The Collapse of China & Complete Destruction of Companies.

holy smokes China is just going to the

he double hockey sticks and it has at

least some effect on Tesla with Tesla

dropping their prices across the board

by five percent on their vehicles and

Boyle boy Tesla stock is not happy now

maybe it's coming under the pressure of

Elon Musk selling but boy oh boy there

is some pain happening in China and

we've got to broadly understand China so

let's go into what's happening in China

and then we'll talk a little bit about

Autos like Tesla and Neo well China is

facing what is likely a dirty Great

Depression and potentially a loss to

decade and it's taking Tesla down with

it well and not just Tesla because

according to markets the Chinese

government ain't helping almost any

company that's because China's once

every five-year party Congress just

ended and dashed hopes that markets had

been waiting for him see China is facing

a multitude of disasters number one

there are property Market has been

facing a deflating of the massive

debt-driven speculative bubble that

propped up the housing market to create

thousands if not tens of thousands of

homes to create homes in a bill that

they will come mentality with

governments subsidizing home builders to

just build as many homes and properties

as possible of course taking on more

debt to finance exactly that

unfortunately when taking on new debt

became impossible via China's a new

three red line policy back in 2021

Chinese developers started defaulting

and that meant no more building which

meant thousands of unfortunate Chinese

were left holding the bag of Unfinished

homes in China and this is crimping

their economy with retail sales just

coming in disastrously below

expectations though GDP coming in

slightly above driven by other other

factors the individuals in China are

getting reamed and unfortunately their

party Congress did little to help them

this week

the second issue that many are facing is

China's coveted zero lockdown so this is

a policy of shutting down schools

restaurants and really streets in a very

eerie and Brave New World style method

where Chinese law enforcement will go as

far as sending robot dogs and drones

around city blocks and right outside of

apartment of Windows announcing

lockdowns and forcing people inside

alter the demise of of course retail

spending and the ability of the country

to manufacture or really any motivation

for Chinese individuals to actually

spend money in fact since January

Chinese individuals have been saving

four times and more money than they had

in the prior January and it's no

surprise because the Chinese are seeing

what their government is doing is

pushing them unfortunately into a

depressionary environment not just

through that 37 decline in real estate

prices that 13 months in a row now of

real estate pain with property

developers defaulting but really also

because of covet 0 and number three

tensions between China and the West

including America and Taiwanese

relations leading to the recent ban of

the sale of any advanced ships to China

from any company so much as using

American Equipment or American software

to manufacture chips a big blow to not

only China militarily but also to their

goals of developing the world's

strongest artificial intelligence and

their goals of expanding their economy

this is a blow especially with companies

like AMD and Nvidia selling over 20 or

receiving over 25 percent of their

revenue from China well Wall Street

believed at the very least that the

Chinese party Congress would at least at

the least lay the foundation for a

strong next five years that's because

these congresses happen every five years

and the themes that we thought we would

hear about would be things like a

relaxation of covet zero policies strong

policy support for housing talk about

reducing poverty a goal of common

prosperity and a goal of peaceful

reunification with Taiwan and again most

importantly that relaxation of covet

zero

but folks

the party Congress ended on Saturday we

didn't get that now I'll talk to you

about what actually happened at the

party Congress and I'll talk to you

about Tesla and Neo will look at some of

their numbers as well on what's going on

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podcast set let's go so what happened in

China and what about Neo and Tesla got a

large consolidation of power

by President Xi Jinping and his

loyalists we got a show of huge Intel

the former president being escorted out

of the party Congress a sign that Xi

Jinping is now in full control and that

nobody should question XI jinping's

control and quite frankly it's not the

control markets wanted we also got zero

indication that covet zero policies

would be loosened something that

analysts across Wall Street had all been

expecting that we would get through this

next winter and then we would start

seeing some softening of covet zero

policies and an eventual removal of them

however China instead applauded their

coveted zero policies and if anything

double down on keeping them showing how

useful and effective they have been at

preventing covet spread and this

has driven the idea that that's it China

really doesn't care about anything other

than state-driven Enterprise private

Enterprise does not matter in China so

what's happening well there's the

highest level of selling of Chinese

stocks happening right now since

2016. companies like Baidu JD and

Alibaba all shaving over 10 percent the

Hong Kong Tech index is now down 50

percent for the year individually stocks

like jd.com are down 17 at the very

moment and

reality is even though GDP came in

slightly stronger than expected for

China many doubt the numbers I mean

quite frankly why wouldn't you doubt the

numbers I mean look at the Q2 earnings

report from Tesla okay this is the

second quarter one not the one that we

just had but the one before that so this

is over three months ago we got this

particular report here and Tesla gave us

a heads up they told us that they're

having demand destruction in China and

that they're having to competitively

price their vehicles in China after this

report they started doing Insurance

subsidies now they're reducing their

prices in China China is having a

painful environment but it's a not just

Tesla that's suffering it's also

companies like Neo that are suffering

right now this morning we went through

the Neo earnings and earnings call with

course members and we've seen a

faltering of growth rates as Neo is

trying to ramp their Factory number two

to create the et5 almost well actually

exclusively in that factory now we

expect expect we expect explosive growth

to come from Neo in uh the fourth

quarter just like we expect explosive

growth to come from Tesla in the fourth

quarter but both of these or companies

that have been ramping factories during

a very hellish inflationary time to ramp

factories Factory two for Neo and Berlin

and Austin for Tesla the only difference

is between the two is Tesla has still

been producing vehicles at a 50 run rate

whereas when you actually look at Neo

they haven't been they've actually seen

their growth kind of stagnate kind of

like this chart that I've drawn here and

you could see that in their quarterly

numbers in their last earnings report

and so Neo not having as much growth

success as obviously Tesla but both of

these companies getting absolutely

hammered on Chinese demand and what's

happening in China Neo right now Neo

adrs are trading down 22 and in order

for you to say it's time for me to buy

the dip on Neo you really have to ask

yourself a do you believe in the Chinese

government do you actually want to

invest in the Chinese government do you

believe that the Chinese consumer is

going to go back to spending even though

they know their economy and shambles in

their saving like crazy well and do you

believe that Neo is actually going to

successfully be able to ramp that uh

Factory number two to the point we

actually get to some strong growth rates

I mean maybe but right now the company's

still losing money we're still not at

levels we're teslaized now that's okay

because Neo is a newer company right

Tesla has over 39

000 supercharging stations you know

things you can plug into Neo has like

1100 battery swap stations and when it

comes to regular charging stations a

fraction of what Tesla is a much newer

company so it's not fair to line them up

part apart but Tesla didn't have this

sort of 2022 stall in growth that Neo

had and that stall is leading to a lot

of questions that will that et5 be able

to bring back their exponential growth

or not things to pay attention to and I

hate to say it but Chinese government

ain't here to help let's just say

markets did not get what they were

looking for here and remember this is a

country that started 52 000

infrastructure projects since January of

2022 and their production numbers are

still negative year over year so you

can't really blame Tesla for cutting

prices in their cars in China by on

average five percent across the board

because what you have is ugly in China

you have an economy that's faltering you

have growth that's stalling probably

quite frankly in a recession and you

have a government that is now emboldened

to keep its economy in a recession but

hey some say there could be some good

news in all of this maybe not

necessarily investing in Chinese stocks

but China could end up being an anchor

for Global inflation

that is as China's economy stalls it

could sink the global inflation

countries across the world are dealing

with with the exception of course of

China is actually actively trying to

stimulate their economy because they're

already so far on the right

other than that though it seems quite

risky to invest in China right now as a

foreign investor as the country it

doubles down onto covet zero and doubles

down on state-run businesses over

private Enterprise and now the fears of

a lost decade in China are truly coming

together let me know your thoughts in

the comments down below or are you

investing in Chinese stocks at the

moment or are you taking your losses in

Tesla instead