Sovereign Wealth Fund

[cubsfan]

1 minute ago, Gregmal said:

I honestly think it would be much more effective to make earnings between $40k-$250k tax free. Above and below that, tax it. Above you don’t need it all and below you need an incentive to work harder cuz it’s not hard to make $40k. Let people at least have a shot at working their way into some prosperity. The current scam system basically keeps everyone middle class stuck.

 

Well, I think that's a great point really.  I'd still like to see remittances to Mexico taxed at 20% until the narco state gets in line with all the problems they cause. They recieved $63B last year, and their economy would collapse without the remittances. It's all part of solving the same problem

and the gov is stupid not to use it.

 

Meanwhile - throw it to the wall constuction or stick it in the wealth funds as James suggested.

[John Hjorth]

13 hours ago, Xerxes said:

I meant to post this few months ago and create a dedicated thread on sovereign funds. Forgot. I guess this thread is a good home for it. 
 

 

 

Hi @Xerxes,

 

Respectfully, I disagree wholeheartedly.

 

To me personally, to mix NBIM into the discussion of this lame intellectual miscarriage by decree of Trump, with no plan, no assets, no defined income stream, no purpose, no founding principles, investment approach etc., is a serious mistake.

 

James [ @james22 ], clearly meant in this topic to discuss Trumps new 'sovereign fund' initiative, based on the content of the starting post in this topic, with absolutely no body text from James personally, just a copy of a link to X embedding a post from X.

 

[Yes, I question the purpose for starting this topic, shortly after another one containing lots of political rhetoric got closed.]

Edited February 4 by John Hjorth

[james22]

1 hour ago, John Hjorth said:

[Yes, I question the purpose for starting this topic, shortly after another one containing lots of political rhetoric got closed.]

 

You don't think the creation of a US SWF is an appropriate topic for a  finance board???

 

1 hour ago, John Hjorth said:

To me personally, to mix NBIM into the discussion of this lame intellectual miscarriage by decree of Trump, with no plan, no assets, no defined income stream, no purpose, no founding principles, investment approach etc., is a serious mistake.

 

And given there's no particulars, but mention of SWF best practices, discussion of NBIM seems appropriate.

 

Lastly, I don't know how something yet so undefined can be a "lame intellectual miscarriage," but way to make it political. Yeesh.

 

14 hours ago, Gregmal said:

Let me guess, the same people whom are always critical of Trump, will now present us their bs analytical case for why this is stupid or unnecessary or doesnt make any sense? 

 

Nailed it.

[John Hjorth]

2 hours ago, james22 said:

 

You don't think the creation of a US SWF is an appropriate topic for a  finance board???

 

 

And given there's no particulars, but mention of SWF best practices, discussion of NBIM seems appropriate.

 

Lastly, I don't know how something yet so undefined can be a "lame intellectual miscarriage," but way to make it political. Yeesh.

 

 

Nailed it.

 

Give me a break, James [ @james22 ],

 

You grab a post from X and post it here on CofB&F with no comments [ mind you, from X!], while you could have done just one - one! - search, and could have started this topic with a primary source, like the below here, for actual discussion of the initiative, in stead of starting a new topic the way you did, that with warp speed gets derailed in to all kinds of polical expressions and statements, because of lack of real content in your starting post, and no personal assessments and comments from you as the topic starter.

 

White House [www.whitehouse.gov] - Fact Sheets [February 3^rd 2025] : Fact Sheet: President Donald J. Trump Orders Plan for a United States Sovereign Wealth Fund.

 

By doing so, you would have prevented establishing just yet another basis for all kinds of posts containing nothing but speculations and political rhetoric [not just to call it political *BS*] and in stead, you would have provided at least a framework and structure for discussion of the matter at hand in this topic.

 

- - - o 0 o - - -

 

It seems to me, that I'm the first one posting in this topic actually trying to dig up what this initiative is actually about, huh?

 

- - - o 0 o - - -

 

Edit :

 

Also, as primary source :

 

White House [www.whitehouse.gov] - Presidential Actions [February 3^rd 2025] : Executive Order - A Plan For Establishing A United States Sovereign Wealth Fund .

Edited February 4 by John Hjorth

[Blake Hampton]

The executive order states, "The Secretary of the Treasury and the Secretary of Commerce, in close coordination with the Assistant to the President for Economic Policy, shall develop a plan for the establishment of a sovereign wealth fund consistent with section 1 of this order."

 

- Secretary of the Treasury: Scott Bessent

- Secretary of Commerce: Howard Lutnick

- Assistant to the President for Economic Policy: Kevin Hassett

 

From everything that I know and have read about these three, I simply do not trust them in managing our nation's wealth.

 

"Almost anywhere you look—from the popularity of gambling and novel forms of retail investing to soaring crypto prices and the electorate’s choice of president—America is embracing risk."

- The Economist

[Blake Hampton]

The things I've seen come out of Cantor Fitzgerald are appalling, and Kevin Hassett coauthored Dow 36,000. I've heard his role as co-author dismissed as a "youthful indiscretion"—apparently "youthful" now means 37.

 

Just read about these people and listen to them talk—they're basket cases.

[james22]

1 hour ago, John Hjorth said:

You grab a post from X and post it here on CofB&F with no comments [ mind you, from X!] . . .

 

You're reading a LOT into the source and lack of comment.

[Saluki]

Well, are the people who are now advocating a sovereign wealth fund from the same party that was railing against getting equity in the banks that we bailed out during the great financial crisis?  I thought we were supposed to just give them the money and expect nothing in return?  Why is this not socialism now if the government is getting stakes in private businesses like the CCP? 

 

Do you remember how AWS sued because a government cloud contact was given to MSFT, and they claimed that it was because Trump hated Bezos.  If you buy TESLA and not NIO for the fund, do you think that will lead to litigation?  What about the bonds of a troubled bank?  Are we going to give them money at par like Treasury to shore up their balance sheet, or drive a hard bargain to get the best return? 

 

Do you remember the Solar Company that went bankrupt? Would the fund invest in stuff like that?  If a foreingn employer like Fiat and a domestic one like GM were both in trouble, would the fund invest in the one with the best return for the taxpayer, or would there be no politics involved?  

 

Who is going to manage this fund?  Blackrock? Goldman? What about the fees?  set by Congress or the lowest bidder, like Pentagon billing.  Those Pentagon contracts aren't padded with hidden fees, right? 

[james22]

To avoid losing anyone else, I'll take John's good advice and suggest we discuss not the personalities, motivations, debt, funding, tax policy, socialism/fascism, fund management, fees, etc., but only how a SWF might effect investments:

 

1. What might be included?

2. Will the additional demand raise value? 

 

The Fannie Mae/Freddie Mac angle is interesting, but maybe best left to that thread?

[John Hjorth]

3 minutes ago, Blake Hampton said:

The executive order states, "The Secretary of the Treasury and the Secretary of Commerce, in close coordination with the Assistant to the President for Economic Policy, shall develop a plan for the establishment of a sovereign wealth fund consistent with section 1 of this order."

 

- Secretary of the Treasury: Scott Bessent

- Secretary of Commerce: Howard Lutnick

- Assistant to the President for Economic Policy: Kevin Hassett

 

From everything that I know and have read about these three, I simply do not trust them in managing our nation's wealth.

 

"Almost anywhere you look—from the popularity of gambling and novel forms of retail investing to soaring crypto prices and the electorate’s choice of president—America is embracing risk."

- The Economist

 

Blake [ @Blake Hampton ],

 

At least now we are moving away from CofB&F members perhaps getting tempory bans for posting political *BS* here on CofB&F, but I have to 'say' to you, that your post above is decoupled from both fundamental documents available here, ref. the use of the words 'plan' above.

 

From where do you get that Scott Bessent, Howard Lutnik & Kevin Hassett are set to manage this fund eventually? Get your act together, and please stop posting this kind of *BS*, that has no bearing in reality or written facts avaiable to you!

 

You seem to be suggesting as an assumption, that they'll propose themselfves for the management of this new SWF.

 

Now, also please tell me how and why this - the above - Economist quote of yours has any relevance or bearing, what so ever, to this topic.

[dwy000]

The concept of a SWF could be really interesting and if done properly, very useful.  I honestly think Trump looked at Saudi Arabia and their ability to make waves thru investing from their SWF and thought he'd love the ability to have that power.  But to be successful it needs to be completely independent of the swaying political control in the US.  If it's just a political slush fund it will be.more dangerous than helpful.

 

The odds of it actually happening are pretty low though. It would require congressional approval and it would require funding.  Getting politicians to use assets for future generations benefits instead of immediately for their own is likely a non starter.

 

But it's a concept worth discussing though.

[John Hjorth]

16 minutes ago, james22 said:

To avoid losing anyone else, I'll take John's good advice and suggest we discuss not the personalities, motivations, debt, funding, tax policy, socialism/fascism, fund management, fees, etc., but only how a SWF might effect investments:

 

1. What might be included?

2. Will the additional demand raise value? 

 

The Fannie Mae/Freddie Mac angle is interesting, but maybe best left to that thread?

 

Thank you, James [ @james22 ]!,

 

Now, we are getting ahead here, in a constructive way! 

 

- - - o 0 o - - -

 

Edit :

 

Somewhere above, I used the term 'lame' about the issued executive action. I hereby take that back, and have left it back where it was posted by me, crossed out, to hang and dry in the winds of time here on CofB&F.

Edited February 4 by John Hjorth

[Blake Hampton]

11 minutes ago, John Hjorth said:

Now, also please tell me how and why this - the above - Economist quote of yours has any relevance or bearing, what so ever, to this topic.

 

Because this is yet another tail-end risk in the system.

[Gamecock-YT]

Obviously the model would be offshore oil and gas à la Norway but that would involve the people trusting their government in a way that they do in Norway, and don't in the US. 

Edited February 4 by Gamecock-YT

[TwoCitiesCapital]

2 hours ago, Saluki said:

Well, are the people who are now advocating a sovereign wealth fund from the same party that was railing against getting equity in the banks that we bailed out during the great financial crisis?  I thought we were supposed to just give them the money and expect nothing in return?  Why is this not socialism now if the government is getting stakes in private businesses like the CCP? 

 

Do you remember how AWS sued because a government cloud contact was given to MSFT, and they claimed that it was because Trump hated Bezos.  If you buy TESLA and not NIO for the fund, do you think that will lead to litigation?  What about the bonds of a troubled bank?  Are we going to give them money at par like Treasury to shore up their balance sheet, or drive a hard bargain to get the best return? 

 

Do you remember the Solar Company that went bankrupt? Would the fund invest in stuff like that?  If a foreingn employer like Fiat and a domestic one like GM were both in trouble, would the fund invest in the one with the best return for the taxpayer, or would there be no politics involved?  

 

Who is going to manage this fund?  Blackrock? Goldman? What about the fees?  set by Congress or the lowest bidder, like Pentagon billing.  Those Pentagon contracts aren't padded with hidden fees, right? 

 

I'm not opposed to the US government getting equity stakes when taking equity like risk. I'm also not opposed to that being put into some collective vehicle like a sovereign wealth fund. Though my preference would be for the govt not to be involved in bailouts at all and for this vehicle to be unnecessary. 

 

IAM opposed to the US government printing money to buy stakes in public companies to then use that ownership/printed money to exert political influence on private entities. I'm very concerned that this is what it will become - under Trump who clearly has a disdain for independent organizations not directly under his control or by Democrats pushing social agendas. 

 

It is odd to me that this somehow fits the Republic narrative of a smaller/less involved government. 

[gfp]

It's a strange leap from "the Federal government is horribly innefficient and ineffective in everything they do" to ->

 

let's have them run a sovereign wealth fund even though they have no need for a savings account, they can create legal tender with keystrokes on a computer...

 

But, you know, tik tok...  what was that Blagojevich quote?  "I've got this thing and it's f'ing golden and I'm just not giving it up for nothing"

[Paarslaars]

How is that fund different from a federal gold reserve that is no longer tied to your currency?

[adesigar]

Good news. Happy about the US Sovereign Wealth Fund.

 

 

[Vish_ram]

SWF assets:

All confiscated assets that are proven to be part of criminal operation that Govt isn’t selling,

If Govt bails out anyone, SWF will get some warrants. 
 

any NIH funding to private results in issuance of equity to SWF.

 

only prob is that Dems will squander it away when they regain power.

[Xerxes]

Caisse de dépôt et placement du Québec (CDPQ) was created decades ago and the province is not an energy superpower with a lots of surplus. 
 

it was just wise governmental decision, to see that through. 

 

On SWF U.S., not much to go with, but the notion that SWF only makes sense for large net energy exporters with a bundle of USD is probably not a good foundation for pushbacks.  
 

I have a few articles that I saved on PIF. I am not sure how Saudi Arabia has been managing its vast wealth in the past 40 years, aside social programs. But unlike Qatar, UAE, the Saudi sovereign fund is relatively new. 
 

And a lot of its assets were seeded either through asset transfer from Aramco, (I recall a refinery was transferred to PIF) and cash injections from the government. 
 

So asset transfer from Federal Government would probably be the way it would get built up.
 

Either way I like the initiative. 
 

 

[Xerxes]

From Gemini:

 

The Public Investment Fund (PIF) of Saudi Arabia has undergone a significant transformation in the past 10 years, particularly since 2015, when Crown Prince Mohammed bin Salman became the de facto ruler. Here's a breakdown of how PIF assets have been built:

1. Shift in Investment Strategy:
 * From Domestic to Global: Initially focused on domestic investments, the PIF has diversified its portfolio significantly, with increasing investments in international markets.
 * Focus on Strategic Sectors: The fund has targeted investments in sectors aligned with Saudi Arabia's Vision 2030 plan, including technology, renewable energy, entertainment, and tourism.
 * Active Investment Style: PIF has moved from passive holdings to more active investments, including taking significant stakes in companies and participating in their management.
2. Key Investment Categories:
 * Giga-Projects: PIF is the primary investor in massive domestic projects like NEOM, a futuristic city, and other infrastructure developments aimed at diversifying the Saudi economy.
 * International Strategic Investments: These include stakes in companies like Uber, Lucid Motors, and investments in sectors like technology, entertainment (e.g., LIV Golf), and sports (e.g., Newcastle United Football Club).
 * International Diversified Pool: A portfolio of listed and unlisted investments across various asset classes and geographies.
 * Sectoral Investments: Investments in specific sectors like renewable energy (e.g., ACWA Power), mining (e.g., Ma'aden), and healthcare.

3. Funding Sources:
 * Government Transfers: The Saudi government has injected substantial funds into the PIF.
 * Asset Transfers: Transfer of state-owned assets, including stakes in Saudi Aramco, to the PIF.
 * Investment Returns: Profits from the fund's investments are reinvested to further grow the asset base.
 * Borrowing: The PIF has also raised debt through green bonds and other instruments to finance its investments.
4. Transparency and Governance:

 * Increased Transparency: Compared to its earlier years, PIF has improved transparency by publishing annual reports and disclosing some of its investments.
 * Governance Structure: The fund has a board of directors and a clearly defined investment strategy, though concerns about the level of control by the Crown Prince remain.

5. Impact and Challenges:
 * Economic Diversification: PIF's investments are crucial to Saudi Arabia's efforts to reduce reliance on oil and build a more diversified economy.
 * Global Influence: The fund's growing international presence has increased Saudi Arabia's global economic and political influence.
 * Controversies: Some investments, particularly in sports, have faced criticism due to concerns about human rights and "sportswashing."
 * Investment Risks: As with any large investment fund, PIF faces risks related to market fluctuations, geopolitical events, and the success of its chosen investments.

In summary, the PIF has rapidly grown its assets in the past 10 years through a combination of strategic investments, government support, and a shift towards a more active and global investment approach. This has positioned the fund as a major player in global finance and a key driver of Saudi Arabia's economic transformation.
 

[cubsfan]

50 minutes ago, Vish_ram said:

SWF assets:

All confiscated assets that are proven to be part of criminal operation that Govt isn’t selling,

If Govt bails out anyone, SWF will get some warrants. 
 

any NIH funding to private results in issuance of equity to SWF.

 

only prob is that Dems will squander it away when they regain power.

 

Now that is interesting.

[Red Lion]

What about the estate tax? If some billionaire decides to actually leave public company stock to their heirs instead of doing a foundation workaround, why not dump shares straight into the SWF instead of forcing the heirs to liquidate stock? I guess this would take money out of the treasury, but seems like it could make sense assuming that we keep onerous estate tax levels. 

[Red Lion]

1 hour ago, Vish_ram said:

any NIH funding to private results in issuance of equity to SWF.

This could be huge in and of itself. And why shouldn't we the taxpayers be getting equity or warrants for IP that we help fund? 

[cubsfan]

Hopefully, Bessent is as smart as you guys, cause you're coming up with some compelling ideas. Our government needs people like you.... maybe we have them for once.