Shulou(Shulou.com)11/24 Report--

On the morning of December 26, Beijing time, it is reported that recently, American billionaire Elon Musk warned against a financing operation called "margin loan" that he often used in the past, mainly because of the large-scale panic in the US capital markets. He also predicted the timing and scale of the US recession.

The so-called "margin loan", also known as "financing balance", refers to stock investors using their shares as collateral to borrow money from securities companies.

In the audio show "All-In" broadcast on Friday, Musk said that in the current volatile stock market, "I really advise people not to make margin loans", the momentum of the US stock market is disappearing in terms of cash, and in a downward market, "you may encounter quite extreme things".

This year, Mr Musk, as chief executive of Tesla, completed a major deal to turn the popular social media Twitter into a private asset at a cost of $44 billion, using large amounts of his own cash and saddling the company with $13 billion in debt.

It is reported that some US bankers who provide financing services to Musk are currently considering a debt swap operation, that is, replacing the high-interest loans borrowed by Musk's mortgage Twitter assets into new margin loans secured by Tesla's shares, because Musk himself is responsible for repaying these margin loans in the future.

Musk himself sold about $40 billion worth of Tesla shares in order to acquire Twitter. The operation caused Tesla's share price to plummet to its lowest level in two years.

Recently, Musk sold Tesla shares again, after which he promised to the outside world that he would suspend the selling of Tesla shares. He stressed that the moratorium on selling would last about two years.

According to reports, the above warning about the margin loan operation is also Musk's second similar statement since December. The media commented that Musk's warning was ironic because he often used Tesla shares for margin loans.

According to a regulatory report filed with the Securities and Exchange Commission in April this year, as of December 2020, Musk had mortgaged a total of 92 million Tesla shares in margin loan transactions.

Earlier this month, Musk said that if there were macroeconomic risks in the market, it would be wise to avoid using the shares of any listed company for margin loans, because in such capital markets, the direction of changes in stock prices has been decoupled from their long-term value.

In the above audio program, Musk reiterated his view that sooner or later the US economy will enter a recession (that is, the GDP downturn), this time the economic downturn may be equivalent to the size of the 2008 financial crisis.

Musk made a forecast for the US economy. He said his forecast was that there would be a "stormy moment" in the next year to a year and a half, and that the recession would dawn in the second quarter of 2024. "that's my best prediction."

Musk added that the boom will not last forever, and by the same token, the recession will not last forever.

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