What I Read This Week…

President Trump plans to sign 100+ executive orders tomorrow, investors are concentrating a record high percentage of their wealth in equities, and mental illness is correlated with brain anatomy

Chamath Palihapitiya

Jan 20, 2025

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Caught My Eye…

Tomorrow marks President Trump's inauguration, the formal transition of the re-elected president and his official first day in office. President Trump and his team are preparing more than 100 executive orders, covering issues from U.S.-Mexico border policy to energy development, federal Schedule F workforce rules, school gender policies, vaccine mandates, and crypto-friendly initiatives. These orders will include rolling back many of President Biden's executive orders. Meanwhile, President Trump and two of his affiliated companies launched the $TRUMP memecoin on Friday. These companies collectively own 80% of the token's supply, with a vesting schedule extending over a period of 3 years. This action represents the President’s embrace of the crypto industry, including the financialization of cultural cache and influence that comes with memecoins. $TRUMP has seen almost $30 billion of trading volume within the last 24 hours, demonstrating that ecosystems like Solana and Ethereum are ready for mass adoption.
Allocations to U.S. stocks across different investment classes (households, mutual funds, pension funds, etc.) have reached a record 54% - double the level seen at the 2009 market low and surpassing even the 2000 Dot-Com Bubble peak of 51%. Meanwhile, allocations to cash and bonds, the traditional safe havens against market risk, are at lows of 18% and 9%, respectively. This is partly driven by quantitative easing and zero interest rate policies, which devalued cash and bonds and compelled investors to move toward equities as inflation-protection measures. Moreover, investor confidence has increased as stock markets have repeatedly defied predictions of recessions and price crashes. Trading volume has nearly doubled from 2000 to today, creating a self-reinforcing cycle: increased trading drives volatility, which attracts more trading as investors try to profit from distorted prices, which in turn contributes further to volatility. Rising stock market values make stockholders feel wealthier, leading them to spend more – a key driver of U.S. economic growth since consumer spending accounts for 70% of GDP. However, this cycle has a dangerous flip side: with Americans holding more stocks than ever before, a major market drop could quickly erase household wealth and destabilize our consumer-driven economy.
Conditions such as depression, anxiety, and schizophrenia commonly exhibit reductions in critical brain regions responsible for emotion regulation, decision-making, and social behavior, notably the prefrontal cortex and insula. Schizophrenia, in particular, demonstrates more extensive brain alterations, with reductions observed in areas associated with cognition, perception, and social interaction, encompassing both cortical and subcortical regions. Conversely, PTSD presents distinct brain changes, including reduced volumes in regions essential for processing visual information and regulating emotions. It’s hard to pinpoint exactly how each mental health condition affects the brain because many patients have multiple conditions at once, and it’s unclear whether the brain differences caused the mental health problems or vice versa.