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Tesla Investor's General Macroeconomic / Market Discussion
- Thread starter FluxCap
- Start date
Great content in this thread lately, thanks to all for contributing.
To reciprocate: a lot of professional newsletters and investment advice sources cost considerable amounts of money to subscribe to and I cannot provide those for free, but some are free and I thought I might share those with some of you who may be interested.
First, I highly recommend subscribing to the free Macroeconomic e-mail newsletter The Daily Shot, which tends towards the gloom and doom more often than not but provides a very incisive view of daily macroeconomic trends and forces with charts. And it's free. Subscribe here.
Second on a more recent note, here are some very good reads from top investment research firm GMO in their quarterly letter, found here:
GMO's 2Q 2015 Letter, which contains Ben Inker's "Price-Insensitive Sellers," and Jeremy Grantham's "Ten Quick Topics To Ruin Your Summer"
Enjoy and happy trading.
To reciprocate: a lot of professional newsletters and investment advice sources cost considerable amounts of money to subscribe to and I cannot provide those for free, but some are free and I thought I might share those with some of you who may be interested.
First, I highly recommend subscribing to the free Macroeconomic e-mail newsletter The Daily Shot, which tends towards the gloom and doom more often than not but provides a very incisive view of daily macroeconomic trends and forces with charts. And it's free. Subscribe here.
Second on a more recent note, here are some very good reads from top investment research firm GMO in their quarterly letter, found here:
GMO's 2Q 2015 Letter, which contains Ben Inker's "Price-Insensitive Sellers," and Jeremy Grantham's "Ten Quick Topics To Ruin Your Summer"
Enjoy and happy trading.
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
This is a strong clash between the wish for a truly free market economy (a la the US) but at the same time tight grips on what's allowed and not.
Short selling in it self is a vital and important part of a functioning stock market. It is of course malicious if coupled with false information or other forms of illegal market manipulation, but no more than a classic dump n' dump scheme.
To think you can forbid short selling and guarantee a market that goes up infinitely is of course the prescription for a bubble, and is a great example of how the Chinese authorities still have one foot in the old times (of dictatorship like control) and one foot in the alluring new world of free markets and capitalism.
The Blue Owl
Endangerous Herbivore
Thanks for posting it. The second entry in particular is required reading.
I also found it incredibly depressing. I am an optimist at heart, but I am also driven by evidence, and as much as I would like to think that everything will work out in the end, sometimes I just can't see it anymore. Here is the closing paragraph:
Jeremy Grantham said:
OK macro TMC friends: China reporting on Tuesday about their economic health. Anyone taking a defensive position on the possibility that this might take down a number of our US based company share prices (ex: TSLA)?
My opinion. will give us a dip in TSLA before ER/CC......
My opinion. will give us a dip in TSLA before ER/CC......
Macro trends are more likely to have long term impact, so I would be surprised if there are any shocks.
Even if there were shocking bad news to report, it would be surprising to hear about numbers that are too bad. When reporting bodies are accountable to no one, they are likely to cherry pick data and report whatever people need to hear.
Slow down in China has the highest impact on emerging or developing economies. These countries' growth were boosted by the rapid expansion of Chinese demand for commodities. That demand has weakened, as evidenced by falling commodity prices. Australia is impacted by low iron ore prices.
IMF cut its forecast for world growth from 3.5% to 3.3%. That is sluggish. I will be happy with that.
US Fed has quite important role to play in the unfolding of the world's economic future. Many developing countries have their currencies pegged to US$. Many countries have debts denominated in US$. Now is not the good time for these countries to face stronger $. Fed has to consider the impact not only inside US but on the sluggish world scene when they make a decision on rates.
Similar scenario in Eurozone (healthy core and struggling peripheries) demonstrated what happens when rates that affect multiple countries are controlled with the interest of only the dominant player in mind. There has to be a balance of interests taken into consideration when making a decision. If Fed acts based only on US domestic situation and raises the rates, many other countries growth might be negatively impacted with such a move. The sluggish world eventually translates into sluggish sales for US businesses.
Pegged currencies
Interesting article in The Economist, Switzerland's Central Bank Makes a Massive Loss
For years, Swiss Central Bank maintained franc/euro peg. The mechanism od pegging local currency to some foreign currency involves printing local currency (francs in this case) and buying target currency (euros) on the open market, in quantities required to maintain the desired peg ratio. Thus SCB ended up with significant reserves in euros.
Pegging is done to make trade easier between the local area and the target area. Countries maintain its export competitiveness by pegging their currency to their target market.
SCB removed the euro peg recently causing instant frank appreciation in relation to euro. SCB euro reserves devalued accordingly. That causes large accounting losses for the SCB.
More significant effect of removing the peg is shrinking of Swiss economy due to franc appreciation and corresponding loss of export competitiveness.
Interesting article in The Economist, Switzerland's Central Bank Makes a Massive Loss
For years, Swiss Central Bank maintained franc/euro peg. The mechanism od pegging local currency to some foreign currency involves printing local currency (francs in this case) and buying target currency (euros) on the open market, in quantities required to maintain the desired peg ratio. Thus SCB ended up with significant reserves in euros.
Pegging is done to make trade easier between the local area and the target area. Countries maintain its export competitiveness by pegging their currency to their target market.
SCB removed the euro peg recently causing instant frank appreciation in relation to euro. SCB euro reserves devalued accordingly. That causes large accounting losses for the SCB.
More significant effect of removing the peg is shrinking of Swiss economy due to franc appreciation and corresponding loss of export competitiveness.
The Swiss knew they were going to take a loss when they made that decision. It was more about not throwing more good money after bad. The Swiss will be fine.
It is not a real loss, just accounting loss. SCB's cost to print money is the only cost incurred.
The real loss is a loss of competitiveness. That might hit their exports and tourism. Imports might increase, hurting local producers. Having said that, I agree that they will be ok. It might take much more than a bit of a trade imbalance to disrupt such a stable country.
China exports -8.3% & imports -8.1% in July
China Exports Fall as Lower Demand, Strong Yuan Hurt Growth - Bloomberg Business
http://www.zerohedge.com/news/2015-...and-why-yuan-devaluation-now-just-matter-time
China Exports Fall as Lower Demand, Strong Yuan Hurt Growth - Bloomberg Business
http://www.zerohedge.com/news/2015-...and-why-yuan-devaluation-now-just-matter-time
China devalues yuan
China's Central Bank (PBOC) decides to devalue yuan
PBOC claims that this is a one-off fix, devaluing yuan for approx. 2%. I take these statements and reports with a grain of salt.
This move is likely to boost Chinese exports, which fell in July approx. 8% from a year earlier. The exports to EU zone fell 12% due to falling euro.
Consequently to this move, other regional currencies dropped in value against USD.
China's economic growth was 7% in the last quarter if the numbers can be trusted. Weak property market, soft domestic demand and falling exports are cited as the main contributors to the slowing pace of growth.
China's Central Bank (PBOC) decides to devalue yuan
PBOC claims that this is a one-off fix, devaluing yuan for approx. 2%. I take these statements and reports with a grain of salt.
This move is likely to boost Chinese exports, which fell in July approx. 8% from a year earlier. The exports to EU zone fell 12% due to falling euro.
Consequently to this move, other regional currencies dropped in value against USD.
China's economic growth was 7% in the last quarter if the numbers can be trusted. Weak property market, soft domestic demand and falling exports are cited as the main contributors to the slowing pace of growth.
InTheShadows
Active Member
This was posted to FB by a good friend of mine. Does anyone else here have the same sentiment about this supposed accumulation of physical gold by major banks?
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Very interesting indeed Shadows. Of course they're playing dirty, like they always do (telling clients and small time traders to trade in one direction while they do the opposite quietly). It's always been this way. Not sure I'd read a big "the market soon comes crashing down into it though". Gold has always been a go-to investment in uncertain times (uncertain as in unclear where we're heading, not necessarily a crash is coming).
The Sjuggerud: I’ll Be Buying Gold And Gold Miners Soon…
More Surprises In The Physical Gold Market Reaffirm Greshams Law | Investment Research Dynamics
The Sjuggerud: I’ll Be Buying Gold And Gold Miners Soon…
More Surprises In The Physical Gold Market Reaffirm Greshams Law | Investment Research Dynamics
Well, Shadows, if the FB poster's claim is as accurate as his/her "Rinse, Lather, Repeat", then I'd not be too concerned. Pretty hard to lather after you've rinsed, you know.
On the other hand, any warm and cuddly feelings I have towards Goldman vanished many decades ago, so I put past them.....absolutely nothing.
On the other hand, any warm and cuddly feelings I have towards Goldman vanished many decades ago, so I put past them.....absolutely nothing.
Your friend starts with "I discovered...". How did he discover this? Is he qualified to have discovered this for himself? Customs official, auditor, something like this? Or did he "discover" it from some spam email or newsletter or something? Personally I'd discount it as valueless speculation.
(Which is not to say that I would trust the banks NOT to do such a thing.)
(Which is not to say that I would trust the banks NOT to do such a thing.)
Related:
The 'Big Long' - Goldman Sachs And HSBC Buy 7.1 Tons Of Physical Gold | Seeking Alpha
The language in this Seeking Alpha piece is very similar to the post made by Theshadows' friend:
Theshadows...was this piece written by your friend or is he merely parroting what he's read on Seeking Alpha?
The 'Big Long' - Goldman Sachs And HSBC Buy 7.1 Tons Of Physical Gold | Seeking Alpha
The language in this Seeking Alpha piece is very similar to the post made by Theshadows' friend:
Theshadows...was this piece written by your friend or is he merely parroting what he's read on Seeking Alpha?
To respond to the current talk of Goldman Sachs, I haven't paid a lot of attention to the gold topic lately so I can't speak to that, but just a general thought about Seeking Alpha; just like TMC only on steroids, it's pretty easy to find people on Seeking Alpha that talk as if they have inside and in depth knowledge and write about things as if they are important hard hitting exposes when in fact they don't understand some piece of nomenclature or accounting and have gone down the rabbit hole drawing conclusions that are based on an earlier misunderstanding. Or sometimes the author just discovered something groundbreaking to them, but which has been known about for a long time. Moreover some of the authors might have that inside knowledge and twist it in the direction of their own bias or vested interest consciously or not (remember John Peterson?). That said there are certainly articles on Seeking Alpha from unlikely authors with few readers that draw great insight, so I guess what I'm saying is just in general make sure your truth detector is on while weeding through SA and any online article for that matter. SA is a great tree of knowledge but you still have to lookout for wormy apples.
On another note, a macro Tesla thing that I wonder about being overlooked is regarding the model 3. Yes it's important to make it affordable and high quality, but how fast demand grows will still be effected a lot on whether filling with kwh at home is cheaper than gas at the pump. I suppose this will differ a lot from place to place but I wonder if there is an average gas price that will serve as a tipping point, assuming that electricity prices are a little more stable than oil has been? Kind of a moving target I guess.
On another note, a macro Tesla thing that I wonder about being overlooked is regarding the model 3. Yes it's important to make it affordable and high quality, but how fast demand grows will still be effected a lot on whether filling with kwh at home is cheaper than gas at the pump. I suppose this will differ a lot from place to place but I wonder if there is an average gas price that will serve as a tipping point, assuming that electricity prices are a little more stable than oil has been? Kind of a moving target I guess.
Jonathan Hewitt
Active Member
If the Model III is as good as the BMW 3 series (comparable ICE) then they will not be able to meet demand for quite some time no matter what gas or electricity costs. I would keep my Model S even if gasoline were free just because it's that awesome of a car. The only negative in my mind was how much I had to pay for it. I think saving money on gas only helps it become more affordable for more people but even without these savings 500,000 BMW 3 series were sold last year. BMW 3 Series - Wikipedia, the free encyclopedia
Yeah I concur, and I didn't mean to say that they would have a demand issue, it's probably going to be a better car than a 3 series so that alone is maybe the true tipping point. I just meant that when it becomes not only a great car, but an actual value proposition too, that's going to drive the huge macro demand from all the people that care more about saving money and time than having a great car, not to mention it's going to make that 328i engine pretty much obsolete. The value proposition where it's just plain cheaper than a gas car is a huge macro lever, and demand should easily trump the 3 series.
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