A sovereign wealth fund of the kind proposed by President Trump, likely funded by debt and primarily investing in domestic assets, violates nearly all of the principles that usually undergird the asset class.

Why it matters: Dani Rodrik, a Harvard economist known for his support for industrial policy and government involvement in markets, tells Axios that this particular proposal "makes no sense at all."

Flashback: The most prominent such fund, 1MDB, ended up collapsing in scandalous ignominy.

• Malaysia wanted a sovereign wealth fund, but it had no sovereign wealth to invest. It therefore created a vehicle, 1MDB, that borrowed money on the international bond markets.
• Most of that money, which was ostensibly invested in domestic development projects, ended up being stolen by government cronies.

Where it stands: 1MDB is the only real precedent for a debt-funded sovereign wealth fund, per Berkeley economist Barry Eichengreen.

• While a U.S. version would not necessarily need to fund itself directly by issuing bonds like 1MDB, ultimately any money flowing into it could alternatively be used to decrease the deficit, therefore it makes sense to think of the fund as directly increasing the deficit and the national debt.
• It exacerbates, rather than addresses, the country's fiscal imbalances, notwithstanding Trump's claim that the fund will "promote fiscal sustainability." The White House did not return requests for comment.

Between the lines: As Axios' Neil Irwin notes, sovereign wealth funds are by their nature prone to suggestions of cronyism, even if the behavior is entirely legal.

• Trump's son-in-law Jared Kushner secured a $2 billion investment from the Saudi Public Investment Fund within a year of leaving the White House and starting out in private equity, leading to accusations that he leveraged his ties to Saudi royalty as a U.S. official into a private sector payday.
• Kushner has not been accused of violating any laws, and rejects the idea he has crossed any ethical lines.

The big picture: The archetypal sovereign wealth fund — think Norway — exists to solve a luxury problem: What should the country do with its windfall oil wealth, given the knowledge that those revenues won't last forever?

• The answer: Instead of spending the money today, it's better to invest it in a diversified set of international assets, so the country's future citizens can share in the wealth even after the oil money runs out.
• The United States, by contrast, doesn't have windfall wealth. Rather, it has a $36 trillion national debt.
• Trump's executive order is extremely vague on where the money might get invested. The president even said, "We're going to be doing something perhaps with TikTok, and perhaps not."

The bottom line: Eichengreen sums it up for Axios this way:

• "Can you say 'recipe for disaster?' Which is the appropriate thing to say even in the absence of cronyism. Of which there is bound to be plenty."

Office occupancy hit 54.2% in January, per the latest swipe data from Kastle Systems, a post-pandemic record high, but not much to write home about (in fact, many of you are probably working at home and reading this).

Why it matters: The return-to-office push by many of the nation's employers, now including the White House, is slowly getting folks back to in-person work, but it's becoming clear that we are in a new world of hybrid work.

Where it stands: Occupancy rates vary widely, depending on the day of the week.

• On Tuesday, during the last week of January, the rate was 63.4%. On Friday, when few people show up in person, the number fell to 36.7%.

The big picture: There are plenty of companies sticking with flexible work arrangements, like the Big Four accounting firms — KPMG, Deloitte, Ernst & Young and PwC — which are looking for way to attract workers amid a shortage of CPAs, as Bloomberg noted yesterday.

• Citi is also sticking with hybrid work, the FT reported this week.

Zoom in: A few cities hit record post-pandemic office occupancy rates, including Houston at 64.9% and Philadelphia at 44%.

Between the lines: D.C. reached a high of 51.5% occupancy, as the White House ordered federal employees back to the office.

• Getting more of those folks to do in-person work might be tricky. The Washington Post reported that there is not enough office space for all these workers to use.
• As Axios's Sami Sparber reported Tuesday, the country's biggest office leases actually got a bit bigger last year, as companies start nudging back toward in-person work.

The bottom line: "As companies continue to shift their policies to require more days a week in the office, we expect that average to continue to rise," Haniel Lynn, Kastle CEO, said in an email.

• Cities like Chicago and Houston now see more than 70% occupancy on certain days of the week, he said.

Shares in private detention center operators — once a core "Trump trade" — are quickly falling as the administration explores options to house deportees and other inmates overseas.

Why it matters: Companies like GEO Group and CoreCivic were among the biggest beneficiaries of a Trump victory, as the promise of mass deportations signaled a possible spike in demand for detention facilities.

Yes, but: The U.S. in recent days has made moves to ship immigrants to Guantanamo Bay, Cuba, as well as held talks with the El Salvadoran government about sending inmates to that country's massive prison.

By the numbers: Shares in GEO Group fell nearly 8% on Tuesday and dipped a touch more yesterday.

• The stock more than doubled from Trump's election to inauguration, but has fallen about 20% since.

Shares in competitor CoreCivic fell almost 6% on Tuesday, before rebounding slightly yesterday.

• The stock rose more than 75% from Trump's election to inauguration, but is off more than 15% since then.

The intrigue: Both stocks experienced a similar roller coaster ride in late 2016 and early 2017, when Trump first came to office.

• Both rose more than 50% between his first election and inauguration.
• They both ended up losing about three-fourths of their value over the course of Trump's first term.