Tesla Investor's General Macroeconomic / Market Discussion

[neroden]

Yeah, the Fed is very definitively inducing a big stock market drop now.

Still not clear to me whether they can actually cause a recession -- there's such a huge undercurrent of growth in the Great Energy Transition that it seems pretty hard to induce a recession. They might be able to blow up the debt-funded oil industry, which would be kind of nice.

I'm now expecting the general macroeconomic scare to weigh on TSLA through the end of the year. After that, the Q4 delivery report should come out.

 

[dmunjal]

Yeah, the Fed is very definitively inducing a big stock market drop now.

Still not clear to me whether they can actually cause a recession -- there's such a huge undercurrent of growth in the Great Energy Transition that it seems pretty hard to induce a recession. They might be able to blow up the debt-funded oil industry, which would be kind of nice.

They can easily cause a recession by just killing the housing and auto loan markets. Those are very interest rate sensitive. Both are big enough to swing GDP to the negative or at least significantly lower than before.

 

[neroden]

They can easily cause a recession by just killing the housing and auto loan markets. Those are very interest rate sensitive. Both are big enough to swing GDP to the negative or at least significantly lower than before.

How much is the housing market, and the borrowing-to-buy-houses market, driving things right now? I was under the impression it had never recovered to its 2007 levels, and that volumes remained low. (OK, I checked: it's above 2007 but well below 2006. New homes are below 1995 numbers.)

Auto loans I can see blowing up. They seem to be pretty overextended, and offered at absurdly low interest rates which are clearly subsidized by the manufacturer or dealer.

 

[dmunjal]

How much is the housing market, and the borrowing-to-buy-houses market, driving things right now? I was under the impression it had never recovered to its 2007 levels, and that volumes remained low. (OK, I checked: it's above 2007 but well below 2006. New homes are below 1995 numbers.)

Auto loans I can see blowing up. They seem to be pretty overextended, and offered at absurdly low interest rates which are clearly subsidized by the manufacturer or dealer.

Where I live, home prices are above their 2006 peaks and it's the case in much of the coasts. Flyover country never recovered. Even with tighter lending standards this time, housing is still very interest rate sensitive. Housing is also connected to other retail expenditures like new furniture, home improvement, etc. Not to mention HELOCs that drive other spending. Auto sales are down already because of higher interest rates. The manufacturers can't subsidize these anymore. No more 0% for 60 months. Just these two sectors can cause a recession dragging everything else down.

 

[defc0n]

Market overreacted way more than I expected. Macro technicals look like total garbage to me now. Nasdaq has 6600 and S&P now has 2500 as possible psychological bottoms but I wouldn't count on them. Good luck

 

[dmunjal]

Indeed. Trump has made enemies with people who understand science and are actually concerned with the health of our environment. I don't know if pulling out of Syria is good or not, (though I'm inclined to think it is), but a single potentially good decision does not negate Trump's attempts to cater to established old school industries and his blatant disregard for the truth.

Re: Syria

Tell me this isn't establishment propaganda? When did CNN start carrying water for the military industrial complex? I thought liberals were anti-war? Of course, Trump is definitely upsetting the establishment.

 

[anthonyj]

I'm not anti-Trump but I have to say he dun goofed with his choice

 

[dmunjal]

I'm not anti-Trump but I have to say he dun goofed with his choice
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Yeah, Bernanke would be easing under these conditions.

 

[Intl Professor]

Today is a good example of what I'm describing this time with regards to military policy.

Trump says he's pulling out of Syria.

Rand Paul thinks it's a good idea.

Lindsey Graham thinks it's a bad idea.

I have no idea if pulling out of Syria is a good thing or not but I do know that Lindsey Graham (like McCain) is a warmongering neocon and if he's against it, I know it's a good decision.

You can tell a lot about someone by the enemies he makes.

Apparently our military did not plan for this which means the last set of troops to withdraw are now in jeopardy. (Might have been smarter to withdraw almost all quietly and then announce the withdrawal of the last remaining troops. Might have been avoided by the normal process of consulting with our military.) Further, this leaves our Kurd allies in an untenable position. Aside from a distracting headline since his first national security advisor was a lobbyist for Turkey, this is another move probably suggested by one of Trump's autocratic buddies, Erdogan when they talked recently.

Also Trump's stated rationale about ISIS is not factually correct. Assuming one cares about facts.

As military commanders our recent Presidents are not tops. Bush Two and Trump are near the bottom in this measure. Compare to Eisenhower for example who was chosen by FDR for his political smarts.

So to women, minorities, immigrants, Wall Street (which hates tariffs), young people, our NATO allies, border governments, Trump is now making enemies of elements in our military. The man has a voracious appetite for enemies.

 

[dmunjal]

Apparently our military did not plan for this which means the last set of troops to withdraw are now in jeopardy. (Might have been smarter to withdraw almost all quietly and then announce the withdrawal of the last remaining troops. Might have been avoided by the normal process of consulting with our military.) Further, this leaves our Kurd allies in an untenable position. Aside from a distracting headline since his first national security advisor was a lobbyist for Turkey, this is another move probably suggested by one of Trump's autocratic buddies, Erdogan when they talked recently.

Also Trump's stated rationale about ISIS is not factually correct. Assuming one cares about facts.

As military commanders our recent Presidents are not tops. Bush Two and Trump are near the bottom in this measure. Compare to Eisenhower for example who was chosen by FDR for his political smarts.

So to women, minorities, immigrants, Wall Street (which hates tariffs), young people, our NATO allies, border governments, Trump is now making enemies of elements in our military. The man has a voracious appetite for enemies.

The last time Trump said he was considering getting out of Syria, Assad coincidentally gassed his own people 5 days later.

April 4th, 2018
Trump Drops Push for Immediate Withdrawal of Troops From Syria Trump Drops Push for Immediate Withdrawal of Troops From Syria

April 9th, 2018
Syria's Assad picked the wrong time to launch a chemical attack on civilians

I think he learned his lesson and just said we're out in 30 days.

 

[replicant]

Tesla has a pretty aggressive program checking their material sources and those of their suppliers. They don't use DRC cobalt.

What's being made public though? I'd love to point people who critize Tesla to a link but can't find a good one.

Idem for battery material recycling.

 

[neroden]

What's being made public though? I'd love to point people who critize Tesla to a link but can't find a good one.

Tesla is reported to get their cobalt from the Phillipines. The company is Sumitomo Inc.

Here's the best link I found.

Tesla Hopes to Use 'Close to Zero' Cobalt for Its Batteries in the Near Future

Now, Duarte's an awful murderous dictator, but you can't have everything.

 

[jbcarioca]

...

Yukon Huang has been influencing my thoughts on the US-China relationship. I highly recommend this video. China will clearly play an important role in Tesla's future.

...

This is one of the most important posts I have yet seen. I was vaguely aware of him from a friend who had studied economics at Princeton concentrating on eastern Europe, principally Poland and Russia. My friend mentioned that Yukon Huang had an unusual ability to understand and resolve seemingly irreconcilable conflicting information. I filed that away and almost forgot about it until your post.

Now I am engrossed in his 2017 book, 'Cracking the China Conundrum'. Suddenly I am learning things I should have recognized during my own dealings with Chinese business, which began in 1968 and became much more involved in 1978 and thereafter. From my personal point of view the greatest insights are most often those that make me react with "...of course, I always knew that". Obviously that thought is complete incorrect.

Thank you very much Johnny Ma for introducing me to great insights.

Just imagine how much better our world could be were world leaders in the US, EU, and a few others were using his insights to guide their policies.
Tariffs would not be imposed. Trade negotiations would be based on an economically balanced view of what constitutes subsidy and what benefits those confer.

 

[defc0n]

I’m short the S&P now via SH with my play money trading account so its time for an economic recovery now right?

 

[Dig deeper]

How much is the housing market, and the borrowing-to-buy-houses market, driving things right now? I was under the impression it had never recovered to its 2007 levels, and that volumes remained low. (OK, I checked: it's above 2007 but well below 2006. New homes are below 1995 numbers.)

Auto loans I can see blowing up. They seem to be pretty overextended, and offered at absurdly low interest rates which are clearly subsidized by the manufacturer or dealer.

Do you see any glaring weakness in any of the captive auto finance arms? I'm looking at Ford Motor Credit Company.

Trying to find out how much penetration, Tesla would need to achieve (with their pickup) into Ford's pickup (the only thing keeping them afloat) market share in order to force them into bankruptcy. Higher rates, oil's demise, and no EV product suggest that the next 5 years will not be kind to them.

 

[dmvevguy]

I’m short the S&P now via SH with my play money trading account so its time for an economic recovery now right?

I did that last week with TVIX and did well. Kinda don't like shorting period, but I bought in AAPL recently at a loss and trying to hedge.

 

[Intl Professor]

The last time Trump said he was considering getting out of Syria, Assad coincidentally gassed his own people 5 days later.

April 4th, 2018
Trump Drops Push for Immediate Withdrawal of Troops From Syria Trump Drops Push for Immediate Withdrawal of Troops From Syria

April 9th, 2018
Syria's Assad picked the wrong time to launch a chemical attack on civilians

I think he learned his lesson and just said we're out in 30 days.

The last sure protection against Trump's military folly has announced his resignation.

Read Jim Mattis’s Letter to Trump: Full Text

He clearly intimate's his main disagreement with the commander in chief is on the importance of allies. Countries that come to mind are the 69 or so which joined us in alliance against ISIS. One can safely assume none of them were consulted about his decision. The twitterer in chief cannot stomach opposition.

Eisenhower's approach to similar nuttiness in foreign policy was masterful when Allen Dulles and Admiral Radford advised use of nuclear weapons to assist the French under siege at Dien Bien Phu. Consult with Congress, Ike said. Both Majority LeaderJohnson and Speaker Rayburn said "consult with our allies," so the two went off to London to consul with Clement Attlee, then PM. Attlee scortched them, having been warned by Ike. Of what use are nuclear weapons in fighting jungle warfare? Brings to mind memories of a meeting at the Pentagon where Tillerson first remarked, the president is a moron, when he asked "what use are nuclear weapons when you can never use them?" Fortunately for him, the president is now unshackled on their use.

 

[dmunjal]

The last sure protection against Trump's military folly has announced his resignation.

Read Jim Mattis’s Letter to Trump: Full Text

He clearly intimate's his main disagreement with the commander in chief is on the importance of allies. Countries that come to mind are the 69 or so which joined us in alliance against ISIS.

It sounds like Mattis wanted to stay in Syria and Trump didn't.

Has there ever been a general who didn't advocate for more war?

 

[dmunjal]

And now Afghanistan.

U.S. to Withdraw About 7,000 Troops From Afghanistan, Officials Say U.S. to Withdraw About 7,000 Troops From Afghanistan, Officials Say

Why is this a bad thing even though the communication was handled poorly?

Afghanistan war was longer than Vietnam.

 

[JRP3]

Of course, Trump is definitely upsetting the establishment.

Parts of it, while supporting others.