Student: “So Elon Musk is a trillionaire?”Me: “Yup.”Student: “How did he get that much money?”Me: “Well, he doesn’t really have a trillion dollars cash.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger good work!
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
today's wall str journal
3.4 trilion in revenue would be about , roughly, 1% of world GDP
this sounds absurd to me, but
we shall see what happens when reality meets expectation -
today's wall str journal
3.4 trilion in revenue would be about , roughly, 1% of world GDP
this sounds absurd to me, but
we shall see what happens when reality meets expectation@failedLyndonLaRouchite There are two plausible pathways to that projection coming true:
1) Elmo invents magic, conquers time and space, and personally leads/profits from humanity’s colonization of space.
2) The Us govt gives SpaceX that much money every year in exchange for a rocket that is totally going to work and definitely deliver human colonization within the next ten years and this time boy oh boy we are serious.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
"No one at the Economist Can Figure Out Why" so many people hate unregulated capitalism.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger
Seriously, how fucking insane is that? -
Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger not disagreeing with the overall message here but last I checked at least Tesla is very profitable: https://www.macrotrends.net/stocks/charts/TSLA/tesla/gross-profit
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger nitpick: Elon Musk is the only billionaire. Everyone else claiming to be a billionaire is only a milliardaire.
I thought this battle was lost in the 1980s, but recent self-immolation by the country that foisted the incorrect definition of billion on the rest of us has encouraged me to revive it. -
Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger gen y doesn't particularly like it either. Would I be Gen Y? I was created in 1990...
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@nswigger not disagreeing with the overall message here but last I checked at least Tesla is very profitable: https://www.macrotrends.net/stocks/charts/TSLA/tesla/gross-profit
@zeenix @nswigger "Very profitable" is maybe a bit misleading if compared to stock price.
Tesla stock is valued at 403.8 with $477M last quarter net income, and $3.86B 12-month net income.
BMW stock is valued at 85 with $1.37B last quarter net income, and $7.52B 12-month net income.
I picked first random car company, but I'd wager the comparison is pretty similar no matter what.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger The flip side of this is how vulnerable they are. Their wealth and power is built on contracts, database records, and PR. It's all shadows.
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@zeenix @nswigger "Very profitable" is maybe a bit misleading if compared to stock price.
Tesla stock is valued at 403.8 with $477M last quarter net income, and $3.86B 12-month net income.
BMW stock is valued at 85 with $1.37B last quarter net income, and $7.52B 12-month net income.
I picked first random car company, but I'd wager the comparison is pretty similar no matter what.
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@zeenix @nswigger "Very profitable" is maybe a bit misleading if compared to stock price.
Tesla stock is valued at 403.8 with $477M last quarter net income, and $3.86B 12-month net income.
BMW stock is valued at 85 with $1.37B last quarter net income, and $7.52B 12-month net income.
I picked first random car company, but I'd wager the comparison is pretty similar no matter what.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger
"But isn't the stock value determined by firm performance --" WELL! Uh, yea ... hehe, about that -
@zeenix @nswigger "Very profitable" is maybe a bit misleading if compared to stock price.
Tesla stock is valued at 403.8 with $477M last quarter net income, and $3.86B 12-month net income.
BMW stock is valued at 85 with $1.37B last quarter net income, and $7.52B 12-month net income.
I picked first random car company, but I'd wager the comparison is pretty similar no matter what.
It doesn't make sense to compare the share prices for different companies. Any company can have whatever share price it wants by issuing or buying back shares, by having stock splits or (whatever the opposite is called, I've forgotten). You need to compare the market capitalisation (share price multiplied by the number of shares). And that makes it look even more ludicrous.
Tesla's market cap is $1.506 T.
BMW's is €43 B (around $50 B).
Tesla's market valuation is around 30x that of BMW (not the 5x that the stock prices alone would imply).
A market valuation for a company is typically a combination of how well it's doing at the moment (profit) and how much people expect it to grow. BMW is probably a relatively stable company, but the price for Tesla is assuming that it will grow by a factor of about 300. Tesla sold a bit under 2M cars last year (including some slightly dodgy accounting with Musk's companies selling to each other). That's close to 2% of total car sales. So a factor of 50x growth would mean that they have 100% of the total addressable market. More than that requires the market expanding significantly or them moving into completely new markets.
This is why Tesla is referred to as a 'meme stock': the valuation has absolutely nothing to do with how much money the company is expected to be and 100% to do with the supply of greater fools.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger The key is that Elon can use the fake "wealth" to get extreme low interest loans to fund his scams.
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@failedLyndonLaRouchite There are two plausible pathways to that projection coming true:
1) Elmo invents magic, conquers time and space, and personally leads/profits from humanity’s colonization of space.
2) The Us govt gives SpaceX that much money every year in exchange for a rocket that is totally going to work and definitely deliver human colonization within the next ten years and this time boy oh boy we are serious.
@nswigger @failedLyndonLaRouchite
3) The AI bubble crashes the US economy so badly that there's hyperinflation on the US dollar and $3.4 T is roughly the cost of a small loaf of bread in 2040.
I do wonder if this is the goal for a load of the datacenter investors: buying a load of land and so on as fixed-interest bond debt and pushing inflation up so much that inflation is much higher than the interest rate so that the debt evaporates.
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Student: “So Elon Musk is a trillionaire?”
Me: “Yup.”
Student: “How did he get that much money?”
Me: “Well, he doesn’t really have a trillion dollars cash. He just owns a lot of stock in companies that are valued at a trillion dollars.”
Student: “So those companies make huge profits?”
Me: “Oh gosh no. They all lose billions of dollars a year. All of them. Huge losses.”The Economist headline: “Gen Z Mysteriously Hates Capitalism and No One Can Figure Out Why.”
@nswigger You forgot the rich people borrow money against those stocks. And that a company can pay the owner bonuses.
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@nswigger @failedLyndonLaRouchite
3) The AI bubble crashes the US economy so badly that there's hyperinflation on the US dollar and $3.4 T is roughly the cost of a small loaf of bread in 2040.
I do wonder if this is the goal for a load of the datacenter investors: buying a load of land and so on as fixed-interest bond debt and pushing inflation up so much that inflation is much higher than the interest rate so that the debt evaporates.
@david_chisnall @nswigger @failedLyndonLaRouchite yes inflating the debt away is quite a strategy but it's a real one -
"No one at the Economist Can Figure Out Why" so many people hate unregulated capitalism.
@huntingdon @nswigger as I've gotten older and been exposed to more of the world, it's become impossible to see economists as anything more than bootlickers for whichever powerful status quo needs a pseudoscientific veneer of validation this decade (the concept of "revealed preferences" is about as damning for their field as "oppositional defiant disorder" is for psychiatry).
Unfortunately, you can't really say that kind of thing at an average cocktail party without sounding like one of those people who drinks their own urine and thinks 5G puts a chip in your head. But we're slowly getting to a place of deserved skepticism for fields that have long played fast and loose with academic rigor.
Anyways, the Economist is a hilarious example of exactly the material you'd expect, from people who would name themselves "the Economist" without a hint of self-awareness or irony.
