SpaceX valued at just $780 billion by Morningstar, less than half its IPO target

[pat_k]

26. The felon shoveling hundreds of millions of our tax dollars at the Mag 10 is propping things up.

The incestuous circular deals are sure reminiscent of the dot com bubble.



This all-in bet on AI that is the American economy is incredibly fragile, however you look at it. Particularly when you add in the fact that our economy relies on spending by the wealthiest. The problem with decimating the middle class is that relying on the wealthiest spending lots is dicey. The minute things start going south, they can cut way back, sending the economy into a death spiral.

https://www.profgalloway.com/how-does-the-end-begin/

The top 10 stocks in the S&P 500 account for 40% of the index’s market cap. Since ChatGPT launched in November 2022, AI-related stocks have registered 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending growth. Meanwhile, AI investments accounted for nearly 92% of the U.S. GDP growth this year. Without those AI investments, Harvard economist Jason Furman noted, growth would be flat. As Ruchir Sharma concluded in the Financial Times, “America is now one big bet on AI,” adding, “AI better deliver for the U.S., or its economy and markets will lose the one leg they are now standing on.” This concentration creates fragility, and how the end begins becomes more visible.
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If Mag 10 valuations are cut in half, the S&P and global markets would decline by 20% and 10%, respectively. In the U.S., the immediate impact would be felt by the wealthiest 10%, who own 87% of the stocks. Those households won’t struggle to pay their bills, but they may be the tail of the whip on the economy, as wealthy households have the luxury of decreasing their spending dramatically, vs. middle-class households, who spend the majority of their income on basics. If the top 10%, who account for half the consumer spending in the U.S., hit the brakes, the nation gets whiplash. I estimate that if the wealthy see their portfolios drop by 20%, we could see a 2-3% decline in GDP. For context: From peak to trough, the Great Recession registered a 4.3% drop in GDP.
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