Meltdown Monday #2 - Musk's Minsky Moment Meltdown
For the Week of 3-20-2023
We’re back! Meltdown Monday #1 was a rousing success. After some reader feedback, we’re changing some formatting. Please remember that this is a work in progress. Our colleague, Ed Niedermeyer, spent all week at South By Southwest (SWSX). Who knows what kind of brainworms he contracted while there? He’ll be posting some updates about the event here this week, but in the meantime, we’ll make sure he gets some ivermectin to kill the critters that are trying to lay eggs in his skull as we speak.
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For the Week of March 20th, 2023
Musk puts his hat in the ring for the next Federal Reserve board opening
Rockets that land! Flame Throwers! Tunnels! Cars that can drive themselves (into innocent bystanders before exploding into a giant fireball)! What field will Elon innovate next? If you said Keynesian Monetary Policy, you win a prize!
After gutting Tesla prices across the board by 15-20%, it sure looks like Quarter over Quarter unit sales are going to be flat, that is, if you trust analysts like Troy Teslike (an all-around nice and honest guy who is a big fan of the brand but refreshingly realistic).
Troy has 409k deliveries for the Quarter ending in 12 days, representing a slight increase over the 405k delivered in Q4 2022. Troy’s estimates have been dropping like a stone, and he’s usually a few weeks ahead of Wall Street estimates. These numbers, coupled with the global fire sale price reductions at the beginning of the quarter, indicate that revenues will be down significantly, perhaps as much as 10-20% lower. That seems not ideal!
Musk sure seems to be doing everything in his power to nuke Tesla’s brand value among people who tend to buy his cars (rich liberals in coastal states) in order to make a bunch of people who would never buy his cars (Catturd2 and some other weird MAGA freaks on twitter) call him “based AF” online. It’s a weird tradeoff, in my humble opinion, but I guess that’s why I’m not a billionaire, nor am I the 2021 Time Magazine Person of the Year.
But, long story short, Tesla sales are in the toilet, big time, especially against projections of 30-50% compounded unit growth for years to come.
Again, not a billionaire here. I’m just spitballing. Maybe Musk should make people want to like his cars, the one thing which makes him very wealthy currently, instead of pasting 4chan memes onto Twitter. But Musk seems to have pivoted, much like Jay Powell, the current Federal Reserve Chairman, onto obsessively talking about Federal Reserve monetary policy?? Ok, I guess.
But in typical Musk style, he busts into the room Kosmo Kramer style, completely out of his depth, and starts speaking with authority about shit he completely does not understand.
ELON! THAT IS NOT HOW T-BILLS ARE DISTRIBUTED! AHHHHHHHHHH!!!! THAT’S NOT HOW FED POLICY WORKS
The real mask-off moment came a day earlier, however.
Musk is a creature of low-interest rate policies. The rise of his wealth, the ability of his companies to continue to raise capital, and the macroeconomic goldilocks conditions that allowed Tech workers and silly boomers to buy expensive cars that constantly break all occurred post-2009, during an unprecedented era of easy money. Musk needs lower rates to survive, he cares not about inflation or employment or the health of the American economy. He’s an oligarch, after all.
I suspect these particular meltdowns will become extremely juicy in the weeks and months to come.
I will use this moment to promote the excellent PBS Frontline episode released last week on this topic. It’s a great watch.
The head of Tesla Autopilot was too busy destroying Twitter’s codebase to work on his actual job.
Both authors of this publication, being steeped in Elon Musk lore, didn’t come away with any jaw-dropping revelations from yesterday’s nicely written, but ultimately rehashed WaPo retelling of how badly Tesla keeps messing up on their automation suites (Autopilot and FSD). This snippet was new information, or more specifically, confirmation of what everyone suspected:
Tesla engineers have been burning out, quitting and looking for opportunities elsewhere. Andrej Karpathy, Tesla’s director of artificial intelligence, took a months-long sabbatical last year before leaving Tesla and taking a position this year at OpenAI, the company behind language-modeling software ChatGPT.
“Since Andrej was writing all the code by himself, naturally, things have come to a grinding halt,” Musk said on an earnings call last year, noting he was speaking in jest.
Ashok Elluswamy, Tesla’s director of Autopilot, has taken on work at Musk’s other company, Twitter, according to employees and documents reviewed by The Post.
Let’s, for one second, ignore that Tesla staff are telling reporters that Karpathy was apparently a one-man programming team, something that feels like it’s bullshit, but also kinda makes sense given how terrible FSD Beta has been.
Ashok Elluswamy, Karpathy’s replacement as Automation Head Honcho, has apparently been moonlighting at Twitter. We already knew that Musk was recruiting Tesla staff to aid him in destroying the perfectly good, if frustratingly imperfect social media site. But in the middle of an Autopilot Murder Spree, with countless lawsuits, investigations, and NHTSA recalls ongoing, Tesla’s well compensated and supposedly critical lead of their autonomy program was busy breaking APIs and databases at Twitter? Excuse me, but that merits a hearty “LMAO.”
In case you missed it, some extraordinarily hilarious court documents were released in January, in which Mr. Elluswamy testified under oath that he didn’t know what an Operational Design Domain (ODD) was. I’m not a controls system software engineer, but apparently, it’s akin to a Cordon Bleu-trained Chef not knowing what a “recipe” is.
I’ll let Mahmood Hikmet, a Ph.D. and highly regarded expert in the field, explain in the Twitter thread below:
That the degrading quality of Twitter’s codebase is following a similar trajectory to Tesla’s FSD and Autopilot development should not be a surprise.
Midjourney Prompt of the Week: I asked the Midjourney AI Art bot for a “crayon drawing of Tesla cybertruck, drawn by a young child.”
Something about the bottom right image made me laugh out loud for five minutes straight; it’s as if that poor child knows his fate is sealed once FSD software is engaged. Also, all of the AI-prompted ideas look better than the actual design, which is very telling.
This week in Elon Musk History
2022: Elon Musk picks a fight with Vladamir Putin and the Wokes
Last year started off with a bang, with Russia deciding to invade Ukraine in February. While I would personally, if I were a business oligarch, avoid picking silly internet fights with Vladamir Putin, there was something almost emdearing about Musk being like “I’LL PUNCH THAT GUY IN THE FACE.” Musk is charmin soft and Putin has absolutely personally murdered numerous people in his life, so while the fight itself would end poorly for Elon, I kind of respect the spunk here.
Especially since the fight also pulled in Dmitry Rogozin, the former head of Russia’s space program, an incredibly evil and gross man. It was good internet content, truly.
By early 2022, Musk had fully crystalized into a shitty alt-right troll. But that he decided turning up the dial to 11 on mocking trans people and wokes using memes from a nazi website right after his somewhat amusing encounter with the leadership of the Russian government is a bit disappointing.
2021: Tesla Semi, Beep beep! VROOOOOOOM
From a company that has hyped the goddamned cybertruck and a person dancing in spandex as a humanoid robot, something about the ongoing Semi saga continues to tickle me. The handful of units delivered to Pepsi last year keep breaking down, and it’s fun to look back at the hype cycle as it ebbed and flowed.
Note to Elon: Semi drivers and fleet managers do not care about track performance.
2020: Elon Musk, Medical Expert.
This time in 2020, Musk was waxing poetic about epidemiology for the rapidly worsening coronavirus epidemic.
This, of course, was all a front for his ongoing standoff with Alameda County. He refused to close the car factory, numerous Tesla employees died as a result, and he nor the company ever suffered as a result. I don’t have a joke about this one. It sucks.
2018: Elon Musk, sick of satire site The Onion refusing to stop mocking him, launches a competitor
This is an underrated and low-key meltdown. Possibly one of my favorites. Musk, reportedly fed up with The Onion not appropriately appreciating his epicness, decided to hire a few Onion staffers to work on a publication he would call “Thud!” The pitch, I think, was that it would be funny and epic like The Onion, but Musk would be able to axe stories and posts that made him sad.
The story has a happy ending: Musk quickly scrapped the project, the writers were never paid and the kicker: The Onion did not hire them back, because there’s nothing funny or edgy about brownnosing to a big rich baby.
UNTIL NEXT WEEK….
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nice work guys