C.O.B. Tuesday

We are sending out this Special Edition COBT at 6:30 AM CT. We are doing so because 80 years ago today, at 6:30 AM at Omaha Beach in Normandy, American troops (at an average age of 22) landed as part of the largest amphibious assaults in all of history. Over 4,000 Allied troops died this day 80 years ago as part of the effort to free Europe from the Nazis. To help us fully grasp the gravity of D-Day, we invited acclaimed author and historian Alex Kershaw to join us on COBT. Alex is the author of over a dozen World War II books, and in particular, the author of “The First Wave: The D-Day Warriors Who Led the Way to Victory in World War II.” Jeff, Mike and I all read the book and felt so lucky to have Alex join us for this unique COBT. One thing that’s quite special about our discussion with Alex is that he actually made a presentation, with slides, that we encourage you to watch. On each page, he shares the personal stories of key heroes from the British, Canadian, French and American forces whose heroics often turned the tide of battle at key moments. If you are able to watch this episode instead of listening, you will likely find it worth it. Of the four million Americans who served in WWII, approximately 100,000 remain. The sad truth is they won’t be with us much longer. Toward the end of our discussion, we ask Alex what he has learned from all his research and writings. He shares his thoughts in a most poignant and direct way. You should hear his remarks for yourself, but the essence of the message is to not give up the fight for freedom and democracy EVER. There will be many ceremonies today, as there should be. Today was one of America’s greatest moments, planned and executed hand in hand with our greatest allies. Dwight Eisenhower’s D-Day speech to soldiers from June 6, 1944 is also quite remarkable to listen to. You can find it linked here. All our best to you on this hallowed and historical day. God bless the soldiers who died on this day. God bless you, and God bless America.

Today we had the pleasure of hosting Lynn Calder, CEO of INEOS Automotive, for an engaging discussion on vehicles, decarbonization, and the future of transportation. As you may have heard, INEOS Automotive has just launched a new vehicle called the Grenadier. Lynn is a fellow energy enthusiast and brings a fascinating background, having previously served at Lime Rock Partners and Talisman before joining INEOS and leading their Shale (CEO), Phenol (Commercial Director), and Composites (CEO) businesses. Lynn was appointed as CEO of INEOS Automotive in December 2022 and has taken on the challenge of building a new automotive company from the ground up. We were delighted to visit with Lynn and greatly appreciated hearing her unique perspectives about the automotive industry and so many of the energy and regulatory issues it touches. One overarching topic that we’ve noticed, and that emerged in our discussion with Lynn, is how interesting large private companies are and their unique approach to decision-making. INEOS is a great example as a global chemical company with 36 diverse businesses including Hydrogen, Aromatics, Energy, Trading & Shipping, Hygienics, and Solvents among others. As you’ll hear in the discussion, Lynn feels she can make decisions quickly and that her team has the freedom to think outside of the box. As we are all car people at heart, we were already fascinated by the challenges of starting a car company but the more we talked to her, the more we thought that what Lynn and INEOS Automotive are doing is a microcosm for what’s going on in the world. She had to work with 45 different governments to get approved for sale, is exposed to all the dialogue around EVs, EV adoption, hybrids, and automotive tariffs, as well as where governments want to take the world vs. where consumers want to go. Lynn also makes interesting comments about being an industrial company in Europe right now, the decisions that are being made in Europe, and how they could affect industry at large. In our discussion we also explore INEOS Automotive’s vehicle lineup and what makes the Grenadier unique, their sales model and market strategy across the US, Europe, Africa and Asia, supplier relationships, plans for future growth, government policies and attitudes, potential shifts in powertrain strategies in the future, and the advantage of INEOS as an energy and chemical producer. Lynn shares her perspective on Europe’s competitiveness in global markets, China’s advancements in EV technology and its impact on trade regulations and EV adoption, the role of entrepreneurship in driving economic growth and much more. It was a fantastic discussion and we are excited to follow up with Lynn as INEOS Automotive continues to grow. Mike Bradley kicked us off by highlighting that over the last week or so, markets seem to be taking on a different tone, one of economic stagnation/slowdown. He noted the 10-year bond yield has recently sunk to ~4.3%, mostly due to a handful of weaker-than-expected economic reports, including today’s JOLTS Job Opening report, which are refueling speculation the FED will cut interest rates this year. Over the last five trading days, WTI price has plunged to ~$73/bbl and broken through “key” technical trading support levels. This week’s plunge in crude price was mostly related to disappointing/confusing news of a potential gradual unwinding of OPEC oil production cuts at a time when global demand growth looks to be slowing. Energy equities are holding up much better in this current downdraft than crude oil. He ended by noting the substantial year-to-date performance gap between EV & ICE auto companies as ICE companies seem to be moving increasingly towards hybrids. Todd Scruggs added to Mike’s comments with data on US and European automotive sales, highlighting the predominance of SUVs and trucks in the US versus a much lower SUV to EV ratio in Europe, indicating a po

On this Memorial Day, we are excited to share a Special Edition with Representative John Curtis (R-UT). Rep. Curtis has been serving in Congress for four terms, beginning in 2017, and is currently running for the U.S. Senate. He serves on the Energy and Commerce Committee including as Vice-Chair of the Energy, Climate and Grid Security Subcommittee. Additionally, he serves as Vice Chair of the Federal Lands Subcommittee and member of the Energy & Mineral Resources Subcommittee on the Natural Resources Committee. He also founded and leads the Conservative Climate Caucus. Prior to his tenure in Congress, Rep. Curtis served as the Mayor of Provo. Leslie Beyer, Veriten Senior Advisor, was kind enough to connect us with Rep. Curtis and Mike, Todd and I were honored to host him in our offices in Houston. Rep. Curtis first shares the inspiration for creating the Conservative Climate Caucus and its role to support solutions that reduce emissions without drastic economic costs. We discuss the importance of distinguishing between climate and climate extremism, Rep. Curtis’s approach to addressing climate issues within the context of energy independence and economic stability, and the importance of avoiding divisive rhetoric and focusing on practical, bipartisan solutions. Rep. Curtis shares his perspective on learning from European energy policies to avoid energy dependence on adversaries, the potential of geothermal energy advancements driven by fracking technology, and the role of the US as a leader in energy technology and the global impact of its energy policies. We discuss distinguishing between reducing emissions versus eliminating fossil fuels, rising power costs and their impact on businesses and families, the need for better education on the realities of different energy sources, addressing climate and environmental concerns within the context of other critical national priorities, areas of bipartisan agreement, and his perspective on restoring the Republican brand and principles. We also highlight Utah’s blend of entrepreneurial spirit, fiscal responsibility, and environmental stewardship, the complex relationship between the US and China, and more. We ended by asking Rep. Curtis for his vision and hopes for the political landscape in ten years. We greatly appreciate Rep. Curtis’s optimistic outlook for the future political leadership of the US as well as the hard work he is doing in Washington on behalf of the energy community and all Americans who want sensible, balanced approaches.   We hope you have a safe and happy Memorial Day as we all remember and honor the brave men and women who have made the ultimate sacrifice for the freedoms we enjoy. COBT returns next week with a regularly scheduled episode on June 5th and a surprise Special Edition on June 6th. We are very excited about both! Thanks to you all for your friendship and support! 

Today we had the pleasure of visiting with Max Layton, Global Head of Commodities Research at Citi. Prior to joining Citi in 2017, Max held notable leadership positions including Managing Director and Head of European Commodities Research at Goldman Sachs as well as Deputy Head of Commodities Research at Macquarie. We have been eager to examine copper’s recent record highs and were excited to have Max join us for a discussion on global commodity trends. In our conversation with Max, we discuss the current commodities landscape and significant trends that Max and his team are observing in the market. We explore the primary factors driving the copper surge, the impact of US Federal Reserve policies on global commodities markets, investment strategies for short-term cycles and long-term structural trends, and the most significant opportunities for growth and investment in the commodities market over the next few years. Max shares his perspective on China’s role in the energy transition and how China’s technological advancements impact the copper market, potential risks to the copper market from geopolitical events or changes in global trade policies, broader energy transition dynamics, and how the current state of the uranium market compares to other commodities. We cover how global economic trends and technological advancements might shape the copper market over the next decade, supply side challenges for copper, how speculative funds impact the copper market, the natural gas market in the US and globally, current trends driving gold prices, long-term oil market demand outlook, power prices and industrial activity, and more. It was fantastic to get Max’s perspective from his vantage point in London and as head of the global group. He and his team clearly see market developments and gather information from multiple unique angles. Thank you for joining, Max! Mike Bradley kicked off the show by noting that this week could be a much slower news week for markets than prior weeks. On the economic front, he highlighted the 10-year yield was trading at ~4.45% yield and that there could be a bit of churn in bond yields this week due to lack of any real economic stats (outside of the FOMC meeting minutes). WTI remains stuck in a narrow trading band ($77-$81/bbl) even with the death of Iran’s President and Foreign Minister in a helicopter crash over the weekend. Front month copper contracts recently spiked above $5.00/lb. mostly due to a substantial increase in “NET” non-commercial future positions. Mike also noted that long-term copper fundamentals remain constructive due to Russian metals sanctions, global production cuts and mine closures (ex. Panama), all at a time when copper demand is set to accelerate. On the broader equity market front, the DJIA hit an all-time high (>40,000) as well as most other broader market indices. NVIDIA reports Q1 results on Wednesday (after the close) and could be a market moving event for broader markets and the Tech sector. He ended by noting that NVIDIA is the best performing S&P 500 Stock YTD (+90%), accounting for ~25% of S&P 500 gains in 2024, so the investor expectation bar is pretty elevated for NVIDIA. Brett Rampal also joined and added his perspective and inquiries to the discussion. Thanks to you all for your support and friendship!

Today we had the pleasure of welcoming back Alexander Zaslavsky, Co-Founder and Managing Partner of Horizon Engage. Alex established Horizon Engage in 2003 and specializes in energy politics in Russia and the former Soviet Union. Horizon Engage merges tech and geopolitical expertise to provide country insights, data on how sanctions and counter sanctions impact your business, security analysis and advisory solutions. To help navigate a meaty Russian/Central Asian/Middle Eastern geopolitical discussion, we called on our good friend Gabe Collins to jump in as a cohost. As you may know, Gabe is a Baker Botts Fellow in Energy and Environmental Regulatory Affairs at Rice University’s Baker Institute for Public Policy. We were thrilled to visit with Alex and Gabe. In our discussion, we address various aspects of the ongoing war in Ukraine, including its impact on alliances and energy security in Europe, business takeovers in Russia following Western companies’ divestment from Russian subsidiaries, and the domestic impact of the conflict with what Gabe refers to as the “Wagnerization of Russia” where families are getting large cash payments for the service (and death) of their male soldiers. We explore the sustainability of Russia’s military endeavors and the potential for escalation, the intensity and effectiveness of Russia’s internal propaganda about the war, the lingering effect of Prigozhin’s legacy (and popularity with the Russian people), and the significance of Russian oil for the country’s economy and its role in funding the war effort. We discuss the Biden Administration’s approach in Ukraine which seems to fear a Russian loss as much as a Russian win, China’s industrial base and its support for Russia in the conflict, the effectiveness of Western sanctions against Russia and lack of real enforcement, potential NATO actions, and geopolitical considerations with COP29 set to be hosted in Azerbaijan. Alex provides insights into potential outcomes of the conflict in Ukraine, geopolitical dynamics and alliances in the region, strategic considerations of Western powers regarding their approach to Russia, the influence of financial institutions like the World Bank, the many mistakes both sides have made in all this, and much more. It was an engaging discussion that highlighted the complexity of geopolitical and economic factors at play. Thank you to Alex and Gabe for joining! Mike Bradley kicked us off by highlighting that most markets this week are focused on one item and that’s the April CPI print due to report on Wednesday morning. On the economic front, Tuesday’s April PPI printed much hotter than expected and the 10-year bond yield unexpectedly decreased to end the day at ~4.45%. On the commodity front, he noted the spike in near-month copper futures to an all-time high (>$5/lb.). He also noted the copper curve has recently shifted from long held contango to a steep backwardation structure which is likely due to a near-month contract squeeze and improving S/D fundamentals. On the broader equity market front, equities so far this week have traded sideways in anticipation of Wednesday’s CPI print which likely could lead to elevated equity market volatility for the remainder of the week. He ended by highlighting the progression of ten stats (bond, commodity and equity) since Alexander’s previous COBT appearance in December 2021. For our COBT history buffs, today’s episode marks Alex’s fourth guest appearance on COBT. He previously joined on December 7, 2021 (episode linked here), May 19, 2020 (episode linked here) and first on April 7, 2020 (episode linked here). Today’s episode also marks Gabe’s third guest appearance; he previously joined on August 23, 2023 (episode linked

For today’s discussion we were pleased to host Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA). Jim’s distinguished background includes roles in both the public and private sectors. Prior to joining the NRECA in 2016, he served in the public policy practice at Squire Patton Boggs based in Washington, D.C. Jim was elected as a U.S. Representative for Utah from 2001 to 2015 and has significant experience in the energy industry. The NRECA is a vital national service organization representing over 900 consumer-owned electric cooperatives, collectively serving 42 million people across 48 states in the US. We were excited to visit with Jim and gain valuable insights into the cooperative landscape. Jim first provides background on the unique structure of electric cooperatives, how they are owned by the members they serve, and focus on consumer interest rather than shareholder interests (a detailed overview of US electric co-ops is linked here). We explore how electric co-ops approach decision making regarding power systems to balance cost, reliability, and emissions reduction, the evolving generation mix, the shrinking margin of error in meeting peak demand and the increasing risk of outages, and the US’s struggle to keep up with building new power plants while also shutting down existing ones prematurely. Jim shares his perspective on the need for increased resiliency in the electric grid, particularly through the expansion of transmission infrastructure, and concerns with the feasibility and economic impact of recent EPA regulations targeting emissions reduction from coal and natural gas plants (details linked here). We discuss potential bipartisan efforts to revise permitting and streamline processes, growing awareness among the public on power issues, election year dynamics, the benefits of natural gas as a fuel source for electricity generation, the need for continued vigilance around cybersecurity measures in the electricity sector, the possibility of bipartisan efforts to prioritize energy security and reliability, and more. We greatly appreciate the work Jim and the team at NRECA are doing. Mike Bradley kicked us off by highlighting that markets have been choppy this past week but managed to get by with modest gains. The 10-year bond yield has plunged to ~4.45%, down from ~4.7%, just one week ago. Bond yields dropped despite the FOMC leaving interest rates unchanged, mostly because Chairman Powell signaled the next rate move would likely not be a rate hike. WTI price this past week had collapsed ~5/bbl due to a large increase in US crude oil inventories, less concern over Mideast chaos, and WTI trading through important technical trading levels. Crude oil traders seem to firmly believe that OPEC will not announce they’re putting barrels back into the market at their June 1st meeting, especially at sub-~80/bbl. Natural gas is trading at its highest level since early January, mostly due to the monthly futures contract roll. The US natural gas storage surplus is still high, but lower 48 natural gas production is falling faster than expected and recently averaged less than 99bcfd. Most S&P companies have reported Q1 results, and so broader markets will need to look elsewhere for direction. Broader markets have rallied recently as they’re less worried today about higher interest rates and higher commodity prices. He further noted that broader markets recently have had a nice bounce because they were technically oversold, and volatility had spiked but are now moving towards overbought territory again. He ended by flagging most energy companies have reported Q1 results and this week will be a heavy dose of SMID-cap E&Ps, Global Oil Majors

Today we had the pleasure of hosting David Holt, President of the Consumer Energy Alliance (CEA), for an important discussion on electricity affordability and reliability for consumers. David’s background is in government affairs with over thirty years of experience working for state and federal agencies and directing outreach and advocacy efforts. The CEA will be celebrating its 20th anniversary in 2025 and has nearly 400 corporate members and over 550,000 individual members representing families, farmers, small businesses, distributors, labor organizations, manufacturers, and energy providers. Beyond his leadership at the CEA, David also serves as Managing Partner of HBW Resources, a consultancy specializing in strategic planning and government affairs in the energy, transportation, and environmental sectors. We were thrilled to have the opportunity to visit with David. In our conversation, David first provides background on the CEA and the groups they represent as well as their “all of the above” approach to meeting energy needs in an affordable, reliable, and sustainable manner. David shares his perspective on the impact of energy policies on prices, concerns with reliability, how energy policy has become overly politicized with a focus on environmental aspects at the expense of affordability and reliability, the role of inflation in the current energy landscape, and the need for increased investment in natural gas infrastructure. We discuss permitting and signaling issues, regulatory framework and regional differences between oil and gas and the electricity sector, factors contributing to the increase in electricity prices, identifying reliable sources of information for understanding energy costs, policy implications, and environmental impacts, and strategies for educating and mobilizing consumers to advocate for their interests in energy policy decisions. We explore voter influence on policy, the role of US oil and natural gas production in moderating global oil prices, the future of the CEA, the challenges of getting the public’s attention on energy and power issues, the CEA’s reaction to recent policies including the IRA, and more. David was a fantastic guest and we greatly enjoyed the conversation. Mike Bradley highlighted a few topics to kick us off. He noted the 10-year government bond yield looks to have found some temporary support at 4.65% and flagged that this could be an unusually volatile trading week for markets (especially bonds) given that both the JOLTS Job Openings Report and FOMC Rate Decision will be taking place on Wednesday. WTI (~$82/bbl) has pulled back recently on the news of a temporary cooling in Mideast tension; nevertheless, he noted that the 2024 crude oil S/D setup still looks very constructive. Q1 earnings for the Magnificent Seven tech stocks will be winding up this week and investor focus will begin shifting to the other 60% of the S&P 500 for near-term direction. On the energy equity front, over seventy energy and electric utility companies will be reporting Q1 results this week with a heavy focus on E&P, Midstream & Electric Utility companies. He ended by flagging that electricity growth will be a more widely discussed topic/theme across most of the reporting energy and electric companies, just as it has been for industrial companies so far in the Q1 reporting season. Todd Scruggs prepped us for our discussion with David by sharing data on electricity costs across the United States. Comparing recent data from February and last summer, he found that California and Northeastern states consistently pay the most, while the West South-Central region pays the least, even during peak summer months. We look forward to following the CEA’s progress and will be sure to share their state electricity scorecards when they’re launched. Thank you again to David for joining and thanks to you all for your support and friendship!

Today we had the pleasure of hosting David Sacks, Fellow for Asia Studies at the Council on Foreign Relations (CFR), for a comprehensive discussion on China and the intricate dynamics of US-China, US-Taiwan, and cross-Strait relations. Prior to joining the CFR in 2017, David served at the American Institute in Taiwan focused on political military affairs. David’s research spans Asia, China, Taiwan, defense and security, as well as political history and theory including the political thought of Hans Morgenthau. The CFR is an independent think-tank and publisher committed to providing insights into global affairs and serves as a resource for its members and the broader public in navigating the complexities of international relations. We have been interested for quite some time in finding an expert on China and were thrilled to visit with David. In our conversation, David first shares background on China’s evolving role globally and the changing dynamics of US-China relations, the security-related and economic implications of conflict between China and Taiwan, the challenges in managing tensions in the Taiwan Strait, escalating tensions in the South China Sea, US-China rivalry in the region and its effects on maritime activity, and China’s assertive foreign policy under Xi Jinping’s leadership and its implications for global power dynamics. David shares his perspective on similarities and differences between the Trump and Biden Administrations’ approaches to China, the feasibility and implications of decoupling from China economically and the interdependence between the US and China in the global economy, the potential for future leadership changes in China, and how other countries are responding to China’s assertiveness including how European perceptions and policies towards China have evolved. We explore China’s economic and demographic outlook and the country’s overall strengths and weaknesses, potential implications if China were to become weaker in the next 10-20 years, the potential export of low-cost EVs from China, trust issues in US-China relations, Taiwan’s perspective and defense strategies, the CFR’s role in international diplomacy, and much more. Thank you, David, for sharing your insights with us all! We learned a tremendous amount and could have gone another hour we were so intrigued with the conversation. Mike Bradley kicked us off with a few updates. He noted the 10-year government bond yield looks to have found some temporary support at ~4.6% but will likely move on Friday’s PCE deflator report. WTI (~$83/bbl) pulled back this past week on what looks to be temporary cooling in Mideast tension. Oil trader sentiment seems to have shifted to one that could be underestimating future geopolitical risks, which could send oil prices materially higher, and force OPEC to push barrels back into the market. Q4 earnings are kicking into high gear with ~35% of S&P 500 companies reporting this week, which should result in elevated broader market trading volatility. S&P 500 relative strength has recently reversed from overbought to oversold levels, and S&P 500 volatility has also spiked to 1-year highs. On the energy equity front, he highlighted that Q1 results are also beginning to kick into high gear with a barrage of results from E&Ps, Oil Majors, Oil Services & Refiners. Electric Utilities were by far the best performing S&P sector last week and there will be many companies reporting this week. He ended by discussing YTD Asian equity market performance, noting that Japan and Taiwan are the top two regional equity market performers. Arjun Murti discussed the concept of geopolitical risk premiums in oil prices, noting three key factors: structural changes in major producers, civil strife causing production fluctuations and difficult forecasting, and the impact of war. Sharing examples for each element, he noted the complex nature of geopolitical risk and its influence on s

Today we were delighted to host Matt Parker, Managing Director and Head of Strategy, alongside Alex Melvin, Commodity Risk Analyst, with Mobius Risk Group for an extensive discussion on commodity and power markets, as well as volatility and risk management in particular. Matt joined Mobius in 2018 and oversees fundamental analytics, decision strategies, financial trading, and physical marketing teams. Alex is the author of Mobius’ Intel Briefs and Energy Shots research and brings prior experience in data analysis and technical writing. Mobius Risk Group is a risk advisory firm offering market guidance to producers, consumers, and capital market participants, influencing transactions totaling over $100B across more than 50 commodities annually. We were thrilled to visit with Matt and Alex. The catalyst to our discussion stems from a report Mobius recently released titled “Eclipse Power Prices Hit $471/MWh: Tracking the Texas grid during the 2024 Total Solar Eclipse” (linked here). Matt and Alex first share background on the Mobius team and their research, natural gas market volatility and its impact on hedging strategies for producers and consumers, and the role of speculators in commodity markets and the influence on pricing dynamics. We explore factors influencing the growth of LNG markets and its implications for energy markets, the challenges and opportunities in renewable energy variability and its impact on grid stability, and regional energy market dynamics, including the reluctance to build pipelines and storage facilities on the West and East Coasts of the US. We discuss key themes from the Eclipse report including the inspiration behind writing the report, storage dynamics and the impact of gas prices on production, the potential shift towards LNG as a solution to market imbalances, the effectiveness of market mechanisms versus centralized control in addressing energy challenges, how consumers are adapting to increased volatility in gas prices, efforts by gas producers to manage volatility in prices and production decisions, the potential for increased gas exports to Mexico, risk management strategy differences between public and private companies, and much more. Thanks to Matt and Alex for joining us today! Mike Bradley started the show by highlighting this week’s spike in the 10-year government bond yield to ~4.65%, mostly due to a hot Retail Sales report on Monday. He noted the next big economic report will be Initial Jobless Claims on Thursday, and if that report prints hotter than expected, odds for a rate cut (anytime soon) would appear very low. On the commodity front, Brent (~$90/bbl) & WTI (~$85/bbl) prices barely budged on the recent Iranian/Israeli conflict, mostly because it was pretty well announced, and to a certain degree already dialed into oil prices. A 2H’24 global oil S/D deficit could position OPEC to begin adding back barrels into the market, potentially as early as June. On the broader equity market front, equities continue to take their cue from interest rate volatility, potential additional Mideast conflict, and Q1 EPS results. Q1 earnings season has begun (with mixed results) and it’s important, given lofty valuations, that S&P companies deliver solid Q1 results and guidance. He ended by flagging that Q1 energy results begin this week with Kinder Morgan and Liberty Energy reporting on Wednesday and SLB on Friday. Liberty Energy should provide investors with an early glimpse of U.S. pressure pumping dynamics while the SLB call should be predominately focused on international and offshore growth. Todd Scruggs emphasized recent analysis from Mobius regarding global coal generation, particularly in China, India, and Indonesia, and compared it to renewable energy development in the US. Globally, approximately 50 GW of coal capacity was added, while the US saw an addition of around 30

Today we were thrilled to be joined by Maya MacGuineas, President of the Committee for a Responsible Federal Budget (CRFB), to discuss a critical yet often ignored topic: the US national debt and budget deficits. Prior to her tenure at the CRFB starting in 2004, Maya served at the Brookings Institution and on Wall Street. Maya is a native Washingtonian, Harvard Kennedy School alumni, and frequently testifies before Congress as a leading budget expert. Founded in 1981, the CRFB is a bipartisan nonprofit dedicated to educating the public on issues with significant fiscal policy impact. The organization offers independent policy analysis, engages with policymakers to improve the country’s fiscal and economic condition, and serves as an educational resource. At over 100% of GDP and in the range of the all-time high last seen during World War 2, the US national debt looms large as a significant macroeconomic and overall risk factor to the nation and the world. We were so excited to hear Maya’s insights on this very important and very complex subject. In our conversation, Maya shares historical context on past efforts to address fiscal issues and how interest in fiscal policy has fluctuated (from Ross Perot to Simpson-Bowles to today), the current economic situation, the impact of recent events like COVID-19 on government borrowing and spending, how the increase in interest rates has highlighted the structural nature of the problem and gained the public’s attention, and the current polarizing political environment and how it has halted efforts to address fiscal challenges. We discuss the responsibility of political leaders to acknowledge and address long-term budget concerns, challenges with addressing entitlement programs including Social Security and Medicaid, political leaders’ refusal to address issues that are headed towards trust fund insolvency, proposed solutions including establishing a fiscal commission to tackle the issue comprehensively, the idea of inflating away the debt or selling assets to reduce the debt, major threats posed by the growing national debt including loss of fiscal space, economic slowdown, national security risks and intergenerational inequity, and much more. We covered a great deal of territory and can’t thank Maya enough for joining. As you will hear, we offered to help Maya in any way we can, including helping her salute the “fiscal heroes” who are leaning in and trying to make a difference.   Mike Bradley kicked us off by flagging that this is an extremely important week for markets given both the March CPI and PPI will be released on Wednesday and Thursday respectively, and that if these stats print hotter-than-expected, the FED will not be cutting rates anytime soon. He noted markets may be underestimating inflation given sharp YTD gains in a variety of commodities. On the commodity front, WTI is trading at ~$86/bbl (highest level since Oct’23), WTI time spreads continue to trade in huge backwardation and the 2H’24 oil S/D deficit positions OPEC to push barrels back into the market. He noted that even though we remain pretty constructive with the 2H’24 crude oil setup, we’re a bit concerned the recent crude oil bullishness is becoming too consensus. On the broader equity market front, equities continue to take their cue from both interest rates and an obsession with AI equities. If CPI and PPI readings print cooler-than-expected, it will result in a huge bond and broader equity market rally. This Friday will also be a heavy Q4 reporting week for U.S. major banks. He ended by highlighting that Exxon Mobil Corp. recently hit an all-time stock price high and that its market-cap and enterprise values (~$500B) finally rebounded back to their late-2007 levels. In late 2007, energy’s weighting as a percentage of the S&P 500 was ~13% (peaked at ~16% in mid-2008) and today is at ~4%, leaving the energy sector plenty more room to run in the years ahead. Arjun Murti dis