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David at Imperial Beach

 
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  • Tesla: The Short Squeeze, Rather Than Short, Of The Decade? [View article]
    Furthermore, the more EVs take off, especially long range EVs, the more likely it becomes that the automakers will be able to lobby the State of California to eliminate the FCV requirements or replace them with equivalent EV ones.
    Sep 1 10:58 PM | 1 Like Like |Link to Comment
  • Tesla: The Short Squeeze, Rather Than Short, Of The Decade? [View article]
    Aussie, you need to get out your map of California and see how far away LA is from SF, Palo Alto (Tesla headquarters), and Fremont (Tesla factory). Tesla is not an LA thing. It's an SF Bay Area thing that just happens to also play well in LA and other areas throughout the world. It may even play well in Sydney and Melbourne, though I don't expect too many supercharging stations across the outback.
    Sep 1 10:48 PM | 2 Likes Like |Link to Comment
  • Tesla: The Short Squeeze, Rather Than Short, Of The Decade? [View article]
    The big dark spot in China is due to heavy smog. They are going for EVs in a big way and welcoming Tesla with open arms. There's nothing mysterious about their demand for Teslas. Teslas are reasonably priced compared to other imported vehicles, and the Chinese will buy every one that becomes available.

    The only nation where Tesla seems to be having trouble capturing the imagination of the people is Germany. Apparently the Germans are too loyal to Herr Rudolf Diesel. That may change if the government decides that sopping up their glut of overpriced, subsidized green electricity for transportation would be better than letting it go to waste.
    Sep 1 10:41 PM | 1 Like Like |Link to Comment
  • Tesla: The Short Squeeze, Rather Than Short, Of The Decade? [View article]
    Don't go slinging around accusations that you can't back up. "Popular media and analysts" do not get compensated for favorable coverage by Tesla in any way.

    Certain investment banks do get Tesla's business when it comes time to float a bond or to issue new shares, but even then, the in-house analysts do not get paid extra for favorable coverage. They do it as loyal minions.
    Sep 1 10:20 PM | 2 Likes Like |Link to Comment
  • Tesla: The Short Squeeze, Rather Than Short, Of The Decade? [View article]
    Quite obviously you're wrong, VS. People who bought in early ($55 or below) can well afford to buy and hold, and you see testimony from other commenters that they are doing exactly that. If I'd bought in that early I'd be holding too, because I seriously doubt that it will ever fall further than 50% in even the most severe bear market.

    I expect Tesla to grow between 80% and 100% almost every year for about two decades. Like Amazon, it won't show any significant profits during that time, but it will grow to be the size of Toyota, GM, or VW, and have also start a brand new industry in stationary storage. It's hard to find growth like that, so Tesla deserves to be "overvalued".
    Sep 1 10:13 PM | 5 Likes Like |Link to Comment
  • Fed Tightening Is Bullish For Bonds And Stocks [View article]
    I agree that we have a very poor excuse for a "recovery". But I certainly do not agree with the premise of the title, that Fed tightening is bullish for bonds and stocks. First off, we're a long way away from Fed tightening, and secondly, the principle is illogical.

    Fed tightening will negatively impact both bonds and stocks, unavoidably, when it finally does come. Right now we don't have Fed tightening. We have tapering, which is a deceleration from full throttle back to coasting. There is as yet no brakes, no tightening, being applied. Taken in conjunction with our minimalist version of recovery, it's no wonder that interest rates continue to fall.

    Right now the Fed is jawboning about raising (nominal) rates next year. That's a far cry from actually raising real rates, actual tightening. Will they? It's a big question that remains to be answered. They haven't committed to doing so, although the market thinks they have. Media propaganda is all reporting how robust the recovery is and how we're all ready and the market is even eager for the rate hikes to come. We'll see.

    My own opinion is that we will see higher inflation before we see rate hikes. So when the hikes do finally come, real rates will remain negative and we will still be in a "stimulated" state of below market rates. Again, this does not fulfill the premise of the title. The Fed won't be tightening at all.
    Aug 31 02:13 AM | 1 Like Like |Link to Comment
  • Are Stocks Set For A Major Decline In The Fall? [View article]
    From the wikipedia article "Jesse Lauriston Livermore":

    "On March 28, 1933, Livermore married 38 year old Harriet Metz Noble in Geneva, Illinois; there was no honeymoon. It was Harriet's fifth marriage; all four of her previous husbands had committed suicide.[12] Livermore would be no different."

    There are some people who do the same thing over and over and drive others insane.
    Aug 31 01:36 AM | 2 Likes Like |Link to Comment
  • Are Stocks Set For A Major Decline In The Fall? [View article]
    The Fed did buy up "problem" MBS (mortgage backed securities) from the banks. The Fed is not planning to sell off any of its balance sheet assets. Even when they expire, the current plan is to use the principal to buy new bonds.
    Aug 31 01:27 AM | 2 Likes Like |Link to Comment
  • Are Stocks Set For A Major Decline In The Fall? [View article]
    Because your friendly neighborhood central bank is still injecting vast quantities of liquidity into the stock market. They've promised to stop, really they will, this very October. But they're alcoholics with bottles hidden everywhere. They'll still be able to sneak enough sips to stay polluted for quite a while after that.
    Aug 31 01:22 AM | 1 Like Like |Link to Comment
  • Are Stocks Set For A Major Decline In The Fall? [View article]
    Pundits rightly claim that many companies still bear reasonable PEs. What they fail to acknowledge is that PEs are dependent on two values, not just one: earnings as well as prices. It is earnings that are way out of whack and will have to revert to mean at some point. Earnings right now are at an all-time high relative to GDP. That can't and won't stay that way for very long. If nothing else, the increases in the nominal interest rates the Fed has in mind for next year will eat into earnings. I also predict that it will become increasingly difficult for the Fed to remove liquidity fast enough to keep inflation under control, even if they wanted to. And it's pretty obvious to anyone who even glances at the federal debt that they should want a good healthy bout of inflation, because the debt is completely unmanageable otherwise.
    Aug 31 01:16 AM | 4 Likes Like |Link to Comment
  • Are Stocks Set For A Major Decline In The Fall? [View article]
    Add to that Nixon and Kissinger were responsible for the petrodollar deal with the Saudis. That one act did more to inadvertently devastate American industry and outsource American jobs over the ensuing 40 years than any other. Nixon received a nation that was an industrial powerhouse. He hobbled it with a currency that was artificially overvalued and that ended our industrial competitiveness.
    Aug 31 01:07 AM | 3 Likes Like |Link to Comment
  • Are Stocks Set For A Major Decline In The Fall? [View article]
    (NASDAQ:QQQ) has been on a tear this summer, but the broader market has not shared so much in the beer flowing from the spigot. It's been a wild party for a select few companies, but a bitter experience for the onlookers who were given only a party hat and a cup of water. Whereas QQQ returned 9.3% in the last three months, (NYSEARCA:DIA) lagged even (NYSEARCA:GLD), returning only 2.4%. Small cap value (NYSEARCA:IWN) returned an even more paltry 1.7%. Developed markets (NYSEARCA:EFG) and (NYSEARCA:EFV) actually lost money at -3.1% and -4.6%. In the sector ETFs, healthcare lead with 6.8% for (NYSEARCA:XLV), and utilities, staples, and industrials did poorly: (NYSEARCA:XLU) 1.3%, (NYSEARCA:XLP) 0.2%, (NYSEARCA:XLI) -0.1%.

    My opinion is that this pattern has a lot in common with the year 2000 before the bubble burst. Buyer beware!
    Aug 31 12:51 AM | 5 Likes Like |Link to Comment
  • The Secular Stagnation Controversy [View article]
    That's not true. The Fed controls interest rates. All the banks can do is try to remain competitive. Low interest rates discourage investment in the local economy and encourage a carry trade into economies with better returns. Low rates also discourage "risky" borrowing to increase production and instead divert corporate efforts into rebalancing their capital structure away from equity and toward low cost fixed debt.

    Nevertheless, economists remain convinced that manipulating interest rates to ridiculously low levels is a good thing and not counterproductive at all. They fail to notice the hemorrhaging of capital from the country. They also fail to notice that corporations that take on more corporate debt but fail to invest in new production capacity do not actually increase economic activity. Instead, they only churn the financial markets.
    Aug 31 12:14 AM | Likes Like |Link to Comment
  • Euro zone inflation continues plunge [View news story]
    In the case of the Europeans, they're more likely to buy dollars than gold if they lose faith in the euro. However, in this case holding a foreign currency or gold isn't really going to help them. Their economy is tanking not due to high inflation, but rather structural imbalances that need to be corrected before their economy gets back on track. They need to incentivize investing in the PIIGS, and unfortunately, none of the PIIGS are significant gold producers, though I believe there might be a few small gold mines in Greece and the Balkan nations.
    Aug 30 11:42 PM | Likes Like |Link to Comment
  • Euro zone inflation continues plunge [View news story]
    His actions are likely to only add fuel to the fire. What he needs to do he's not even proposing.

    He needs to deleverage the toxic waste in the European banking system. They're struggling with up to 10% of loans nonperforming. This is because Germany does not buy enough products from the PIIGS, and the banking system is not prepared to lend nearly enough money to set up new factories in the PIIGS to produce things that Germans might want to buy. Thus euros flow into Germany and get stuck there.

    He's talking about buying German bunds. That's the last thing he needs to do. Germany already is swimming in a glut of euro liquidity that needs to be drained. He needs to buy nonperforming loans from the PIIGS and set their banks free to lend again, even if they have to borrow euros from the Germans to do it.
    Aug 30 11:30 PM | Likes Like |Link to Comment
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