Eric Wallerstein

Poland spends the highest portion of GDP on defense (4.5%), invests heavily in education and productivity-enhancing areas rather than welfare, and remains outside the euro. It will benefit from any EU fragmentation through capital inflows and currency appreciation. Poland is a long.

Spain is the most vulnerable to EU fragmentation due to its large bilateral trade deficit with China, minimal defense spending, heavy welfare state, and reliance on US/German security. If Spain tries to leave the EU or pivots to China, it will face a rude awakening. This makes Spain a short.

The US economy is resilient due to deregulation, increased bank lending, a productivity boom in manufacturing, and AI-driven earnings growth. Iran conflict hurts US growth slightly but hurts Europe and other regions much more, making the US a relative beneficiary. Investors should maintain core exposure to US equities.