Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[insaneoctane]

Probably way less than $200. If it is like the Model S&X, it is just a second screen on the MCU. So, the only costs are the touchscreen and a cable. (If they use the same screen as the S&X, that could really drive the costs down.)

Hell, it's worth $200 just to allow rear occupants to control their own bacon!

 

[Artful Dodger]

But if we made it policy that the fed would backstop ALL deposits (which it de facto does now anyways) wouldn’t that solve things?

I don't think extending that policy ends this banking issue. What would is if the Treasury Dept and/or the Federal Reserve made a blanket statement that they will purchase any and all 10-yr T-Bills held by FIDC-insured institutions at book value, rather than the institution having to sell them at a loss in a panicky bank-run scenario (like Thu/Fri). I think we'll hear exactly this by the time of the next FOMC meeting.

 

[Artful Dodger]

Ironically, my sister (who was a bank stress tester for E&Y)

Ironically, my sister is a stress tester for SPANX (not the Bank). /s

 

[Maarten]

I can't claim a very good grasp of the business workings of these banking institutions. Does anyone have an opinion on which ones might be getting unfairly lumped in with the SVBs of the world? I'm specifically looking at Charles Schwab. I don't follow them, but I've been using them for over 25 years and the only complaint I've had was when they found the 32 grand they accidently misplaced in one of my accounts. Seriously, they seem like a solid company.

In Europe the banks are being stress tested yearly by the ECB (European Central Bank).
The results decide as to a bank will be allowed, amongst others, to pay dividend to their shareholders.
Last year a new stress test was added: will banks be able to resist the possible shocks as a result of climate changes.

In my opinion these stress tests are very important and were a clear lesson from the past, when governments had to prevent banks from collapsing.
I do hope lessons will be learned quickly from what has happened with the Silicon Valley Bank.
Independent oversight by stress testing clearly is very necessary.

 

[Artful Dodger]

I am never a fan for using this as a form of argument. Tesla makes like 98% of their net income from cars and 90% of their revenue from cars

Lol, I'm not fond of saying other car companies make their own cars. They do not, maybe their own emgines, and final assembly of parts they bought from Tier 1, 2, and 3 suppliers (to whom they forego profit). And then they sell to Dealers (who eat more profits), not end customers. Established Car companies are Banks that make cars, and sell replacement parts for obsolete cars. And those Banks are under duress right now. No fondess at all for this comparison.

Telsa on the other hand makes most of its own parts, all of its own software, and does no catalog engineering. If they do buy from 3rd parties, they have their own Tesla engineers embedded at the companies to ensure product compliance to Tesla's demanding specs.

Oh, and the Energy business (which no car maker has). And AI robots and Supercomputers. And sometime in the future, a ride-hailing network with driverless cars.

I'm a fan of all that.

 

[Artful Dodger]

Since the market didn’t completely bleed to death today, can we assume that a bank run and complete market meltdown is no longer as likely? Or do we have to wait a couple more weeks until things stabilize to see if that could still be a possibility?

The lingering issue for the Market is what the FED does with interest rates at the next FOMC meeting. That's not until March 21-22.

P.S. There's always "the next thing". Wall St. lives on the churn they themselves create.

 

[bkp_duke]

Lol, I'm not fond of saying other car companies make their own cars. They do not, maybe their own emgines, and final assembly of parts they bought from Tier 1, 2, and 3 suppliers (to whom they forego profit). And then they sell to Dealers (who eat more profits), not end customers. Established Car companies are Banks that make cars, and sell replacement parts for obsolete cars. And those Banks are under duress right now. No fondess at all for this comparison.

Telsa on the other hand makes most of its own parts, all of its own software, and does no catalog engineering. If they do buy from 3rd parties, they have their own Tesla engineers embedded at the companies to ensure product compliance to Tesla's demanding specs.

Oh, and the Energy business (which no car maker has). And AI robots and Supercomputers. And sometime in the future, a ride-hailing network with driverless cars.

I'm a fan of all that.

For the sake of full disclosure, there are still a few notable exceptions to the above.

Brakes - they are full Brembo setups. Nothing special about them that indicates any Tesla Engineering is involved.
Airbags - they are sourced from traditional suppliers (Takada, etc.)

I don't see these two changing anytime soon.

 

[SmokyPeat]

According to CME 26.2 % chance now of Fed rate pause....and 74.5% chance of .25% rate hike.

CME FedWatch Tool - CME Group

Count down to the next Federal Open Market Committee (FOMC) rate hike with the CME FedWatch Tool, based on the Fed Funds target rate. View the tool.

www.cmegroup.com

Nice. I assume that means there's a -.7% chance of a .5% rate increase.

 

[aubreymcfato]

When banks collapse, what happens to the stocks they bought for you? (I have mine in Fineco, FWIW).

 

[Cobbler]

Pi date 3/14: time to announce a refreshed "Highland" model 3 (4680 based model 3) to get those IRA credits?

 

[Stretch2727]

https://twitter.com/x/status/1635519541466857473

That still looks likes waves to me.

 

[Max Plaid]

That still looks likes waves to me.

Strange how MSMs, Wall Street, short sellers, bears and TSLAQ are unable to discern such an obvious and repeatable pattern...

Still, it's their stupidity, or malevolence, that made many of us a splendid return on our TSLA shares

 

[unk45]

No. He said bankruptcy within a few weeks, which was pure hyperbole. In any case, there was never any question that they would figure out something, just how long it would take. Would it be in time to avoid running out of money? Obviously not.

This whole sub-discussion came up because I wrote that Elon has demonstrated that he's not to be trusted when talking about his companies' finances. I'd say it's obvious at this point, with many tweets and such in evidence.

But I am inclined to trust what he says on earnings calls, as he's much more aware of a higher standard of accountability at those times.

you may have ignored that Elon also knows that that bankruptcy happens when liquidity dries up. Tesla, in his estimation at the time, faced that risk. Not hyperbole. If Tesla lost the faith of suppliers and financiers at that time, they would have failed. You think that was wrong.?
I do think that was a factual statement. Just because it did not happen does not invalidate the risk.

 

[Knightshade]

Yea guess it's too big to fail. I did see on tonight's news that Biden and FDIC said they would cover deposits beyond the $250k limit. Funny how the rules can change when you're big enough. Wonder where they will get the $? Lot of talk but nothing about the details.

That detail was in the announcement itself- and discussed a fair bit here including a cite to the relevant federal law-so not sure how you missed that as well? it will be paid for with a special assessment to all other FDIC insured banks.

 

[unk45]

I don't think extending that policy ends this banking issue. What would is if the Treasury Dept and/or the Federal Reserve made a blanket statement that they will purchase any and all 10-yr T-Bills held by FIDC-insured institutions at book value, rather than the institution having to sell them at a loss in a panicky bank-run scenario (like Thu/Fri). I think we'll hear exactly this by the time of the next FOMC meeting.

We will! FOMC minutes don’t record all the comments. From their perspective major non-financial events become highly relevant. The 1973 OPEC actions were one dramatic example. Somebody always thinks of protecting a given market by eliminating that market.
Sadly, perhaps, the rule as described to me once as “pure capitalism when the sun shine, socialism for the capital when the storm comes”.

We probably remember when FOMC members, NOT the committee, were involved when the US government rescued General Motors and that other one that always needed rescuing, Chrysler. Luckily they’ll be very unlikely to ever discuss TSLA although they talk about Tesla among themselves, probably.

 

[unk45]

Given the events of this year thus far I am reminded of how valuable this thread is to me. We wander too much, argue, but end out usually learning from each other.

Thanks to all of you for helping us learn. Especially I’m grateful to all the places in TMC where people ask questions and others help answer them. I learn every day here, even on those bad days.

It’s tempting to list a few people who give excellent answers. I won’t because that would ignore the enormous value of those who ask the questions.

 

[Artful Dodger]

For the sake of full disclosure, there are still a few notable exceptions to the above.

Brakes - they are full Brembo setups. Nothing special about them that indicates any Tesla Engineering is involved.
Airbags - they are sourced from traditional suppliers (Takada, etc.)

I don't see these two changing anytime soon.

Tesla switches from Brembo to Mando for rear brake calipers on Model Y Performance - Drive Tesla (2022-08-16)

"This isn’t the first time Mando has supplied brake calipers to Tesla as the rear brakes on both the Model S and Model X are equipped with Mando calipers."​

 

[ZeApelido]

It’s tempting to list a few people who give excellent answers. I won’t because that would ignore the enormous value of those who ask the questions.

It’s okay you can name me. I’m very humble.

 

[Singuy]

The lingering issue for the Market is what the FED does with interest rates at the next FOMC meeting. That's not until March 21-22.

P.S. There's always "the next thing". Wall St. lives on the churn they themselves create.

The adjustments being made by the market dictates what the feds will do. As of right now the FED has yet to deviate what the market predicted because the market tells them what rates they should increase by. So the "chance" percentage fall and rise is what moves the market after each report of jobs, gdp, cpi, ppi, and pce. The only thing that is unpredictable is the language fed uses during the meeting (hawkish or dovish tone).

 

[Snerruc]

This is going to be fun to watch the actual realization of what FDIC covers and what happens after they give out what they are required to do. Federal Deposit Insurance Corporation covers exactly that, bank deposits. They have always made it clear that they only cover up to $250k for each account. If you have more than that you have to sue the bank itself in court. Same as SIPC covering your investments. At a brokerage house they cover cash first and then your securities. SIPC covers up to $500k but only up to $250k in cash. Again if you exceed their coverage, you are left to litigation against the bank itself. It's called get in line to sue.

We went thru similar stuff with Pension Benefit Guaranty Corporation (PBGC) when the airlines went bankrupt. In the 80's pilots fought the airlines for their promised pensions of more than $100k and refused to take what was offered (much less). The airlines claimed bankruptcy and PBGC came in. Again the pilots union sued claiming they were promised X. The courts explained that those promises were from a now bankrupt entity not PBGC's problem/promise. I knew more than a few pilots that had to get jobs as the $40k or so PBGC payout was not enough to get by.

In all these cases the companies in each industry pay FDIC, SIPC, PBGC insurance premiums. You can't open a bank without FDIC or a brokerage firm without SIPC. Tax payers don't pay squat.

Oh what about savings and loans or credit unions (not banks and not covered by FDIC)? We could bring back memories about the 1980's Silverado Savings fiasco and I think it was Neil Bush. This one did cost taxpayers $1 billion. In the aftermath Congress passed the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which dramatically changed the savings and loan industry and its federal regulation.

Size does matter. They saved Chrysler because they were "too big to fail". Not sure if any of the banks in the news are anywhere near big enough to warrant gov intervention. These are regional local banks in the news today and I doubt they will be treated the same as a BoA or Wells Fargo failure.

If I remember correctly, the government eventually made a tiny profit out of both. I may be misremembering. I know for sure a friend of mine made millions by buying Chrysler financial 10% bonds for 25 cents on the dollar and holding them to maturity.