Uncategorized

March 2023 Econ and Financial Forecast Slides

Thank you to everyone that attended the February 2023 Econ Forecast co-sponsed by the Newport Beach Chamber of Commerce and for Edwards Lifesciences for having me provide a forecast in March.

In summary, I believe we will have a recession but likely later in the year and the Fed is likely to be more aggressive than the market. We should be in for a choppy year for equity markets and a bullish year for long-term bonds. Below you can download my slides from March and watch a replay of the February forecast.

Slides here: 2023 February Econ and Financial Forecast

Video here: 2023 February Econ and Financial Forecast Recording

By Christopher Schwarz, ago

Tesla: The House of Cars

Tesla stock is down over 60% from its high. It was predictable this would happen: Way overvalued. People also seem to now understand why Elon was fired from PayPal. But there’s a bigger problem: Elon’s loans.

As of June of this year, Elon has used over half of his Tesla stock as collateral for loans. This is why he didn’t use his own money to buy Twitter. He didn’t want to use even more of his stock. (Or banks wouldn’t let him.)

Whelp, on June 30th, Tesla stock was at $225. Which means, by the time it hits $112.50, Elon would be getting margin calls. Twitter is bleeding money (he’s even looking for new money already) and SpaceX is private and is a cash user. He’s sold all of his houses.

Thus, if Tesla stock drops much farther, it seems likely that Elon will get margin calls which he will need to sell Tesla stock to fulfill. This will push the stock down more, which will lead to more margin calls.

At least he only owns like 25-30% of the stock…

By Christopher Schwarz, ago