Sovereign Wealth Fund

[orthopa]

On 2/3/2025 at 7:40 PM, Gregmal said:

I do think a wealth fund makes FNF release much more likely. 

 

https://www.wsj.com/politics/policy/trump-allies-are-working-on-plans-to-privatize-fannie-and-freddie-a9c4e5ff

 

Trump Allies Are Working on Plans to Privatize Fannie and Freddie

A deal would call for the government to try to sell a chunk of its holdings in the mortgage giants to investors, including sovereign-wealth funds

 

Seems pretty clear to me where the funds would go if monetized and sold. 

[cubsfan]

7 hours ago, Xerxes said:

 

The video is not about SWF but about the original tariff man. And how at some point they “had” to get rid of surplus. That is history. 
 

If there is a more to the tariff than it being simply a negotiating tool, if there is real conviction in the White House that it is a permanent tool to increase revenues, (not just to arm wrestle other trading partner), than those future cash pile have to go somewhere, if not earmarked for debt reduction. 
 

why would they not go for debt reduction ? No clue. Not everything has to make sense right away. 
 

Couple that with bitcoin reserve aspirations (as unlikely as it seems). Wouldn’t those be place in this so called SWF as well.  

I don’t know the history of SPR well but I imagine when it was first envisioned during the Arab oil embargo, the idea that US had to “save” up expensive barrels during the time when demand was really high seem absurd. 
 

like I said not everything has to make sense right away. 
 

 

 

 

 

 

I think Secretary Bessent answers your question right here:

 

https://www.foxbusiness.com/video/6368327998112

 

 

[Spooky]

On 2/5/2025 at 12:43 AM, TwoCitiesCapital said:

There is already the opportunity for this. Anytime can open a brokerage account with minimal upfront and buy the S&P ETF commission free. 

 

On 2/4/2025 at 9:23 PM, Spooky said:

 

, it might help with inequality and the feeling that only the top 1% benefit from capitalism.

 

I am skeptical it will help anyone except the well connected and political elite.  

 

You are probably correct.

[Xerxes]

On 2/5/2025 at 6:45 PM, cubsfan said:

 

I think Secretary Bessent answers your question right here:

 

https://www.foxbusiness.com/video/6368327998112

 

 

 

Thanks. One more from master of coin. 

 

[sleepydragon]

On 2/5/2025 at 4:35 PM, orthopa said:

 

https://www.wsj.com/politics/policy/trump-allies-are-working-on-plans-to-privatize-fannie-and-freddie-a9c4e5ff

 

Trump Allies Are Working on Plans to Privatize Fannie and Freddie

A deal would call for the government to try to sell a chunk of its holdings in the mortgage giants to investors, including sovereign-wealth funds

 

Seems pretty clear to me where the funds would go if monetized and sold. 

 

Here is my reasons why they will do it:

1. They need this to be done within 4 years because they need this money to fund various initiatives (tax cuts, balance budgets, and sovereign fund etc..). It's now an essential ring of a much bigger scheme of the plan. The administration is highly motivated to push this forward.

2. If treasury doesn't cancel the senior preferred, Fannie/Freddie will never be able to built or raise enough capital within 4 years to privatize. It will take another decade for Fannie to build enough capital.  Since treasury care more what cash inflow is flowing in, instead of how it's being done, treasury will cancel the senior preferred. To speed things up, they use  an IPO to raise more capital.  

3. Bessent knows this is do-able, but he's only concerns is this is a complicated task and whether this is going to result in higher mortgage rate. That's why he want to push the tax cuts through first, so it will be easier to do this. 

 

 

[Spekulatius]

On 2/5/2025 at 9:09 AM, yesman182 said:

and on top of that, the US government already owns the profits of all American companies via the corporate tax. The US government doesn't need equity in these companies to share in the profits.....

Correct, the  USA. (We the people ) owns 21% of all US companies via taxes, plain and simple. It can easily own a higher percentage if needed by raising taxes, if needed.

Edited February 9 by Spekulatius

[Xerxes]

 

[formthirteen]

I had a dream where they bought INTC for that piggy bank money.

 

 

I'm not sure how I could profit from this. I already own OXY.

 

Here's Perplexity's (R1) ”how to position for potential financial gains”:
 

Spoiler

Here’s how to position for potential financial gains:

Key Profit Opportunities

1. Capitalize on Asset Monetization Initiatives

The SWF plans to raise capital by leasing/selling federal assets like offshore drilling rights, unused real estate, and mineral rights17.

• Invest in energy companies (e.g., offshore drilling contractors) or real estate trusts positioned to bid on federal land leases.
• Monitor infrastructure firms involved in repurposing federal properties.

2. Target Global Markets

The fund is expected to prioritize international passive investments, avoiding U.S. corporate ownership to prevent conflicts12.

• Increase exposure to international ETFs or emerging market equities, particularly in sectors like technology, energy, and infrastructure.
• Consider funds tracking Norway’s SWF portfolio, which heavily invests in global equities and bonds68.

3. Infrastructure and Strategic Partnerships

The SWF may focus on U.S. infrastructure projects (airports, highways) and strategic foreign investments (e.g., Greenland, Panama)34.

• Invest in construction/material suppliers (steel, cement) or engineering firms likely to secure government contracts.
• Explore public-private partnership (PPP) opportunities in transportation or renewable energy.

4. Tech Sector Plays

Trump hinted the fund could acquire TikTok or similar assets23.

• Watch for tech M&A activity involving platforms with national security or strategic value.
• Invest in cybersecurity firms or data infrastructure providers aligned with SWF priorities.

5. Tariff-Linked Industries

If tariffs fund the SWF37, industries shielded by trade barriers (e.g., manufacturing, agriculture) may benefit.

• Consider domestic steel producers or automakers that could gain from reduced foreign competition.
• Hedge against retaliatory tariffs by diversifying into sectors less exposed to trade wars.

Risks to Mitigate

• Political Interference: The SWF’s success hinges on avoiding politicized investments49. Favor sectors with bipartisan support (e.g., infrastructure).
• Funding Uncertainty: If asset sales underperform, the SWF may rely on debt issuance, risking higher inflation7. Monitor Treasury yield trends.
• Global Market Volatility: Passive international strategies could suffer during downturns. Diversify across geographies and asset classes8.

Long-Term Strategies

• Financial Services: Asset managers (e.g., BlackRock, Vanguard) may secure mandates to handle SWF investments26.
• Commodities: Rising demand for minerals (e.g., lithium, copper) tied to SWF-backed infrastructure projects.
• ESG Alignment: The fund may prioritize sustainable investments to align with global SWF trends68. Focus on renewable energy or carbon-capture tech.

By aligning with the SWF’s funding mechanisms, investment priorities, and risk-mitigation frameworks, investors can position for both short-term market reactions and long-term structural shifts.