Tesla Repays a Big Federal Loan Early

That is great news!. Now, to get Government Motors to do the same within the next 1 - 2 months.

DBCassidy

 

Telsa is doing EVERYTHING right. Refreshing to hear good things.

 

Now if only Fisker and Coda would repay back their loan. Oh, nevermind...

 

I'm rooting for Tesla, whether I can ever afford one or not. I bought the Prius to do all the driving chores a more budget minded EV is not up to. When I finish paying off the Prius, I'll buy an EV and probably be the first one at my work {for a fuel distributor} to own one.

 

WOW! I rejected before the GM bashing for taking money from the Government to restructure itself and keep folks working and also those bashing the Volt for the $7.500. "Seems to be getting" is good imagination and now it extends to bashing another country?

This was posted earlier!Tesla Model S Outsells All “Large Luxury” Competitors in Q1 of 2013 | PriusChat

 

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Which government?

DBCassidy

 

Debt transferred from tax payers to stock holders.

America is still the center of the capital world i.e. raising money on Wall street for long term corporate debt. London is a global leader. By 2025 we will see China Shanghai open up to foreign listings and quickly catch up to NY in IPO funding. Other top payers will be Brazil, India and Russia.

However today NY is the leader

http://www.pwc.com/en_US/us/transaction-services/publications/assets/capital-markets-2025.pdf

 

There is a large moral hazzard with bailing out GM and giving money to Fisker. In the case of GM it was a your damned if you do, your damned if you don't. I share your opinion about the bail out, we just need to hold our noses when we give money to companies with lobbies that make them too big to fail. Fisker on the other hand seems a more direct place for crony capitalism. No reason for it. Both programs need to be changed. The loans and grants have been, but GM is still allowed to be too big to fail. Toyota is also too big to fail, but it is likely that the Japanese, not the US taxpayer would be the one's paying. Tesla was in the same program, and it was wise for them to repay early and gets them out of the politics of it all.

The Japanese have created a system even more generous to big domestic auto companies. As such they have more of a problem, and the strong yen was a drag on their economy. I don't think the weak yen is going to help as much as the government hopes. There are structural problems that need major reform.

As for the incentives for plug-ins, well these are tiny, and appear to be quite effective. If you agree that the government has a place to reduce oil dependence and many disagree, plug-in incentives are much less expensive than ethanol mandate, cafe standards, and oil subsidies.

 

I think they are 2 different types of loans. Tesla is DOE to facilitate start-up alternative energy companies when no banks will lend them money and GM was bailout from TARP.

 

Yes, GM was from TARP, part of the too big to fail. MOre money was given to the banks, and money is still flowing to the banks through qualitative easing. We have not had regulatory reform to stop too big to fail.

Tesla was from DOE, as part of a loan program to lower the cost of capital to create advanced technology. In the case of Ford and Nissan, also recipients of the loans, these simply were ways to make investments look better, but didn't have large risk of default. Unfortunately money from this program also went to Fisker, which always had a large risk of default. It was also similar to the program that gave loans as Ener1 and Solyndra. Politically some tried to lump these all together, and this was especially prevalent during the last election. New loans from this program have been suspended. The amount of risk at Tesla was much higher than at Ford, but tesla's loan was much less risky than Fisker or Solyndra. Tesla couldn't have banks lend them money, but cash from Mercedes, Toyota, Musk's personal fortune would have kept the company running, but the S might have been delayed more without the loan.

Mike Kelly, the anti-environmental chevy dealer congressman from Pennsylvania is the one that first tried to link Tesla's loans to GM's bailout.

 

Gov bailed out AIG when the private sector just could not. They made Billions on it. Gov lost it's shirt on Fisker and similar deals.

The TARP days were interesting, our modern Day Great Depression. Just my opinion but if Gov did not bail out GM, and all those big banks, it would be far worse than it was.

 

A large part of the reason that Tesla was able to pay back loans early is because the stock market is so horribly gamed. People set to retire can no longer keep their nest egg in the bank because the Feds are gaming the banks. They have dropped interest to nearly zero. You can't pay your utility bills and buy groceries using your nest egg interest if the interest is zero. With hundreds of billions of fake paper dollars continually being printed - guess what happens ... that causes deflated money value. If you can't get at least 3% to 5% interest in the bank - then your money pile is effectively being destroyed in value. Sadly, that's the plan. We're protecting the stock market at all cost. People with nest eggs are forced into the markets just so their nest eggs won't lose value.

Its not Tesla stock that is going up crazy its most stocks going up crazy. IIRC, the month before last or last month alone - stock value gains were something in the neighborhood of 57%. Jeez. That's much better than Vegas odds. Gone are the days when wisdom said its good to save. The new stock market Casino math says ride ride ride let it ride. It doesn't cease to astound me how fast the last giant economy bubble has been forgotten -and what its ramifications were and still are.
.

 

I agree Bank CD rates and Savings accounts actually lose value when you factor in Inflation.
Best to look at Wall Street for different options but risky ones at that.

However if your borrowing money and have excellent credit your in a good place. Mortgage rates are super low from an historical perspective.

 

The bank interest rates charged versus paid still look like what they were in the early 1970's to me. A home mortgage loan for a person with good credit was 8% and regular savings accounts were 5%. A 3% spread. I refinanced my home mortgage a year and a half ago at less than 4% interest and the savings account rates are abysmal. Still, the spread is 3.5 to 3.75%. Given banking deregulation, I don't see the spread too much different. However, if your home is paid off and you expect much from your savings account, it's not happening.

As for the stock market, my opinion of putting money there could not be lower. Twenty years of my IRA in a mutual fund versus my wife's IRA in bank savings CD's, and she was about 5 grand ahead when I gave up and switched to a bank CD. I think all the really big players have an insider advantage and if/when they are caught, the penalties are not nearly severe enough.

 

I disagree.
Tesla made the Model S when many of the "experts" were saying it never would.
Tesla then ramped up production to full speed when many of these "experts" said they never would.
Tesla was called a looser and lumped in with Solyndra and Fisker by national personalities.
Many investors listened to the people that were yelling these things at the top of their lungs.
Heck, almost half Tesla shares were shorted, probably by people listening to these experts.

Tesla built the Model S...
Tesla ramped up production to full speed...
The Model S took home numerous awards and tied for the best rating Consumer reports ever gave...

The "experts" said Tesla will fail as they have no lease program.
Tesla got a financing program.

Each and every step has strengthened the business and put the hurt on the investors shorting the stock. And yes, part of the reason the stock is 6 times its IPO is those Shorts needing to cover their bets before they lost more than their shirts.

Tesla is the real thing. They still have a lot of challenges, but I am hopeful some of the big boys will take up the challenge and give us some competing products.

 

Sometimes it is a little luck and sticking to a plan.

The fact remains unless you have a Private Pension you need to save for retirement.

Sometimes a good low cost index fund with a good asset allocation plan can help.

Always have the mortgage paid in full before retirement or a plan to downsize and buy something and be mortgage free.

Consider some senior friendly places for retirement.

 

As has been common wisdom since before the invention on money. What is different now?

Mike