Overall, it was a stronger-than-expected print—but for all the wrong reasons. With the U.S. labor market deteriorating as it has for much of 2025, this fairy-tale growth number is unlikely to move the needle as the US economy moves in an inevitable inflationary bust.

Despite the officially proclaimed economic “heaven,” the people on the ground seem less convinced. The Conference Board’s December consumer confidence shows the Present Situation falling sharply, while Expectations merely held steady after an unusually generous revision—pulling the headline index down. As Confucius might say: when the statistics shout prosperity but the household sighs, wisdom lies in trusting the sigh.

Beneath the incense smoke, the message is clear. The Present Situation soured as views on business conditions turned negative for the first time since September’s labor scare. The labor market’s weakness continues to spread quietly. Confidence slipped across nearly all ages and incomes; only the very young still hope, and only the Silent Generation grew more cheerful—perhaps because silence expects nothing.

As the Master would say: when optimism survives only in revisions, and reality erodes across households, the cycle has already turned.

After the “stellar” GDP fairy tale and a limp, caffeine-deprived 2Y auction, the Treasury decided to spice up the last coupon week of the year with a $70bn serving of 5-year paper.

The auction cleared at a high yield of 3.747%, up from 3.557% in November and the highest since July, while still managing to tail the When-Issued by 0.1bp. Call it consistency: this marks the 6th tail in the last 7 auctions—a streak that would make even the most loyal dog proud.

The bid-to-cover slipped to 2.35 from 2.41 last month—the weakest since September and now below the recent average of 2.36.
The internals didn’t help the optics. Indirect bidders (read: foreign buyers) took down just 59.5%, the lowest share since September and well under the recent 61.8% average.

But fear not—the auction was rescued by Directs. Taking down 31.7%, they delivered the highest allocation on record, stepping in just in time to keep the show on the road.

As a result, dealers were left holding just 8.8%—tied for the lowest on record, proving that when the music stopped, they barely had a chair at all.

Overall, this was yet another ugly, tailing 5-year auction, and it would have looked outright disastrous had Directs not heroically stepped in at the last minute.

As more investors awaken to the uncomfortable truth that the once “risk-free” asset is now anything but—and one of the riskiest assets to own—yields will be forced much higher in the Year of the Fire Horse, or the Fed will resort to Yield Curve Control, a path that would only hasten the debasement of paper IOUs relative to real assets.

Resource wars, fragile currencies, and portfolios built to survive chaos.

The Macro Butler joins the Financial Sense podcast to explain why the old playbook is broken—and how anti-fragile assets, real resources, and hard truths matter more than ever in the Banana Republic era of finance. Listen in and rethink what “safe” really means.

https://themacrobutler.substack.com/p/interview-with-the-financial-sense-9f2

As the Educated-Yet-Idiots of Europe—and much of the Western world—continue to blame Putin for every hardship born of their own Malthusian fantasies, a gentle seasonal reminder is in order:
‘Dear Europeans, please reserve your blind faith for Santa.’

Merry Christmas. 🎄

The slow-motion decline of the U.S. empire can be summed up with a straight face and a crooked chart: out of a 275-million working-age population, only 164 million are employed, 34 million of them part-time, while a convenient 103 million are waved away by the BLS as “not in the labor force,” leaving a laughable 4.6% unemployment rate that magically ignores reality north of 20%. Manufacturing—the thing that once built wealth—has shrunk from 30% of jobs in 1950 to 8% today, replaced by an explosion in Education and Health Services (from 4.8% to 17.8%), while Americans somehow became neither smarter nor healthier, just fatter, sicker, and more administrated. Government payrolls remain bloated, productivity hollowed out, and the economy now runs on debt, consumption, and statistical theater. And just as the professional class finished lecturing blue-collar workers to “learn to code,” AI showed up to code them out of a job. Welcome to the golden age—measured, revised, and massaged for your convenience.

The superficially stable job market has been the only thing keeping this ship of fools afloat, but the rise in the conveniently massaged unemployment rate from 4.0% when Donald Copperfield took office to 4.6% today suggests the hull is already leaking—and it’s only a matter of time before millions are submerged by waves of debt, delusion, and disastrously poor decisions.

As Santa warmed up the reindeer and checked his naughty-and-nice list, the U.S. Treasury squeezed in one last act of festive finance, auctioning $44 billion of 7-year notes—the final bond sale of the Jubilee Year. The paper landed with a 3.930% yield, up from November’s 3.781% and the spiciest since July. In a rare holiday miracle, it actually stopped through the when-issued yield by 0.3 bps, snapping a streak of four straight tailing auctions. Ho ho ho—miracles do happen, just not often in bond markets.

The bid-to-cover jumped to a merry 2.509, up from 2.459 last month and the strongest since July—just a hair below the six-auction average of 2.520, because even markets enjoy suspense. Unlike earlier auctions this week, where foreign buyers apparently took an early holiday, Indirects showed up in festive spirit, snapping up 59.04%, up from 56.65% and the strongest since August. Directs joined the party too, grabbing 31.6%, just shy of an all-time record, leaving Dealers holding a skinny 9.34%—their lightest stocking since July. Turns out even in bond land, Santa still rewards good behavior.

Overall, it was a stronger auction than the soggy offerings earlier in the week—but let’s not confuse seasonal cheer with structural sanity. It is only a matter of time before more investors realize that what was once marketed as a risk-free asset has quietly morphed into the riskiest thing in the portfolio, thanks to the tireless efforts of the Educated Yet Idiots and their ever-ripening banana-republic policies running the global show.

While families feasted, the Malthusian-Orwellian European Council quietly cemented its stance on the digital euro on December 23, 2025—paving the way for talks with Parliament and confirming an offline payment mode, a nod to privacy in a world increasingly surveilled.

The ECB has triumphantly finished all the “technical prep work” for the digital euro, and Christine Lagarde assures us that all that’s left is for the ever-efficient political machinery to wave it through. On December 23, 2025, the Council finally adopted its official negotiating stance—setting the thrilling stage for a potential rollout by 2029, assuming the regulators remember to pass the rules by 2026. The digital euro will feature online and offline payments, because nothing says “progress” like peer-to-peer transfers between certified devices that are almost as private as actual cash… for low-value purchases, of course.

Naturally, the ECB insists the digital euro isn’t here to banish cash—fear not, you can still hoard your coins and paper bills. And don’t worry, it’s all perfectly “safe”: holding limits and fancy safeguards are in place to stop anyone from actually moving big piles of money out of commercial banks. Stability guaranteed… or so they say.

https://cryptonews.com/news/eu-digital-euro-offline-digital-euro-payments/

In a nutshell, while Europeans were feasting, the ECB and Council quietly greenlit the digital euro’s “offline privacy mode” and set the stage for a 2029 rollout of its CBDC.

While Wall Street diligently rehearsed its favorite bedtime story about “vanquished inflation”—right on cue with Donald Copperfield’s mid-term spin—the New York Fed governor quietly let the mask slip, admitting what anyone fluent in ‘CPLie’-speak already knew: the November numbers were pure statistical fiction.

https://www.cnbc.com/2025/12/19/ny-fed-president-williams-says-some-technical-factors-distorted-novembers-cpi-reading-downward.html