Ep. 434 — Q1 Economic & M&A Update: Reading the Money Before You Make the Bet

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Episode Summary

You’re staring at a year where M2 money supply is finally turning back up, $9 trillion of government debt has to roll over, commercial real estate refinancing is a slow-motion train wreck, tariffs are on then off then on again, and your CPA is telling you the year is going to be “a little soft.” You don’t need another headline. You need the context that lets you decide whether to lock in financing, push reinvestment, hold off on a sale, or lean into hiring while your competitors freeze. That’s why I built this quarterly update the way I did. I brought on three people I trust to give me the data without the clickbait: Alan Beaulieu at ITR Economics on where we sit in the business cycle and what the second half of 2025 actually looks like, Jeff Buettner at ButcherJoseph on what’s happening with M&A multiples, debt markets, and what makes a business a premium right now, and Joe Brown at Heresy Financial on the four ways out of the government debt situation and why the 10-year yield (not the Fed funds rate) is the chart you should actually be watching. The throughline: the Three-Statement Model you run inside your company is the same machine the government is running, except gravity still applies to you. Real numbers, real trade-offs, and the bets I think owners should be sizing up right now.

Top 10 Takeaways

  1. The second half of 2025 is going to be measurably better than the first half. Plan for the recovery now, not when you can feel it.
  2. M2 money supply growth has turned positive after 18 months of contraction. That’s the fuel underneath the next 18 months.
  3. Watch the 10-year yield, not the Fed funds rate. The 10-year is the actual benchmark every other loan in the economy gets priced off.
  4. Your gross margin and bench strength matter more than your top line. Premium businesses get premium multiples because buyers can see the post-deal math.
  5. If you don’t have a five-year plan and a clean three-statement model, the buyer will write your story for you. And they’ll write it cheaper than you would.
  6. There are only four ways out of $36T of government debt (inflate, austerity, default, produce). The actual answer is a messy blend of all four.
  7. Don’t move your supply chain on a tweet. Build the plan. Wait for the carve-outs. The 2017-2018 tariff cycle taught us most inflation got absorbed before it bit.
  8. The labor opening from federal cuts is real. Companies that hire deliberately right now will look genius in 18 months.
  9. Most U.S. companies under $5M of revenue have no buyer. Cash flow can’t service the buyout. ESOPs and creative equity structures are worth a real look.
  10. Be fearful when others are greedy and greedy when others are fearful. Money scarcity is the time to deleverage; money abundance is the time to redeploy.

Sound Bites

“100% of the companies on the planet that I’ve ever met are underpriced… I mean, the leading indicators, retail sales, non-defense capital goods, new orders excluding aircraft, they’re all showing signs of life. The second half of this year is going to be much better than the first half.” (@00:04:40) — Alan Beaulieu

“Economists don’t have feelings. It’s not about feelings. It’s about the math. Math doesn’t mislead you. Your feelings can be based upon the latest article or headline or conversation.” (@00:07:37) — Alan Beaulieu

“If you’re driven by the worry, it’s safe to be in the herd. But you don’t lead when you’re in the herd. If you’re a leader, just ignore that and pay attention to what actually matters.” (@00:44:33) — Alan Beaulieu

“If you’ve got it already cleaned up and it’s ready to go and it’s just rocking and rolling, that’s an easier lift for someone to step into than if they need to invest in a new leadership team. And some of that bears fruit in your financial performance and your margin profile.” (@00:59:26) — Jeff Buettner

“You can either inflate your way out, you can deflate your way out, you can go through austerity, or you can produce your way out. Those are the only four options. The reality is, we do get out of this. It’s just when is the pain, how much is the pain, and who bears the pain.” (@02:00:11) — Joe Brown

“You cannot consume what has not been produced. There’s been a lot of consumption, which means it needs a lot of production to compensate. So the question is, who’s going to pay the price? It’s not, are we going to escape the pain altogether.” (@02:02:32) — Joe Brown

About This Episode

This is the Q1 2025 quarterly economic and M&A update, structured in three back-to-back segments with three guests Ryan trusts on the data side. Alan Beaulieu is Consulting Principal at ITR Economics, has 30+ years of economic forecasting experience, and co-authored Prosperity in the Age of Decline and Make Your Move. Jeff Buettner is Managing Director at ButcherJoseph with 20+ years in valuations, ESOP transactions, and financial restructuring; previously at Stout Risius Ross and PwC. Joe Brown is the CEO and Founder of Heresy Financial, a YouTube-led education business with 300K+ subscribers focused on money supply, treasury markets, and how the macro picture lands on your kitchen table. The format is built for owner-operators who want to make capital-allocation decisions with context, not headlines.

Resources Mentioned

  • ITR Economics — Alan Beaulieu’s firm. — itreconomics.com
  • Alan Beaulieu on LinkedIn — linkedin.com/in/alan-beaulieu-8343283
  • Prosperity in the Age of Decline — Co-authored by Alan Beaulieu
  • Make Your Move — Co-authored by Alan Beaulieu, on managing through business cycle changes
  • ButcherJoseph & Co. — Jeff Buettner’s investment bank. — butcherjoseph.com
  • Jeff Buettner on LinkedIn — linkedin.com/in/jeff-buettner-7b817b127
  • Heresy Financial — Joe Brown’s firm. — heresy.financial
  • Heresy Financial YouTube — Joe Brown’s channel. — youtube.com/heresyfinancial
  • Peter Zeihan — The End of the World Is Just the Beginning — Referenced by Ryan and Alan on demographics, maritime trade, and the post-Bretton Woods order
  • Neil Howe — The Fourth Turning — Referenced for generational cycle framing
  • Ray Dalio’s economic cycles work — Referenced alongside Zeihan and Howe
  • Jack Stack — The Great Game of Business — Referenced for open-book management and using the income statement as the dashboard
  • Justin Timberlake — In Time — Referenced on time as currency
  • Judy Shelton — Gold Bond work — Referenced by Joe Brown for the remonetized gold proposal

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