🧑‍💼 In the words of Rihanna, “work, work, work, work, work”  - 143k jobs were added in January, which was lower than the analyst-projected 169k. However, revisions to the November and December reports added a combined 100k jobs to the total jobs counts. As mentioned in previous newsletters, the Fed will cut interest rates based on one of two things happening: 1) inflation rate comes down to their target 2% 2) the job market softens. With unemployment lowering from 4.1% to 4.0%, the most recent report should not distract the Fed from their “wait and see” mode when it comes to rates.

🎛️ Well, well, well. How the turntables… - Didn’t realize this hadn’t happened already. Amazon is set to pass Walmart in revenue for the first time. For the past 12 years, Walmart held the crown of top revenue generator each quarter.  But on Thursday, Amazon announced it is expected to report revenue of $187 billion for Q4 2024, and Walmart is expected to really phone it in with $180 billion. Pretty weak.

🌊 Not totally tubular - Liberated Brands filed for Chapter 11 bankruptcy last weekend. So? So, so, so it's home to brands like Quiksilver, Billabong, and Volcom, which will be shut down. This is just one of many brands suffering from the shift from retail to online shopping. I haven’t seen the skate community take this big of an L since we lost the skate park in my home town to make way for a high rise.

No, this section is not about the 2019 viral clip in which an angry old man loses his mind at someone that tells him to “chill” (clip to video here). While it may not be appropriate or even relevant, I can’t help but relate to both sides of the video as I read the news each day about the latest monumental shift in government that happens overnight. I am not arguing for or against, but more so working through them so you can make an informed decision when investing (yes, that was a plug). This week, I want to focus on the efforts to cut government spending.

Cutting Government Spending

Overview

President Trump ran his presidential campaign on a major promise to cut down on government inefficiencies and reduce unnecessary spending. He even started a department helmed by Elon Musk focused on this very mission, aptly named the Department of Government Efficiency (DOGE).

What is happening?

Two major initiatives aimed at cutting costs that really came to light over the past week include:

1. Issuing a hiring freeze, and offering federal workers full pay and benefits until September 30th if they resigned by February 6th, which has now been extended to February 10th
2. Cutting the US Agency for International Development (USAID) workforce from 8,000 to fewer than 300 and fold the department’s mission into the State Department

✅ Why might it be good?

On the hiring freeze and resignation initiative:

• The White House has put out a report that said they expect to persuade up to 10% of the federal civilian workforce to resign, which would save $100 billion a year in costs
• If the DOGE moves forward with firing a large number of the workforce after the voluntary resignation, this provides those on the fence an opportunity to lock in payment, while they search for a new job
• While the Twitter acquisition shouldn’t be used as a case study by any means, a lot of times businesses and governments become bloated over time and a severe reduction in workforce may unearth the inefficiencies that lay beneath, which could lead to modernization of the government and technological advancements to make up for less workers

On the USAID initiative:

• In 2023, USAID accounted for approximately $40 billion of the $68 billion the U.S. spent on international aid. The U.S. has been the world's largest contributor to international development by a significant margin. Reducing its spending could prompt other countries to step up
• While there has been false information about certain USAID contracts, the White House put forward several projects that demonstrate “waste and abuse”, including a grant of $2.5 million for electric vehicles in Vietnam and $6 million for tourism in Egypt
• The reduction in cost from both the projects and reduction in workforce could be used in other areas or reduce unnecessary spending by the government

❌ Why might it be bad?

On the hiring freeze and resignation initiative:

• While the White House figure of a 10% acceptance paints a rosy picture, in actuality, only 2% of the workforce or roughly 40,000 federal workers had accepted the deal the day before it was originally to expire (February 5th)
• Because this has never been done before, the offer includes a lot of gray area, including a lack of guarantee about the offer, no specifics on how it plays out, and in the event of a job being eliminated before September 30th, what would happen to those who accepted the offer
• The federal funding may not be there; the email states payments would be made from February 6th until September 30th, but funding for most government agencies expires on March 14th, which means the administration is spending money before they have it

On the USAID initiative:

• While some of the initiatives are wasteful, given the size of US international aid, the impact will be felt globally and the worthwhile causes will lose necessary funds - from providing prosthetic limbs to soldiers injured in Ukraine, to clearing landmines and containing the spread of Ebola in Africa
• The legality of shutting down a government agency of that size is being called into question, and the rollout of the initiative has definitely been rapid
• There is a potential threat to national security - according to some reports, prison guards in Syria, who were charged with securing thousands of Islamic State fighters, nearly walked off the job when US funding was paused

Conclusion

When I began writing this section, I had thought we would also cover the tariffs and international relations changes over the past week. However, the government cost cutting initiatives have people for and against it, and if you walk into your Super Bowl party without both sides of the argument, the chicken wings might not taste so good as people either scold you for not knowing or call you a bigot for saying one off-the-cuff thing. We as a nation are incredibly divided, but most people have no idea what they are talking about. I don’t claim I know anything about Shinola, but I try to stay as informed as possible so I can understand where both sides are coming from.

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• All the king’s horses and all the king’s men would be freaking out at the economic impact of Humpty Dumpty falling from that wall today. Bird flu has caused your eggs to skyrocket, and over 2025, they could increase by 20%
• Anduril, a defense tech giant, is raising $2.5 billion at a $28 billion valuation, months after raising $1.5 billion at a $14 billion valuation. Currently trading in my leather jacket that Jensen Huang wears for the goatee and Hawaiian shirt of Palmer Luckey, Anduril’s CEO
• This isn’t relevant, I just found it hysterical. A Memphis Zoo is offering to send your ex a video of an elephant pooping for $10 on Valentine’s Day

I am writing this review from an airplane and cannot believe how crazy the Wright brothers must have been. Think about their world, they had managed to create an airplane, but the slightest gust of wind, and they could have crashed into pieces. We had all heard the stories of the bike shop brothers turned inventors of the airplane, but I had never realized their work ethic & vision. They would work relentlessly, taking one day off per week to focus on anything but work. The segmentation in their lives led to the birth of the airplane.

McCullough is considered one of the greatest historical writers ever, and this book was one of my first forays into his work. Whether you are a history buff or not, he does an excellent job of not just stating the facts but weaving them into the story of the Wright brothers’ lives.

⭐ 4.76 / 5.0 in my book (no pun intended)

1. “I was too legit to quit. But now I'm not legit. I'm un-legit. And for that reason I must quit.”
2. “Only that which is the other gives us fully unto ourselves”.
3. “I'll have the spaghetti. With a side salad. If the salad is on top, I send it back.”

There’s a species of jellyfish that is biologically immortal! 🪼

The Turritopsis dohrnii jellyfish has the ability to revert its cells back to an earlier stage of development, essentially starting its life cycle over and avoiding death from aging. It can theoretically do this indefinitely, making it the closest thing we know to an immortal creature!

1. Hot Rod (Rod, aka Andy Samberg)
2. Two Weeks Notice (Sandra Bullock’s Friend & Sri Yogananda - couldn’t find video, sorry)
3. The Office (Michael Scott)