Happy Friday!  

This is our new “reality.” I was going to have Hunter do a full-blown rant about the situation, but I don’t want to end up on a list. We’re already labeling everything he says as “satire” – lest we accidentally offend someone. BUT it seems that the “offences” are easier and easier to come by now and you never know what’s going to trigger the President or his team and trigger the Right’s new “Cancel Culture,” where they are LITERALLY CANCELLING CULTURE!  

Podcast: https://share.transistor.fm/s/e7baf82e

Video: https://youtu.be/VczraAjzkSU

Even if you are THRILLED that Jimmy Kimmel “got what was coming to him” because he said something about one of Trump’s friends (and he actually said nothing – it was just a pretext – THAT’s what’s so scary), will you be so thrilled when you run into one of Trump’s friends in business and you displease them with your “competition“? Under the surface, that’s what this is, Trump sicced the FCC on Disney/ABC and threatened to put them out of business if they didn’t cancel Kimmel – do you really think you’ll ever win a contract bid against one of Trump’s friends?

And even if you start sucking up to the President now (love you Donald!!!, by the way), when push comes to shove will you be the biggest suck-up when he has to choose between you? So far, Trump has outright targeted Undocumented Immigrants (who doesn’t hate them?), Asylum Seekers (let them work it out in their own countries!), Political Officials in Left-leaning Cities and States (they’ve had it coming for a long time), Federal Civil Servants (the Deep State!), Agency Personnel (Deep State!), LGBTQ+ (no more Rocky Horror references!), the Environment (I never trusted that thing!), Climate Science (can you even call it science if the President doesn’t agree with it?), Starving Children (are there no workhouses?), Struggling Families (Welfare Queens!), Disaster Victims (whiners!), Sick People (heal thyself!), Old People (they should have made more money), Foreign Aid Recipients (clearly not our responsibility) and International Organizations (screw that World!) and, of course, all those who are looking for non-religious educations and the people who would dare to provide it (heathens!).  

As long as you are not in one of those groups (or getting older without lots of money), then I’m sure you’ll be fine – at least until all those obstacles are gone and THEN Trump comes out with a new List or President Vance gets to make his List or the President after that, etc. because this is how America works now – and we’re all OK with that, right?  

And I know a lot of you may be saying “but what does this have to do with the markets” but isn’t Disney (DIS) a major ($204Bn) corporation? If their broadcast license and ESPN deal can be threatened over the speech of ONE of their 177,000 employees, don’t we have to factor in FOT (Friends of Trump) or KTA (Kissing Trump’s Ass) scores along with the rest of their Corporate Profile? 

And what about the company themselves (and all companies)? Don’t they have a fiduciary duty to their shareholders (mostly Trump and his friends) to make sure NO EMPLOYEE GETS OUT OF LINE? Not just what they say but what they tweet, what they post – even what they say to their families and friends that may get recorded at parties or restaurants (and how long before we reward kids who turn in their parents?). It is, in fact, the DUTY of every business in America to make sure nothing is said that can damage the company – expect to see employment contracts with these clauses no later than Jan 1st!  

They don’t even have to set new policy – they’ve already set the precedent, and precedent is far more powerful because it creates uncertainty. When Disney’s $204 billion market cap can be threatened over one employee’s comments, every CEO and board of directors in America got the message loud and clear: your fiduciary duty to shareholders now includes Political Risk Management (PRM). 

This isn’t about new laws or regulations – it’s about the chilling effect of watching what happens to those who displease the wrong people. Workers will have to self-censor because they know their jobs depend on it, and business owners will implement draconian speech policies because their Insurance Companies, Lenders, and Shareholders WILL DEMAND IT.

The legal framework is already in place through existing employment law – employers can fire workers for “damaging the company’s reputation” or “creating a hostile work environment,” and now those terms can be applied to virtually any political statement that might anger the wrong person.

Corporate America has always been risk-averse, but now the biggest risk isn’t market competition or regulatory compliance – it’s accidentally ending up on the wrong side of a political tweet. And once that fear takes hold, it doesn’t matter what the official policy says, because everyone will be too scared to test the boundaries.

So how do we invest in this new reality? It’s actually quite simple – follow the money and the power structure:

🚢 The “FOT Portfolio” Investment Strategy

Companies That Benefit from Proximity to Power:

• • • • Tesla (TSLA) – Musk’s direct access ensures favorable regulation

      • Truth Social/Trump Media (DJT) – Literal Trump business

      • Defense contractors with Trump connections

      • Private prison operators (mass deportations = more detention facilities)

      • Energy companies that kissed the ring early

Companies in the Danger Zone:

• • • • Disney (DIS) – Already being targeted, as you mentioned

      • Meta (META) – Zuckerberg’s past conflicts create risk

      • Any company with strong ESG/DEI profiles (target-rich environment)

      • International companies that might displease America First policies

The “Compliance Cost” Investment Theme

Every corporation now needs:

• • • • Expanded HR departments to monitor employee speech

      • Social media monitoring software

      • Legal teams specializing in political risk

      • Government relations consultants (lobbying boom)

Investment plays:

• • • • Corporate security firms

      • Employee monitoring software companies

      • Lobbying/government relations firms

      • Legal services companies

The Economic Reality Check

• • • • LEI at -0.5% while we’re focused on political risks

      • Consumer sentiment at 55.4 while corporations worry about speech codes

      • Dollar weakness accelerating while domestic control tightens

      • This is what happens when institutions break down – markets become political tools

The market isn’t even pricing in a recession and it SHOULD be pricing in an Authoritarian Risk Premium (ARP). And that premium is about to get VERY expensive for anyone not on the right list.

Have a great weekend, 

— Phil