Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

Tesla Investor's General Macroeconomic / Market Discussion

This site may earn commission on affiliate links.
@ValueAnalyst I am grateful for your wisdom on this board, as well as every single one of your articles including the one yesterday that hit prime time around noon, and hope you continue to share. I need to hit you up on macro b/c I feel uneasy with NK at the moment.

Anyways, thank you for sharing your thoughts and please do so more!

@dmvevguy - the way I think about NK:

Politically and globally very dangerous and has a potential to get out of hand quickly.

Based on what I've read/heard from people I trust on the subject, my understanding is that NK can hit SK and potentially the West Coast U.S.

In other words, the risk to Tesla is (a) supply chain disruption in SK and (2) potentially worse in the West Coast U.S.

I see the probability of this risk materializing in the next twelve months as less than 10-15%, so not much, but something to keep in sight.

NK-related volatility, like other macro risks, is a major risk for LEAPs, but fairly negligible for shareholders who can sit out short-term volatility.

This is another reason why I stick mostly with Tesla stock, complemented by varying level of margin depending on discount to intrinsic value.

Hope this helps.
 
Goldman's analysis on S&P 500 Earnings (and by extension market) from the various Tax Reform pieces

DLTKobwWkAAkEro.jpg
 
@dmvevguy - the way I think about NK:

Politically and globally very dangerous and has a potential to get out of hand quickly.

Based on what I've read/heard from people I trust on the subject, my understanding is that NK can hit SK and potentially the West Coast U.S.

In other words, the risk to Tesla is (a) supply chain disruption in SK and (2) potentially worse in the West Coast U.S.

I see the probability of this risk materializing in the next twelve months as less than 10-15%, so not much, but something to keep in sight.

NK-related volatility, like other macro risks, is a major risk for LEAPs, but fairly negligible for shareholders who can sit out short-term volatility.

This is another reason why I stick mostly with Tesla stock, complemented by varying level of margin depending on discount to intrinsic value.

Hope this helps.
Thanks for the nice link to a summary of conflict Trump has with Tillerson.

FWIW the tweets undercutting diplomacy are very worrisome to me, especially combined with a comment Trump has reported to have made (sorry no citation) why nuclear weapons if you never use them? This displayed ignorance of decades of strategic thinking about the weapon. I don't think he had in mind abolishing them, although I think that would be a good idea. I'm not so concerned about first use of such weapons down the chain of command, but playing chicken with another bully using real arms and their deployment while jockeying for position exaggerates the possibility of accidents, as you point out. Especially worrisome is an accident by the other side.

(Decades ago when we had a plane crash and only the last of six fail-safe weapons worked as designed, I think it was in the Kennedy Administration, we shared fail-safe technology with the Russians shortly thereafter.)

As I keep pointing out one of Aristotle's maxims for avoiding revolution was "bring distant dangers near." I think at some point the oafish comments of our commander in chief will provoke even more domestic opposition while more segments of the population are insulted thus putting him under pressure to seek war as the ultimate diversion. I'm sure the military are prepared to balk, but then there is Kim.

Bullies are accustomed to getting their ways. I wonder how much experience, scientific or anecdotal, there is about how bullies relate to each other in conflict. In cooperation, we have some evidence in the Trump/Putin symbiosis which is likely a negative feedback mechanism. But the NK conflict as it is playing out in the Kim/Trump symbiosis has all the earmarks of positive feedback, like augmenting steering while driving in reverse. (The recent TV series documenting Vietnam is a wonderful recent reminder.) Reversing the threat of nuclear weapons, or any war, is hard to do once started. We have a lot of experience with that in history. Thus, statistically, the future seems grim.

Edit: At some point the Cabinet should remove Trump from office, at least temporarily, since impeachment proceedings are so slow and dependent on popular support until Congress is assured of success. Tillerson should stay for now but resign publicly, loudly, and with logic and empirical proof of his convictions. That might affect our Bully Chief's tenor if not his tenure.
 
Last edited:
@dmvevguy - the way I think about NK:

Politically and globally very dangerous and has a potential to get out of hand quickly.

Based on what I've read/heard from people I trust on the subject, my understanding is that NK can hit SK and potentially the West Coast U.S.

In other words, the risk to Tesla is (a) supply chain disruption in SK and (2) potentially worse in the West Coast U.S.

I see the probability of this risk materializing in the next twelve months as less than 10-15%, so not much, but something to keep in sight.

NK-related volatility, like other macro risks, is a major risk for LEAPs, but fairly negligible for shareholders who can sit out short-term volatility.

This is another reason why I stick mostly with Tesla stock, complemented by varying level of margin depending on discount to intrinsic value.

Hope this helps.
Interesting...I tend to agree that risk is low, but it's still a risk and unpredictable. Last news I saw was they were mobilizing some weapons in NK.

US unfortunately can't do much in this situation, but I am just weary and getting nervous as October is highly volatile generally and just thinking if NK does something stupid right now will be very bad for Tesla esp with Model 3 release.

That def is scary if they can reach West Coast USA right now...thx for the perspective. I asked you a similar question about a good 1-1.5 months ago where you were thinking 2H19 for a recession / downturn so this still falls inline with that prediction.
 
Biometric IDs are just plain a mistake. They've actually proved highly spoofable, but even if they weren't, they don't solve the real problem, which is that for most things, *identification is not actually what you want*, what you want is proof of appropriate authorization, which is *not the same thing at all*.

All the best security breaches were done by insiders. They were who they said they were, they just shouldn't have been on the authorization list ("any more" in most cases).

The father of a friend of mine was a security guard. The CEO of the company he was guarding showed up. The CEO did not have the right ID and papers to prove that he was authorized to enter the building. My friend's father didn't let him in. *This is correct*. (How does the security guard know that the Board hasn't fired the CEO? He doesn't.) But it's very rare behavior... security is counterintuitive to most people.
 
  • Like
Reactions: zdriver
It is hard to connect much of today's political news to effects on the macro economy. However it is my belief the uncertainties inserted into our politics these days on a variety of topics, say the threats to N. Korea, and others undermine confidence in the state of our current government. That uncertainty and lack of confidence will have ripple effects elsewhere, ultimately affecting the macro-economy as well. Preoccupation with gun violence will delay consideration of tax reform, for example, or increasing the medicare eligibility to 67 making possible more tax cuts. (Just trying to cover my rear with the mods.)

In light of the recent disaster in Las Vegas there is likely to be debate over what should be done. Probably the gun silencer bill is dead—certainly it is postponed—and there is talk even from the NRA of making sale of bump stock attachments illegal.

Any further action, even legislation to make it more difficult for recognized loonies to get guns, is unlikely to happen for the 115th Congress has already taken action easing restrictions by the Federal Government on access. Many news accounts were published last February about this.

Rachel Maddow raised the matter again on her show last night.

Trump signed law to help mentally ill get guns

She refers to this Joint Resolution of Congress, note it was approved by both Houses and Trump (short):

Text - H.J.Res.40 - 115th Congress (2017-2018): Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Social Security Administration relating to Implementation of the NICS Improvement Amendments Act of 2007.

Here is what is amended by “such rule shall have no force or effect.” (long, but you get the gist).

Federal Register :: Implementation of the NICS Improvement Amendments Act of 2007
 
Last edited:
Rates came back down later, which I thought was quite odd after today's 4.2% print. How do you interpret today's macro data?
Yeah good ? VA, I saw that to.
It’s a tough nut to crack right now, but my current eval is this is all noise currently. That’s why I haven’t really commented or changed investment positions. This is part of a transition currently in macro world. The equity market is topping out, producing demand for bonds. The bond market is ‘trapped’ - every dip in Bonds (higher yield) is purchased as a hedge against current equity valuations and world (US) uncertainty. Countered with knowledge that Fed will most certainly be raising rates in Dec, lowering current bond purchase values, thereby limiting their purchase (trapped).
Bottom line, it’s all noise currently as we transition from bull market, low rates,
to flat line consolidation while the Fed normalizes rates against growth and inflation (coupled with quantitative tightening).

This will last for the upcoming months and current underlying economy is too strong to induce major corrections in equity markets. It’s an extremely awkward period both locally and historically.

Outside TrumpDump, the biggest risk is consensus the tax cut reform is an elusive hoax chopping the market. Otherwise underlying fundamentals look strong and this noise should be monitored but not induce anything but full tesla investment (none or minamally leveraged).

We were very close to moving to macro bear a few weeks back (Orange alert), but yield curves and fed went dovish and mitigated. So expect volatility now to continue replacing bull, but not yet going bear.

Watch for tax reform sentiment short-medium term. And watch bond rate - yield curve for early pricing in recessive pull back. I think the market will price in bear-recessive sometime next year (about 6 months prior to actual economic pullback). In other words it’s going to be produced by macro events, valuations against flattening earnings, and market reaction to same, rather than actual economic activity.

Yellow watch continues, stay fully invested in TSLA is my course and 2 pennies.
 
  • Like
Reactions: Ocelot and TMSE
Yeah good ? VA, I saw that to.
It’s a tough nut to crack right now, but my current eval is this is all noise currently. That’s why I haven’t really commented or changed investment positions. This is part of a transition currently in macro world. The equity market is topping out, producing demand for bonds. The bond market is ‘trapped’ - every dip in Bonds (higher yield) is purchased as a hedge against current equity valuations and world (US) uncertainty. Countered with knowledge that Fed will most certainly be raising rates in Dec, lowering current bond purchase values, thereby limiting their purchase (trapped).
Bottom line, it’s all noise currently as we transition from bull market, low rates,
to flat line consolidation while the Fed normalizes rates against growth and inflation (coupled with quantitative tightening).

This will last for the upcoming months and current underlying economy is too strong to induce major corrections in equity markets. It’s an extremely awkward period both locally and historically.

Outside TrumpDump, the biggest risk is consensus the tax cut reform is an elusive hoax chopping the market. Otherwise underlying fundamentals look strong and this noise should be monitored but not induce anything but full tesla investment (none or minamally leveraged).

We were very close to moving to macro bear a few weeks back (Orange alert), but yield curves and fed went dovish and mitigated. So expect volatility now to continue replacing bull, but not yet going bear.

Watch for tax reform sentiment short-medium term. And watch bond rate - yield curve for early pricing in recessive pull back. I think the market will price in bear-recessive sometime next year (about 6 months prior to actual economic pullback). In other words it’s going to be produced by macro events, valuations against flattening earnings, and market reaction to same, rather than actual economic activity.

Yellow watch continues, stay fully invested in TSLA is my course and 2 pennies.

I agree with your interpreteration. Interesting how similarly we seem to be looking at the facts.

I'll note one thing: TSLA has some correlation, although weakening, to energy equities, which tend to do well even after that 6-month period that you mentioned leading up to a recession. So even if the overall equity market fundamentals weaken, I think we'll see TSLA rising up to the recession start.
 
watch for continued pressure from labor shortages -
both in wage increases but more importantly in competitive growth prospects for US companies -
This of course massively misaligned with current policy of exporting immigrants and limiting new immigration?
[alignment with Tesla human-less automation push]
DLyauHkVAAEgfBQ.jpg
 
  • Like
Reactions: ValueAnalyst
There's your problem right there. You went to CNN for "news". Can't trust any of them.

Since high school when I first wondered who determined what was news I have been concerned about news filtering. (Our daily newspaper was the New York Times.) Decades later as a teacher I defined politics as the struggle for control over people’s picture of reality. We certainly see that in FUD, other communication and resultant volatility in markets. I think it was Murray Chotiner, Nixon's advisor, who said "If you have them by the balls, their hearts and minds will soon follow." I believe the reverse is true.

For years critics have faulted our press for being “stenographers with amnesia,” Tom Wickers, or over worked, ill paid, and lazy. My friend and colleague is a well-recognized scholar of journalism. He and a former student of mine hit the big time with "Reporting Iran the Shah's Way," the cover story in Columbia Journalism Review, Jan./Feb. 1979, just as the Shah hit the fan, so to speak. Their UC press book is entitled: The U.S. Press and Iran: Foreign Policy and the Journalism of Deference, where the duo argued the mainstream press always favors whatever U.S. administration is in power. A lot of evidence proves the point without reading the book. JFK famously apologized to the New York Times for suppressing on his watch a report about planning for the Bay of Pigs invasion. “I wish you had ignored us and printed it.” A more devastating example is how the Times, Post, and others completely missed Dick Cheney’s dumb arguments in justification of Sadam’s weapons program in advance of the Iraq War. The Knight-Ridder service, on the other hand, uncovered almost all of the shenanigans leading up to the war. Their reporters took the time to do due diligence.

I think the wisest short qualification of your position is the notion of “uncritical acceptance” of news reporting. That interpretation is worthy of respect. Further, it is quite clear to me the mainstream media is not deferring to the administration now, except for Fox News, which says a lot. I hope more Americans pick up on reporting of direct quotes of Administration pronouncements. There is a clear way, then, if you observe carefully that the administration lies constantly, personalizes any slight, and is slowly becoming unhinged from a sense of reality. I think Senator Corker is right and his concerns should be taken seriously. Much of the press is just providing evidence for his conclusions.

Please do not tune out because the news is bad. We need good journalism and that means the press will always be pricks in the side of government. I believe it is Richard Reeves, a reporter, who said: “cynicism is the rust of democracy.”

Edit: Fixed unnecessary word.
 
Last edited:
I'll give you a story not being reported: there is a complaint from the Mayor of San Juan, Puerto Rico, about FEMA being more concerned about filling out paperwork than delivering product, amid at least one clear report on CNN that they could go inland on undamaged roads only to find FEMA had appeared only to ask for paperwork. After their first report, FEMA showed up again to ask the mayor there to list his priorities. Still no delivery of needed water, food, and other supplies in CNN's followup.

Was this a problem with Houston and Florida? If not, why not?

Edit: There may be a basis for lawsuit by PR against the government on racial bias, a clear violation of equal protection under the law.
 
Last edited: