We concur that 612 miles from 1500 Pennsylvania Avenue is a schlep. More to the point, why bother? Treasury Secretary Scott Bessent’s predecessor’s predecessor, Steve Mnuchin, toured the Fort Knox vault seven years ago. Walking past Bessent as he approached the 6th floor elevator I’d just exited at Bloomberg’s Lexington Avenue headquarters yesterday, he emitted anything but the vibe of a guy craving validation rewarded by shrewdly planted click-bait. In a million years, Bessent couldn’t have typed: “Who is confirming that gold wasn’t stolen from Fort Knox? Maybe it’s there, maybe it’s not.” On Wednesday, Musk followed up on his personal social media platform: A “livestream” of the highly secretive location would be – insert fire emoji. How pedestrian. Rather than feed the conspiracy theorists, Bessent calmly reassured the public that “all the gold is there,” secured since 1937 by the 16,000 cubic feet of granite; 4,200 cubic yards of concrete; 750 tons of reinforcing steel; and 670 tons of structural steel required to build the vault. Graciously, he invited any senator to take part in the third tour of unauthorized entrants since Fort Know became the assigned protector of more than half the nation’s gold.
As dignified as Bessent comports himself, the media had a field day mocking him for not delivering on his pre-confirmation commitment to extend the maturity profile of U.S. debt. “The Fed said they may stop their balance sheet runoff,” he noted on Bloomberg TV. Once that happens, he will no longer be competing with another effective “big seller of Treasuries.” As for revaluing the gold from $42.22 an ounce to market prices punching $3,000, he again disappointed those who don tin foil hats in the wee hours: “When we were talking about the sovereign wealth fund, and I said, ‘monetize the balance sheet,’ I promise you that’s not what I had in mind.” What a party pooper, and after that glitzy night in Miami, with all that media coverage and spunky music!
Our best guess is Bessent is more self-aware than your typical wealthiest man on earth. Perhaps he’s even seen the spike in Google searches for “Job Cuts” (upper left chart), which dovetails nicely with the 81% of U.S. workers MyPerfectResume reported feared job loss in 2025 last December. To Bessent’s credit, he comes across as someone who can empathize, who knows there are real people behind every sterile headline detailing this bankruptcy being filed and that agency being summarily shuttered.
We wonder, though, if his newfound role of being a steady hand amongst trigger-happy man-children will wear on the Secretary. Speaking of selfishness, we trust someone in our circle shared with Bessent our graph depicting the rarity of household deleveraging cycles, the century’s third of which got underway in 2024’s final three months (purple line). He might not even deduce as trite the “antiquated” Leading Economic Index (LEI), a relic left for dead by the Street which uncannily predicts said deleveraging with a long lead (lilac line).
Another note on the LEI in the ‘we can’t take credit’ department arrived care of QI frere David Rosenberg, who noted that, “The ratio of the leading to coincident indicator, a key forward momentum index, is back to where it was in the 2008-2009 Great Recession and is at a level that has either presaged or occurred amidst nearly every recession going back to 1960. Not a forecast as much as an observation that the macro bulls, while being on the right side of the call these past few years, should probably not get overly smug (teal line).”
“Smug” is a good way to characterize how White House economists felt as initial jobless claims hit the wires at a benign 219,000 in the week ended February 15th, which contained the 12th, the date of the month that always coincides with the nonfarm payroll survey week. Like us, Betsey Stevenson, a University of Michigan professor of economics, is no believer in coincidence. In a CNBC interview, she posited that mass public layoffs were delayed until after the 15th to buy the new administration time. If this was a planned sleight of hand to flatter the February jobs report, it did nothing to mitigate the ongoing pain among continuing claimants, whose ranks remain north of two million (green line) with a widening breadth engulfing an 11-month-high 70% of the population (yellow bars).
As for what’s to come in March, we owe MacroEdge a debt of gratitude. As the media buries us in competing private and public sector job cut headlines, the data-meisters there have graciously drawn a dividing line between the Government (dark blue bar) and Ex-Government layoff announcements, the latter of which they’ve faithfully tracked and are desegrated to track the private sector as a standalone (light blue bars). In short, the aggregate figure is running 90% north of January’s pace. On bankruptcies, while Bloomberg-tracked large filings ($50 million or more in liabilities) have stabilized this month (red line), we’ve observed a yet-to-be-tallied pickup in filings of firms with $1-10 million in liabilities as well as monsters, with billions in liabilities. Look for us to report back on these once month-end figures are in hand.
All this jobs talk fails to preview today’s first data to hit– February’s preliminary prints of S&P Global’s Purchasing Managers Indices. We do have an inkling of what’s to come — tariff scare today, anticlimax tomorrow. At least that’s the message conveyed in this week’s first two installments of Federal Reserve regional factory surveys. Marrying the monthly changes in February’s Future Capex indices via the New York and Philadelphia Fed Districts yielded a clear signal that sliced through a noisy series. The pandemic aside, at -40.0, the aggregate delta hasn’t been so deep in the red since September 2008 (orange line). While no one person on Planet Earth knows all the procedures to open the vault at Fort Knox, there’s no single living investor who can’t tell you what happened that month.