DYTTIGAF

DYTTIGAF t1_j9bjlk5 wrote

Carvana isn't in the used car business. They are in the note securitization business (which means they lend money on used cars to consumers who can qualify and bundle those thousands of notes and sell the bundled pile as a financial product).

Carvana needs volume. They need a pipeline of notes and that requires a pipeline of sales. This requires a pipeline of people who can qualify on a 11% car loan that is almost $40,000. This is now a very small percentage of consumers. Most are carrying credit card, mortgage, student loan, and miscellaneous personal debt that could choke a pig.

The Federal Reserve is getting ready to raise rates again in June. Carvana's models worked at 2% interest rates. They don't work at 11%.

Carvana is dead.

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DYTTIGAF t1_j6oycm3 wrote

The Federal Reserve has broadcasted a .25 increase tomorrow. This is the 6th hike (in less a year) and the issues now are both financial and philosophical.

The Federal Reserve sent in trillions into the economy in a short period of time and the result was inflation (that could not be controlled with simple policy statements). It's real. It's pernicious. It's not transitory.

The act of fixing this cancer will not be a quick dose of chemotherapy. You cannot raise rates (in a short period of time) and hope to correct monetary policy decisions that took decades to install. Inflation is a deadly virus of price appreciation that does not give a shit about your timeline for opening up the liquidity again.

No easy money by December. Nope. It's just not going to happen. The marketplace has yet to realize this truth. Shoving a few rate increases down the throat of the economy hoping to make things "all better" is not a realistic policy solution.

The acceptance of what's ahead has not been priced into assets. The next rate hike is going to put people's jobs at risk (if they continue to hold onto the pleasant fiction that things are going back to normal by the end of the year).

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DYTTIGAF t1_j6ojczv wrote

Reply to SNAP yolo? by Bhalskar

SNAP earning down 400% last reporting period according to Yahoo Finance.

"The trend is your friend...Don't fight the Federal Reserve". Two good pieces of truth to live and trade by in my experience.

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DYTTIGAF t1_j6mq4iy wrote

Papa Powell will bring discipline to the unruly teenagers who think they have control of his "house".

They are tourists (these Masters of the Universe). The pimp hand of capital formation and the landlord who "rents" money is now exerting his authority.

Let the thumb sucking and gnashing of teeth begin.

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DYTTIGAF t1_j6mmmzb wrote

A rate hike into an overleveraged zombie debt bubble economy is positive for what reasons again?

Oh. There're no benefits to paying more to "rent" money. Similarly they're no benefits to paying more for food, gas, hookers, and blow.

Simple.

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DYTTIGAF t1_j6lo3qb wrote

It's now apparent to the entire investing world that valuing Tesla to be worth more that the collective value of every single car company on the planet might not have been such a good idea.

So...Tesla is down 50% in the last couple of months. And it has another 40% to go...to even get close to its real valuation.

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DYTTIGAF t1_j6lkwfr wrote

I took an Uber here in Austin, Texas right before Christmas. The car was a Tesla. The interior of this vehicle felt like it was assembled at a third rate community college manufacturing shop class.

It just felt cheap. It had no soul. This was a new model according to the driver. My view: it felt like a golf cart with a roof on it.

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DYTTIGAF t1_j6gbk6f wrote

You have to buy the course (in order to get the discount on the monthly subscription to the news letter).

Plus...you obviously want to be in the Insiders Club which gives you a chance to bid on the tickets for the private/access VIP table at all the traders conferences.

Wait a minute....this is the same model the Republicans and Democrats follow during a fund raising drive. I must be becoming aware the world is nothing...but fraud and deception?

Wait. What? You mean there's no Santa Claus?

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