The Next Top Treasurer

Good morning and happy Monday. 

If the planners of COP, one of the biggest climate conferences in the world, wanted to underscore how much they have their work cut out for them, they couldn't have chosen a better host. 

This year's COP29 — the two-week summit hosted by the UN and featuring climate leaders that kicks off today — is being hosted in the Azerbaijan capital city of Baku, which just so happens to literally be built on oil fields. Per the UN, fossil fuels account for roughly 60% of Azerbaijan's income. The nation says it plans to have 30% of its own energy come from renewables by 2030, though it is also planning to increase oil-and-gas production by 35% by 2035, according to clean energy advocacy group Oil Change International. Let's just say it's not the most obvious path to net-zero emissions.

Meta thinks it's a wonderful idea to safeguard children on its vast social media platforms, and it wants Apple and Google to get right to it. 

Last week, Australian Prime Minister Anthony Albanese announced the government will push ahead with plans to introduce a new law banning children from using social media as a way of shielding them from the various harms that lurk online. Details on what the law might actually look like are scant, but Meta came in hot on Friday suggesting that the burden of keeping minors off the socials should fall on app stores, i.e. Apple and Google. It's part of Meta's broader beef with the app store operators over age controls.

Do Australians Love Their Children Too?

Australia isn't the first place to think seriously about age-gating social media and mandating some form of age restrictions. Texas brought in a bill in June last year that requires parental consent for under-18s to access digital services. In response to the emerging trend for more stringent policies around children accessing social media platforms, Meta has done all it can to put the onus of age verification on the app store operators, arguing kids (just like the rest of us) primarily access Meta's services via their phones. Meta has even proposed US federal legislation to that effect, and to eschew any accusations that it's shifting blame, it insists that it would apply to its own app store for its VR platform.

There is the distinct possibility that Australia's proposed ban never materializes, but assuming it does, few expect it will achieve what it set out to do, which is improve the lives of young people: 

• "It's probably well-meant, but very, very poorly thought out," Andrew Przybylski, Professor of Human Behaviour and Technology at the University of Oxford, told The Daily Upside. "The evidence is really clear that young people use social media to reach out and to receive social support," he added.
• "What is being described is a direct violation of the UN Charter on the Rights of the Child," Przybylski said. "Children have a right to be safe, and we should be protecting them much more [...] but they have a right to association, they have a right to play, they have a right to information."

Przybylski isn't the only skeptic, more than 120 academics and experts wrote an open letter to Albanese saying a ban would be "too blunt an instrument to address risks effectively."

Everything's Social Now: Quite apart from whether a ban would help children's wellbeing is the question of how on earth Australia would enforce it, and what it would count as social media. "Fortnite is social media, Roblox is social media, YouTube is social media, GitHub is social media — it's not just TikTok," Przybylski said. Even Google Docs could be a weapon for mass socialization. 

Written by Isobel Asher Hamilton

You don't need a monocle to be in the luxury business. Well, when it comes to having houses all over the board, there's one player doing it better than anyone else: Pacaso. 

Pacaso sells fractions of luxury vacation homes to aspiring owners. This gives buyers an easy ownership stake in a vacation house while Pacaso manages the property… and the headaches. As you know, owning the most valuable properties in Monopoly usually brings success. By following that model, Pacaso has already earned nearly $100M in gross profits in just three years. And you can own a stake in their entire portfolio by investing in the company.

Now they're buying even more, expanding to new destinations like Paris.

Invest in Pacaso as they scale in their $1.3T market.*

If the President is America's CEO, the CFO is the Treasury Secretary. Come early next year, the country will have a new one in its metaphorical c-suite.

Charged with leading the department that oversees national banks, pays the government's bills, collects taxes through the IRS, and manages the cash available to markets, the next secretary will immediately become one of the most influential figures on the planet, their every word pored over by analysts and traders. Here's who President-elect Donald Trump is eyeing for the job.

Billionaires Billionaires Billionaires

Leading Trump's transition team are two billionaires: Howard Lutnick, the CEO of investment bank Cantor Fitzgerald, and Linda McMahon, the former CEO of World Wrestling Entertainment. McMahon, who served in the first Trump administration as director of the Small Business Administration, is considered a possible Commerce Secretary, while Lutnick has an outside shot at Treasury himself.

But early word from inside Mar-a-Lago suggests two other billionaires, both hedge fund managers, are the leading candidates. Paulson & Co.'s John Paulson, who has been publicly salivating for the job and who Trump has reportedly considered for months, has advocated for tariffs on imports, a key campaign pledge. Key Square's Scott Bessent, while a more traditional market conservative, also embraced the tariff proposal during the campaign — and he had a "very positive" meeting with Trump on Friday, sources told Reuters. Whoever gets the job will have a clear set of near-term priorities, and — if past is prologue — a bit more stability than is afforded to other Trump appointees:

• The Treasury post was the most stable cabinet position during the president-elect's first term. Investment banker Steve Mnuchin — also a film producer who helped finance "The Lego Batman Movie" — held the post for nearly four years and helped push through the 2017 tax cuts that lowered most individual income brackets and set a flat corporate tax rate of 21%.
• The individual tax cuts are set to expire next year, so a key job for the next Secretary will be working with the White House and Congress to fulfill Trump's pledges to extend them and cut corporate taxes to 15%. They'll also likely be called in to advise on the aforementioned tariffs: Trump promised a 60% duty on goods from China and 10% from everywhere else, which experts say could raise prices for consumers.

Getting Moody: Moody's, the last of the three major US credit ratings agencies to maintain a top rating for the US government, warned that "in the absence of policy measures to help limit fiscal deficits" the new economic policies could send debt levels skyrocketing. To that end, Trump surrogate Elon Musk, another billionaire, said he'd help the administration cut hundreds of billions in spending, which experts have also raised concerns about. Paulson, meanwhile, said he'd gladly work with Musk if picked. 

Written by Sean Craig

Whoops, how'd that slip through?

US sanctions have been designed to keep high-powered computer chips from entering China, but last month one of TSMC's chips was discovered inside a processor made by the Shenzhen-based Huawei. Now, according to a Reuters report this weekend, the US government has ordered the chipmaker to halt orders of advanced chips to the country starting Monday.

TSMC You Later, China

US rules do not ban TSMC from selling all chips to China, just those that are high-powered and could be used for advanced artificial intelligence purposes. But while imposing export controls on high-powered chips is easy, enforcing them is much harder. That's because TSMC makes chips based on customer designs, and experts say that chips are so complex it can be difficult to ascertain their power based on design alone. 

In October, a teardown of a Huawei AI processor by research firm Tech Insights found one of TSMC's high-powered chips. TSMC then flagged the discovery to the US Commerce Department, claiming it was unsure how the chip made its way into the China-made hardware. The incident has raised enough of a panic to spark even more stringent export controls:

• Following the notification, the US Commerce Department ordered TSMC to impose even more beefed up restrictions on certain chips, a source told Reuters. TSMC has told Chinese clients it is suspending shipments starting Monday, and will introduce a tighter review process on designs likely to involve the US government, sources told the Financial Times.
• That likely means an even bigger dent to its business. The share of TSMC's revenue from China has fallen from around 20% in 2019 to 12% last year amid the increased export controls (the company still generated around $9.8 billion in revenue in October alone, it recently announced).

A New Era: For its part, TSMC in a statement insisted it was a "law-abiding company." The Taipei-based firm operates in accordance with US rules to maintain access to critical US tech. But with a new administration en route that has criticized Taiwan's chip industry, TSMC's continued seat at the US table looks slightly in doubt. One source told the FT that TSMC's cooperation is "designed to underscore that we are the good guys and not acting against US interests."

Written by Brian Boyle

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