The value add for Tesla, if I understand correctly, is that Tesla get a reliable source of battery packs. Panasonic was unwilling to invest in a new plant because of the risk – why build a expensive plant that will be gathering dust in 10 years because Tesla has moved on – either by going bankrupt or moving to a new battery technology.
It is not uncommon for a company to co-invest with a supplier to ensure their supply chain. Apple invested in new Samsung LCD foundries to ensure they would have a ready and exclusive supply of retina displays, but I don’t think Apple got hold of any of Samsung’s IP.
Auto manufactures, Intel, WalMart, and Boeing are a few of the other companies that I can think off – sometimes they reach deep into the supplier, other times not.
So at this point I am saying I don’t know but I think not – still looking for evidence.
It will be producing Panasonic batteries so I assume that the majority IP would be Panasonic. Besides, it is not just the IP (knowledge) but also “total factor productivity” (ability to apply that knowledge.) I assume the ability to (hopefully) efficiently run the factor would mostly accrue to Panasonic. (and yes, I am making a lot of assumptions here. I would love to hear from anybody who knows more.)
For the battery packs, I would be surprised. The Gigafactory that Tesla is building will be majority owned by Panasonic. i.e., it is a Panasonic factory, building Panasonic batteries, but it is being built for Tesla, with Tesla money. It is “Tesla” factory because they will be getting the output.
I know that Tesla is looking for better battery solutions but I have not heard that they have come up with anything.
Right - If Tesla sells it's own stocks those funds are treated as cash flow. If Tesla issues bonds that would be treated as cash flow. Both of these end up on the balance sheet as either equity or a liability. In neither case does it show up on the income statement as profit or revenue.
As a side note, Tesla can only dilute it's own stock by issuing new stock as long as investors have a long term positive view on it's profitability. The more shares you issue the more you dilute any future profit that a single share has claim to, reducing the price of that stock.
How does a rising stock price affect Tesla's profit? If Tesla sold more of it's own stock that would generate cash flow, not profit. Any other explanations?
The US currently has 0 reserve requirements for savings accounts and CDs (the M2+ ex M1).
At least 5%. The Fed wants it to be closer to 8% so we don’t have another financial crisis. See Basel III to understand. True, the banks only have to deposit that with the Fed but that fraction still adds up to the trillions.
Those reserves in excess of physical currency could be 0.
O.K. What does that give us? Banks would no longer need 3t at the reserves – they would need 3t in the bank vaults. That just shifts the problem.
And why would you want the government to procure more gold if it should decide to raise reserve requirements, and thereby shrink the money supply. Sounds backwards to me.
As for the other points it looks like we have a misunderstanding – I am not sure how you pulled that statement. Let me try again. US Money (M2) is balanced upon the smaller supply of currency with a value of about 3t. We currently have gold with a value of 240b, which leaves us a gap of~2.7t. Filling that gap would be interesting . one would need to do it either by buying vast amounts of gold or by gimmicks. Revaluing the dollar is not going to do you any good – you are not changing the value of the gold – the value of the gold is set by world prices.
I do not like hard currency systems, but if you are going to have a hard currency system you should do it right. Its virtue is that it is simple and robust. There is no way to break the bank by having a currency run. Hybrid system between hard and fiat money tend to have contradictions that causes their collapse.
On to your points.
MO is just physical cash. You also need to factor in the monetary base – what banks keep in the vault or at the central bank – the non-fractional part of fractional reserves. That would also need to be replaced. http://en.wikipedia.org/wiki/M...
For a gold back standard to work a country must able (or appear able) to swap currency with gold, which means it is tied to the world price of gold. People have tried various methods to get around this.
One could revalue the dollar vs. gold, which really means devaluing, which means debasing, which just causes inflation and does not get you anywhere. Remember, the value of all dollars should be the same as the value of your gold in your vault.
People have tried to game the system. The problem is that when people call your bluff and you can’t ante up, your currency collapse.
Most hard money types consider FDR’s action the first step off of the gold supply. Also times were different then. The US had much more gold in stock relative to the economy and the economy was less global. Not so much today. Plus FDR was sitting on the biggest supply of gold. As the 800 pound Gorilla nobody nation could called his bluff.
There are other ways to bluff the system. Cranking up real interests is one but that hurts the real economy. On can restrict currency conversion (holding gold, exporting gold, or importing anything else.) to have a closed system but that has serious implications. See Venezuela today. There are many other examples back in the 70s and 80s. Countries have tried to get away with holding only fractional reserves or dual reserves (Gold and Silver) but when these system are tested they hold up until they crumple like a pop can.
You are right. Currency is fixed. Money (i.e. any ready asset, not just currency) is elastic. Only currency would need to be fully backed by gold – and it would have to or there would be a run on the currency. If there were a run, well.
We would need about 3 trillion dollars of gold to go back on the gold standard. I think we have about 240 billion. Not sure how many more metric tons we would need.
My 2 cents - I don’t think currency should be backed by stock, be it gold, cattle, cotton, stock, etc. We have a responsible central bank, and as long as we have one of those the benefits of fiat money outweigh the risks.
There is a simple way to identify something as an investment or speculation. If something has a cash flow (or a yield) it is a investment. If it doesn’t it’s speculation.
If I purchase 1 BitCoin and 1 ounce of gold today, I will have 1 BitCoin and 1 ounce of gold 1 year from now. That’s speculation – you are hoping that the price will change.
If I buy a bond it has a yield. If I buy some stock I am going to get a slice of the company’s earnings. If I buy property I will get rent. If I buy some forest my trees will grow – this is my non-cash example. These are investments.
Sigh, no it doesn't. About 5% to 10% of mined gold goes into manufacturing. The rest goes towards bullion or jewelry (which for most people is the same as bullion – a store of wealth). We could shut down every last gold mine and have enough in our reserves to meet manufacturing demands for centuries. The price of gold is determined by the “investors” in gold – not the manufactures.
If you want to tie your currency because they have manufacturing value, chose copper, chromium, nickel, or tungsten
In the old days? Yes - and it would take much longer to correct. I remember the time when George H. W. Bush (senior) was shot. That rumor tanked the FX markets for 4 hours. Markets go down a little faster today, but they recover much much faster.
By the way, when France taxed the HFT, spreads and volatility increased. The issue is not the speed of the system but that the system can be gammed. Fix the root cause, not the symptoms.
She has a point – a weak one but still a point. I have read the book and it seems to me that the system is not gammed for small retail orders – those are harder to front run. And even if the HFT trades scalp a penny or three per share that is still better than the $.125 spread 20 years ago. Not saying that the system can’t be improved – Flash Boys did change my mind on that – but let’s realize the magnitude and who it affects.
He is a creative consultant plus Disney has access to all of his old files.
I actually take this as a good sign. Lucas does the big stuff – like universe building – well. That is what he is going to have input on. I like JJ Abrams is very good at making great stuff that is bright and shinny – the deep stuff less well. Hopefully they will fill in the gap for each other weaknesses.
Yeah – I read about that rule after I posted. I wonder how much that rule can be bent. If you travel outside the area I assume you still can get access. What if you travel often, or even the majority of the time. Snowbirds who live away for 6 months? People with just a P.O. Box? I knew many Canadians who had American P.O. boxes so they could get American satellite TV.
I think my point still stands, but in a much weaker state.
It does matter. You are trying to measure the change in purchasing power from one time period to another you need to measure apples to apples. As you say, you expect improvements in quality – but what do you expect that to be? Are we faster or slower than we expect?
Maybe total cost of ownership is better - reliability is up and fuel consumption is down so maybe a car is more affordable? Then how do you want to factor in the improved safety features or change in ride (cars are smaller but they have got Bluetooth.)?
This is one of the things that tend to be glossed over when talking about inflation and CPI. CPI tends to understate inflation because you don’t have exactly the same type of apple in each time period. Adjustments are made for changes in quality, but these adjustments are deliberately conservative and thus understate inflation.
errrr. The only reason why there is an alternative minimum tax is that the tax code is complex and is designed to be gammed - instead of a AMT we would be better off if we just simplified the tax code.
We actually have multi layered technology today. They figured out how to do it in the last year or so. I don't think they have done commercial production yet.
We are talking about geosynch – a very high orbit. That cuts out many space faring states. I can’t think of any American enemies that can get there – only friendlies and neutrals. Who are you thinking of?
And of course getting to space is only half the trick – you then need to guide your missile. Guidance is hard.
There are only 3 countries that can shoot down satellites today, the US, China, and Russia. So maybe not against those. I am sure that others could follow suite, but it is going to be a long time before insurgents, irregulars, etc. could do it.
I am missing your point. The article does mention using a tether to stabilize the solar array. Are you thinking about electric production? I can be used as such but unfortunately producing electricity robs one of delta, which drops your orbit – eventually into the atmosphere. There is no such thing as a free lunch. Most suggestions I have seen is to pump electricity into the tether to increase delta.
First, geosynchronous orbit. It will always point to the same spot on earth. (There are issues – see the article for depth.)
Secondly, microwaves are not much affected by the atmosphere, clouds etc. I don’t think the odd bird would have much effect. Not saying there won’t be an effect on the bird.
Third - well yes. It is the Department of Defense and not the Department of Energy which is pursuing this in the US. What may be impractical for daily electric consumption may be practical on the battlefield..
Sunlight is broad spectrum and some of it will be absorbed by the atmosphere, clouds, etc..
The idea is to shift the energy from a broad spectrum to a wavelength, like microwaves, which are not absorbed. In theory one can squeeze more energy out. Now, we are talking about sunlight => electricity => microwave output => microwave reception => electricity, so there are known issues that need to be resolved.
Your point on base load is a bit off point. Base load is cheap because it uses coal or nuclear. If you want be to carbon neutral or want to close down all of your nuclear plants, those things go away so your cheap base load goes away. And as of today we don’t have any good way to store electricity generated during the day for night time use. Yes – I will acknowledge that there are some interesting projects out there, but nothing cheap enough for prime time today. This would be a solution – abet an exotic one.
Space is theoretically more efficient. Period. You don’t have an atmosphere absorbing the sunlight. You point out some practical issues but that does not detract that space is theoretically more efficient. Poke around the interesting and you can find plenty of interesting solutions. Some are table top demonstrators while others boarder on science fiction. But I will stand that on theory it is better. I can’t say if we can overcome the practical aspects.
On solar for the military, you have to deal with nighttime storage issues and operations during the winter where there is little sunlight. Space based would avoid these issues. Solar is not a slam dunk.
Does space based power have formidable challenges? Yes. Will it likely happen? No. However we should all have a soft spot for long term projects that try to hit a home run with creativity. As a reminder, today is DNA’s 61st birthday. Without some wild and crazy experiments we would never have found the double helix.
First, you don’t have to worry about your power going out at night. These things are so far away that the earth’s shadow will rarely fall on the array.
Second, in theory cells in space should be more efficient then cells buried underneath the atmosphere. I am not sure if they can overcome the practical problems to make it actually more efficient.
Side note – the US military is also looking at this. Beaming power to remote locations could be more efficient then hauling fuel. Power could be beamed to drones, giving them unlimited endurance.
Slashdot Mirror
The value add for Tesla, if I understand correctly, is that Tesla get a reliable source of battery packs. Panasonic was unwilling to invest in a new plant because of the risk – why build a expensive plant that will be gathering dust in 10 years because Tesla has moved on – either by going bankrupt or moving to a new battery technology.
It is not uncommon for a company to co-invest with a supplier to ensure their supply chain. Apple invested in new Samsung LCD foundries to ensure they would have a ready and exclusive supply of retina displays, but I don’t think Apple got hold of any of Samsung’s IP.
Auto manufactures, Intel, WalMart, and Boeing are a few of the other companies that I can think off – sometimes they reach deep into the supplier, other times not.
So at this point I am saying I don’t know but I think not – still looking for evidence.
It will be producing Panasonic batteries so I assume that the majority IP would be Panasonic. Besides, it is not just the IP (knowledge) but also “total factor productivity” (ability to apply that knowledge.) I assume the ability to (hopefully) efficiently run the factor would mostly accrue to Panasonic. (and yes, I am making a lot of assumptions here. I would love to hear from anybody who knows more.)
For the battery packs, I would be surprised. The Gigafactory that Tesla is building will be majority owned by Panasonic. i.e., it is a Panasonic factory, building Panasonic batteries, but it is being built for Tesla, with Tesla money. It is “Tesla” factory because they will be getting the output.
I know that Tesla is looking for better battery solutions but I have not heard that they have come up with anything.
Right - If Tesla sells it's own stocks those funds are treated as cash flow. If Tesla issues bonds that would be treated as cash flow. Both of these end up on the balance sheet as either equity or a liability. In neither case does it show up on the income statement as profit or revenue.
As a side note, Tesla can only dilute it's own stock by issuing new stock as long as investors have a long term positive view on it's profitability. The more shares you issue the more you dilute any future profit that a single share has claim to, reducing the price of that stock.
Service for current vehicles.
Powertrains for Toyota's RAV4.
They sell fuel credits to other companies that make polluting vehicles.
etc.
Lots of this and that.
How does a rising stock price affect Tesla's profit? If Tesla sold more of it's own stock that would generate cash flow, not profit. Any other explanations?
The US currently has 0 reserve requirements for savings accounts and CDs (the M2+ ex M1).
At least 5%. The Fed wants it to be closer to 8% so we don’t have another financial crisis. See Basel III to understand. True, the banks only have to deposit that with the Fed but that fraction still adds up to the trillions.
Those reserves in excess of physical currency could be 0.
O.K. What does that give us? Banks would no longer need 3t at the reserves – they would need 3t in the bank vaults. That just shifts the problem.
And why would you want the government to procure more gold if it should decide to raise reserve requirements, and thereby shrink the money supply. Sounds backwards to me.
As for the other points it looks like we have a misunderstanding – I am not sure how you pulled that statement. Let me try again. US Money (M2) is balanced upon the smaller supply of currency with a value of about 3t. We currently have gold with a value of 240b, which leaves us a gap of~2.7t. Filling that gap would be interesting . one would need to do it either by buying vast amounts of gold or by gimmicks. Revaluing the dollar is not going to do you any good – you are not changing the value of the gold – the value of the gold is set by world prices.
I do not like hard currency systems, but if you are going to have a hard currency system you should do it right. Its virtue is that it is simple and robust. There is no way to break the bank by having a currency run. Hybrid system between hard and fiat money tend to have contradictions that causes their collapse.
On to your points.
MO is just physical cash. You also need to factor in the monetary base – what banks keep in the vault or at the central bank – the non-fractional part of fractional reserves. That would also need to be replaced.
http://en.wikipedia.org/wiki/M...
For a gold back standard to work a country must able (or appear able) to swap currency with gold, which means it is tied to the world price of gold. People have tried various methods to get around this.
One could revalue the dollar vs. gold, which really means devaluing, which means debasing, which just causes inflation and does not get you anywhere. Remember, the value of all dollars should be the same as the value of your gold in your vault.
People have tried to game the system. The problem is that when people call your bluff and you can’t ante up, your currency collapse.
Most hard money types consider FDR’s action the first step off of the gold supply. Also times were different then. The US had much more gold in stock relative to the economy and the economy was less global. Not so much today. Plus FDR was sitting on the biggest supply of gold. As the 800 pound Gorilla nobody nation could called his bluff.
There are other ways to bluff the system. Cranking up real interests is one but that hurts the real economy. On can restrict currency conversion (holding gold, exporting gold, or importing anything else.) to have a closed system but that has serious implications. See Venezuela today. There are many other examples back in the 70s and 80s. Countries have tried to get away with holding only fractional reserves or dual reserves (Gold and Silver) but when these system are tested they hold up until they crumple like a pop can.
You are right. Currency is fixed. Money (i.e. any ready asset, not just currency) is elastic. Only currency would need to be fully backed by gold – and it would have to or there would be a run on the currency. If there were a run, well.
We would need about 3 trillion dollars of gold to go back on the gold standard. I think we have about 240 billion. Not sure how many more metric tons we would need.
http://en.wikipedia.org/wiki/M...
http://en.wikipedia.org/wiki/U...
My 2 cents - I don’t think currency should be backed by stock, be it gold, cattle, cotton, stock, etc. We have a responsible central bank, and as long as we have one of those the benefits of fiat money outweigh the risks.
There is a simple way to identify something as an investment or speculation. If something has a cash flow (or a yield) it is a investment. If it doesn’t it’s speculation.
If I purchase 1 BitCoin and 1 ounce of gold today, I will have 1 BitCoin and 1 ounce of gold 1 year from now. That’s speculation – you are hoping that the price will change.
If I buy a bond it has a yield. If I buy some stock I am going to get a slice of the company’s earnings. If I buy property I will get rent. If I buy some forest my trees will grow – this is my non-cash example. These are investments.
Sigh, no it doesn't. About 5% to 10% of mined gold goes into manufacturing. The rest goes towards bullion or jewelry (which for most people is the same as bullion – a store of wealth). We could shut down every last gold mine and have enough in our reserves to meet manufacturing demands for centuries. The price of gold is determined by the “investors” in gold – not the manufactures.
If you want to tie your currency because they have manufacturing value, chose copper, chromium, nickel, or tungsten
In the old days? Yes - and it would take much longer to correct. I remember the time when George H. W. Bush (senior) was shot. That rumor tanked the FX markets for 4 hours. Markets go down a little faster today, but they recover much much faster.
By the way, when France taxed the HFT, spreads and volatility increased. The issue is not the speed of the system but that the system can be gammed. Fix the root cause, not the symptoms.
She has a point – a weak one but still a point. I have read the book and it seems to me that the system is not gammed for small retail orders – those are harder to front run. And even if the HFT trades scalp a penny or three per share that is still better than the $.125 spread 20 years ago. Not saying that the system can’t be improved – Flash Boys did change my mind on that – but let’s realize the magnitude and who it affects.
He is a creative consultant plus Disney has access to all of his old files.
I actually take this as a good sign. Lucas does the big stuff – like universe building – well. That is what he is going to have input on. I like JJ Abrams is very good at making great stuff that is bright and shinny – the deep stuff less well. Hopefully they will fill in the gap for each other weaknesses.
Yeah – I read about that rule after I posted. I wonder how much that rule can be bent. If you travel outside the area I assume you still can get access. What if you travel often, or even the majority of the time. Snowbirds who live away for 6 months? People with just a P.O. Box? I knew many Canadians who had American P.O. boxes so they could get American satellite TV.
I think my point still stands, but in a much weaker state.
It does matter. You are trying to measure the change in purchasing power from one time period to another you need to measure apples to apples. As you say, you expect improvements in quality – but what do you expect that to be? Are we faster or slower than we expect?
Maybe total cost of ownership is better - reliability is up and fuel consumption is down so maybe a car is more affordable? Then how do you want to factor in the improved safety features or change in ride (cars are smaller but they have got Bluetooth.)?
This is one of the things that tend to be glossed over when talking about inflation and CPI. CPI tends to understate inflation because you don’t have exactly the same type of apple in each time period. Adjustments are made for changes in quality, but these adjustments are deliberately conservative and thus understate inflation.
errrr. The only reason why there is an alternative minimum tax is that the tax code is complex and is designed to be gammed - instead of a AMT we would be better off if we just simplified the tax code.
We actually have multi layered technology today. They figured out how to do it in the last year or so. I don't think they have done commercial production yet.
http://www.economist.com/news/...
We are talking about geosynch – a very high orbit. That cuts out many space faring states. I can’t think of any American enemies that can get there – only friendlies and neutrals. Who are you thinking of?
And of course getting to space is only half the trick – you then need to guide your missile. Guidance is hard.
There are only 3 countries that can shoot down satellites today, the US, China, and Russia. So maybe not against those. I am sure that others could follow suite, but it is going to be a long time before insurgents, irregulars, etc. could do it.
I am missing your point. The article does mention using a tether to stabilize the solar array. Are you thinking about electric production? I can be used as such but unfortunately producing electricity robs one of delta, which drops your orbit – eventually into the atmosphere. There is no such thing as a free lunch. Most suggestions I have seen is to pump electricity into the tether to increase delta.
First, geosynchronous orbit. It will always point to the same spot on earth. (There are issues – see the article for depth.)
Secondly, microwaves are not much affected by the atmosphere, clouds etc. I don’t think the odd bird would have much effect. Not saying there won’t be an effect on the bird.
Third - well yes. It is the Department of Defense and not the Department of Energy which is pursuing this in the US. What may be impractical for daily electric consumption may be practical on the battlefield..
Sunlight is broad spectrum and some of it will be absorbed by the atmosphere, clouds, etc..
The idea is to shift the energy from a broad spectrum to a wavelength, like microwaves, which are not absorbed. In theory one can squeeze more energy out. Now, we are talking about sunlight => electricity => microwave output => microwave reception => electricity, so there are known issues that need to be resolved.
Your point on base load is a bit off point. Base load is cheap because it uses coal or nuclear. If you want be to carbon neutral or want to close down all of your nuclear plants, those things go away so your cheap base load goes away. And as of today we don’t have any good way to store electricity generated during the day for night time use. Yes – I will acknowledge that there are some interesting projects out there, but nothing cheap enough for prime time today. This would be a solution – abet an exotic one.
Space is theoretically more efficient. Period. You don’t have an atmosphere absorbing the sunlight. You point out some practical issues but that does not detract that space is theoretically more efficient. Poke around the interesting and you can find plenty of interesting solutions. Some are table top demonstrators while others boarder on science fiction. But I will stand that on theory it is better. I can’t say if we can overcome the practical aspects.
On solar for the military, you have to deal with nighttime storage issues and operations during the winter where there is little sunlight. Space based would avoid these issues. Solar is not a slam dunk.
Does space based power have formidable challenges? Yes. Will it likely happen? No. However we should all have a soft spot for long term projects that try to hit a home run with creativity. As a reminder, today is DNA’s 61st birthday. Without some wild and crazy experiments we would never have found the double helix.
2 reasons.
First, you don’t have to worry about your power going out at night. These things are so far away that the earth’s shadow will rarely fall on the array.
Second, in theory cells in space should be more efficient then cells buried underneath the atmosphere. I am not sure if they can overcome the practical problems to make it actually more efficient.
Side note – the US military is also looking at this. Beaming power to remote locations could be more efficient then hauling fuel. Power could be beamed to drones, giving them unlimited endurance.