Read the Beforeitsnews.com story here. Advertise at Before It's News here.

By CoyotePrime (Reporter)
Contributor profile | More stories

Story Views
Now:
Last hour:
Last 24 hours:
Total:

Contagion

Monday, January 27, 2020 17:10

% of readers think this story is Fact. Add your two cents.

“Contagion”

by David Stockman

“Throughout recorded history, the most powerful leveling invariably resulted from the most powerful shocks. Four different kinds of violent ruptures have flattened inequality: mass mobilization warfare, transformative revolution, state failure, and lethal pandemics. I call these the Four Horsemen of Leveling. Just like their biblical counterparts, they went forth to “take peace from the earth” and “kill with sword, and with hunger, and with death, and with the beasts of the earth.” Sometimes acting individually and sometimes in concert with one another, they produced outcomes that to contemporaries often seemed nothing short of apocalyptic.

– Walter Scheidel, “The Great Leveler: Violence and the History

of Inequality from the Stone Age to the Twenty-First Century” (2017)

“One of the strangest Sundays in recent American history, with the tragic passing of a sports-and-culture icon and the all-too-predictable preening of a national security state ghoul, gave way to the first major market crack of the new year.

“Down as many as 550 points from its Friday close, the Dow Jones Industrial Average has recovered some of that ground but is still off 1.25% as of midday. The S&P 500 Index is down 1.24%, the Nasdaq Composite 1.53%.

The proximate cause is neither Kobe Bryant’s death nor John Bolton’s oh-so-timely Impeachment Kabuki cameo. No, today’s mini-panic is about China and the coronavirus. Last week, as Craig Noland of Credit Bubble Bulletin noted, the Bloomberg Commodities Index was down 3.1%. West Texas Intermediate crude oil (-7.4%), copper (-5.7%), nickel (-6.9%), tin (-5.4%), and zinc (-3.6%) were also down for the week. China’s renminbi lost 1.2% versus the dollar.

The number of reported cases climbed toward 3,000 over the weekend, as reported deaths passed 80. A region holding a population equivalent to New York City and Chicago combined is under quarantine. Indeed, not many “chief market strategists had ‘a virus caused by people eating bats and snakes’ in their 2020 Outlook notes this December.”

But this is still a major crash just waiting for a sufficient catalyst. The collapse of the Red Ponzi certainly qualifies, though foundations have been undermined to such a degree and for so long that it won’t take a global pandemic to get it done…

When the fools in the Eccles Building pumped nearly $500 billion of newly minted credit into the bond pits with their “not QE” program, it was inevitable that the final blow-off phase of the third great stock market bubble of this century would incept. And, so, it did. And it was symbolized by Tesla’s (TSLA) absurd crossing of the $500 per share mark after having doubled over the preceding three months.

For want of doubt, I suggest that proper stock price for TSLA is $0. That’s because Elon’s pleasure toy is hopelessly sub-scale among the giants of the global auto industry. Nor does he have any real proprietary technology to speak of. And sales are falling in its largest market, the good old U.S. of A. On a scale of “1” to “10,” it’s a “1” when it comes to an efficient parts and components supply chain and proficiency in manufacturing and assembly at the demanding level of quality and reliability that’s par for the course in the global auto industry.

In short, Tesla is the poster child for the kind of stupendous malinvestment attending the tops of central-bank-inflated financial bubbles. It would have been dismembered – if not liquidated – in bankruptcy court years ago if not for the massive flow of speculative capital. The latter enabled it to fund its continuous multibillion-dollar annual negative cash flows with upwards of $10 billion in new junk debt and equity.

Tesla gave the concept of a “burn baby” a wholly new definition. And it also helped to explain why today’s unhinged financial markets are so riven with dangerous speculation while Main Street struggles to stay above the flatline.

Click image for larger size.

In a healthy system, equity markets function as a growth nursery by mobilizing long-term risk capital to fund productive expansion and efficient innovation. By contrast, in today’s environment of falsified financial asset prices, equity markets are speculative casinos, a devil’s workshop were capital is massively misallocated.

An economy does not thrive and grow wealthier by destroying capital. At the same time, in honest financial markets, capitalists who make errors or get way over their skies on a failing bet find the tap is quickly shut off. That’s why the saga of Tesla is so hideous. Its cumulative losses since 2009 total $6.7 billion. Of course, in the age of Bubble Finance, net income is apparently a discretionary attribute.

Consider that TSLA sports a market cap north of $100 billion – more than that of Ford Motor Company (F) and General Motors Company (GM) combined. On a one-to-one basis, TSLA’s actually pretty close to Volkswagen AG (VWAGY), which is valued at $103 billion.

Alas, the latter sold nearly 11 million vehicles worldwide during the last 12 months. That’s 30 times more cars than Tesla. And Volkswagen’s revenue of $229 billion produced $15.5 billion of net income. That’s about $1,400 per vehicle of profit. By contrast, Tesla posted $24 billion of trailing-12-month sales and generated a net loss of $828 million. That’s a loss of $2,240 per vehicle.

The fact is, Tesla does not have a profitable business model, period. And it has no hope of attaining one, even if today’s tiny electric vehicle market survives the removal of deep government subsidies in the U.S., China, Netherlands, Norway, and elsewhere, and the company also gains a meaningful share of the 80-million-unit annual global auto market.

So, here’s the thing… Tesla is no aberration. Like much else in the so-called “growth” and technology sectors of the stock market especially, it’s being valued on ludicrous assumptions about a perfect future world that ignores virtually every headwind imaginable. And we were only talking about the inevitable business cycle downturn that lies just around the corner.

Anomalies – like viruses caused by people eating bats and snakes – threaten to accelerate and exacerbate the consequences and scope of the eventual collapse.”

- http://deepstatedeclassified.com/

Source: http://coyoteprime-runningcauseicantfly.blogspot.com/2020/01/contagion.html

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).

Comments

Online:
Visits:	1,599,952,908
Stories:	8,140,814