Tesla’s stock is slipping… The extent to which this is a problem for Elon Mask is yet to be determined because, well, isn’t he the richest man in the world?
Ok, now let me go back aways and tell you all about this thing in the early part of the century called the Global Financial Crisis. It was caused by a collapse in the subprime housing market…
Now, it’s a bit hard to explain this and not have many of you fall asleep… In the film, “The Big Short” they explained one of the boring bits by filming Margot Robbie in a bubble bath drinking champagne while she explained it. Unfortunately, I don’t have any bubbles either for the bath or the champagne and I’m not sure that I have the same drawing power… Besides, I don’t remember what she said so it wasn’t really effective.
Whatever, the problem with the collapse of the subprime housing market wasn’t the fact that it collapsed. The entire value of the subprime market wasn’t enough to really cause a major problem… the problem was the leveraging.
Put simply, if you lend me a million dollars and I put up my unpublished writing as collateral, that seems like a pretty good deal if you believe me when I tell you that somewhere in my unpublished writing is a novel that will be a bestseller and the film rights will earn you more money than the novel on which it’s based, so you feel quite ok borrowing a few million on the basis of the film deal and then eventually someone else uses the collateral to borrow enough to buy Twitter and change its name to…
Ok, I think you get the idea. At this point, when somebody realises that, not only is my novel unlikely to be made into a movie, it’s unlikely to be made into a novel and now that everyone has to pay back everything, I feel really bad that I didn’t write something much better because now that everyone has to find actual money…
All right, they don’t actually have to find “actual money”!
There’s no such thing as actual money because money is basically a concept. It’s a way of measuring things. You might as well say now that the property market has collapsed, I need an actual square metre… No, not a square metre of land… An actual square metre!!
What they need to find is someone who’ll lend them the money… Alternatively, they could sell what they bought and pay back the loan that way… which is a fine thing if you bought bottles of Grange as an investment and not as something to piss up against wall… which is what I would have done if I’d drunk a million dollars worth of Grange…
Elon, on the other hand, may simply have to sell his Tesla shares in order to pay for the loans he took out to buy Twitter – as X, as it’s now known. This would be no problem if the shares were going up, but in a buyer’s market, it’d be a fire sale… And not just because of the Teslas that were lit up by “terrorists”…
However, the shares are going down. At this point, we have no idea whether this is because people are concerned that:
- Tesla is a risky investment because Musk abused woke people and a large percentage of Tesla buyers would have taken this personally.
- Tesla is a risky investment because people are protesting outside Tesla showrooms.
- Tesla is a risky investment because BYD have just developed a fast charger that can charge EVs about as quickly as it takes to fill up a large car with petrol.
- Elon has already started selling his shares and this has caused them to tank.
- The Tesla vehicle that looks like a tank and was meant to be impenetrable has had a problem when hostile people throw things at it and the windows break if they’re hit with things as heavy as a large shoe…
Whatever…
Will Donald bail out Tesla by insisting that everyone has to buy one, or will he say, “Sucks to be you, Elon, I only like winners!”
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Trump loves bankruptcy :
“Trump’s Taj Mahal opened in April 1990 in Atlantic City, but six months later, “defaulted on interest payments to bondholders as his finances went into a tailspin,” The Washington Post’s Robert O’Harrow found. In July 1991, Trump’s Taj Mahal filed for bankruptcy. He could not keep up with debts on two other Atlantic City casinos, and those two properties declared bankruptcy in 1992. A fourth property, the Plaza Hotel in New York, declared bankruptcy in 1992 after amassing debt.
Trump Hotels and Casinos Resorts filed for bankruptcy again in 2004, after accruing about $1.8 billion in debt. Trump Entertainment Resorts also declared bankruptcy in 2009.”
Trump’s talent for bankruptcy is now being extended to the US economy and potentially that of the rest of the world………….it won’t be pretty !