This a beautiful story. Bankers get shafted lending money to apex capitalist.
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this post was submitted on 29 Aug 2024
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Some days ago I read an article here that said that a lot of the money came from Russia and that they are getting exactly what they wanted: chaos
No one has ever explained how bankers are losing. They say they've lost money. Yet the only details are Musk has to make payments and put up Tesla stock as collateral. That a no lose for the banks. They don't care if Tesla stock crashes, they are making money from selling it.
If Tesla's stock crashes, then the value the banks could get from selling it is much lower.
If Twitter and Tesla go bankrupt, the banks will have loaned out billions to own something worthless.
At least I would assume that's how it works.
The bankruptcy scenario is correct but the first part isn't: you don't have X shares as collateral that you can liquidate. Instead, you have collateral to cover sum Y.
As long as the collateral contract covers enough stock positions the bank won't lose.
That said all of this is assuming standard contracts. If y bank wrote "0% interest and instead 50% of the revenue growth of Twitter" then this would be an easy way to lose money.
Haven't heard of a stupid banker yet, though, so what would the chances be?
I mean, the 2008 housing market was done by greedy and stupid bankers.
Who also made massive profits.
Stupid? It was a masterstroke by them.
They made a fortune, then governments had to throw money at them or risk a complete economic crash.
After the crash, people were poorer, and credit was cheap, so they came to banks for loans and financed everything more and more.
Houses temporarily crashed in price, but the poorest were too risky for banks to lend to, leading to houses being bought up en-mass by people who were already wealthy.
Bankers in 2008 were greedy, yes. But certainly not stupid.
IMO they should not have been bailed out. For most people the economy has already failed and it should be allowed to crash fully so that it can be rebuilt and restructured in full. That might sound extreme but I don't see many other alternatives. Something has to be sacrificed for the sake of the vast majority of people and the real economy and I think it should be the financial sector.
I mean, I feel like the banks that failed still should have done some research on what they were putting their money into. https://en.m.wikipedia.org/wiki/List_of_banks_acquired_or_bankrupted_during_the_Great_Recession
Ah! Thank you for the explanation
Careful there, bud, you're singing the siren song of bank bailouts.
The proletariat is still sore about the ones in 2008. They revealed plan the stratified economic system.
I remember reading that the banks who loaned him the money haven't been able to sell off the debt.
It's because when banks make loans, they sell of the debt, but nobody has wanted to buy the debt for Musk's loans. My understanding of this is essentially, if someone takes out a loan of $100 million, the bank will sell that debt to an investor for $101 million, and the investor will make back $102 million once the loan is paid off due to interest. But no investors are confident enough that Musk will pay back his loan so no one is ponying up the dough to buy it.
That's easy, just give him a AAA credit rating and call it a bond, some pension fund will buy it.
Take it a step further, bundle it with a bunch of other subprime loans and then pass it around like a hot potato.
It was the paid blue checkmark for $8 back in 2022.
Kinda old article info without much current stuff except the lawsuit against the ad trade group.
Still makes me gleeful reading about his stupidity.
It does, until you realise that his monstrous wealth insulates him from any consequences, deflecting them onto the heads of mortals. No matter what he does, heβll be alright.
I felt a little better reading today how many of his children are conceived IVF or surrogate. I canβt fathom having anyone having sex with him.
And now we donβt have to!
He's so insecure though, all the mocking he receives online is pretty satisfying
Not only that, but there are thousands of people insulating him from those consequences. People at Xitter working to keep what functionality they can, despite years of knowing what a shithead Musk is. People who keep the operation of SpaceX separate to make it successful despite his involvement. The Russian and Saudi investors who gave him the money to buy Twitter when he ran his mouth off about it.
Savedyouaclick
Thank you!
please just put the interesting part in the title.
But then there would be no title.
explain exactly what you mean.
The fact that this tweet caused their stock price to dive really shows what a joke the stock market is .
Ugh... it drives me nuts!
MuskΒ had to borrow around $13 billionΒ for his doomed $44 billion acquisition.
Had he spent that $57 billion on developing space hardware instead of going insane and squandering it on social media bullshit, he might have done something worthwhile. I mean... fifty seven billion! What even is that much money? He could have had his own space station for that much money! He could fly up there for weekends, just for funzies.
That's not how math works.
No, my math is just fine, it's my reading comprehension that needs work, because I totally misunderstood what that sentence was saying.
That $13 billion is part of the $44 billion, you don't add them together.
He spent $31 billion of his own capital, and borrowed $13 billion to cover the rest.
Oh great, I added all the numbers in your comment together and now it's $101 billion?? When will this madness end???
With all that money, he could have given every person in the world $12.625 billion!!! It's unfathomable!
maybe you couldn't fathom it, but I'm built different
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Oh thank you, my mistake. Still the numbers are huge!
"own capital" probably more like stocks from Tesla, I doubt any actual money moved
That's why I used the word "capital" instead of "money", but I had a feeling someone still was going to deliberately misunderstand me to try to sound smart.
I do English, but your math is wrong
Haha everyone keeps saying that! But it's pretty funny how wrong everyone is about where the mistake was.
The math is just fine, I did the simple addition correctly. It's the reading comprehension that I got wrong, I misunderstood what the sentence was saying.
he might have done something worthwhile
No, he wouldn't have. Musk is an incompetent billionaire parasite, even more incompetent than the average billionaire parasite, and would have simply squandered his ill-gotten money on something else.
Oh ok, well that's a relief. I'm glad we had you and your crystal ball handy!
Take your lithium
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Why didnβt he just spend his own billions to prop up his venture? Oh, because he doesnβt want to pay taxes.
I'm GLAD we don't tax Billionaires like Musk! Imagine if instead of buying a Website for $44BILLION he instead bought kids $44BILLION worth of School Lunch! The HORROR!
Watching Twitter die the slow agonizing cancerous death it deserves makes me all warm and fuzzy inside.
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