats."

I'd love for you to read that piece with a fair eye. But I'm afraid you won't, because you are married to the cartoon you think encapsulates it and me. And you are really clueless.

By creating an atmosphere of survival of the unfittest (in fact, a company like Tesla gets rewarded as the highest valued car company in the world -- as it burns through money and barely produces cars), they put a giant debt overhang over the global economy. 2008 was the product of more than a decade of hamhanded manipulation that stole from the future for sugar highs that were done for short-sighted political reasons. Everyone was getting wealthier, home ownership was expanding. ... and it was phony. It was an experiment in price fixing to inflate bubbles that got brazen compared to what they dared to do in the past, and it ended predictably with a debt crisis. Rather than dealing with the consequences of a self-created debt mess, the response was to put a stranglehold on the debt markets for a decade now to force more debt (because naturally the solution to a debt problem is more debt) -- stealing even more from the future to stupidly kick the can down the road. Now, we are not talking about sugar highs anymore -- the global economy has been in permanent stagnation for the last decade. Except for the already rich who have gotten richer gambling on the risk assets that have been artificially inflated, because what they do exacerbates wealth inequality. Of if you consider millions of subprime borrowers with auto loans they can't afford or trillions of dollars of student loans that have put 20 year olds in massive debt before they ever get started, a sugar high, I guess you have that to show for it.

I have no idea what "fad" you are talking about. But yes, of course that kind of lunacy can't last. It's common sense. It should have never happened in the first place -- I am the guy who tried to point it out to you. But humans sometimes behave in incredibly stupid ways -- particularly when it comes to immediate gratification without regard to the predictable consequences down the line. Just like a moron with a credit card for the first time ends up paying eventually, there is cause and effect here. the ponzi-level of financing all of the cheap debt has created are exactly what Hyman Minsky was talking about -- which leads to instability. Among other things (and this is a small consequence), it made Tesla into a company valued at $65 billion. ... without profits and with an insane cash burn rate. The guy pointing that out isn't the guy who isn't rooted in reality.

 

Great piece yesterday by Christopher Whalen pointing out among other things what I did last week -- how what central banks have done to break our equity markets over the last few years relates to TSLA, which I said is the poster child for the malinvestment.

The Institutional Risk Analyst