|Day's Range||0.2000 - 0.4800|
(Bloomberg Opinion) -- The world economy is turning toward a depressingly familiar cycle of lower rates, renewed quantitative easing and more fiscal stimulus. The return to a persistent semi-slump in advanced economies is likely to increase interest in universal basic income, or UBI – an idea supported by Democratic presidential contender Andrew Yang and business figures from Facebook Inc.’s Mark Zuckerberg to Tesla Inc.’s Elon Musk. If adopted, this radical prescription is unlikely to prove a magic bullet.Advocates argue that guaranteeing every individual a flat-rate payment irrespective of circumstances will help to address the poverty traps inherent in traditional welfare systems, the declining share of income going to labor, and increasing threats to employment from automation. Yang, a tech entrepreneur and an outsider for the Democratic nomination, proposes giving $1,000 a month in cash to every American and has made the plan a key talking point in candidate debates.The concept isn’t new. It was first suggested by Sir Thomas More in his 16th century work “Utopia,” and was championed by free-market economists such as Friedrich Hayek and Milton Friedman in the 20th century. In a national referendum in 2016, Switzerland rejected a proposal to establish a universal basic income.The case for UBI is that it can increase the efficiency of welfare systems by minimizing bureaucracy, the administrative costs of delivery, and drainage of resources through political exploitation or benefit fraud. Trials in Finland, Canada and India have been inconclusive, showing psychological improvements among recipients but limited success in achieving economic or social objectives. Critics point to the financial constraints of funding such programs. In the U.S., $1,000 per month per person would equate to a total cost of around $4 trillion per year, approximately the size of the 2018 federal budget. The Organization for Economic Co-operation and Development found that income tax would have to increase by almost 30% to fund a modest UBI.The key to the proposal’s renewed political appeal is how it could neutralize rising criticism of QE, which has disproportionately benefited the wealthy by driving up the prices of financial assets. UBI funded by new rounds of central bank purchases of government bonds – branded as “QE for the people” – may be a more palatable way to return to monetary stimulus.UBI would allow for the introduction by stealth of “helicopter money,” a controversial proposal for central banks to print money and distribute it to consumers to boost growth and inflation. The idea covers a wide range of policies including the permanent monetization of budget deficits and direct transfers to households financed with base money. Friedman outlined the concept in his 1969 parable of dropping money from a helicopter. If everyone is convinced that this is a unique, non-repeatable event, then it is assumed they will spend the money, increasing economic activity. The concept generated revived interest in recent years as a means of preventing deflation. There’s a telling link between universal basic income and modern monetary theory, an unconventional economic approach that’s been gaining ground with politicians. MMT, loosely, argues that a state cannot go bankrupt where it can print its currency – a version of the argument that deficits don’t matter. Under MMT, governments should borrow and spend when demand is inadequate to move the economy to full employment. It provides theoretical cover for governments to issue debt to central banks in greater amounts than hitherto contemplated. This can then finance spending programs – such as a universal basic income – to maintain economic activity.Whether a guaranteed minimum income can produce economic recovery is questionable, though. It’s a repackaging of existing approaches that have had limited effectiveness. There’s little new in central banks financing governments via QE or fiscal stimulus, including welfare spending. It doesn’t address key structural issues such as excessive debt, imbalances, wage levels and demographics. Adoption of such an approach would also mean the economy becomes dependent on government intervention to sustain activity. A universal basic income financed by helicopter money may perversely increase uncertainty. Ordinary people may react to unlimited money printing by shutting their wallets and hoarding. Australia’s recent “cash back” program, which provided up to A$1,080 ($740) to taxpayers earning less than A$126,000, doesn’t appear to have offset pessimism about the outlook.That’s unlikely to deter more countries from embracing such solutions. The reality is that existing policy is increasingly constrained. Significant debt restructuring and writedowns as well as acceptance of lower growth and stagnant or diminishing living standards is unacceptable. Policymakers will be desperate to show that there are more tools to stave off loss of confidence in their powers.Friedman believed that policies should be judged by results, not intentions. Unfortunately, the continued lure of a painless and easy solution to economic problems dictates that universal basic income will remain on the political agenda. To contact the author of this story: Satyajit Das at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Satyajit Das is a former banker and the author, most recently, of "A Banquet of Consequences."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Beyond Meat announced Thursday afternoon that former Amazon.com and Tesla executive Sanjay Shah will be the meat-alternative company’s chief operating officer.
Beyond Meat Inc. announced Thursday afternoon that former Amazon.com Inc. and Tesla Inc. executive Sanjay Shah will be the meat-alternative company's chief operating officer. Shah was most recently senior vice president of Tesla's solar business, a role he took on in 2018, though Bloomberg News reported last month that he was no longer in charge of the unit. He went to Tesla from Amazon, where he served in a variety of roles from 2011 to 2018. "Sanjay's focus on making operational excellence a sustained competitive advantage, his experience in and appetite for global expansion, along with shared values and a tireless work ethic, makes him a welcome addition to the Beyond Meat family," Beyond Meat Chief Executive Ethan Brown said in Thursday's announcement. As COO of Beyond Meat, Shah will be responsible for the company's global operations and production. In a filing with the Securities and Exchange Commission, Beyond Meat said that Shah would receive a $450,000 sign-on bonus and stock awards totaling $7 million, with $3.5 million in shares vesting on the first anniversary of his hire and the rest vesting on a quarterly basis through his second year. Shah will have a $440,000 annual salary and a targeted bonus of 50% of his salary, and be able to purchase additional shares.
Beyond Meat, Inc. said Thursday it has hired Sanjay Shah, formerly senior vice president of energy operations at Tesla Inc. as its chief operations officer. Shah was at Tesla for just over a year. The electric automaker has seen high turnover in its executive ranks as it has ramped production of its Model 3 and begun construction of a huge new production plant in China.
Morgan Stanley analyst Adam Jonah says the company could triple its lineup of vehicles, a move that he said would expand the market Tesla addresses.
While top U.S. auto giants General Motors (GM) and Ford (F) issue vehicle recalls recently, recreational vehicle manufacturer Winnebago Industries (WGO) inks a deal to buy Newmar.
The Tesla Inc.'s 2019 Model 3 got a top safety award from an insurance group on Thursday. The all-electric sedan joins the Audi e-tron, also electric, and the Hyundai Nexo, a fuel-cell vehicle, that had recently qualified for the award. General Motors Co.'s Chevrolet Bolt did not qualify because its headlights "cause too much glare," the Institute for Highway Safety, or IIHS, said. "Vehicles with alternative powertrains have come into their own," IIHS Chief Research Officer David Zuby said. "There's no need to trade away safety for a lower carbon footprint when choosing a vehicle." Shares of Tesla rose 1% in midday trading and are down 26% for the year, contrasting with gains of 20% for the S&P 500 index .
Tesla's (TSLA) Gigafactory 3 in China is set to begin production in the next few months and ramp up to normal production levels in mid-2020.
(Bloomberg) -- Masayoshi Son, who built a $15.2 billion fortune investing in tech startups like Alibaba Group Holding Ltd., is betting on himself more than ever, even as his empire shows signs of vulnerability.The SoftBank Group Corp. founder has pledged 38% of his stake in the Japanese firm as collateral for personal loans from 19 banks, including Credit Suisse Group AG and Julius Baer Group Ltd., according to a June regulatory filing. That’s up from 36% at the start of the year and triple the level in June 2013.“It lets him monetize a large share of his wealth without foregoing influence over the firm,” said Michael Puleo, assistant professor of finance at Fairfield University’s Dolan School of Business in Connecticut. “But there’s an elevation of crash risk. If the share price falls low enough, he could get a margin call and that could be pretty costly.”The structure highlights the extent of Son’s exposure to SoftBank and its $100 billion Vision Fund. Shares in the Japanese conglomerate have been rocked recently by the postponement of WeWork’s initial public offering. The delay came after the office-rental unicorn was being marketed at a steep discount to the $47 billion figure that the Tokyo-based conglomerate invested at earlier this year. That’s spooked investors, who’ve sent SoftBank’s shares down 4.6% this week through Thursday as the listing unraveled, knocking about $700 million off Son’s net worth. The stock has still advanced 26% this year.Son, 62, also has leveraged his stake in the Vision Fund, which invests in tech startups. That boosts his returns if things go well, with outsized losses if they don’t. Uber Technologies Inc.’s falling market capitalization and WeWork’s travails are set to dent the 62% return on the fund that SoftBank reported through March.“There is a danger in companies where the founder calls all the shots regardless of whether there are loans,” said Robert Pozen, a senior lecturer with the MIT Sloan School of Management in Boston. “And when founders borrow a lot against their shares, they might be more tempted to make riskier decisions,” he said, adding that borrowing against 5% of one’s stake is usually considered prudentd.Pay OutSoftBank’s compensation plan also involves a lot of debt. Son loaned himself around $3 billion to invest in the first Vision Fund, according to people with knowledge of the matter, who asked not to be identified because the information isn’t public. Using loans for a private investment compounds Son’s risk because he would be less able to bail himself out if things go south, Pozen said.The loan was swapped for equity in the fund and will generate profits when deals make money -- and losses when they don’t. Vision Fund employees, including high-profile bankers and investors, receive base salaries and bonuses, but only get payouts when profits are booked.It’s unclear how much of this compensation will be reported in SoftBank’s next annual report. Son’s pledged shares, which currently have a market value of $9 billion, are excluded from his net worth calculation by the Bloomberg Billionaires Index. SoftBank spokeswoman Hiroe Kotera declined to comment.SoftBank is planning to lend as much as $20 billion to its employees to buy stakes in a second venture capital fund, the people said. Son may account for over half of the employee investment pool, they said.Ellison, MuskPledged shares have become an increasingly common way for founders to unlock the value of a stake without selling shares. Larry Ellison has a history of pledging Oracle Corp. stock to fund a lavish lifestyle, which includes trophy properties, America’s Cup teams and the Indian Wells tennis tournament. About 27% of his Oracle shares -- worth more than $16 billion -- are currently pledged. Elon Musk has pledged about 40% of his stake in Tesla Inc., according to a May 2019 filing.Still, the move comes with risks. “If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means. Any such sales could cause the price of our common stock to decline further,” Tesla warned in a filing.The risk-loving Son, who saw $70 billion wiped from his fortune in the dot-com crash, is unlikely to be fazed. He told shareholders at the company’s June meeting that SoftBank’s investment portfolio could grow 33-fold to 200 trillion yen ($1.8 trillion) in 20 years.(Updates Son’s net worth in fourth paragraph.)\--With assistance from Pei Yi Mak, Sonali Basak, Ben Stupples and Venus Feng.To contact the reporters on this story: Giles Turner in London at firstname.lastname@example.org;Tom Metcalf in London at email@example.com;Pavel Alpeyev in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Pierre Paulden at email@example.com, Steven Crabill, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Last year, the Tesla Model 3 earned a five-star safety rating from the NHTSA. However, the Tesla Model 3 also received a top safety rating from the IIHS.
The IIHS has given the Model 3 its highest rating, top safety pick+. It said the Model 3 earned good ratings across the board for crashworthiness. The car's structure held up well in the driver-side small overlap front test, IIHS said.
Tesla's Model 3 electric sedan earns the top safety rating from the Insurance Institute of Highway Safety, the first Tesla model to be granted the coveted award.
(Bloomberg) -- A former Tesla Inc. engineer who helped develop the electric-car maker’s home battery product is now trying to reinvent the humble electrical panel.San Francisco-based Span.IO Inc., led by Arch Rao, the former product chief at Tesla Energy, is selling a “smart” panel that the company says will make it easier for homeowners to install solar panels, batteries and electric-car charging by acting like a plug-and-play of sorts, according to a statement.The panel displaces the need for many disparate pieces of equipment with a single, integrated device. The company is partnering with solar installers to offer the panel as part of a package, saying it reduces the overall time and costs of installing a system.“Electrical panels haven’t seen significant innovations in over three decades despite being the ideal center for controlling home energy and bringing intelligent connectivity into homes,” Rao said.The announcement comes as an increasing number of solar installers are pitching panel-plus-battery installations, allowing homeowners to store power when the sun is out and use the electricity when it sets. Span.IO says it’s working with some installers in California and Hawaii.To contact the reporters on this story: Mark Chediak in San Francisco at firstname.lastname@example.org;Dana Hull in San Francisco at email@example.comTo contact the editors responsible for this story: Lynn Doan at firstname.lastname@example.org, Jasmine NgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Tesla Inc.’s Model 3 earned a coveted Top Safety Pick+ award from the Insurance Institute for Highway Safety, after the sedan performed better in a crash test than the Model S.The Model 3 earned “good” crash ratings in each of IIHS’s tests, including one that measures how vehicles perform in front, driver’s-side-corner collisions. The Model S fell short in the small overlap test in 2017, with the group finding drivers could sustain a skull fracture.Elon Musk has for years crowed about the safety of Teslas, sometimes to the chagrin of U.S. regulators. The National Highway Traffic Safety Administration sent the chief executive officer a cease-and-desist letter last year regarding claims the company made about the probability of motorists being injured in the Model 3. Tesla’s boasts were inconsistent with NHTSA’s advertising guidelines, and the agency told Musk it would ask the Federal Trade Commission to investigate whether the company’s statements were unfair or deceptive.The scrutiny hasn’t deterred Musk. On Tesla’s support page outlining its referral program, which rewards customers for recommending its cars to others, the company says it “makes the safest cars in the world according to U.S. government testing.” NHTSA specifically tells automakers to avoid using the word “safest” to describe how the agency rates the safety of their vehicles.Model 3’s MarksThe Model 3 is one of 48 vehicles currently sold in the U.S. that have earned IIHS’s top safety accolade. Its standard front-crash prevention sys tem earned a “superior” grade.In the challenging small overlap test, the pillar along the front door hinge caved in toward the driver by 8 inches and the door buckled. Still, IIHS determined drivers face only a moderate risk of lower leg injury from a front-left corner crash.The Model 3 is the third zero-emission vehicles to earn top-pick status this year, after the Audi e-tron electric SUV and the Hyundai Nexo hydrogen fuel cell SUV.“There’s no need to trade away safety for a lower carbon footprint when choosing a vehicle,” David Zuby, IIHS’s chief research officer, said in a statement.\--With assistance from Ryan Beene.To contact the reporter on this story: Chester Dawson in Southfield at email@example.comTo contact the editor responsible for this story: Craig Trudell at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Tesla wants to steal Porsche's bragging rights by testing its Model S on the northern loop of Germany's Nuerburgring circuit, using a marketing tool that German carmakers have long used to tout the superiority of their products. Germany’s Auto Motor und Sport this week published photographs of a Tesla with "100D+" markings on the track where according to the magazine, it clocked an unofficial time of 7 minutes and 23 seconds, beating the recently launched electric Porsche Taycan's lap time of 7 minutes 42 seconds.
Morgan Stanley analyst Adam Jonas said he believes Tesla can potentially more than triple its model line-up and questioned if short term noise diverted attention from this potential. Yahoo Finance's The Final Round discuss.
Tesla's Model 3 is being marked as one of the safest cars on the road, earning a top safety pick+ award from the insurance institute for highway safety. The organization said that the Model 3 earned "good" ratings across the board for tricky accidents. Yahoo Finance's Adam Shapiro and Julie Hyman discuss with the panel.