To put this in perspective, they lost an average of $2B per month in value. According to HUD, there were about 582,000 homeless people in the US last year. $2B per month is enough to house all of them nearly 4 times over if you assume $1k per month in housing expenses.
What a monumental waste of resources that could have made a difference. Musk just sucks
It’s not real money, though. It’s all just speculative value based on estimates of future revenue.
The real barrier to ending homelessness is the large number of real estate vacancies that are held open to prop up the price of the housing market. Twitter’s lost value has nothing to do with that.
But the 44B was payed, so they do/did exist. Now he could have just NOT bought twitter and spent half of this money on the poor et voilà no more homeless for at least 4 years.
But you are right with the rest.
But the 44B was payed, so they do/did exist.
It was mostly debt swaps. Elon traded equity in Tesla for equity in Twitter.
There is no “real” money. It’s all speculative based on what value people assign to it. For example, you may have noticed that the US dollar has become worth significantly less in recent years. Shares and fiat currency just have different volatility.
The US dollar has outpaced nearly every other global currency. Five years ago you’d get 100 yen to the dollar. Now you get 150.
But cartelization of the supply chain means we don’t get to see the benefits of low import prices. The difference all goes to business profit, while real increases in material and labor get passed on to the consumer.
Netflix buys anime for pennies on the dollar and sells it back at escalating rates. They spend less and we pay more.
You’ve missed the mark on two counts:
- Musk raised $44B of real money to buy Twitter and bring it into private ownership. I’m saying had he just left well enough alone, he could have used that money for other purposes
- Your point on adding more supply to the real estate market to prop up prices is the opposite of Econ 101 - more supply, all things equal, will reduce prices. Mental health is a much larger barrier to receiving help for the homeless.
I used to volunteer weekly with homeless and housing insecure people in Philadelphia and untreated mental health or substance abuse was an issue for many. There are also barriers to receiving government aid that would assist them because many programs require an address or the process is unnecessarily complicated.
Housing is just one step. They would also require a great deal of counseling, job training, and medical attention to reintegration into society. Anyway, my point was simply to illustrate what a magnificent waste of resources it was to buy Twitter.
Musk raised $44B of real money to buy Twitter
He raised $20B by using his own (highly inflated) Tesla stock as collateral. So this wasn’t new money, it was a swap. He covered the balance with Twitter’s own equity as collateral (which is a big reason why he’s been so cavalier with its devaluation). This new money was effectively just to keep a business in the red from running out of operating income.
more supply, all things equal, will reduce prices.
Not under a cartel. And real estate markets are increasingly cartelized, with large vacancies kept off the market clearing rate in order to prop up the book value of the rest of the market.
untreated mental health or substance abuse was an issue for many. There are also barriers to receiving government aid that would assist them because many programs require an address or the process is unnecessarily complicated.
Which creates a vicious cycle, sure. But the solution is to reclaim vacant real estate from speculators and use it as real housing.
Building more investment properties and vacant luxury units to increase book value of real estate does nothing to reduce homelessness.
Housing is just one step. They would also require a great deal of counseling, job training, and medical attention to reintegration into society.
All services that are best delivered to housed populations. What’s more, they’re services with a universal application. You don’t just need to be homeless to benefit from professional counseling, education, and public health care.
But, again, sky high real estate costs make these services prohibitively expensive to expand into neighborhoods.
Delivering these services at cost requires local governments to reclaim vacant real estate kept open at above market clearance rates and turning it over to public sector service providers.
all the people that imagine their home prices are as high as they are, will fight tooth and nail to prevent this. the empty house market is crazy, just look on a “social home sharing site”. houses are hotels for the few.
