Saturday thoughts (related to the GSEs because it's the most glaring inconsistency in American business). The United States has the best economic system in the world. Legal and financial rules set the lanes so people can use their creative force to form companies and generate massive economic value with products people want. The market economy takes care of the rest. In my Stanford Business School classes, professors loved to say, “If the dogs eat the dog food, there is value in it. If not, pivot.” Superfluous metaphor for humans aside, the main point stands: if an entrepreneur creates value and manages his company and product well, there is a place for it in the market, and he, together with the owners/shareholders of his company, will be rewarded. Shareholders provide the capital needed to build the business after all. Our business school education is rigorous in mathematics, accounting, and finance, which itself is somewhat of a mix between hard sciences and a liberal art. Financial projections- pro formas, about the future are often wildly optimistic, or pessimistic, and completely miss the mark. Financial accounting, however, is a set of well-established principles and rules for everyone to follow, INCLUDING our government. To that end, I was shocked to see how little financial literacy our legal arbiters possess. The judges ruling on the Fannie/Freddie's net worth sweep initiated by the Obama Administration in 2013 displayed a novice understanding of balance sheets and P&Ls. It’s possible the government attorneys knew that Deferred Tax Asset write downs and Net Worth Sweep mechanics would fly over the judges’ heads, and used that to arbitrage that naiveté and win HERA’s anti-injunction 12 U.S.C. § 4617(f) cases that should have been won by the shareholders. Though the shareholders won one big case recently with the breach of implied covenants. So how do you value $30B+ in annual profits and growing? That’s Fannie and Freddie every year. Why are the companies in conservatorship under the most pro-business President of our time? Is this a capitalist approach? If so, why do students go to business school? Are regulatory captures, nationalizations, and conservatorships the norm now? @pulte, @SecScottBessent, @realDonaldTrump

This is a fantastic F2 idea for the Trump Administration that achieves multiple objectives: 1. Give the youth skin in the game—capitalist principles, leading by example—by letting them own shares in Fannie Mae and Freddie Mac through Trump accounts. 2. Unlock $400B of value for American taxpayers without delay or a bureaucratic middle layer (prior to the 2028 election). 3. Restore trust in the public markets by returning the GSEs to the NYSE, where they belong, functioning as the public utilities they are, regulated by FHFA. 4. Take off the table the political risk of AOC, Bernie, and Warren running these companies and using them to discriminate against a large segment of the population. ruleoflawguy.substack.com/p/…

I thought AT&T CEO said they were innovators and disruptors?

Who is digging tunnels on the moon and Mars anyway?

Perhaps I overweigh this, but I believe Elon must be hyper-focused to deliver on the insanely ambitious plans he has for SpaceX and Tesla. If nothing else, this alone is the #1 reason for a SpaceX and Tesla merger: to reduce the Democratic attack surface on the founder. Tesla shareholders must support this deal.

💯

Bill, you were a verbal ninja on @CNBC, especially on Fannie and Freddie. The conservatorship exit argument is so persuasive, it’s hard to understand how Trump would ever risk passing the GSEs on to AOC in 2028 if Dems win. So many wins for everyone involved if the companies simply get back on the NYSE with a resolved capital structure! Nice to see Bessent and Pulte publicly acknowledge this as a priority next year.

Absolutely