Elon Musk is in the news.
He is everywhere.
The CEO of premium electric vehicle maker Tesla (TSLA) – Get the Tesla Inc report somewhat reminiscent of former Republican President Donald Trump when the latter was in power.
Like Trump, Twitter is Musk’s main communication channel. Like the property developer, the tech mogul seems to like being in the spotlight. When another business news story manages to steal the show, Musk always finds a way to bring all eyes back on him.
Since April, he has found a strategy to monopolize media attention. Its $44 billion bid to acquire Twitter became a telenovela with unexpected twists. Every day seems to hold its share of surprises. More than a month after the announcement of the offer, few can say that Musk will finalize the transaction which will put him in debt along the way.
When it’s not Twitter, Musk has found another way to be the center of attention: he gives his opinion and comments on political topics but also economic and current topics.
The world’s richest man, who considers himself a global CEO, has just given his diagnosis of the state of the economy as consumers grapple with soaring grocery store receipts and investors wonder if we are in a recession.
“We are in a recession”
“I think we’re probably in a recession and the recession is going to get worse,” the billionaire said May 16 during a virtual appearance at the recent All-In Conference held in Miami. “But you know, these things pass and there will be boom times again.”
The Tesla CEO added that the recession will “probably” last 12 to 18 months.
“That’s usually the time it takes for a correction to occur.”
Economists are currently divided on the state of the economy, although the recent rout in the financial markets shows that fears of recession are very strong among investors.
Gross domestic product (GDP) contracted by an annualized 1.4% in the first quarter. But the drop came mainly from a slowdown in inventory growth and a widening trade deficit. Consumer spending and business investment – the mainstays of the economy – posted solid gains. The unemployment rate was 3.6% in March.
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“The economy is still showing some resilience, but the first quarter GDP report signals the start of more moderate growth this year and next, largely in response to higher interest rates,” he said. said Sal Guatieri, senior economist at BMO Capital Markets.
Musk recommends companies monitor their costs as well as their cash flow.
“Recessions aren’t necessarily a bad thing. I’ve been through a few. And what tends to happen is if you have a boom that lasts too long, you get a bad allocation from the capital. It’s starting to rain money on fools. Basically, it’s like anything makes money and I’m sure you’ve seen a few of those,” Musk said.
“So somebody just gets out of control. And you just have a misallocation of human capital where people are doing stupid, unnecessary things for their fellow human beings,” he continued. “Watch your cash flow and get cash flow positive whenever you can.”
“The real president is the one who controls the teleprompter”
The mogul added that one of the things about recessions is that they separate good companies from bad ones.
“Bullshit companies go bankrupt and those that make useful products prosper.”
Also during the same interview, Musk sharply criticized Democratic President Joe Biden when asked if he observed any difference in immigration between the current administration and that of his predecessor Donald Trump. The serial entrepreneur begins with a laugh before responding that Biden can only do one thing: read the teleprompter.
“It’s hard to say what Biden is doing to be totally candid,” Musk said. “The real president is the one who controls the teleprompter. The path to power is the path to the teleprompter. I feel like if someone accidentally leaned on the teleprompter, it would be like ‘Anchorman’. ”
Tesla CEO references 2004 film about a news anchor who will read anything written on the teleprompter even if it ruins his career.
Relations between Musk and the White House have been strained from the start. The richest man in the world has not digested that Biden organizes events on electric vehicles without inviting him or mentioning the name of Tesla when it was his company that pushed the auto industry towards electrification .
“This administration, just, it doesn’t seem to be doing much,” Musk continued. “The Trump administration, leaving Trump aside, there were a lot of people in the administration who were effective in getting things done.”
“This administration just seems like it doesn’t have the will to get it done. That’s my impression. That’s my impression. We absolutely need to fix immigration policy, like we have COVID which is a problem.”