Jun 14, 2016
FluxCap Hi guys, I see you are caring for and feeding the thread well in my absence - well done!
What are thoughts on Brexit odds? Betting markets say not happening, but if it did, I think we are in for some rough seas in global markets.
Bookies Are Still Pretty Sure Brexit Isn�t Going to Happen
Polls and bookies say two very different things about Brexit odds�
Jun 14, 2016
FluxCap I realize this is an older post, but I think this is great analysis and falls right in line with my own predictions. Well done, neroden.�
Jun 14, 2016
MitchJi Hi Flux,
You agree with Nerodens post that Tesla won't be impacted by macro. What do you think the impact of Brexit passing would have on Tesla?�
Jun 15, 2016
FluxCap I don't agree that Tesla will not be impacted by macroeconomic events and that is not at all what neroden stated. He mostly wrote an analysis of Tesla's relationship to changing global energy landscape. He made the case that over the very long term, Tesla is relatively more insulated from macro effects than some stocks, which I agree with. In any given short time frame window, an individual stock is always subject to macro and general market forces. No company exists in a vacuum.
Brexit would generally suck, that's about as far as I've gotten. I hope it doesn't happen for the same reasons I hope US States don't secede from the Union.�
Jun 16, 2016
GoTslaGo Interesting article about China:
China Dumping More Than Treasuries as U.S. Stocks Join Fire Sale�
Jun 17, 2016
neroden Hmm. So it's looking like Brexit is likely to happen. All the investment banks are claiming Brexit will cause the pound to drop, apparently without any actual reasoning. As a result, I think all the pound sellers have already sold. I expect Brexit will cause the pound to rise, while causing the euro to drop due to general fear that other countries will exit the euro and reduce its utility. (This is bad for Britain and good for the rest of Europe; you want your currency to be low to promote exports.)
George Osborne, the Chancellor, has announced bizarre and insane plans to intentionally sabotage the British economy if voters vote to leave, which will *not* be popular and will probably result in the Tories getting thrown out of power. Obviously the sabotage will be bad for Britain, but getting rid of the Tories will definitely be good for Britain.
The effect on Tesla? A drop in the euro would mean they have to raise their European pricing, and a drop in the pound would mean they would have to raise their British pricing. Sabotage of the economy would be bad for demand in Britain, but getting rid of the Tories would be good for demand in Britain. So, who knows?�
Jun 17, 2016
geneclean55 Umm, not so sure about "likely to happen'" but it will be close. There is a significant undecided fraction of voters according to the polls. It is thought that much like the Quebec referendum of 1995, and the Scottish independence referendum of 2014, that when it comes to crunch time these people will vote to remain. Also, the gambling industry currently favors a remain vote.
Osborne is clearly using scare tactics to push the remain vote with his proposed budget .�
Jun 17, 2016
Intl Professor Paul Krugman has another op ed today in the NYTimes regarding brexit. He pretty much repeats economic arguments made before, but he admittedly has more problematic political arguments eventually advocating to remain within the EU. That is modified by reference to another who reminds Britons they can always vote later for exit if hope for EU learning from its mistakes happens. On that score Krugman is not optimistic, but a brexit now forecloses learning and might have a cascade effect. I've read elsewhere, perhaps here, that Italy might then be next.
http://www.nytimes.com/2016/06/17/opinion/fear-loathing-and-brexit.html�
Jun 23, 2016
FluxCap Well I'll be. Merry Olde England may have just touched off a global recession in the name of nationalistic isolationism. A bunch of geriatrics pining for the good old days just outvoted their kids and grandkids...this seems monumentally foolish to me. Futures are down historic levels. Circuit breaker just tripped on the Nikkei. This is not going to end well for stocks. Buckle your seat belts, and please someone help me figure out where the S&P will be a month from now?
I was already defensive going into this and I don't think even I have the gonads to buy tomorrow morning.�
Jun 23, 2016
maoing US market had never been knocked down by external issues. Last August China issue, Jan-Feb Oil issue and now Brexit issue. But I agree this event might be well a trigger for a correction in US stock market.�
Jun 24, 2016
hobbes Didn�t expect that. Question for me is: Should I still sell some now before US market opens expecting price will drop further then (I am in Germany)? Tesla is down 5%, compared to Volkswagen and Daimler at 10%.�
Jun 24, 2016
neroden Arguably Brexit is good for the British economy and employment. At the very least their export industries will benefit massively from the huge drop in the pound. The longer-range political consequences are another matter. I kind of think the Eurocrats brought this on themselves by failing to address the 'democratic deficit' in the EU, and I wish they'd been much more serious about transferring power to the European Parliament.�
Jun 24, 2016
neroden Oh. Expect Tesla to raise their UK pricing to compensate for the drop in the pound. Like, immediately. If you were thinking of ordering a Tesla in the UK, complete your order tonight, don't wait!�
Jun 24, 2016
Johan Cameron says he will resign over Brexit, GB should have new prime minister come fall. Wowaweewow, this is not going to be pretty for the stock market, but perhaps the US market is a bit more insulated than the EU market?�
Jun 24, 2016
Johan By the way here's my highly personal view on Brexit: The Brits are stupid. But they never have liked Germany's strength in the EU. You have to understand that Germany is the economic motor or Europe and the powerhouse of Europe. The Brits keep dreaming of the 17th to 19th century when they were an economic super power, but those days are over. Look at what West Germany did when the wall fell; they literaly let billions and billions of D-mark flow from the West to the East in a gigantic economic rescue operation. Did you hear the West Germans complain? Yes, sure some did but overall they understood that by propping up East Germany and getting them up to speed the new Bundesrepublik would become the powerhouse it is today, industrially, economically and politically. The same could be true for the EU as a whole; the richer nations in the north and west of Europe stand to gain from helping the poorer nations in the south and east of Europe to get up to standard quicker, and the EU could become a stronger economic power on par with China and the US. But instead the Brits try to tear the house down from the inside. Very bad indeed.�
Jun 24, 2016
lklundin Feel free to elaborate on what exactly constitute British "export industries".
The first that comes to my mind is "tax evasion" and along with that "good riddance".�
Jun 24, 2016
neroden Sheep?
No, OK, I did my research. Yes, the insane "financial" stuff (much of which they are well rid of, it doesn't help the average Briton at all) dwarfs the manufacturing industry.
What Britain exports: the ultimate chart
But apparently the UK's top export goods category is actually *still* machinery, even after two centuries of manufacturing moving elsewhere:
Drinks, planes and machines � the real story of what Britain actually makes
Followed by drugs, beverages, *aircraft* (!!), chemicals...�
Jun 24, 2016
neroden It *could*. Except that the German goverment has explicitly refused to financially support Southern Europe (the way they did East Germany) for *the last eight years running*, despite being told to do so by practically every economist in the world repeatedly. Apparently they'll rescue Germans, but the Spanish and Greek speakers, they can go to hell.
This is the core problem with the EU right now. It makes sense, in my opinion, for *everyone* to get out of it, as long as the German government continues to have this parochial attitude. If Germany can't think of themselves as fellow Europeans rather than as Germans -- and apparently they can't -- then the European project is impossible, and it's time to get out.
Given that the problem is German attitude, it would probably be ideal if *Germany* was kicked out of the EU, but that's not going to happen and would be kind of impractical anyway.�
Jun 24, 2016
hobbes I was thinking I should keep out of this discussion as I am German, but what you saying is just not true. Germany is one of the countries paying more into the EU than receiving, so money is going from Germany to Southern Europe. I am not saying everything is great and we couldn�t help other states more, but please stick to the facts. Here are some numbers from 2014, when the net money flow from Germany into the EU was 15 billion (sorry, in German): Nettozahler und Nettoempf�nger in der EU | bpb�
Jun 24, 2016
neroden It's 100% true, but I did leave a few steps out. Let me educate you.
The problem is not that, exactly. It's not nearly enough money -- given the 2008 recession, 15 billion is peanuts. For comparison, look at how much the US sends to Mississippi. Or look at the size of the subsidy for East Germany caused by valuing the Ostmark at 2:1 instead of the market rate of 5:1 or 10:1, a subsidy which was worth 30-40 billion DM at the time -- worth roughly 100 - 130 billion euro in todays money. Smaller amounts of money held by individuals were converted at par, which was an even larger additional subsidy, but I don't know how much was held in those smaller amounts so I made a conservative estimate. (There were additional subsidies to East Germany on top of that; estimates run at 100 billion per year for 20 more years.) Germany transferred more money to East Germany in one year *which was not bad economically* than they have transferred to Southern Europe in 8 years *after the deepest recession since the 1930s*. But really the problem is deeper. You can see that the problem is deeper if you realize that the average German has also been suffering through a recession and cuts in government spending....
The problem is that the German government (along with a couple of others, including the Netherlands) demanded a fiscal straitjacket in the Maastricht treaty -- the European Central Bank is *not permitted* to finance deficit spending (aka "fiscal policy" aka "stimulus" etc). Now, John Maynard Keynes explained decades ago that in a deep high-unemployment recession, the only reliable way out of it is for the government to print money and spend it hiring people. This is what the US did after the 2008 crisis. This is what China did. This is what *Iceland* did, for goodness sake. And this has been rendered *impossible* by the straitjacket written into the Maastricht treaty by the German government (and some other countries' goverments). (By contrast, the subsidy involved in converting Ostmarks... was done by printing money.)
It's been described as the modern equivalent of legislating the gold standard, and it's had the same deleterious effects as the gold standard had in the 1930s. Germany has been asked repeatedly to relent on this provision and Merkel has refused every time. But the other political parties in Germany aren't much better on this issue.�
Jun 25, 2016
lklundin Excuse me, but the very first paragraph in the above link states that these numbers are not the whole picture.
Germany is paying to the EU not to be "nice", but because these payments come back as an improved export market for the country as a whole. So the effect of these payments is bigger than their sum (it is called synergy) - with _lots_ of money flowing back into Germany, in exchange for exported goods which keep the country's industry going.
And don't take my word for it, look instead for example at:
List of sovereign states by current account balance - Wikipedia, the free encyclopedia�
Jun 25, 2016
tentonine I am curious, what makes you think that the financial industry doesn't help the average Briton? A very large percentage of government income comes from taxation on the financial industry profits.�
Jun 25, 2016
neroden Well, that doesn't mean much (in order to explain why I would to explain the entire theory of government finance for a government which prints its own money, which I do not want to do right now.)
But you do have a point in that the financial industry employs an enormous number of people inside the UK (from receptionists and janitors on up), and *that* helps the average Briton.�
1/1/2015
guest Tsla I really like the quarterly chart
Down 5th quarter in a row
Odds of a big UP quarter next are very high
I'd love to see how the rest of the month shapes up�
1/1/2015
guest VW Group 2016 H1 Profit Portfolio
VW�s Year on the Edge and How the Carmaker Is Clawing Back
IF Tesla takes majority of Audi's and Porsche's market share Then it takes down VW Group.
VW CEO says he understands the danger and will introduce dozens of BEVs over the next decade to prevent that but we shall see.�
![[?IMG]](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i4YIKJtttfH0/v2/488x-1.png)
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