Happy Friday, View fans. Can’t wait to see what happens to Tesla Motors Inc.’s stock after investors digest the news in the first item below. But the way this market is going, who knows, maybe investors will see it as a reason to buy. On with the links.
Tesla’s CEO has outburst of straight talk
“I think that we have quite a high valuation, and a higher valuation than we have any right to deserve,” Tesla Chief Executive Officer Elon Musk said at an event marking the opening of a new Tesla showroom in London, according to the Financial Times. Who could argue with that? With a $21 billion stock-market value, the electric-car maker trades for about 15 times revenue. And forget the price-earnings ratio, because there is no E. (Fyi, the short interest in Tesla is about 26 percent of the company’s freely tradable float.) There are echoes of the late 1990s here. Remember in 1999 when Microsoft Corp. CEO Steve Ballmer warned that tech stocks were overvalued, including his own company’s shares? He was right.
How global investment banks pillaged Monte Paschi
Rescue efforts at the world’s oldest bank, Banca Monte dei Paschi di Siena SpA, have cost Italian taxpayers 4.1 billion euros ($5.6 billion). As the bank struggles to survive, Elisa Martinuzzi and Vernon Silver of Bloomberg News look at how its downfall proved a boon to global investment banks: “They offered merger and investment advice to executives beholden to politicians that helped wipe out 93 percent of Monte Paschi’s value. Then they sold it complex derivatives that hid, even worsened the losses.”
Why does the ECB need a whole year to do stress tests?
Irish Times columnist Chris Johns says it’s just another game of extend and pretend. A bad outcome would trigger another crisis, and we can’t have that: “The longer the losses sitting on bank balance sheets can be hidden, the more chance there is that the passage of time will gradually shrink the size of the problem. That’s the plan at least. To a greater or lesser extent, most European countries have a banking problem. The trouble is that these difficulties are too easy to hide –- until they overwhelm us, often overnight with little warning (from stress tests at least). One clue about the magic ingredient of time is to be found in how long the next stressful exercise is going to take: a full year. I am tempted to say that it isn’t really that complicated. A decent banking analyst supported by some recently minted MBAs armed with the appropriate software could do all this in weeks –- using publicly available information.”
So this is the genius who was running the NSA, huh?
Michael Hayden, the former head of the National Security Agency, was riding the Acela train yesterday between New York and Washington and sharing tales with journalists over the phone on deepest darkest background. And he was doing it loudly enough that a guy sitting nearby could hear everything. So that fellow, Tom Matzzie, decided to live-tweet it all. Then the two posed for a picture together, after which Matzzie tweeted: “I’m actually a little afraid. The intelligence world is kind of dark and scary.”
P.J. O’Rourke on his drafty, creaky New Hampshire home
He never ceases to amuse: “So we have wound up living in a place with the size of Downton Abbey, the charm of Levittown and the value of a FEMA trailer on a Colorado flood plain. But we love our house. We hope our children will keep it in the family. They'll probably have to. Now this has been published, they'll never be able to sell it.”
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)