-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
The Bank of Tesla?
- Thread starter Buckminster
- Start date
Watts_Up
Well-Known Member
I watch all of their pods and this is an important topic. Could affect TSLA significantly if it goes the wrong way.
Zach Kirkhorn certainly has an opportunity to exercise his treasury skills. It's one of the reasons that I didn't begrudge the Bitcoin dabbling, despite that I think that there are other things that would be a better allocation of Tesla's time and money to further the mission.
There is a long list of financial services that Tesla can provide short of becoming a bank. Take a look at Fidelity as an example. And Berkshire Hathaway. I think the essence of a bank is fractional reserve lending plus borrowing short and lending long. Not sure when Tesla would touch on those aspects.
Last edited:
This confirms what we were saying with the original Twitter acquisition and with the incremental insurance products. The original X.com plans were never secret. (I read that in 2000 when my SF banker client told me PayPal was a clever but too limited name, then told me I would be remiss if not to invest in ‘anything Elon Musk does’. He was prescient, and both of us have reaped the benefits of very early adoption. It behooves us to understand that this is NOT about Tesla, although Tesla is obviously part if that.
Things that are critical to that vision have been happening for some time but have been ‘hidden in plain sight’, some Tesla some SpaceX Examples:
Autobidder: acts within the wholesale energy markets as a market-maker, resulting in near- instant intermediation in wholesale energy markets providing, for the first time, sub-second rate arbitrage. Hint: that is a financial product, acting in a specific market;
Cash Management: The innovations in financial tools (required to optimize the advantages provided by manufacturing and distribution improvements ) are regularly undervalued, probably because the manufacturing side is so amazing.
Energy Provider licenses: These are the 21st century equivalent of The Manhattan Company, with public water supply allowing a Bank when duels were fought to prevent them, spawning what has become JP Morgan Chase. These, incredibly, are now widespread for Tesla, EU, UK, Texas, etc. People think these are unimportant, but they are displacing entire hugely lucrative wholesale markets.
Deposits and Subscriptions: The core of this category is central to Tesla practices since beginning, and is called ‘services’ by AAPL, for which it is by far their largest margin category.
Payment Processing, deposits and more: For Elon that is why X.com. Tesla is central and fundamental for investment banking, as above, while the X.com focus really is the interface among all others. In investors terms, X.com is the market structure (similar to DTC in securities) coupled with things like Central Asset Accounts (Merril Lynch CMA, Schwab One). Tesla has become and is rapidly growing in the largest single category, energy market intermediation.
I will not list other categories. However, please understand that Elon has been pursuing these goals since they first entered his head, with his development of Zip2, when he saw how powerful direct tie to purchasing intentions can extend. Our problem, nearly always, is seeing ‘what is’ rather than what ‘could be’.
In the short run, nobody much is paying attention. In the long run, the ‘earth will move’. It does depend on Elon Musk surviving and thriving for enough time.
1790’s Lottery Printers; 1890’s-1920’s Trusts, next Telephones, Internet, cellular telephones, now Internet if Things and AI. As with every major step on the way the world understands only a generation or so after it happens.
I’m perplexed that many of us do not see what has already happening. It’s not just electric vehicles, they’ll be large but be dwarfed by the colossus of Tesla Energy, admittedly technological, but financial transactions are growing to be the largest profit provider. Just as in AAPL that is hiring in plain sight.
The Fidelity Cash Management account is a clone of those first offered in the early 1980's mentioned in a post above.
Basically the legal definition of a bank in the USA remains the same . It must take consumer deposits and make commercial loans. There was a proliferation of non-bank-banks which met requirements for FDIC and were entirely consumer-focussed. Much later the Glass-Steagall Act was repealed so immediately commercial banks bought brokerage and investment firms while securities firms began to operate banks. In 2008 all that rather collapsed and pretty much everyone could be, and became, banks and bank holding companies. Fidelity did not, but does offer numerous FDIC insured products.
With Elon's 2000 plan for X.com he intended to do everything any fo those could do. Your thought about the 'essence of banks' sounds good but trivializes the myriad functions banks provide that are not lending in a traditional manner. In any event there are concepts such as coterminous lending, that remove timing risks and accept credit rick. Derivatives of many types end out minimizing any given type of risk, for a price.
All this requires legions of textbooks with bizarre permutations that included my PhD dissertation., weirdly enough on a culturally unique interest rate elimination process.
As for Tesla, they are far beyond these concepts already. That was the subject of my last post before this one.
Similar threads
- Poll
- Article
