Donald Trump Jr. Bets on the Anti-Woke Economy

Summary

WSJ What’s News: Donald Trump Jr. Bets on the Anti-Woke Economy
Released on November 19, 2024

In this episode of WSJ What’s News, The Wall Street Journal delves into a range of pressing global and economic issues, culminating in an in-depth exploration of Donald Trump Jr.'s latest venture into the "anti-woke" economy. The episode seamlessly weaves together geopolitical tensions, shifts in venture capital dynamics, and significant moves within the incoming Trump administration, providing listeners with a comprehensive analysis of current events shaping markets and political landscapes.

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1. Escalation of the Ukraine-Russia Conflict

The podcast opens with a focus on the intensifying conflict between Ukraine and Russia. For the first time, Ukraine employed U.S.-supplied long-range missiles against Russian targets, marking a significant escalation in the war.

• Key Event: Ukraine utilized the Army Tactical Missile System (ATACMS) to strike an ammunition storage facility in Russia's Bryansk region (00:29).

• Implications: This move tests Russian President Vladimir Putin's resolve, especially after Moscow's stern warnings against such actions. Russian Foreign Minister Sergey Lavrov labeled the missile strike as an "expansion in the war" during a news conference at the G20 summit in Rio de Janeiro (00:40).

Notable Quote:

"If long range missiles are going to be applied from Ukraine into Russian territory, it will also mean that they are operated by American experts, military experts, and we will be taking this as a qualitatively new phase of the Western war against Russia and we'll react accordingly."
— Peter Rudiger (04:58)

2. Russia’s Response: Nuclear Doctrine Amendments and Sabotage Allegations

In response to Ukraine's actions, Russia has signaled a potential shift in its military strategy.

• Nuclear Doctrine: Putin signed amendments to Russia's nuclear doctrine, a move interpreted as a warning to the West, suggesting a broader scope for Russia's nuclear capabilities (02:10).

• Sabotage Incidents: Russia is suspected of orchestrating significant acts of sabotage across Europe. Notably, interruptions in internet links between Sweden's Gotland Island and Lithuania, as well as between Finland and Germany, have raised alarms. These incidents are viewed as part of Moscow's escalating hybrid warfare against NATO countries.

Notable Quote:

"Russia has warned for months that use of such long range missiles against its territory would amount to an attack by the North Atlantic Treaty Organization and lead to a clear response."
— Berber Jinnah (02:10)

3. Iran’s Nuclear Activities and International Concerns

The episode also touches on Iran's increasing nuclear ambitions, which have significant geopolitical ramifications.

• Stockpile Increase: The United Nations Atomic Energy Agency reported that Iran has sharply increased its stockpile of nearly weapons-grade uranium. This move occurs amid heightened tensions with Israel and growing doubts about Iran's commitment to peaceful nuclear development.

• Diplomatic Pressure: Europe is likely to intensify diplomatic efforts to curb Iran's nuclear expansion, especially in light of senior Iranian officials suggesting that Tehran has mastered most techniques necessary for developing a nuclear weapon.

Notable Quote:

"Iran has always claimed its nuclear work is solely for peaceful civilian purposes."
— Berber Jinnah (02:10)

4. Venture Capital Stagnation Amid Regulatory Challenges

Shifting focus to the U.S. economy, the podcast examines the current landscape of venture capital (VC) investments, which are facing significant hurdles despite abundant startup opportunities.

• Investment vs. Returns: According to PitchBook data referenced in the episode, U.S. venture firms invested $60 billion more than they collected last year—the highest deficit in 26 years. Furthermore, only $26 billion worth of shares were returned to investors, the lowest since 2011 (03:00).

• Root Causes: Peter Rudiger explains that traditional exit routes for startups, such as Initial Public Offerings (IPOs) and acquisitions, are largely unavailable. Strict regulatory environments and a reluctance among startups to go public have left many "unicorns"—private companies valued at over a billion dollars—unable to realize profits for their investors (04:58).

Notable Quote:

"The traditional exit routes for startups, which are IPOs and acquisitions, those two exit routes are essentially shut."
— Peter Rudiger (04:58)

5. Incoming Trump Administration and Economic Leadership

As the podcast progresses, attention turns to the incoming Trump administration and its potential impact on the U.S. economy.

• Commerce Department Nomination: President-elect Donald Trump announced his intention to nominate Howard Lutnick, a veteran Wall Street financier and a staunch Trump supporter, to lead the Commerce Department. Lutnick is expected to play a pivotal role in shaping the administration's economic policies, particularly concerning trade and regulation (06:37).

• Market Reactions: The nomination reflects Trump's broader strategy to align key economic positions with his administration's priorities, especially in areas that may affect Wall Street and broader financial markets.

Notable Quote:

"Trump called Lutnick, quote, a dynamic force on Wall Street."
— Berber Jinnah (06:37)

6. Donald Trump Jr.'s Foray into the Anti-Woke Economy

The centerpiece of the episode is an exploration of Donald Trump Jr.'s investment activities within the "anti-woke" economy, a burgeoning sector aligned with conservative values.

• 1789 Capital: Trump Jr. has joined 1789 Capital, a venture capital firm led by Omeen Malik, a former Bank of America executive. The firm focuses on investing in companies that espouse conservative principles, aiming to capitalize on a Republican-aligned parallel economy (07:00).

• Investment Focus: The first investment made by 1789 Capital was in Tucker Carlson's new media company, which produces his web show. Additionally, Trump Jr. and Malik have invested in Public Square, an online marketplace designed to cater to conservative brands, offering alternatives to mainstream platforms that have faced backlash over social issues (08:09).

• Conflicts of Interest: The podcast addresses potential conflicts of interest arising from Trump Jr.'s investments, particularly with companies like Firehawk Aerospace, which have partnerships with NASA and the Air Force. While Trump Jr. plans to recuse himself from businesses dealing directly with the government, the intertwining of political influence and business investments raises concerns about the appearance of favoritism (09:51).

Notable Quotes:

"1789 has some pretty big names from Republican donor and policy circles involved very much in this tight circle of people close to the Trump family and Trump administration."
— Tracy Hunt (08:09)

"Anytime you have folks working in the defense industry where people at the Pentagon or the Department of Defense kind of have a say in who's going to get a contract and who isn't, you're going to have at least the appearance of conflicts in those questions."
— Tracy Hunt (09:51)

7. U.S. Market Performance and Corporate Earnings

Concluding the episode, the podcast provides a snapshot of the U.S. stock market and highlights key corporate earnings.

• Market Overview: On the day of the episode's release, the Nasdaq rose by 1%, the S&P 500 increased by 0.4%, while the Dow Jones Industrial Average dipped by 0.3% (10:00).

• Walmart's Performance: Walmart reported a rise in U.S. sales for the most recent quarter, driven by increased consumer spending on groceries, home goods, and toys. This uptick signals a healthy start to the holiday shopping season. However, Walmart is also monitoring potential policy changes under the incoming Trump administration, such as import taxes, prompting some early product imports in anticipation of new tariffs or possible port strikes in January (10:00).

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Conclusion

This episode of WSJ What’s News adeptly navigates a complex array of topics, from heightened global conflicts and shifting nuclear policies to the evolving landscape of venture capital and the strategic moves within the Trump family’s business ventures. By incorporating expert analysis, direct quotes, and timely updates, the podcast offers listeners a nuanced understanding of the factors currently influencing both global stability and market dynamics.

Timestamps Reference:

• [00:00] - Introductory Remarks
• [00:29] - Ukraine Uses U.S. Long-Range Missiles
• [00:40] - Putin's Response at G20 Summit
• [02:10] - Russia's Nuclear Doctrine and Sabotage Allegations
• [03:00] - Venture Capital Investment Deficit
• [04:58] - Peter Rudiger on VC Challenges
• [05:42] - Berber Jinnah on Venture Capital Returns
• [05:48] - Peter Rudiger on Regulatory Environment
• [06:30] - Discussion on Potential Regulatory Changes
• [06:37] - Nomination of Howard Lutnick
• [07:00] - Transition to Donald Trump Jr.'s Investments
• [08:09] - Details on 1789 Capital and Anti-Woke Investments
• [08:54] - Potential Conflicts of Interest
• [09:51] - Managing Conflicts in Defense Investments
• [10:00] - Market Performance and Corporate Earnings

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This summary was crafted to provide a comprehensive overview of the podcast episode for those who have not listened, capturing the essence of discussions, insights, and critical developments featured in the show.

Transcript

[Tracy Hunt]

Courage. I learned it from my adoptive mom. Hold my hand.

[Berber Jinnah]

You hold my hand. Learn about adopting a team from foster [e-mail] you can't imagine the reward brought to you by Adopt US Kids, the US Department of Health and Human Services and the AD Council. Ukraine for the first time used US provided long range missiles against the target in Russia And Donald Trump Jr. Mixes business with politics in a new anti woke endeavor.

[Tracy Hunt]

He was in business before his father was elected president in real estate. Now he wants to do something more aligned with his values and kind of the following he's built up among the MAGA coalition.

[Berber Jinnah]

Plus profits are way down as venture capital firms await AI investments payday. It's Tuesday, November 19th. I'm Tracy Hunt for the Wall Street Journal. This is a PM edition of what's the top headlines and business stories that move the world today. Ukraine today fired long range missiles provided by the US Into Russia for the first time, posing a test for Russian President Vladimir Putin after Moscow's threats to retaliate for such a move. A Ukrainian official said the country used an army tactical missile system known as ATACMS to strike an ammunition storage facility in Russia's Bryansk region. The strike came just days after President Biden gave approval for their use. At a news conference in Rio de Janeir, where he's attending the G20 summit leaders meeting, Russian Foreign Minister Sergey Lavrov said the strike marks an expansion in the war.

[Peter Rudiger]

If long range missiles are going to be applied from Ukraine into Russian territory, it will also mean that they are operated by American experts, military experts, and we will be taking this as a qualitatively new phase of the Western war against Russia and we'll react accordingly.

[Berber Jinnah]

Russia has warned for months that use of such long range missiles against its territory would amount to an attack by the North Atlantic Treaty Organization and lead to a clear response. Putin today signed amendments to Russia's nuclear doctrine, a move that appeared to be timed to send an additional warning to the West. Meanwhile, Russia is suspected of orchestrating another major act of sabotage in Europe, according to government officials and telecom operators. A 135 mile Internet link connecting Sweden's Gotland island and Lithuania stopped working on Sunday morning. The following night, a 700 mile long cable linking Finland and Germany also stopped working. Western officials said there are indications that Russia was behind the incidents, which they said were similar to other operations resulting from Moscow's escalating hybrid warfare against NATO countries in Europe. The Russian government didn't immediately respond to requests for comment on the allegations. The United Nations Atomic Energy Agency today said that Iran sharply increased its stockpile of nearly weapons grade uranium amid its confrontation with Israel. Iran's decision to expand its stockpile of nuclear fuel and its failure to fully cooperate with the International Atomic Energy Agency, which monitors Tehran's work, is set to trigger fresh diplomatic pressure from Europe. Concerns are growing in Western capitals that Iran could decide to develop a nuclear weapon after comments by senior Iranian officials that Tehran has mastered most of the techniques for doing so. Israel's hollowing out of Hezbollah, Iran's most powerful proxy in the Middle east, has also prompted a public debate in Iran about whether the country's best form of deterrence lies in having an atomic bomb. Iran has always claimed its nuclear work is solely for peaceful civilian purposes. Both the incoming Trump administration and Tehran have sent mixed messages about whether they will seek confrontation or some kind of diplomatic engagement after President elect Donald Trump takes office on January 20th. Silicon Valley's venture capital firms are having an easy time finding promising startups to back. The hard part is cashing out. According to PitchBook, US venture firms last year invested $60 billion more than they collected, the highest such deficit in PitchBook's 26 years of data. And venture firms only returned $26 billion worth of shares back to their investors. That was the lowest amount since 2011. Joining us now is WSJ reporter Berber Jinnah. So Berber, why aren't these venture capital firms seeing any returns right now?

[Peter Rudiger]

The traditional exit routes for startups, which are IPOs and acquisitions, those two exit routes are essentially shut. So in the US a very harsh regulatory environment has discouraged a lot of startups from getting acquired by big tech companies. And a lot of startups still don't want to go public for a variety of reasons. And what the result of that is is you have thousands of so called unicorns or private companies valued at a billion dollars or more that are essentially stuck and some of their investors have been invested in those companies for over 10 years now and they're not able to turn those shares into profits.

[Berber Jinnah]

So you mentioned a harsh regulatory environment. What would a Trump presidency mean for those conditions?

[Peter Rudiger]

In general, venture capitalists are very hopeful that the Trump administration is going to loosen regulations, spur more deal making. They're very hopeful that the current FTC chair, Lina Khan, will be replaced by a more business friendly regulator. But a lot remains to be seen because at the same time, Vice President elect J.D. vance has praised Lena Khan and there are Republicans who have a lot of influence within the party and a voice to Trump who actually have applauded over the years the sort of more harsh antitrust approach that Lina Khan has taken and criticized the power that big tech companies have.

[Berber Jinnah]

That was our reporter Berber Jinn. Thank you so much.

[Peter Rudiger]

Thank you. It's a pleasure to be on.

[Berber Jinnah]

President elect Donald Trump today said that he will nominate veteran Wall street financier Howard Lutnick to lead the Commerce Department, elevating one of the financial world's most vocal supporters of Trump to a crucial position overseeing the incoming administration's economic agenda. Lutnick has fiercely defended Trump's economic proposals in the midst of opposition from some on Wall street who worry the president elect's pledge to impose sweeping tariffs will trigger trade wars and ultimately lead to higher prices for American consumers. In a statement, Trump called Lutnick, quote, a dynamic force on Wall Street. Coming up, Donald Trump Jr. S going all in on the so called anti woke economy. That's after the break. The president elect's son, Donald Trump Jr. Has joined 1789 Capital, a venture capital firm aiming to invest in companies espousing conservative values. 1789 Capital is founder and former bank of America executive Omeen Malik's latest attempt to pursue profits in the so called anti woke or Republican parallel economy. Trump Jr. S involvement made public last week will have him mixing politics with business, even as he has said he plans to stay out of the future Trump administration. Joining us now is WSJ reporter Peter Rudiger. Peter, what are these anti woke companies Malik and Trump Jr. Want to work with?

[Tracy Hunt]

The first investment that Malik's firm, 1789 Capital, made was in Tucker Carlson's new media company that's producing his web show. Prior to 1789 Capital, Donald Trump Jr. And Omid separately invested and advised in a company called Public Square. Think of that as kind of an anti woke online marketplace akin to Amazon or maybe an Etsy that's really catering to conservative brands, brands targeting consumers that might be disaffected by bud light or PayPal or Target or some of these companies that have gotten flack in the media for their stances on social issues. So 1789 has some pretty big names from Republican donor and policy circles involved very much in this tight circle of people close to the Trump family and Trump administration.

[Berber Jinnah]

Wouldn't that bring rise to potential conflicts of interest for Trump Jr. For the.

[Tracy Hunt]

Most part, investing in startups might offer fewer conflicts than if you're investing in big companies that do lots of business with the government. But there are still potential for conflicts here. To give one example, there is a rocket Company in 1789's portfolio called Firehawk Aerospace. They have done partnerships with NASA, with the Air Force. Anytime you have folks working in the defense industry where people at the Pentagon or the Department of Defense kind of have a say in who's going to get a contract and who isn't, and if a relative of an investor might have an influence over who gets that contract, you're going to have at least the appearance of conflicts in those questions. Now, what our reporting did show for this story is that Trump Jr. Is planning to recuse himself from business with any companies that might have business with the government. And this investment in Firehawk was made before Trump Jr. Was a part of 1789. But it's just going to be something that they have to manage on an ongoing basis.

[Berber Jinnah]

All right. Peter Rudiger is a reporter covering hedge funds and investing for the Wall Street Journal. Thank you so much, Peter.

[Tracy Hunt]

Thanks for having me.

[Berber Jinnah]

U.S. markets ended mix today. The Nasdaq rose 1%, trailed by the S&P 500, which added 0.4%. The Dow fell 0.3%. Walmart today said U.S. sales rose during the most recent quarter, propelled by shoppers buying groceries, home goods and toys, a sign that spending is off to a steady start this holiday season. Walmart executives said they are watching potential policy moves by the incoming Trump administration, particularly on import taxes, and are importing some products early in case of new tariffs or potential port strikes in January. And if you're wondering what to make of this earnings season as it draws to a close, heads up. We're going to be releasing a special bonus episode tomorrow where we take a look at some of the big themes that are standing out in corporate earnings reports. That'll be this Wednesday afternoon in between our usual AM And PM Editions. Check it out and let us know what you think. And that's what's news for this Tuesday afternoon. Today's show was produced by Anthony Bansi with supervising producer Michael Kosmidis. I'm Tracy Hunt for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.