Saule Omarova on a National Investment Authority

[Castanza]

https://www.youtube.com/watch?app=desktop&v=WkP0Esyfh54&ab_channel=JFI-JainFamilyInstitute

 

 

 

Trying to keep this non-political

 

This is an interesting listen for sure. Some random notes below.

 

Purpose of NIA

- Take pension under there wing for "guaranteed returns at a maybe slightly lower return rate"
        -NIA should be able to borrow from the FED to guarantee 100% principle returns on pension funds
- Use federal funds to prop up failing companies which cannot obtain capital in the private markets
- Fill the role of private market venture capital for companies which cannot get funding due to revenue/profit standards outside of private market expectations. "We want the NIH to be the patient investor"

 

O&G

O&G 35:00 "We want them to go bankrupt" "So that NIA can take over management of those companies" proposed similar structure to FNMA with GSE

 

PIC

Public Interest Counsel - Sounds interesting. A public counsel which has representation between regulators and private industry during times like nationwide financial crisis. Access to info, request info, provide to congress an annual report on it's assessment of NIA performance.

 

Q

What worries me is the NIA structure and the projects it chooses to take on. One of the listeners asked the question "What happens with projects that lose money (Ex. affordable housing). Her response is that the rest of the investments will be generating enough revenue to cover the cost burden of these projects. My question is, how tf can you guarantee this? We have private pension funds currently which are drastically underfunded and promised 14% returns etc. The NIA is supposed to promise 100% on principle, act as venture capital to private companies (which private capital wouldn't touch), take over bankrupt industries (with unions), and somehow backstop all of this with the FED? 

 

Perhaps my feeble brain can't comprehend this so I'm curious if any others on here have been following this? What impact would this have on the markets? 

 

Edited November 11, 2021 by Castanza