Category: zerohedge

A disturbing story is starting to make waves once again on the internet, according to Ben Swann who notes, you can now pay for Starbucks with food stamps. The story, which previously aired on FOX12, sees Jackie Fowler, a Salem, Oregon food stamp recipient, went inside the luxury Starbucks franchise located inside of a Safeway grocery store with the local Fox News station filming. She purchased one tall Frappaccino and a slice of pumpkin loaf. Her total was $5.25. She slid out her Oregon Trail food stamp card, paid in part by the federal government, and handed it to the cashier who processed the transaction. Fowler only made the purchase to assist FOX but it indicates just how deeply the ECBT card has become embedded in US society when, as she notes, coffee's "overpriced as it is, that's money that somebody could be eating with."

 

The original FOX 12 Clip:

KPTV – FOX 12

 

And as Ben Swann adds:

“They’re overpriced as it is,” said Fowler of the luxury brand. “That’s money that somebody could be eating with — a loaf of bread, a gallon of milk.” Fowler says the program is in need of reform due to the abuse.

 

It doesn’t seem like management is trying to discourage the use of food stamps inside of the Starbucks. In fact, they are advertising it, as seen in the sign.

 

 

Corporate stores do not accept food stamps. However, because the store is run by the grocery chain it is offered as a “grocery item”. Such Starbucks outlets are located inside of  airports, malls, colleges, Target, Alberstons, Fred Meyer and other chain grocery stores.

 

The initial report from FOX12,

…

 

"There are a lot of loopholes," she said.

 

A spokesman with Safeway told FOX 12 the store recently made the change as an added convenience to customers.

 

"We think that compliance with state laws is something we can easily do," said Dan Floyd, of Safeway.

 

According to federal Supplemental Nutrition Assistance Program (SNAP) guidelines, people cannot buy foods that will be eaten in the store or hot foods. However, luxury items that are allowed include soft drinks, candy, cookies, ice cream, even bakery cakes and energy drinks that have a nutrition facts label.

 

While FOX 12 learned you cannot use an Oregon Trail Card at a corporate, stand-alone Starbucks location, the Starbucks inside Safeway is run by the store. Fowler tried to use her card at a stand-alone Starbucks, but was denied.

 

However, the register at the in-store location considers the purchase a "grocery item" and as long as it's cold, it's allowed, according to store employees.

 

"It shouldn't be allowed, whether it's a cold item or not," said Fowler. "It's a luxury item. If you really want one (Frappuccino), save your money and go buy one. Don't use the system.

 

A spokesman with the State Department of Human Services told FOX 12 he wasn't aware this practice was happening.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-ijJZBLmYJA/story01.htm Tyler Durden

A disturbing story is starting to make waves once again on the internet, according to Ben Swann who notes, you can now pay for Starbucks with food stamps. The story, which previously aired on FOX12, sees Jackie Fowler, a Salem, Oregon food stamp recipient, went inside the luxury Starbucks franchise located inside of a Safeway grocery store with the local Fox News station filming. She purchased one tall Frappaccino and a slice of pumpkin loaf. Her total was $5.25. She slid out her Oregon Trail food stamp card, paid in part by the federal government, and handed it to the cashier who processed the transaction. Fowler only made the purchase to assist FOX but it indicates just how deeply the ECBT card has become embedded in US society when, as she notes, coffee's "overpriced as it is, that's money that somebody could be eating with."

 

The original FOX 12 Clip:

KPTV – FOX 12

 

And as Ben Swann adds:

“They’re overpriced as it is,” said Fowler of the luxury brand. “That’s money that somebody could be eating with — a loaf of bread, a gallon of milk.” Fowler says the program is in need of reform due to the abuse.

 

It doesn’t seem like management is trying to discourage the use of food stamps inside of the Starbucks. In fact, they are advertising it, as seen in the sign.

 

 

Corporate stores do not accept food stamps. However, because the store is run by the grocery chain it is offered as a “grocery item”. Such Starbucks outlets are located inside of  airports, malls, colleges, Target, Alberstons, Fred Meyer and other chain grocery stores.

 

The initial report from FOX12,

…

 

"There are a lot of loopholes," she said.

 

A spokesman with Safeway told FOX 12 the store recently made the change as an added convenience to customers.

 

"We think that compliance with state laws is something we can easily do," said Dan Floyd, of Safeway.

 

According to federal Supplemental Nutrition Assistance Program (SNAP) guidelines, people cannot buy foods that will be eaten in the store or hot foods. However, luxury items that are allowed include soft drinks, candy, cookies, ice cream, even bakery cakes and energy drinks that have a nutrition facts label.

 

While FOX 12 learned you cannot use an Oregon Trail Card at a corporate, stand-alone Starbucks location, the Starbucks inside Safeway is run by the store. Fowler tried to use her card at a stand-alone Starbucks, but was denied.

 

However, the register at the in-store location considers the purchase a "grocery item" and as long as it's cold, it's allowed, according to store employees.

 

"It shouldn't be allowed, whether it's a cold item or not," said Fowler. "It's a luxury item. If you really want one (Frappuccino), save your money and go buy one. Don't use the system.

 

A spokesman with the State Department of Human Services told FOX 12 he wasn't aware this practice was happening.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-ijJZBLmYJA/story01.htm Tyler Durden

Remember the main reason why the Fed should have tapered, namely the illiquidity in the bond market it is creating with its feverish pace of collateral extraction, and conversion of quality collateral into 500x fwd P/E dot com dot two stocks? Here to put it all in context is Scotiabank’s Guy Haselmann: “Through its QE policy, the Fed buys $3 of mortgages for every $1 of origination.  The consequence is that secondary mortgage market liquidity has been decimated: it is as bad as when Bear Stearns failed.” That’s just MBS for now. However, since the Fed has refused and refuses to taper, the same liquidity collapse is coming to Treasury’s first, then corporates, then ETFs, then REITs and everything else that the Fed will eventually monetize. Just like the BOJ.

As a post script, here are some other observations from Haselmann:

• Moral Hazard has run wild due to Fed policies. Risk appetite, complacency, and market speculation are at elevated levels.  Buyers are scrambling to find assets to buy. As a result, there has been a surge in debt issuance, especially of riskier securities like covenant-lite loans, leveraged loans, and payment-in-kind bonds. 
• The Fed does not have an inflation problem, simply because the $3 trillion+ it has created out of thin air has not been lent into the fractional reserve system.  In other words, the velocity of money has been falling.  The lack of visibility health care costs, the national fiscal budget, the tax code, regulatory rules and economic growth generally (to name a few), is so widespread that it is impossible to assess the financial logic behind potential capital investment projects. When this uncertainty fades, the velocity of money will rise and the Fed’s ability to control inflation with be challenged accordingly.
• IPO’s have also come at a fierce pace, taking advantage of investors scrambling to put easy money to work; and who may not be giving enough attention to valuations and the risks involved.  Market pundits seem to fuel investor complacency with daily statements that equity P/E’s are historically cheap. However, comparing today’s “new normal” growth trajectory to the high growth period of the 1990’s seems misguided.  Furthermore, the current environment is unprecedented and the “E” is a rapidly moving target.
• The P/E’s of the top 50 Russell 2000 stocks is over 45.  The P/E of Linkedin is 755, AOL’s is1278, Chipotle’s is 54.  After Twitter’s IPO tomorrow, the stock will trade near 42X revenues (because it has no “E”).  Now that is “cheap”- at least relative to where some stocks traded during the dot.com bubble.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/qo79Lhj0-Ug/story01.htm Tyler Durden

Remember the main reason why the Fed should have tapered, namely the illiquidity in the bond market it is creating with its feverish pace of collateral extraction, and conversion of quality collateral into 500x fwd P/E dot com dot two stocks? Here to put it all in context is Scotiabank’s Guy Haselmann: “Through its QE policy, the Fed buys $3 of mortgages for every $1 of origination.  The consequence is that secondary mortgage market liquidity has been decimated: it is as bad as when Bear Stearns failed.” That’s just MBS for now. However, since the Fed has refused and refuses to taper, the same liquidity collapse is coming to Treasury’s first, then corporates, then ETFs, then REITs and everything else that the Fed will eventually monetize. Just like the BOJ.

As a post script, here are some other observations from Haselmann:

• Moral Hazard has run wild due to Fed policies. Risk appetite, complacency, and market speculation are at elevated levels.  Buyers are scrambling to find assets to buy. As a result, there has been a surge in debt issuance, especially of riskier securities like covenant-lite loans, leveraged loans, and payment-in-kind bonds. 
• The Fed does not have an inflation problem, simply because the $3 trillion+ it has created out of thin air has not been lent into the fractional reserve system.  In other words, the velocity of money has been falling.  The lack of visibility health care costs, the national fiscal budget, the tax code, regulatory rules and economic growth generally (to name a few), is so widespread that it is impossible to assess the financial logic behind potential capital investment projects. When this uncertainty fades, the velocity of money will rise and the Fed’s ability to control inflation with be challenged accordingly.
• IPO’s have also come at a fierce pace, taking advantage of investors scrambling to put easy money to work; and who may not be giving enough attention to valuations and the risks involved.  Market pundits seem to fuel investor complacency with daily statements that equity P/E’s are historically cheap. However, comparing today’s “new normal” growth trajectory to the high growth period of the 1990’s seems misguided.  Furthermore, the current environment is unprecedented and the “E” is a rapidly moving target.
• The P/E’s of the top 50 Russell 2000 stocks is over 45.  The P/E of Linkedin is 755, AOL’s is1278, Chipotle’s is 54.  After Twitter’s IPO tomorrow, the stock will trade near 42X revenues (because it has no “E”).  Now that is “cheap”- at least relative to where some stocks traded during the dot.com bubble.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/qo79Lhj0-Ug/story01.htm Tyler Durden

Via ClubOrlov blog,

[This week’s guest post is by Scott Erickson, who is an award-winning humor writer and the author of a satirical novel titled The Diary of Amy, the 14-Year-Old Girl Who Saved the Earth. I liked it. It is entirely disarming and strikes a good balance between humor and seriousness. There are enough jeremiads and diatribes and rants on this topic out there. Luckily, this isn’t one of them because Scott’s scathing social critique and mordant wit are delivered via a charming narrative device: a smart, earnest, precocious 14-year-old girl.]

A 14-YEAR-OLD GIRL EXPLAINS HOW WE CAN STOP THE ADDICTION TO ECONOMIC GROWTH THAT’S DESTROYING THE EARTH

Hi! I’m Amy Johnson-Martinez, the 14-year-old girl who’s saving the earth from environmental destruction. A lot of people don’t understand how the destruction of the earth is connected to our addiction to economic growth. Actually, a lot of people don’t even realize that we’re addicted!

Personally speaking, I think it’s kind of weird that economists don’t tell us about this. So I guess it takes a 14-year-old girl to tell you about it!

Economists always say, “The economy has to keep growing or else it will collapse.” But it can’t grow forever, because the earth is running out of resources. Actually, it’s already starting to happen. That’s a big reason why the economy is getting worse.

Our economy is giving us a totally stupid choice: Save the economy or save the earth. It won’t let us save both! I personally think that’s pretty crazy!

On my journey to save the earth from environmental destruction, I figured out pretty quickly that the main problem is the economy. Pretty much every time there’s an idea that would make things less destructive and more sustainable, the argument against it is always: “It will be bad for economic growth.”

That’s when I found out the economy has to grow or else it collapses. But when I asked why, nobody knew the answer. So I had to figure it out myself.

I looked at a bunch of economic books, but none of them said anything about why we’re addicted to economic growth. I couldn’t even find out how the economy could grow. That’s another basic question: How can money grow?

Isn’t that an interesting question?

This led to another question, “How is money introduced into the economy?”

The answer wasn’t easy to find. At first I thought the answer was that the government prints it, but that was back when I was young and naive. It turns out that the government prints only a tiny percentage of the money in circulation, and the rest is just promises, based on future growth (which is kind of weird if you think about it.)

Then I found out about “quantitative easing,” which sounds intellectually sophisticated. But it’s not the “real” answer, because quantitative easing only creates more promises. And the only way to live up to these promises is by overall growth of the economy. So we’re back to where we started: How does the economy grow?

Since I couldn’t find any answers in books about contemporary economics, I tried looking at books about the history of economics. I focused a lot on John Maynard Keynes, who was from England and invented the basic economic ideas we still use.

I found something interesting that he wrote in 1933. It’s the first thing I found that talks about economic growth. Basically, he thinks it’s important to have the economy grow, but when everybody is doing OK then growth should stop:

Suppose that a hundred years hence we are eight times better off than today. The economic problem may be solved.

The economic problem, the struggle for subsistence, always has been the primary, most pressing problem of the human race. Thus for the first time since his creation man will be faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to live wisely and agreeably and well.

When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. The love of money will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue – that avarice is a vice, that the exaction of usury is a misdemeanor, and the love of money is detestable.

But the prediction that economic growth would end poverty hasn’t happened. In fact, even with all the economic growth that’s happened since then, poverty is getting worse. Obviously, the idea that economic growth will end poverty isn’t right.

I had to look up what the word “avarice” means, and basically it means “greed.” I also had to look up what “usury” means. It means to charge interest on loaning money. It’s a religious word and at one time all religions were against it as unethical.

Even though the quote was interesting, it didn’t answer the question about how money can grow. So I had to go back even farther. The ideas of John Maynard Keynes were influenced by another guy – John Law.

What a weird person! According to one book, in addition to being a banker and an economist he was “a gambler, swindler, rake and adventurer forced to flee the British Isles after killing an opponent in a duel.” This kind of person helped invent our economic system?

I found something in a book about John Law that seemed important: “Law made clear the distinction between a passive treasury, where money just accumulated, and an active bank, where money was created.”

Banks create money? That was news to me! I thought they just kept money and loaned some of it out.

The answer has to do with the “fractional reserve system” which started in the 1700s. It used to be that money was sort of a “receipt” for gold. The receipt was called a “banknote,” which was printed by the bank. But then some bankers figured out they could print more “receipts” than the gold they had, therefore they only had a “fraction” of the gold compared to the “receipts” (actual money).

That explains how it came to be that banks could create money, but it didn’t explain how money could “grow” – since banks were only allowed to print a certain percentage extra.

Then, some bankers figured out a way to become even more wealthy with this “extra money” they could print themselves. What they did is to give out the money in the form of a loan. Since they charged interest on the loan, they would get back more than they gave out. This next part is where the addiction starts.

Let’s say you get a loan for $100, but because of the interest you pay back $110. Here’s an interesting question: Where did that extra $10 come from?

It didn’t come from you, since you can’t create money. Only banks can – by making loans. So the extra money could only come from one place: More loans! If you trace money to where money comes from, it almost always comes from a loan.

People can get personal loans, but what’s more important for the economy is business loans – loans to start or expand a business. Of course all the loans have interest, which means paying bac
k more money. But we’ve already figured out that money is “created” by banks issuing loans. So to pay off past loans, somewhere else in the economy there has to be new loans which create more money. But then THOSE loans have to be paid off with money, which means MORE loans.

It always comes back to the banks making more loans to pay off the existing loans. This has been going on for hundreds of years, which is how the economy “grows.”

Economic growth needs more money, but more money needs more economic growth, which needs more money. And it doesn’t stop. It can’t stop.

That’s not only how the economy grows, but why it HAS to grow. We can never get to a point where growth is “enough.”

This is why we’re addicted to economic growth. We’re not creating money; we’re creating debt!

Like with any addiction, we keep doing it even when it’s not working any more. This is why even when it’s obvious that economic growth isn’t solving unemployment or ending poverty or doing any of the other stuff it says it can do, we keep trying it anyway. It’s why even though we have more money than ever before in history, we still need more.

The funny thing is that the solution is super-easy. All we have to do is stop the banks from creating money as debt.

You know what’s really interesting? I discovered that our greatest president Abraham Lincoln figured this out and tried to stop it. Lincoln tried to fix the problem by having the government print a kind of money called “greenbacks”—$450 million of interest-free money. But the banks did NOT like this because they wanted to create all the money themselves! So they bought up all the “greenbacks” and forced the government to buy them back in exchange for gold.

Lincoln had the right idea, but he didn’t go far enough. We have to eliminate interest on ALL money. The answer is actually super-easy.

To end the addiction to economic growth and save the earth, this is what we need to do: End the creation of money as interest-bearing loans. Put an end to fractional reserve banking and make it so banks can’t create money. Then give the U.S. Treasury the exclusive right to issue U.S. currency free of debt.

Of course, the big banks won’t like this, because they make money from keeping us addicted. But as I learned in school, we live in a democracy which means companies aren’t the boss of us; we’re the boss of them. Yay for democracy!

Let’s stop the addiction before the economy collapses and destroys the earth, which is very beautiful. In fact, it’s my favorite planet!

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-blhaLn39uA/story01.htm Tyler Durden

3 months later and it appears hope has reverted (once again) to its new normal reality. “Just one more quarter,” we are sure, will be the clarion call from all asunder…

(it seems the hatchet has been taken to Q4 – one-off of course, due to the shutdown – which incidentally had no effect whatsoever on any survey or soft-data macro or the stock market)

 

(h/t @Not_Jim_Cramer)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/QkM0mV8tGk0/story01.htm Tyler Durden

Submitted by Simon Black via Sovereign Man blog,

Just over 400-years ago today, a group of 13 conspirators were caught trying to assassinate King James I of England and blow up the House of Lords in what became known as the Gunpowder Treason.

If you’ve ever seen the movie V for Vendetta, you know the story. Guy Fawkes was found underneath the House of Lords with three dozen barrels of gunpowder… and to this day, his effigy is still burned annually in commemoration of the event.

Fundamentally, the Gunpowder Treason was about freedom. The English monarchy at the time was controlling nearly every aspect of the economy and their subjects’ lives– from what they could wear to how they could worship.

“Sumptuary laws” which regulated private behavior were commonplace. Elizabeth I, for example, re-introduced a beard tax on all facial hair grown in excess of two weeks.

She also published long lists, categorized by social class, dictating precisely what color and type of garment her subjects were required to wear.

It turns out these sumptuary laws were just an early form of state-sponsored corporate welfare; the English textile industry had paid Elizabeth huge sums of money in exchange for royal decrees about knitted caps and woolen socks.

As a consequence, a great deal of English labor and disposable income was misallocated towards silly garments instead of being put to more productive uses… and the country was in an almost perpetual state of stagnation.

Not to mention, English finances deteriorated under Elizabeth. By 1600, state expenditures were 23% greater than tax revenue, which would be the equivalent of a $550 billion budget deficit in the US today. Not exactly a trivial figure.

James I, Elizabeth’s successor, continued to spend extravagantly and indebt the English economy, often showering taxpayer funds on a handful of favored nobles.

By the time James’s successor Charles I came to power, the monarchy’s credit was running so thin that Charles had to force people to loan him money; those who refused were imprisoned and had their property confiscated.

Unsurprisingly, civil war broke out in 1642. Charles I was executed in 1649, and the genocidal dictatorship of Oliver Cromwell dominated England for the next decade.

When you think about it, this collapse was inevitable.

For decades prior, the entire English economy was under the control of a single individual who massively indebted the state, impeded growth, and reduced people’s individual freedoms. Not exactly a recipe for long-term success.

The Gunpowder Treason of November 5, 1605 may have been a failure for the conspirators, but given enough time, a system so screwed up, so unsustainable, was destined to collapse on itself.

We’re not so different in the west today.

We have our own sumptuary laws, regulating everything from tobacco consumption to what foods we can/cannot eat. We have our own state-sponsored corporate welfare. We’re comically indebted.

And just like the English monarchs, we have a tiny elite that controls absolutely everything about our economy– taxation, regulation, and the supply of money.

Needless to say, this is also unsustainable. And history shows that these types of unsustainable systems will always collapse under their own weight.

Is it wise to think that this time is any different?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/82DJ3JBDgvI/story01.htm Tyler Durden

Submitted by Simon Black via Sovereign Man blog,

Just over 400-years ago today, a group of 13 conspirators were caught trying to assassinate King James I of England and blow up the House of Lords in what became known as the Gunpowder Treason.

If you’ve ever seen the movie V for Vendetta, you know the story. Guy Fawkes was found underneath the House of Lords with three dozen barrels of gunpowder… and to this day, his effigy is still burned annually in commemoration of the event.

Fundamentally, the Gunpowder Treason was about freedom. The English monarchy at the time was controlling nearly every aspect of the economy and their subjects’ lives– from what they could wear to how they could worship.

“Sumptuary laws” which regulated private behavior were commonplace. Elizabeth I, for example, re-introduced a beard tax on all facial hair grown in excess of two weeks.

She also published long lists, categorized by social class, dictating precisely what color and type of garment her subjects were required to wear.

It turns out these sumptuary laws were just an early form of state-sponsored corporate welfare; the English textile industry had paid Elizabeth huge sums of money in exchange for royal decrees about knitted caps and woolen socks.

As a consequence, a great deal of English labor and disposable income was misallocated towards silly garments instead of being put to more productive uses… and the country was in an almost perpetual state of stagnation.

Not to mention, English finances deteriorated under Elizabeth. By 1600, state expenditures were 23% greater than tax revenue, which would be the equivalent of a $550 billion budget deficit in the US today. Not exactly a trivial figure.

James I, Elizabeth’s successor, continued to spend extravagantly and indebt the English economy, often showering taxpayer funds on a handful of favored nobles.

By the time James’s successor Charles I came to power, the monarchy’s credit was running so thin that Charles had to force people to loan him money; those who refused were imprisoned and had their property confiscated.

Unsurprisingly, civil war broke out in 1642. Charles I was executed in 1649, and the genocidal dictatorship of Oliver Cromwell dominated England for the next decade.

When you think about it, this collapse was inevitable.

For decades prior, the entire English economy was under the control of a single individual who massively indebted the state, impeded growth, and reduced people’s individual freedoms. Not exactly a recipe for long-term success.

The Gunpowder Treason of November 5, 1605 may have been a failure for the conspirators, but given enough time, a system so screwed up, so unsustainable, was destined to collapse on itself.

We’re not so different in the west today.

We have our own sumptuary laws, regulating everything from tobacco consumption to what foods we can/cannot eat. We have our own state-sponsored corporate welfare. We’re comically indebted.

And just like the English monarchs, we have a tiny elite that controls absolutely everything about our economy– taxation, regulation, and the supply of money.

Needless to say, this is also unsustainable. And history shows that these types of unsustainable systems will always collapse under their own weight.

Is it wise to think that this time is any different?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/82DJ3JBDgvI/story01.htm Tyler Durden

Having beaten consensus earnings and revenues, it seems that the momentum stock of the year is finally getting its come-uppance as it missed whisper numbers on earnings and deliveries:

• *TESLA 3Q ADJ. EPS 12C, EST. 10C (whipser ~17c)
• *TESLA FINISHED 3Q WITH SLIGHTLY MORE THAN 5,500 DELIVERIES (whisper ~6,000)
• *TESLA SEES 4Q NON-GAAP PROFITABILITY `CONSISTENT’ WITH 3Q

This has sent the stocks down over 9% after-hours to 10 week lows… perhaps Musk was right after all.

 

 

Q4 outlook: We are continuing to expand production and plan to deliver slightly under 6,000 Model S vehicles in Q4, which increases our total expected deliveries to 21,500 vehicles worldwide for 2013. ASPs are expected to be relatively flat sequentially as we continue to see a rich mix of options on incoming orders.

Model S gross margin may continue to make slight improvements over the next several quarters as we continue to drive down manufacturing costs. While we expect to achieve our target of 25% non-GAAP automotive gross margin in Q4 (assuming no contribution from ZEV credits), further progress is likely if customers continue to purchase our vehicles with a high option take rate.

R&D expenses are expected to increase sequentially by about 25% in Q4 as we accelerate product development efforts on Model X and Model S enhancements. SG&A expenses are expected to rise sequentially by about 20%, driven by the growth in our retail locations, service centers and Supercharger facilities.

We expect our non-GAAP profitability to be about consistent with Q3, with approximately 139 million fully diluted shares outstanding based on the current level of our stock price. Free cash flow is expected to be close to breakeven.

We expect to spend about $75 to $85 million on capital expenditures for a total of approximately $250 million in 2013, as we expand our factory production capability and customer support infrastructure. All these investments, funded in part by our profitable operations, position us for further expansion of our product portfolio and global growth.

We are now producing 550 cars per week with improved process controls which consistently result in high quality cars. Consequently, we finished the quarter with a record of slightly over 5,500 deliveries, including over 1,000 deliveries to European customers.

 

Full TSLA earnings here (PDF).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/fQsvciUPdbc/story01.htm Tyler Durden

Credit markets have been nervous for over a week. Treasury yields have been rising notably. The USD has been pushing higher and with all eyes focused on the momo name du jour (and indices ‘near’ all-time highs) it seems few have noticed US equities have actually had 3 down days in the last 5 days. Only NASDAQ managed a green close. Of course, this is merely an excuse buy moar with all the money on the sidelines but today’s move in Treasuries (and intraday volatility in stocks) suggest some anxiety is back that a flow-slowing Taper is closer on the horizon of hope than many believe. Oil and Gold lost ground on the day – though the latter is the best of the commodities on the week. The USD is back to unchanged on the week (with CAD and EUR weakness in charge). VIX diverged higher into the close with its first up-day in the last six.

 

Better-than-expected ISM sent stocks lower (good news is bad news) exaggerating early weakness on China ‘tightening’ suggestions…

Only the Nasdaq managed to close green…(depiste the Dow scrambling back to green intraday)

 

S&P futures blew through VWAP on POMO then faded all afternoon – despite an attempt at a ramp – ending teh day at VWAP…

 

Treasury yields blew higher with notable steepening… (worst day for 30Y in 2 months)

 

The USD reverted higher back to unch on the week

 

Credit markets remain entirely unimpressed…

 

 

Charts: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/FVSG47GOekw/story01.htm Tyler Durden