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#88 – Markets, Tariffs, Panic, Tesla, Robots, Xai

April 19, 2025

Opening

Markets

Full Correction Territory (down 10%); quickly moving to “Bear” down 15%. 

  • S&P 17%, Tech 25%+
  • Basically flat to 1 year ago. 
  • Apple in huge correction. PE still at 30
  • Netflix at 43.

Search for "S&P 500 P/E Ratio." It provides quarterly historical data from 1988 to 2024 (and into 2025 with updates). You can customize the chart for 2005–2025. It’s precise, showing averages like 21.69 over the last 5 years, with a current value near 24.85 as of early April 2025.

Tariffs

  • Income Taxes. No income tax in the US income tax until 1913. Then WW2 started income tax to fund the war. The modern, permanent federal income tax began with the 16th Amendment, ratified on February 3, 1913.
  • Tariff rates: The U.S. charged less than most big players—think 2-5% versus 5-15% from others—especially in trade deals. 
  • Trade Deficit: in 2024 was $918.4 billion, according to data from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau.
  • Total US spending deficit: $1.8 trillion in 2024 per FRED. Spend $6t and take in $4t. 
  • Total US Debt. $36 trillion. Total Debt nowAs of today, April 4, 2025, the total U.S. national debt is approximately $36.6 trillion, based on the latest available data from the U.S. Treasury’s "Debt to the Penny" dataset, which is updated daily.
  • Interest expense is $1t growing to $1.3. Estimated. 
    • So assuming we can even cut spending to $4t. Then interest is 25% of our spend. 
  • Roughly $10 trillion of U.S. debt is expected to mature and require refinancing within the next 12 months.

Markets crashing pushing people into Bonds: 

  • I want safety!! Buy a Bond costs $100 and pays 5%. Bidders drive that Bond to 110, still paying $5. So effective interest rate is 4.5%.
  • The tariffs are pegged to amounts it said other countries impose on the U.S. In many cases, those amounts appear to match a basic formula: the size of a country’s goods-trade imbalance with the U.S., divided by how much America imports from that nation. 
    • So imbalance is 100. US exports 10, x country exports 90.  90/100 = 90%. 

Play Ray Dalio on the significance and problem of debt.

Play: Antonio Gracias on SS and Medicaid Fraud. 

NOTE: I think this is all a negotiating tactic!!! 

Financial Education

  • Officially funding kids Roth and Brokerage accounts. 
    • Take advantage of gift tax exclusion. $19,000 per child per year. Not subject to lifetime inheritance limit. Lifetime Exemption: Beyond the annual exclusion, there’s a lifetime gift and estate tax exemption, which in 2025 is $13.99 million per person (or $27.98 million for a married couple). Gifts exceeding the $19,000 annual limit per recipient reduce this lifetime exemption, but you only pay gift tax if you exceed the lifetime amount. The annual exclusion gifts don’t touch this lifetime cap, which is what you’re referring to when you mention the "lifetime inheritance max."

Netflix

  • Adolescence
  • Cruising thru…there are so many good shows and movies!!! 
  • Crockett reiterated his buy rating on Netflix stock with a price target of 1,494.
  • Elsewhere on Wall Street, Evercore ISI analyst Mark Mahaney said his firm's latest
    • Mahaney rates Netflix stock as outperform with a price target of 1,100.

SpaceX

Interestingly Amazon’s project Kuiper launching a competitor internet service using Boeing Starliner. DO I have this correct.  Great to see Amazon finally kicking off with Project Kuiper! Atlas 5 is a joint venture between Boeing and Lockheed Martin

    • However, there’s a catch: if launches continue with ULA’s Atlas V, costs could spiral out of control. An Atlas V launch costs around $100-150 million, and with 3,200 satellites to deploy, that could add up to over $10 billion just for launches, even with conservative estimates. Reusable rockets are an absolute must these days—SpaceX’s Falcon 9, for example, brings costs down to about $30-50 million per launch thanks to its reusability. So, we can only hope Blue Origin makes quick progress with the reusable New Glenn, which could significantly cut costs. The cost comparison really shows how crucial efficient launch systems are for making mega-projects like this possible.

X & Xai

Elon announcement here

CNBC interview with Rich Greenfield. . 

WSJ Article here. 

That deal consists of a $33 billion price tag for X, alongside a $80 billion valuation for xAI. The new $80 billion valuation figure for xAI is a big jump from just four months ago, when the company was valued at $50 billion in its last fundraising. The new level was set as part of the merger talks, not in a new funding round.

Robotics

Tesla

  • Tesla worst delivery numbers in years. 
    • Norway registered more cars in March that ever.
    • China too. 
      • This is importantly interesting because that is the land of the best EV’s. Biggest and best competition. 
    • Keep in mind Tesla spent ~month upgrading lines in Shangai, Austin and Germany to revamp new Model Y production: best selling car in world in 2024 and 2023.
  • Made in the USA
  • Some of the uptick coming from Elon and Trump announcing Elon will step back soon. Mission accomplished and the right people in place. 
  • Keying of Tesla cars has become ridiculous! People are ruining their lives and demonstrating extreme lack of rationale.  
  • Elon just said they know who the “organizers” are and will go prison. Anchor mentioned RICO charges. 
  • RICO charges refer to violations of the Racketeer Influenced and Corrupt Organizations Act, a U.S. federal law enacted in 1970 under Title 18, Section 1961 of the United States Code. Designed to combat organized crime, RICO allows prosecutors to target individuals or groups involved in a pattern of illegal activity, even if the specific acts differ, by linking them to an ongoing criminal enterprise.

Key Elements of RICO Charges

  1. Enterprise: A group (formal or informal) with a common purpose—e.g., a gang, corporation, or even a loose association. It doesn’t need to be a legal entity.
  2. Pattern of Racketeering Activity: At least two acts of "racketeering" (called predicate acts) within 10 years, showing ongoing criminal behavior. These acts must be related and pose a threat of continued crime.
  3. Predicate Acts: A long list of specific crimes under RICO, including:
    • Violent crimes: Murder, kidnapping, arson, extortion.

Government inefficiency

  1. Fix Regulation and be more efficient. Unleash power of business, building, entrepreneurship. 
    1. Play at 3:30.Here is video of Ezra Klein discussing with Jon Stewart why $44b of broadband connected zero homes in 4 years. 
      1. Bridge not built yet. 
      2. No train in CA. 
  2. Cut waste and fraud. 

Social Security:

Doge

Goal is to reduce spending by $1b or 15%.  

Entire Doge Interview with Brett Baier.  Survey at 1:10. $1b. $830m online survey.  

  • NIH computers.  Play at 14:00. 1700 different IT systems. 17 CIO’s. Non-technical. 
I'm Sean Hathaway

Hi, I'm Sean

20 years of finance experience and obsessed with high quality results.

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Markets, Terafab, Tesla, SpaceX, CA Fraud

sean@hathawayfinancial.com - 1-971-409-4180 - Almaden, San Jose, California

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