Posted by: asdfgh March 28, 2018
Chances of another recession like 2009 ?
Login in to Rate this Post:     2       ?         Liked by
@regidk, you're drawing big conclusions here. At its absolute worst, Tesla as company may not exist but it will surely be bought out by another motor company because the technology behind it is revolutionary. This happens all the time, companies get bought out by competitors, it is the very nature of capitalism-- creative destruction.

It typically takes startups like Tesla, Amazon, Shopify, Uber, Snap (you name it) at least a decade to start generating profits, not because they're inherently bad companies, but because they're scaling up their businesses at a massive scale, which as you can imagine is very capital intensive. This creates losses in the short run but stunning profits down the line.

Interest rates will still be historically low even with the planned rate hikes. The Fed will not increase rates too much because that could make the Federal government insolvent (!!). The housing situation will also remain intact because of the strong job market and tight lending standards. Even when people enter dire financial situations where they have to choose between what bills to pay first, mortgage is always number one.

Finally, realize that unlike 08', the current boom in the economy is not because of a speculative bubble on a non-productive asset like real estate. It's based on the massive digital revolution that has been upon us since the start of this decade, This has created entire new industries and has also monetized existing industries at significantly higher rates. Companies are still posting record profits and unless there is massive collapse of the Chinese ponzi scheme economy, this boom still has legs to last another 4-5 years.
Last edited: 28-Mar-18 12:37 AM
Read Full Discussion Thread for this article