Magnetic North Summer Letter

Happy Summer

Every June, I look forward to beach time on Sullivans Island. It's the best!

Charleston has several beaches, but there are hidden spots on Sullivans, and it's nice not to be surrounded by tourists.

Magnetic North Financial progress:

We are hard at work on several big liftoffs that will hopefully be announced no later than July. All three are in legal review, with lawyers acting important. Once complete, I can share; it will be very exciting.

Market notes:

This administration moves so fast it's hard to keep up with anything relative to talk about. By the time I digest and analyze if it's worth discussing, it's already obsolete.

One thing worth discussing is why we didn't have a recession and why markets calmed down so quickly!

I have long said that if you put high tariffs on our trading partners and seriously cut federal spending, you would indeed have a severe economic correction. But that's not what happened.

Despite the administration's best efforts, the budget and Deficit are increasing daily. It's one of the reasons Elon Musk resigned. He's cutting federal programs, and Congress and the Senate are spending those savings on pet projects. It's not exactly productive.

If Republicans want to be serious about budget cuts and getting interest rates down, they need to cut 2 Trillion dollars (rising rates are a reaction to the Deficit). But no one in our elected government is going to do that. It would create a massive economic contraction, and politicians always want to be re-elected.

Not to sound cynical, but the lack of cutting budgets is good for our progress.

Countries that have had to cut spending to contract deficits have led to economic contraction.

Expanding deficits lead to economic expansion. Expansion is growth and leads to job creation.

Tariff Talks:

Something happened on April 24th with Scott Bessent and the off-the-books talk with JP Morgan.

That meeting led to a 180 in policy with Tariffs.

I don’t know what was said, but I would have loved to be a fly on the wall in that room.

I can only imagine how heated a conversation it was! Wall Street money VS POTUS one one-on-one. No cameras.

Ever since the administration has been tariff-lite and actively pushes progress in proposed deals.  

They need an agreement(s) signed ASAP!

Eventually, the market will call them out again!

Chris