Today we had a fantastic conversation with Daan Struyven, Co-Head of Global Commodities Research and Managing Director, Head of Oil Research, alongside his colleague Lina Thomas, Commodities Strategist, with Goldman Sachs. Daan joined Goldman in 2015 and previously co-led the Goldman Global Economics team as well as the firm’s Canada Economics research effort. He holds a Ph.D. in Economics from MIT. Lina joined Goldman after earning her Ph.D. in Economics from Harvard, where she focused on safe-haven assets. We were thrilled to welcome these Ph.D. powerhouses for a deep dive into a topic we haven’t yet explored on COBT – the gold markets and how they intersect with oil, gas, copper, interest rates, tariffs, geopolitics, central banks, structural market changes, and more.
 
In our discussion, Lina provides a detailed overview of the historical inverse relationship between gold and interest rates, and highlights the unusual strength of the gold rally that began in 2022. She describes that the rally was triggered by the freezing of Russian central bank assets in February 2022, which prompted central banks, particularly those geopolitically aligned or close to Russia, to increase gold purchases to reduce reliance on politically vulnerable reserve assets. Lina explains that in addition to modest investor inflows, ongoing central bank demand has played a critical role in sustaining gold’s price rise and discusses how geopolitical proximity is a key predictor of central bank gold buying. We explore Goldman’s approach to estimating actual central bank purchases, which are underreported in official data, Russia’s gathering of gold reserves ahead of its invasion of Ukraine, the effects of the war and subsequent sanctions, and how Russia rerouted its gold exports similar to its post-sanction oil trade. Daan outlines Goldman’s copper market outlook, including their view on proposed copper tariffs, the anticipated supply deficit by 2026 due to limited investment in new projects, their copper price forecast, and the key short-term drivers influencing copper prices. We cover gold’s unique role as a stock rather than a flow asset, with only about one percent of tradable gold coming from annual mine supply, why central banks favor gold over silver, Goldman’s four structural investment themes (Dollar Diversification, Defense Spending, Disinvestment in Supply, and De-risking Energy Systems), the firm’s crude oil outlook over the next year, and much more. We greatly appreciate Daan and Lina for sharing their time and perspectives.
 
Mike Bradley opened the discussion by noting that “Trumpatility” has faded considerably, with the S&P 500 Volatility Index now trading near year-to-date lows. Ironically, this introduces some degree of risk as broader markets are now technically overbought. Moody’s downgraded U.S. debt by one notch this past week but U.S. bonds and equities shrugged it off, mostly because U.S. bonds don’t typically move on ratings changes, but more so on inflation and employment growth, while broader equities are driven mostly by forward earnings estimates. The U.S. dollar weakened slightly on the U.S. debt downgrade while Bitcoin and gold prices are trading near all-time highs, likely a reflection of growing U.S. debt levels. He wrapped up with a roundup of notable Energy & Electricity headlines, including: Blackstone Infrastructure’s $11.5 billion acquisition of TXNM Energy; Strathcona Resource’s $6 billion takeover offer for MEG Energy; Phillips 66’s Proxy vote battle with Elliott (involving four board nominations); Trump’s unexpected reversal of his recent shutdown of Equinor’s Empire Wind 1 project off Long Island; and the recent decline in Permian oil rig count and the potential associated gas growth implications. Jeff Tillery also joined and peppered in his thoughts to the discussion.
 
We hope you find today’s discussion as insightful and interesting as we did. Our best to you all!

Today we had the pleasure of hosting Dr. Francesco Sassi for a wide-ranging discussion on global energy and geopolitics. Francesco is a Postdoctoral Fellow at the University of Oslo and previously served as a Research Fellow in energy geopolitics and markets at Ricerche Industriali ed Energetiche (RIE). Francesco holds a Ph.D. in Political Science – Geopolitics from the University of Pisa, where he focused his research on the Sino-Russian gas interdependence. We were drawn to his straightforward analysis, insightful commentary, and use of maps to bring complex dynamics to life. We were thrilled to visit with Francesco and learn from his perspective.
 
In our conversation, we explore the rise of political risk in energy markets and the growing global interdependence of the energy system, driven by factors such as China’s increasing influence in shaping energy geopolitics, new interdependencies created by energy technology, trade and manufacturing, as well as disruptions like COVID-19 and the Russia-Ukraine war. We examine Russian gas volumes to Europe, Spain’s leadership in clean energy and the implications of its recent blackout, and the dual forces shaping Europe: rising cross-border interconnectivity projects alongside increasing energy nationalism. We touch on President Trump’s recent visit to the Middle East, which is part of broader interest in energy and AI investment in the region, OPEC+ strategy, market share pressures, and the impact of low oil prices on Russia. Francesco shares his perspective on the potential for a Putin-Zelensky meeting, tensions between India and Pakistan, and how energy policy is becoming increasingly central to electoral platforms in Europe. We turn to Argentina’s recent progress under President Milei, Israeli investment in lithium extraction technology in Argentina’s lithium triangle, and how energy and mineral resources are increasingly being used as tools of foreign policy and geopolitical leverage. We close with Francisco’s thoughts on the growing power of energy as a force shaping international relations and global industrial strategy. It was a dynamic and insightful conversation.
 
Mike Bradley kicked off the discussion by noting that broader markets rallied substantially on Monday following news that China and the U.S. have agreed to a “tentative” tariff deal. Broader equity markets (S&P 500) have completely retraced their losses since Trump’s April 2nd Day of Liberation and are now up slightly (+4%). Meanwhile, the S&P Volatility Index has plunged from its April 8th tariff volatility highs and is now trading near YTD lows, something to be monitored closely as any surprise event could send broader markets lower. On the bond market front, the 10yr bond yield is trading sideways even though April CPI came in lower than expected. PPI will be released on Wednesday and if it too prints lower than expected, it could provide room for the Fed to begin cutting rates at their June 18th FOMC meeting. On the crude oil front, WTI price has rebounded nicely over the past week and now trades at ~$63/bbl. Oil traders remain focused on future OPEC+ production increases and increasingly on whether U.S. E&Ps will begin altering their 2025 capex plans at these lower prices levels. He wrapped up with a look at key events this week, notably NRG Energy’s acquisition of LS Power’s portfolio of natural gas generation assets (~13gw for ~$12 billion). The move follows Constellation Energy’s mid-January deal to acquire Calpine Corp. and demonstrates that both companies are positioning themselves for an acceleration in electricity growth this decade.
 
Many thanks to Francesco for sharing his time and insights with us today. We hope you enjoy the discussion as much as we did! Our best to you all.

Today we were thrilled to welcome our good friend Ashley Zumwalt-Forbes, former Deputy Director for Batteries and Critical Materials at the U.S. Department of Energy, to our offices in Houston. Ashley brings more than a decade of experience in acquiring, financing, and developing greenfield and brownfield mining projects, with deep expertise across the global mining supply chain. She served in the Biden Administration from January 2024 to January 2025, overseeing deployment of capital and tax incentives into the U.S. battery supply chain. Prior to her government service, Ashley was Co-Founder and President of Black Mountain Metals and Black Mountain Exploration. We were delighted to host Ashley for a timely and insightful conversation on the state of the global metals and minerals landscape.
 
In our discussion, we explore the bipartisan consensus on reducing U.S. dependence on foreign-sourced metals and minerals, particularly from China. Ashley shares her experience at the DOE and her goal to buy down demand risk to attract private capital, especially for large-scale processing infrastructure. We discuss the surge of investment and momentum in lithium brine projects in the U.S. along with efforts to accelerate domestic mining, including the Trump Administration’s move to expedite permits for 20 projects. Ashley outlines the tension between the desire to onshore more production and the current lack of downstream markets outside China, which remains a bottleneck for full supply chain development in the U.S. She shares innovative developments in processing methods, including China’s nickel conversion efforts in Indonesia, the potential for copper to be codified as a critical mineral in upcoming legislation, and why permitting reform and seabed mining are bandaids for the larger challenge of unit economics in the U.S. Ashley further explains the difficulty in making margins at each U.S. supply chain stage, especially when compared to China’s vertically integrated structure and non-profit-driven strategy, the benefits of targeted tariffs to protect nascent U.S. industries, and the lack of U.S. processing as the true choke point. She highlights the decline of U.S. stockpiles from Cold War levels to today, how the materials once stockpiled fueled the Allied victory in WWII, the depleted reserves in the U.S. today, the complexities involved in the U.S. minerals agreement with Ukraine, challenges in raising capital for mining projects, and the limited investor base. We also examine how structured government support will be essential for the U.S. to be competitive, Ashley’s next steps in her pursuit of sourcing and supporting “weird and wonderful” mining transactions, and more. As you will hear, Ashley offers a unique mix of policy insight, deep market understanding, and a genuine passion for rebuilding the U.S. industrial base. We’re thankful for her time and insights.
 
Mike Bradley opened the discussion by noting that broader markets were down marginally for the day and that “Trumpatility” appears to be temporarily subsiding. He highlighted a handful of notable developments in energy markets over the past week, first being OPEC+ agreeing to another ~400kbpd increase in June oil production in addition to the ~400kbpd production increase in May, both of which are being done into an oversupplied global oil market. Saudi seems to be the main driver of the OPEC+ increases and offered several reasons for their actions at this juncture. The second development relates to a big change in E&P mindset that’s occurred over the last couple of weeks at these lower oil price levels (high $50s/low $60s). A handful of E&Ps recently announced cuts to their 2025 capital programs (CTRA, EOG & FANG) and others are fully expected to announce cuts this week and next. The final development was Diamondback Energy’s recent Letter to Stockholders (linked

Today we were delighted to host the team from the Bipartisan Policy Center (BPC), a leading Washington NGO dedicated to bringing stakeholders together to address critical policy issues for the U.S. and find areas of alignment for action. Joining us for the session are Margaret Spellings, President and CEO, along with her colleagues David Hill, Executive Vice President of Energy, and Bill Hoagland, Senior Vice President. Margaret became CEO of BPC in 2023 and brings extensive leadership experience at both the state and federal levels, most recently serving as President & CEO of Texas 2036. Earlier in her career, Margaret served as White House Chief Domestic Policy Advisor, Senior Policy Advisor and Secretary of Education under George W. Bush. David has more than 25 years of energy experience, having served as General Counsel of the U.S. DOE and as DOE’s Deputy General Counsel for Energy Policy during the Bush administration, as well as Executive Vice President and General Counsel of NRG. Bill focuses on fiscal, health, and economic policy at BPC, following a long tenure on the U.S. Senate Staff and as VP of Public Policy at CIGNA Healthcare before joining BPC in 2012. We were thrilled to visit with Margaret, David, and Bill for their latest insights from Washington.
 
In our conversation, Margaret first outlines the BPC’s team structure and its dual focus on research and advocacy through bipartisan engagement on Capitol Hill. We discuss setbacks in U.S. education policy, including how 20 years of bipartisan federal accountability progress under Presidents Bush and Obama have been undone in recent years, highlighting the need to refocus on reading and evidence-based instruction. Bill provides an overview of the U.S. national debt, noting that politically untouchable programs dominate the budget and leave little room for meaningful reform. He flags that interest payments on the debt now exceed defense spending and describes the slow-building debt and energy crises as “termites under the porch,” noting that Washington only acts under strong leadership or in response to crisis. David shares his perspective on the need for durable, stable energy policy and the importance of long-term policy certainty to encourage private sector investment in infrastructure. We explore BPC’s efforts to modernize education and workforce policy to reflect today’s labor market, how private conversations often reveal more bipartisan consensus than public discourse suggests, and how BPC facilitates those critical dialogues. We also touch on the disconnect between Washington and the rest of the nation, the need to clearly communicate how policy failures impact everyday Americans, the challenges posed by outdated government technology, and much more. Thank you, Margaret, David, and Bill, for sharing your insights and expertise with us all!
 
Mike Bradley kicked us off with a few updates focused on Trump’s first 100 days, Canadian election results, and the recent Spain/Portugal power outage. The best word to describe Trump’s first 100 days would be volatility, or as we have aptly named it, Trumpatility! The 10yr bond yield has fallen ~40bps (to 4.2%) over this timeframe and the U.S. dollar has depreciated by ~6%. Two commodity standouts are WTI price, which has plunged ~$15/bbl to ~$61/bbl, and gold, up ~22% to ~$3,300/oz. From a broader equity standpoint, the S&P 500 was down ~8%, Nasdaq down ~10% and Russell 2000 down ~14%. The S&P 500 Volatility Index spiked by ~50% (and ~275% at its April 7th volatility peak). The Energy sector was down ~11% with Oil Services down ~28%, E&Ps down ~21%, Refiners down ~15%, U.S. Oil Majors down ~10%, Midstream down ~5% and Alternative Energy up ~5%. Electric Utilities were up ~2% while IPPs/Power Index was down ~18%. Regarding the Canadian election, Mark Carney’s Liberal Party eked out a narrow win Monday night against Poilievre’s Conservative Party but fell short of a majority in t

Today we had the distinct pleasure of hosting Mark Lashier, Chairman and CEO of Phillips 66. Mark joined Phillips 66 as President and COO in 2021 and assumed the CEO role in July 2022. Prior to that, he served as the President and CEO of Chevron Phillips Chemical Company (CPChem), where he held several senior leadership roles, including Executive Vice President of Olefins and Polyolefins, Senior Vice President of Specialties, Aromatics and Styrenics, and Vice President of Corporate Planning and Development. Mark began his career at Phillips Petroleum and holds a doctorate in Chemical Engineering. Beyond his leadership at Phillips 66, he serves on the Executive Committee of the American Petroleum Institute and is a Board Member of the Greater Houston Partnership and several other nonprofit organizations. Mike, Arjun and I were thrilled to host Mark for this Special Edition to discuss Phillips 66’s recent performance, his strategic vision for the company, insights into today’s energy landscape, and the ongoing debate with Elliott Management.
 
In our discussion, Mark shares background on his career and transition to CEO, his early priority of addressing improvements in Phillip 66’s refining segment, and the cultural transformation to re-instill pride and competitiveness amongst refiners, which involved engaging employees at all levels and investing in strategic capital projects to fix operational bottlenecks and improve reliability and earnings. We discuss Bob Pease’s addition to the board, who was originally nominated through Elliott’s engagement, and how he shifted from being skeptical to supportive of the company’s strategy, execution, and focus on shareholder returns. We explore the history and structure of CPChem, the benefits of Phillips 66’s integrated business model during times of volatility and potential downturns, and the company’s industry-leading safety performance, which ties safety directly to employee compensation. Mark shares his perspective on why maintaining a diversified portfolio across refining, midstream, and chemicals is strategically and financially advantageous, as well as the optimization and regulatory advantages of an integrated structure. We touch on Phillips 66’s strong ROCE versus peers, activist pressure to sell midstream assets for a higher multiple, growth across their midstream business, and broader global trends toward integration rather than asset breakups. Mark highlights the company’s refining performance improvement, the rationale behind merging PSXP and DCP assets, efforts to attract generalist investors back to the energy sector by demonstrating consistent earnings, Phillips 66’s philosophy of keeping assets “for sale every day” to ensure focus on shareholder value, and much more. We greatly appreciate Mark for sharing his candid insights into a complex and highly public debate.
 
As you will hear, we reference a few items in the discussion. Phillip 66’s Investor Relations presentation entitled “Delivering Value & Demonstrating Commitment,” released Monday, April 28, is linked here. Veriten’s COBT episode featuring Doug Terreson is linked here.
 
Thanks to Mark for joining us for an insightful discussion and thanks to you all for your friendship and support!

It was our privilege today to welcome the Honorable Jason Kenney, former Premier of Alberta, for a timely and insightful discussion on Canada’s upcoming federal election (April 28). Jason holds 25 years of public service at both the federal and provincial level with wide-ranging policy and leadership experience. He served as the 18th Premier of Alberta from 2019 to 2022 and now serves as a Senior Advisor at Bennett Jones, in addition to holding several board positions. Prior to his time as Premier, Jason held several key federal cabinet roles, including Minister for Citizenship, Immigration and Multiculturalism, Minister of Employment and Social Development, Minister of National Defense, and Chair of the Cabinet Operations Committee. He was first elected a Member of Parliament in 1997 and was re-elected six times. We were thrilled to host Jason and learn from his unique perspectives on what the election means for energy, trade, and the U.S.-Canada relationship.
 
In our conversation, Jason walked us through Canada’s evolving political landscape and the two leading candidates: Pierre Poilievre of the Conservative Party and Mark Carney of the Liberal Party. He highlights key issues shaping the election including Trudeau’s long tenure and declining popularity, Canada’s weak per capita GDP growth, an overwhelmed immigration system, a doubling of housing costs, and issues of rising addiction and crime. Jason explains how Poilievre maintained a commanding 18-month lead in the polls until Trump’s aggressive trade rhetoric reignited deep-rooted anxieties about Canadian sovereignty, prompting Trudeau’s exit and opening the door for Carney to reframe the election around “Who can stand up to Trump?” while Poilievre continues to focus on affordability and change. We explore the role of minor parties in Canada’s Parliamentary system, the unprecedented focus on energy and climate in Sunday’s federal debate, expected policy outcomes depending on who wins, and the looming 2026 USMCA renegotiation. Jason shares his perspective on Canada’s opportunity to grow LNG exports, the barriers posed by the Liberal government’s zero-gas electricity rule and industrial carbon tax, and the potential for Alberta to become a hub for large-scale, gas-powered data centers given its cold climate and abundant stranded gas. We discuss Canadian electricity exports to the U.S., broader infrastructure challenges tied to electrification and economic growth, Canada’s continued reliance on U.S. exports, and the growing sense that Canada’s “holiday from history” is over. We also reflect on the emotional, historic and familial ties between the U.S. and Canada, the hope for reconciliation and renewed cooperation, and much more. It was a fascinating discussion. If you’re interested in watching the energy and climate portion of Sunday night’s Canadian Federal Leaders’ debate, the 18-minute segment is linked here.
 
Mike Bradley kicked off the discussion by highlighting President Trump’s recent pressure on Fed Chairman Powell to immediately lower interest rates or risk getting fired. While global fear and uncertainty remains high, Mike noted that that it can and probably will be mitigated when Trump signs some high-profile tariff deals. In broader equity markets, the S&P Volatility Index remains pretty elevated, which was evident by the DJIA plunging by ~1,000 points on Monday and surging over 1,000 points on Tuesday! Investors are closely watching Tesla’s Q1 earnings, with one analyst calling it a “Code Red” Moment, which could have broader market implications. He shared several bond, currency and equity market stats for Canada. From an energy equity reporting standpoint, Liberty Energy and Halliburton reported Q1 results, with both companies noting that E&Ps haven’t decided to cut 2025 activity levels yet but are looking at a range of macroeconomic scenarios in anticipation of oil price

Today we had the pleasure of hosting David Hambling for a sweeping discussion on drone technologies and their applications. David is a journalist, author, and defense technology expert with over 20 years of experience. He writes for Aviation Week, Forbes, The Economist, New Scientist, Popular Mechanics, WIRED, and more (for an archive of David’s writings, click here). David is the author of “Swarm Troopers” and has researched the history of drones and in particular, has zeroed in on the potential impact of smaller drones in both military and consumer applications. We were thrilled to visit with David.
 
In our conversation, David shares his background in military technology and how his previous book, “Weapons Grade,” led him to explore the rise of drones. We discuss how the military lost its tech lead due to rapid commercial innovations, particularly as mobile phone technologies enabled the development of small, cheap, and highly capable drones. David explains the evolution of drone use, from reconnaissance tools to precision combat systems, and how this transformation has played out dramatically in the Russia-Ukraine war, where nearly two-thirds of Russian fatalities on Ukrainian soil are reportedly caused by small drones. We explore the shift from human-operated drones to autonomous systems, the difficulty of defending against small, agile drones, and the growing threat that they pose to critical energy and transportation infrastructure. David shares background on the historical cultural bias within militaries that sidelined drones in favor of piloted aircraft, until the CIA’s early adoption of drone strikes eventually forced the Air Force to adopt them, as well as the recent surprising Trump Administration decision to continue the Boeing F-47 contract. We cover the regulatory challenges facing drone adoption, particularly the limitations on beyond visual line of sight operations, public concerns around safety and privacy, and global developments including Dubai’s plans to pilot flying taxi drones by 2027. David outlines China’s dominance in the global drone market, applications of drones including infrastructure inspection, delivery services, reforestation, and the unique Ukrainian “Victory Drone” program that encourages civilians to help war efforts by building drones at home for frontline use. We also touch on China’s demographic challenges and how its shrinking and aging population is fueling the nation’s strategic investment in AI, robotics, and autonomy, the critical role of software in making humanoid robots useful, especially with using assistive tech for elderly care, and more. We end with David’s thoughts on what the drone and robotics landscape might look like in ten years. It was a fascinating and wide-ranging discussion that raised both the opportunities and the ethical complexities involved.
 
Mike Bradley kicked off the show by noting that from a broader equity market standpoint, “Trumpatility” remains alive. Despite S&P volatility being cut in half over the last five trading days, it’s still higher than average and will likely stay elevated until we begin to see tariff deals signed. Equity markets feel much worse than reality, given that the S&P 500 is only down ~7% year to date. On the International equity front, Argentina received a $20 billion IMF package last Friday, which could be an extremely important development for the country’s long-term growth. On Monday, Argentina allowed its currency to freely float (between 1,000-1,400 pesos per dollar) for the first time in a very long time. In response, Argentinian 10yr bond yields plunged this week by ~150 basis points, and the Argentina equity market (Merval) and major Argentinian Energy equities have both rallied on the IMF deal. From an oil market standpoint, WTI looks to have temporarily stabilized in the low-$60s per barrel range. This week, the IEA slashed both its 2025 &am

We are excited to share this Special Edition COBT featuring Matt Loszak, CEO, and Jon Guidroz, Senior Vice President of Commercial and Strategy, from Aalo Atomics. Founded in 2022, Aalo is a pioneering nuclear energy company working to revolutionize the industry by manufacturing entire nuclear plants using prefabricated, factory-built components. Matt comes from a background in software startups, and his interest in nuclear began during his childhood in Toronto. Jon joined the company in September and is a seasoned leader in technology and sustainability, having previously held senior roles at Microsoft, Amazon Web Services, and Google Cloud. Last Monday, we had the opportunity to attend Aalo’s Factory Unveiling in Austin and see the technology up close. Mike Bradley, Brett Rampal and I were thrilled to host Matt and Jon.
 
In our conversation, we explore the renewed interest in nuclear energy, driven by the growing need for reliable low impact low cost power. We discuss Aalo’s impressive growth (expanding from a small team of 5-10 to 45 people in under a year with plans to scale to 85-90 employees in the next 12 months), the company’s Factory Unveiling event showcasing their Aalo Pod, designed to power AI data centers, and their ambitious goal to deliver power at under 3 cents per kWh. Matt shares insights into Aalo’s focus to cross the “first-of-a-kind” barrier to “nth-of-a-kind” and what makes their “XMR” (Extra-Modular Reactor) design unique. We touch on the company’s culture, focused on urgency and achieving lofty goals, their success in drawing talent from organizations like SpaceX, Tesla, and the oil and gas industry, and the company’s plans to begin construction of a reactor at Idaho National Labs in 12 months. We cover the advantages and challenges of their sodium reactor design, the company’s successful Series A fundraise and goals for Series B, and collaboration opportunities with oil and gas. It was a fantastic discussion and we appreciate Matt and Jon for taking the time from their busy schedule to visit.
 
We look forward to following Aalo’s progress and hope you enjoy the discussion as much as we did. Our best to you all!

Today we had the pleasure of hosting Dr. Kostas Bakoyannis, Chair of the Committee on the Environment, Climate Change and Energy at the European Committee of the Regions. Kostas has served as a member of the Committee since 2020 and previously held elected roles as Mayor of Athens, Governor of Central Greece, and Mayor of Karpenisi. He brings nearly two decades of public service experience including roles at the Greek Ministry of Foreign Affairs, the European Parliament in Brussels, and the World Bank in Kosovo. We were thrilled to connect with Kostas for an insightful discussion on Europe’s energy future, the pressures facing European industry, and how the EU is navigating today’s complex geopolitical landscape.
 
In our conversation, Kostas shares his perspective on Europe’s environmental and energy policies and the challenge of balancing energy security with energy transition amidst rising geopolitical tensions. We discuss the impact of tariffs and trade relations, Europe’s internal challenges regarding energy affordability, regulatory complexity, and bureaucracy, and Greece’s more balanced and pragmatic energy policies. We explore the importance of interconnection and regional energy cooperation within Europe, as well as the broader geopolitical and economic implications of efforts to connect energy systems with Cyprus and Israel. Kostas offers insights into how average Greek and EU citizens experience energy and financial pressures, the limitations of EU communication, and the importance of preserving the U.S.-European alliance built after WWII. We examine how different EU countries are pursuing diverse energy mixes and the need for technological neutrality in policymaking. We touch on Europe’s evolving strategy on industrial policy and tariffs, the urgency of presenting a united Western front in dealing with China, calls for increased European defense spending, and the seriousness of concurrent economic, national security, and ideological tensions. Kostas highlights Greece’s economic transformation, the investment climate, lessons from local governance, the need for more flexible, innovation-friendly regulation within the EU, and more. It was a broad-based discussion and we’re thankful to Kostas for sharing his time and unique insights.
 
Mike Bradley opened by discussing that “Trumpatility” is alive and global fear is high! He noted that Trump’s reciprocal tariffs are dominating global markets and that broader equity markets could still have additional downside. However, the time for panic was weeks ago when equity market volatility was low, not today, when fear is extremely high. On the broader equity market front, Trump’s reciprocal tariffs haven’t just affected U.S. equities (S&P 500 down 12% over last 5 trading days) but also global equity markets (down 8-12%) over the same timeframe. Investor fear is historically high with the S&P 500 Volatility Index (VIX) trading at ~55 today and as high as 60 on Monday (3rd highest VIX level of the last 30 years). The S&P 500 opened strongly on Tuesday (up 3.5%) before ending the day down just under 2.0%, which looks to be signaling that investors are “selling the bounce” rather than “buying the dip.” Investors seem inclined to “buy the dip” around the S&P’s 200-day moving average of 4,675 (6-7% lower). On bonds, he pointed out that the 10yr bond yield trades at ~4.25%, which is a higher yield than it traded on Liberation Day, as traders sense the Fed could be conflicted between tariff induced price inflation and a tariff induced U.S. recession. March CPI & PPI reports due this week could influence Fed decisions, with a cooler-than-expected inflation reading possibly paving the way for interest rate cuts as early as the May 7th FOMC Meeting. In the oil market, WTI price has plunged ~$14/bbl (to $58/bbl) over the last five trading days and is now trading at Mar ’21 price levels. The recent plunge in oil price was due not only to Trump

Today we were delighted to welcome Michael Kao, Private Investor at Kao Family Office and CEO & Portfolio Manager of Akanthos Capital Management. Michael founded Akanthos in 2002 and transitioned to focus on his family office in 2019. Michael is also the author of "Kaoboy Musings” on Substack (linked here). Previously, he was a Portfolio Manager at Canyon Capital Advisors, where he co-founded the Canyon Arbitrage Fund. Michael started his career in the commodities unit at J.Aron/Goldman Sachs and has over 30 years of experience across commodities, credit, convertible arbitrage, and distressed investing.

As we approach what President Trump has coined “Liberation Day” on April 2nd, we were eager to find someone who could help us all better understand the rationale behind these developments and their implications. In recent Substack posts, Michael has shared some of his interesting theories and makes a case that what appears chaotic and unpredictable might actually be part of an audacious but coordinated plan. We were thrilled to hear Michael’s latest insights on market volatility, energy dynamics, the evolving investment landscape, and why April 2nd might just be another stop on the way to (hopefully) something better.

In our conversation, we first ask Michael for his view on the complexities surrounding the Trump Administration’s actions and how to interpret the end goals of their policies. He shares an analogy comparing the current U.S. economic environment to navigating an asteroid field (like Han Solo’s decision to fly the Millennium Falcon directly into an asteroid field when being chased by the Empire in Star Wars), highlighting several key economic challenges to manage including the current 7% non-wartime deficit, short-term debt reliance, geopolitical tensions, and the need for broader economic recalibration. We explore various ways to manage the U.S. debt including the possibility of terming out debt and reshoring manufacturing, the impact of oil prices on the broader economy, the weakening U.S. dollar, and how the Trump Administration’s shift from a “carrot” to “stick” approach in policy negotiations may affect market dynamics. We discuss potential scenarios for a U.S. recession or economic slowdown, the growth of the private equity market, the increasing role of private credit in financing private equity-backed companies, and the role of the Federal Reserve in the broader economic picture. Michael provides insights on how sovereign wealth funds could help manage the U.S. national balance sheet by leveraging geographic assets, his experience in transitioning to managing his family office and focusing more on uncorrelated private investments, the potential for a black swan event, the risk of ongoing geopolitical tensions escalating, the importance of thinking outside the box, and much more. We greatly appreciate Michael joining and sharing his expertise and insights with us all.

As you’ll hear, we discuss some of Michael’s recent posts. His piece entitled “Mental Models – Navigating The Asteroid Field With Trump 2.0” is linked here and the Kaos Theory podcast episode featuring Michael Every is linked here.
 
Mike Bradley kicked off the show by noting that markets are in a “Calm Before the Storm” mode with investors awaiting the impact of Trump’s April 2nd reciprocal tariffs. Rather than focusing on how markets might react post-reciprocal tariffs, Mike reviewed how markets performed in Q1’25 with the “Trumpatility” overhang. In bonds, the 10yr fell in Q1 by ~35bps to ~4.20%. WTI price ($71.50/bbl) ended Q1 relatively unchanged, which was a big surprise given the bearish oil sentiment that had built throu