Do You Hear The People Sing?
w.285 | Family Offices, Pensioners, France, Nepal, Deficits, & 1517
Dear Friends,
When the French start lighting things on fire and take to the streets, this song from Les Miserables runs on auto-play in my head. No comments here on Charlie Kirk or related items here beyond reiterating that “murder is bad, I feel sorry for his two young children, and we all have more work to do as a community,” because this is (mostly) an investing newsletter.
I’ve been ‘unplugged’ in spartan conditions and without access to the Internet over the last two days. It’s good to be back.
Today's Contents:
Sensible Investing: Trends
Song of the Week: Do You Hear The People Sing?
Sensible Investing
Adapting to the Terrain - Goldman Sachs Family Office Insights Report. The takeaway is a lower allocation to cash as interest rates drop. The greatest investment risks cited are governmental rather than fundamental. Almost two-thirds (61%) of respondents consider geopolitical conflict to be a top risk, followed by political instability and economic recession.
Relatedly, the US government is unable to get its deficit spending under control. In fact, it is not even close. And no one appears to be trying.
As a friendly reminder, the US government has already passed its statutory debt ceiling. We are now about to be discussing the vagaries of the so-called “X-date” when the government can no longer meet its obligations, which is supposed to be in late Q3 / early Q4 2025. Here is hoping cool heads prevail.
France: Its 5th Prime Minister in a year resigns, and people take to the streets.
What’s actually going on? First, the FT explains how Emmanuel Macron’s France became Europe’s fiscal problem child. Basically, it’s everything you’d expect.
But the FT also released several graphics (see below) which shows that pensioners now have higher incomes than working adults. And Italy, Norway, Canada, the US, and Germany are not that far behind.
There is no way the government can keep everyone happy, and fiscal deficits are beginning to reflect strongly in the bond market. The chart below is also quite exceptional as French Companies’ Borrowing Costs Fall Below Government’s as Debt Fears Intensify (in the FT). Lower yields for groups including L’Oréal, Airbus, and Axa shake up the typical order and signal Paris’s loss of ‘risk-free’ status.
Will the Mag7 someday be able to borrow at cheaper rates than the US Government? Given the relative trajectories of the two, I think it’s possible.
We are still far from a revolution in France. In Nepal, it happened all this week. This explanation on X was the best I’ve found.
TLDR: The Nepali government was overthrown in 48 hours, and I think we just witnessed the first Internet-native revolution.
There is already a new Prime Minister, elected in a Discord server and now formally acknowledged by the Ministry of Foreign Affairs of China as they respect that she was chosen ‘independently by the people of Nepal.’
Song of the Week:
Here on YouTube.
A classic song. Its relevance is referenced above.
“Do You Hear The People Sing” by Les Misérables
Do you hear the people sing?
Singing the song of angry men?
It is the music of the people
Who will not be slaves again!Selfie of the Week
I haven’t taken a selfie this week. I have been on SciFi tours and “unplugged” in the woods with the 1517 Fund and their community. Almost everyone we met was building for the AI capital expenditure (capex) of hyperscalers.
I’m a huge fan of their ethos and impressive origin story. Danielle and Michael, GPs of 1517, previously founded the Thiel Fellowship (Why Thiel Fellows Win PDFed from Pirate Wires). They are not scensters and are like non-VCs with a venture fund, i.e., most comfortable with their pipeline of young renegade scientists and dropouts rather than the winners of yesterday, which is probably why they have and will continue to outperform.
There is a tight link between those who have grown up with some ‘alternative education’ paradigm and those pursuing large, technical visions in Silicon Valley and beyond. As the 1517 team describes, their job is to decipher between young people who are ‘Crazy Crazy’ or ‘Crazy Awesome’, and that can take years.
On the name of the fund: Martin Luther nailed 95 Theses to the Wittenberg church doors in 1517 because the Church was abusing the sale of indulgences – give money and this paper will save your soul! Today’s cathedrals – colleges, universities, and their supporters in media, government, and corporations – sell pieces of paper – diplomas & degrees – that tell students they can’t be taken seriously without them. It’s time for a New Reformation.
Thanks for reading, friends. Please always be in touch.
As always,
Katelyn