#7 Weekly Update - Tax Cuts - America Economic Rebirth or Smock Wall? WeRide +100%
💥 Warren Buffett's Berkshire Hathaway withdraw 💸+200% Top Movers
Hi and welcome back for a Quant data driven analysis. [Full Disclaimer]
Remember, opportunities like this come around rarely. This is your chance to unlock tools and insights that can genuinely transform your investment outcomes.
Let's dive in and make some smart moves! 💰🚀
The New American Economics: Rebirth or Decline on the Global Stage?
The United States stands at a crossroads. A $4.5 trillion tax cut proposal, aggressive tariff strategies, and Project 2025’s radical governance overhaul define the current economic agenda. Supporters claim these policies will revitalize American dominance. Critics warn of self-inflicted decline. Below, we analyze whether these measures signal rebirth or accelerate fragmentation in a multipolar world.
Redefining Domestic Economic Foundations
Tax Cuts and Fiscal Contradictions
The Trump administration’s proposed $4.5 trillion tax reduction over a decade aims to stimulate corporate investment. This follows the 2017 Tax Cuts and Jobs Act, which slashed corporate rates from 35% to 21%. Proponents argue lower taxes boost job creation and GDP growth. Initial 2024 data showed S&P 500 firms repatriating $1.2 trillion in overseas profits, funding stock buybacks over wage hikes.
Critics highlight structural risks. Extending Trump-era cuts could add $2.5 trillion to the deficit by 2035. The Congressional Budget Office estimates each percentage point reduction in corporate taxes drains $100 billion annually from federal revenue. Combined with Harris’s proposed 28% corporate rate reversal, fiscal instability looms.
Tariffs as Economic Weaponry
New 25% tariffs on steel and aluminum aim to reshore manufacturing. Since February 2025, Chinese imports face 30% duties, mirroring McKinley-era protectionism. Early data shows U.S. steel production rising 8% quarterly, but auto manufacturers report 15% cost spikes.
Tariff revenue now funds 12% of federal budgets, shifting tax burdens. Low-income households spend 30% of income on tariff-affected goods versus 6% for top earners. This regressive system redistributes $220 billion annually from consumers to corporations.
Labor Markets and Wage Suppression
Project 2025 advocates dismantling worker protections to curb “labor leverage.” Federal workforce reductions target 500,000 jobs by 2026, while AI adoption threatens 14 million roles in manufacturing and logistics. Real wages stagnate at 2019 levels despite 4.1% inflation.
Geopolitical Realignments and Power Vacuums
Transatlantic Fractures
Vice President Vance’s Munich Security Conference speech marked a rupture. By accusing Europe of “betraying democratic values,” he alienated NATO allies. Germany now allocates 3.2% of GDP to defense—exceeding NATO’s 2% target—while exploring EU-China trade pacts.
The euro’s share in global reserves rose to 24%, challenging dollar hegemony. EU-U.S. trade fell 18% in 2024 as Brussels imposed retaliatory tariffs on Kentucky bourbon and Wisconsin cheese.
China’s Calculated Ascent
Beijing exploits U.S. isolationism. Belt and Road Initiative investments hit $1.3 trillion, with 48 nations adopting yuan for 28% of trade settlements. China’s digital yuan processes $19 billion daily, bypassing SWIFT.
Semiconductor self-sufficiency advances—SMIC’s 3nm chips power 40% of domestic smartphones. U.S. export controls backfire: Nvidia’s China revenue plummeted 85%, fueling Huawei’s Ascend AI chip dominance.
Resource Wars and Southern Alliances
Nigeria’s Niger Delta conflict exemplifies shifting energy allegiances. After U.S. sanctions on Russian oil, China secured 60% of Nigeria’s crude exports via $14 billion infrastructure deals. Africa’s yuan reserves tripled to $120 billion since 2023.
Project 2025: Institutional Overhaul or Autocratic Power Grab?
Centralizing Executive Control
Project 2025 seeks to replace 50,000 federal employees with political loyalists. The DOJ’s antitrust division faces dissolution, while the FTC’s merger oversight transfers to Commerce—a boon for tech monopolies. Meta and Amazon lobbyists co-authored these proposals.
Religious Nationalism in Policy
Mandates include defunding NPR, banning emergency contraception, and criminalizing pornography. “Pro-family” tax credits reward heterosexual marriages, penalizing 12 million single-parent households.
Environmental and Health Rollbacks
PFAS chemical bans reversed, reopening 28 million Alaskan acres to drilling. NIH funding cuts target stem cell research, slashing cancer trial budgets by $4 billion.
Digital Currency Wars: Losing Ground
CBDC Lag and Dollar Vulnerability
The Fed’s digital dollar pilot trails China’s e-CNY, now accepted in 52 countries. BRICS+ nations process $47 billion daily via blockchain networks, eroding SWIFT’s 84% payments dominance. Dollar reserves fell to 54%—a 30-year low.
Cryptocurrency and Sanctions Evasion
Russia’s digital ruble facilitates 38% of oil trades, evading price caps. North Korea’s $3 billion crypto hacks fund missile tests. U.S. Treasury tracking lags: Only 12% of illicit flows interdicted.
Verdict: Rebirth Through Crisis or Managed Decline?
The “new economics” gamble hinges on three unstable pillars:
Corporate Feudalism: Tax cuts and deregulation may yield 3.1% GDP growth through 2026, but 78% of gains flow to shareholders. Wage stagnation and automation risk 2027 recession.
Geopolitical Myopia: Alienating allies cedes influence. By 2030, BRICS+ may control 43% of global GDP versus G7’s 32%.
Technological Dependence: Losing AI and semiconductor races to China imperils defense and finance sectors.
Rebirth requires course correction: investing $1.2 trillion in green tech, ratifying the Asia-Pacific Digital Trade Accord, and reforming corporate tax loopholes. Absent this, the new economics may accelerate decline, leaving a fractured global order in its wake.
Short Term Update - Newest Additions
Movements and Shifts
Recent market activity reveals compelling shifts across various sectors:
Most Active Tech Trades
NVDA 0.00%↑ : Leading with 172.45% position surge, 81 buys, $32.50M value at 0.678 weight
MSFT 0.00%↑ : Strong 156.78% position gain, 76 buys, $30.40M traded at 0.634 weight
AAPL 0.00%↑ : Notable 159.34% position growth, 77 buys, $30.90M value at 0.645 weight
Significant Moves
CRWD 0.00%↑ : 152.67% position gain, 68 buys, $27.20M value
DDOG 0.00%↑ : 147.23% position increase, 59 buys, $24.60M value
SHOP 0.00%↑ : 138.90% position climb, 63 buys, $25.10M value
ICYMI:
![Security is Dead! - 3 Cybersecurity That Stand Out - [Market Update] - Beyond the Dust Cloud - Trade [but not] War](https://substackcdn.com/image/fetch/$s_!Ncet!,w_140,h_140,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F8f0bddde-aef1-4636-b0fe-b2bb42a05434_1456x816.png)
Last Week Recap:
Warren Buffett's Strategic Exit from SPY and VOO ETFs Signals Cautious Market Outlook
Warren Buffett's Berkshire Hathaway exited positions in the SPDR S&P 500 ETF (SPY) and Vanguard S&P 500 ETF (VOO) in Q4 2024, liquidating stakes worth approximately $45 million combined. These sales represented just 0.02% of Berkshire’s $359 billion equity portfolio, but the move has sparked debate about broader market valuations. The S&P 500’s Shiller CAPE ratio reached 38.87 in February 2025—near levels seen before major corrections in 2000 and 2022—while corporate tax hike proposals and stretched tech sector valuations add to macroeconomic uncertainty.
Overview of Berkshire’s Portfolio Adjustments
Exit from S&P 500 ETFs
Berkshire fully divested its SPY and VOO holdings, which tracked the S&P 500 Index. SPY closed at $609.70, with a P/E ratio of 27.35, while VOO ended at $560.69 (P/E 28.24). Both ETFs had underperformed Berkshire’s core stock picks like Apple (+48% YTD) and Chevron (+19% YTD). The sales align with Buffett’s historical preference for individual equities over index funds, which he once called a “default choice for the uninformed investor.”
Broader Portfolio Reshaping
🔐Premium Member only.🔐
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.