Here’s a preview of what we’ll cover this week:

• Macro: Uncertainty on tariff resolution, FED’s independence in question, and liquidity risk are shaping a new uncertainty premium

• Market: Stagflation pressure is rising, and with thin liquidity, a performance chase setup is taking shape

• AI: Launch of reasoning models from OpenAI and Google, while AI investment targets healthcare for cancer and CVD

Lumida in Spotlight

In this week’s Non-Consensus podcast, we invited Rob Kahn, Managing Director and Chief Economist at Eurasia Group, to discuss critical economic issues with Ram Ahluwalia. 

They covered U.S. tariff policies, U.S.-China trade tensions, the unsustainable “band-aid mode” of trade policy, and the looming  question: are markets pricing in a recession? 

First things first 

This Week In Tariffs

President Trump views the Trade Deficit as a ‘Profit & Loss’ statement for the U.S. economy.

A better metaphor for the trade deficit is a credit card provided by the rest of the world to Americans.

Jeff Sachs, an economist, I’m no fan of, makes the great point that it is silly to accuse the rest of the world as ripping off Americans when Americans are making calculated voluntary decisions to make a purchasing decision overseas.

But… that sounds bad right? Isn’t running up a credit card bill bad?

Not in this case.

Why? Americans return on capital is greater than cost of debt used to finance capital investment.

The competitive advantage of the United States is in capital formation. That means creating great businesses, IP, brands, stocks and other investable assets.

The wealth-generating assets that far outstrip the financing provided by the trade deficit.

The U.S. doesn’t just borrow to consume; it borrows to invest, innovate, and dominate.

Let’s go thru some data to prove this.

The Power of American Capital Formation

Let’s start with the numbers.

In 2023, the U.S. goods trade deficit was $971 billion, a figure that grabs headlines and fuels hand-wringing.

But compare that to the $4.9 trillion in gross private domestic investment. That includes investments such as Softbank’s proposed project Stargate, semiconductor plants,home building, biotech investing, venture capital and private equity, roads and bridges - and a lot more.

These are all forms of capital. Capital increases productivity and therefore incomes.

(The next time you hear the word ‘imbalance’ in your mind you should replace that with ‘American capital formation dominance”.)

The net stock of private fixed assets stood at $73.8 trillion in 2023, with intellectual property products like software and R&D growing at a blistering pace, up 7.5% annually since 2010,

This capital formation isn’t limited to physical assets. Human capital is a cornerstone of America’s advantage. Take a doctor who borrows $200,000 for medical school today. That debt is a personal trade deficit—spending now to earn later. Over a 30-year career, she might generate $10 million in income, repay her loans, and contribute to society’s wealth through healthcare innovation or patient care.

Multiply this by millions of students, engineers, and coders investing in their skills, and you see why the U.S. labor force remains a global powerhouse.

In 2023, U.S. spending on higher education was $700 billion, producing graduates who fuel industries from AI to biotech.

This human capital compounds the nation’s ability to create assets that outpace borrowed funds.

Entrepreneurs and Global Investors: A Symbiotic Surge

Nowhere is America’s capital-forming prowess clearer than in its entrepreneurial ecosystem.

American startups don’t just create companies—they create industries.

And they often do so with foreign capital, turning the trade deficit’s credit into extraordinary wealth. Consider SoftBank’s Vision Fund, which poured billions into U.S. startups like WeWork, Uber, and DoorDash.

While some bets flopped, others, like DoorDash, went from a $3 billion valuation in 2018 to a $70 billion IPO in 2020.

That’s capital formation on steroids—foreign dollars fueling American innovation, creating assets worth far more than the initial investment.

And the entrepreneurs who start these businesses are American tax payer citizens. They capture the bulk of the gains.

The U.S. attracted $477 billion in foreign direct investment (FDI) in 2023, more than any other nation, because investors know their money grows faster here.

Nvidia, Google, and Meta - these aren’t just stocks—they’re capital assets, from data centers to proprietary algorithms, built on the back of global credit and American ingenuity.

The trade deficit’s financing is a drop in the bucket compared to this wealth creation.

A Virtuous Loop of Dollar Hegemony and Investment

This cycle—borrowing through the trade deficit, investing in high-return capital assets, and attracting more global capital—is a virtuous loop.

It’s why the U.S. dollar remains the world’s reserve currency. Foreigners hold $8.2 trillion in U.S. Treasury securities (as of mid-2024, per the Treasury Department), not out of charity, but because they trust America’s ability to generate returns.

The dollar’s dominance lets the U.S. borrow cheaply—10-year Treasury yields averaged 4.2% in 2024, low by historical standards—fueling more investment. This, in turn, creates more assets, drawing more FDI and portfolio investment ($1.1 trillion in 2023), reinforcing the dollar’s strength.

The loop also makes the U.S. the world’s most attractive investment market.

Where else can you find a $25 trillion economy with liquid capital markets, a culture of risk-taking, and a legal system that protects property rights?

China’s capital controls and Europe’s sluggish growth can’t compete.

In 2023, the U.S. accounted for 40% of global equity market capitalization, despite being 24% of global GDP. That’s the market saying, “Put your money here.”

The trade deficit is the credit card, but America’s capital formation is the mansion built with it.

A Shadow on the Horizon

Tragically, recent policy actions have dented global confidence in this virtuous loop.

Trade wars and tariffs, while aimed at protecting jobs, raise the cost of capital.

Debt capital is more expensive. Equity capital is more expensive. That means multiples must come down.

It also means the demand for the dollar declines due to less demand for U.S. assets.

So non-dollar assets increase in value. And we’re seeing that with international stock indices including Europe, Mexico and China – al targets of tariffs - trouncing U.S. equity markets.

The trade deficits have set in motion a ‘reverse uno card’ that causes a reversal of flows that Made America Great in the post-WWII era.

Tariff Band AId Mode continues

Since January, the administration has proposed or implemented over 20 tariff-related actions. That includes baseline tariffs on all imports, sector-specific increases, retaliation threats from key trading partners, and exemptions that shift week to week. Semiconductors are spared. Vietnam gets a pass. Auto imports are floated, paused, then reintroduced. 

This is not a rules-based system, it’s improvisational policy.

The historical timeline illustrates the point: in a span of weeks, tariffs were imposed on Canadian steel, proposed on EU whiskey, paused for Mexico, and raised again on China. 

These reversals create ambiguity that stalls capital formation. Business leaders can’t plan ten-year projects with week-to-week tariff risk.

What do you do if you’re Nike and other businesses? You wait and see. That means you pause capex projects, hiring, and new orders.

The effective tariff rate on U.S. imports is now projected to rise materially. 

Goldman Sachs estimates that current and likely measures could push the average U.S. tariff burden to over 17%, a structural shift from the 1.5% average in the pre-2018 era - and at levels not seen since Smoot-Hawley.

That’s a twelvefold increase.

Eggs are a small part of the U.S. trillion dollar economy. The proposed tariff wall - which President Trump suggested would be ‘high’ - even after trade deals is a cost push that impacts the earnings and prices of virtually all industries.

The idea that this is a ‘one time’ cost push is a soft abstract concept that makes this all sound digestible.

It’s really not. Volvo announced layoffs for American workers across plants as they expect lower consumer demand. Americans are front-running purchases pulling forward demand.

What we have here is a confidence shock combined with policy volatility.

We are also seeing Chinese manufacturers move to the highest end-point in the value chain and acquire American businesses that have the bulk of the profit margins:

American Consumers are also now directly shopping for luxury handbags and other goods at Chinese manufacturers.

It turns out that the markup on a Hermes brand is far greater than even a 245% tariff if you can buy direct.

American business always had the option to replace any component of its supply chain. The strategic high ground is owning the end consumer. We are seeing that shift now.

And the economic impact? 

It scales with size. 

As Bob Elliott points out, 10% tariffs may be absorbed by foreign producers. At 50%, costs shift to domestic consumers. At 245%, trade halts entirely.

China is now at the center of the pressure campaign. 

The U.S. is using both tariffs and technology controls as leverage. 

Case in point: the administration has blocked Nvidia from shipping its H2O chips to China, despite the fact those chips were specifically engineered to comply with prior restrictions. 

The message is clear: China should initiate the negotiation for a tariff deal.

Meanwhile, Nvidia CEO Jensen Huang visited China this month. 

Nvidia is trying to preserve access to a key market. Meanwhile, Washington is leveraging that to build pressure. 

Overall, there’s a deeper macro risk here: 

Credibility Erosion

This policy volatility is causing planning paralysis. 

CEOs are pausing capacity expansions and long-cycle projects due to unpredictable rules. 

This rising uncertainty premium is evident in declining capex expectations (Goldman's tracker below its long-term average), weak survey sentiment, and growing corporate cash positions, signaling a 3-12 month investment pause. 

This is due to the extended unpredictable policy that the long-cycle projects are shelved. The result is a drag on both productivity and earnings visibility across industrials, tech, and upstream manufacturing.

Lack of Consistent Messaging

Institutional investors are continuing to pull back in confidence. In our view, it’s hard not to see institutions continue to sell into rallies – unless there is a decisive and prompt about face in policy.

Consider the lack of consistency in messaging below.

Macro

Trump Vs Fed Independence 

The administration is signaling that it may end the independence of the Federal Reserve. 

Trump is reportedly considering removing Jerome Powell and replacing him with Kevin Warsh. 

Kevin Warsh is a smart guy and former Morgan Stanley Investment banker with FOMC experience.

His minutes from that period indicate he would have been on the wrong side of history by not advocating for interest cuts in September 2008 due to inflation concerns.

He would have turned a Great Recession into a Great Depression.

The challenge to Fed independence challenges the very foundation of monetary policy credibility.

We are consistent long-time critics of Fed policy including the necessary experiment in QE.

However, putting the Fed under the thumb of the executive branch is a recipe for inflation. 

This is the kind of policy you see in emerging markets. The inevitable consequences will be that long-term interest rates rise as investors demand compensation for inflation risk.

Modern civilization has long struggled with how to setup a monetary system that preserves accountability and good decision making. 

(If Aliens land on earth, the first question I will ask them is how they manage their money supply.)

From a markets perspective, when Trump threatened to fire Powell (his appointee…), that was the worst day for markets and markets rallied.

Keep that in mind.

Unless Trump replaces Powell, the bark isn’t as bad as the bite.

Gold Is The New Safety Trade 

We noted in a prior newsletter that gold has replaced bonds as the safety trade.

That increases the cost of capital for all Americans.

There’s a big debate whether we are seeing a blow off top in Gold, or whether this is a continuation move.

We think near-term chasing Gold isn’t a great idea. It is going parabolic. However, getting an entry on a pullback in miners can make sense if the current policy course doesn’t shift.

We are at a point where USD is deeply oversold - and has breached long-term support levels. 

The US Dollar is at a key level. The trajectory depends entirely on White Houes policy.

Rick Rieder at BlackRock also said: “We’re in a recession now. We’re adding gold. We like cash.”

Ray Dalio is also sounding the alarm. He’s a bit too doomery for us, but he is making legitimate points around the consequences of current policy.

We do believe Trump will pivot… but only by being forced by market prices. Even so, we don’t believe Humpty Dumpty can be put back together again.

Market psychology has taken a hit - and it won’t get off the mat that easily. 

Without successful tariff negotiations, the stagnation risk is high.  

If Trump gets a deal done with China - and he can do this unilaterally simply by stating a lower tariff level - we would expect a short-lived market rally.

Is Yale Dumb Money?

The Investment Committee "approved increased in the VC capital target from 21.5% to 23.5%"

Geez.

Venture capital has vintage effects.

The best vintages are uncrowded, hated and ignored -- and therefore have the cheapest valuations. 

That led to $4MM valuations for UBER and great deals on Twitter.

Venture valuations are still bananas right now.

And, AI disruption poses a 'singularity' type of Event Horizon. 

Not in a literal sense, but the metaphor is that in 3 to 5 years you can't make accurate predictions on, say, software or medical diagnostics.

The risk premium for venture investing as an asset class is extremely high.

You're much better off owning AI-proof businesses that throw off loads of free cashflow. 

LIke a roll-up of auto body shops, hair salons, acupuncture, Harvard MBA-led HVAC roll-ups and so forth.

Repricing Recession Risk

The main risk factor in markets is that at 19.5X earnings, they are not discounting recession risk and the uncertainty around policy.

Rates are also higher and attractive relative to risk assets.

Although strong bounces can happen in a bull market, it’s likely that we are in a bear market.

That doesn’t mean sharp and furious rallies aren’t off the table. 

It also doesn’t mean we see a bull market in some corners of the market like international value and small cap value. 

(We think the latter is re-rating lower too, but will outperform after they settle just like after the dotcom bust. The inverse of large cap growth is small cap value - and that category is out-performing in recent days.)

If recession risk gets re-priced, expect wider spreads, weaker equities, and a deeper Fed cut cycle than currently assumed, possibly starting with a 50bp move.

The table below breaks down what asset classes have worked in past bear markets, especially during recessions. We can see the shift clearly: when recession risk rises, capital rotates into a set of assets that have consistently held up; T-Bills, gold, the Swiss franc, and the yen.

Gold, in particular, has maintained a strong track record. 

In the 1970s stagflationary downturns, it was the preferred hedge. In recessionary bear markets since 1990, gold delivered positive returns in 62% of cases, and the T-Bills hit 100% of them.

Equities may be underpricing the odds of a deeper downturn. But the asset rotation is already underway. If this regime persists; policy instability, inflation uncertainty, Fed credibility in question, then we might be facing a recession like that of 1974 rather than 2008.

Consumer Trading Down 

As volatility increases, we’re starting to see the ripple effects at the market level.

Consumers are anxiously trading down, and that is significantly visible in the luxury sector.

LVMH just kicked off earnings season for high-end retail, and its clear: demand at the top of the market is softening, fast. Organic sales fell 3% YoY in Q1, missing expectations by a wide margin. Wines & Spirits, once a growth driver, saw a nearly 10% decline. Fashion and Leather Goods, which are supposedly resilient, have also missed. 

Much of the weakness is due to China. Organic revenue in Asia dropped 11%, more than double the analyst forecast. This is deceleration, and it suggests that even the high-end Chinese consumer is pulling back.

We’re seeing a similar shift in the airline sector.

United Airlines posted strong Q1 numbers, but its outlook split into two scenarios: one with stable demand, another with a potential recession. 

So even though bookings are being made right now;  domestic up 17% YoY, international up 5%, but management is already cutting capex and reducing domestic capacity for later this year.

Demand is still coming through, but companies are preparing for uncertainty and everyone’s building downside scenarios into their plans

Liquidity is Thin

We have noticed that there aren’t as many active buyers and much of the recent activity has been driven by retail flows; particularly into high-beta names like Palantir, Palo Alto Networks, and Crowdstrike.

Furthermore, institutional buyers, for the most part, are absent.

We’re also experiencing resistance at key technical levels. 

The bearish market psychology is setting in because every rally toward descending moving averages (see the purple line above) is met with selling. 

The markets also remain hypersensitive to policy headlines, which is contributing to the tactical selling near resistance.

One difference from Trade War 1.0 in Q4 2018: this time, valuations are higher, earnings are softening, and growth momentum is slower. 

So even with tactical bounces, our view is half glass full. 

That fragility is reflected in public sentiment. 

According to the latest Chief Executive Confidence Index, 5 in 8 U.S. CEOs now expect a recession within the next six months and almost two-thirds see either a mild or severe downturn ahead.

Setting The Stage For A Performance Chase

Hedge fund net exposure is at the 0th percentile over the last 5 years. Even after the biggest buying week since November (+3.2pts WoW), discretionary managers remain heavily underweight. 

Systematic strategies; CTAs, risk parity, vol targeting, have also cut exposure aggressively. Current positioning sits near 35 (vs a 5Y avg of 175), levels last seen in March 2020.

This creates conditions for a performance chase.

If markets stabilize and drift higher due to a trade deal win, managers on the sidelines will be forced to chase. 

Risk gets re-added by the need to close the gap.Flows accelerate. Under-positioned managers scramble to catch up. The marginal buyer is reactive hence, what begins slow can ultimately become a fast squeeze.

For now, markets remain reflexive. Small moves can snowball quickly. 

This dynamic is why you have strong rallies in bear markets.

Feel free to reach out to Marc, our Senior Advisor, at [email protected] for more about Lumida’s services.

In this week’s leg of earnings, State Street (a name we like and now own) came out with some robust figures. 

Earnings Highlights

State Street Corporation (STT) – Q1 FY25 Earnings Highlights

• Earnings Overview:

  • Net Income: EPS $2.04, up 49% from $1.69 YoY, beating $1.98 expected by 3.03%
    

  • Revenue: $3.28 billion, up 4.7% from $3.14 billion, slightly missing $3.3 billion expected by 0.57%
    

  • Key Metrics: 

    • Fee revenue up 6%, driven by management fees and front office software/data

    • Assets under custody/administration (AUC/A) up 6% to $47.0 trillion

    • Assets under management (AUM) up 9% to $4.6 trillion

    • Expenses down 3%
      

• Verbatim Quotes:

  • "In developed market equities, machine learning now does the fund accounting; there are no fund accountants. What used to take 1.5 hours is now done in 15 minutes."  Ron O’Hanley (CEO)
    

  • “As we look to the second quarter, we anticipate a step-up in repurchase activity. For 2025, we continue to expect to return around 80% of earnings to shareholders subject to market conditions.” Ron O’Hanley (CEO)
    

• Insights on Consumer Trends:

• Strong institutional demand persists, with AUC/A rising 6% to $47.0 trillion and AUM up 9% to $4.6 trillion, showing asset managers and institutions trust State Street’s custody and management services amid tariff volatility, a trend likely holding into April 2025
  

• Fee revenue growth (6%) from management fees and software/data solutions reflects clients’ shift toward tech-driven, cost-efficient investment tools, signaling cautious optimism in a turbulent economy

• Outlook:

  • The $350–$400M servicing fee wins target for 2025, backed by a strong pipeline and strategy

  • Full-year fee revenue growth guidance remains 3%–5%, assuming stable markets

  • Expect NII to stay flat, with slight variance based on rates and deposits

Strong fundamentals, attractive valuation, and supportive technicals made it a compelling buy, which we acted on last week ahead of earnings.

NFLX also posted solid results this week. While the stock saw a meaningful post-earnings move and remains widely held, valuation concerns still persist.

Netflix, Inc. (NFLX) – Q1 FY25 Earnings Highlights

• Earnings Overview:

  • Revenue: $10.54 billion, up 15% year-over-year (from $9.16 billion), beating $10.51 billion expected by $0.03 billion (+0.29%)
    

  • EPS: $6.61, up from $5.28 YoY, beating $5.66 expected by $0.95
    

  • Key Metrics:

    • Operating margin at 33%

    • Q2 guidance projects 17% revenue growth

    • FY25 revenue guidance at $43.5–44.5 billion (midpoint $44.0B), below consensus $44.3 billion by $0.3 billion
      

• Verbatim Quotes:

  • "We continue to expect to roughly double our advertising revenue in 2025, driven by upfronts, programmatic expansion, and scatter." Greg Peters, Co-CEO
    

  • "With AI-powered tools, we're seeing blockbuster-quality effects accessible at indie-film budgets. It’s not just cheaper — it’s getting better." Ted Sarandos, Co-CEO
    

• Insights on Consumer Trends:

  • Strong streaming demand persists, with $10.54 billion in revenue (up 15% YoY) beating expectations, reflecting consumers’ continued spending on entertainment despite tariff pressures, a trend likely continuing into April 2025.
    

  • High operating income and net cash flow ($2.82B vs. $2.28B last year) indicate robust subscriber engagement, while UCAN revenue growth expected to reaccelerate in Q2 suggests consumers are prioritizing streaming as a cost-effective entertainment option in a volatile economy.
    

• Outlook:

  • Strong Q2 and Full-Year Outlook: Netflix guided to 15% revenue growth in Q2 ($11.04B vs. $10.9B est.) and reiterated full-year revenue of $43.5B–$44.5B with a 29% operating margin, highlighting gains from price hikes, membership growth, and ad revenue.
    

  • Shift in Focus to Margins and Monetization: With subscriber data no longer disclosed, Netflix is emphasizing operating efficiency and margin expansion, signaling a shift from hyper-growth to monetizing its existing user base through pricing and ads.

AI

AI Insights

Key Takeaways: Reasoning Models, Hybrid AI, and Healthcare Applications

1. OpenAI released 2 new AI models, o3 and o4-mini, which have the ability of image-based reasoning, marking a shift toward multi-modal intelligence.

2. Google releases Gemini 2.5 Flash which is its first hybrid reasoning model, allowing developers control over cost, speed, and output quality.

3. The University of Pittsburgh and Leidos launch a $10M partnership to deploy AI in cancer and cardiovascular disease diagnostics. 

AI News & Developments

OpenAI Launches o3 and o4-mini with Visual Reasoning

OpenAI has released 2 of its most advanced models yet: o3 and o4-mini. 

These models have the capability to process images natively as part of their reasoning workflow, which enables them to enhance their coding, mathematics, and complex task execution. 

The update also expands tool use within ChatGPT, making the models more versatile for enterprise and technical use cases.

[Source: CNBC]

Google Unveils Gemini 2.5 Flash: A Hybrid AI Model for Developers

Google also released Gemini 2.5 Flash in preview this week via Google AI Studio and Vertex AI. 

The model offers a bold claim that it can give the same output, in reasoning performance, as gemini 2.0 even when you’re not actively working “brain off mode”.  while maintaining speed and cost-efficiency. 

It’s Google’s first fully hybrid reasoning model, giving developers the ability to toggle “thinking” modes and set budgets to balance latency and quality. Gemini 2.5 Flash is live within the Gemini app and supports new interactive features like Canvas for refining documents and code.

[Source: Google Blog]

Use our AI Investment Analysis Tool to track developments like these in real time. Unlock differentiated insights at lumidaai.com

Lumida Curations

Tucker Carlson with Ray Dalio

Speaker/Guest: Ray Dalio
Key Insights:

• Dalio outlines five cyclical forces shaping history: debt cycles, internal political disorder, great power conflict, acts of nature, and technological innovation. He argues we are simultaneously deep into all five, suggesting today's instability is systemic, not episodic.

• The idea that discretionary budget cuts alone can stabilize debt is unrealistic. Without rapid productivity gains or technological breakthroughs, fiscal tightening will either fail or impose painful consequences. 

• Dalio warns of an imminent breakdown in the U.S. Treasury supply-demand dynamics. If buyers don’t absorb upcoming issuance, rates will spike, forcing the Fed to intervene, risking currency debasement. 

Scott Bessent X Bloomberg Surveillance

Speaker/Guest: Scott Bessent
Key Insights:

• The U.S. is structuring trade negotiations to avoid China's "debt diplomacy" playbook as seen in Africa, where resource extraction, hidden debt, and long-term tolling arrangements trap countries. 

• The current trade strategy acknowledges that Chinese exports won’t disappear but they’ll be redirected. Higher-value goods are expected to move into developed markets like Europe and Canada, while low-value products will flow into the Global South. 

• China is a unique case as it is the U.S.'s top economic competitor and military rival. Unlike past trade conflicts (e.g., with Japan in the 1980s), this dual-role dynamic demands a “special formula,” complicating any path toward full decoupling or normalization.

Scott Bessent X Yahoo Finance

Speaker/Guest: Scott Bessent
Key Insights:

• Nvidia controls 98% of the high-end chip market, and U.S.'s dependence on Taiwan for semiconductor manufacturing is now seen as a geopolitical risk, highlighting the need to diversify.

• Despite tariff headlines, the administration’s economic strategy is braised on a  three-legged policy stool: tariffs (short-term), tax reform (mid-2024 timeline), and deregulation (expected to drive consumer savings in Q3/Q4).

• Fears over China dumping U.S. Treasuries are overstated; doing so would strengthen the yuan, counter to Beijing’s weak currency policy, and reduce the value of their own dollar reserves, making it an ineffective retaliatory tool.

Bits and Bips

Speaker/Guest: Noelle Acheson, Alex Kruger, Ram Ahluwalia, James Seyffart
Key Insights:

• The extreme volatility across treasuries, equity index futures, and individual names is being driven by thin liquidity and mechanically reactive positioning, not valuation or earnings. 

• Trump’s policy style is being compared to a “startup founder” A/B testing ideas live. His improvisational rollout of tariffs and trade pivots is reshaping not just economic outcomes, but market psychology breaking investor confidence.

• The economy is near stall speed. The psychological break in confidence, especially among market participants and small businesses, is what’s now driving the feedback loop of risk aversion and liquidity stress.

The All In X Larry Summers

Speaker/Guest: Larry Summers, David Sacks, Chamath Palihapitiya, Jason, Ezra Klein
Key Insights:

1. Trump’s use of blanket 10% tariffs is reframing global trade dynamics, not as an economic penalty but as a strategic filter. Countries are now actively coming to Washington to renegotiate on U.S. terms, effectively turning tariffs into a form of leverage.

2. The market reaction, especially in bonds, may be less about tariff policy itself and more about structural fragility. A large, leveraged bet by a Japanese hedge fund triggered acute bond yield volatility, exposing how reactive the current market system is.

3. The core critique of bringing China into the WTO isn’t about specific tariff removals, t’s about the downstream effects: enabling capital flows, legitimizing China’s system, and fueling U.S. corporate offshoring. 

Trump X Meloni

Speaker/Guest: Donald Trump
Key Insights:

• Trump downplays inflation concerns, stating, "We don't really have inflation now."

• A minerals deal is set to be signed, signaling progress in resource agreements.

• Trump asserts control over Federal Reserve Chair Jerome Powell, stating he could remove him quickly if desired.

Sam Altman X TED Talks

Speaker/Guest: Sam Altman
Key Insights:

• We’re on the edge of a 2nd major shift in software development: agent-based systems will soon go beyond assistive coding and start autonomously writing, testing, and deploying software. 

• OpenAI’s preparedness framework actively evaluates frontier risks like biosecurity misuse and the potential for models to become self-improving beyond human control.

• AGI, per Altman, isn't about current intelligence benchmarks, it’s about autonomous learning and execution. True AGI will identify its own weaknesses, seek new knowledge, and complete tasks across systems without prompting.

Stay tuned, stay informed, and as always, stay ahead.

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