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Top stories today: 1) Tesla announces China factory for Megapack battery, 2) ByteDance's EBITDA was $25B in 2022, 3) S&P 500 earnings expected to fall 6.8%, 4) Macron distances himself from the U.S. and USD dominance, and 5) FTX report shows more control failures.

0. Data and calendar

1. Tesla announces China factory for Megapack battery

• Location: Shanghai, China.

• Expected production: 10K Megapacks per year, equivalent to around 40 GWh of energy storage. - Bloomberg

• Expected revenue contribution: $10B-$19B, given the current Megapack unit price of $1.88M, discounts for bulk orders, and the expectation of falling prices.

• Elon is said to have visited China this weekend, although he did not confirm the news.

Megapack production will be split between the U.S. and China

Tesla's car production is already split between China and non-China

No wonder why Elon Musk is so pro-China

• Remembering his anti-Taiwan quote in October: "My recommendation . . . would be to figure out a special administrative zone for Taiwan that is reasonably palatable, probably won’t make everyone happy. And it’s possible, and I think probably, in fact, that they could have an arrangement that’s more lenient than Hong Kong." - FT

Elon sparred with GOP candidate Vivek Ramaswamy on his potential subordination to the CCP

2. ByteDance's EBITDA was $25B in 2022

• EBITDA: $25B in 2022, +79% YoY

• Revenue: $85B in 2022, +30%+ YoY (The Information previously reported $80B+).

  • China: $70B, International: $15B - FT

3. S&P 500 earnings expected to fall 6.8% QoQ in Q1

It would mark the first fall since 2020:

This Fri: JPMorgan, Citi, and Wells Fargo report earnings

• The #1, #3, and #4 banks are having their conference calls one after the other, so we can listen live to all of them. Bank of America, the 2nd largest bank in value of assets, will report earnings on April 18.

4. Macron distances himself from U.S. foreign policy and USD dominance

• Against the U.S. using its reserve currency power: "He also suggested Europe should reduce its dependence on the “extraterritoriality of the U.S. dollar,” a key policy objective of both Moscow and Beijing. “If the tensions between the two superpowers heat up … we won’t have the time nor the resources to finance our strategic autonomy and we will become vassals,” he said." - POLITICO

• Suggests some Taiwan dovishness: "The paradox would be that, overcome with panic, we believe we are just America’s followers,” Macron said in the interview. “The question Europeans need to answer … is it in our interest to accelerate [a crisis] on Taiwan? No. The worse thing would be to think that we Europeans must become followers on this topic and take our cue from the U.S. agenda and a Chinese overreaction,” he said." - POLITICO

The USD is still 59% of global reserves, vs 21% for the EUR

5. FTX details previous control failures in report; now says $3.1B in crypto found

FTX stored most of its customer money in highly-risky hot wallets

Not only FTX, FTX US, and Alameda shared customer money, but they also shared AWS access

"Alameda is unauditable, [we] sometimes find $50M of assets lying around", wrote SBF

"If Nishad got hit by a bus, the whole company would be done," said one executive

$3.1B in digital assets have been identified: $1.4B already in cold storage, and $1.7B being recovered

In March, they said they had identified $4.1B in crypto; it is unclear how the above numbers are compatible

Read more: Molly White, FTX press release.

6. 54% of independents believe Trump should have been charged in the Manhattan hush-money case

In line with Trump going from +2 to -2 vs. Biden, in the latest YouGov poll

Overall, we think markets are correct to suggest that the 2024 presidential elections are about 50/50 odds

Given we are so far away and that polls show Trump and Biden neck-a-neck:

7. Other headlines

Tech

• Elon Musk to fly to Miami to speak at ad conference; many large companies still skeptical about advertising on Twitter.

• Twitter stops throttling tweets mentioning Substack.

• High YC valuations are still motive for talk in Silicon Valley.

• LLaMA: a look at the open-source models derived from Meta's leaked model (still much worse than GPT-4).

• When startups are acquired, founders get pay raises, but patent applications fall.

Business

• Eli Lilly: EU cutting down exclusivity period from 10 to 8 years will hurt innovation (true).

• TSMC concerned about CHIPS Act "guidance".

• Apple's 270 U.S. retail stores' managers talk to staff about unionization risks.

• Private equity investment in food sector plummets 78% in 2022, after a record 2021.

• Beating the roulette: a look at how Niko Tosa did it (he claims just eye practice).

• Moving to Saudi Arabia looks like a downgrade to most expats.

• China continues to strangle financial sector.

• Super Mario Bros.: $377M in global box offices, best weekend opener for animated film.

Crypto

• SushiSwap's old contract gets hacked for $3.3M.

• Bitget starts self-funded $100M fund, focus is on non-U.S. startups.

• Arbitrum community seeks to return $1B in ARB tokens to its treasury.

• Binance.US struggles to find bank partner, after Signature and Silvergate closed.

Politics

• How to beat Trump: Frank Luntz summarizes his recent focus group work.

• China held a 2nd day of military exercises, including simulated precision strikes, in Taiwan.

• Ukraine could be out of defensive missiles by mid-April: leaked documents.

• Ukraine resumes drafting people to war: most men 18 to 60 can't leave and are eligible.

• Russia nearly shot down British spy plane on Sep. 29: leaked documents.

• Leaked documents likely came from a U.S. person.

• Julian Assange charges not being dropped, U.S. says, as Russia charges WSJ reporter.

8. Interesting tweets, memes, and images

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