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Economic Transparency from the White House

I’ve been listening to the All-In podcast for the past five years, since it was started in March 2020 during Covid. At first, I didn’t listen to too many podcasts and was getting more familiar with social platforms like Twitter/X. The Besties were initially discussing the markets, making great jokes and having a great time.

The All-In podcast was also the first time I listened to a podcast with no sponsors. The key difference between the All-In and other podcasts is that the Besties are already very wealthy. They choose to have a weekly discussion because they are friends and enjoy each other's company. Without the sponsorship incentive, the podcast provides more transparency without misaligning incentives.

However, for the two years I probably listened to very few episodes. First, after A.I. became mainstream, I decided to consume less content to create more. Plus these A.I. tools do a fantastic job summarizing content in all form factors. Second, the All-In podcast became too political for the right reasons. I’m personally not a political activist but I have come to learn that politics is a key element when it comes to American economics.

That’s why I decided to pay attention to President Trump’s full election cycle, especially how he chose his cabinet members. There’s a lot to unpack here but today I will focus on two of the key members who are related to the markets: Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.

Treasury Secretary

Scott Bessent is impressive. I remember when the previous Treasury Secretaries were chosen: Janet Yellen and Steven Mnuchin. I wasn’t familiar with either of them so I had to study their history. When Bessent was first mentioned, I had to set aside time to learn more about his background as well.

For years, Scott has stood outside of the spotlight because he is a global macro trader. This means he had to predict and invest on economic forecasts all over the world. Interest rates, foreign currencies and government securities. Bessent is familiar with all of these instruments, and more importantly he was successful at making money.

In his role as Treasury Secretary, Scott is focused on managing tax revenue and the Treasury’s debt. Personally, I want a sophisticated investor who is successful in managing the assets and liabilities of the balance sheet. In contrast, Janet Yellen had zero operational experience and never executed a real trade.

At the moment, Scott is working closely with Elon and D.O.G.E. to label Treasury payments across their computer system. Supposedly up to $2 trillion of payments are unaccounted for. I bring this up because Scott will play a key role in managing our country’s deficit and balancing the budget. Right now he’s going on a media tour to educate the public about the challenges our country’s Treasury faces. Watch Scott’s interview with the Besties to learn more.

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Commerce Secretary

Howard Lutnick really impressed me. Today Howard is the 41st Secretary of Commerce. He is responsible for implementing Trump's trade agenda, particularly regarding tariffs. Previously he was the CEO and Chairman of Cantor Fitzgerald, a top 20 investment bank on Wall Street. Cantor is a Treasury dealer and a multi-billion dollar firm.

At first, I thought Howard was only involved with the transition of Trump’s Administration and recruiting key members like Scott and Elon to the team. In his All-In interview, he breaks down his recruiting process in great detail. Howard is impressive and aggressive. I understand why President Trump appointed Lutnick to manage trade negotiations. America has had historically poor trade deals and Howard has a deep understanding of the history of U.S. tariffs.

This video interview is almost two hours long but is worth watching. Howard explains the need to balance the budget and how he will generate $1 trillion in revenue for the U.S. government. Even for me, this was difficult to grasp because I’ve never heard anyone discuss a trillion dollar budget. Even companies in the public markets only mention how to generate $100 billion in annual revenue. Howard is tasked with generating 10x more revenue over the next four years.

Watch this video to learn more about the economic details of his plan, specifically related to tax cuts and tariffs.

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What can investors expect next?

At the moment, it looks like we will have an economic downturn over the next six months. Over the next few months, the Trump Administration is heavily focused on cutting government spending. Elon and his team have a plan to reduce the deficit by $1 trillion and are on the path of saving Americans almost $4 billion per day.

One key observation I heard from Howard’s interview was they plan to revise how GDP and economic measures are calculated. Howard explained in great detail that too much government spending has skewed how investors view the economy. Politicians seem to overspend when it comes to election season. Because government spending is a large portion of GDP, it always seems like the economy is growing.

I think the combination of Elon cutting spending, Howard generating revenue and Bessent managing the budget, we will experience a lot of market volatility. But these dislocations will create a lot of new opportunities for investors over the next 24 months.