Elon Talks Economy, Possible Discounting, Demand Issues, Stock Sales, and TSLA on on Twitter Spaces

[JBee]

QUOTE from JBEE above.
"What I don't I understand is how we are still having fossil fuel resource wars (Russia over Ukraine reserves being explored by Shell and Exxon) whilst vehicle and industry electrification, and RE, is going to take the sales away from fossils anyway? As EM mentioned in the supercut, how to we transition to a "sustainable energy economy". I believe there is considerably more to that simple statement than at first meets the eye. In fact does this change put additional pressure on a downturn on fossil driven industries? I think it would have to. "
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Here is an interesting video on this subject: 2023 does not look good at all.
(218) Don't BUY A CAR Until You've Watched This: Massive AUTO COLLAPSE Coming in 2023! - YouTube

That video highlights numerous compounding factors. Often it's not just the one straw that breaks the camels back, especially so if we experience cascading systems failures like when the pandemic started. I fear our unbridled interdependence will be our demise.

 

[HaulingAss]

What, next years going to be worse than 2022? ?

Are you talking about the price of the stock or the growth of the business? Because they are two very different things. The first is controlled by speculative investors while the second is controlled by the execution of the company plus things mostly outside their control like COVID shutdowns and the economy.

 

[HaulingAss]

that’s part of my disappointment in laying down cheap debt. We could have been making way more on investments. And there’s a certain comfort in having tangible assets if things go really poorly. And if shit really hits the fan, debts are wiped out anyway.

When would you say was the last time that consumer debt was wiped out by financial turbulence in American history? I'm only 59, but I'm not familiar with any such events.

 

[Crissa]

When would you say was the last time that consumer debt was wiped out by financial turbulence in American history? I'm only 59, but I'm not familiar with any such events.

You're not, because we've been in the longest expansions since the 30s. Also, people keep choosing variable rates, which are terribly consumer unfriendly.

But don't confuse consumer debt with federal debt, which isn't variable, and benefits us all when it buys stuff like roads and hospitals.

-Crissa

 

[Richard V.]

When would you say was the last time that consumer debt was wiped out by financial turbulence in American history? I'm only 59, but I'm not familiar with any such events.

I agree that individuals are not helped by government. They are just expected to go bankrupt. However, big businesses (i.e., Us Banks, GM and etc.) are helped by the government by using tax payer money (e.g., 2009) directly. I think they did not have to pay back, but Tesla did pay back all with interest. They said to be too big to fail. Now, the whole student dept has been raised as a way to give back to individuals, but it is judged by many not to be fair for the ones that managed not to get in trouble and made the hard choices that affected their lives in the mean time.

2023 could see a lot of individuals not paying their old car loan and the Banks are still playing their risky money games with car loans. Something is about to break. The raising of the interest rates is potentially a big issue compounding user depts. My Tesla stooks are down not because of Twitter, but just look at the investment market. A lot of it is down and the economy is not getting better with the Feds/Banks in the US and Canada playing God with interest rates.

 

[charliemagpie]

The used ICE industry is farked by the fact that used ICE values will never be in equilibrium ever again, and will 90% die a death. Without any help from shady lenders.

Maybe half true, and best I think it's a smoke screen. On its own, this cannot compare with the 2008 housing bust. Chalk and Cheese.

What are we talking about ? 5 million second hand cars defaulted ? it's only a few Billion$. Or is it 5000 cars ? or 500,000. It is not even a ripple in the economy. Even then, the banks will recover something.

Transition to new tech will destroy the whole lot. This is the real news story.

 

[DMC-81]

This meme sums up '23 and me:

 

[Luke42]

You're not, because we've been in the longest expansions since the 30s. Also, people keep choosing variable rates, which are terribly consumer unfriendly.

Just to hammer on the previous point a little, consumer debt wasn't wiped out during the Great Depression, except by the relatively civilized process of bankruptcy.

Bankruptcies just happened much more frequently than they would have in a functioning society whose economy did not suffer a cascading collapse.

But the legal framework of debt and commerce remained intact.

 

[JBee]

Just to hammer on the previous point a little, consumer debt wasn't wiped out during the Great Depression, except by the relatively civilized process of bankruptcy.

Bankruptcies just happened much more frequently than they would have in a functioning society whose economy did not suffer a cascading collapse.

But the legal framework of debt and commerce remained intact.

The bankruptcies in the great depression were the banks, not the consumers, because the banks issued more fake tokens than they had in actual value. Thats where the term bankruptcy comes from, the banks being broke because they stole all the peoples valuables. There's a much bigger, world shaping story there, than most know. The invention of human live-stock as security for fiat debt.

 

[SwampNut]

When would you say was the last time that consumer debt was wiped out by financial turbulence in American history? I'm only 59, but I'm not familiar with any such events.

Never, and I specifically used the words "if shit really hits the fan." Meaning a real collapse, anarchy, etc. If there's just a mild recession and more inflation, then debt still wins because you pay it back in cheaper fiat currency. There's no downside to debt in recession, and it's backwards to pay things off before such times. If we turn into Venezuela, then you want to have tangible things that are valuable. Metals, some in the form of guns and ammo, vehicles, other commodities. In any real collapse situation, debt is not relevant; holding tangible things is.

 

[Cybertruck Hawaii]

I remember the 70s no one could finance and or had a credit card in their wallet, now credit cards are given everywhere?!

Before President Reagan, the interest on a car loan was deductible. You can thank the right for cutting that benefit out.

 

[SwampNut]

Before President Reagan, the interest on a car loan was deductible. You can thank the right for cutting that benefit out.

I do thank them. I didn't know it was a one-sided thing, but certainly a good thing.

 

[HaulingAss]

You're not, because we've been in the longest expansions since the 30s. Also, people keep choosing variable rates, which are terribly consumer unfriendly.

But don't confuse consumer debt with federal debt, which isn't variable, and benefits us all when it buys stuff like roads and hospitals.

-Crissa

I was speaking of consumer debt being wiped out. I'm not really worried about Federal debt being a problem except as it devalues the dollar. That's why I invest, to stay ahead of the devaluation of the dollar.

I will point out that people have a tendency to conjure up financial disasters that never seem to materialize. Sure, the economy is cyclic and has periods of recession followed by rapid growth. The economy continues to grow and become bigger and more productive because we keep inventing more productive ways to provide goods and services for less investment. The growth makes any speed bumps along the way insignificant.

Technology is making every sector more efficient which is just another way to say we can provide more goods and services with fewer hours of labor. And in the larger picture, technology has only just started doing this in the last 2-3 decades and it was formerly very expensive. Now we have the synergies of multiple technologies coming together very cheaply, from AI to cameras, to massively cheap computing power,8 batteries, efficient and cheap electric motors, robotics and on, and on. This will supercharge the economy so it can continue to grow by leaps and bounds without the usual amounts of needed labor. Tractors will run without drivers, day and night, on electricity from the sun, cars will be built with minimal human input very quickly and with a minimum of energy, energy, the largest part of our economy, is about to become much cheaper, etc. etc.

I have no doubt there will be resets and recessions along the way, but the economy will continue to grow. People want to create better lives for their families and we have more tools than ever to do that easily and efficiently. The doom and gloom predictions have been going on since as long as I can remember but the economy continues to grow and prosper because people need energy and houses and transport to live well. This is what drives the economy and, contrary to the scary and disasterous scenarios that are so popular and easy to predict, the economy continues to hum along. I don't see anything stopping it short of nuclear Armageddon. I don't worry about that because it does no good to worry, all I can do is vote for the most reasonable people on the ballot and talk with friends, family and neighbors. In the end, if it happens, the economy doesn't matter. Most of us will be dead or suffering greatly. That is not a scenario I feel it is productive to plan for. So I plan for more of the same. Because that's how the world works.

This is why I think the economic expansion you speak of is actually accelerating, not at risk of collapsing. The big picture is that humanity is the transition from the age of oil and gas to the age of technology and cheap, clean energy. There will be many disruptions associated with this, bankruptcies, etc. but this is how renewal and change happens. The economy continues to grow. In the real world, not everybody wins. If they did, there would be no incentive to create new efficiencies, and make life better for humanity. The experiment of socialism has already been tried with disasterous results. Nobody wanted to do any work, they expected everything would be provided for them from above. Well, guess what, it was, but there was not much variety, not much quality, and not much quantity. People suffered and things on the black market were unaffordable to almost all. Productivity, which is the engine of living better, went downhill fast.

Our economy is not on that path and I don't see how it could get on that disasterous path unless the extreme left have their way by trying to make everyone a winner. That is the path to a declining economy. Keep in mind, I'm a compassionate democrat my entire life but compassion has to be done in a way that doesn't exacerbate the problems that already exist. As my party moves further to the left, I become more willing to vote for moderates on the other side. I see a bright future ahead and that is the path forward. Predictors of doom and gloom are not useful to humanity and are always wrong in the end unless we destroy the only planet we have to live on.

 

[HaulingAss]

Never, and I specifically used the words "if shit really hits the fan." Meaning a real collapse, anarchy, etc. If there's just a mild recession and more inflation, then debt still wins because you pay it back in cheaper fiat currency. There's no downside to debt in recession, and it's backwards to pay things off before such times. If we turn into Venezuela, then you want to have tangible things that are valuable. Metals, some in the form of guns and ammo, vehicles, other commodities. In any real collapse situation, debt is not relevant; holding tangible things is.

Debt is less bad in a recession, it's actually good if you have long-term debt below the long-term rate of inflation/devaluation of the dollar. But that is not the norm, and the economy only spends a minor fraction of the time in recession compared to economic growth and borrowing rates are normally significantly higher than the rate of inflation/devaluation of the dollar. So, in general, consumer debt should be avoided.

Consumer debt is good for the "haves" and bad for the "have nots". The working people do themselves no favors by using consumer debt to buy more things. Debt should be an instrument of last resort and it pays big dividends to work hard to avoid it. It's better to do without nicities until they can be afforded without taking on new debt. This includes new vehicle purchases. And I will swear that I'm not trying to move up in the Cybertruck reservation line with this recommendation!

 

[SwampNut]

So, in general, consumer debt should be avoided.

Only true if the cost of the debt is close to or exceeds the income potential of the assets, and/or the possibility of needing the asset. I'll have pulled around 8-10% from investments this year and am paying 2.3-4% on debt. I'd be an idiot to convert the income to a payoff.