 Good day, fellow investors and welcome to the stock market news with a long-term fundamental twist. The topic of today is the end of free money and we're going to show a few examples by discussing Tesla, Bitcoin, why Toys R Us failed and then finish with why America should impose huge tariffs on BMW and Mercedes because they are using still a lot of free money which distorts everything. Let's immediately start with Tesla. You know it, but not a lot of people pay attention to this. Tesla's free cash flow is terrible. They are burning more than $1 billion per quarter and things are not improving. If we take a look at what Tesla promised, guided and what is actually going on, you can see that Tesla is way, way off estimates. First it was that Tesla will produce 5,000 Model 3 cars by the end of 2017. That was missed. They postponed it and said they will produce 5,000 cars by the end of the first quarter of 2018. They are way off that. Now they have become a little bit more conservative and they expect to produce 5,000 cars per week by the end of the second quarter of 2018. Will they hit it? According to Bloomberg model of their production rate they are now at 721 per week. There have been a lot of issues around the car and it's very unlikely that they hit 5,000. This means a lot of things. If you look at the balance sheet of Tesla, from 2016 to 2017 liabilities increased by 6 billion and if you look at from 2015 liabilities increased by 18 billion. So from 7 billion to 24 billion in two years, which is huge. This means that what Tesla needs to survive is availability of capital. So they need cash. Be it in form of new equity, races or debt. As long as they can get as much cash as they want, on their promises that they never managed to fulfill, they will survive and things will look as they are. Let's see who owns Tesla and who is really the financing behind it. Fidelity, Bailey Gifford, Price T, Rowe Associates, Vanguard, BlackRock. So index funds, hedge funds, pension funds, all that have a lot of money now and they are seeking risky assets in order to reach any kind of performance. However, Jim Chayness, the short guy in the stock market, said that Tesla is worth zero and he is short the stock. And he thinks that the credit environment will close at some point in time and Tesla won't be able to refinance and it will go bankrupt. The stock price of Tesla underperformed the SAP 500 in the last few years so it's not such a miracle stock anymore. And this brings me to what can happen and there we have the story of Toys R Us. They needed 400 million, just 400 million to refinance, pay the suppliers and to try to survive after a good season. They didn't manage to get it because when the first capital provider gets scared, it becomes a chain reaction and all of them get scared. And simply you ask for money but nobody is going to put money where they know there is very little probability of getting that money back. And Tesla is promising a lot also and when the first of those in the capital providing chain says no, all others will too says no because everything depends on people believing in Tesla. When the trust shifts, it's over. Tesla can go bankrupt very, very quickly and that's in the picture of ending free money, higher interest rates, that's very dangerous. Similarly, the Bitcoin, since we have started to see some more tightening, some more normalization, we can see how also the Bitcoin is an attractive very more and it's on a straight downward trend. And then you see headlines like this, Bitcoins that crossed looms as strategists eyes 2800 level. This is the most read article on Bloomberg this week. So look at what people focus. This will create panic, lose trust, et cetera, et cetera. And then you have a downward spiral. What's the reason behind behind all of this? It's the end of free money. Three years ago, four years ago, the interest rate on the one year Treasury US Treasury note was 0.11%. Now it is 2.07%. So the savers, everybody who has some money, okay, now I can go for riskless assets and I don't have to do stupid things to get returns. This is what the end of free money means and we have seen it on Toys R Us and we will probably see it on Tesla or the risks have hugely, hugely increased. However, there is still a place where the money is free. Let's see what is Daimler paying on its debt. If we look at the bond list of Daimler, we can see that the yield is mostly 0% and there low you have a yield that's negative. So minus 0.26%, minus 0.24%. This means that people that lend money to Daimler are not making any money on it. This is because the ECB is buying, which puts Daimler in a hugely advantageous position when doing business. So when Trump says that he should put tariffs on BMWs and Mercedeses, he's right because they have free money and they compete around the world with free money. Ford pays around 4.5%, 5% on its debt. So that's a huge difference. That's a huge competitive advantage and that's also a way to stimulate domestic companies. So ECB is doing by buying directly those bonds. That's stimulus. That's the opposite of tariffs but it's stimulus and other countries will have to adjust for that because it's simply not fair. There's not a global fair amount of let's say interest rates. So it's always a dense, higher lower, higher lower. The free money is ending up, is drying up in the US. Probably we'll see something similar in the Eurozone and who knows about Japan or other countries. So the environment is shifting. We have seen the short-term news, how those companies are affected, how those companies might be affected with Toys R Us Tesla. So we'll see how this evolves over the longer term. One thing to keep an eye on. Thank you for watching. Tomorrow an analysis of Berkshire. I'll see you in the next video.