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Tesla: Bonfire Of The Money Printers' Vanities
Submitted by David Stockman via Contra Corner blog,
The trouble with the money printing madness in the Eccles Building is that it generates huge deformations, misallocations and speculative excesses in the financial markets. Eventually these bubbles splatter, as they have twice this century. The resulting carnage, needless to say, is not small. Combined financial and real estate asset markdowns totaled about $7 trillion after the dotcom bust and $15 trillion during the 2008-2009 financial crisis.
Yes, the Fed has managed to reflate this cheap money bubble for the third time now, but the certainty that it will splatter once again is not the issue at hand. What gets lost in the serial bubble-making process of modern central banking is that vast real resources—labor, capital and materials—- are misallocated owing to mispricing of stock, bonds and real estate during the bubble inflation phase.
During the bust phase, of course, these excesses are written-down on financial statements and often liquidated entirely on an operational basis. But that’s just the problem. These bust-phase corrections amount to deadweight losses to the economy—-a permanent setback to growth and societal prosperity.
The Wall Street casino is now festooned with giant deadweight losses waiting to happen. But perhaps none is more egregious than Tesla—–a crony capitalist con job that has long been insolvent, and has survived only by dint of prodigious taxpayer subsidies and billions of free money from the Fed’s Wall Street casino.
Not surprisingly, the speculative mania on Wall Street has reached such absurd lengths that Telsa is being heralded and valued as the second coming of Apple and its circus barker CEO, Elon Musk, as the next Henry Ford. Indeed, so raptured were the day traders and gamblers that in the short span of 33 months between early 2012 and September 2014 they ramped up Tesla’s market cap from $2.5 billion to a peak of $35 billion.
That’s a 14X gain in virtually no time—-and its not due to the invention of a revolutionary new product like the i-Pad. Instead, we’re talking about 4,600 pounds of sheet metal, plastic, rubber and glass equipped with an electric battery power pack that has been around for decades, and which is not remotely economic without deep government subsidies.
Beyond that, the various Tesla models currently on the market carry price tags of $75k to more than $100k. So they are essentially vanity toys for the wealthy—–a form of conspicuous consumption for the “all things green” crowd.
But notwithstanding all the hype on Wall Street, there was nothing remotely evident in its financials that justified Telsa’s $35 billion peak market cap. Net sales for the LTM period ended in September amounted to $2.9 billion, meaning that speculators were putting a silicon valley style multiple of 12X sales on a 100-year old industrial product; and one sold by a fly-by-night company distinguished from its auto company peers, which trade at 0.5X sales, only by marketing hype and a high cost power plant that could be made by any of two dozen global car companies if there was actually a mass market demand for it.
Needless to say, Tesla’s meager LTM sales were not accompanied by any sign of profits or positive cash flow. September’s LTM net income clocked in at negative $200 million, and operating cash flow of $150 million was dwarfed by CapEx of $700 million.
Unless you are imbibing in the hallucination-inducing Cool Aid dispensed by Goldman Sachs, which took this red-ink machine public in 2009 and has milked it via underwritings, advisories and early stage investments for billions, Tesla’s valuation was patently absurd. Yet the gamblers piled-in based on the utterly improbable assumption that oil would remain at $115 per barrel for ever; that a mass market for electric battery autos would soon develop; and that none of the powerhouse marketing and engineering companies like BMW, Toyota or even Ford would contest Tesla for market share at standard industry profit margins.
The truth is, there is massive excess capacity in the global auto industry owing to government subsidies and bailouts and to union protectionism that keep uncompetitive capacity alive; and that chronic condition is now especially pronounced due to the wildly soaring growth of unused production capacity in China. This means that the global economy is literally saturated with expert resources for auto engineering, design, assembly, machining and component supply.
Consequently, if a mass market were to develop for battery powered vehicles these incumbent industry resources would literally swarm into Tesla’s backyard. So doing, they would eventually drive margins to normal levels, sending Elon Musk’s razzmatazz up in the same cloud of smoke that has afflicted many of his vehicles.
These is no reason to think that any long-term mass market player in the auto industry could beat Toyota’s sustained performance metrics. In the most recent period, its net profits amounted to 7.5% of sales and it traded at 11X LTM net income. So even if you take as granted the far-fetched notion that in a world of $2-3 per gallon gasoline——-which is likely here for a sustained duration—-that a mass market will develop for electric battery vehicles, Telsa would still need upwards of $50 billion of sales at Toyota profit rates and valuation multiples to justify last September’s peak market cap.
So let’s see. Tesla’ CY 2014 sales totaled $3.2 billion, meaning that you would need to bet on a 16X gain in sales over the next few years and that today’s rag tag start-up manufacturing operation could achieve levels of efficiency, quality and reliability that it has taken Toyota 60 years to perfect. Yet take one hard look at Tesla’s historical financials and it is blindingly evident that there is no reason for such an assumption whatsoever.
In fact, Tesla is not a Toyota in the making; it is a Wall Street scam in plain sight. It has been a public filer for seven years now, and here are the horrific figures from its financial statements.
Since 2007 it has booked cumulative sales of just $6.1 billion, and that ain’t much in autoland; it amounts to about one week of sales by Toyota and two weeks by Ford. Its cumulative bottom line has been a net loss of $1.4 billion, and the losses are not shrinking—-having totaled nearly $300 million for 2014 alone.
More significantly, during its entire seven years as a public filer, Tesla has failed to generate any net operating cash flow (OCF) at all, and has, in fact, posted red ink of $500 million on the OCF line. During the same 7-year span ending in Q4 of 2014, its CapEx amounted to a cumulative $ 1.8 billion.
So go figure. Combining OCF and CapEx you get a balance sheet hemorrhage of nearly $2.4 billion. The real question, therefore, is not why Tesla was worth $35 billion, but why it wasn’t bankrupt long ago?
The answer is that it was and should be now. Tesla would not have even made it to its Goldman-led IPO without a $500 million bailout by Uncle Sam. That the hard-pressed taxpayers of America were called upon to underwrite a vanity toy for the wealthy—–and one peddled by a serial milker of the public teat—is surely a measure of how deep crony capitalist corruption has penetrated into the business system of America.
But even these egregious windfalls do not begin to compare with the gifts showered on Elon Musk by the money printers in the Eccles building. Tesla has stayed alive only because it has been able to raise billions of convertible debt in the Wall Street casino at yields which are the next best thing to free money. In short, it has been burning massive dollops of cash for years and replenishing itself periodically in capital markets which are rife with momo speculators flying high on cheap carry trades and the Fed’s buy-the-dip safety net.
During the spring of 2014, for instance, it raised $2.3 billion of 5- and 7-year money at interest rates ranging between 25bps and 125bps. That’s right. This company is a red ink spewing rank speculation, but the money printers have enabled it to raise cash that costs virtually nothing on an after tax basis. Call it free money for the Telsa bonfire of the vanities.
True enough, these miniscule interest rates were attached to convertible bonds—-so supposedly the “upside” justified giving a proven red ink machine free money. Yes, and the strike price on those converts implied a market cap of about $50 billion!
In truth, Tesla’s true losses are even greater than its accounting statements suggests. For instance, it has booked upwards of $500 million of revenue and profits owing to ZEV (zero emissions vehicle) credits. The latter were invented by Al Gore after he finished inventing the internet, and amount to nothing more than bottled air—-clean or not.
Also, Tesla’s affluent customers pocket about $10,000 per vehicle of Federal and state tax credits, meaning that taxpayers have fronted another $500 million or so to stimulate Tesla sales.
Finally, Tesla’s marketing machine has even converted itself into a repo man for the wealthy. That is, Tesla guarantees a large share of its customers that it will buy back their vehicles at no loss after three years.
So how does it possibly make a profit deploying this blatant free rent-a-car gimmick? Ask its accountants. In their wisdom and clairvoyance, they have undoubtedly assumed that the residual value of these vehicles will be levitated by the same juice which fuels Tesla’s stock price.
Yes, Tesla is a bonfire of the vanities. In due course, the bubble will collapse and billions will have been wasted—-much of it with taxpayer money—on things like its imaginary gigafactory in Nevada. But that’s what happens when central bankers destroy honest price discovery and turn capital markets into a gambling casino.
Oh, yes, and the whole “green” story is a crock, too.
Eric Peters lays that out in chapter and verse below.
There is an episode of the TV show Top Gear involving a Prius hybrid and automatic weapons. God, I wish I could afford to do the same to a Tesla.
Unfortunately, I (and thee) are too poor to afford a Tesla. But that doesn’t mean we won’t continue to be forced to “help” Elon Musk build these mobile – just barely (and briefly) monuments to crony capitalism.
This is a company that bleeds money like a machine-gunned hemophiliac, yet doesn’t die because fresh transfusions are always available. Just last week it was announced the company lost another $100 million and change while delivering fewer than 10,000 cars. Tesla has yet to earn – properly speaking – a single honest dollar. The money it takes in (a very different thing) is obtained chiefly via carbon tax credits ($130 million from the state of California alone; that is to say, from the pockets of the taxpayers of the state of California) and everyone knows all about the $7,500 per car subsidy Uncle dangles in front of prospects to lure them into buying one of these flashy, yet functionally useless, electric Edsels. There are in addition state-level subsidies (in 23 states) ranging from $1,000 to $5,000 per “sale.”
Do you know what a “carbon tax credit” is? It’s a tax, first of all – only one paid to an entity (I won’t call it a company, as companies are businesses and Tesla is neither) like Tesla rather than to the government. Here’s how it works. I own a business that makes things people are actually willing to buy without being coerced or subsidized. But, alas, my manufacture of this product results in “greenhouse gasses” – carbon dioxide having been decreed the primary one (even though it far less of one than several other gasses, such as methane and also water vapor; but we’ll leave that aside for now).
Well, I want to make the thing and you want to buy the thing, but in order for me to be allowed to make it, I must send money to an entity like Tesla as a kind of (no, an actual) kickback. Because Tesla is “green” while I am not – except of course as regards the color of the money that’s been transferred to Elon Musk’s ever-growing bank account – which is very green indeed.
The argument is that each Tesla built with these kickback dollars amounts to “x” quantity of carbon dioxide negated overall. I’m allowed to build my economically viable product, so long as I “help” Tesla manufacture his not-economically viable products.
But they are “green,” right?
Certainly. In the same way that an outhouse is clean… before you use it. Only with Tesla, it’s the reverse. The finished car may not produce any noxious emissions, but it took a lot of noxious emissions to build the thing. Do American haters of internal combustion ever stop to wonder why Tesla is building its “Gigafactory” in… China?
Where there is no EPA?
Do you know what goes into making a Tesla’s lithium-ion electric battery pack? Caustic, highly reactive solvents and cobalt oxide, a nasty compound that is uber poisonous and carcinogenic. Carbon dioxide and water vapor have been accused of triggering “global warming” (oops, “climate change” now) but breathing either will not give you cancer or neurological problems.
Cobalt, on the other hand… .
And how do you get cobalt? By mining other materials such as nickel and copper. Then, using various noxious processes to separate out the cobalt, such as “froth flotation,” “roasting” and “leaching” with sulfuric acid.
Mmmm mmmmm good!
This form of Gaia-rape is ok, though, because it does not occur within sight of Al Gore’s house. Most of the cobalt needed to make Tesla and other electric batteries is located in places like China, Afghanistan and Africa. Those parts of the earth are ok to fist and finger.
Battery production (like sausage making) is an aspect of EVs that is routinely overlooked – deliberately. Because the picture isn’t pretty. In addition to the environmental nastiness of the materials, it takes a great deal of un-green energy to transform those materials into the finished product (a battery). Nearly twice the energy that goes into making a conventional (internal combustion engined) car, as it turns out.
Where does this energy come from? Like mountain oysters, you really don’t want to know. But maybe you should. Coal and oil. Which are used to run the heavy industry plants that make the damned things. And which also make most of the electricity that powers the damned things. Did you know that electric cars that depend on coal and electric utilities are actually 17-26 percent worse, in terms of their total “carbon footprint, than a gas or diesel-engined car? (Those interested in more will find this study worth a look.)
Captain Planet, phone your office.
Meanwhile, Elon Musk continues to suckle the teat of Uncle. Which he must, because his operation is fundamentally a con. Without the force of government backing him, he’d have to bankroll this epic failure himself – which a smart guy like Musk would be unlikely to do. If we had a free market, he’d have no choice but to do that… or shut down.
Instead, he does the corporatist thing.
Which would less obnoxious if he didn’t constantly preen about the virtues of lightening the wallets of millions of average people so as to further fatten the wallets of millionaires and billionaires, who are the only people buying Teslas and profiting from their existence.
Throw ‘em in the Woods.
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Delorean
strip them of there name... no need to drag nikolai through the mud with them
It's called printing money to fund jobs and research, it's a win win situation.
Unless you are not invited to the money printing party.
And printing currency makes the CURRECNY collapse, not the stock market.
...but "financial bloggers" don't seem to know that.
You fucking idiots. ^^^^
Fuck Elon Musk and his sucking at the Public Teat, his dispensing of expensive toys to the rich as trinkets.
Don't ever bother the greenies with the truth. They just can not handle the fact that their actions are NOT saving the environment and their solutions are worthless.
Newsflash: Elon has said that he does not expect profitability until 2020, which implies that he has planned a way to keep the doors open until then.
Further newsflash: The stock being massively overvalued has no bearing on the quality of the company, only the competence of market participants.
Bonus newsflash: Tesla paid back their US government loans, so claims that they're "sucking at the Public Teat" or whatnot are empirically invalid.
David Stockman just lost a lot of credibility with me, it looks like he's done absolutely no research on this company whatsoever before ranting about it. "not remotely economic without deep government subsidies" --- No shit, sports cars aren't SUPPOSED to be economic! "Economic" is the focus of future models they haven't begun production of yet. "Tesla’s marketing machine has even converted itself into a repo man for the wealthy" --- Huh? They barely even HAVE a marketing department! Ever hear of Coca Cola? THAT's a "marketing machine".
Disclosure: I've profited by shorting TSLA four times now.
Money printing only makes the currency collapse if enough of the new cash gets into general circulation. But it isn't, is it? Barely enough gets into circulation to keep stuff going, but most of it stays inside the banking system and bids up the price of speculative assets.
Because the newly "printed" cash is created as debt, the sum total of money in the system is actually negative (more is owed than exists), and there is no path for the new money to escape the banking system and get into general circulation.
If Tesla himself had to design a car, it would be powered via Tesla coils set up along the roads for remote recharging (or some other visionary stuff like that).
Musk is opposite of Nicola: his ideas ideas are mediocre, but his financial sense is very well developed.
Enron Mask
Yeah, Musk is the opposite of Tesla. Tesla talked a big game rarely produced, died a broke virgin, and spent much of his time conversing with pidgeons. Musk puts in 16+ hour workdays and so do many of his staff. Every company he's started up so far has either been a phenomenal success or is still in the early stages, and he has pretty much changed the game in space travel in a few short years.
You folks don't know what the hell you're talking about. Yes the stock is overvalued, so what. Don't buy it then. It doesn't mean every easily refutable claim you make about them is suddenly true.
No wonder people call the content on this site "doom porn".
strip them of their name... no need to drag nikolai through the mud with them
The Dale.
let me guess! Author lost a lot of money shorting tesla and is now a hating lil biznatch. boo hoo.
All bow down at the alter of TECHNOLOGY!!!
Everyone must use your Bitcoins to buy your Tesla in order to save the Global Economy.
Yes, all bow wow!
Tech-No-Logical Mar-vels...
https://aadivaahan.wordpress.com/2010/06/09/an-older-piece-pertinent/
Excellent!
Elon Musk supporters take one step Forward! please.
But,... but,... it's electric; so it must be clean; right?... right?..
Don't bother to get into a conversation about that with a CA Progressive.... source of energy, massive loss through resistance in transmission, disposal of batteries, etc. The cars are a fucking ecological nightmare.
What is supposed to make them ecologically worthwhile is the fact that they are power source agnostic. If it is charged via something that makes sense like nuclear, the mine-to-road resource consumption is low. Better battery recycling will follow in the wake of electric cars. And if not, someone will just have to come up with a new type of electric storage technique. There's been a lot of work in supercapacitors lately.
But but he is a "vissssionarrrry"....
At least Musk is DOING SOMETHING, trying to move the world forward with Tesla and SpaceX If money is being thrown away I prefer on advancement of something other than padding the 1%. There must be something to it as Apple is supposedly jumping in. Y'all just keep posting on forums bashing anything that moves, that will help innovation a lot.
Hey man, burning the rainforest is progress too. Killing millions of people, progress. Dumping radioactive materials in the oceans EVERY DAMN DAY, progress. Paying farmers to not farm, progress. The largest market cap in the history of the world getting into the game for the freebies, progress!
/Sarc
Add paying wind farms NOT to produce (Even though they can't).
Elon Musk is the 1% being padded at our expense, FFS
Worse than Putin from what I hear.
Probably listens to that infernal "rock and roll music" too.
Darn Momma's and Poppa's ruined 'merica I tell ya!
Before them California was GOING somewhere!
We hate you California! You're drop dead gorgeous women, your beautiful weather, your wealth, technological prowess and ingenuity.
We HATE IT ALL!
Soon...from our hide-bound frozen caves we will alight like a THUNDERING TURD an you will be NO MORE!
Fear us for soon we cometh in mighty gas guzzling F-150 Super Dinosaur editions to stomp on your petty asphalt!
You will feel the roar of our Goodyears and quake like cattle!
Lol! It's too easy, isn't it?
So is David sayin' they've been lying to us?
That's too big, man. It's too big, I can't process that.
I'm gonna sit right here with a picture of my grandma, eat some apple pie and try and forget what I just read.
I have been more or less short since high 200's and have followed this quite a bit over the last year.
My personal take is something along the lines of nice car, but deeply flawed company that has been hopelessly hyped to retail
I think people have been caught up in the cult of Elon "never bet against Elon" being a reincarnation of Steve Jobs but its just not the case.
Im not going to iterate everything thats wrong, but there seems to be much more downside than up at this point.
I suspect years from now we will be reading about this like we did Enron
It all depends on how long the Central Banks can keep the game going with ZIRP/NIRP, without hitting a recession. If they can keep it going long enough, Tesla might get enough economy of scale, improvements in charge times, and national infrastructure to get into the black. How long can they keep the great ponzi going?? 1 year? 10 years? 100 years? I have no idea at all.
The stock is about 4x overvalued at least. There's no evidence that they're running any sort of scam however, Elon himself said the company does not expect to be fully GAAP profitable untiil 2020.
Sadly, they actually manufacture real products, however lost any semblance of 'free' markets. All-digital app startups with similar valuations = wtf loony planet.
Friend of mine bought a Model S. I've driven it a few times, and it's shitfire fun to drive...the acceleration is like driving a giant coffee grinder...but it's certainly not worth the 99K he dropped.
I will say that from a driving standpoint the Model S could lure me away from Audi...but not at that ridiculous price point and no guarantees the company will be around in ten years. Look at Fisker.
And besides, the Quattro system is hard to beat.
Not to mention you won't have to drop a new 'engine' in your Audi every 7 or 8 years to the tune of $12,000.00...
http://en.wikipedia.org/wiki/Tesla_Model_S
[PS: That $12K buys 4,800 gallons of gas @ $2.50/gal. Which would run a typical sedan (that gets only 25 MPG) about 120,000 miles. That's about 10 Years worth of average driving...]
The Model S really is a magnificent machine, and I do think Musk is a bad ass, but until the entire infrastructure to support it is in place and that price comes down to reasonable levels, I'll be keeping it German. Achtung, baby.
But if I had NYC Skyscraper People Money, hell I'd grab a Tesla. They are goddamn fun to drive and look great. There's even a compartment in the frunk that will accommodate an AR-15.
AND if I had the aforementioned silly bux, I'd grab an Aventador and an Aston Martin Rapide too. What the fuck, right?
Okay I'm way off topic.
TITTIES.
Maybe that's why they built a sports car model first, knowing full well that they'd have to drive down the price of the batteries before they could build a cheaper car. Oh wait, that just so happens to have been their plan from day one. Maybe they have a fucking clue after all, unlike most people here, hopping on the hate bandwagon because of a bunch of provably false assertions and one correct assertion, which is that the stock is massively overvalued.
Tesla requires 1%'ers but those are here to stay and will not be going away soon.
Even after the upcoming crash, they will still be wasting money on shit. Example perfume companies.......
Plus they know where the government tit is.
Musk was able to elevate his scam all the way to the top and his timing was right. Battery powered vehicles are nothing new, everyone knows that.
He is a good enough conman to out con other conmen. "They" will keep his bullshit going because no one wants to admit they were scamed. Besides it is not their money that Elon beat them out of!
In a real world he would be bankrupt and on the side of the road with a dead battery, or his car going up in flames!
Electic carriages, as far as I recall, pre-date gasoline engines.
Annually I go to an EV convention. Even though I'd never spend money on an electric car, I like looking at other's people's conversions and imports. Every year they bring this same old electric car from 1914. It's sort of a mascot. They say that everything in it is pretty much original. They had to replace brushes and substitute batteries with modern lead acid ones, the rest is still in top shape after 100 years.
Electric cars had 100 years to progress and they hardly did. The last breakthrough in battery technology allowed us to go from NiMh to Lithium. More capacity for higher price, but still not enough to make large scale production and implementation viable. In terms of chemistry, we've scouted the top left corner of the periodic table already, all the way up to hydrogen. There's no good combination of highly reactive elements that will allow us to produce and store electrons cheaply and efficiently.
The miracle of gasoline is that it quickly releases energy that's been accumulated over millions of years though organic process. It's something we don't have to make, and if we did, we'd be wasting almost all of the input to produce and equivalent amount of output. Corn ethanol anyone?
EV's had been around for over 100 years. Musk invented and revolutionized nothing. Cars still weigh a lot. Range is alright, but component longevity and the initial price tag will ensure the tech remains a toy for the rich. Nothing else.
I personally like EV's. I used to build electric race cars. I love the tech itself, but I don't bullshit myself that it's an economically viable product suitable for mass production. It it was, we would've figured it our over the last millenia.
Gas is a dinosaur and the 2005-ish peak in oil, as called by liberal greenie T Boone Pickens, is the asteroid lighting up the sky as it hits the atmosphere. Take the Koch out of your mouth.
The key lies in the fact that you can charge the car however you like. When people finally come to their senses and we have an electric grid that's pure nuclear for base load power and Solar/Wind/Other for peak demand supplementation , electric cars will start to make a LOT of sense.
If you are interested in drones check out this site http://pickyourdrone.com/
With the power of the print, the progs always imagine they can do anything.
BAU, David. Elon Musk is doing the same thing as the frackers, the unions, the munis, the whole snarl. Big Pharma, Big Ag, Big Auto, the Koch brothers, Uncle Warren ... everyone is in, and in up to their eyeballs. The Fed has distorted everything, everywhere. Everybody is jumping in, everyone has a plan to get their hands on some of that free money. Anyone who can play at that level but isn't doing so is stupid, just plain stupid. And none of them are going to get caught either. They'll get the secret memo that says "time to get out" and they will, selling to everyone standing along side the road yearning for a part of the action. Those suckers will fall on the fire sales like ravenous hounds, and shortly after be destroyed.
BAU, David. And yeah David it was your business for a while, now I think about it, wasn't it. I guess you'll have to sit back and watch the Big Players rape the life out of that business you were in, drain out the blood, crack the bones for the marrow, scatter the shreads, destroy everything. Just destroy everything, David. Whatever that really means. What a sight.
Yes David you are correct, I am very much looking forward to it. Because when they are done destroying everything they can touch I am going to eat them. That you see is the business I am in. My business bats last, and always did, and always will.
Driven top Mercedes, BMWs, Audis for years. Tesla is hands down best car I've ever owned. Scrolling through Zero Hedge in rush hour traffic on the 17-inch screen can't be beat, and when the road is clear acceleration, handling and comfort provide driving fun at its best. Not a single problems in the first year of driving. NOT ONE! Lithium ion batteries? OOOOOOHHHHHH, danger, Will Robinson! As if they haven't transformed workers and consumers lives already; just visit any Home Depot. Person who wrote article needs to understand that people are buying the stock not because this or the next quarter hold promise, but because the next decade holds promise, not merely in the delivery of vehicles but in the delivery of batteries. And more, if Musk retains his vision. If all companies thought long term instead of the next quarter this BS economy could stop stagnating. But each to their own . . .
the story wasnt about the honest investors.... it was about the criminal money dumps of the federal reserve system
No it's about bashing Tesla.
It wasn't no promotion piece either.
The issue isn't whether the Tesla is a nice car; it is.
The issue is that it's being subsidized by middle-class taxpayers, and polutes just as much (if not more) than most modern internal-combustion-powered sedans.
Not to mention all the 'free' charging stations paid for by taxpayers. (I'd love to have 'free' gas stations too...)
I could produce a pretty nice car too,... if you let me lose $100,000.00 on every sale like Tesla does...
Go on then. The only reason sales are low is cause they can't keep up with demand. And yeah cars cause pollution, what a ducking surprise I thought they great like flowers in pretty gardens.
>>The only reason sales are low is cause they can't keep up with demand.
And the only reason the stock is still at 200 is because retail believes this lie
Pool Shark gets it! Bingo and Kudos!
Polaris Slingshot...
Should have named it the Musk
Damn ZH! The bullshit was so strong I can't see anymore...
Off Topic but I didn't see it mentioned:
Russia ratifies $100bn BRICS New Development Bank Published time: February 20, 2015 14:12Edited time: February 20, 2015 14:55
http://rt.com/business/234027-russia-ratifies-brics-bank/
With Russian Official Said To Head New BRICS Bank, Will Dollars Get Dissed?http://www.forbes.com/sites/kenrapoza/2015/02/20/russian-official-said-t...
electric motors are simply the future of torque.
electric batteries are perpetually in the future.
tesla would have gone bankrupt but for their new factory. they were gifted billions of dollars in land grants and taxes by nevada.
the tricky thing about massive stock market scams is that they are so widely popularized---that a feedback loop of trust can result in FREE SHIT LIKE BILLIONS OF LAND AND TAX-REBATES GIFTED TO COMPANIES FOR BRINGING 'JOBS'.
in turn , there are no promises the jobs will remain paid well. or even remain in existence. in the end----tesla's battery factory will likely be more profiteable than the company itself, which may very well go bankrupt.
the battery factory is simply a compeititve lithium ion battery power plant at massive scale. it's not a bad idea ---just go bigger. you can sell the batteries to laptop makers, power tool makers, and even -----by some stretch of the imagination to the bjillions of electric cars that simply won't exist or be sold .
the only way electric cars sell more than even 1 million per year WORLD WIDE. ( they sell less than 1 million per year world wide , and this bumper year of 2014 sold less than 100K electric cars in the u.s.)
is WITH BATTERIES THAT CHARGE EXTREMELY FAST.
the batteries don't need to be more power dense, and there are fundamental limits on power density anyways which is the one reason why people like ot buy into the fuel cell nonsense.
FAST CHARGING ELECTRIC BATTERIES ARE IDEAL FOR URBAN ENVIRONMENTS WHERE CARS CAN SIMPLY BE CHARGED MORE FREQUENTLY THAN GASOLINE CARS.
the problem remains that the battery charges FAR TOO SLOWLY. the work around elon musk perfeected is the MASSIVE BATTERY PACK OF 1500 POUNDS of batteries. this workaround is economically insufficient to sell more than 1 million cars per year.
cars with battery packs weighing no more than 400 pounds must be able to provide 80 miles of range charge within 4 minutes or less. you're talking 20 kwh hour pack USING ALL OF ITS CAPACITY INSTEAD OF JUST 50% (which is what most ecar makers to to extend lifetime of the battery which is in part why the range is so shitty) maximum providing performance far far in excess of what the chevy volt battery pack does now. wildly in excess of it. but it's the charging speed , not the range that is wildly improved.
http://www.hybridcars.com/2015-volt-gets-17-1-kwh-battery/
Good post.
A great scam occured in the State of Minnesota all the way back in the 1990's.
It was the story of North West Airlines and a new Airbus maintenanace facility in Duluth MN.
Duluth had lost jobs for decades. The State decided to entice NW Airlines to bring it's new Airbus Maintenance Facility to Duluth.
In short. The state gifted millions upon million of free dollars. Free land at the Duluth Airport. Taxpayers paying for the new building, tax breaks, no property taxes, free hook up of utilities. Everything you can imagine.
When all the math was done. The State of MN was paying NW Airlines around 500,000 of free gifted money for each job.
In the end, only half the promised jobs came there. In a few years half of those went overseas. The the recession took another half the jobs. Now there is a handful of workers left. I would say the price would now equal. 2 million dollars in gifted money for each existing job there.
What a deal. Taxpayers spend 2 million dollars for each job. Not new jobs, this was all paid out just to MOVE THE JOBS existing, from Minneapolis to Duluth, 200 miles.
Taxpayers raped. NW in return handed huge bonuses to Managers and CEO.
Yep...Tesla is an EZ-Go factory with Govt funding...
Like Evergreen Solar, Beacon Power, A-123, Fiskar and on and on.
I sold manufacturing equipment shit to all of them, been in all their factories...so at this moment, let me say 'thank you' to the taxpayers...Like many things in my past, I'm not proud of this exploit, but whats a guy gonna do with all these fish in a barrel? After all, It wasnt THEIR money they were spending, so it was really easy..
I wrote a lot of stuff about the industry, at the end of this article will be links to the last one and so on...
http://dailybail.com/home/green-corruption-the-five-circles-of-carbon-ta...
Enjoy!
Oh, and for additional info I have shitloads of very good info in the comments section for each of the articles I wrote.
Well done. Like encouraging welfare recipients of every caste to max out their particular .guv issued EBT account. It's an effective way to catalyze the burn of the system. Far more, that is, than voting against "hope and change".
The site I referred to is idle. It was amazing to catch the trolls like flypaper does...
I thought i was responding to the good efforts by clade7 to exhaust and bankrupt the public trust, but i see now that ZH's posting software can keep neither its wits nor the position of its posts in order through the turn of a page. Nevertheless, I would hope that you had good troll hunting. The greenies(read progs) are such maroons.
It's the Stanley Steamer of the 21st century.
There isnt enough lithium in the world to make 100 million electric cars based on the Tesla model.
As usual David Stockman is right on the money! " The trouble with the money printing madness in the Eccles Building is that it generates huge deformations, misallocations and speculative excesses in the financial markets"
Housing comes to mind.
The Stockmarkets come to mind.
But, but, all the most fasionable people said the Musk-man is a genius and so our government and investers gave him truck loads of money---but i guess none of the rubes realized that you can't sell cars at a $10K loss per unit forever. So they were dumb fuckers after all no matter how much the servile press outlets ballyhooed his genius--including those IT cunt know-it-alls in the valley.
Tesla Motors Inc (TSLA)’s 10 Biggest Hedge Fund Backers
http://www.insidermonkey.com/blog/tesla-motors-inc-tslas-10-biggest-hedg...
In the latest round of 13F filings, Philippe Laffont‘s Coatue Management was the largest Tesla Motors Inc (NASDAQ:TSLA) shareholder, reporting a $76.2 million stake, which contains 709,800 shares and is also a new position in the hedge fund’s 13F portfolio.
image: http://cdn2.insidermonkey.com/blog/wp-content/uploads/2012/09/Tesla-Moto...
The second-largest shareholder of Tesla that also started a new position in Tesla during the second quarter of the year is Bridger Management, managed by Roberto Mignone. The stake involves 600,000 shares of Tesla, worth $64.4 million. In addition, D. E. Shaw‘s hedge fund, D E Shaw disclosed ownership of almost 436,000 shares, the stake being valued at $46.8 million. D E Shaw’s position in Tesla surged by over 1,000% as in comparison with the January-March period. Drew Cupps‘ Cupps Capital Management reported a stake worth $38.5 million, which contains about 358,600 shares of Tesla. During the second quarter of the year, Cupps Capital Management cut its stake in Tesla by 37%.
=============
D.E. Shaw’s First Wind Holdings Withdraws $240 Million IPOhttp://www.bloomberg.com/news/articles/2010-11-24/d-e-shaw-s-first-wind-...
edit:
Larry Summers has his dirty lips all over this. Now to wonder how they got so dirty?
Targeting Tesla ffor the investment bubbles is bullshit. Tesla is the Henry Ford of out times, why would anyone here begrudge the guy creating one of the most exciting cars in the world and doing so in the US? Elon musk while an investment darling is not part of the establishment, remember the BS that was thrown at him for a few car crashes. The truth is the game is stacked against him in the US.
http://www.engadget.com/2014/07/17/tesla-motors-us-sales/
Jesus I thought most here believed in Capitalism, do you honestly think putting together a car like this is fucking easy? At least he's actually producing an actual product instead of you fucking obese Americans consuming Chinese ones. The price tag is reasonable considering the product, it's a luxury product, which is the hope for manufacturing in the west, we can't make plastic crap for less than a dollar like in Asia. Any well paid middle class person could buy this car.
Jeezuz, most here do believe in capitalizm; not crony capitalism, that is what the article and commentary are about. Stop forcing the taxpayer to fund these risky "cool" ideas.
Exactly how many millions or billions did Henry Ford get from the taxpayers to subsidize his development on the assembly line?
I want a fucking flying car just like Mechanics Illustrated promised me forty years ago, and I DEMAND that the rest of you guys pay for it.
When hand held calculators first came out they cost a hundred dollars. A FEW years later I got a Texas Instrument solar powered calculator for eleven dollars and still use it. Electric cars will not always be 100K.
Oh you poor dumb bastard...apples to oranges eating mutherfucker...how many shares do you hold?
Thug life youtube audition next forum mate.
None, but if I had extra money I would put it with Musk before anything else.
Not me. I'm backing JPM and Goldman. If I'm betting on a thief, I'm going for the top of the class.
>>how many shares do you hold?
And thats exactly the crux of the problem. These guys HAVE to be true believers even when the world really is not flat as they say
Agree. Musis only problem is he simply can't make them fast enough with skilled people. It's hardly something for people to attack on here.
elon made out like a bandit. bankers and billionaires, the rest of us don't matter.
Then go train yourself in something other than cynacism made you could help make them. Sadly most in the US are as about as useful to modern manufacturing as Nepalese farmers.
Then go fuck yourself...
Fixed it.
Being an asshole poster is about all you can do I'm sure. I'm not surpried your kind are jealous of Musk. Whine on little man.
i'm fucking way richer than you bitchez. but then that probably isn't saying much.
I like Stockman. But I have one complaint with his story here. He is talking market fundamentals and stock price. Since when do fundamentals have anything to do with stock valuations? David, you are living in the Stone Age. In todays world stocks are not beholding to fundamentals. the Fed sets stock prices, not balance sheets.
Exactly! Fundamentals bear no relationship to what is going on: Amazon anyone?!
Fundamentals will matter when the tide goes out. If you buy puts on Tesla, you are really betting when the next recession hits. In a ZIRP-NIRP world, there is no predicting. It could be years, or it could be this year. No one has a clue.
If this was only how it worked for us small business people...cheap, almost interest free money to start and run our businesses. But, the greedy .01% would never be able to make billions off of us. We would never make to the size needed to issue a IPO. If we showed balance sheets like Tesla's, no one would be foolish enough to invest any money, much less manage to hang on for seven years.
Only the "well connected" have access to the FED's "free money spigot." Only in 'Merica can a massive cash burning company generate the size of "return on investment" that Tesla does. Or Amazon, or Facebook, or Alibaba, or Tulips...
WABOB!
Well connected? he's like an average guy from South Africa. You begrudge him for becoming successful and networking? The guy built a fucking rocket!
Umm. He didn't build that...
Kinda funny that UPC Renewables disappeared their South Africa operation... But the NA business seems do do quite well. Ever see the show Shark Tank?
http://thirenewableenergy.com/leadership/management-team/
I have some issues with this article even though I can generally agree with most of it, but that is really not the problem of Musk, he just took advantage of the opportinity that presented itself. What I mean is that I feel people like Musk (even if they get state/federal subsidies) actually produce stuff in the US (they may as well be building a factory in China, but who does not these days?) and provide real manufacturing value added jobs. I'm not sure what the author of the article is suggesting considering that the manufacturing base has been lost to Asia a long time ago. Is he saying people like Musk should just close shop? Yes, - today these cars may produce higher footprint than conventional cars, but that may change very quickly once new technologies (especially as far as batteries are concerned) become available. If a business like this is closed down others will take its place elsewhere and once this whole 'green car' business picks up (and it will) it's those who are in the business that will take full advantage of this... what is better, innovate and produce something tangible for the people or export inflation and war the US is so good at? I feel American manufacturing is going down the drain... seeing as companies like CAT are struggling big time...
Agree. Musk is simply a genius entrepreneur. I've seen him say the stock price is too high and that he does not even care about then price. You can't blame him for taking subsidies that normally go to Jap or Korean firms.
I've seen him compared to Howard Hughes but I'm not sure if that is good or bad.
I love how people drive a tesla and then praise the dash. There's a reason why most cars don't go all electronic for the dash. It's because they fail and leave you blind. Sure, it looks all shiny, it looks amazing, but it's unreliable. There's really nothing revolutionary or exciting about the cars themselves. They have a nice design, but it's just a battery pack slapped on some motors and a car shell slapped on over it. Good luck repairing it, good luck when the batteries die. There is no standard for batteries or even chargers at this point which means you can't hotswap, you can't go off anywhere to charge either. There is no revolutionary breakthrough in batteries that has happened, so it's all just smoke and mirrors.
LION batteries also have that tendency to kinda sorta explode when ruptured, ford pinto anyone? People are buying the stock because GS ramped it up to attract morons.. so no, people are not buying the stock, morons are.
What better car is made in the US by an American company?
Talking like anyone can make a decent electric car is retarded. Most of the competition look like Trabants.
Ford Super Duty trucks... Amazing how so many of those electric cars ended towed into the shop here in NE over the last few weeks.
Did they need a bailout?
It's because there is no real market for it and the price points are not there. If there was an actual market, you would be seeing them. Hybrid is more realistic as gas is everywhere and you are not stuck recharging for a few hours compared to a 2 minute stop at the pump.
Electric bikes make far more sense in all honesty, especially in the cities and scooting around the burbs. You can even get electric bikes with a flatbed in the back to haul shit around and they get decent range. The batteries can be removed and taken inside to charge too. Cars? fff, it's a fucking joke... which is why noone bothers actually making them. BYD has some, no one wants them. Once you factor in the "gas savings" even at $5 a gallon, it's still overpriced.
Yes, I'm sure there will never be anymore innovation, ever. Especially if ZHers are involved. It's easier to bitch than do/support something.
Having been there, and done that, I can tell you Musk is to TESLA, what Lay was to Enron.
The battery technologly is still not there for electric vehicles, except slow moving ones.
In 150 years , with billions in todays dollars spent on research,the same problems remain.
There are tweaks improving the endemic battery problems, but there are no solutions.
TESLA a boongoggle that could only have happened in the current fiscal nighmare, and it will
will be remembered as a folly of our times.
Musks claim to fame and fortune was his market conceptualization of Paypal...a great historical example of perfectly being in 'the right place at the right time, with the right skills and the right mind'..for that he should be applauded....
please dont equate that kind of success albeit financially admirable with the actual effort involved in the manufacturing of things, especially things of which he has no base knowledge...he sure worked the free money RND path for old glory though...so that was a sweet move too...without a .gov handout, he'd be smoking a turd in purgatory and everyone with a mechanical mind knows it...
They're great cars.
They're taxpayer scams
They're dirtier than gasoline autos.
Elon is a Member Large of the 1% who got there and stays there courtesy of the public tit.
Balloons of free money. More to the point.
Privileged behavior, perhaps morer to the point.
Nicolai Tesla was a true mechanical/electrical genius definable in any sense of the word...He died poor, crazy, and broke...Musk is riding name recognition and knows how to work the financial/legal crowd..theres a lot of true 'Teslas' out there, but they cant work the crowd ...
Perception is much more important than reality in today's world. This is why marketing is so important. We need to BELIEVE...
Meh. Tesla is a future tax loss carry forward shell waiting to happen.
This isn't the next Henry Ford. Their cars are as close to made-to-order or just-in-time as they get. That's great for a niche designer product like this. But want some scale? Maybe you're going to achieve that with some assembly line production and building inventory to sell through. He's the anti-Henry Ford.
I did the business case for the utilities for these things. These things won't be anything until the fast charge stations can be created. Right now they're 3-4 miles a kWh. Want 400 miles tank range? 100 kWh please. How long does that take with 20 amp and a 220 home connection? Like 20 hours. You're going to need some serious capacity to fast charge these things. Either 3 phase or a DC. Not a home use product.
Proggies and pols especially, don't do maff. Put simply, they can't.
Last year I watched a video about some mysterious propulsion technology they had developed that allowed a drone to stay afloat for 5 years without re-fueling.
Thank God I didn't have the money to take the bait!
Uai!
Ninguém vê que essa coisa é uma bosta cara demais?
hehe
You should read Dave Kranzlers research regarding "Amazon.con" on his site investmentresearchdynamics .com
Amazon is probably even worse than Tesla when it comes to insane overvaluation and they are trying to increase revenue but have never made any profits in 20 years.
Using accounting tricks to paint the pig in lipstick and defraud investors.
Their businessidea is to "lose money on every product they sell but they make up for it on volume"
I use Amazon Prime frequently and there is no way they can be making money delivering products sometimes next day from another city.
Some contrarian thoughts.
(I am holding some Tesla lottery chits).
1. Elon Musk did not create the crony capitalist gravy train. But, he knows what to do with the gravy.
If the cronies are going to pave the sidewalks with greenbacks, I'll pick some up.
2. One if the big unrecognized contributions of Musk/Tesla is that he validated the concept of the all electric vehicle, thereby creating a huge, viable product category that didn't exist.
He validated the electric car by debunking "range anxiety".
The fundmental knock on electric cars is: "What happens when my car runs out of juice and I'm only half way to where I want to go?"
Tesla is showing the market that 97 percent of car travel can be done comfortably within the 300+ mile range limits of a Tesla. For the other three percent of travel, use Uber, use a rental car, use Southwest Airlines, use NetJet or whatever.
3. The high price points of the Tesla really chafes the populist egalitarians, but as Hillary says: "At this point, what difference does it make?"
Tesla is in the market initiation phase and is supply constrained. It is cream skimming, and charging what the market will bear.
But Tesla's crown jewels are NOT car factories or assembly lines, it is technology innovation, product integration, and recognizing that myths about electric cars are mythical and can be overcome.
BMW is utilizing Tesla technolgy, presumably in it's i3.
Apple's remarkable interest in an electric vehicle, shows what? It shows that the most valuable company in the world with $130 billion in cash believes the all electric vehicle concept is valid.
I don't think any company in Silicon Valley would have ever have seen the light of day if the founders and investors waited for the "green eye shade" pencil pushers to give them the go ahead.
The un-fall-able mighty do eventually fall. Nobody thought that Lance Armstrong would fall, but one of his buddies turned him in...crash. Madoff? He tripped over his weenie when the market turned the wrong way....crash crash. I forsee Al Gore and Elon Musk joining that crowd... it is really inevitable, but when? Al's facade is cracking, and it gets harder to explain the climate models doing so poorly every year as they diverge further and further from reality. Soon, somebody inside the organization will develop a conscience and something nasty will break. Elon? I agree with those here that say that these are great toys for the rich greenies....and there are LOTS of them in silicon valley and hollywood. 0 to 60 so fast you left your teeth at the starting line....and you with your toothless shit-eating-grin won't mind dropping $100k on this sexy toy, baby. But how long will the stockholders put up with continual losses? And how long can Elon keep the public nipple feeding him?
This being an investment blog, what is the liklihood of r.o.i. on this bet? Shorting something that could go to the moon doesn't suit my tastes. Keeping and rolling forward a handful of puts might be the trick...deep out of the money and buying 4-6 months out & rolling every 2-3 months.... There will be a cost to keeping this bet active, is it worth it? Whadday think friends?
<edit - just ran the math for rolling $150 puts, buying 10 months out selling 7 months out....a black swan taking tesla stock down 80% pays about 5x the yearly cash loss to keep this position rolling....think the chances of that sort of black swan are greater than 1 in 5? I dunno...there are still a lot of optimists out there, and it seems the puts are a bit bid up...>
A car company taking advantage of taxpayer provided funding? Surely nothing like that has ever happened before.
elon musk
LMFAO!!!!!!!!!!!!!!!
Your great grandfathers old safe was just found in storage. As you open it...how do you hope he stored his wealth?
That artilcle reads as though the author is short TSLA.
You think?
Stockman needs to lay off the cocaine. It can't be healthy to make articles that long.
All I know about the Tesla is I saw one beat a brand new Corvette in a drag race once. But if Obummer like's it then it must be bad.
It's crazy how much the media and the sheeple kiss this guys ass
He's a slick sales men, thats for sure.
Fuck Tesla!
If you want to drive "green" get a Honda civic- and no..not the hybrid.
If it wasn't for Tesla people would have less money because the degenerate oligarchs wouldn't do anything with it. At least this way some of that free cash gets sloshed around.
Those psychotic, cash bloated, inbred retards from Silicon Valley are danger to themselves and population and must be stopped. It seems to me that cocaine doped Wall Street sadomasochist perverts, in their wet ponzi dream are fornicating with those poor mentally challenged Silicon Valley megalomaniacs, squirting “green” feces off their rotten minds onto hard working US taxpayers, during their cerebral herpes induced seizures of sick imagination. That’s cruel.
Interesting take on those parasites of reasonable mind and taxpayer wallet I found at:
https://sostratusworks.wordpress.com/2015/01/08/smell-of-silicon-madness/
and propaganda lies about renewable energy at:
https://sostratusworks.wordpress.com/2015/02/11/engineering-renewable-delusions/
Excerpt:
..few groups of corporate sponsored green fanatics hugging trees before they are cut down for pleasure or profit, chasing remaining dolphins or already empty fishing boats for YouTube clicks, or supposedly cleaning rivers while in facts providing cover for globalists to move industry and jobs abroad and pollute river for profit somewhere else. Instead of reason and human concern about dwindling natural resources described in the plan we got psychotic rants such as “drill baby drill, dig baby dig, burn baby burn” for national energy policy promoted by elites all over the world.
I saw one on the road recently, looks nice! I still see a DeLorean every now and then also, they look nice and are unique as well. In other words, Tesla will be tomorrow's DeLoran. I suggest a movie starring a Tesla, "Back to the Past".
This is an odd rant. About a valuation that existed months ago?
Also, in looking at their actual financials... they already have a gross profit last year and only a modest actual loss. They have a good current margin and rising equity.
Consumer Reports ranked their car as the greatest car EVER reviewed, with a score of 99/100.
I can't afford one, but know a few people who own them.. not one of them bought it becuase of the financial incentive, they buy them because they love the car. This is no different that Macs, which have never been as capable as Windows PCs, but sell for 50% more anyway.
I would bet on Elon Musk all day long, and even though I don't like subsidies of any kind.... I would rather that Tesla get them than any of the dinosaur auto companies in the USA.
Most of the people I know with Teslas (myself included) bought them because they are fast, quiet and just a load of fun to drive compared to anything else we have ever driven including fancy jerman or eyetalian cars, which I found finicky, troublesome and way overvalued.
Deekras (dears), TESLA like a lot of these other Silicon Valley "new" companies is full of horse ca-ca. Just more of the "second coming of America" nonsense that I have been hearing for over 20 years. It is all nonsense and meant to keep this casino in business until the last wealthy Americano has secured his/her second passport and they are able to easily get OUT and STAY OUT (the latter is the tricky bit). Then when all hell breaks loose they will be gone and the poor folk will be stuck holdilng the bag.
Take for instance the real estate "boom" that the media is touting. We all kknow that it is nearly fueled by rich foreign investors (nearly all Chinese with a sprinkling of Russians) and they are doing it largely for money laundering reasons. Entire luxury buildings in NYC are sold out but are ghost buildings in that no one lives in them. Of course that bubble is going to pop as well.
As I have said before, if you can get out of USA then get out. If not then perhaps a home in a very rmote area may be a good bet. I do not believe that the exits will remain open for much longer.
Tesla Motor's Elon Musk was the co-founder of PayPal with none other than Peter Thiel. Among Peter's credit are his stint as the head of the Bilderberg group Steering Committee.
So... Tesla is, INDEED, the crony capiitalist sink-hole for the money of the elites that control the world... or, at least, are trying to control the world.
Never underestimate the financial tricks and legerdemain that will be used to save Tesla Motors for these elite investors...
Firing David Stockman was one of the few good decisions made by Saint Reagan.
Some ZH sheeple will likely short Tesla as a result of this article. They can add it to their Apple, Google, Facebook, Amazon, QQQ, DOW, U.S. Dollar, Long Treasuries, and Nikkei shorts as well as increase their long positions in PM’s, commodities, and Bitcoin (Beanie Babies for Libertarians).
Heh ZHers, your Libertarian mental model isn't working… everything you know is wrong. Some points-
-The use of fossil fuels has begun a long slow descent… sure, there will be occasional market adjustment spikes but the long term trend is down
- Alternative energy and alternative transportation works… get used to it. We’re in the early stages of a massive turning point in the world energy infrastructure. This is where you should be putting some money.
- Government incentives and subsidies (either direct or through university research) has proved useful and productive… see antibiotics, integrated circuits, computers, the Internet, the GPS, avionics, etc. WWII and part of the Cold War were periods of very high government involvement in the economy and high debt levels. Of course, back then the government as bogeyman didn't exist.
I wonder if Stockman is a paid fossil fuel shill?