Why the Pentagon Is Hiring Wall Street Bankers

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Today's number, four. That's how many Oscar nominations Timothy Chalamet has received. However, he has still never won. Today's other number is 100,000. That's how many ballerinas celebrated on Sunday night.

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**Ed Elson** (2:10)
Welcome to Prof G Markets. I'm Ed Elson. It is March 17th. Let's check in on yesterday's market vitals. The major indices climbed as Trump called on other nations to help secure traffic through the Strait of Hormuz. Oil prices declined on that news. The yield on 10-year treasuries also fell, and the dollar dropped the most in more than a month.
Okay, what else is happening? The Pentagon is seeking unusual hires, specifically Wall Street bankers. The Defense Department is recruiting investment bankers for a new 30-person economic defense unit. The team would be tasked with identifying strategic investment opportunities and deploying as much as $200 billion over the next three years. The money would be directed towards sectors considered vital to national security, including mineral extraction, drones, and energy. According to the government's presentation, the goal is to prevent China from gaining military superiority to lure top talent. The Pentagon is offering high salaries, access to foreign contacts, and the chance to manage, quote, more capital than most investors deploy in their entire careers. Here to discuss this is the journalist who broke this story, Liz Hoffman, Semaphore's business and finance editor and host of Compound Interest. Liz, welcome back to Prof G Markets. First, tell us, what do we know about this new investment banking recruiting operation that Trump has initiated here? What is interesting or striking to you about it?

**Liz Hoffman** (3:42)
Yeah, I mean, through the military budget, through these trade deals that the Trump administration has been striking with foreign countries and with a bunch of other things that they're working on to kind of, as the Treasury Secretary calls it, kind of monetize the national balance sheet. The Trump administration is going to end up with a couple of hundred billion dollars, maybe more than a trillion dollars, kind of to invest and has a lot of ideas about its priorities. But its challenge is going to be finding things to buy and invest in. It's one thing to say, we'll just take 10% stake in Intel. It's a pretty well-known company, pretty important to national security. But there's a long tail of things that they're going to want to go after, and finding those deals is what Wall Street investment bankers do for a living. They are explicitly hiring what in Wall Street is called coverage bankers, and every industry has them. So you might be a coverage banker covering industrials companies or energy companies or retailers.
There are coverage bankers for private equity firms. Their clients are the Blackstones and KKRs and Carlisles of the world. And their job is to know what these guys own, what they might be willing to sell, and then to try to find the money to put those deals together. So that's the unit that's being put together here. And as you correctly know, it is the Pentagon correctly dangles. This is a jaw dropping amount of money and could be a very fun playground for Wall Street investment bankers. And judging by kind of the inbound that I received saying, who do I call to get this job? It is a fairly juicy opportunity, I think.